Civil law system with common law influences Thai, English, ethnic and regional dialects


  • Ease of Doing Business Report 2013: 18 out of 185 (down 1 ranking)
  • Global Competitiveness Index 2013: 38 out of 144 (up 1 ranking)
  • Index of Economic Freedom 2013: 61 out of 177 (down 1 ranking)
  • Corruption Perceptions Index 2012: 88 out of 176 (down 8 rankings)
69.5 million Upper middle $8,360


The Kingdom of Thailand became a constitutional monarchy in 1932. It was known as Siam until 1939 and was the only country free from colonial takeover in South East Asia. Numerous military coups have occurred throughout the country's modern history. The most recent coup ousted Prime Minister Thaksin Shinawatra in 2006. Since then, lengthy and violent street protests from supporters and opponents of the Thai Government have sporadically paralysed the capital, Bangkok. Despite this political unrest, and major flooding of large areas of Thailand in 2011, it remains one of the more advanced economies in South East Asia. Thailand's King Bhumibol Adulyadej is the longest serving Monarch in the world and is widely revered in Thailand. The current Prime Minister is Yingluck Shinawatra, the sister of former Prime Minister Thaksin Shinawatra.


  • Thailand is heavily reliant on energy imports, notably oil and gas. In 2011, imported natural gas provided over half of the country's energy needs, with domestic natural gas providing about one-quarter of primary energy supply.
  • Electricity consumption has grown by 3.3% per year for the past five years.
  • A rural electrification program instigated in the 1970s has resulted in 98% electrical coverage in households throughout Thailand.

Generation, distribution and transmission

  • The Power Development Plan was introduced in 2007. The plan stopped the practice of developing centrally- managed major power plants and sought to enhance competition in the power generation sector through Independent Power Producers (IPPs), Small Power Producers (SPPs) and Very Small Power Producers (VSPPs). There are over 150 active SPP and VSPPs generating 4.7GW of energy in Thailand. The IPPs, SPPs and VSPPs sell electricity to the Electricity Generating Authority of Thailand (EGAT).
  • The plan envisages large hydropower, nuclear energy and fossil fuel sources as the dominant contributors to meet Thailand's growing electricity demand.
  • There are a number of energy-related state enterprises that regulate and control the electricity industry:
    • EGAT, a state-owned company, controls 60% of generation capacity as well as the entire transmission system (the remainder of generation is supplied by IPPs like the Electricity Generating Company (EGCO) and the Ratchburi Electricity Generating Holding Public Company Ltd (RATCH)).
    • EGAT is the single purchaser of electricity that is generated in Thailand. In 1998, it was privatised when the Government sold most of its shareholdings in EGCO and sold a power station to RATCH. Further privatisation has been controversial, with labour union protests effectively preventing further privatisation in 2004.
    • EGAT sells electricity to two retail suppliers, the Metropolitan Electricity Authority (MEA) for Bangkok and the Provincial Electricity Authority(PEA) for areas outside Bangkok. MEA and PEA have a monopoly in coordinating retailing activities and distribution.
  • The Ministry of Energy (MoE) oversees all other government bodies in the sector, including the:
    • National Energy Policy Council (NEPC), which is comprised of cabinet members who prepare guidelines for the implementation of the energy program which are then administered by the National Energy Policy and Planning Office;
    • Department of Alternative Energy Development and Efficiency;
    • Department of Energy Business;
    • Department of Mineral Fuel, which regulates the business of exploration and exploitation in oil and gas activities in Thailand;
    • Energy Regulatory Commission, which regulates the activities of operators in the electricity sector and enforces the Energy Business Act 2007. It is chaired by the Prime Minister; and
    • Energy Conservation Centre of Thailand, which provides technical expertise and services to promote energy conservation.

Electricity laws

  • The Energy Industry Act 2007 governs and regulates energy business in Thailand. Among its regulatory purview, the Act seeks to allow more participation in the energy sector by private enterprises. The broad ambit of this Act is contained in section seven, which provides for the promotion of adequate and secure energy services, protection of energy consumers, promotion of competition, fairness and efficiency.
  • Additionally, the Act:
    • gives a number of powers to the Energy Regulatory Commission, such as the capacity to grant licences;
    • sets out the procedure for setting of tariffs by the Minister of Energy (with the consent of the NEPC); and
    • has provision for a Power Development Fund to support the electricity sector.
  • The National Energy Policy Council Act 2008 (as amended) establishes the NEPC and its powers. It also sets forth qualifications of members of the NEPC.


