Thailand prepares to launch its first direct power purchase agreements (PPAs) for renewable energy, signaling a transformative step toward open-access electricity markets and sustainable investment.
Thailand is moving closer to implementing its first Direct Power Purchase Agreement (DPPA) framework by the end of 2025, marking a watershed moment in the country’s clean energy transition. The pilot program, overseen by the Energy Regulatory Commission (ERC), will allow renewable power producers to sell electricity directly to large corporate consumers—particularly data centre operators—under a regulated structure designed to expand access to green energy and attract high-value foreign investment.
Unlike the traditional “single buyer” model, in which the state utility acts as the exclusive intermediary, the new regime will enable private contracting between generators and corporate offtakers, using the national transmission grid under Thailand’s forthcoming Third-Party Access (TPA) Code. The National Energy Policy Council (NEPC) approved the initiative in 2024, with an initial cap of 2 gigawatts (GW) of renewable energy transactions. Eligible sources include solar, wind, hydropower, and biogas, with a second phase anticipated once regulatory and operational mechanisms are proven.
Industry players have broadly welcomed the scheme. Renewable developers such as Gunkul Engineering and multinational investors in the data-centre sector have long advocated for a clear framework enabling direct renewable energy procurement. The DPPA mechanism is expected to align Thailand more closely with international energy market practices and allow corporations to achieve their sustainability and net-zero targets within a recognized legal structure.
Regulatory Outlook
The success of the DPPA regime hinges on the finalization of the Third-Party Access (TPA) Code, which will govern grid access, wheeling charges, balancing obligations, and ancillary service fees. The ERC has confirmed that it is finalizing these rules in coordination with distribution utilities and stakeholders. The framework will also define eligibility thresholds, technical standards, and compliance obligations for both generators and buyers to ensure grid reliability and transparency.
In parallel, policymakers are evaluating whether to expand capacity beyond the initial 2-GW limit in response to sustained demand from multinational corporations. Although the Energy Policy and Planning Office (EPPO) projects a 1.6% contraction in overall energy demand in 2025 due to slower economic growth, appetite for renewable electricity among large private users remains strong, particularly in sectors prioritizing carbon neutrality and sustainability reporting.
Outlook and Commentary
The introduction of Thailand’s direct PPA framework marks a pivotal development in the country’s transition toward a more open and competitive electricity market. By enabling corporate buyers to source renewable power directly, the government is advancing both its Net Zero 2065 commitments and its ambition to position Thailand as a regional clean-energy hub.
Still, the framework’s success will depend on its execution. Clear and predictable regulations on grid access, wheeling charges, and contractual enforcement will determine investor confidence and bankability. Legal practitioners should closely monitor the forthcoming ERC notifications and subordinate TPA regulations, which will define the commercial landscape for direct PPAs.
If implemented effectively, the DPPA model could serve as a regional benchmark for Southeast Asia, combining regulatory certainty with market flexibility—and reinforcing Thailand’s position as a leading destination for sustainable, high-tech investment.