Introduction
The electrical energy market in Thailand is described as an enhanced single purchaser mannequin. Primarily based on this construction, the Electrical energy Producing Authority of Thailand (the “EGAT”) purchases all electrical energy generated by non-public energy producers, aside from: 1) energy generated by “very small energy producers” the place the put in capability of the facility plant is lower than 10 MW which could be offered to both the Metropolitan Electrical energy Authority (the “MEA”) or the Provincial Electrical energy Authority (the “PEA”); and a pair of) non-public direct gross sales from small-scale amenities (e.g. rooftop photo voltaic) or by industrial customers. Whereas this market construction has been efficient in latest a long time in coordinating investments to make sure Thailand’s electrical energy provide is adequate to fulfill its financial progress aims, its inherent lack of competitors has change into a barrier to speedy deployment of renewable vitality tasks.
Underneath the improved single purchaser mannequin, EGAT holds a monopoly on high-voltage transmission and the wholesale electrical energy market. Equally, the MEA and the PEA maintain monopolies in managing the distribution grids, in addition to being the first retail sellers of energy. To liberalize the electrical energy market, due to this fact, non-public electrical energy mills will want the power to entry each the transmission and distribution grids in an effort to promote energy to clients at a distance.
Draft Third-Occasion Entry Code Tips
As a measure to reinforce competitiveness within the energy business, the Vitality Regulatory Fee (the “ERC“) has launched a public listening to on a draft Notification Re: Standards and Tips on Preparation of the Third-Occasion Entry Code for the Electrical energy Community Programs (the “ERC Notification“). This draft ERC Notification discusses third-party entry codes (the “TPA Codes“) regarding electrical energy community techniques that embody the electrical energy transmission techniques and the electrical energy distribution techniques.
The draft ERC Notification requires that designated electrical energy transmission system licensees and electrical energy distribution system licensees situation TPA Codes ready in accordance with the Third-Occasion Entry Framework Tips connected to the ERC Notification (the “TPA Code Tips“). As soon as the TPA Codes are adopted and the ERC’s additional regulation of utilization and utilisation of the electrical energy community techniques is applied, the issuers of the TPA Codes usually must enable third events, who’ve requested to utilise or hook up with the issuers’ electrical energy community techniques and have been allotted with the supply capability of electrical energy community techniques, to utilise or hook up with the issuers’ electrical energy community techniques. Underneath the ERC Notification, third events are specified as non-public energy enterprise operators or licensees beneath the Vitality Trade Act B.E. 2550 (2007) aside from the issuers themselves. The issuers can be entitled to service charges, which might be topic to the additional supervision by the ERC.
Unsurprisingly, based mostly on the draft ERC Notification, the designated issuers of the TPA Codes can be EGAT, the MEA and the PEA. The ERC is authorised to designate further electrical energy transmission system licensees and electrical energy distribution system licensees because the TPA Code issuers beneath the ERC Notification.
Pursuant to the draft TPA Code Tips, the companies that the EGAT, the MEA and/or the PEA (as TPA Code issuers) will present can be on a use-it-or-lose-it foundation; that’s, any capability not utilized by a person inside the specified time and circumstances could be allotted by the issuers to different customers or candidates. Moreover, the TPA Code issuers can be required to suggest service charges and penalty charges to the ERC for approval, and the service price charges should even be compliant with the Electrical energy Tariff Regulatory Framework and worldwide prudent price observe. As well as, the TPA Codes should combine steps and restrictions that assist to make sure that the issuers’ associates is not going to obtain preferential remedy to different gamers with respect to their functions to utilise or hook up with the electrical energy community techniques. The issuers may also have to make sure that they don’t favour their respective associates over third events when it comes to the allocation of obtainable switch capability and entry to info relating to the identical.
A public listening to of the draft ERC Notification occurred on 3 February 2022. If the draft ERC Notification is enacted as presently drafted, the designated TPA Code issuers (i.e., the EGAT, the MEA and the PEA) must procure and suggest their draft TPA Codes to the ERC inside 180 days from the effectiveness of the ERC Notification. The TPA Codes accepted by the ERC have to be issued and introduced by the designated TPA Code issuers inside 30 days from the date of the approval.
Implications and Remaining Ideas
The enactment of TPA Codes to supply higher entry to non-public electrical energy mills ought to enhance competitors in Thailand’s energy markets and, finally, decrease retail electrical energy prices. A key situation to observe going ahead can be wheeling costs imposed by the TPA Code issuers, since this can be a driving think about figuring out the financial viability of personal electrical energy buying and selling.
The first beneficiaries of a liberalized market can be customers who ought to be capable to profit from decrease energy costs. One other key motivator would be the capacity to obtain electrical energy solely or primarily from renewable sources. As many firms have adopted commitments to attain internet zero carbon emissions by a specified date, permitting the acquisition of energy that has been generated solely from renewable sources will facilitate the achievement of those commitments and supply alternatives for renewable vitality builders.
The draft ERC Notification is an attention-grabbing and noteworthy improvement given its potential to reshape Thailand’s electrical energy market.