In addition, there would be another fund of Bt1 billion to be loaned to very small power producers (VSPPs), with annual interest of 4 per cent, he told a seminar promoting VSPPs.

A ministry source said the Energy Conservation Fund's board would convene on December 21. As of September, the fund had an outstanding balance of Bt5 billion.

From 2007-08, the ministry would allow VSPPs, which produce 1-10 megawatts of power, to propose extra tariffs for the sold power, depending on fuels. The ministry will also resume purchasing power from very small co-generation plants, after stopping the practice in 1997.

At present, recyclable power plants generate 2 per cent of total installed power capacity, which stands at 26,000MW.

"This policy would immensely benefit the country, because it is part of the sufficiency-economy philosophy, in which all resources are fully and efficiently exploited. This would help reduce dependence on commercial generation from expensive and volatile fuels, as well as reduce the country's environmental problems," Piyasvasti said.

Recyclable power carries a higher cost than fossilised fuel-based power. As an incentive, the ministry has set the rate for biomass power at 30 satang a unit above that quoted for fuel-based power plants.

The differential is 80 satang for hydroelectric power plants of less than 50MW capacity, 40 satang for hydroelectric power plants 04 50-200 MW capacity, Bt2.50 for waste-fuelled and wind-powered plants and Bt8 for solar power.

VSPPs could ask for the differential, known in the industry as an "adder", from 2007-08. The adder would be in place for seven years after the power plants start the generator.

"The differentials are meant to encourage the generation of power from wastes like garbage or wastewater from industrial plants," he said.

Energy Reporters

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