Thailand's ambitious plan to be a global production base for energy storage technology is shaping up well, with the government lending full support at a time when private firms have been pouring billions of baht into developing the power storage sector, say industry officials and experts.
Deputy Energy Minister Surasak Srisak said the government plans to include the energy storage issue in the latest revision of its national renewable development plan (PDP:2015-36). That move comes as the Energy Ministry has been monitoring the issue for some time, having found that it should promote energy storage technology alongside plans to promote renewable energy to help mitigate potential blackouts and other problems affecting the country's energy grid.
He said lending full support to encourage rising investment in renewable power without implementing new measures to develop storage facilities to secure power supply could result in economically adverse power disruptions, as has happened in the United States.
Gen Surasak said the revision of the PDP was also due to the delay of the development of coal-fired power plants in the southern region and a large number of new renewable power projects, boosting related capacity. The revision of the PDP is expected to be finalised by the end of this year.
"We definitely want to encourage private companies to invest in the power storage sector to create facilities serving the development of electrical vehicles (EVs), for which the government is lending its full support," he said.
The move is in line with global trends, while renewable power-generating capacity is growing rapidly, raising demand for power storage facilities to make renewable generating systems more sustainable and secure.
Recently, Hitachi Chemical Co Ltd entered into an agreement to acquire a 43.9% stake in SET-listed battery manufacturer and distributor Thai Storage Battery (BAT-3K) from its major shareholding family in a deal worth 2.41 billion baht. The acquisition is expected to facilitate technology transfers, helping 3K develop more efficient vehicle batteries in the future, particularly for EVs.
To promote the power storage sector, Gen Surasak said the government needs to think thoroughly about support measures, as putting forth any poorly thought out plans could lead to unforeseen glitches, forcing the government to once again employ Section 44 of the interim charter to resolve the problem.
Thailand began promoting the development of renewable power a decade ago, but private Thai firms opted not to jump into the industry at that time, saying the production costs were very high, particularly for solar panels.
That put a halt on commercial investment, forcing the government to provide subsidies, for example, by paying for renewable power from these private firms at higher than market prices to help offset the high costs incurred through importing expensive solar panels.
That subsidy cost was ultimately passed on through higher monthly power bills for consumers.
But better technology has brought down the production costs of solar panels, encouraging some Thai investors to start investing in their local production. Many Chinese solar panel producers have also switched their production bases to Thailand over the past several years to skirt anti-dumping charges from the US and EU.
That means nearly 100% of the 3,000 megawatt of renewable power currently being generated comes from imported solar panels, mostly from China.
The rising level of renewable power in tandem with government plans to further raise to proportion of renewable power has pushed the need for a more robust power storage system to serve private firms, particularly for SET-listed renewable power developers that are looking to spend big in the sector over the next several years.
The government's scheme to support the development of the power storage sector are in line with the Federation of Thai Industries (FTI) and private firms' plans, which expect to see the first prototype for battery production facilities to be launched by year-end.
Suvit Toraninpanich, the FTI's deputy secretary-general, said Energy Absolute Plc, a SET-listed renewable power developer and operator, is considering using Thailand and other Asian countries as manufacturing bases for its lithium-ion battery project, which is worth 100 billion baht.
Beta Energy Solution is also teaming up with Singapore-based New Resources Technology Pte to develop production facilities for nickel manganese cobalt oxide batteries in Bang Pu district, with commercial operations slated to begin in 2019.
Mr Suvit said two other SET-listed firms are also conducting feasibility studies for the battery business: Bangchak Corporation and Global Power Synergy Plc, a power and utilities arm of PTT Group.
For the automotive industry, Thai firms have begun seeking out higher technology to develop more efficient power storage.
Solar rooftops are further set to become more popular over the next several years as the government is hammering out a privilege scheme to encourage homeowners to install their own solar panels.
The FTI recently hired the Thailand Development Research Institute to conduct a feasibility study to create a new privilege model to that end.
Twarath Sutabutr, secretary-general of the Energy Policy and Planning Office, said he expected the first prototype for highly-efficient batteries for EVs and the power grid to be launched after 2018.
He said policymakers are now monitoring the latest technology and conducting pilot projects to produce preliminary energy storage models for the power grid, to be employed by state utilities.
"Clean energy is good for everyone but it should come with efficient power storage systems to ensure the efficiency of the renewable power sources, as well as the future of renewable power," said Mr Twarath.
According to a report by the Energy Regulatory Commission released in June, renewable power for commercial operations totalled 7,000MW, while another 2,200MW is still being developed. Solar power made up 3,000MW of operational renewable power, followed by biomass at 2,873MW, biogas (600MW), wind farms (488MW), with hydro power accounting for the rest.
Piyasavasti Amranand, former energy minister and chairman of the board for the national oil and gas conglomerate PTT Plc, said energy storage will be available in the household sector in the next few years, as production costs have been trimmed down substantially, paving the way for homeowners to start developing their own solar power systems.
He said PTT's power business arm, Global Power Synergy Plc, is also poised to expand its investment in the power storage sector if it manages to acquire US-based M24, a lithium ion battery producer. He said GPSC further plans to produce EV batteries.
Sumet Suthapacti, chief executive for Inter Fareast Wind International, a large wind farm operator, said the company is also testing its energy storage unit at its existing wind park in Nakhon Si Thammarat, with total capacity 10MW.
The energy storage unit has improved the wind farms plant factor -- the ratio of a facility's average power load to its rated capacity -- up 5.7% from 20% previously.
"Energy storage has been in the experimental phase in Thailand for many years and now it is coming into commercial operations," said Mr Sumet.