Thailand’s energy storage market lags despite renewable push and upstream manufacturing support

It is therefore vital to examine Thailand’s current electricity generation to assess the development of renewable energy and the potential role of energy storage.  

The county’s goals are based on its Power Development Plan (PDP) 2018, and while a 2024 version was drafted, it was not finalised. With a new government, discussions of an updated plan could resurface, making renewable energy even more prominent. 

Thailand’s Alternative Energy Development Plan 2018 aimed for renewable energy to account for 30% of final energy consumption by 2037.  

The draft PDP 2024 expanded renewable energy plans, stating an aim of adding 35GW of renewable energy capacity by 2037 (24 GW from terrestrial solar). 

For energy storage, the PDP 2024 targeted a 10GW/10.5GWh of operational battery storage and 3.5GW of pumped hydro energy storage.  

This article mainly centres around the state-owned Electricity Generating Authority of Thailand (EGAT), which plays a crucial role in the electricity market, being the largest power producer, in addition to the transmission system owner and operator.  

Capacity and Generation 

Figure 1: The contracted generating capacity of EGAT has been falling from the ongoing move away from fossil fuel power plants in addition to the increased electricity generation from private players.  

Source: Electricity Generation Authority of Thailand 

As of December 2025, EGAT had 16.235 GW of generation capacity across 56 power plants (3 thermal, 10 combined-cycle, 1 diesel, 30 hydropower, 11 other renewable energy, and 1 pumped-storage hydropower). Thailand is still heavily dependent on natural gas, with combined-cycle power plants making up 51% of EGAT’s generating capacity. This is followed by thermal at 23% then hydropower at 19%.  

The share of renewable energy has remained around the same level (25%) since 2020; this includes the capacity of the Lamtakong Jolabha Vadhana pumped-storage hydropower plant. However, it is only a slight improvement from a decade prior, where non-fossil fuel-based capacity was only around 22%. Hydropower remains the dominant source of renewable energy generation; however, capacity from other sources (namely solar, wind, and geothermal) has been increasing, rising 23% from 2020 to 2025.  

The total generational capacity is roughly evenly split between regions; however, the Western region has the highest share of hydropower at 62%, whereas the Central region has the highest share of combined-cycle capacity at 50% across its five plants. 

In addition to generating its own electricity, EGAT has contracted generating capacity from Independent Power Producers (IPPs), Small Power Producers (SPPs) as well as importing power from Laos and Malaysia. In 2025, the share of owned contracted capacity was only 32%, a noticeable decline from the 40% share in 2015. 

Figure 2: The share of EGAT-generated electricity is generally on the decline, falling from 41% in 2014 to 30% in 2024. 

Source: Electricity Generation Authority of Thailand 

The share of renewable energy, including from pumped-storage hydro, generated by EGAT has increased from 7% in 2020 to 10% in 2024. However, generation from natural gas still accounted for the majority at 67%, and energy from solar and wind, from both EGAT generation and purchased power, contributed only around 2% of Thailand’s energy mix that year. 

In 2024, EGAT purchased electricity from 13 IPPs, all of which utilised fossil fuels as a power source. Despite not purchasing any energy generated from fuel oil from IPPs in 2024 and a 96% decline in diesel oil energy purchases, energy purchases from bituminous coal and natural gas increased 34% and 20% respectively, marking a total increase of 18% of IPP energy purchases. 

Energy from renewable or partially renewable sources accounted for 21% of purchases from SPPs in 2024, up from 15% a decade prior. The majority of capacity was purchased from biomass (10%), followed by wind (6%). Of the nine projects Thailand purchased from Lao in 2024, eight were from hydropower plants, and the remaining one was a thermal power plant. 

In December 2025, the share of generation from renewable sources (excluding Laos, Malaysia, and Lamtakong Jolabha Vadhana pumped-storage hydro plant) was 20.58% of total electricity generation in EGAT’s system. 

Future Plans 

To aid in the renewable energy transition, EGAT has plans to develop floating solar projects across nine dams, totalling 2,725MW. 69MW has already been completed, the latest being the 24MW Hydro-Floating Solar Hybrid at Ubol Ratana Dam that entered operation in 2024.  

With increased electricity demand, the grid faces further pressure. There are upgrade plans in the works, notably the Transmission System Renovation and Expansion Project, with phase 1 initially scheduled to have been completed in 2025. Transmission line length has been increasing, rising 22% from 2015 to 2025, and during the same period, 25 substations were added. Recently, work has primarily focused on the 115 kV and 500 kV lines, and 2025 saw 200.52 circuit km of additional 115 kV lines. 

Gulf Energy, Thailand’s largest IPP, has also been making strides in developing renewables in the country. The company have already completed 12 solar and co-located solar and battery projects totalling 649 MW and has plans for three more to be completed in 2026 that would bring the capacity to 843 MW.  

In early 2026, a THB60 billion loan (US$1.9 billion) was secured with Asia Development Bank for the investment in these sites along with the planned 12 industrial waste-to-energy power projects. Gulf has utilised overseas financing in its renewable energy projects prior to this with Japan’s Joint Crediting Mechanism scheme. 

Thailand’s power capacity reserve margin has historically remained well over the 15% minimum target, which could have delayed significant strides in new renewable energy plants. To achieve the country’s clean power goals, incentives have been put in place, notably tax exemptions and Feed-in Tariffs (FiT). The FiT scheme introduced in 2022 had a procurement quota of 5203 MW, with a majority of PPA capacity (2632 MW) allocated to ground-mounted solar.  

Solar co-located with BESS received a higher rate of 2.8331 Baht/kWh compared to stand-alone solar, which received a rate of 2.1679 Baht/kWh.  

Regarding behind-the-meter (BTM) applications, adding batteries remains economically unfeasible for a large proportion of projects. However, this could change in the coming years if battery prices continue their decline.

Upstream 

Battery storage has been encouraged by the Thailand Board of Investment (BOI and the incentives for BESS manufacturing, with A1 to A3 privileges based on the components manufactured in the country. 

A1, A2 and A3 are categories of investment incentives for foreign businesses, and A1 brings the highest level of tax incentives.

This is potentially to help increase cell production and encourage interest from overseas companies looking to expand manufacturing overseas. For more information regarding battery manufacturers, please refer to the Battery StorageTech Bankability Ratings Report. 

Conclusion

Thailand’s energy landscape is still evolving as it tries to keep up with the renewable energy shift. While other ASEAN countries like Vietnam and the Philippines are accelerating their adoption of battery storage through new revenue frameworks and bidding programs, Thailand’s policies are still lagging behind.  

The lack of peer-to-peer electricity trading and additional revenue streams does not present the most attractive landscape for developers.

However, the 2GW direct power purchase pilot project set to start this year, targeting data centres, states a requirement for the power producers to only use renewable energy sources and could subsequently drive an uptick in interest in storage.