Thailand has issued new Community Power Plant Project Procurement Regulations detailing eligibility criteria, terms and conditions for Power Purchase Agreements (PPAs) for Very Small Power Producers (VSPPs). The new regulation is part of the Electricity Generating Authority of Thailand’s (EGAT) Energy Policy for the Local Economy.
In abidance with the current legislation on public procurement, VSPPs must not generate more than 10 MW per project, which can fall into one of the following categories: biomass; biogas from wastewater or waste; biogas from biofuel; a hybrid of biomass with biogas (wastewater or waste); and a hybrid of biogas (biofuel) with solar power.
Applicants must also post demand guarantees with the Metropolitan Electricity Authority (MEA) or the Provincial Electricity Authority (PEA). The guarantees or bonds are the following:
1. Bid Bond in the amount of THB 500 per kW of electricity offered for sale, posted by the contractor, which is either returned (in the event the applicant withdraws its bid, loses a bid or has entered into the PPA) or retained by the project owner (in the event the applicant defaults on its obligations under the tender).
2. Performance Bond in the amount of THB 500 per kW of electricity offered for sale, posted by the contractor prior to executing the PPA and returned on the Commercial Operation Date (COD).
The PPA is to be entered into by successful applicants within 120 days from the date on which the contract was awarded, lest the PPA be void and the Bid Bond forfeited, unless the failure to perform is caused by the default of the contracting authority or a force majeure event.
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