Government Scraps Solar, Wind Power Contracts, Slashes Rates to 2.16 Baht

Thailand's government has terminated perpetual renewable energy contracts with private solar and wind power producers, ending automatic contract renewals and cutting purchase prices to 2.16 baht per unit—matching community solar project rates.

Danucha Pichyanan, Secretary General of the National Economic and Social Development Council (NESDC), announced the decision following a meeting chaired by Deputy Prime Minister Anucha Nakasai. The committee resolved to reform electricity purchase guidelines for private renewable energy to ensure consumer fairness and reflect true production costs according to government policy.

The committee found that the main problem stems from small and very small power producer (SPP/VSPP) contracts between the state and private sector for solar and wind energy. These contracts were structured as perpetual agreements with automatic renewal periods of 3-5 years upon expiration. Original purchase prices referenced wholesale rates plus variable electricity charges (FT) exceeding 3 baht per unit, despite these facilities having no actual fuel costs since they generate power from wind and solar. The committee therefore decided to adjust rates to align with current, cheaper technology, setting the new rate at 2.16 baht per unit—the same as community solar projects. This rate will first apply to solar cell facilities, while wind power rates will be determined separately.

The committee concluded that contracts should be handled in two groups: First, approximately 515 contracts that have completed their 25-year terms with combined capacity of roughly 2,400 megawatts. These previously renewed automatically in 3-5 year increments but will now be allowed only one final renewal of the original contract period, after which they must expire. The new purchase rate will be 2.16 baht per unit.

Second, approximately 46 contracts that have received subsidies (Adder) for 10 years but have not reached their 25-year term end, with approximately 1,478 megawatts of commercial operating capacity (COD). These are considered to have recouped construction costs during the subsidy period, so remaining contract years will have their purchase rates reduced to 2.16 baht per unit. Additionally, approximately four non-COD contracts with 67 megawatts total capacity that have exceeded their COD deadline by two years without progress will be cancelled case by case.

"We haven't yet calculated exactly how much this new pricing structure will reduce electricity costs," officials stated, "but reducing the variable charge component to reflect true current costs benefits overall consumer rates. The Office of Energy Policy and Planning and the Energy Regulatory Commission are currently calculating the impact. Rate reductions may not occur immediately this period since contracts must be gradually revised between the electricity authority and private producers before taking full effect."

The committee will present these measures to the National Energy Policy Committee (NEPC), chaired by the Prime Minister, to establish formal policy before implementation and contract modifications proceed.