In January Thailand was the second country in the world to confirm a Covid-19 case. The government’s response to an increasing number of cases, considered a success by the WHO, included a wide-ranging lockdown declared on 21 March and followed by a night-time curfew from early April to mid-June. The measures taken were reflected in falling electricity demand. A 2.9% year-on-year reduction in March (after more than 3% growth in January and February) was followed by between 7% and 10% lower demand from April to June compared to the same months in 2023 (demand was additionally dampened by large storms in June). In July and August demand started to recover, but was still around 3% lower in August compared to the previous year.
Thailand’s power sector has been heavily reliant on gas-fired generation in recent decades, accounting for around 70% of the total in the early 2000s. In the past few years the generation mix has become more diversified, with the share of gas-fired generation falling to close to 60% in 2023, followed by coal at around 20%. The share of clean energy in Thailand has been increasing for the past few years, from around 12% in 2017 to almost 20% in 2023, consisting of hydropower, biomass, wind and solar PV. Electricity generation has continued to grow by about 2% annually over the past few years.
Thailand’s total installed generation capacity was 47 GW in 2023, with 30 GW from gas-fired power plants, 6 GW from coal and 11 GW from renewables (including 4 GW of hydropower capacity built in neighbouring countries specifically to export their power to Thailand). Peak electricity demand in 2023 was around 30 GW. CO2 emissions from the power sector have plateaued since 2013, due to the increasing share of clean energy resources.
With the global trend towards energy transition and renewable energy, Thailand has a broad set of policies to cost-effectively accelerate the uptake of cleaner energy This includes renewable energy as well as LNG as part of Thailand’s Energy Master Plan. Under this plan sit the Power Development Plan, the Alternative Energy Development Plan, the Energy Efficiency Plan, and Oil and Gas plans. Recent versions of these plans were endorsed by the Cabinet in October 2023.
The latest Power Development Plan (PDP 2018 Rev.1) aims to provide a transition roadmap for the power sector with three key principles: energy security, economic sustainability and environmental sustainability. The renewable energy target for electricity (excluding imported hydro) is set at 29% of total generation by 2037, with an additional 6% energy efficiency target. In terms of capacity, renewables are expected to reach 29 GW, which accounts for around 35% of total capacity in 2037. The transition in the power sector is supported by policy development that covers digitalisation, decarbonisation, decentralisation, deregulation and electrification.
Grid modernisation is a prominent part of the latest Power Development Plan to improve the reliability, resilience and flexibility of the power system in response to the rapid uptake of emerging technologies, particularly VRE. As recommended in the Thailand Renewable Grid Integration Assessment conducted by the IEA in 2018, a number of flexibility options could be implemented to enable the cost-effective and reliable integration of VRE. This has subsequently led to the launch of power plant flexibility pilot projects in Thailand by the national electric utility. There are also other pilot projects to provide system flexibility, including a 45 MW hybrid hydro floating solar PV and utility-scale battery energy storage system.
With the lower than expected demand growth in recent years (less than 3% annual growth), Thailand’s power sector is facing the issue of generation overcapacity and a high reserve margin, which has been in the range of 40%. This situation is expected to become more prominent in the coming years due to the impact of Covid-19. A number of options are being considered, including retirements of ageing power plants with relatively low efficiency and delaying investments in large-scale fossil fuel power plants to allow for an effective utilisation of existing power plants in the system.
Covid-19 has reduced overall electricity demand in Thailand since March 2023 compared to the same period last year, as a result of lower economic activity in the commercial and industrial sectors and despite increases in residential demand. The impact is expected to continue in the medium to long term. As a result stimulus and recovery measures have been put in place to counter the shocks to the economy and to support the growth of renewable energy. One of the priorities is implementation of the “energy for all” policy, which promotes community-based power plants using local infrastructure and renewable energy resources, particularly biofuels in rural areas. This policy aims to boost the economic benefits and create jobs in local communities, as well as raise the value added of agricultural products.