Thailand energy authorities are preparing to discuss DPPA regulations with investors. (Photo: iStock)
To attract foreign investment, particularly from data centers, the Thai government intends to open up Direct Power Purchase Agreements (DPPA), allowing businesses to directly purchase green electricity from power generators. Officials have stated that they are preparing to discuss green electricity transmission and pilot project proposals with local and international investors, aiming to expedite regulatory development.
Thailand to include wheeling charge plans in DPPA
Poonpat Leesombatpiboon, Secretary-General of the Office of the Energy Regulatory Commission (OERC) in Thailand, mentioned that officials will be in contact with embassies from major countries in Europe, Asia, and America. They plan to engage with potential investors to understand their needs through referrals.
After a meeting with U.S. Commerce Secretary Gina Raimondo, Thailand Prime Minister Srettha Thavisin learned that many foreign enterprises desire clearer DPPA plans to facilitate the liberalization of renewable energy trading. He directed relevant authorities to draft new legislation, incorporating provisions for green electricity transmission. This would require power sellers to pay a certain fee to transmit renewable energy to users through the national grid.
New green energy plan for large investors
In June, the Thai government targeted large investors such as data centers to trial the direct green electricity procurement plan. This plan requires foreign investments to meet certain scale and standardized operational processes in other countries, with a procurement cap of 2,000 MW. And Excess electricity cannot be resold to other local power companies.
Thailand’s data center market has been ranked the third largest in ASEAN and continues to post significant growth, according to Kasikorn Research Center. (Image: iStock)
Since Thailand's power market is not fully open yet, power generators currently need to sell green electricity to the Electricity Generating Authority of Thailand (EGAT), which then distributes it to users through the national grid. The plan to gradually allow direct connections between power producers and users will aid in power management and carbon emission reduction.
The Kasikorn Research Center estimates that from 2024 to 2027, Thailand will attract investments of up to $7.9 billion in the data center sector. Research director Rujipun Assarut stated that the government must ensure an adequate supply of alternative energy and competitive green electricity prices, as these are the two major considerations for investors.
Source: Bangkok Post(1)(2), Kasikorn Research Center, Bloomberg
