Thailand promotes solar farms amid the paddy fields (Feature)

By Peter Janssen Feb 22, 2010, 5:06 GMT

Bangkok - Sun-worshippers should think twice about Thailand's famed beach resorts.

The ideal places to capture the sun's rays in Thailand are in fact on its elevated north-eastern plateau, called Isaan, and the flat, rice-growing lands of the central plains, according to the Energy Ministry.

'Solar farms are best on flat ground, where there are no mountains nearby, because if you are too close to mountains there is a better chance of clouds,' Twarath Sutabutr, deputy director of the department of alternative energy at the Energy Ministry, said.

Similarly, a coastline is a cloud magnet, Twarath, the government's chief salesman for solar energy, said.

Thailand has taken a clear lead in promoting the use of solar energy in South-East Asia, a region rich in sunshine but poor in budgets for promoting expensive alternative energies that may help save the planet but ultimately cost consumers more.

A combination of factors fell together last year to turn the tide in Thailand, which is now enjoying a mini-boom in solar projects.

Firstly, the price of imported solar panels fell about 50 per cent in 2009, as a result of an oversupply on the world market caused in part by the global recession.

Secondly, Thailand introduced an 'adder tariff,' similar to Germany's 'feed-in tariff,' for purchases of solar energy from private suppliers.

The Electricty Generating Authority of Thailand (EGAT), which operates the national electricity grid, now pays 8 baht (25 cents) per unit of electricity supplied by solar roofs or solar farms, compared with the 3 baht for other energy sources.

And thirdly, worries about global warming began to be recognized by the government, which has vowed to reduce greenhouse gas emissions from the energy sector by up to 30 per cent by the year 2020.

The Energy Ministry last year invited the private sector to invest in solar farms to meet its goal of producing 500 megawatt (MW) of solar-generated electricity by 2020.

By last month, the ministry has already received applications for projects that would supply 425 MW within the next two-three years.

'It came to us as a surprise,' Twarath said of the rush of projects.

'At first we thought there would not be much interest to build this system, but after we enforced the adder tariff and other factors such as Copenhagen (climate change conference) and the price of PV (photovoltaic) solar panels falling, we're seeing a boom of solar farms in Thailand,' he said.

Whether the boom will materialize remains to be seen.

The first solar project that is expected to see the light of day is a 30-MW farm in Ayutthaya province to be built by Bangchak Petroleum Company, one of Thailand's main oil refineries and the owner of a chain of petrol stations nationwide.

The board of directors at Bangchak, which has set itself a goal of becoming a 'zero global warming impact company' within five years - ambitious for a refinery - has already approved a 3-billion-baht (90.9-million-dollar) investment in a 30-MW solar farm in Ayutthaya, which should in operation within 18 months.

'We will probably finalize the supplier contract this month,' Bangchak's Executive Vice President Bundit Sapianchai said. 'At the time we start up we will be the biggest in Thailand.'

But it probably won't be the biggest for long.

The Hong Kong-based China Light and Power (CLP) has submitted a proposal to build a 73-MW solar farm in Lopburi province, at an estimated cost of 9 billion baht.

If they follow through, that would be the largest solar farm in the world. The current largest is a 60-MW operation in Spain.

Bangchak is also looking for a plot of land in Chaiyaphum province for a 50-MW solar plant.

One of the biggest investment costs for solar energy is land. It takes about 1.5 hectares of land to produce 1 MW of solar energy.

An advantage Thailand has in solar energy is the availability of relatively cheap land, at least in the north-east.

'The land in Chaiyaphum is cheap, and in some areas it's salty so you can't grow anything,' Bundit said.

He calculates that with the government's adder tariff, Bangchak should be able to get a return of 10-12 per cent on its investments in solar farms.

The Energy Ministry has so far set a limit of 500 MW on solar energy that it is willing to buy under the 8-baht adder tariff scheme, after which the government may need to start reducing the tariff or passing on the cost to consumers.

This could partly explain the big corporate rush to get the solar farm projects up and running.

'The Thai government has a firm policy of promoting renewable energy projects on a first-come, first-served basis, because we would like to award the projects that are ready to go and we are trying to avoid brokers,' Twarath said. 'So I would like to see real investments happen within this year.'