Estimation of marginal abatement subsidization cost of renewable energy for power generation in Thailand

Abstract

Thailand has steadily increased the use of renewable energy as a result of the Alternative Energy Development Plan (AEDP), intends to promote renewable energy production and consumption in all sectors which caused impacts to greenhouse gas (GHG) emission mitigation, in addition to reducing the fossil energy imports from other countries. Renewable energy accounts for 15.51% of total final energy consumption in Thailand in 2020, reducing carbon dioxide emissions by 36.73 million tons. It is commonly used in the form of electricity, which is accounted for 24.2% of total renewable energy consumption, second only to heat. However, because renewable energy power generation has a relatively high cost, the Thai government has designed subsidization schemes to increase financial interest. This research focuses on estimating the marginal abatement costs (MAC) of subsidizing power generation from renewable energy in Thailand, through Feed-in Tariffs (FiT) and direct subsidy schemes, which includes (i) natural type (solar energy, wind power, and hydro energy), and (ii) bio-renewable type (biomass, biogas, and MSW) from 2013 to 2018. MAC is widely-recognized as an important economics instrument for policymakers to prioritize greenhouse gas mitigation measures and shape up the policy decision to set up appropriate relevant mechanisms in the medium and long term. We found that MAC results are ranging from 5,740.19 to 8,472.59 THB/tCO 2eq for solar energy, from 6,437.66 to 6,979.21 THB/tCO 2eq for wind power (all scale), from 4,415.00 to 4,786.39 THB/tCO 2eq for small hydro energy, from 4,862.13 to 7,820.28 THB/tCO 2eq for biomass, from 3,050.92 to 8,087.03 THB/tCO 2eq for biogas, and from 5,635.57 to 10,682.50 THB/tCO 2eq for MSW while the actual GHG mitigation from those activities were 19.84 MtCO 2eq in 2019, mainly from bio-renewable type.