Cost–Benefit Analysis of Rooftop PV Systems on Utilities and Ratepayers in Thailand
Abstract
:1. Introduction
2. Background of Power Sector and Tariff Structure in Thailand
3. Methodology
3.1. Scope of Work
- Minimum cost reduction. Buyback rates are 0, 1, 2, and 2.6 (the average wholesale electricity rate) THB/kWh. Weighted average wholesale rate is from the rate at voltage level of 69–115 kV. A fuel adjustment charge (Ft) was included as of September–December 2017 (−0.0045 USD/unit for MEA and −0.0071 USD/unit for PEA). Buyback rates of 0, 1, 2, and 2.6 THB/kWh would be 0, 0.03, 0.06, and 0.07 USD/kWh, respectively (exchange rate: 35 THB/USD). An annual PV installation cost reduction is 2%. The timeframe of this analysis starts from the date of this writing (2018) to the end of AEDP (2036).
- Maximum cost reduction. Buyback rates are as above with an annual PV installation cost reduction of 4%.
- AEDP. Self-consumption only (the buyback rate is 0 THB/kWh with an annual PV installation cost reduction of 2%).
3.2. Methodology
4. Results
4.1. Net Economic Impacts on MEA, PEA, and EGAT
4.1.1. Minimum and Maximum Cost Reduction Scenarios
- −225 to −360 million USD (or approximately −1 to −2% of projected revenue in 2036 for MEA). (The negative percentages mean that the net costs are greater than the net benefits, while the positive percentages mean that the net benefits are greater than the net costs.);
- −238 to 259 million USD (or approximately −0.59% to 0.63% of projected revenue in 2036) for PEA;
- −4254 to −6537 million USD (or approximately 9 to 14% of projected revenue in 2036) for EGAT.
4.1.2. AEDP Scenario
4.2. Retail Rate Impacts
4.2.1. Minimum and Maximum Cost Reduction Scenarios
4.2.2. AEDP Scenario
5. Discussion
- The net economic impacts on utilities depend on the specific characteristics of each utility.
- With a low level of PV adoption, the net economic impacts and retail rates are minimal.
- Higher PV adoption influenced by higher buyback rates and higher PV installation cost reductions leads to higher net economic impacts and retail rates as the values of solar power decrease.
- As PV policies can help increase PV adoption and impact utilities and retail rates at the same time, it is necessary to seek a balance among the relevant stakeholders before proposing such a policy.
- There are also approaches to mitigating the impacts on utilities and ratepayers in terms of policy mechanisms, utility business models, and regulatory approaches on rate designs that require tradeoffs among the stakeholders.
6. Conclusions
Supplementary Materials
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
References
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Groups | PV System Size (kW) |
---|---|
Residential scale (RES) | 5 |
Small general service (SGS) | 5 |
Medium general service (MGS) | 100 |
Large general service (LGS) | 1000 |
Utility | Maximum Forecasts of PV Adoption (MW) | |||||||
---|---|---|---|---|---|---|---|---|
Min. Cost Reduction_0 | Min. Cost Reduction_1 | Min. Cost Reduction_2 | Min. Cost Reduction_Average Wholesale | Max. Cost Reduction_0 | Max. Cost Reduction_1 | Max. Cost Reduction_2 | Max. Cost Reduction_Average Wholesale | |
MEA | 5946 | 6066 | 6185 | 6256 | 7483 | 7618 | 7749 | 7827 |
PEA | 18,668 | 19,836 | 20,984 | 21,671 | 25,345 | 26,688 | 28,003 | 28,778 |
Total | 24,614 | 25,902 | 27,169 | 27,927 | 32,828 | 34,306 | 35,752 | 36,605 |
% PV adoption (country level; energy basis) | 9.3% | 9.8% | 10.3% | 10.6% | 12.4% | 13.0% | 13.6% | 13.9% |
Benefits | Costs | |
---|---|---|
Distribution utilities (MEA/PEA) | - Avoided Electricity Generating Authority of Thailand (EGAT) purchases =Total PV generation × Weighted average wholesale price during solar production hours. (It equals to 3.05 THB/kWh as of 2017—during solar production hours, it is mostly on-peak period on weekdays while it is off-peak period on weekends.) - Avoided cost of distribution (D) loss = Avoided EGAT purchases due to self-consumption × % Distribution line loss - Avoided cost of distribution (D) capacity = Deferred investment cost due to decreases in peak demand × % utility interest rate - Resale margin of exported PV = (Excess generation) × (Average wholesale rate − Export rate) | - Revenue loss from lower customer sales - Integration cost (For MEA and PEA, the integration costs are related to distribution system upgrades and balancing issues to accommodate PV.) |
