February 11, 2008 (Bangkok Post) – To cope with high oil prices and reduce greenhouse gas emissions, Thailand must pursue four options: development of renewable energy, energy efficiency, nuclear energy and carbon capture and storage. However, renewable energy has certain limitations, and options for each country are different depending on availability of natural resources, technologies and manpower. This is why the Thai government has mainly concentrated on renewable energy based on domestic raw materials and wastes.
Financial incentives together with the provision of information to investors and consumers have proved to work wonders, for instance in the promotion of biofuels. The consumption of gasohol (E10) more than doubled in 2007. With the introduction of E20 in 2008, daily demand for ethanol should reach two million litres by 2011 when new cars capable of using E85 should be on sale.
However, due to the inability of old cars to use E85, it may take 15 years for E85 to account for 50% of gasoline sales. Mandating that all diesel oil be B2 by February 2008, coupled with pricing incentives for biodiesel, have pushed the daily demand for biodiesel (B100) from 6,000 litres in 2006 to more than one million litres at present. It is hoped that the expansion of palm oil plantations will enable mandatory B5 usage in 2011.
Higher purchase prices for electricity sold to the national grid by SPPs and VSPPs (small and very small power producers) from renewable energy facilities announced at the end of 2006, investment subsidies for “new” technologies, soft loans, provision of information and advice have resulted in a large number of new projects.
At the end of 2007 proposals had been received from 265 renewable energy SPPs and VSPPs to produce 1,716 megawatts of power with sales to the grid of 1,116 MW. Apart from the usual fuels (paddy husk, wood chips, bagasse), we are seeing enormous fuel diversity with projects using palm oil waste, coconut shells, biogas from waste water, municipal waste, and solar energy. Many wind farm proposals are expected this year.
Within three years I expect most of the country’s pig farms, tapioca starch factories, palm oil and rubber processing factories to turn all their waste water into energy. These projects can also sell carbon credits under the Clean Development Mechanism (CDM) approved by the government in early 2007.
The initial investment costs of renewable energy may be high, but strong incentives, creation of markets and competition, and R&D could substantially bring down costs as we have seen in the cases of ethanol, biogas and now solar photovoltaic cells with the emergence of a number of “solar farms” (87 projects selling 123 MW to the grid).
However, most types of renewable energy have drawbacks: solar cells cannot produce electricity unless the sun is shining, a 5,000 MW wind farm will produce as much electricity as a 1,000 MW nuclear power plant, availability of paddy husk depends on rice production, and ethanol demand is constrained by the number of old cars.
We cannot rely on renewable energy alone in the next two decades. Renewable energy is an essential and increasingly important part of our energy mix, but we must supplement it with other types of commercial energy.
Still, renewable energy in Thailand is beginning to have a significant impact in reducing our dependence on imported fossil energy. The share of new renewable energy (excluding charcoal and fuel wood) in final energy consumption should reach 9% in 2011. This will further reduce the share of oil from 41% in 2007 to 34% in 2011.
If one includes large hydroelectric projects, the share of renewable energy in electricity generation is expected to rise from 6.5% in 2008 to 17% in 2015 and 27% in 2021.
Dr Piyasvasti Amranand was energy minister during the Surayud Chulanont government.