WIND ENERGY DEVELOPMENT IN THAILAND · • 8 VSPP PPAs signed with PEA/MEA and achieved COD, with...

3155095_1 memo re wind energy development in thailand-v14-070219_(3155095_1).docx 1

7 February 2019

WIND ENERGY DEVELOPMENT IN THAILAND OVERVIEW On January 23, 2019, the National Energy Policy Council (NEPC) approved much-anticipated revisions to Thailand’s Power Development Plan (PDP). The revised PDP, which will cover a period from 2018 to 2037, reportedly contains several targets which are likely to raise the interest of private investors. The updated PDP has been forwarded to the Cabinet for its consideration. Once approved by the Cabinet, the updated PDP will take effect immediately without any additional formalities. The finalized version is expected to be released to the public in the coming months. The PDP is part of the government’s long-term strategic blueprint for energy development and is generally updated every 3-4 years. Previous revisions have occurred in 2012 and 2015. The PDP outlines government policy priorities, and allows the Energy Regulatory Commission (ERC) and government-owned utilities to implement concrete regulations and development plans. Number of Wind Projects1 Currently, 15 wind projects have achieved COD in Thailand with a total selling capacity of 459.65 MW. Information from ERC’s website as of 3 April 2018. They include:

• 9 SPP PPAs signed with EGAT, with a total selling capacity of 556 MW, as follows:

No. Name of Project Installed Capacity Selling Capacity

COD

1. Khao Kor Wind Power, Phetchabun 60 60 05/08/16 2. K R 2, Nakornratchasima 103.50 90 08/02/13 3. Chaiyaphum Wind Farm, Chaiyaphum 80 80 16/12/16 4. Wayu Wind Farm, Nakornratchasima 50 50 29/12/16 5. First Korat Wind, Nakornratchasima 103.50 90 14/11/12 6. Watabak Wind, Chaiyaphum 60 60 24/12/16 7. EA Wind Had Kang Han 3 (Project 1)

Songhla 36 36 03/03/17

8. EA Wind Had Kang Han 3 (Project 2) Nakhon Sri Thammarat

45 45 10/06/17

9. EA Wind Had Kang Han 3 (Project 3) 45 45 23/06/17

1 Based on information published in ERC’s website as of 3 April 2018, which the last update by EGAT was on 14/03/2018,

PEA on 16/03/2018 and MEA on 07/12/2017.


Nakhon Sri Thammarat

• 8 VSPP PPAs signed with PEA/MEA and achieved COD, with total selling capacity of 29.4 MW.

• 1 Wind Farm Project developed and operated by Department of Alternative Energy

Development and Efficiency, with total selling capacity of 0.250 MW. Increased Investment in Renewables under the new PDP The PDP calls for significant increases in investment in renewable energy sources. The previous PDP envisioned an increase in generating capacity of approximately 15 GW between 2014 and 2036; in the updated PDP, an additional 20 GW of renewable generating capacity will be added between 2018 and 2037. This should encourage more private small-scale investment. The Electricity Generating Authority of Thailand (EGAT) will reportedly work with the Provincial Electricity Authority (PEA) in developing “smart cities”, This may form the foundation for a long-term overhaul to the transmission grid. Supreme Administrative Court’s Decision regarding Wind Farm Development on Agricultural Land Reform Office Land (“SAC Decision”) On 26 January 2017, the Administrative Court read the decision of the SAC under Black Case No. Or.1203/2556, Red Case No. Or. 1728/2559 to revoke the resolution of the meeting of Chaiyaphum Agricultural Land Reform Committee No. 4/2552, held on 23 September 2009. According to the court case, 10 residents of Ban Rai Sub-District and the Association of Lawyers for Environmental Protection filed a lawsuit with the Administrative Court against (i) the Director-General of Agricultural Land Reform Office (“ALRO”), (ii) the Chaiyaphum Agricultural Land Reform Committee (“Chaiyaphum ALRO”) and Thepsathit Wind Farm Co., Ltd. as the first (1st), second (2nd) and third (3rd) defendants respectively. The SAC upheld the Administrative Court’s decision to revoke the Decision No. 4/2552. ALRO permits the business of electricity generation by wind power (wind turbine) for a lease term not to exceed 27 years under the Notification of Agricultural Land Reform re Rules on Prescription of Term for Lease, Utilization under the Regulations of the Agricultural Land Reform Commission Re Rules, Procedures and Conditions for Granting of Approval and Compliance by Approval Grantee in Relation to the Utilization of Land or Immovable Property for Business in Support of or Related to Agricultural Land Reform dated 27 June 2000 as amended by Notification (No. 2) dated 3 May B.E. 2553 (the “ALRO Notification”). This ALRO Notification was issued by virtue of the provision of Section 9 of Regulations of the Agricultural Land Reform Commission Re Rules, Procedures and Conditions for Granting of Approval and Compliance by Approval Grantee in Relation to the Utilization of Land or Immovable Property for Business in Support or Related to Agricultural Land Reform B.E. 2541 which was issued by virtual of Section 30 Paragraph 5 of the Agricultural Land Reform Act B.E. 2518 (“ALRO Act”). Section 30 Paragraph 5 of the ALRO Act provides as follows:

“In addition to allocation of land to a person under (1), (2) and (3), ALRO shall have the power to allocate land or immovable property to any person to lease, hire-purchase, purchase or utilize for use in other activities that support or are related to land reform as prescribed in the notification of the Minister of Agriculture and Cooperatives published in the Government Gazette, according to the size of holding of land deemed appropriate by the Board, which


must not exceed 50 rais. The rules, procedure and conditions for granting permission or for compliance by the person granted permission shall be as specified by the Board with the approval of the Council of Ministers.”

The SAC made a decision based on the view that in order for ALRO to allocate ALRO land to any person for other activities that support or are related to land reform, it must be the activities that related to the purpose of agriculture land reform whereby the local farmers in that area should benefit from such activities directly. However, the purposes for generating electricity by wind power (wind turbine) by the third defendant include the sale of electricity directly to the Electricity Generating Authority of Thailand (“EGAT”), in order to make a profit from the third defendant’s wind project. It should not be considered as a business related to the living conditions of the agriculturists economically and socially in the land reform area according to item 1.5 of Notification of Ministry of Agriculture Re Prescription of Other Businesses in Support of or Related to Agricultural Land Reform under Section 30, Paragraph Five, of Agricultural Land Reform Act B.E. 2518, as amended by Agricultural Land Reform Act (No. 3) B.E. 2532 (No. 2). Effect of SAC Decision The SAC Decision will result in the revocation of Decision No. 4/2552 which specifically relates to the area in Ban Rai Sub-District, Thepsathit District, Chaiyaphum Province and the granting of an approval to Thepsathit Wind Farm Co., Ltd. to use ALRO land by way of lease agreement for the operation of electricity generation by wind power (wind turbine). It will not automatically revoke other resolutions approved by local ALRO for other area that have already been designated for electricity generation by wind power (wind turbine) and approved other companies to lease ALRO land for that purpose. It is uncertain how the Governmental Authorities, including ALRO, would deal with the SAC Decision. However, on 30 March 2016, news reports from Bangkokpost indicates that “the Agricultural Land Reform Office (Alro) said Wednesday that 16 wind farm projects located on Sor Por Kor government land are legal and can continue as planned.” (See news article at: http://www.bangkokpost.com/news/general/1223656/alro-clears-wind-farm-development) BACKGROUND AND HISTORY 1. Energy Regulatory Commission

The Energy Industry Act B.E. 2550 (A.D. 2007) was published and became effective in December 2007. It established a new regulatory regime for electricity and natural gas businesses. One of the purposes of the Act was to restructure the energy industry management by separating policy making, regulation, and operating functions. It provided for the establishment of the Energy Regulatory Commission, whose members have been appointed, and the Office of Energy Regulatory Commission. Operators of energy businesses must obtain several licenses from the Commission. The types of licenses required depend on nature of operation and size of production capacity or distribution capacity. Royal decree, regulations, and notifications to implement the Act have been published. The Commission is responsible for the prevention of abusive use of monopoly power and protection of energy consumers and those adversely affected by the energy industry operation.

