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NEPC approves 2,000 MW Direct PPA pilot project for Renewable Energy


Mr. Prasert Sinsukprasert, Permanent Secretary of the MOE, informed the results of the meeting of the National Energy Policy Council (NEPC) on June 25, 2024, chaired by Mr. Srettha Thavisin, Prime Minister that the NEPC approved the frameworks for a Direct PPA pilot project to purchase up to 2,000 MW of renewable energy through Third Party Access (TPA).  This pilot project is aimed at attracting leading global companies invited by the government, particularly those interested in investing in Data Centers which require renewable energy to meet their parent companies' requirements.

 

Companies eligible for participation must be large-scale investments, operate in a consistent manner across all countries where they invest in, and not sell electricity back to the national grid. The meeting assigned the Ministry of Energy and the Energy Regulatory Commission (ERC) to study the impact of the Direct PPA pilot project using TPA on the three electricity authorities and electricity consumers in both the residential and industrial sectors.

 

The NEPC ordered the ERC to prepare the TPA tariffs to be completed by the end of 2024 and determined that the said tariffs must cover various charges, including 1. Wheeling Charges, 2. Connection Charges, 3. System Security Charges or Ancillary Services Charges, 4. Imbalance Charges, 5. Policy Expenses, and other related service charges or expenses. In addition, the tariffs must be fair and reasonable, aligned with the proposed Utility Green Tariff (UGT) framework. The ERC will propose the tariffs to the Committee on Energy Policy Administration (CEPA) for approval before implementation. It is expected that the Direct PPA pilot project can be implemented in early 2025.

 

In addition, the NEPC also approved the proposal to purchase electricity in the case of contract renewal for biomass power plant projects that have been converted from Adder to Feed-in Tariff (FiT) scheme in accordance with the NEPC resolution dated March 11, 2016, at a fixed rate of 2.28 baht per unit for the period of time that the project reduces from the change from Adder to FiT scheme for a period of 27-56 months.

 

Therefore, the biomass power plants that the government is considering for contract renewal will be able to generate additional electricity for sale to the grid without the need for new machinery investment. This is because these projects have already been commercially operational (COD) but have not yet reached the end of their project life (20 years) according to the standard life of the machinery/power plant. So, the machinery and power plant might be in good working condition and can operate efficiently. If the contract is renewed, these power plants will not face financial or operational risk, as they have already recovered their project investment and are receiving a return on their investment through the sale of electricity under the FiT scheme. This allows the government to consider an appropriate electricity purchase rate that allows the operators to continue their operations without impacting the overall electricity cost in the country.

 

Moreover, the NEPC also agreed that the ownership of Renewable Energy Certificates (RECs) or Carbon Credits (Carbon Credits) arising from the generation of electricity from renewable energy for biomass power plant projects that have been converted from Adder to FiT scheme and have been renewed contract, is the ownership of the Electricity Authority as the buyer or the government.

 

 

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