Thailand outlines energy transition towards Net Zero economy
Energy Minister Akanat Promphan highlights the new PDP 2026, biofuel subsidies, and renewable power plans to balance industrial growth with green goals.
- Thailand aims to achieve a Net Zero economy by 2050 by balancing three key factors: affordable energy prices, environmental goals, and national energy security to reduce reliance on imports.
- The strategy involves supporting biofuels and a gradual transition to electric vehicles (EVs) to protect its existing automotive industry while reducing oil dependency.
- A new Power Development Plan (PDP) targets approximately 60% clean energy by 2050, driven by simplified solar rooftop regulations, increased household electricity buy-back quotas, and support for wind and biomass.
- The government is managing the massive energy demand from new sectors like data centers through policies such as power reservation deposits and cost-based electricity rates to avoid burdening the public.
Energy Minister Akanat Promphan said at the "Energy Transition: Transitioning Thai Energy to a Low-Carbon Economy" seminar, hosted by Thansettakij under the topic "Thai Energy Direction and PDP 2026 Progress", that discussions on energy transition often focus solely on electricity.
However, it must not be forgotten that oil remains a crucial fuel driving the economy, given Thailand's strategic location connecting the region.
Both the industrial and transport sectors rely on it, with logistics and oil serving as key national costs.
In the future, the world may view Data Centres and artificial intelligence (AI) as the new fuel, but currently, the government must manage oil, electricity, and Data Centres/AI simultaneously.
Three factors driving Net Zero 2050.
Regarding the challenges and the Net Zero 2050 target, the Thai government is committed to achieving Net Zero by 2050, or in the next 25 years.
Three key factors must be considered:
- Price: Requiring the cheapest oil and electricity as industrial costs.
- Environment: Clean energy aligning with global trends.
- Energy security: Driven by geopolitical uncertainty, such as the conflict between the US and Iran affecting the Strait of Hormuz.
Currently, Thailand imports more than 90% of its crude oil and relies heavily on imported gas (LNG and from Myanmar) for electricity generation.
Therefore, international crises directly impact Thailand.
Strategy to reduce Middle East oil imports.
Akanat added that regarding the biofuel strategy and the automotive industry's adaptation to reduce oil imports from the Middle East, the government supports biofuels such as ethanol and biodiesel.
Although import prices might occasionally be lower, using biofuels circulates money among Thai farmers and business operators.
Price subsidies: The Oil Fuel Fund is utilised to make E20 and B20 cheaper than base oil by THB5 to incentivise public use.
Automotive industry: Thailand has been a major production base (Detroit of Asia) for 30-40 years, with a 90% domestic supply chain.
Transitioning to 100% electric vehicles (EVs) immediately could affect the existing manufacturing base.
Thus, a balance must be maintained, striving to be the "Last Man Standing" for combustion engine vehicles alongside hybrid development.
New PDP extending 25 years.
Meanwhile, the clean energy plan and the new Power Development Plan (PDP) will extend 25 years to 2050 to align with the Net Zero target, aiming for approximately 60% clean energy.
Solar rooftop is the cheapest method as it involves self-generation and consumption.
The government has cancelled the Factory 4 (Ror.Ngor.4) permit requirement for rooftop installations to reduce complications.
It aims to process self-use installation permits within seven days, or within 30 days for selling power back to the grid.
Announcing increased household electricity buy-back Quota expansion: An increase in household electricity buy-back will be announced, rising from 90 megawatts to 500+500 megawatts.
Direct PPA (a free power market) will allow industries to purchase clean electricity directly through the state electricity grid, with fees adjusted to be appropriate and competitive.
Alternative energy: Both wind and biomass will be supported.
These can generate electricity 24 hours a day and help create income for Thai farmers, replacing the import of LNG, which has volatile prices.
Data Centres require nearly 30,000 megawatts.
Akanat also noted that under the Data Centre strategy and electricity costs, there is currently a demand of nearly 30,000 megawatts from Data Centres, representing a massive investment.
The government has the following management guidelines:
Power reservation deposit: Preventing verbal reservations by requiring advance deposits to fund power grid development.
Electricity rates (UGT 2): Setting appropriate prices based on actual costs, especially for imported LNG, to avoid burdening the public.
Public lighting costs: A policy to remove public lighting costs from citizens' electricity bills to make electricity cheaper, with the government taking direct responsibility.
Progressing towards Net Zero is not merely an environmental issue but also about increasing Thailand's competitiveness in the global market.
This requires a clear direction, a firm intent, and cooperation from all sectors to turn the energy crisis into a national opportunity over the next 5-10 years.
