Infrastructure & PPPs in Thailand - Q4 2022 Update
YOG INFRA Q4 2022 insights
THAILAND has seen notable project development activities in clean energy transition, including solar, wind, hydrogen projects. For instance, 10GW is planned to meet electricity demand for increased adoption of EVs across the country. We also see continued investments by international players, due to a conducive regulatory PPP framework.
Read more about key developments in Infrastructure and PPPs in the country in our latest insight.
THAI ELECTRICITY REGULATOR TO OFFER POWER PURCHASE CONTRACTS
Thailand's Energy Regulatory Commission (ERC) is planning to select developers from whom to buy renewable power. Agencies are preparing selection criteria, grid operators will buy power from companies licensed to build renewables plants.
The government aims to set up 5.2 GW of renewables between 2022 and 2030, accounting for 50% of the country's total electricity generation, up from around 10% in 2021.
AIR LIQUIDE THAILAND TO BUY RECs FROM B.GRIMM POWER
France’s Air Liquide has committed to buying renewable energy certificates (RECs) from Thailand-listed B.Grimm Power. The RECs — generated from solar, wind, hydro, and biomass sources — represent a significant portion of the renewable energy used by the gas producer’s Thai unit.
Air Liquide expects the move to help it supply low-carbon industrial air gases to customers looking to meet their carbon dioxide reduction targets, as well as decrease its own emissions substantially.
CONSTRUCTION COMMENCES ON THE 9,400-KM-LONG ASIA DIRECT CABLE
Philippines-based PLDT Incorporated has commenced construction on the 9,400-km-long Asia Direct Cable (ADC) between Southeast and East and Asia. Work on the subsea cable network is scheduled to be completed by the end of 2023. The ADC will cover the Philippines, Singapore, Hong Kong, Japan, Vietnam, Thailand and China.
The cable network will have a minimum of 200 G dense wavelength-division multiplexing (DWDM) design, allowing it to provide at least 36 TBps of additional network capacity for the delivery of hyperscale data. The network will complement Pangilinan Group’s three landing stations in the region that are scheduled to come online over the next 3 years, including the Apricot cable system. Once operational, the ADC and the Apricot cable systems will increase international network capacity from the existing 60 Tbps to over 130 Tbps.
THAI DEVELOPER SEEKS DEBT FOR USD 42 Mn WTE PROJECT
Thai power developer Tha Chang Green Energy is negotiating with domestic and international lenders to debt finance a 10 MW waste-to-energy (WtE) project in the Samut Sakhon province. The Tha Chin Community Waste Power Plant is expected to cost up to THB 1.5 Bn (USD 42 Mn) and will be financed through a mix of 70% to 75% debt and equity. The company is talking to more than three financial institutions.
Tha Chang won the right to build, own and operate the WtE development with a 25-year project implementation time-frame.
The project will generate power from municipal solid waste and aims to start construction in the first quarter of next year. It is expected to start commercial operations, providing revenue to Tha Chang by the year 2025. The project will agree a power purchase agreement (PPA) to sell about 8 MW of the electricity generated from the project.
Including the Tha Chin WtE project, Tha Chang is currently in negotiations for a PPA for four WtE projects in Thailand with a total estimated generation capacity of 32 MW and is also in negotiations with lenders to finance the other three projects.
CIP AGREES THAI WIND POWER JV WITH GPSC
Thai electricity generator Global Power Synergy (GPSC) has signed a joint venture agreement with Denmark's Copenhagen Infrastructure Partners (CIP) to develop a portfolio of wind projects in Thailand. GPSC, a unit of Thai oil and gas company PTT, will own 51% equity in the joint venture while CIP's unit CI NMF I Cooperative will hold the remaining. The duration of the joint venture agreement is two years. It will cover both onshore and offshore wind projects in Thailand.
Joint venture will follow Thailand's regulations for purchasing electricity from renewable energy sources under a feed-in-tariff (FiT) scheme between 2022-2030 for plants with no fuel costs, which is a total of 1.5 GW for wind.
