F-022 (P)

The 2nd Joint International Conference on Sustainable Energy and Environment (SEE 2006)
21-23 November 2006, Bangkok, Thailand

Effect of Energy Policy on Biomass-based Power Generation in Thailand

Surin Ngaemngam* and Tetsuo Tezuka
Graduate School of Energy Science, Kyoto University, Yoshida-honmachi, Sakyo-ku, Kyoto, 606-8051 Japan
Abstract: Rice farming is the largest sector of agriculture in Thailand. Rice husk is a by-product of paddy mill. In Thailand, rice husk
contributes about 4.6 million tons a year, 23% of the total rice production. Instead of being dumped as waste or given for free
villagers or farmer, so far, rice husk has been used as fertilizer, chicken and duck farms litter, fuel source for manufacturing processes
such as brick and charcoal making. Compared to the total amount of rice husk being used, its potentials have not been yet fully
exploited, which is still the main problem for rice mills owner to decide on. Recently, Thai government has made an energy policy to
promote the use of biomass as fuel for generating electricity. In the past, the price of the rice husk was reported to be in the range of
50 - 150 baht per ton (US$1.25-3.75 per ton) but nowadays, after policy proposed, the price in some area has, however, jumped
suddenly and has reached around 1,000 baht per ton (US$25 per ton). The purpose of this study is to assess the rice husk situation
and utilization of rice husk in Thailand and assess the effect of energy policy on biomass based power generation plant.
Keywords: Rice Husk, Price Fluctuation, Biomass, Electric Power Generation Plant, Energy Policy, Thailand

1. INTRODUCTION
Biomass is an importance energy source harnessed by mankind. It does not add carbon dioxide to the atmosphere as it absorbs the
same amount of carbon in growing as it releases when consumed as a fuel. Its advantage of biomass is can be used as energy source
for generating electricity with the same equipment or power plants that are now burning fossil fuel [1]. Thailand is an agricultural
country and has a vast amount and variety of agriculture products which could be used as energy source instead of fossil fuel such as
coal. These include bagasse which is the residue of sugar cane, rice husk, palm oil residue (empty fruit bunch, fiber, shell and frond),
cassava residue, coconut residue, corn cob and etc. Rice husk utilization is the target of this study since rice farming is the largest
sector of agriculture in Thailand. Thailand is one of the worlds top rice exporters with approximately 28 percent of the market share
in the world. In Thailand, the amount of the rice husk can be estimated to be about 23 percent [2] (4.6 ton per year) of the total rice
production (average about 20 million tons per year). Rice husk has been used for many purposes such as fertilizer, chicken and duck
farms litter, fuel source for manufacturing processes such as rice milling process, brick and charcoal making and etc. Currently, data
obtained by interview and questionnaires show that rice husk are used as a fuel source for manufacturing process, paper mill, cement
companies, sugar mill, and vegetable oil companies. Recently, Thai government has enforced an energy policy to promote the use of
biomass as the fuel for generating electricity through SPPs (Small Power Producers) and VSPPs (Very Small Power Producers)
program. After the policy proposed rice husk and rice husk mixed with other biomass-based power generation plants increased to 35
plants in 2006 with total capacity about 574 MW [3]. The amount of rice husk which is used as fuel for generating electricity is
approximately 6 million tons per year (9,800 tons per MW per year). At the beginning of the policy enforcement, rice husk is among
the first choices due to its cheap, small size, and low moisture, compare with other biomass such as palm oil residue (this does not
include bagasse since most of bagasse is used as fuel in sugar milling process and power generation at sugar mill plants). Moreover,
rice-husk ash has good quality and it can be sold to material industries if its combustion is well controlled. Effect of this policy
appeared in the rice-husk collection process. The high price of rice husk occurred in some area due to the limitation of the amount of
rice husk. Investigation of the economic viability shows that the current price is the maximum value at which the rice-husk-based
power generation plant can get the profit by selling the electric power to the grid. On the other hand rice husk in some area is not
used effectively and the rice husk has low price and is often disposed. The price of rice husk depends on its location of production.
Rice husk utilization in each region of Thailand and effect of energy policy on biomass based power generation plant are discussed in
this paper. The specific aims of this study are: (1) to investigate reasons behind the price jump in order to identify desirable policy
measures related to rice-husk utilization, and (2) to investigate of the optimal rice husk utilization in each region of Thailand. The
data about rice-husk utilization have been obtained in this study through the questionnaires which were followed by interviews.

