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Thailand: Maximizing Agriculture Sector for Renewable Energy

By Nanda F. Moenandar

Wednesday, 2 Dec 2015

The ASEAN Centre for Energy was pleased to have the opportunity to meet with one of ASEAN’s leaders during the 33rd AMEM. Dr Areepong Bhoocha-Oom, newly appointed as the Senior Officials on Energy (SOE) Leader of Thailand per October 1, 2015, agreed to share his views on renewable energy (RE) efforts in Thailand and his aspirations for the ASEAN Member States (AMS).

Q: According to the new power development plan (PDP) 2015-36, the proportion of renewable energy (RE) as a resource to produce power will rise to 20% from the current 8%. What are your government’s approaches to meet this target?

A: First of all, our RE definition is not the same as that of ASEAN’s. Ours does not necessarily include hydropower. We have 10% for hydro while 20% is for alternative energy like solar, for example. So with the ASEAN RE definition, our targets are 20% for alternative energy plus 10% for hydro.

In regards to the target, Thailand’s problem is that we have been importing other sources of energy. So the strategy is if we can produce our own energy from our agricultural products or free energy from the wind and the sun, it means that we do not have to spend our money on importing fossil fuels. This is a strategy that ASEAN countries can benefit from because the money spent on fossil fuels will enrich the agricultural sector.

We approach RE efforts differently in Thailand. Thailand is concentrating on growing food and creating more value to it. For instance, we can use different parts of tapioca for food and the parts we don’t eat we use it for RE fuel. There is an added value to the product, and it gives more income to farmers. This kind of project will be developed across the country and will benefit communities of farmers. Energy is a source of income that does not fluctuate like agricultural products. If we are to buy RE from a community of farmers, the price will be based on a contract plan that is fixed for say, 20 years. That way, those farmers will have a stable income. So the benefit of this kind of RE for the whole country is; not only we save our money from importing fossil fuels, we spend it on our own people. This is a strategy that I think other AMS should pursue.

What is difficult with RE is that we cannot buy it every day like we buy oil, so we have to make investment return feasible. We must have a stable supply of RE fuels, in this case, we are talking about agriculture-based products, so it can be from sugar, wood chips, etc. We must have a 20-year contract to be able to return the investment. This has allowed us to realize 70 to 80 agricultural RE projects last year. What we grow for RE fuels depends on each region. In the north, we have plenty of corns, so we grow corns for fuels there. In the eastern part, we got a lot of rice and tapioca so we use them there. Also, we look at agricultural policy per region, then we just improve upon that. Again, I’d like to emphasize that the most important thing in our approach is to best utilize everything we already have.

Q: What other measures does the government take to support those approaches?

A: We have a plan of 20 years with which we focus on 2 categories: RE from agricultural products and RE from non-agricultural products like wind and solar.  We have been doing these 2 categories since the beginning. And to this day, as you see in the ASEAN Energy Awards, Thailand has been leading in the number of Awards received every year, especially in RE and energy efficiency (EE). In RE programmes, we give incentives to producers, higher than to fossil fuels producers. We give agricultural RE investors at least a 12% return with a 20-year fixed-price contract. If the project goes well, bankers will not hesitate to lend money to them, while they gain more knowledge on the sector. Then investments will come and get in line with other similar projects. So sources of energy are secured. This cycle, in consequence, closes the gap of prices between RE and fossil fuels each day.
Moreover, by doing pilot projects, we accumulate knowledge. And that knowledge helps us in minimizing the risks in RE management, like risks from investment, risks from unclear regulations, etc. By minimizing these risks, private sector starts to apply for new projects.

Q: How do you view your role as Thailand’s appointed Senior Officials on Energy (SOE) Leader in the efforts to meet that target?

A: I like this position because energy is very important for Thailand. Energy, food and water are the country’s drivers for a sustainable economy. These days, investors look into Thailand and one of the major things they look at is the cost of energy. Through the 20-year energy plan that we pursue, they would see the potentials for energy cost in Thailand to be comparatively far below other AMS’. That is why I see being a SOE Leader is an interesting task for me; I have to make the energy sector to be able to attract future investments in Thailand.

Q: As Thailand’s SOE Leader, what are your aspirations for the RE cooperation with ASEAN?

A: First of all, we have to think that ASEAN borders start to fade away. That way, we can connect with each other in developing energy plans. For example, the northern part of ASEAN has a lot of hydro sources while the southern part has a lot of fossil fuels. If we can connect the two, that would benefit us. Thailand is cooperating on a bilateral level with Myanmar & Cambodia to develop RE programmes. This means we develop together. Collectivity is key. Resources from neighbouring countries could complement our own resources, so we reduce costs together, like in the concept of RE integration market, for example. When we have different resources for RE in different countries, then we can integrate RE production lines. For instance, Indonesia has palm oil while Thailand has good refinery, then we produce together. So we build the value chain of this industry together. If one AMS has a good amount of certain materials, we can try to develop it together to become an energy product.

However, in terms of ASEAN cooperation, we have come quite far. We do need to focus together as AMS. Setting goals together like this here (the 33rd AMEM, Kuala Lumpur, October 5-9, 2015) is very useful. I think the 7 programme areas (set in the ASEAN Plan of Action for Energy Cooperation 2016-2025) are all important things that will soon be realized in ASEAN.

The views, opinions, and information expressed in this article were compiled from sources believed to be reliable for information and sharing purposes only, and are solely those of the writer/s. They do not necessarily reflect the views and opinions of the ASEAN Centre for Energy (ACE) and/or the ASEAN Member States. Any use of this article’s content should be by ACE’s permission.

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