• The Thailand energy grid requires modernisation and optimisation to support renewable energy-related goals
• Thai Prime Minister Srettha Thavisin announced a desire for renewables to make up 50 percent of the total electricity produced by 2029
• Smart systems, battery energy storage, and consumer products are among the areas of need

The Thailand energy grid needs modernisation and optimisation to support the increasing usage of renewables with this expected to be a point of emphasis in the upcoming Thailand National Energy Plan. Asian Insiders’ partner in Thailand, Axel Blom, provides an update on the current situation and outlines why now may be an opportune time to enter the market.

At the 26th UN Climate Change Conference leaders’ summit in Glasgow, Thailand announced intentions to reach carbon neutrality by 2050 and net-zero greenhouse gas emissions by 2065. Achieving this requires significant increases in renewable energy production.   

Recently, Thailand Prime Minister Srettha Thavisin announced a desire for green and renewable energy to make up 50 percent of the total electricity produced in the Kingdom by 2029. Details of how that will be accomplished have been included in the Power Development Plan (PDP) which will be in place from 2024-2037.

This is part of the larger Thailand National Energy Plan (NEP), an overarching strategy that will shape the sector’s policy direction during this critical period. The plan was expected to be released in the second quarter of 2024 but was again delayed with Thailand’s Energy Policy and Planning Office (Eppo) saying it will now be published during the third quarter.

In addition to the PDP, the NEP consists of the Gas Plan, Alternative Energy Development Plan, Oil Plan, and Energy Efficiency Plan. Eppo also expects to finalise those in the coming months.

With the NEP putting renewable energy targets in place, following through on the Smart Grid Master Plan, which was enacted in 2015 and covers 20 years, now has a greater sense of urgency. The strategy to develop smart grids in the Kingdom entered its second phase.

The potential limitations of the Thailand energy grid are coming into focus as the country seeks to expedite its green transition. With more renewables slated to come online over the next few years, there is a pressing need to make faster progress on Smart Grid advancements.

Thailand’s three central power agencies, the Electricity Generating Authority of Thailand (EGAT), the Provincial Electricity Authority (PEA), and the Metropolitan Electricity Authority (MEA), have separately launched Smart Grid initiatives, but large-scale integration and optimisation are ongoing.

What’s preventing Smart Grid development in Thailand?

A few Smart Grid pilot projects in Thailand have taken place, but more work required to integrate Smart Grid innovations into existing infrastructure. This covers everything from greater smart meter installation to the development of a demand response trading system.

At the highest level, two other significant challenges stand in the way of Smart Grid development in the Kingdom. First, there is a need to ensure uniformity as it relates to scaling up modernisation efforts along with interoperable communication standards that ensure all Smart Grid elements operate seamlessly.

Second, the Thailand energy grid covers both rural and urban locations, and the unique issues of each will need to be addressed to guarantee coverage and functionality. To that end, it has been mentioned that a country-wide Smart Grid may not be feasible. A potential solution would be Smart Grids covering designated areas.  

Thailand energy grid an economic priority

Thailand’s primary reason for the green transition is to achieve carbon neutrality and net zero goals. However, a secondary reason is spurring this recent push. The Thai government believes increasing renewable energy availability will help accommodate large-scale investments from foreign countries.

Prime Minister Srettha has gone on record saying major overseas firms have expressed interest in utilising clean energy for production to achieve their respective carbon reduction targets. Being able to provide this would make the Kingdom a more attractive base for manufacturing, data centres, or other operations.

Meanwhile, Thailand’s central location could allow it to become a hub of regional energy storage and transmission. Instead of allowing electricity to pass through, the government is looking at the role it can potentially play as a renewable energy trading centre.

This business element could help fast-track the development of infrastructure required to support the growth of the renewable energy sector. Even with the progress being made on the Thailand Smart Grid, several obstacles must be addressed, and soon, should the government realise these economic aims.

What is needed in Thailand?

There are key opportunities across the Thailand energy grid that the country either lacks or requires assistance with. These are:

1) Smart Systems

Technology or expertise that can modernise existing grid infrastructure. This includes wide area monitoring; wide area monitoring, protection, and control; and ICT Integration. There is also a need for energy and distribution management systems and data communication systems.

 2) Consumer Products

Building up the consumer side of Smart Grids is a priority. Smart meters and smart installation remain limited. Eventually, pricing systems and demand response market development will be needed, among other advancements.

 3) Battery Energy Storage Systems

While some headway has been made in terms of microgrid pilot projects in Thailand, there is still a demand for battery energy storage systems and related technologies.

What to watch out for

Smart Grid development in Thailand has been fragmented, as EGAT, PEA, and MEA mostly focus on their own projects rather than collaborating. All three agreed to jointly research a National Energy Trading Platform in 2018, but updates have been scarce.

A lack of progress on Smart Grids has been a source of consternation among private power producers in the country. Although attempts have been made to streamline regulations that would make it easier to build these, more is still required in this area.

Additionally, the regulation of the Thailand energy grid and the energy sector as a whole is opaque, with different bodies overseeing different areas. This is not difficult to overcome for those entering the market, but having a local partner familiar with the local regulatory landscape is advised.

Final thoughts

Ambitious renewable targets and a government that needs clean energy to support economic plans make Thailand a desirable destination for companies with Smart Grid technology and expertise. Advancements have been made in this area, but much remains to reach the country’s stated goals.  

There are many opportunities for firms to assist in Thailand’s efforts to improve and optimise the energy grid or support other renewable energy initiatives. To learn more, schedule a no-obligation call with Jari Hietala, Managing Partner: jari.hietala(at)asianinsiders.com or Axel Blom, Managing Partner, Thailand, axel.blom(at)asianinsiders.com