2. Policies re Renewable Energy

On 26 December 2006, the National Energy Policy Committee (“NEPC”) approved EGAT purchasing power from generators using renewable energy, and instructed EGAT to revise its

http://www.bangkokpost.com/news/general/1223656/alro-clears-wind-farm-development

http://www.bangkokpost.com/news/general/1223656/alro-clears-wind-farm-development


regulations for purchase of power from SPPs using renewable energy. On 28 January 2009, the Cabinet approved a 15-year Renewable Energy Development Plan (“REDP”), and on 9 March 2009, the NEPC approved additional tariff “adders” for certain categories of alternative energy. The announced goal was for renewable energy to constitute up to 20% of total energy consumption by 2022. On 30 November 2011, the NEPC approved a 20-year energy conservation plan (2011-2030) under which energy consumption by the industrial sector, large-scale business buildings, small business buildings, and residential hours and transportation sector will be reduced. NEPC also approved a 10-year 25% Alternative Energy Development Plan 2012-2021 (“AEDP”) to replace the 15-year REDP. During the 14th ASEAN Summit in Thailand 28 February – 1 March 2009, the meeting recognized the challenge of climate change, and agreed to cooperate on energy security, ASEAN energy cooperation, and development of renewable and alternative energy. The Department of Alternative Energy Development and Efficiency (“DEDE”) is responsible for implementation of the alternative energy plan. See its website at www.dede.co.th. On 23 August 2011, the Prime Minister presented the Policy Statement of the Council of Ministers, which included:

“3.5.4 Support the production, use, research and development of renewable and alternative energy sources, with the objective of replacing 25% of the energy generated by fossil fuels within the next decade. Comprehensive development of the energy industry will also be promoted.”

On 16 July 2013, the NEPC approved two policies to promote solar power: feed-in tariff rates for solar PV rooftop and solar PV community ground-mounted systems.

3. EGAT Regulations

On 18 April 2007, EGAT announced Regulations for the Purchase of Power from Small Power Producers exclusively for the generation from renewable energy. SPPs can obtain information from the Power Purchase Agreement Division, EGAT. The Regulations (as amended in 2009) can be found at www.ppa.egat.co.th/Sppx/b4.2.htm. The Regulations cover the following subjects:

A. Objective of Power Purchase from Small Power Producers B. Enforcement C. Characteristics of the Power Generating Processes of SPPs D. Electrical System Standards of SPPs E. Procedures and Consideration Principles of Power Purchase from SPPs F. Conditions of the Power Purchase from SPPs G. Power Purchasing Point and Connection Point H. Costs Incurred for SPPs I. Conditions of the Power Generating Operation and the Maintenance Shutdown of

SPPs J. Principles of the Tariff Determination for the Purchase of Power from SPPs K. Failure to Comply with the Power Purchase Agreement (PPA) L. Performance Security for Compliance to the Power Purchase Agreement after the

Commercial Operation Date M. Bill Settlement Conditions N. Damages to the Power System

http://www.dede.co.th/

http://www.ppa.egat.co.th/Sppx/b4.2.htm


O. Problems Arising from Compliance with the Regulations and Power Purchase Agreements

P. Amendments to the Regulations Q. Solution to the Problems Arising from Compliance with the Regulations for

Synchronization of Generators to the Power Utility System, the Power System Interconnection Criteria and the SPP Grid Code

EGAT published standard forms of PPAs including Model Non-Firm Agreement (Renewable, without Supporting Fuel (Khor. 1), with Adder) (See Attachment No. 1.)


4. PEA Regulations In 2006, PEA announced Regulations for the Purchase of Power from Very Small Power Producers for the Generation Using Renewable Energy (“Regulations”). On 20 May 2008, PEA has issued the Notification re: Prescription of Increment of Power Purchase Price for Renewable Energy Very Small Power Producers. The Cabinet at its meeting on 24 March 2009 approved and acknowledged the resolution of the NEPC at its meeting No. 2/2009 (No. 124) held on 9 March 2009 re: Proposal to Improve the Guideline for Promotion of Power Generating from Renewable Energy by prescribing the period and purchased power capacity eligible for increment of power purchase price, adjustment of rate of increment of power purchase price for renewable energy power producers classified according to the type of technology and fuel, and revision of Regulations For Purchase of Power. PEA also published standard forms of PPAs including Power Purchase Agreement for the Purchase of Power from a Very Small Power Producer (for the Generation using Renewable Energy). See Attachment No. 2. Features of PEA’s PPAs signed after 19 August 2009.

• 5-year term, renewable without limit • Requirement for a bank guarantee of Baht 200,000 per MW • Delay LDs for delays exceeding 60 days in achieving SCOD: 0.33% of guaranteed

amount per day 5. Carbon Market Financing

There is a growing market for carbon market finance. Thailand established a Designated National Authority (“DNA”) to manage CDM projects, currently the Thailand Greenhouse Gas Management Organization (“TGO”). According to information available from TGO’s website as of 16 October 2015, 222 letters of approval for CDM projects have been issued, there are 153 registered Thai CDM projects, and 54 projects have been certified. The TGO is drafting the rules for a carbon fund. It would provide low interest rate loans for CDM, and purchase carbon credits from project developers for sale to the international carbon trading markets (latest data posted in DNA website).

6. Adder Policy

On 19 August 2009, PEA issued the Notification of the Provincial Electricity Authority re: Prescription of Increment of Power Purchase Price for Renewable Energy Very Small Power Producers (up to 10 MW) under the Resolution of the NEPC dated 9 March 2009. For wind energy with total capacity less than or equal to 50 kW (<= 50 kW), an adder of Baht 4.50 per unit was prescribed, for ten years from COD. For wind energy with total capacity of more than 50 kW, an adder of Baht 3.50 per unit was prescribed, for ten years from COD. The special adder for 3 southern most provinces (Yala, Pattani, and Narathiwat) of Baht 1.50 was also prescribed. On 15 January 2010, EGAT issued the Notification re Prescription of Increment of Power Purchase Price for Renewable Energy Small Power Producers (10 MW ≥ 90 MW).. For wind energy, an adder of Baht 3.50 per unit was prescribed, for ten years from COD. The special adder for 3 southern most provinces (Yala, Pattani, and Narathiwat) of Baht 1.50 was also prescribed.


