Thailand seeks two years to fully adopt green tariff

Thailand seeks two years to fully adopt green tariff

Time estimate based on public hearing

Businesses, mostly comprising SMEs, said they are not ready to adopt the GUT, while larger companies said they are aware of the importance of the GUT but are also not yet ready for it.
Businesses, mostly comprising SMEs, said they are not ready to adopt the GUT, while larger companies said they are aware of the importance of the GUT but are also not yet ready for it.

Thailand may take two years to fully adopt the green utility tariff (GUT), recently launched to regulate renewable power prices, as many businesses would need time to adapt to the global campaign against carbon-intensive manufacturing, according to the Energy Regulatory Commission (ERC).

The timeframe is an estimate, following a public hearing on the GUT, which is a new tariff to be used to calculate the price of electricity generated by renewable resources.

Businesses, mostly small and medium-sized enterprises, and some state agencies say they are not ready to adopt the GUT, while larger companies say they are aware of the importance of GUT but are not fully ready for it at this moment, said ERC secretary-general Khomgrich Tantravanich, citing the findings of the public consultation involving more than 4,000 participants.

Some other businesses, especially those in the information technology and big data management sector, welcome the GUT as they need more renewable power, he said.

Shopping mall operators are also interested in the new tariff because clean energy usage is crucial to brand building.

The ERC introduced businesses, including power plant operators, to the new tariff, which is divided into GUT 1 and GUT 2, in January.

GUT 1 refers to rates for existing renewable power generating facilities, including six hydropower plants operated by the Electricity Generating Authority of Thailand. It applies to certain types of renewables.

GUT 2 refers to rates for new clean power developers who will be allowed to use various types of renewable energy.

GUT 1 rates are slightly higher than the current power tariff of 4.18 baht per kilowatt-hour (unit), while GUT 2 rates are estimated to be in the range of 4.55-4.56 baht a unit.

Other countries in Southeast Asia are applying different rates of renewable power tariff. They range from 3.4-4.5 baht a unit in Indonesia to 4.5-4.9 baht a unit in Malaysia.

Authorities need to clarify the GUT rates as demand for renewable power increases. Manufacturers in Thailand are required to make their operations more environmentally friendly if they export certain products to the European Union, which began enforcing the Carbon Border Adjustment Mechanism (CBAM) on Oct 1, 2023.

The transitional phase of CBAM requires importers of iron and steel, aluminium, cement, fertilisers, electricity and hydrogen to report greenhouse gas emissions embedded in their imports without being subject to financial payments or adjustments.

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