Thailand energy plan: ‘Current’ contracts for a brighter future

The Government of Thailand is poised to approve a plan involving the Metropolitan Electricity Authority (MEA) and Provincial Electricity Authority (PEA) to manage energy conservation projects in state agencies under long-term contracts. This initiative aims to accelerate energy-saving efforts within the state sector, according to the Department of Alternative Energy Development and Efficiency.

The impending approval will bolster campaigns across 800 state agencies nationwide, which have been directed to cut energy consumption by at least 20%, stated PEA Director-General Wattanapong Kurovat.

MEA and PEA will adopt a model similar to that of an energy service company, or ESCO, to deliver energy solutions. ESCO is a privately run firm established by MEA, PEA, and the Electricity Generating Authority of Thailand, providing energy services to businesses and households.

Previously, ESCO refrained from engaging with state agencies under long-term contracts due to concerns over state budget spending procedures. The Budget Bureau allocates funds to state agencies annually, creating a mismatch with the long-term nature of ESCO’s energy-saving projects.

Under the new contracts, ESCO will invest in energy-saving equipment installations, such as rooftop solar panels, and will receive monthly returns based on the savings generated on electricity bills.

This financial management model is new to state agencies, leading to apprehensions about business risks as ESCO explained.

However, long-term energy management requires specialized expertise, prompting the government to consider having MEA and PEA step in for ESCO. State agencies need specialists to handle energy management and provide necessary advice as Wattanapong noted.

Concerns about long-term maintenance and other energy issues have made state agencies hesitant, highlighting the need for expert intervention, said Wattanapong.

“The project, with a budget of 20.2 billion baht, is expected to reduce electricity consumption from the state grid by 585 million kilowatt-hours per year.”

In a related development, the government plans to incentivise households to install rooftop solar panels by offering tax reductions. Wattanapong anticipates 90,000 households will participate in this project, slated for implementation between 2024 and 2025, reported Bangkok Post.