On 5 April 2010, EGAT issued a notification suspending receipt of applications for sale of power from wind project. On 29 October 2010, EGAT issued a notification which lifted the suspension for wind projects. On 9 April 2010, PEA issued a notification suspending receipt of applications for sale of power for wind projects. On 22 September 2010, PEA issued a notification which lifted the suspension for wind projects. On 20 July 2010, the Thai Cabinet approved resolutions of NEPC adopted on 28 June 2010, including NEPC’s guidelines for coordination and follow-up of promotion of renewable power production in compliance with the policy, and establishment of a committee comprising representatives from such related agencies of MoE and NESDB, and to approve a Feed-in Tariff system. On 30 March 2011, EGAT issued the Notification re Prescription of Increment of Power Purchase Price for Renewable Energy Small Power Producers in order to amend the EGAT Notification dated 15 January 2010 and to approve the special increment of power purchase price (Adder) for renewable energy projects from Small Power Producers that located in the areas of four Districts in Songkla Province, namely, Jana District, Thepa District, Nathawi District and Saba Yoi District, that sell the electric to the system under the Regulations for the Purchase of Power from SPP. For wind energy, an adder of Baht 3.50 per unit was prescribed, for ten years from COD. The special adder for four Districts in Songkla Province of Baht 1.50 was also prescribed.

On 12 April 2011, PEA issued the Notification of the Provincial Electricity Authority re: Prescription of Increment of Power Purchase Price for Renewable Energy Very Small Power Procedure Under the Resolution of the NEPC Dated 25 November 2010 in order to amend the PEA Notification dated 19 August 2009 and to approve the special increment of power purchase price (Adder) for renewable energy projects from Very Small Power Producers that located in the areas of four Districts in Songkla Province, namely, Jana District, Thepa District, Nathawi District and Saba Yoi District, that sell the electric to the system under the Regulations for the Purchase of Power from VSPP. For wind energy with total capacity less than or equal to 50 kW (<= 50 kW), an adder of Baht 4.50 per unit was prescribed, for ten years from COD. For wind energy with total capacity of more than 50 kW, an adder of Baht 3.50 per unit was prescribed, for ten years from COD. The special adder for four Districts in Songkla Province of Baht 1.50 was also prescribed.

7. Prohibition of amendments to PPAs

The Committee on Management of Measures for Promotion of Renewable Power Production, appointed under the National Energy Policy Board, No. 1/2554 on January 26, 2011, (No. 6), instructed the three power authorities to issue a notification prohibiting a change in or amendment to PPAs with renewable energy projects applying for (i) a change in the quantity of the power energy offered for sale, (ii) relocation of the power plant, or (iii) a change in the production technology. EGAT issued such notification dated 14 March 2011.

Attachment:

(1) EGAT Model Non-Firm PPA (Renewable, without Supporting Fuel (Khor. 1), with Adder) (2) PEA standard form of VSPP PPA (renewable energy). (3) “Update on Wind Energy Developments in Thailand”, Dr. Twarath Sutabutr, Deputy DG of

DEDE on 4-5 June 2012.


Attachment 1

(Translation)

MODEL NON-FIRM AGREEMENT (Renewable, without Supporting Fuel (Khor.1), with Adder)

Electricity Sales Agreement No. ………………………

Between

………………… Co., Ltd. and the Electricity Generating Authority of Thailand

________________ This Electricity Sales Agreement is made at the Electricity Generating Authority of Thailand on ……………………, between ………………………. Co., Ltd., represented by …………………………….., title ……………………., with office located at no. ……. ………………………….………………………………………………………….., hereinafter referred to as the “Company”, of the one part, and the Electricity Generating Authority of Thailand, represented by ………………………., title: Governor of the Electricity Generating Authority of Thailand, with office located at no. 53 Moo 2, Charansanitwong Road, Tambol Bang Kruai, Bang Kruai District, Nonthaburi Province 11130, hereinafter referred to as “EGAT”, of the other part. Both parties agree to purchase and sell electricity under the following conditions: 1. Application and Termination of Agreement 1.1 This Agreement shall become effective on the date of its signing by both parties and its term

shall commence from the month in which the Company sells electricity to EGAT and last for a period of 5 years. Before the term of the Agreement expires, if any party wishes to renew the term, that party shall notify the other party in writing at least 30 days before the expiration of the Agreement, and this Agreement shall be renewed for 5 years each time.

1.2 If any party fails to comply with any provision of the Agreement, the other party shall give a

written notice to that party to remedy, failing which the other party shall be entitled to terminate this Agreement.

1.3 The following attachments hereto shall be deemed part hereof:

1.3.1 No. 1 Electricity Tariff

1.3.2 No. 2 Regulations on Connection to Power Network System of EGAT (in case of connection of power network system to EGAT, add “and Regulations on Use of Services of EGAT’s Power Network System”).

1.3.3 No. 3 Regulations on Connection of Power Network Systems, Regulations on Use of Power Network System Services and Regulations on Operation of Power Network System of the Metropolitan Electricity Authority or the Provincial Electricity Authority (in case of connection to Power Network System of the Metropolitan Electricity Authority or the Provincial Electricity Authority).

1.3.4 No. 4 Power Generation Process Data Form.


1.3.5 No. 5 Notification of EGAT re: Prescription of Adder for the Purchase of Electricity from Small Producers of Power from Renewable Energy.

Where a provision of an attachment is contrary to or inconsistent with a provision of this Agreement, the latter shall prevail. In case of contradiction between the provisions of the attachments themselves, the Company shall present the matter to the Energy Regulatory Commission (ERC) for decision.

2. Action Required prior to Purchase and Sale of Electricity 2.1 The Company shall prepare the environmental impact analysis report (as required by law) and

shall produce the approval and the analysis report to EGAT at least 5 business days before the date of signing of the Electricity Sales Agreement. The Company shall produce to EGAT the certificate of permission for construction of the plant to install power generators, the license for generation of electricity from the ERC, the environmental licenses and other licenses required by law at least 10 business days before the Commercial Operation Date.

2.2 The Company shall submit in writing to EGAT the steps of test runs for the generators and the expected date of commencement of synchronization of generators to the systems of the Power Utility for EGAT’s consideration and approval at least 60 days before the commencement date of the synchronization of the generators.

2.3 The Company and the Power Utility shall jointly determine procedure for electricity

distribution, daily communication procedure, electricity turning off, daily energy volume report, instruction procedure, keeping records of electrical data of each generating unit, distribution of reactive energy, and names of coordinating officers of both parties.

2.4 The Company shall notify the date on which the Company intends to commence the sale of

electricity to EGAT in writing at least 30 days in advance, and EGAT reserves the right to determine the Commercial Operation Date as may be technically justified.

2.5 If the Company is unable to commence the sale of electricity within 12 months from the

scheduled commercial operation date (SCOD) under Clause 4.1, it shall be deemed that this Agreement is terminated.

