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In Thailand, the Small Power Producers (SPPs) program was introduced in the early 1990s and is designed to promote grid-connected electricity generation from renewable energy and cogeneration. A flexible power purchase agreement has been introduced (firm and non-firm) to respond to the technical limitations of renewable energy technologies. Power purchase price is based on the utility’s avoided costs.
In 2002, Thailand introduced a new framework that promotes small-scale renewable electricity generation known as Very Small Renewable Energy Power Producers (VSREPP). A VSREPP is defined as a generator with his own generating unit, whose power generating process utilizes renewable energy sources, agricultural and industrial wastes and residues, or by-product steam, and who sells no more than 1 MW of electrical power directly to a distribution utility. The VSREPP regulations allow for net metering arrangements and streamlined interconnection process and requirements so as to minimize the costs of connecting a VSREPP to the distribution systems. Generators with net generation can generate income by selling electricity to the distribution utilities at the latter’s avoided costs (the wholesale price that the distribution utilities pay to EGAT for bulk electricity). The main targets of the VSREPP Program are pig farms and food processing industries.