China poised to back Thailand’s move to solar

China’s foothold in producing solar panels in Thailand, as well as investing in and building solar power stations there, will be essential if the country is to continue to move away from fossil fuels with sufficient speed.

Thailand is in the midst of a policy shift toward solar projects.  In March 2021 Thailand announced it will draft a master plan to reach net zero carbon emissions. Though it has not set a date for net zero, that deadline will probably be announced in November 2021 at the COP26 UN climate talks in Glasgow.

Thailand currently only has around 3.3 MW of solar power generation installed capacity. In 2018, its energy authorities raised their 2036 target for non-hydro renewables generation in the energy mix from 20% to 30%. About half of the 29.4 GW allocated to renewables in the update was set for solar, including existing capacity and rooftop solar.

The 73-megawatt Lopburi solar power plant in central Thailand was one of the largest solar photovoltaic projects in the world when built in 2011. The project was is a Thai China joint venture .

While the country is on track to meet its goals for solar energy, these goals fall far behind what is needed to align with the Paris Agreement. 

“Thailand has become a panel production location for Chinese solar PV players – in part to address US sanctions,” says Ingo Puhl, co-founder of South Pole Group, the carbon finance consultancy. 

Chinese solar panel production companies have set up in Thailand in part to circumvent punitive tariffs by Western countries; by 2014, US tariffs on Chinese solar products were as high as 165%. Companies like Lingyi commenced manufacture in Thailand’s Eastern Economic Corridor. Each year since 2016, Lingyi has been producing photovoltaic panels with a total generating capacity of 300 megawatts. 

“This localised production capacity will help drive solar PV deployment in the region, including Laos and Cambodia,” Ingo Puhl says. “China has a substantial role in supporting the international transition to net zero in countries like Thailand.”

Courtney Weatherby,an analyst with the Stimson Centre, says “Thailand’s solar stock has slowly been rising over the last 15 years. We now see a convergence of significant price drops, clear funding and regulatory processes for solar projects.” She says “This makes a domestic boom in solar a possibility in a way that was not true 10 years ago … I wouldn’t say that China’s outsized role is a problem for Thailand, in part because China’s efficiency of scale in producing solar panels has been a key factor in making solar affordable and competitive as an alternative electricity source.”

The Talesun solar panel factory in Rayong, majority owned by the state-run Chinese Zhongli Sci-Tech Group, aimed to reach 2 gigawatts of production capacity last year. Most of these panels are exported to the US, where demand continues to grow. 

Chinese solar panels dominate the sourcing for many solar projects around the region because they’ve historically been the most affordable.

China has a hand in building some of Thailand’s most ambitious upcoming solar projects. Near the confluence of the Mun and Mekong rivers in Thailand’s east, work on Thailand’s largest floating solar plant continues apace: the hybrid hydro­–floating solar at Sirindhorn Dam is expected to be completed in June.  

Workers walk between solar cell panels over the water surface of Sirindhorn Dam in Ubon Ratchathani, Thailand April 2021.

The Sirindhorn project, according to the Electricity Generating Authority of Thailand, can replace the use of 348,000 litres of fuel oil per year, reducing CO2 emissions by 851.1 tonnes per year. The 45 MW project is being built by Thai company B.Grimm Power and China Energy Engineering Corp. The 45 MW project
is expected to be one of the largest of its kind in Thailand and there are plans to replicate the floating project at eight more dams over the next 16 years.

In northern Thailand’s Khon Kaen, work is beginning on a two-kilometre solar power station from China Gezhouba Group International Engineering, a subsidiary of China Energy Engineering Corp. The photothermal and photovoltaic hybrid station is slated to cost US$500 million and provide 90 MW. 

Even as Thailand experiences its worst outbreak of Covid-19 to date, authorities are turning to solar to deal with its coming power demand. Egat announced plans in July to increase power generation capacity at its nine floating solar farms to a total of 5GW and hopes to shorten the completion time frame for those projects, from 16 years, to between 5 and 10 years.

Source: Edited extracts from China Dialogue, 30 July 2021

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