Year 2007

 May

2007 a Golden Year for Green Power Producers Government Offers “Adder” to Power Purchasing Price

With the fertility of agricultural resources in Thailand, the country can reap the benefits of having abundant agricultural products to produce energy, particularly electricity to enhance the power system of the country other than the construction of large power plants.

For the past 15 years, the government has continuously supported and promoted power generation using renewable energy, regardless of the renewable fuel types-it can be power generation from rice husks, woodchips, biogas from livestock farms, or from solar and wind energy. This is aimed to make the optimum use of the domestic renewable energy potential.

The Year 2007 will be the Golden Year for investor s interested to produce electricity using “green energy” as fuel because the Ministry of Energy is forging ahead with the power generation using renewable energy by providing “Adder” , an incentive price addition to the normal purchasing prices that Small Power Producers (SPPs) and Very Small Power Producers (VSPPs) will receive, based on the types of fuel used.

At present, the promotion by the Ministry of Energy is carried out under two programs:

1. Small Power Producer (SPP) Program
2. Very Small Power Producer (VSPP) Program.

SPP – THE PIONEER OF POWER GENERATION USING RENEWABLE ENERGY
An SPP, or Small Power Producer, is a power producer with power sale to the grid of greater than 10 megawatts (MW), but not exceeding 90 MW. Since 1992, the Ministry of Energy has given support to SPPs using either the cogeneration system (producing electricity and steam) or renewable energy.

To date, 119 SPPs have received the notification of power purchase acceptance, accounting for a total proposed sale of 2,821.1 MW. There are 82 SPPs already supplying power to the grid, accounting for a total sale of 2,383.6 MW.

Classified by fuel type, 52 SPPs use renewable energy, with a total proposed sale of 479.9 MW; 26 SPPs use commercial energy, totaling 1,670 MW; and 4 SPPs Use combined energy (renewable & commercial energy), totaling 233 MW.

2007 TARGET; 530 MW TO BE SUPPLIED TO THE GRID BY RENEWABLE ENERGY SPPs
INTERESTED PRODUCERS ARE WELCOMED TO SUBMIT PROPOSALS, STARTING 1 MAY 2007
In 2007, the Ministry of Energy has set a target to purchase power from SPPs using the cogeneration system, totaling 500 MW, and from SPPs using renewable energy, totaling 530 MW. For the generation from renewable energy, it is further divided into: municipal solid waste (MSW), 100 MW; wind, 115 MW; solar, 15 MW; and others (e.g.rice husks, wood chips), 300 MW;

As an incentive to increase the number of SPPs using renewable energy, the Ministry of Energy has introduced the provision of “Adder” to renewable SPPs for a period of 7 years from the commercial operation date (COD). The adder for SPPs using MSW and wind energy is fixed at a rate of 2.50 Baht/kWh and for SPPs using solar energy, at 8 Baht/kWh. (as shown in the picture).

From 1 May – 15 June 2007, the Request for Proposals for SPPs using renewable energy, such as rice husks and wood chips, can be purchased at the Energy Policy and Planning Office (EPPO). Interested SPPs can purchase the RFP package and obtain more information from the Power Division, 5th Floor, EPPO Office, or the website: www.eppo.go.th Proposals will be accepted until 1 August 2007. Then, consideration will be made by EPPO taking approximately 2 moths, Selection priority will be given to those with the lowest adder rate proposed.

VSPP – TINY BUT VALUABLE
33 VSPPs ARE GOIMG TO SUPPLY MORE POWER TO THE GRID
A VSPP, or Very Small Power Producer, is power producer with a generation capacity of or less than 10 MW. Support is given by the Ministry of Energy for both VSPPs using the cogeneration system and, in particular, VSPPs using renewable energy.

Following the announcement on the purchase of power from VSPPs using renewable energy, there are currently 23 VSPPs supplying power to the grid, accounting for a total capacity of about 13 MW.

After the announcement was made on 2 February 2007 by the two Distribution Utilities (MEA and PEA) on the provision of “Adder” to date, 35 VSPP projects have submitted the applications for sale of power and for the power system interconnection, making a total proposed sale of 187 MW. The 35 projects comprise: 33 renewable VSPPs (179 MW) and 2 cogeneration VSPPs (8 MW).

The government fully supports VSPPs using renewable energy if they request for the adders because they are in compliance with the policy on the promotion of renewable energy utilization, which is a means to make the optimum use of domestic resources. For the 33 renewable VSPPs, the financial support in the form of “Adder” will amount to 414.30 million baht/year, divided into: solar energy projects, 19.87 million baht/year; MSW projects, 26.28 million baht/year; biogas projects, 5.05 million baht/year; and biomass projects, 363.10 million baht/year.

The Ministry of Energy hopes that the new measure introduced, i.e. the provision of “Adder” will be good news and will encourage more “green power producers” to participate in the power generation business. Specifically for many areas in Thailand, much potential exists to make use of local energy resources for power generation. Not only will a power generation station be established within a community and hence strengthening the power supply for the community, but also the country will benefit from early target achievement of greater use of renewable energy for power generation.

Last but not least, the more renewable energy is used for power generation, the less investment is required in the expansion of the transmission and distribution systems to remote areas. Hence, the budget saved can be used for other development for the betterment and well-being of the people.

This article is written by The Nation

18/05/2007

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