Thailand’s emerging energy storage sector

Monday 19 February 2024

David Beckstead

Chandler MHM, Bangkok


Although private power producers generate more than half of Thailand’s electricity, the wholesale market and grid operations are dominated by three state-owned utilities. As such, government procurement plays a key role in the deployment of new infrastructure.

Thailand’s grid remains heavily reliant on fossil fuels, with natural gas accounting for 57 per cent of generation and domestic coal accounting for an additional 15 per cent.[1] Renewables only account for ten per cent of overall generation, although this figure includes biofuels and waste-to-energy. Solar and wind, the two key variable renewable energy (VRE) technologies which have been facilitating grid decarbonisation around the world in recent years, only account for a total of four per cent of Thailand’s current electricity output.[2] While grid capacity is currently approximately 48.8 GW, peak demand has never exceeded 34.2 GW. Given the excess of dispatchable power generation capacity and minimal penetration of VRE sources, there has been little push for storage technologies to enable greater deployment of renewables or to provide grid balancing services.

Nevertheless, Thailand’s decarbonisation commitments in its Nationally Determined Contributions (NDCs) under the Paris Agreement have triggered new rounds of renewable energy deployment, with over eight GWp of greenfield wind and solar projects announced or in the procurement pipeline. Moreover, a revision to Thailand’s Power Development Plan (PDP) is expected in early 2024, meaning amended renewable targets are likely to be announced, allowing additional wind and solar to be procured. Indeed, based on Thailand’s Long-Term Low Greenhouse Gas Emission Strategy, released in November 2022 under the previous government, renewables are targeted at 68 per cent of output by 2040, meaning government policy foresees a significant ramping up of renewable energy deployment over the next two decades.

Some of the foreseeable opportunities in the near future are set out below.

Ground-Mounted PV Solar + Battery Energy Storage Systems (BESS)

As part of the renewable energy procurement round in 2022, the government awarded projects to 24 solar plus co-located BESS projects, with a total capacity of 994 MW. The power purchase agreements (PPAs) with the Electricity Generating Authority of Thailand (EGAT), a government utility responsible for wholesaling and transmission, will be on a semi-firm basis. This contrasts with most existing ground mounted solar projects, where the PPAs are typically a non-firm structure, where the generator does not take on any minimum availability guarantees.

The deployment of BESS is welcome because it will allow for greater deployment of VRE with reduced strain to grid infrastructure. Although co-locating BESS projects alongside grid scale solar entails a relatively straightforward contract structure, it does not significantly enhance grid stability since the new BESS projects will not be able to purchase excess power from neighbouring VRE projects. Furthermore, given the absence of links between peak and off-peak pricing which VRE-generating capacity entails, there is little room for arbitrage opportunities for operators of these BESS projects.

In terms of technology being used in these BESS projects, it appears likely that most (if not all) developers will opt for lithium-ion batteries.

Pumped hydro storage

The Ministry of Energy and EGAT have reportedly been considering the impact of deploying additional pumped storage hydropower in order to improve grid flexibility. This would align well with government ambitions to install floating solar on hydropower dams operated by EGAT, with plans to build over 2.7 GWp of floating solar capacity by 2037. Although no official policy sets out a goal for the volume of pumped hydropower currently being considered, it appears the Ministry of Energy is considering adopting plans that would allow EGAT to deploy up to ten GWh of pumped storage hydropower. Updates to the PDP are likely to establish precise targets in this regard.

Heat storage

Thailand’s current thermal power plants typically supply heat (along with power) to purchasers in neighbouring industrial estates. As the energy transition results in fewer power plants fuelled by coal and natural gas, industry will need to procure heat from alternative sources.

The US-based Rondo Energy signed an agreement with Siam Cement Group, one of Thailand’s largest industrial conglomerates, to manufacture the former’s heat batteries. In addition to being manufactured in Thailand, the domestic industrial sector presents a potentially attractive customer base.

Power sector liberalisation

Regulations in Thailand already permit behind-the-grid technologies such as rooftop solar and storage to be deployed, subject to the Energy Regulatory Commission (ERC)’s licensing regime. However, many small to medium-sized buildings are not attractive behind-the-meter developers, since excess power cannot be sold to the grid or to third parties via grid infrastructure.

The ERC has initiated a process of requiring the power utilities to develop third party access codes (TPA Codes), which would allow buyers and sellers of power to use grid infrastructure to trade at a distance. The TPA Codes are still in draft form and there is no clear timeline of when they will be approved. Once they come into force, it is likely that we will see an influx of solar and storage projects to enable purchasers, particularly businesses with decarbonisation commitments, to purchase more or all of their power from renewable sources.

Final thoughts

Energy storage is in its infancy in Thailand, and new business models are already emerging. As the regulatory framework adapts to accommodate new players in the market, we expect to see greater penetration in this area.



[1] Energy Policy and Planning Office, Ministry of Energy, electricity statistics

www.eppo.go.th/index.php/en/en-energystatistics/electricity-statistic accessed 10 February 2024.

[2] IOE. ‘Thailand’s Clean Energy Transition’, August 2023 www.iea.org/reports/thailands-clean-electricity-transition accessed 10 February 2024.