Backing for Thailand’s renewable energy strategy

Supportive policies, such as feed-in tariffs and programmes that promote investments, have played a key role in encouraging the growth of solar energy in Thailand, propelling the Kingdom to its current position as the largest producer of solar energy in Southeast Asia.
“The bond market will play a crucial role in this transformation. Interest in solar-powered electricity generation and the consequent funding needs could ignite demand for power bonds in Thailand,” highlights Chong Van Nee, RAM’s co-head of Infrastructure and Utilities Ratings.
Thailand had an installed power-generating capacity of 38.8 GW as at end-December 2015. Notably, the Kingdom still relies heavily on natural gas, which fuels two-thirds of its electricity generation. As part of its fuel-diversification strategy, the government has proposed to reduce natural-gas-powered generation by increasing its dependence on renewable energy, particularly solar, as well as coal. Despite some softness in the Kingdom’s economic performance amid a slew of political and structural challenges, demand for solar power remains robust; Thailand’s solar power capacity expanded almost 5 times to 1.3 GW between 2011 and 2014.
RAM has published a commentary on the Thai power sector, “Powering Ahead with Solar Energy”, as part of its Asean Power Series. The commentary analyses the sector’s industry structure, regulatory landscape, capacity and fuel-supply situation, the key players and how these are influencing the sector’s growth and infrastructure funding.