  • Thailand is considered to be the leading renewable energy provider in South East Asia.
  • The Thai Government was one of the first countries in the region to develop incentives for renewable energy generation. In 1992 for instance, Thailand introduced the SPP Program and in 2001 introduced the VSPP Program, which both offered incentives for renewable energy power plants.
  • Despite the interest of large utilities in maintaining the status quo in Thailand's electricity market, the goal of renewable energy policy is to shift the country from a reliance on large utilities to a decentralised model comprising renewable energy projects.
  • By the end of 2011, over 260 renewable energy plants were operational under the SPP and VSPP schemes, with a generating capacity of roughly 1 GW.
  • Around US$1.5 billion was invested in renewable energy in Thailand in 2011.

Alternative Energy Development Plan (2012 to 2021)

  • The MoE's 10 year Alternative Energy Development Plan (2012 to 2021) (AEDP) was approved by the Thai Cabinet on 30 December 2011. The AEDP replaced the Renewable Development Energy Plan (2008 to 2022) (REDP).
  • The AEDP establishes more aggressive objectives, with renewable energy consumption targeted at 25% of total energy consumption by 2021 (the REDP target was 20.3%). This amounts to approximately 9.2GW from alternative energy sources, composed of:
    • 1.2GW of wind energy;
    • 2GW of solar energy;
    • 1.608GW of hydropower (mini/micro);
    • 3.63GW of biomass energy;
    • 600MW of biogas energy;
    • 160MW of waste energy;
    • 2MW of tidal energy; and
    • 1MW of geothermal energy.


  • Like wind power, hydropower has great potential in Thailand, however it has been underutilised to date. There is an estimated capacity of 700MW, with just 56MW installed as of 2008.

Wind energy

  • Just 7.28MW of a potential 1.6GW of wind power generation has been developed.
  • Central, western and coastal regions of Thailand have been investigated as possible turbine sites.

Solar energy

  • The north and north-eastern regions of Thailand receive an average of six to eight sunshine hours per day, making Thailand an attractive destination for solar PV projects.
  • It is estimated that Thailand has the capacity to generate 50GW of solar power.
  • Thailand has several companies involved in manufacturing solar cells and modules using imported wafers, as well as several companies who assemble imported cells into modules. Nonetheless, the majority of domestic solar projects use imported equipment.

Geothermal energy

  • There are currently 64 geothermal resources in Thailand, predominantly in the northern regions of the country.
  • The geothermal industry however, will not contribute significantly to Thailand's renewable energy target. A geothermal target of just 1MW by 2021 underlies the reliance on other sources of renewable energy.

Biomass energy

  • There is an estimated capacity above 4.4GW for biomass.
  • Thailand had 1.61GW of installed biomass capacity in 2008.


  • The Energy Development and Promotion Act 1992 gives the Department of Energy Development and Promotion broad powers to regulate production, transformation, utilisation and conservation of energy sources.
  • The Energy Conservation Promotion Act 2007 promotes the efficient use of electricity.


  • Significant increases in renewable energy production and investment are limited by resource constraints, a lack of grid connections for renewable generation sites (it is estimated that roughly half of Thailand's renewable energy capacity is connected to the grid), a complex bureaucracy and political instability.
  • Energy security is a major issue in Thailand. The country is reliant on natural gas imports from countries like Myanmar, as well as hydropower imports from Laos. The cost of energy imports is estimated to represent about 12% of the country's GDP. This reliance, coupled with growing electricity demand, has created a strong impetus for increasing domestic energy production through renewable energy.
  • Interim renewable energy targets under the REDP show that solar and biogas production were well ahead of their respective targets. Wind, hydropower and biomass energy, however, were well below their targets. Analysts have accordingly noted the lack of a balanced renewable energy portfolio in Thailand.
  • Media reports suggest that the MoE may revoke the licences for 700MW of approved solar projects as the Ministry believes that only 1GW (of the 3GW of approved solar projects), will actually come online. It is reported that ultimately, the MoE plans to revoke 2GW of solar licences given this prediction.


