Grid tied decentralized power generation experience from thailand and tanzania
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Grid-tied decentralized power generation: experience from Thailand and Tanzania. Chris Greacen Palang Thai AEPF 9 17 October 2012 Vientienne , Lao. Outline. What is decentralized electricity? Practical policies for decentralized electricity Thailand Tanzania.

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Grid-tied decentralized power generation: experience from Thailand and Tanzania

Chris Greacen

Palang Thai


17 October 2012

Vientienne, Lao


  • What is decentralized electricity?

  • Practical policies for decentralized electricity

    • Thailand

    • Tanzania

What is decentralized electricity?

  • Decentralized electricity: generating electricity from many small, local energy sources

    • High efficiency cogeneration (CHP)

    • On-site renewable energy

    • On-site power

  • Centralized electricity: large power plants generally located far from loads

    • Coal

    • Nuclear

    • Large hydropower

    • Natural gas (CCGT)

Decentralized Technologies

The Move to Decentralized Technology



Old way

New way

Power plant

Power plant


Wind power




Energy efficient end-use, or dispatchable loads

Cost and size of thermal power plants from 1930 to 1990

  • Initial cost declines through increasing scale.

  • 1990s through mass production of smaller turbines

    Source: Hunt, Sally and Shuttleworth, Graham. Competition and Choice in Electricity. (England, John Wiley & Sons, 1996).

Decentralized generation brings down costsIreland – retail costs for new capacity to 2021

Worldwide energy waste

Electricity Generation Worldwide (TWh)

(Source: International Energy Agency 2002)

Cogeneration (Combined Heat and Power – CHP)

14 MW cogeneration at University of Massachusetts, Amherst, USA75% efficient. Provides heating for 200 buildings

Denmark – a transition to decentralized energy

Source: Danish Energy Center

CHP cools Bangkok’s airport

Suvarnabhumi International Airport in Bangkok cooled by district cooling system powered by a CHP that also generates 52.5MW of electricity.

Decentralized electricity policies and outcomes -- Thailand

Practical policies to support distributed electricity

  • Access to grid

  • Feed-in tariffs

  • Low cost financing

  • Tax incentives

Thailand’s SPP+VSPP

  • Access to grid


Technical regulations:

Allowable voltage, frequency, THD variations

Protective relays

Communication channels

Commercial regulations:

Definitions of renewable energy, and efficient cogeneration

Cost allocation

Standardized tariff determination

Invoicing and payment arrangements


  • Access to grid


+ Standardized Power Purchase Agreement (PPA)

  • Access to grid

Small Power Producer (SPP) regulations:

  • Started 1992

  • Fossil-fuel cogeneration and renewable energy up to 90 MW (export to grid)

  • Low tariff offered for “non-firm” generators made it difficult for most renewables.

Bangkok Cogen, Rayong, 115 MW

LaemChabang, Chonburi 100 MW

4494 MW online + 4152 MW with signed PPAs... 75% fossil fuel

PluakDaeng, Rayong 70 MW

Map Ta Phut Olefins, Rayong, 70 MW

Evolution of Thai VSPP regulations

  • Access to grid

  • Feed-in tariffs

  • 2002

    • VSPP regulations drafted, approved by Cabinet

    • Up to 1 MW export, renewables only

    • Tariffs set at utility’s avoided cost

  • 2006

    • Up to 10 MW export, renewables + cogeneration

    • Feed-in tariff “adder”

  • 2009

    • Tariff adder increase, more for projects that offset diesel for English version of regulations, and model PPA

  • Feed-in tariffs



Feed-in tariff policies worldwide

  • Feed-in tariffs

Revolving Fund

  • Thai Government loans funds at 0% interest to commercial banks for investment in:

    • Energy efficiency improvement projects

    • Renewable energy development and utilization projects

  • Low cost financing

11 local financial institutions have participated.

  • Max loan amount: 50 MB

  • Max. interest rate: 4%

  • Max. loan period: 7 years

January 2003 – present

7000 M Baht






A source of venture capital for ESCOs to jointly invest with private operators in energy efficiency & renewable energy projects. The program targets SMEs & small projects.

  • Low cost financing

Energy Conservation Promotion Fund


Investment Committee

Fund Manager

ESCO Venture Capital

Equity Investment

Equipment Leasing

Carbon Market

Technical Assistance

Credit Guarantee Facility


Tax Incentives

  • Tax incentives


Bangkok Solar 1 MW PV

  • Signed PPAs for 767 MW of PV (SPP + VSPP)

Lopburi 73 MW PV (over 1,000 rai = 160 hectares)

  • Project size: 1 MW

  • Uses self-manufactured a-Si

  • Signed PPAs for 767 MW of PV (SPP + VSPP)

Solar thermal electricity

  • 5 MW, 135 MW planned

  • 900 Million baht (180 baht/watt) but costs expected to decrease 20 to 30% to 135 baht/watt

  • Commissioned in Kanchanburi on Nov 2011

  • Signed PPAs for 1343 MW of solar thermal

Biogas from Pig Farms

Reduces air and water pollution

Produces fertilizer

Produces electricity

8 x 70 kW generator


Uses waste water from cassava to make methane

Produces gas for all factory heat (30 MW thermal) + 3 MW of electricity

3 x 1 MW gas generators

Korat Waste to Energy – biogas… an early Thai VSPP project

Rice husk-fired power plant

9.8 MW

Roi Et, Thailand

Feb 2007

18 MW online

Thailand VSPP Status

June 2008

Thailand VSPP Status

June 2009

Thailand VSPP Status

Mar 2010

Thailand VSPP Status

Sep 2011

1056 MW online

(58-fold increase since 2007)

PPAs signed for additional 4318 MW

Thailand VSPP Status

Solar trends in Thailand

Evolution of Tanzania SPP regulations

  • Approved by regulator August 2009

  • Up to 10 MW export, renewables & cogeneration

  • SPP Tariffs at average of LRMC and SRMC

    • Grid-connected SPP tariff (2012): $0.096/kWh

    • In rural mini-grid areas offsetting diesel (2012): $0.243/kWh

  • 3SPPs in operation, 12+ in pipeline by October 2012 English versions of regulations, and model PPAs

Policies to encourage decentralized mini-grid electricity in rural areas

  • Allow off-grid generators to pick their own retail tariff (subject to transparent regulatory approval)

    • Simple 1-page spreadsheet for regulators to do this: by World Bank for use in Africa)

Policies to encourage decentralized electricity in off-grid areas

  • Lower investment risk to mini-grid generator operators in event that “big grid reaches mini-grid” by:

    • Allowing formerly off-grid generators to sell back to the grid; and/or

    • Allowing mini-grid operators to purchase wholesale electricity for resale to retail customers.

Micro- hydropower

  • 300 kW – remote mini-grid

  • LUMAMA hydropower project

  • Mawengi village, Njombe, Tanzania

TPC, Moshi17.5 MW – selling 4 MW to main gridCogenerationSugarcane bagasse

Mwenga 4 MW hydroexpected to serve 1000 customers by Feb 2013


  • Access to grid

  • Feed-in tariffs

  • Low cost financing

  • Tax incentives

  • Remote mini-grids:

    • Flexibility in retail tariff setting

    • Reduce investment risk by working out details of what happens when “big grid” reaches mini-grid

Thank you

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