Gulf Energy signs agreement for 25 solar farms in Thailand

Picture courtesy of Bangkok Post

Gulf Energy Development Plc, a leading private power producer, has announced the completion of power purchase agreements for the construction of 25 solar farms with the Electricity Generating Authority of Thailand (Egat). This initiative is expected to aid the government in managing electricity prices, potentially reducing power bills for consumers.

The 25-year agreements mark a strategic shift in Thailand’s power generation, with an increased focus on solar energy. “Egat can sidestep the volatility of fuel prices through buying electricity from the 25 solar farms,” said Yupapin Wangviwat, Gulf’s deputy chief executive and chief financial officer.

Thailand, largely reliant on gas for power generation, has been battling rising electricity production costs due to the soaring prices of imported liquefied natural gas (LNG). The dependency on costly LNG has been a significant factor in the recent surge in power bills.

The newly planned solar farms, boasting a combined power generation capacity of 1,353 megawatts, are expected to offer a more affordable alternative. According to Yupapin, their production costs are significantly lower than the current power tariff of 4.18 baht (US$ 0.11) per kilowatt-hour, which forms the basis for monthly power bills until August.

The estimated cost for the development of the 25 solar farms, set to commence commercial operation between 2024 and 2029, stands at 63 billion baht (US$ 1.7 billion). The infrastructure incorporates 13 ground-mounted solar farms with a total contracted capacity of 653MW and 12 solar farms with battery energy storage systems, contributing an additional 700MW.

These projects are part of the 5.2-gigawatt renewables scheme supervised by the Energy Regulatory Commission, with Gulf being one of the successful bidders. The solar farms, including those equipped with energy storage systems, will receive a feed-in tariff of 2.16 baht (US$ 0.06) and 2.83 baht (US$ 0.08) per unit, respectively, reported Bangkok Post.

“In line with Thailand’s strategy to promote the use of clean energy, Gulf intends to ensure that at least 40% of our portfolio is comprised of renewable energy by 2035,” Yupapin stated. To achieve this goal, the company plans to increase its investments in renewable energy sources, including solar, wind, and hydroelectric power.

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