Thailand Prepares to Launch First Direct Power Purchase Agreement Pilot by Year-End

Thailand’s Energy Regulatory Commission (ERC) has confirmed that the country’s first pilot project for the Direct Power Purchase Agreement (DPPA) is in its final review phase and is expected to launch by the end of 2025. The scheme is aimed at attracting international data center developers to invest in Thailand, with officials considering raising the current 2 GW trading cap if industry response proves strong.

ERC Secretary-General Poonpat Leesombatpiboon said discussions with the Ministry of Energy and the Board of Investment are ongoing, with the Third Party Access Code remaining a key issue. Under the framework, companies using the national grid would be subject to wheeling charges.

Industry stakeholders have urged authorities to accelerate liberalization of the green electricity market as global businesses move toward low-carbon and net-zero goals. Foreign data center operators have indicated their willingness to invest in Thailand if a clear DPPA policy is implemented.

Naruechon Dhumrongpiyawut, CEO of Thai clean energy firm Gunkul Engineering, said Thailand must keep pace with regional peers such as the Philippines and Taiwan, where DPPA mechanisms have been successful in attracting foreign investment.

Meanwhile, Thailand’s electricity sector faces changing dynamics. Government data showed gas-fired power generation fell 12% year-on-year as of July—the steepest decline on record—while liquefied natural gas (LNG) imports contracted for the first time since 2014. Natural gas still accounts for 56% of total generation.

According to Raksit Pattanapitoon, an analyst at Norway-based consultancy , frequent rainfall reduced extreme heat this year, curbing electricity demand. The World Bank has also forecast Thailand’s economic growth to slow to 1.8% in 2025 and 1.7% in 2026 due to weak exports, sluggish tourism recovery, and political uncertainty.

Despite these short-term pressures, analysts expect long-term electricity demand growth, supported by transport electrification and the expansion of data centers.