New feed-in tariff scheme

  • A new feed-in tariff scheme commenced from March 2009, and introduced an additional tariff to the price of power sold to the grid.
  • The tariff will be in place for seven years; however, solar and wind tariffs will last for 10 years.

Corporate Income Tax Exemption for Sale of Carbon Credit (2009)

  • The Board of Investment Promotion (chaired by the Prime Minister) and the Revenue Department provide a corporate income tax exemption for three consecutive years on the profit derived from the sale of carbon credits of a Certified Emission Reduction (CERs)project or a Voluntary Emission Reduction (VERs)project, as certified by the competent authority prior to, or in 2012.

Power Development Fund

  • This fund allows the Energy Regulatory Commission to promote renewable energy from funds sourced by electricity tariffs.

The Board of Investment

  • The board allows an eight year corporate income tax exemption for manufacturing solar cells, generation of alternative source energy, manufacturing of energy saving machinery or renewable energy equipment and machinery and energy service consulting firms who provide consulting services on the use or installation of energy-saving machinery and equipment.
  • A Board of Investment certificate grants foreign companies who make a "major investment" under the Investment Promotion Act a number of benefits, including permission to conduct a "restricted business" as defined under the Foreign Business Act, to bring in foreign skilled workers, permission to own land (not normally allowed for foreigners), exemption on import duties and reduction of corporate income tax at the expiry of any applicable eight-year exemption for corporate income tax.


  • REC has announced that it will deliver 72MW of solar panels in the construction of six solar farms in Nakhon Pathom and Suphan Buri provinces. Yanhee EGCO Holdings will own and operate the solar projects. REC has 82MW of installed or pipeline capacity as of June 2013.
  • Thailand's largest solar power project is run by Solar Power Co., Ltd. The project involves the construction of 6MW of solar facilities at 34 different sites, predominantly in north-eastern Thailand.
  • Natural Energy Development Co's 84MW Lopburi Solar Project was completed in May 2013.
  • Suntech Power Holdings Co. Ltd will supply 9.43MW of solar panels and technical support for the second phase of a 44MW solar power plant just outside Bangkok.
  • Thai Solar Energy Co. is South East Asia's only solar thermal energy producer. The company plans to spend more than US$447 million over the coming years to develop projects with a total capacity of 135MW.
  • Wind Energy Holding Co. is planning to develop three wind power plants north of Bangkok. The proposed project would generate 270MW of electricity and be valued at US$550 million. Another US$400 million, 270MW wind farm is currently being developed.
  • The Fang District geyser field in Chiang Mai has a 0.3MW binary-cycle geothermal plant in operation.
  • The Asian Development Bank has contributed funding to a number of solar projects in Thailand. Recently it announced lending of US$85 million to Solarco for three solar plants with total capacity of 57MW.


  • The Foreign Business Act of 1999 (Foreign Business Act) has superseded the earlier Alien Business Law of 1972. The Foreign Business Act divides foreign investment into three categories:
    • category one businesses, which are absolutely prohibited from foreign ownership unless a special exception is granted;
    • category two businesses, those businesses which were foreign-owned prior to the Foreign Business Act. Such businesses were permitted to apply for a special Alien Business Licence. Foreigners who now wish to start a Category Two business must gain Ministerial and Cabinet approval; and
    • category three businesses, which are similar to Category Two businesses, except the granting of an Alien Business Licence is at the discretion of the Director General rather than the Minister/Cabinet.
  • An alien business licence will have conditions attached to it, such as a minimum capital input into Thailand.
  • The Foreign Business Act sets out a number of sectors and activities in which foreign capital is limited to less than a 50% stake.


  • Thailand ratified the United Nations Framework Convention on Climate Change in 1995 and the Kyoto Protocol in 2002. Thailand does not have any binding emissions reduction targets as it is a "developing nation", however, it has indicated that it will aim to reduce current levels of "energy intensity" by 25%.
  • Thailand is a member of the Asia Pacific Energy Research Centre and also the Association of South East Asian Nations, which includes a regional integration of power networks.

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