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Gulf Energy Development, a large private power producer in Thailand, anticipates that the establishment of 25 new solar farms will aid the government in more effectively regulating electricity prices, potentially resulting in reduced power bills.
Following the recent completion of power purchase agreements for 25 solar farms with the Electricity Generating Authority of Thailand (EGAT), Gulf anticipates future power pricing. These agreements are set to last for 25 years.
Yupapin Wangviwat, deputy chief executive and chief financial officer at Gulf Energy, said that EGAT can avoid fuel price fluctuations by buying electricity from the 25 solar farms.
Thailand relies on gas as a primary fuel for power generation. Due to insufficient domestic gas supply, the country imports liquefied natural gas (LNG). However, if LNG prices surge due to geopolitical conflicts, this could increase electricity production costs. Expensive LNG is one of the reasons cited for the surge in power bills.
The 25 solar farms, with combined power generation capacity of 1,353 MW, promise cheaper electricity because the production costs are relatively lower than the cost used to calculate the power tariff of 4.18 baht per kWh, according to Yupapin.
The development cost of the 25 farms, set to commence commercial operation between 2024 and 2029, is estimated at 63 billion baht.
The infrastructure comprises 13 ground-mounted solar farms with a combined contracted capacity of 653 MW, along with 12 solar farms equipped with battery energy storage systems, providing a total contracted capacity of 700 MW.
These projects are part of the 5.2 GW renewables scheme, which is supervised by the Energy Regulatory Commission.Gulf Energy was among the successful bidders in the auction for this scheme, which encompasses the development of ground-mounted solar farms, ground-mounted solar farms with energy storage systems, biogas, and wind power energy.
The 25 solar farms, as well as those equipped with battery energy storage systems, will receive a feed-in tariff of 2.16 baht and 2.83 baht per kWh, respectively.
Yupapin said that the company aims to increase the share of renewable energy in its portfolio to at least 40% by 2035. To achieve this objective, the company plans to expand its investments in renewable energy sources such as solar, wind and hydroelectric.
