Bangchak urges cut in solar adder rate
Bangchak Petroleum has suggested that the government reduce the adder rate for solar power in line with the continued drop in the costs of plant operators, which are benefiting from declining solar-module production costs.
President Anusorn Sangnim-nuan said the currently high adder rate would pose a burden on electricity users.
The Energy Ministry is considering a new adder rate for solar power. The current rate is Bt8 |per unit for solar power plants, as set under the ministry’s previous measure for promoting alternative energy.
Bangchak has launched Phase 1 of its solar-power project, Sunny Bangchak, which is in Ayutthaya and has an electricity-production capacity of 38 megawatts. Commercial production began on August 8.
The project deploys solar-module technology from China’s Suntech Power. Bangchak took the press to see the technology in China last week.
Shi Zhengrong, the chairman, chief executive officer and founder of Suntech Power, said the firm’s technology had been improved further, which enables the modules to provide more electrical power at a lower production cost.
The cost of producing a solar module is expected to fall to US$1 (about Bt31) per watt in the next two or three years, from between $1.20 and $1.30 at present. The cost has already dropped from $3 per watt in 2000, and was as high as $6 in 1990.
Suntech believes that in the near future, solar power will be able to compete with other power sources such as coal and without the need for state subsidy, Shi said.
Suntech sells more than 130,000 solar panels per year to customers in 80 countries. The company employs 20,200 staff and posted revenue of $2.9 billion last year.
Anusorn said that if the price of crude oil were to reach $250 per barrel, solar power could compete with conventional power without the need for state subsidy in terms of a high adder rate.
Sunny Bangchak has signed a power-purchase agreement with the Electricity Generating Author-ity of Thailand and the Provincial Electricity Authority for a combined 118MW, at the adder rate of Bt8 per unit for 10 years.
Bangchak spent Bt4.2 billion on the development of the first phase of the Sunny Bangchak project.
The second phase, costing Bt3.6 billion, will have a combined capacity of 32MW, split equally between facilities in Ayutthaya and Chaiya-phum provinces. The company is holding bids to seek constructors for this phase, which is expected to start selling electricity in December next year.
The third phase, in Saraburi, will cost Bt5.4 billion and feature another 48MW. It is expected to start selling electricity in December 2014.
The company’s board has approved a plan to invest further in solar power, expanding overall capacity to 500MW. It aims to become the country’s leader in solar-power production.
Anusorn said that as the government is considering raising annual solar-power consumption to at least 2,500-3,000MW by 2020, from the original target of 500MW within the same time scale, it should cut the adder rate for solar-power plants to Bt6.50 per unit from Bt8, or reduce the rate each year in line with declining solar-module prices.
If it reduced the rate, he added, it should also extend the adder-rate period enjoyed by plants to 15 or 20 years, from the current 10 years. The government should also seriously promote the solar-module production industry in the Kingdom to support the sector and create jobs.
A lower adder rate for a longer period would enable the government to attract those with a genuine intention to invest in the business, Anusorn said.