RENEWABLES PRODUCTION NEEDS TO INCREASE BY 10 GW TO MEET EV DEMANDS IN THAILAND
Thailand’s Ministry of Energy (MoE) has announced that renewable energy (RE) production needs to be increased by 10 GW to meet demands of electric vehicles (EVs) across the country. Currently installed RE capacity in Thailand is 9 GW, making up 14 per cent of its total power mix.
The Government of Thailand is targeting to deploy 1 Mn EVs by 2025, and 15 Mn by 2032. The government is also pushing to increase EVs’ share in the country’s total domestic car manufacturing to 10 per cent as soon as possible.
ACWA POWER SIGNS DEAL FOR A USD 7 Bn GREEN H2 PROJECT IN THAILAND
Saudi Arabia-based ACWA Power has signed a memorandum of understanding (MoU) with PTT Public Company Limited (PTT) and Electricity Generating Authority of Thailand (EGAT) to develop a USD 7 Bn facility in Thailand to produce green hydrogen and its derivatives. The proposed facility can produce around 225,000 tonnes of green hydrogen annually which will be used for both domestic consumption as well as for export to other countries.
The partners will now proceed with a feasibility study for the project and work to devise a comprehensive plan for the production process. The project will support Thailand’s goal to become carbon neutral by 2050 and achieve net zero emissions by 2065.
THAI DEVELOPER'S 30 MW WIND POWER SALE RECEIVES REGULATORY APPROVAL
Thailand's Energy Regulatory Commission (ERC) has approved the sale of electricity from renewables projects to be built by the clean energy subsidiary of local telecommunications company Bliss Intelligence.
Bliss Innovation, a unit of the Bangkok-listed company, plans to sell power to Thai state authorities from six wind projects with a combined capacity of 30 MW at a proposed feed-in tariff of THB 3.1014 (USD 9 cents) per kWh.
The wind power projects will be located at Waritchaphum, Sawang Daen Din, Khok Si Suphan and Phanna Nikhom districts in Sakon Nakohn province. The approval is in line with the ERC's recently issued regulations to establish Thailand’s feed-in-tariff regime for the sale of electricity from renewables projects to state electricity authorities till 2030.
The ERC will announce a qualified technical readiness process in January next year and successful projects will be announced. Bliss, engaged in the business of telecommunications and infrastructure solutions, imports and distributes telecom equipment in Thailand.
THAILAND LAUNCHES HIGHWAY PPP TENDER IN TOURIST DESTINATION PHUKET
The Expressway Authority of Thailand (EXAT) has called for proposals from developers to build a THB 14.7 Bn (USD 423 Mn) elevated highway project.
The project involves constructing a 4 km toll road linking Tambon Kathu district to the popular beach resort town of Patong in Phuket province. Patong can only be accessed via a mountainous route as of now. The EXAT will spend six months assessing bids and will announce the winner later.
Construction of the Kathu-Patong expressway is scheduled to start in 2024 with a target commissioning date in 2027. About THB 5.8 Bn of the total cost will be required for land acquisition, to be provided and taken up by the government. The remaining 8.9 Bn, to be spent on construction, will need to come from the concessionaire. The concession period is 35 years and the contract will be awarded in the build, operate, transfer model. The toll will be priced at THB 15-125, depending on the type of vehicle.
AIRPORTS OF THAILAND TO LAUNCH TENDERS FOR TWO MAJOR EXPANSION PROJECTS IN 2023
Airport of Thailand (AOT) plans to launch tenders for two major expansion projects at the Suvarnabhumi and Don Mueang International Airports in 2023. The expansion projects will be key in meeting the surge in passenger traffic at Bangkok’s two airports. Bidding is scheduled for Q1 of 2023 with construction set to begin in 2024.
The two airports recorded traffic of around 3 Mn passengers during October2022, compared with average monthly traffic of about 1.2 Mn during the first 9 months in 2022. The new passenger terminal at Suvarnabhumi International Airport will cost USD 290 Mn to build and will be opened for service in 2028. AOT is also seeking bidders for works on the third phase of Don Mueang Airport’s expansion project, which has a budget of USD 1 Bn.
A construction plan is set to be submitted for approval to AOT’s board of directors in March 2023 which will then be presented to the National Economic and Social Development Council for endorsement.
List of Transactions - Thailand Q4 2022
Source: Inframation, YOG INFRA analysis
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