Thailand seeks more biomass power to curb reliance on costly LNG

Ministry reviews tariffs for existing plants

Thailand’s energy minister, Eknat Promphan, has backed negotiations to bring more existing biomass capacity into the power system as the country seeks to reduce its exposure to expensive imported liquefied natural gas. Siam Rath reported that biomass operators told the minister on July 23, 2026 that the current feed-in tariff of 2.28 baht per unit was insufficient to support operations, after earlier projects had benefited from an Adder premium.

The ministry’s proposed approach focuses on plants that have already been built. Their tariff would not include the capital cost of constructing a new facility because equipment, boilers and grid connections are already available. Instead, negotiations would consider retrofit expenses, operation and maintenance costs, and an appropriate biomass fuel price. Fuel costs reportedly vary from 2.60 to 3 baht per unit between plants, while the minister also referred to a baseline of about 2.50 baht or more.

Idle capacity could support firm generation

According to the biomass association, Thailand has approximately 3,000-3,500 MW of installed biomass capacity, but only around 1,800 MW is currently supplying the grid. Some capacity dropped out after contracts expired, while some industrial plants, including sugar mills, chose to consume their electricity internally when grid purchase prices were uneconomic.

The ministry wants to determine how much of the remaining capacity can operate on a firm basis, with reliable commitments throughout the year. The plants could reduce output to 70% during daylight hours, when solar generation is abundant, and increase it to 100% at night. Biomass is less flexible than gas, but it can provide continuous power for 24 hours, compared with about 4 hours a day cited for solar generation.

Emergency electricity is currently purchased at 2 baht per unit, which the association said did not cover biomass fuel costs. Operators proposed a price above 3 baht to encourage plants to restart and displace LNG immediately. The government said purchases would depend on efficiency, reliable output and a price acceptable to both the state and consumers.

LNG prices strengthen the biomass case

Natural gas supplies as much as 60% of Thailand’s electricity generation, with imported LNG accounting for approximately 25-30% of that gas. The national power development plan assumed an LNG price of roughly $9-10, but overseas instability pushed the price as high as $20, according to Siam Rath. The ministry therefore considers domestic biomass potentially cheaper during periods of elevated LNG prices and a way to retain more spending within Thailand.

The Energy Policy and Planning Office and the Department of Alternative Energy Development and Efficiency accepted the proposal in principle. Officials will examine actual available capacity, technical conditions and an appropriate FiT without waiting exclusively for the next power development plan. A working group, including 1-2 representatives from the biomass association, is expected to compile plant-level information.

Many facilities are very small power producers of around 9.9 MW and are distributed across the country. The association estimates that more than 200,000 workers, transport operators and farmers are connected to the sector. Greater use of agricultural residues could support rural income and reduce open burning associated with PM2.5 pollution. The minister nevertheless said renewed contracts should cover only efficient, environmentally responsible operators and warned plants not to burn waste when agricultural fuel is scarce.