BANGKOK, Thailand – Earlier this week, representatives from the Thai Renewable Energy Association, also known as “RE 100,” met with Pirapan Salirathavibhaga, Deputy Prime Minister and Minister of Energy. They discussed solutions to the long-standing issue of indefinite power purchase agreements with small and very small power producers under the Adder and the Feed-in Tariff (FiT) systems. These contracts, known informally as “permanent contracts,” allow repeated 5-year renewals without an expiration date, based on a 2007 resolution by the National Energy Policy Committee.
The Adder and FiT mechanisms were originally intended to encourage private investment in renewable energy by offering financial incentives above normal electricity rates. However, the indefinite nature of these agreements has imposed a growing burden on the government and consumers, contributing to rising electricity prices.
During the meeting, the association acknowledged the issues rooted in past policy decisions and agreed with the Energy Ministry’s direction toward reform. As Chair of the National Energy Policy Executive Committee, Minister Pirapan has appointed a subcommittee to explore options for setting clear expiration terms on non-firm renewable energy contracts. The subcommittee was instructed to act swiftly and ensure that all solutions are equitable for both investors and the public.
This marks the first formal attempt to address structural flaws in the Adder and FiT frameworks. The association has expressed its willingness to collaborate with the government in finding solutions and reducing electricity costs for Thai citizens. (NNT)
