part 1: overview of cogeneration and its status in asia - Fire

54 Part II: Cogeneration experiences in Asia and elsewhere
The National Energy Policy Office (NEPO) has estimated the technical potential for
cogeneration in about 20 industrial estates alone to be as high as 5,000 MW.
1.3.2 Institutional initiatives and government policies
Apart from the government’s policy to encourage private sector participation in power
generation in the form of independent power producers (IPPs), the energy authorities of the
country recognize that energy generation from non-conventional energy, waste or residual
fuels, and cogeneration:
1. promotes the use of indigenous by-product energy sources and renewable energy for
electricity generation;
2. increases the efficiency in the use of primary energy;
3. encourages the participation of small power producers (SPPs);
4. reduces the financial burden on the public sector with respect to investment on electricity
generation and distribution.
The power utility has the obligation to purchase electricity from any SPP who cogenerates
using any type of fuel, meeting certain requirements. These include the type of thermal cycles
to be used, the minimum amount of thermal energy to be used from the cogeneration plant,
and the minimum overall efficiency on the basis of the type of fuel used.
Further boost has been given, through the announcement of a special power purchase price
in September 1996, to the SPPs intending to develop waste-to-energy projects. As of April
1997, 22 projects using bagasse, rice husk, wood chips, and palm oil wastes had been
accepted, with a capacity to produce 462 MW of electricity, of which 182 MW will be sold to
the power utility.
The price for purchasing electricity from SPPs is based on avoided cost of electricity. For
those signing contracts to supply a firm capacity, the purchase price is based on the long-run
avoided cost of the utility. On the other hand, there is no contracted demand for non-firm
contracts, and accordingly, there is no capacity payment. As an example, the purchase price
of electricity for a non-firm contract is 1.29 Baht/kWh whereas it can increase to 1.60
Baht/kWh in the case of a firm contract for a period of 25 years. Figure 1.2 shows the
evolution of power purchases from SPPs during the period 1994-97.
Purchased,GWh/year
1,800
1,500
1,200
900
600
300
0
Firm Non-firm
1994 1995 Year 1996 1997
Figure 1.2 Evolution of power purchases from small power producers