Thailand introduces its first green electricity tariff – UGT1

Businesses in Thailand without their own captive renewable energy sources will now be able to buy “green” electricity from Thailand’s state-owned hydropower dams. 

On 23 January 2025 the Energy Regulatory Commission (“ERC”), together with EGAT, MEA, and PEA (“Utilities”), launched the Utility Green Tariff (“UGT”) program, allowing businesses to buy electricity generated from renewable energy sources via power purchase agreements (“PPAs”) with the Utilities. The first phase of the program, UGT1, marks a significant step in attracting multinational investment and advancing Thailand’s clean energy transition.

According to the Secretary of the Office of the ERC, the Utilities have allocated approximately 2,000 million units (kWh) of electricity per year for the UGT1 scheme. The scheme has a one-year term, commencing from the UTG1 supply date or, if starting mid-year, running until 31 December of the same calendar year. 

The first phase - hydro 
The ERC Notification on the Criteria for Service Provision and Determining the Utility Green Tariff B.E. 2566 (2023) (“Notification”) establishes two types of UGT: UGT1 and UGT2, differentiated by their electricity sources. UGT1 relies entirely on renewable power from existing state-owned sources such as hydropower dams,  whereas UGT2 (once implemented) will allow participants to select specific sources of renewables (e.g. from wind or solar), from either state-owned or private renewable generators. 

UGT1 Premium 
In addition to the standard tariff (including Ft), a private entity opting for electricity under the UGT1 scheme must pay a premium of THB 0.0594 per unit, exclusive of VAT, for electricity supplied by MEA, PEA and EGAT. As between the Utilities, MEA and PEA will pay a premium of THB 0.0527 per unit, exclusive of VAT, for electricity supplied by EGAT.

Eligibility  
UGT1 is available exclusively to specific categories of electricity users: Type 3 (Medium General Service), Type 4 (Large General Service), and Type 5 (Specific Business Service). The key characteristics of these 3 eligible user types are summarized below: 

Applicants must have no outstanding debt to the Utilities and must not be in breach of any electricity usage terms with the Utilities as at the registration date.

First-come, first-served allocation
The allocation of green electricity under UGT1 will be conducted on a first-come, first-served basis. Successful applicants will be required to enter into an addendum to their PPAs with the Utilities.

If the total monthly production of UGT1 electricity is sufficient to meet the demand of all applicants, the Utilities will allocate green electricity based on each applicant’s actual consumption, subject to a cap specified in their PPAs.

If the available green electricity under UGT1 is insufficient to meet total demand, allocation will be determined using the weighted average principle.

Renewable energy certificates 
One of the key benefits to the users of UTG1 is the acquisition renewable energy certificate (“REC”). The Utilities will issue the RECs to applicants based on their allocated or adjusted electricity amount, provided that users have fully settled the electricity fees due with the Utilities.

The issued REC will comply with the International REC Standard (“I-REC Standard”) or the Energy Attribute Certificate standard (“EAC”). RECs will be issued annually, within 3 months after the expiration of the term specified in the PPAs or as specified by the Utilities.

UGT1 Deadline, UGT2 and direct PPAs
The application period for UGT1 is set to close on 28 February 2025, as announced on MEA and PEA websites. EGAT has not yet launched a dedicated portal for UGT1 registration on its website. Following UGT1, the next phases will include the introduction of UGT2, followed by direct PPAs utilizing third party access to Thailand’s electricity grid, marking the continued development of Thailand’s renewable energy framework.

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