Benefits | Costs | |
---|---|---|
Generation/Transmission utilities (EGAT) | - Avoided cost of energy = Total PV generation × % Energy mix × Fuel price × Heat rate × Value Factor - Avoided cost of transmission (T) loss = Avoided energy × % Transmission line loss - Avoided cost of generation/transmission (G/T) capacity = Deferred investment cost due to decreases in peak demand × % utility interest rate - Avoided cost of reserve = Avoided cost of G/T capacity × % reserve | - Revenue loss from fewer sales to distribution utilities (MEA/PEA) = Total PV generation × Weighted average wholesale price during solar production hours - Integration cost (For EGAT, the integration costs are related to generation and transmission system upgrades as well as balancing and power back-up issues to accommodate PV.) |
Utility | Net Economic Impacts in 2036 (million USD) | |||||||
---|---|---|---|---|---|---|---|---|
Min. Cost Reduction_0 | Min. Cost Reduction_1 | Min. Cost Reduction_2 | Min. Cost Reduction_Average Wholesale | Max. Cost Reduction_0 | Max. Cost Reduction_1 | Max. Cost Reduction_2 | Max. Cost Reduction_Average Wholesale | |
MEA | −225 (−1.34%) | −245 (−1.47%) | −268 (−1.60%) | −291 (−1.74%) | −273 (−1.67%) | −301 (−1.84%) | −330 (2.02%) | −360 (2.21%) |
PEA | 118 (0.28%) | 33 (0.08%) | −75 (−0.18%) | −220 (−0.53%) | 259 (0.63%) | 127 (0.31%) | −34 (−0.08%) | −238 (−0.59%) |
EGAT | −4254 (8.92%) | −4535 (-9.51%) | −4816 (−10.10%) | −4987 (10.46%) | −5674 (−11.90%) | −6006 (−12.60%) | −6338 (−13.29%) | −6537 (−13.71%) |
Utility | Net Economic Impacts in 2025 (million USD) | % Net Economic Impacts to Projected Revenue in 2025 |
---|---|---|
MEA | −5 | −0.05% |
PEA | 19 | 0.09% |
EGAT | −150 | −0.65% |
Year | Retail Rate Impact (USD/kWh) | |||||||
---|---|---|---|---|---|---|---|---|
Min. Cost Reduction_0 | Min. Cost Reduction_1 | Min. Cost Reduction_2 | Min. Cost Reduction_Average Wholesale | Max. Cost Reduction_0 | Max. Cost Reduction_1 | Max. Cost Reduction_2 | Max. Cost Reduction_Average Wholesale | |
2018–2022 | 0.0001 (0.1%) | 0.0001 (0.1%) | 0.0001 (0.1%) | 0.0001 (0.1%) | 0.0001 (0.1%) | 0.0001 (0.1%) | 0.0001 (0.1%) | 0.0002 (0.1%) |
2023–2027 | 0.001 (0.6%) | 0.001 (0.6%) | 0.001 (0.7%) | 0.001 (0.8%) | 0.001 (0.6%) | 0.001 (0.7%) | 0.001 (0.8%) | 0.001 (0.9%) |
2028–2032 | 0.005 (3.1%) | 0.006 (3.6%) | 0.006 (4.0%) | 0.007 (4.3%) | 0.007 (4.3%) | 0.008 (4.8%) | 0.009 (5.3%) | 0.009 (5.8%) |
2033–2036 | 0.012 (6.4%) | 0.013 (7.1%) | 0.014 (7.8%) | 0.015 (8.3%) | 0.016 (8.6%) | 0.017 (9.5%) | 0.019 (10.4%) | 0.020 (11.1%) |
Period | 5-Year Retail Rate Impacts (USD/kWh) | Change in Projected Retail Rate (%) |
---|---|---|
2018–2022 | 0.0001 (0.004 THB/kWh) | 0.1% |
2023–2025 | 0.0004 (0.02 THB/kWh) | 0.4% |
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Chaianong, A.; Bangviwat, A.; Menke, C.; Darghouth, N.R. Cost–Benefit Analysis of Rooftop PV Systems on Utilities and Ratepayers in Thailand. Energies 2019, 12, 2265. https://doi.org/10.3390/en12122265
Chaianong A, Bangviwat A, Menke C, Darghouth NR. Cost–Benefit Analysis of Rooftop PV Systems on Utilities and Ratepayers in Thailand. Energies. 2019; 12(12):2265. https://doi.org/10.3390/en12122265
Chicago/Turabian StyleChaianong, Aksornchan, Athikom Bangviwat, Christoph Menke, and Naïm R. Darghouth. 2019. "Cost–Benefit Analysis of Rooftop PV Systems on Utilities and Ratepayers in Thailand" Energies 12, no. 12: 2265. https://doi.org/10.3390/en12122265
APA StyleChaianong, A., Bangviwat, A., Menke, C., & Darghouth, N. R. (2019). Cost–Benefit Analysis of Rooftop PV Systems on Utilities and Ratepayers in Thailand. Energies, 12(12), 2265. https://doi.org/10.3390/en12122265