2.6 The Company shall enter into a backup power purchase agreement to purchase backup power

from the Power Utility before the Commercial Operation Date by not less than one-third of the installed capacity less the volume of capacity sold into the system of the Power Utility, and the Company shall produce such backup power purchase agreement to EGAT at least 10 business days before the Commercial Operation Date under Clause 2.4.

3. Power Systems Connection 3.1 The Company shall be responsible for the design work, construction, installation,

maintenance and possession of the power plant and supporting equipment beyond the power system connection point on the Company’s side.

3.2 The Company shall install telemetering equipment on the Company’s premises, maintain the

equipment and bear the expenses related to the equipment so that it is usable at all times, in accordance with the standard set forth in Attachment No. 2 hereto.


3.3 The Power Utility shall be responsible for the design of the electrical equipment and protective equipment for the connection of power systems.

3.4 The Company shall allow the Power Utility to enter its premises to install, operate, maintain,

replace and/or remove power system connecting equipment, after informing the owner or possessor of the premises.

3.5 The Power Utility reserves the right to subsequently add protective equipment so as to be in

line with technical standard of the Power Utility. 3.6 The Company shall bear the expenses for the power systems connection, i.e. the cost of the

transmission system and the power distribution system from the power system connecting point to the Company’s power plant, cost of electricity meter, cost of electricity preventive system and all increased operating costs incurred out of the purchase of electricity from the Company, and the Company shall make full payment before the commencement of the sale of electricity.

3.7 Each party shall notify the other party in advance in case of any change in its power system

that will affect the protective equipment in the power systems of both parties. 4. Purchase and Sale of Energy 4.1 The scheduled commercial operation date (SCOD) is …………………..……… 4.2 The Company agrees to sell, and EGAT agrees to purchase, electricity in the capacity volume

of ……. megawatts at the voltage of ……….. kilovolts, with the point of purchase of electricity being at the point of installation of electricity meter located at …………………………………….

4.3 The Company agrees to sell, and EGAT agrees to purchase, the electricity according to the

electricity tariff provided in Attachment No. 1 hereto. 5. Generation in accordance with Technical Standard of the Power Utility The Company shall generate electricity with quality, and shall comply with the safety standard and connection standard in accordance with the Regulations on Connection to the Power System of EGAT pursuant to Attachment No. 2 hereto [and Regulations for Synchronization of Generators to the Distribution System, Regulations on Use of Power Network System Services and Regulations on Operation of Power Network System of the Metropolitan Electricity Authority or the Provincial Electricity Authority (in case of connection to Power Network System of the Metropolitan Electricity Authority or the Provincial Electricity Authority pursuant to Attachment No. 3 hereto.] 6. Power Plant Control and Operations 6.1 The Company shall notify EGAT of its annual power generation plan for the subsequent year,

within the 1st day of October of every year. 6.2 The Company shall notify EGAT of its monthly power generation plan for the subsequent

month within the 15th day of the month. 6.3 If the Company changes the power generation plan from the one under Clause 6.2, the

Company shall notify EGAT of the same at least 7 days in advance. 6.4 The Company shall strictly comply with the switching order of EGAT’s power system control


center, and may not do anything with respect to the connecting equipment without prior written notice to EGAT except in the event of likely danger to life or property of either party.

6.5 The parties shall keep records of electrical data and data concerning charging of electricity

tariff and all other data required by the other party for at least 5 years. 6.6 Either party has the right to inspect the other party’s records and data related to this

Agreement any time during the period such data are being kept, by giving a 14-day advance written notice to the other party.

6.7 For the stability of power systems, the parties shall inspect their electrical equipment

according to schedule and may request the other party to rectify and improve the other party’s power distribution equipment that relates to the Power Utility’s power system as may be necessary.

6.8 The Company shall pay the cost of inspection of its power distribution equipment that relates

to the power system of the Power Utility under Clause 6.7 (whether it is an inspection under the regulations of the Power Utility or inspection at the request of the Company), and additional expenses incurred out of appropriate performance by the Power Utility, to the Power Utility within 30 days from the date of receipt of an invoice from the Power Utility.

6.9 The Company uses ………………. as its fuel. The Company shall notify EGAT every month

of the volume of fuel used and the volume of electricity energy and thermal energy (if any) produced, in the form prescribed by EGAT according to Attachment No. 4 hereto. The Company shall also bear relevant expenses incurred for equipment and meters related to the production process as well as expenses for inspection of such equipment and meters.

6.10 EGAT shall be entitled to inspect the power plant at all times as may be appropriate, by giving

a written notice to the Company at least 3 days in advance, and the Company shall provide assistance to EGAT’s representative in the inspection of the power plant.

7. Electricity Meter 7.1 The Company is the owner of both main set and secondary set of the electricity meters

including supporting equipment used in measuring the volume of electricity energy sold, which can measure the volume of electricity energy at each period of a day. Both the main set and the secondary set of electricity meters may have an inaccuracy in accordance with international standard by no more than plus or minus zero point two percent (±0.2%), and the supporting equipment used to measure the electricity shall have an inaccuracy in accordance with international standard by no more than plus or minus zero point two percent (±0.2%) or plus or minus zero point three percent (±0.3%) pursuant to Attachment No. 2 hereto. Said electricity meters shall be tested and compared to the standard electricity meter approximately once a year. The supporting equipment used to measure electricity energy volume shall be tested at an agreed interval which may be no more than 3 years. The expenses incurred in connection with the test shall be borne by the Company.

7.2 All electricity meter and measuring equipment used to measure electricity energy volume sold

to EGAT must be sealed. Breaking the seals for inspection or test or adjustment must be done jointly by officers of both parties. A party wishing a test or adjustment shall notify the other party in writing at least 14 days in advance. The expenses incurred in connection with the inspection, test or adjustment shall be borne by the party wishing the test or adjustment.

7.3 If the result of the test specified in Clause 7.1 shows inaccuracy no more than plus or minus


zero point five percent (±0.5%) difference from the standard electricity meter, no adjustment will be made to the payment of the electricity charge made to the Company. However, if such test shows inaccuracy exceeding plus or minus zero point five percent (±0.5%), the Company and EGAT shall jointly calculate the accurate volume sold by the Company to EGAT during the period the electricity meter shows inaccuracy. If the period of inaccuracy of the electricity meter is not known, half of the period of time between such test and the previous test shall be used, provided that it does not exceed 6 months. This corrected electricity energy volume shall be used to calculate the electricity charge payable by EGAT to the Company. The difference between the electricity charge previously calculated and the re-calculated electricity charge shall be paid by EGAT to the Company or be refunded by the Company to EGAT, as the case may be, by adding to or deducting from the electricity charge invoice for the subsequent month.

7.4 Whenever it is found that the electricity energy volume measured is inaccurate due to any

cause other than the test under Clause 7.1 by more than plus or minus zero point five percent (±0.5%), the calculation of the electricity energy volume sold during the inaccuracy period and the payment of the electricity charge to each other shall be made in the same manner as those under Clause 7.3.

7.5 Reading of electricity meter to calculate the electricity charge for billing shall be made from

the main set of electricity meter ending at 24.00 hours of the last day of each month, and the representative of each party shall sign to certify the accuracy thereof. The secondary set of electricity meter will be used only in case of defect or breakdown of the main set of electricity meter. If the reading method and/or electricity meter reading certification method between the Power Utilities have changed, the reading method and/or electricity meter reading certification method under this Agreement shall be changed accordingly.

