As renewables markets mature, renewables investors are looking to new markets for their next source of growth.

In this series of e-briefings, we summarise the opportunities and risks for international investors in the developing renewables markets of South East Asia. The renewables sector in South East Asia is nascent (with some notable exceptions). However, the commitments made by Asian countries at COP 21 indicate that renewables enjoys broad support throughout the region.

Below you will find insight to the renewables Programme in Thailand. If you have any questions or would like to discuss further these opportunities please don´t hesitate to get in touch with us on the details at the end of this bulletin.

Thailand´s Renewables Programme

1. Market Readiness

1.1 Statutory Framework

Although there is no standalone legislation for the renewables sector, the two principal statutes which renewable developers should be aware of are:

  • the Energy Industry Act 2007 (EI), which governs the energy industry in Thailand generally. The EI defines renewables to include energy obtained from wood, firewood, paddy husk, bagasse, biomass, hydropower, solar power, geothermal power, wind power, wave and tidal
  • the National Energy Policy Council Act 1992 (NPE), which established the National Energy Policy Council to manage the energy sector

The Ministry of Energy is responsible for the oversight and enforcement of the provisions of the EI and NPE.

1.2 Targeted Capacities


According to Thailand’s Alternative Energy Development Plan (AEDP), the generation of renewable energy will be increased to 19.6 GW of installed capacity or 17.7 GW of contracted capacity, of which the targeted contracted capacity for renewables is:

  • 8 GW between 2015 and 2026
  • 4 GW between 2027 and 2036

Thailand’s electricity demand is forecast to grow by 2.67% each year to 2036. As a proportion of total energy generation, Thailand’s Government aims to increase its renewable capacity from 8% in 2014 to over 10% by 2026 and to at least 15% by 2036.


The solar sector in particular has been supported recently and Thailand’s target is to increase its solar capacity from 2.7 GW to 6 GW by 2036. According to media reports, the ERC awarded 281 MW of new solar PV capacity at a FIT rate of Bt5.66 kwh to 6.7 solar farm, also are expected to start operations by the end of 2016.

1.3 Key Regulators

The wholesale power market in Thailand is regulated by:

  • the Electricity Generating Authority of Thailand (EGAT), which is the leading state-owned power utility in Thailand, and is responsible for generation, transmission and bulk electric energy sales and is the largest power producer in Thailand
  • the Provincial Electricity Authority (PEA), which is responsible for the generation, procurement, distribution and sale of electricity to the public, business and industrial sectors in 74 provinces (with the exception of Bangkok, Nonthaburi and Samut Prakarn provinces)
  • the Metropolitan Electricity Authority (MEA), which supplies electricity to customers in Bangkok, Nonthaburi, and Samut Prakarn
  • Energy Regulatory Commission (ERC), which is the independent regulatory agency for the energy sector

1.4 Grid

The grid network is capable of accommodating new intermittent sources of renewable energy and transmission losses are significantly lower in Thailand that in many other Asian countries (although there are a lack of grid connections for sites). EGAT operates the grid throughout Thailand and is responsible for grid connections, any upgrades required and the apportionment of costs between developers.

1.5 Feed-in-Tariff

Thailand has a Feed-in-Tariff (FIT) programme for renewable energy, which is differentiated according to technology, type and capacity size. Solar benefits from the largest FIT, followed by wind.

Thailand was the first Asian country to implement a FIT programme (in 2006). Initially, the programme was an “adder” programme, which offered renewables developers with a premium to the wholesale electricity price. However, the adder programme expired on 31 December 2015, and was substituted by a FIT plus premium model, which has proven popular. The FIT plus premium model is itself to be replaced shortly by competitive bidding (except for solar PV).

1.6 Power Purchase Agreements

Power Purchase Agreements may be entered into with EGAT, the PEA or the MEA. The Thai Government does not typically guarantee payments under PPAs. The allocation of risks in PPAs is well understood and is generally bankable by Thai and international banks that are active in the Thai power market.

Payments under the PPA are made in Thai Baht only.

The governing law of all PPAs is Thai law and the preferred method of dispute resolution tends to be arbitration.

2. Project Considerations

2.1 Content Requirements

There are no local content requirements or preferences for renewables projects.

2.2 Land Requirements

Renewables projects may be developed on private land. Private interests in land may be freehold or leasehold.

The Thai Land Code prohibits ‘foreign entities’ from acquiring freehold land in Thailand. Foreign entities include Thai limited companies with foreign shareholders who:

  • hold more than 49% of the issued share capital of the company
  • comprise more than half the total number of shareholders

Consents and Permits

The principal consent required for a renewables project is a licence from the ERC under the EI.

2.3 Tax

Investment promotion concessions are available for solar, wind, biomass and biogas developers (but not for garbage or refuse derived fuel). Energy service companies may be eligible for an exemption from corporate income tax.

3. General Investment Considerations

3.1 Foreign Ownership

Thai renewables developers can be 100% owned by foreigners (although refer to previous sections regarding restrictions on foreign ownership of land in Thailand).

3.2 Incorporating Companies

Private limited companies can be incorporated in 24 hours. Private limited companies are analogous to private companies in common law jurisdictions and have similar constitutional requirements (for example, a Memorandum and Articles of Association). A minimum of three shareholders are required and there are no nationality or residency requirements for directors or officers. There are no requirements as to a minimum level of capitalisation.

3.3 Selling or Pledging Shares

Although there are no restrictions on the sale or pledge of shares in a Thai company under general company law, Thai regulations may contain restrictions on foreign ownership.

3.4 Availability of Debt Finance

Thailand has a liquid local commercial banking market and Thai banks are experienced at limited recourse debt funding: DFIs are also active participants in the Thai project finance market.

Eversheds would like to thank Timblick & Partners, International Finance Corporation, Wind Prospect and Ernst and Young for their contribution towards the e-briefing.