Theppana Wind Power Project in Thailand: Pioneering Private Sector Utility-Scale Wind Power

To achieve sustainable long-term economic growth, diversify its energy mix, and reduce dependence on imported fossil fuels, Thailand is promoting alternative sources of energy. Under its alternative energy and power development plans, the government aims to have 3,002 megawatts (MW) of wind power capacity installed by 2036, up from 7.3 MW in 2011. The state-owned Electricity Generating Authority of Thailand (EGAT) is the largest generator of power in Thailand. EGAT has the sole right to purchase power from private producers and is the only firm permitted to supply electricity to distributors and retailers. The power distribution market is under the monopoly of the Provincial Electricity Authority of Thailand (PEA) and the Metropolitan Electricity Authority of Thailand (MEA). Entities in the electric power industry are regulated by the Energy Regulatory Commission (ERC). The Thai government supports decentralized power generation through its Small Power Producer (SPP) and Very Small Power Producer (VSPP) programs. The SPP program allows private developers to build, own, and operate 10 to 90 MW power projects and enter into power purchase agreements (PPAs) with EGAT. Under the VSPP program, developers who produce up to 10 MW may sell power to the MEA or to the PEA under a PPA with a renewable five-year term and continual automatic extensions. Renewable energy SPPs and VSPPs are also eligible for a feed-in tariff, known as an “adder.” The adder for wind power is THB 3.5 per kilowatt-hour (kWh) for ten years from the commercial operation date (COD), on top of the wholesale tariff. The Electricity Generating Public Company Ltd. (EGCO) is a Thai-based power producer developing and operating fossil fuel and renewable energy projects in Thailand, Lao PDR, Philippines, Indonesia, and Australia. As part of its corporate strategy to have over 300 MW of renewable energy capacity installed in Thailand by 2015, EGCO developed the 7.5 MW Theppana Wind Power Project (hereafter referred to as the Theppana Project, or the Project), located in the Thepsathit district, in Thailand’s Chaiyaphum province. The Theppana Project was EGCO’s first wind power project, the Asian Development Bank’s (ADB) first private investment in wind power in Southeast Asia, and one of the first three wind power projects financed by a local bank. Construction began in September 2012, and the wind farm began commercial operations in July 2013. The Theppana wind farm has been operating satisfactorily, with a high plant availability rate. Theppana’s success paved the way for EGCO to continue with its plan for a 90 MW wind facility at Subyai (the Subyai Project, also known as the Chaiyaphum Wind Farm), which became operational in 2016. Both projects have the same ownership and financing structure, based on the partnership between a local commercial bank and the ADB. In the case of Theppana, the Clean Technology Fund (CTF) provided USD 4 million in financing, while the ADB and a Thai-based commercial bank, the Bank of Ayudhya, each provided THB 145.2 million.