8. Linkage of Communication Systems 8.1 The Company shall arrange for linkage of communication systems between its power plant

and EGAT at the communication system linkage point, with number of operating circuits sufficient for use in accordance with the requirements, so that the coordination, control and instructions for power generation and measurement of electricity energy volume can be done accurately and speedily in order to maintain the stability of the overall power systems.

8.2 The Company shall provide communication equipment in accordance with Attachment No. 2

hereto, which equipment shall meet international standards as used by EGAT, and permission must have been obtained as required by law from relevant authorities, for communicating with EGAT’s power system control center.

8.3 The Company shall be responsible for the design work, installation, test and operation as well

as maintenance of the communication system equipment on the Company’s side and at the communication system linkage point. In this connection, EGAT shall designate the linkage point that is technically justified. To the Company’s communication equipment linked to EGAT’s communication system, the Company may not do anything unless consent from EGAT has been obtained.

8.4 The Company shall bear the costs of connecting the communication systems from the

communication system linkage point to the Company’s power plant, i.e. costs for design, equipment, installation, test, maintenance and monthly expenses incurred and related to the communications throughout the period of sale and purchase of electricity.


8.5 If any party needs to inspect its own communication equipment located in EGAT’s premises, both parties shall provide cooperation to each other. If it is found by the inspection that the communication equipment suffers damage as a result of the act of any party, that party must be responsible for the cost of repair of such equipment, and the party causing such damage shall pay the cost of the equipment repair within 30 days from the date of receipt of a written notice thereof.

8.6 Each party shall notify the other party at least 7 days in advance before any change to its

communication system that will affect the communication system connecting the Company and EGAT.

9. Damage to the Power Systems The Company and the Power Utility must install equipment to prevent damage to the power systems in accordance with the regulations on connection to power system network of EGAT) pursuant to Attachment No. 2 hereto [and the regulations on synchronization of generators, the regulations on the use of distribution system serviced and the regulations on the operation of the power system network of MEA or PEA (in the case of connection to the power system network of MEA or PEA) pursuant to Attachment No. 3 hereto]. In case of damage arising from a defect of the power system equipment or other event caused by any party, that party shall be responsible for the damage to the power equipment of the other party, provided that it must be direct damage arising from such defect, excluding consequential damage. 10. Billing and Payment 10.1 EGAT shall pay the electricity energy charge and the adder to a small producer of power from

renewable energy each month as follows: 10.1.1 The electricity energy charge during the peak period: The electricity energy

volume during the peak period that does not exceed the capacity volume under Clause 4.2, multiplied by the number of hours during the peak period of that month at the rate of the Electricity Tariff during the peak period in accordance with Attachment No. 1 hereto.

10.1.2 The electricity energy charge during the off-peak period: The electricity energy

volume during the off peak period that does not exceed the capacity volume under Clause 4.2, multiplied by the number of hours during the off peak period of that month at the rate of the Electricity Tariff during the off-peak period in accordance with Attachment No.1 hereto.

10.1.3 The Company shall receive the adder in accordance with the electricity energy

volume chargeable under Clauses 10.1.1 and 10.1.2. The rate of the adder and the period for receipt of the adder shall be in accordance with Attachment No. 5 hereto. Such rate of the adder does not include value added tax.

10.2 The Company shall submit an invoice for the electricity charge to EGAT once a month, and

EGAT shall make payment to the Company within 30 days from the date of receipt by EGAT of the invoice for the electricity charge from the Company.

10.3 EGAT shall submit an invoice to the Company (if any), and the Company shall make payment

to EGAT within 30 days from the date of receipt by the Company of the invoice. 10.4 If any party disputes against the other party concerning an invoice under Clauses 10.2 and


10.3 and if payment can be made only in part, the party to whom the invoice is sent shall pay the undisputed amount within the schedule. If it is found later that the cause of the dispute did not arise from the fault of the party who issued the invoice, the party to whom the invoice is sent may not raise the dispute to release itself from being in default of payment.

10.5 If any party is in default of payment within the period specified in Clause 10.2, 10.3 or 10.4,

as the case may be, the defaulting party agrees that the other party may charge interest on the unpaid amount on a daily basis equal to the minimum overdraft rate announced by Krung Thai Bank Public Company Limited on the date immediately following the due date plus 2 (MOR+2%), from the date of default until the payment has been made in full, provided that in no event shall the interest rate exceed fifteen percent (15%) per annum.

11. Security for Electricity Sale Proposal 11.1 The Company has submitted security for electricity sale proposal in the form of …………….,

issued by …………., no. ………, dated ……………., in the amount of ……………. Baht (……………. Baht).

11.2 EGAT shall return the security for electricity sale proposal to the Company within 15 working

days in the following cases: 11.2.1 When the Company has reached the Commercial Operation Date:

(1) To return the full amount in case it can transmit the electricity into the power system within 60 days after the Scheduled Commercial Operation Date under Clause 4.1;

(2) To return the balance of the amount after EGAT has deducted the fine for

delay in transmitting the electricity into the power system by more than 60 days after the Scheduled Commercial Operation Date under Clause 4.1 at the rate of zero point three three percent (0.33%) per day of the amount of the security for electricity sale proposal.

11.2.2 The Company has no permission under the other relevant law and has complied with

rules and conditions for such permission properly and completely and the absence of such permission does not arise from the Company’s fault.

11.2.3 When EGAT has deducted the fine and other expenses incurred as a result of the

failure to transmit the electricity into the power system by the Company in full.

11.3 If the Company fails to reach the Scheduled Commercial Operation Date specified in Clause 4.1 for a cause not attributable to EGAT or the force majeure under Clause 13, EGAT shall be entitled to fine for the delay at the rate of zero point three three percent (0.33%) per day of the amount of the security for electricity sale proposal after the lapse of 60 days subsequent to the Scheduled Commercial Operation Date under Clause 4.1.

12. Assignment of Rights and/or Obligations 12.1 EGAT may not assign the rights and obligations hereunder to other person without written

consent from the Company, except for an assignment of EGAT’s rights and obligations hereunder to its affiliate in which EGAT holds at least one half of its shares, and the assignee must possess the same capabilities required for performance of the obligations under the Agreement as EGAT.


12.2 The Company may not assign the rights and obligations hereunder to other person without written consent from EGAT. If the Company is to assign its rights and obligations to its financiers or a person designated by the financiers as security for credit facilities, EGAT shall give consent thereto under the following conditions: 12.2.1 The person designated by the financiers to perform the obligations under the

Agreement on behalf of the Company must possess the qualifications, status and capacity in respect of law, finance and technology that are appropriate to fully perform in accordance with the provisions hereof.

12.2.2 The financiers or the person designated by the financiers must be jointly liable for

any indebtedness of the Company to EGAT from the date of signing by the Company of this Agreement.

