Missed energy transition opportunity
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Missed energy transition opportunity

The New Power Development Plan outlines Thailand's power development roadmap from 2024 to 2037. Under the plan, 51% of energy in the country would be renewable by 2037. (Photo: 123RF)
The New Power Development Plan outlines Thailand's power development roadmap from 2024 to 2037. Under the plan, 51% of energy in the country would be renewable by 2037. (Photo: 123RF)

I recently reviewed the draft Power Development Plan (PDP2024), outlining Thailand's power development roadmap from 2024 to 2037. This draft, which was put for a public hearing process during June 12–19, left me disappointed. The lower-than-expected economic growth, high energy surplus, fluctuating electricity costs due to gas price volatility and a more ambitious net-zero target all signal a need to recalibrate our plans towards low carbon emissions.

Unfortunately, we are falling short.

Despite the government's claims that renewable energy will constitute 51% of our energy mix by 2037, a closer examination reveals that the planned gas power plants -- a major source of fossil-based energy -- remain almost unchanged from the PDP2018 revision 1. The only positive development is the decision not to commission any new coal power plants.

To align draft PDP2024 with Thailand's Long-Term Low Greenhouse Gas Emission Development Strategy (LT-LEDS), we must phase down 7% of coal power plants in the energy mix and increase the share of renewable energy from 51% to 68% by 2040. However, this appears unlikely given the slow pace of our energy transition.

Moreover, this goal represents only a "low bar" for Thailand, as we aim to achieve carbon neutrality by 2050 and net-zero emissions by 2065. This target is the slowest among Asean countries, with neighbours like Vietnam and Malaysia aiming for net-zero emissions by 2050.

Next year, at COP30, all countries are required to submit revised Nationally Determined Contributions (NDCs). Given the urgency of climate change, all countries are expected to adopt more ambitious goals. Thailand seems poised to fall short, even with its already unambitious targets.

The False Solutions

Thailand's draft PDP2024 includes several low-carbon solutions that seem promising on the surface but raise significant concerns upon closer examination. For instance, the plan proposes building more dams on the Mekong river, with hydroelectric imports projected to play a significant role in the energy mix at 15% by 2037. Nonetheless, the Mekong River Commission (MRC) has warned that these planned mainstream dams could result in the loss of significant Mekong fish catches and severely impact Vietnam's farming economy, which relies on nutrient-rich alluvial sediment carried downstream.

The draft also diverts interest into emerging low-carbon technologies, such as Small Modular Reactors (SMRs) and hydrogen combustion. SMRs are touted as less expensive and faster to build than traditional nuclear reactors, and incorporating hydrogen into gas combustion could potentially reduce emissions. Despite the fact that these technologies are currently in the proof-of-concept stage and may not be commercially viable without substantial government subsidies.

On the other hand, Thailand's solar energy cost is the second lowest in Asean, making it a strong contender for solar power production and export. Prior to 2018, Thailand was a regional champion in solar energy.

However, Vietnam now has approximately 17,000 megawatts of installed solar capacity, more than six times Thailand's installed capacity. According to draft PDP2024, Thailand will achieve what Vietnam has already accomplished by 2032.

While draft PDP2024 does significantly increase the ambition for solar energy in Thailand, projecting it to constitute 16% of the energy mix by 2037, the pace remains too slow given the low incentive for solar energy producers. Recent data from the Electricity Generating Authority of Thailand (Egat)'s website shows that the cost of producing electricity from gas is approximately 4 baht/kWh, compared to 2.8 baht/kWh as a feed-in-tariff rate for a solar farm.

Thus, it is crucial to give incentives to solar energy manufacturers who produce low-cost and clean technology.

The Price We Pay

Draft PDP2024 boasts that Thailand's electricity price will average 3.87 baht/kWh. This figure is uncompetitive compared to Vietnam's 3.50 baht/kWh and Malaysia's 2.85 baht/kWh. This forecasted electricity price may not account for heightened geopolitical risks that could increase gas price fluctuations. The recent Russia-Ukraine conflict caused Thai electricity prices to spike to nearly 5 baht/kWh due to our reliance on gas for approximately 60% of our energy mix.

The cost of electricity also does not include the upcoming Thailand Climate Change Act, which may implement an Emission Trading Scheme (ETS) and/or carbon tax. For current gas power plant technologies, every 100 baht of carbon price will increase the cost of electricity produced by gas by approximately 0.05 baht/kWh.

To achieve carbon neutrality by 2050, Thailand will need to acquire technology such as Carbon Capture and Storage technologies (CCS) to absorb emissions from operating gas and coal power plants. This comes with a high price tag, approximately US$100 (3,600 baht) per tonne of carbon dioxide. That raises the question of who will bear the cost: the Thai government, private power producers or customers through current mechanisms?

While the cost of these emerging technologies may decrease over time, relying on this uncertain future is a significant risk. Instead of pinning our hopes on unproven technologies to arrive in the future and increasing our dependence on energy imports, we should prioritise existing low-emission domestic energy sources, such as solar power. Doing so requires our state utility to think outside the box and have more innovative approaches to harnessing more solar and wind energy.

This forward-thinking strategy is more sustainable and future-proof compared to expanding liquefied natural gas terminals in anticipation of increased domestic demand from gas power plants.

Choosing to wait for unproven technologies, such as modern nuclear and hydrocarbon, while the world has embraced proven renewable solutions like solar energy, may leave Thailand lagging, both economically and environmentally.

The opportunity cost of delayed action in the energy transition is immense. The effect is not only failing to keep up with climate change target. Our economic competitiveness and the well-being of future generations will be at stake.

Rapeepat Ingkasit

CFNT Head of Research

Rapeepat Ingkasit is Head of Research at Climate Finance Network Thailand (CFNT), a think tank devoted to propelling sustainable financial practices and assisting in Thailand’s transition towards a low-carbon economy

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