FTI urges rule rejig for energy trade

FTI urges rule rejig for energy trade

Thailand uses an enhanced single buyer model for energy trade.
Thailand uses an enhanced single buyer model for energy trade.

The Federation of Thai Industries (FTI) is calling on the government to amend laws to allow factories easier access to electricity made from renewable energy to help Thailand reduce carbon dioxide emissions.

The call is part of a global campaign against climate change, as European countries consider imposing a non-tariff barrier on companies that do not use enough clean energy in their manufacturing.

Natee Sithiprasasana, vice-chairman of the FTI's Renewable Energy Industry Club, said the government wants to promote more renewable energy as a main source of electricity generation, but some regulations may not facilitate power trade among companies that want to use more renewable energy.

He was referring to the enhanced single buyer (ESB) model, which is considered a legal hindrance.

ESB allows the Electricity Generating Authority of Thailand (Egat) to be a single buyer that sells electricity to the public.

If power companies want to sell electricity produced by renewable resources, they are required to sell it to Egat and state power distribution agencies, which then distribute electricity through their grids to companies and households.

Power companies are only allowed to directly sell electricity to the industrial sector under private power purchase agreements, but only fossil fuel-based electricity is traded.

Mr Natee was speaking at a seminar held yesterday to mark 2021 Asean Sustainable Energy Week.

He said Thailand is gearing up for a carbon neutrality goal, which will be achieved through more use of renewable energy.

Whether electricity supply from clean energy will satisfy growing demand from investors remains a worry, said Mr Natee.

Japan-based Denso Corporation, a global auto component manufacturer, last year requested 100% renewable energy to feed its production facilities in Thailand, he said.

The company needs to serve demand for clean energy by its largest auto parts purchaser, Toyota Corporation.

Arthit Vechakij, also vice-chairman of the club, said the FTI is teaming up with environmental authorities to develop a new carbon credit trading platform to replace the old one, which had higher expenses and a complicated verification process.

Carbon credits, which refer to the amount of greenhouse gas reduction from environmental projects, can be traded to companies to offset the carbon dioxide they release into the atmosphere.

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