12.2.3 The financiers or the person designated by the financiers must agree to be bound

by and be liable under the Agreement in the same manner as the Company. 12.2.4 Such assignment of rights and obligations will not release the Company from its

obligations and liabilities which have arisen prior to such assignment. 13. Force majeure 13.1 “Force majeure” means any event the happening or pernicious results of which could not be

prevented or controlled, and which was not caused by the fault or negligence of a person against whom it happened or threatened to happen even though such person were to take such appropriate care as might be expected from him in his position and situation. Subject to the above definition, force majeure shall include: 13.1.1 Act of the government, such as change in energy policy or law, which causes the

party to be unable to perform any provision of the Agreement. 13.1.2 Blockage or act of enemy in the nature of war, whether declared or not. 13.1.3 Uprising, insurrection, civil commotion, espionage, sabotage, strike, lock-out

under labour law, any derogation of right, accident, earthquake, storm, fire, flood, epidemic, severe and unusual weather conditions, explosion.

13.1.4 The refusal to renew any government license related to the possession,

construction, financing, operation or maintenance of power plant equipment, which is not caused by the act or omission of the Company.

13.1.5 Seizure or taking possession from the Company of the power plant, any property,

right, shares or interest by a government agency, or act or omission by a government agency which will severely affect the Company’s power plant or the performance hereunder or any contract related to the Company’s power plant and to which the Company is a party.

13.2 “Force majeure from government agency” means the force majeure provided in Clauses

13.1.1, 13.1.2, 13.1.4 and 13.1.5 caused by a government agency. 13.3 If any party cannot perform under this Agreement due to the force majeure under Clause 13.1,

such party who has complied with Clause 13.4 may not be deemed as being in breach of the Agreement, and the other party shall not claim any damages. The period for performance


shall also be extended to the extent of the period of the force majeure and the period required to remedy the force majeure, unless the party entitled to the extension of time does not require such extension.

13.4 The party claiming force majeure must notify the other of the force majeure as soon as

practicable together with details of the force majeure and the period required to remedy the damage due to such force majeure.

13.5 For avoidance of doubt, if a machine or the power system breaks down or if a machine, power

transmission line, power plant or equipment and tools owned or used by any party cannot be used in the course of normal operation (whether by such party or by other person), such case shall not be deemed as a force majeure.

14. Settlement of Dispute 14.1 Where the Company meets with a trouble arising out of the performance under the Agreement

or where the Company intends to file a request or appeal relating to the performance under the Agreement, it shall submit the same to the ERC for decisions.

14.2 The decisions of the ERC shall be absolute and final and shall be binding on the parties. If the

ERC cannot find the solution, Thai court shall decide the case. 15. Consequential Damages Any party may not claim consequential damages or damages that are not direct damages incurred by a party caused by a breach of the Agreement. 16. Ownership and Risks Ownership and risks in the electricity from the power system connecting point to the Company’s power plant shall belong to the Company. 17. Governing Law This Agreement shall be governed by Thai laws. This Agreement is made in duplicate with identical contents. Both parties, having thoroughly read and understood the contents hereof, have therefore signed and affixed seals (if any) hereon in the presence of witnesses. Each party retains one copy of the Agreement as evidence. ………………………… Co., Ltd. The Electricity Generating Authority of Thailand Signed …………………… Seller Signed ………………………….Purchaser (………………………………..) (……………………………………..) Title………………………….. Governor of the Electricity Generating Authority of Thailand Signed …………………… Witness Signed ……………………….. Witness (……………………………….) (…………………………………..) Title………………………….. Title……………………………..


Attachment No. 1 to EGAT model

Electricity Tariff

Between …………………………….. Co., Ltd. and the Electricity Generating Authority of Thailand

For Power Generating from Renewable Energy

Under the Regulations on Purchase of Electricity from Small Power Producer,

Non-Firm Contract Category, B.E. 2550 (2007), Clauses Khor.1, Khor.2 and Khor.3 ________________

Electricity Tariff at the electricity purchase point located at the electricity meter installation point, at …………………………………………………………………….. A. Energy Payment (EP) The energy payment shall be equal to the wholesale price of electricity at the voltage of 11-33 kilovolts, which the Electricity Generating Authority of Thailand sells to the Distribution Utility, plus the electricity charge according to the formula of automatic adjustment of electricity tariff at average wholesale price (average wholesale Ft). B. Value Added Tax The above electricity tariff does not include value added tax.

_______________


Attachment No. 2 (Not Attached)

Regulations on Connection to Power Network System of EGAT (in case of connection of power network system to EGAT, add “and Regulations on Use of Services of EGAT’s Power Network System”). Attachment No. 3

(Not Attached) Regulations on Connection of Power Network Systems, Regulations on Use of Power Network System Services and Regulations on Operation of Power Network System of the Metropolitan Electricity Authority or the Provincial Electricity Authority (in case of connection to Power Network System of the Metropolitan Electricity Authority or the Provincial Electricity Authority). Attachment No. 4

(Not Attached) Power Generation Process Data Form.

________________


Attachment No. 5 to EGAT model

Electricity Generating Authority of Thailand

Notification Re: Prescription of Increment of Power Purchase Price for Renewable Energy Small Power

Producers

Whereas the Electricity Generating Authority of Thailand (EGAT) has issued the Notification re: Prescription of Increment of Power Purchase Price for Renewable Energy Small Power Producers dated August 4, 2009 in compliance with the resolution of the Council of Ministers held on March 24, 2009 regarding proposal for improvement of guideline for promotion of generation of power from renewable energy. The Energy Regulation Commission passed a resolution on December 25, 2009 that EGAT should issue additional regulation to the notification re increment of power purchase price for renewable energy small power producers regarding prescription of condition for the return of guarantee for power sale offer so as to be appropriate for the present circumstance. Therefore, EGAT hereby issues a notification that the Notification re: Prescription of Increment of Power Purchase Price for Renewable Energy Small Power Producers dated August 4, 2009 be cancelled and replaced by this Notification. 1. This Notification shall apply to renewable energy small power producers (SPP) and

those submitting an offer and wishing to receive an increment of power purchase price as follows:

1.1 A person submitting an offer who has filed an application for sale of power in accordance

with the Regulations on Purchase of Power from Only Small Power Producers Who Produce Power from Renewable Energy B.E. 2550 (2007) and Regulations on Purchase of Power from Small Power Producers of Non-Firm Contract Type B.E. 2550 (2007) after August 4, 2009.

1.2 A person submitting an offer who has filed an application for increment of power purchase

price for small power producers before August 4, 2009 and has not received a power purchase reply or has not made a power purchase contract with EGAT shall proceed in accordance with Clauses 5 and 6 from the date of being informed.

