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Thailand

Overview

Thailand’s energy transition gained momentum in 2022 with the introduction of a 5 GW Power Purchase Agreement (PPA) and Feed-in Tariff (FiT) scheme to accelerate renewable energy deployment. However, progress is constrained by curtailment risks, limited regulatory incentives, lack of long-term grid planning, and the absence of defined renewable energy targets. To fully unlock its renewable energy potential, Thailand needs systemic approach that includes supportive policies for renewable deployments, strengthened grid infrastructure, and a clear national RE roadmap, positioning the country as a regional leader in clean, affordable and secure energy. 

 

Key barriers and solutions

One major challenge is the lack of suitable incentives for distributed generation (DG), particularly rooftop solar. Despite the country’s strong solar potential, uptake remains low due to insufficient financial incentives and a regulatory environment that does not actively support small-scale or household generation. This represents a missed opportunity for a rapid, low-cost expansion of solar capacity, although it is seen as an area with high potential for positive change.

A carbon pricing mechanism such as a carbon tax could play a pivotal role in Thailand by shifting the relative costs of fossil fuels and renewables. Discussions are underway, with public consultations scheduled for 2024, but such policies have not yet been finalized or implemented.

Thailand’s power system flexibility is another significant barrier to scaling up renewables. While wind and solar are nominally designated as “must-take” sources, they are still subject to curtailment without compensation due to existing take-or-pay contracts with gas generators. This creates a structural incentive for the system operator, EGAT, to prioritize fossil-based generation over renewables. Furthermore, there are currently no robust regulatory or market-based measures to incentivize system flexibility or RE integration. Despite Thailand’s technical capacity, the lack of policy focus and awareness around flexibility options hinders progress.
In terms of grid development, while planning exists to expand the transmission network, it is largely centered on supporting large fossil fuel and hydropower projects. A comprehensive and long-term grid expansion roadmap through 2050 that aligns with RE targets and carbon neutrality ambitions is still missing.

Thailand has also not committed to a fossil fuel phase-out, with its latest Power Development Plan projecting a 41% share of gas and 7% share of coal in the electricity mix by 2037. This creates uncertainty around the role of renewables and weakens investor confidence in the long-term energy transition. A lack of phase-out strategies makes it difficult to pave a clear pathway for the replacement of fossil fuels with solar and wind.
On the target-setting and governance side, Thailand’s revised 2037 target aims for renewables to account for 51% of electricity generation, including all RE sources. While this is a step forward, the level of ambition may still fall short of what is needed to achieve carbon neutrality by 2050. Moreover, while efforts are being made to improve monitoring and reporting under the new National Energy Plan, current indicators are fragmented and do not provide a clear, consolidated view of progress toward climate and RE goals. Tracking mechanisms specific to the transition pathway remain as a part to develop.

Assessment Results

Legend: Low Barriers Medium Barriers High Barriers