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Thailand: Eppo to review feed-in tariffs to help operators
A decline in renewable energy costs is prompting the Energy Policy and Planning Office (Eppo) to review the inclusion of feed-in tariffs in electricity prices to help power operators, though it would increase power bills for households.
The feed-in tariff, in use since 2013, is the state guarantee to buy electricity from renewable power plants at fixed prices for 25 years. It is a kind of subsidy granted to encourage private investors to use clean fuels, including solar power, to produce electricity in order to absorb high facility development costs.
But the assistance causes the fuel tariff (Ft), a key factor for calculating monthly power bills, to increase.
The Energy Regulatory Commission (ERC) recently reported subsidies amounted to a Ft charge of 53 billion baht. Its rate in power bills stood at 0.289 baht per kilowatt-hour (unit) for a monthly average.
The Ft includes another subsidy, known as the adder tariff, which was introduced in 2006. Energy authorities use it to encourage investors to build solar farms by adding an eight-baht tariff to electricity prices.
This results in households having to pay more through power bills to help the government support the subsidy programmes.
However, Eppo is considering a change in feed-in tariff, following a decline in renewable energy costs. Solar energy development, in particular, saw its cost dramatically decrease over the past decade, while its power generation efficiency increased.
“We have yet to conclude a new version of the feed-in tariff, which may stay unchanged, adjusted or even scrapped,” said Veerapat Kiatfuengfoo, chief of Eppo’s power policy division, adding a study is needed to help the government make a decision.
The revision will be carried out soon and is scheduled to be finalised by September next year, he said.
Thailand set a target to have renewable energy make up 30% of the national energy portfolio. Electricity from solar power is expected to increase to 12,725 megawatts by 2037.
A possible change in feed-in tariff is the latest move to adjust the electricity rate. The ERC earlier announced it would cut the Ft rate, which is also determined by fuel prices, early next year, though mainstream fuel prices are expected to increase.
The commission also said it is planning to revise the high base tariff rate.
The Ft and base tariff, which indicates the costs of power plants and distribution systems, make up the power tariff, which is used to calculate power bills for households.
Source: https://www.bangkokpost.com/business/2020139/eppo-to-review-feed-in-tariffs-to-help-operators