As multiple impacts of climate change become more severe worldwide, including in Thailand, the need for an energy transition becomes ever more paramount. To that end, the latest draft of the Power Development Plan (draft PDP2024), which was unveiled in June, is touted by the Ministry of Energy as being consistent with Thailand’s goals of reaching carbon neutrality by 2050 and net zero by 2065 — goals that already lag behind those of most countries.
Earlier in this space, Rapeepat Ingkasit, my colleague from Climate Finance Network Thailand (CFNT), has summarised the reasons we believe that draft PDP2024 is not only failing to bring Thailand closer to its climate goals but also risks increasing the economic, social and environmental costs. This is due to the draft plan’s preference to bet on as-yet expensive and unproven technologies such as carbon capture and storage (CCS) and hydrogen, as well as large hydropower projects in Laos, which have already incurred significant social and environmental costs, instead of rapidly scaling up proven renewables such as solar which has become cost competitive with fossil and even hydropower.
Fair Finance Thailand, a coalition comprising research company Sal Forest and four local civil society organisations (CSOs) that share an interest in advocating more sustainable banking policies and practices in Thailand, published a research report in 2023 titled “Developing Thailand Taxonomy that is in line with Just Energy Principles”. Part of our research methodology involved conducting interviews with policymakers, energy and financial regulators, energy companies, energy experts, and CSOs to encapsulate what a “just energy transition” should look like in Thailand’s context.
Simply put, an energy transition is “just” when it ensures that no one is left behind or bears undue burden in the transition to a low-carbon society. The conclusion we gleaned from stakeholders interviewed for the 2023 report is that a “just energy transition” in Thailand should have three major characteristics. Unfortunately, draft PDP2024 is poised to bring us farther away from a just energy transition, not closer, when comparing its content to these three characteristics.
The first characteristic of a just energy transition in Thailand is fair compensation for fossil-related industries. Every stakeholder group agreed that workers in the fossil industry should be assisted in the transition to new jobs in the green economy. There are still differing opinions on how, how much, and even whether existing fossil companies should be compensated for the early retirement of their fossil-fired power plants.
Draft PDP2024 is silent on this debate because it gives no timeline for fossil phaseout. On the contrary, the plan still envisions adding 6,500 megawatts of new gas power plants, resulting in gas accounting for 41% of total energy production in 2037.
The second characteristic of a just energy transition in Thailand is the topic on which most stakeholders agree: the need to reform both energy governance and energy market structure to be fairer and more accountable to the public.
In the eyes of most stakeholders we interviewed, this entails opening up the grid for third-party access (TPA), liberalisation and decentralisation away from the current centralised Enhanced Single Buyer (ESB) system, and a rapid scaling up of prosumer solutions such as solar rooftops.
On this point, draft PDP2024 is either silent or regressive. Although it touts that Thailand will have 51% renewables by 2037, in detail, such “renewables” largely comprise big-ticket items such as buying electricity from large hydropower projects in Laos (15% of total energy production, or close to one-third of all renewables), SMR nuclear, solar farms, and floating solar.
While the previous energy development plan six years ago (PDP2018) includes solar rooftops, draft PDP2024 removes any mention of this. The planners seem to focus on preserving and prolonging the current centralised system as much as possible instead of laying the necessary groundwork for a decentralised and distributed renewables-first system that is much fairer and more beneficial to the public.
The last characteristic of a just energy transition in Thailand is promoting renewable energy that is socially and environmentally responsible. This characteristic arises from the concern of experts and CSOs that many companies in Thailand increasingly pronounce themselves “green” only because they manage to lower carbon emissions, even though their activities still cause significant pollution or environmental harm. Therefore, they call for renewables that are socially and environmentally responsible.
Draft PDP2024 is also worrisome on this point. Over one-third of renewables, or 15% of total energy production, will come from large hydropower projects in Laos, while the plan stipulates 3,500MW of new production.
This target is set even though electricity from older Laos hydropower projects is much cheaper, less socially and environmentally harmful (since the cumulative impact occurred long ago), and Thailand is already renewing power purchase agreements with such projects on a regular basis.
There is, therefore, no conceivable reason for PDP2024 to support the construction of new hydropower projects in Laos that are more expensive, potentially more socially and environmentally damaging, and incur higher risks of lower-than-expected production due to climate change — compared with better alternatives such as scaling up the adoption of solar rooftops across the country.
As long as the planners behind the draft PDP2024 do not seriously take heed of the imperatives of a “just” energy transition and mounting net zero pressures, their plan will trap Thailand for decades to come under the spell of a powerful fossil lobby and an archaic centralised system that has no place in a low-carbon economy.
Without a truly “just” energy transition, hidden costs, higher prices, higher inequality, and the loss of economic competitiveness will surely entail. It is the Thai populace and economy at large that will pay the ultimate price.
First Published on the Bangkok Post
