Thailand’s Energy Regulatory Commission (ERC) has on October 3 unveiled draft regulations on the Direct PPAs (Draft Direct PPA Regulation) which seeks to govern the procurement of renewable energy by data centers direct from power producers channelled through the national grid system, according to a paper published by the National Law Review last Saturday.
Approved by the National Energy Policy Council (NEPC) in June 2024, the Direct PPAs pilot policy allows Thailand Board of Investment (BOI) -promoted data centers to quickly procure renewable energy throughout the country by signing direct power purchase agreements with renewable energy producers. The power will be channelled through Thailand’s national grid thus liberalising the energy industry whilst supporting data centers in meeting global sustainability mandates.
“With the industry predicting substantial growth, data center operators are scrambling to secure energy at competitive prices, especially renewable energy that will also help them align with various ESG goals. As part of Thailand’s ongoing efforts to support the development of the data center ecosystem in the country, Thailand continues to refine various laws and regulations to align with the country’s strategic objective to position the country as a regional hub for digital infrastructure,” the paper stated. It noted that as the regulations are still at a draft stage, further revisions are possible, as well as further guidance issued by government agencies prescribing and refining the criteria, procedures, and conditions.
According to the draft law, in order to be eligible, power producers and data centers must comply with certain conditions.
Amongst them, power producers are restricted to using only renewable energy sources or a combination of renewable energy sources and battery energy storage system. The power plant must also be a new facility with an installed capacity of at least 1,000 kVA, and must not have any existing PPAs whether with a private offtaker or a governmental utility operator. There are no restrictions on foreign ownership of the power plant but to own the land, approval must be obtained from the BOI and only in the case of BOI-promoted foreign investors.
Data centers have to comply with more conditions, for example, the project must have received an investment promotion by the BOI, has a minimum IT base load of 50 MW per building and submit a 10-year plan detailing proposed Direct PPAs, grid usage, and total load projections. The data center must also intend to utilise renewable energy for 100 percent of its power demand as well as being mandated by its headquarter to use renewable energy.
More significantly, the facility has not yet generated any income as at the date the data center submits an application to the ERC for Direct PPAs quota. It must also produce evidence that it has already secured commitment from a power producer to utilise the Direct PPA facility. This could be in the form of a Memorandum of Understanding or Letter of Intent. The data center can procure supply from multiple power producers.
In the first half of 2025, the data center business alone attracted a combined investment value of 521.2 billion baht (US$16.1 billion) from 28 projects, while the renewable energy sector saw 191 applications totalling 42.24 billion baht (US$1.3 billion) of investment amid soaring demand for cloud services, the BOI announced in August as reported by w.media.
Meanwhile, Krungsri Bank’s Industry Outlook 2025–2027: Data Center Industry, projected an annual average growth rate of 7.5–8.5 per cent in total revenue for Thailand’s data center industry.
“This increase reflects Thailand’s strategic positioning as a regional hub for digital infrastructure and its commitment to enabling large-scale, sustainable operations through regulatory and energy market reforms,” the paper added.