Prime Minister Srettha Thavisin has expedited the data centre initiative, directing the National Energy Policy Committee (NEPC) and the Board of Investment (BoI) to develop support measures to facilitate direct power purchase agreements (PPAs).
Speaking after the weekly cabinet meeting yesterday, the premier said that given the significant interest from foreigners in investing in data centres in Thailand, it was crucial to implement policies that promote clean energy for them.
This effort requires direct PPAs for clean energy, he said.
A direct PPA is a contract between a renewable energy generator and a buyer, typically a business or large energy user, that allows the buyer to purchase electricity directly from the generator. The PPA specifies the terms of the sale, including the price, the duration of the contract, and the volume of electricity to be delivered.
Direct PPAs can be used to purchase electricity from a variety of renewable energy sources, including solar, wind, hydroelectric and biogas.
A major benefit of a direct PPA is that it allows the buyer to secure a long-term, stable price for electricity, helping to manage energy costs and reduce the carbon footprint.
In addition, direct PPAs can provide a financial incentive for renewable energy generators, as they can sell their electricity at a premium price. This can help to encourage the development of new renewable energy projects and support the transition to a low-carbon economy.
According to Mr Srettha, the Energy Ministry through the NEPC and the BoI have been directed to discuss and clarify this policy, presenting it at the NEPC meeting on June 18.
At the NEPC meeting in March 2023, the committee approved an increase in the purchase of renewable energy. This approval is part of a plan to purchase an additional 3,668.5 megawatts of renewable energy, on top of the 5,203MW now being procured under the feed-in tariff scheme for renewable energy projects without fuel costs from 2022 to 2030.