2. Rate of increment of power purchase price for renewable energy small power producers The rate of increment of power purchase price (increment) for a renewable energy small power producer classified according to the type of technology and fuel


Fuel Increment (Baht/kilowatt-

hour)

Special Increment for 3 Southernmost

Provinces1/ (Baht/kilowatt-

hour)

Total Special Increment for 3 Southernmost

Provinces (Baht/kilowatt-

hour)

Support Period

from the COD

(Years)

1. Biomass 0.30 1.00 1.30 7

2. Biogas 0.30 1.00 1.30 7

3. Garbage2/

(1) Fermentation or garbage pit

2.50 1.00 3.50 7

(2) Thermal process 3.50 1.00 4.50 7

4. Wind energy 3.50 1.50 5.00 10

5. Solar energy 8.00 1.50 9.50 10 Note: 1/ Means southernmost provinces, namely Yala, Pattani and Narathiwat provinces. 2/ Means community garbage and industrial garbage that is not dangerous and not organic garbage. 3. Support period 3.1 The support will be granted for a period of 10 years from the Commercial Operation Date

(COD) for small power producers who produce power from wind energy and solar energy. 3.2 Support will be granted for a period of 7 years from the COD for small power producers who

produce power from biomass, biogas and garbage. 4. Persons not eligible to receive increment of power purchase price Small power producers who have made a power purchase contract with EGAT. 5. The person submitting the offer must submit the following documents and evidences in

support of consideration: 5.1 Details of information supporting the application and offer to sell power in accordance with

the Regulations of Purchase of Power from Small Power Producers with respect to Generation of Power from Renewable Energy B.E. 2550 (2007) and Regulations of Purchase of Power from Small Power Producers of Non-Firm Contract Type B.E. 2550 (2007).

5.2 Guarantee for the offer (applicable to only those submitting an offer for sale of power who are

a renewable energy small power producer, of non-firm contract type) in the amount equal to 200 baht (two hundred baht) per kilowatt according to the power capacity offered for sale, using any of the following guarantees: 5.2.1 Cash; 5.2.2 Cash cheque drawn by a domestic bank (cashier’s cheque) and payable to “Electricity

Generating Authority of Thailand”, dated the date of submission of the offer or not


more than 5 public working days before that date, and if collection from the cheque incurs any fee, the offeror must bear such fee;

5.2.3 Letter of guarantee of a domestic bank; 5.2.4 Letter of guarantee of a finance company licensed to operate finance business for

commercial purposes and to operate guarantee business under the notification of the Bank of Thailand, and whose name has been circulated to government agencies.

6. Placement of guarantee for submission of the offer to sell power 6.1 The person submitting the offer who has submitted an application for increment of power

purchase price before August 4, 2009 must place a guarantee for submission of the offer within 60 days from the date of receipt of the notification. If the said period has passed the person will be regarded as having waived its right to submit an offer.

6.2 The person submitting the offer after August 4, 2009 must place a guarantee for the offer on

the date of submission of the offer. 7. Consideration criteria 7.1 EGAT will consider an offer to receive power purchase price increment of an offeror who has

proper qualifications and has submitted accurate and complete documents and evidences pursuant to the details supporting the application and an offer to receive power purchase price increment, based on the order of submission of offer and readiness of proceeding with the action plan proposed, documents and evidences submitted in support of consideration and consistency of the date of supply of power into the system and the goal of the 15-year alternative energy development plan and impact on the power price rate according to the automatic power price rate adjustment formula (Ft) as follows: 7.1.1 EGAT will consider an offer of a person submitting the offer who has submitted an

offer to receive power purchase price increment before August 4, 2009 and who has already placed a guarantee first.

7.1.2 EGAT will consider an offer of a person submitting an offer after August 4, 2009 as

the next order. 7.2 EGAT may request additional documents to be used as the basis for consideration of the

readiness of the person submitting the offer. 8. Conditions of return and seizure of guarantee 8.1 EGAT will return the guarantee to the person submitting the offer, within 15 business days in

the following cases: 8.1.1 After the person submitting the offer is informed in writing by EGAT that its offer is

rejected;

8.1.2 After the small power producer has commenced sale of power (COD):

1) The full amount will be returned if power can be supplied into the system

within 60 days after the date of commencement of sale of power (SCOD);


2) The remaining guarantee will be returned after EGAT has deducted penalty for delay of supply of power into the system beyond 60 days at the rate of zero point three three percent (0.33%) per day of the guarantee amount;

8.1.3 The person submitting the offer fails to have obtained any permit under other relevant

laws after it has duly and fully complied with all of the rules and conditions applicable to such permit, and the withholding of the permit is not due to the fault of such person.

8.1.4 After EGAT has deducted the full amount of penalty and other expenses incurred

from the failure to perform the conditions of supply of power into the system by the small power producer.

8.2 If the person submitting the offer withdraws its intention to sell power or if a small power

producer who has been selected but is unable to sign the power purchase contract agreed during negotiations due to the fault of the small power producer, EGAT will seize the guarantee for such offer.

8.3 If the person submitting the offer is unable to commence sale of power on the date of

commencement of sale of power (SCOD) provided in the power purchase contract without the fault of the power utility or force majeure, EGAT shall be entitled to impose a penalty for such delay at the rate of zero point three three percent (0.33%) per day of the guarantee amount after completion of 60 days from the SCOD.

9. Cancellation of increment If power sale and purchase is not commenced within 12 months after the SCOD, the power purchase contract shall be deemed terminated.

Notified on this 15th day of January 2010.

-Signature- (Mr. Sutat Patamasiriwat)

Governor of the Electricity Generating Authority of Thailand


Attachment 2

PEA standard form of VSPP PPA (renewable energy)

Power Purchase Agreement No.______________ for the Purchase of Power from a Very Small Power Producer

(for the Generation Using Renewable Energy) between

______________ and the Provincial Electricity Authority

This Power Purchase Agreement is executed and delivered at the Distribution Utility on between , represented by , with the office located at , hereinafter called “the Power Producer,” of the one part, and the Provincial Electricity Authority, represented by __________, title: , office: ____________, hereinafter called “the Utility,” of the other part. WHEREAS both parties agree to purchase and sell electricity under the following terms and conditions: 1. Purchase and Sale of Electricity 1.1 The Power Producer and the Utility shall abide by the terms and conditions pertaining to the

purchase of power and system interconnection as stipulated in the Regulations for the Purchase for Power from Very Small Power Producers (for the Generation Using Renewable Energy) and the Regulations for Synchronization of Generators with Net Output under 10 MW to the Distribution Utility System, B.E. 2549 (2006), as detailed in Appendices 1 and 2 attached to this Agreement respectively.

1.2 Appendices 1 and 2 annexed hereto shall form an integral part of this Agreement. In case of

inconsistency between the provisions in this Agreement and those in Appendices 1 and 2, the former shall prevail.

1.3 The Utility agrees to purchase and the Power Producer agrees to sell electricity at a maximum

capacity of MW at the voltage level of Volt, with the Purchasing Point located at , with details of the generation system as specified in the Application for Sale of Electricity and System Interconnection and the Power Producer agrees to sell electricity to the Utility within ___________.

1.4 The Utility agrees to sell standby power to the Power Producer at the request of the latter,

pursuant to the announcement on the standby power tariff and in line with the standby power purchase agreement between the Utility and the Power Producer.

2. Agreement in Force and Termination

This Agreement shall come into force as from the date of its signing by both parties for a period of five (5) years. The Agreement shall be automatically extended on a continual basis, each time for another period of five (5) years, and shall remain effective unless it is terminated in the event of the following:

2.1 The Power Producer gives a written notice to the Utility of his intention to discontinue the

purchase/sale of electricity by terminating the Agreement.


