Energy policymakers have revised up their renewable energy target to 40% of the country's total power generating capacity by 2036, according to the Alternative Energy Development Plan (2012-21).
That is 15-20% higher than previously targeted, generating up to US$20 billion (680 billion baht) in the renewable power-generating sector over the next several years.
Private companies are keen to invest more in this promising industry but have been discouraged by the lack of proper government regulations. The private sector wants to be involved in the policymaking process, as every revision will affect them directly.
Officials say the move to boost renewable energy is in line with Prime Minister Prayut Chan-o-cha's directives, after the government committed at the Conference of the Parties (COP 21) to cut greenhouse gas 25% by 2030, up from the previous target of 20%.
Energy experts estimate the new target will take total renewable power-generating capacity to 40,000 megawatts in 2036, up from 19,600MW under the previous plan. This would mean the development of new projects by private firms as well as state utilities in the near future.
But the enthusiasm is being dampened by doubts about future policy for the fuel segment, with the government promoting the use of electric vehicles while putting the promotion of biofuel cars on hold.
The private sector is also concerned that current regulations are not clear or consistent enough for them to compete. There have been several problematic decisions made by related departments that have tripped up private players, who have had to suspend projects as a result, says the industry.
For instance, 16 wind farm projects had to suspend operations earlier this year when it was found that they were operating on Sor Por Kor land, which according to the law has to be used for agricultural purposes only. That forced the Agricultural Land Reform Office, which oversees the issue, to intervene and allow those wind farms to continue operations.
Existing regulations have also created stumbling blocks for renewable energy adoption, as many players that have been granted solar farm licences have not yet started building farms, as they are waiting to make a profit by selling their licences to others. That has left around 1,000MW of potential power-generating capacity untapped.
Omsin Siri, vice-president for corporate communications of SET-listed Energy Advance Plc, says investors want to see clearer policies and regulations to make it fair for all parties interested in the sector. She points to the "lucky draw" system as one example of a policy creating a lack of predictability in the industry.
Policymakers should also let investors know in advance how much total power-generating capacity will be open for bidding so that they can prepare their investment strategies, says Mrs Omsin.
With unclear regulations over the past several years, she says Energy Advance has had to buy licences from investors who were granted permission to operate wind farms, solar farms and other waste-to-energy projects for which construction has not yet been completed.
In line with this strategy, Energy Advance acquired the Hanuman Wind Farm in Chaiyaphum, with power-generating capacity of 260MW, for 20 billion baht.
Cherdsak Wattanavijitkul, managing director of a MAI-listed TPC Power Holding, says the government should seek other, more secure methods to govern investment in renewable power.
"Since the capacity is due to double through [the government's] policy, it should have appropriate regulations to govern the sector, as massive investment is about to be poured into it. The government should be ready for it or even set up a special committee to govern the industry," says Mr Cherdsak.
Since the increase in renewable power-generating capacity will have an impact on all investors in the industry, Mr Cherdsak says the private sector should play a part in revising the policy.
Due to the uncertain domestic environment, SET-listed BCPG Plc's president and chief executive Bundit Sapianchai says the company had opted to invest in renewable energy abroad.
BCPG has recently sealed a deal to acquire a 33% stake in Indonesia-based Star Energy Group Holding for $358 million. The company views Indonesia as a prime location to develop renewable energy, as power demand is expected to rise substantially.
One of Thailand's leading solar farm operators, Thai Solar Energy Plc (TSE), has voiced a view similar to that of Mrs Omsin, saying the lucky draw system should be done away with.
TSE's executive committee chairwoman Cathleen Maleenon says the licences to be granted to investors should instead be based on the companies' qualifications. TSE is another renewable company which forwent the lucky draw system, opting instead to develop solar projects in Japan.
With business expansion in Japan, she says TSE's solar power-generating capacity is due to double to 12,000MW over the next several years.
The Energy Policy and Planning Office's deputy director-general Prasert Sinsukprasert says the additional renewable power-generating capacity is likely to be from solar rooftop installations and biomass projects as other parts of the renewable power sector are becoming saturated.
Energy policymakers are expected to study what kind of resources to pursue by year-end.