Direct power purchase pilot project approved
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Direct power purchase pilot project approved

Regulators respond to requests from businesses keen to better manage energy costs

The National Energy Policy Council (NEPC) has approved a pilot project that will allow businesses to purchase electricity directly from power producers.

The move is a response to requests from foreign investors, particularly energy-intensive data centre operations, about the possibility of direct power purchase agreements (PPAs) that would help them better manage energy costs.

“We have resolved to approve electricity trade not exceeding 2,000 megawatts under direct PPAs,” Prasert Sinsukprasert, permanent secretary of the Ministry of Energy, said on Tuesday after an NEPC meeting chaired by Prime Minister Srettha Thavisin.

Renewable power can be generated from various sources, including solar and wind energy, hydropower plants and biogas. The power trade will be conducted through the state grid.

One advantage of direct PPAs is that electricity users can better manage their energy costs and also help cut carbon dioxide emissions in line with campaigns to achieve carbon neutrality.

The Energy Regulatory Commission has been assigned to study any negative impact that direct PPAs may have on power users, both households and businesses, given that the country has only used a single-buyer system up to now, said Mr Prasert.

Currently, if power companies want to sell electricity produced by renewable resources, they are required to sell it to the Electricity Generating Authority of Thailand and state distribution agencies, which then distribute electricity through their grids.

Poonpat Leesombatpiboon, the ERC secretary-general, said the commission is drafting new regulations for direct PPAs, including a wheeling charge — the fee collected from the use of state transmission lines.

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