2.2 If one party is in breach of any terms and conditions specified in the Agreement, the non-breaching party shall send a written notice to the breaching party to make necessary correction. If the breaching party fails to make such correction, the non-breaching party is entitled to terminate this Agreement.

3. Power System Interconnection 3.1 The Power Producer will allow the Utility to enter its premises to install, to undertake the

maintenance, to change and/or to relocate the power system interconnection equipment after the owner or the possessor of the location has been notified.

3.2 The Utility reserves the rights to specify the requirement of additional equipment, at a later

stage, both for the Utility’s distribution system and for the Power Producer’s power plant, to be in line with the technical standards and the pattern of power dispatch of the Utility.

3.3 One party has to notify the other party in advance if any change has been made to its power

system, which will affect the protective equipment in the power system of both parties. No action related to the interconnection equipment shall be taken without a written notice to the Utility in advance.

4. Control and Operation of the Power Plant 4.1 The Power Producer must strictly abide by the switching order of the Utility’s Control Center

for the benefits of the operation and maintenance, except for the case where damage may be caused to the life or property of either party.

4.2 The Power Producer has to submit the information about the amount of fuel consumption per

year and the Average Lower Heating Value of the primary and secondary fuels used for electricity generation.

4.3 The Power Producer, using commercial fuels, such as oil, natural gas and coal, as a secondary

fuel at a ratio greater than 25% of the total heat consumption for power generation in that given year, must generate electricity efficiently by having the ratio of Primary Energy Saving (PES) at no less than 10% in each year. The PES ratio calculation method is provided in Attachment 2 of the Regulations for the Purchase of Power from Very Small Power Producers (for the Generation Using Cogeneration System). In case of the failure to comply with the requirements about the efficiency of the power generating processes, a fine shall be imposed, pursuant to the calculation method described in Item 4.4.

4.4 In the event that the PES ratio achieved by the Power Producer is less than 10%, the Utility

will demand a refund from the revenue from the energy charge that the Utility has paid to the Power Producer in that given year, according to the difference of the PES ratio as required by the Regulations, i.e. 10%, and the actual PES ratio derived from the calculation using the calculation formula specified in the Regulations for the Purchase of Power from Very Small Power Producers (for the Generation Using Cogeneration System).

5. Billing Settlement 5.1 The payment for the purchase/sale of electricity shall be in compliance with the provisions

specified in the Regulations for the Purchase of Power from Very Small Power Producers (for the Generation Using Renewable Energy).


5.2 In case the Power Producer fails to make payment within the period specified in the Regulations for the Purchase of Power from Very Small Power Producers, the Utility is entitled to take measures pursuant to the Utility’s announcements or regulations.

5.3 In case the Utility fails to make payment within the period specified in the Regulations for the Purchase of Power from Very Small Power Producers, the Utility agrees that the Power Producer charge for the interest of the amount in arrears at the then MLR rate charged by Krung Thai Bank Public Company Limited, as from the date of default until the payment is made in full. In this connection, the imposed interest rate shall not exceed fifteen percent (15%) per annum.

6. Force Majeure 6.1 “Force Majeure” denotes any event of which the happening or pernicious results could not be

prevented even though a person against whom it happened or threatened to happen were to take such appropriate care as might be expected from him in his position and in such a situation, and shall include any or several of the following events: 6.1.1 acts of the government such as a change to the energy policy of the government; 6.1.2 acts of public enemies in a war situation (whether declared or undeclared), blockades,

riots, insurrection, commotion, espionage, sabotage, strikes, work stoppages as stated in the labor law, any eviction, earthquakes, storms, fires, floods or explosions; and

6.1.3 interruptions in the distribution system resulting from detriments to the distribution

system or any devices related to the system interconnection. 6.2 In the event that either party is unable to perform his obligations under this Agreement by

reason of Force Majeure under Item 6.1 hereof, such party shall not be held in breach of the Agreement, and the other party shall not claim for any compensation whatsoever.

6.3 The party claiming Force Majeure shall:

6.3.1 notify the other party as soon as practicable of the Force Majeure, together with the detailed information of the event and the period of time necessary to cure the damages resulting from such Force Majeure; and

6.3.2 use, at its own cost, all reasonable efforts to remedy the situation as soon as possible

and such implementation must be within the ability of the party. 7. Settlement of Disputes and Arbitration 7.1 Any dispute or difference arising out of, or in connection with, the Agreement or the

implementation of any of the provisions of the Agreement which cannot be settled amicably shall be referred to arbitration. If no settlement can be reached by arbitration, the dispute or the difference shall be referred to a Thai court for a final decision.

7.2 Unless both parties agree in the appointment of a single arbitrator, any dispute or difference

shall be referred to two (2) arbitrators. Either party shall serve upon the other a notice of intention to submit the dispute or difference to arbitration and specify the name of an arbitrator to be appointed by him. Then, the other party shall appoint the other arbitrator within thirty (30) days after receipt of the said notice. If the two arbitrators are unable to compromise such dispute or difference, an umpire shall be appointed by the two arbitrators within thirty (30) days from the date of disagreement. The umpire so appointed shall resolve


the dispute or difference. The arbitration proceedings shall follow either the Rules of Arbitration of the Ministry of Justice’s Arbitration Office, mutatis mutandis, or the Rules of Arbitration and Conciliation of the International Chamber of Commerce, as agreed by both parties. The arbitration proceedings shall be conducted in the Thai language.

7.3 The appointed arbitrators must have qualifications illustrating expertise in the field of

development, debt financing, construction, power plant operation or power plant maintenance and shall not be employees or agents of, or advisors to either party.

7.4 Should either party decline to appoint an arbitrator, or in case the two arbitrators cannot reach

an agreement regarding the appointment of an umpire, each party is entitled to refer the matter to a Civil Court for the appointment of arbitrator or umpire as the case may be.

7.5 Any decision or award given by the arbitrators or the umpire, as the case may be, shall be

final, conclusive and binding upon the parties hereto. If the arbitrators or the umpire cannot settle the dispute or difference, or the notified party pursuant to Item 7.2 hereof fails to appoint an arbitrator on his side, wishing to exercise the right of institution of court action, then the dispute or difference shall be deferred to the relevant Provincial Court for a decision.

7.6 Each party shall bear the cost of his own arbitrator’s service and share equally other cost of all

proceedings. In case a single arbitrator or an umpire is appointed, the cost of the single arbitrator’s service or the cost of the umpire’s service shall be decided by the arbitrator or the umpire, as the case may be.

This Agreement is executed in two identical counterparts. Both parties have thoroughly read and understood the contents hereof and have hereto appended their respective signatures and affixed their seals (if any) in the presence of witnesses. Both parties shall keep each copy of the Agreement.

Power Producer Provincial Electricity Authority Signature: ……..………..…. Power Producer Signature: …………….………….. Utility (___________________) (___________________)

Title Title ___________________ ___________________

Signature: ………………………. Witness Signature: …………………… Witness

(___________________) (___________________) Title Title

___________________ ___________________


Attachment 3

WIND ENERGY DEVELOPMENT IN THAILAND · • 8 VSPP PPAs signed with PEA/MEA and achieved COD, with...

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