The development plan for a floating storage re-gasification unit (FSRU) to serve power generation in the South will soon be suspended, says Energy Minister Siri Jirapongphan.
The FSRU is an enormous barge designed to process liquefied natural gas, which is then fed to onshore service providers whose clients are mostly gas-fired power plants and transport operators. The only FSRU facility in Thailand is located at Map Ta Phut, Rayong and operated by PTT Plc.
The suspension may mean that new development of gas- and coal-fired power plants will be unnecessary for the next five years.
Mr Siri said the region has the potential to develop an additional 300 megawatts of renewable power to serve electricity consumption through 2027.
The idea was proposed under the Sustainable Development Goals initiative, organised by the Thailand Business Council for Sustainable Development.
The council said rubber tree and oil palm waste can be used to generate biomass energy, serving as a substitute for fossil fuels.
"Power supply in the South may be secured through biomass and more high-voltage transmission lines, which will soon be designed to feed power from Central Thailand," Mr Siri said.
The delay of two coal-fired power plants in Krabi and Songkhla, with a combined capacity of 2,800MW, has pressured energy policymakers to find other sources of power.
The Electricity Generating Authority of Thailand (Egat), tasked with developing the coal-fired plants, said the South will face power shortages after 2020 because of high demand from tourism.
Mr Siri said some renewable power plants in the South will be served by a smart grid system or regional power system (RPS), which is intended to stabilise energy for local consumption.
A feasibility study for an RPS pilot project is under way for biomass power plants in Pattani, Narathiwat, Satun and Songkhla.
Policymakers plan to kick off the first RPS this year.
Mr Siri said a tentative business model is expected to grant development and licences to cooperative units or local administration offices.
"Once the RPS business model proves itself successful, the South will not need to import energy from fossil fuels or construct the FSRU unit for large power plants," Mr Siri said.
He said an upcoming power tariff will be kept at less than 3.30 baht per kilowatt-hour, as a higher rate would hurt the country's competitiveness and raise consumers' power bills.
Renewable power plants with tariffs higher than those for fossil fuels may no longer be needed, he said.
Mr Siri said a recent auction for small power producer programme licences, granted under a semi-hybrid power purchase deal, will entail a tariff of 2.44 baht per kWh on energy sold back to state utilities.
Biomass power plants using waste from sugar millers were the auction winners.