2. RICE HUSK UTILIZATION IN EACH REGION OF THAILNAD

Thailand is divided into 76 provinces and four natural regions: northern, north-eastern, central plain, and southern. Rice is
grown in every region of Thailand especially in north-eastern region. Rice husk is the by-product of paddy mill that constitutes about
23% of paddy. There are many usage of rice husk. Fig 1 shows rice husk utilization in each region of Thailand. Rice husk utilization
in each region is not quite different with each other. Since Thailand is agricultural country, rice husk is used as fertilizer in all regions.
Rice yields can be improved by addition of rice-husk ash in fertilizer. Rice husk can also serve as a moisture retention helper or as a
weed growth inhibitor in soil. When rice husk is burned, the remaining ash can serve as a mix for fertilizer. Finely ground rice husk
are also used as component in commercial mixed fertilizers. The rice husk prevents caking of other fertilizer components. Generally
speaking, rice husk ash is more useful for farmers than rice husk itself. Rice husk is also used as fuel since it is of low cost, low
moisture content, small size and small environmental impact. The sectors that use rice husk as fuel are: electric power generation
plants, paper mills, cement plants, rice mills, sugar mills, brick companies, sugar mills, vegetable oil companies and charcoal
companies ( especially in rural regions). From Table 1 which shows the sector using rice husk as fuel in each region, most of the
power generation plants, rice mills, vegetable oil companies, paper mills, sugar mills and cement companies are in central region of
Thailand. In southern region, since this region has large amount of rubber wood therefore most of rice husk is used as fuel for making
charcoal from rubber wood. For rice husk price situation, high price of rice husk appears in the central region since there have been
Corresponding author: surin@eecom.energy.kyoto-u.ac.jp

F-022 (P)

The 2nd Joint International Conference on Sustainable Energy and Environment (SEE 2006)
21-23 November 2006, Bangkok, Thailand

constructed many rice-husk-based power plants. On the other hand, the price in the south region with only a few rice-husk-based
power plants remains low. This means that the balance between the supply and demand of rice husk plays an important role for
stabilizing the rice-husk market and that keeping balance with small fluctuation seems difficult due to the limited amount of annual
production of rice husk. Other usages of the rice husk, especially in rural area, are making special paper, ice preservative, chicken
and duck farms litter, making salted eggs (food) and charcoal making from rice husk. And moreover, investigation by questionnaires
and face to face interview found that some amount of rice husk is disposed as waste. The reasons to dispose rice husk as waste at rice
mill plants are that (1) rice mill plant is so far away from rice husk utilization site such as power plants and that (2) rice mill owners
do not know that rice husk can be sold to power plant or etc. Most of rice mills where the rice husk is disposed as waste are small
scaled.
Fuel

Power generation Plant

Paper mill

Northern

Cement company
Rice mill
Charcoal making
Sugar mill
Brick company
Rice husk

North.
Eastern

Vegetable oil company

Fertilizer
Charcoal from rice husk

Central
plain

Special paper
Ice trade
Salted eggs

Southern

Farm
Throw away

Fig. 1 Rice husk utilization in each region of Thailand

Table 1 Purpose of rice husk use as fuel in each region of Thailand [4]
Number of companies
Type of business
Northern
North-eastern
Central plain
Rice husk and rice husk mixed with other
2
5
7
biomass based power generation plant
Paper mill
7
1
9
Cement company
2
1
13
Sugar mill
10
13
23
Rice mill
12871*
68433*
3635*
Charcoal making from wood
3
20
3
Brick company
163
130
194
Vegetable oil company
3
4
51

Southern
4269*
41
163
8
*Source [7]

3. BIOMASS-BASED POWER GENERATION PLANT

Since Thai government has a policy that encourages the private sector to an even stronger role in the electricity supply industry of
the country. SPPs and VSPPs programs have been proposed by the year 1992 and 2000 respectively. The main objectives of the
policy on power purchase from SPPs are as follows [5]: (1) to promote the use of indigenous by-product energy sources and nonconventional energy for power generation, e.g. wind, solar, geothermal, waste and waste agriculture, and economical and efficient
use of energy, (2) to encourage participation of private sectors in power generation by allowing private sectors to generate and sell
electricity to the power utilities, and (3) to promote competition in the power-generation sector by authorizing private power
producers to supply electricity directly to industries and nearby residential customers without the need to link with any of the three
utilities transmission systems. Consumers are, therefore, given more options on which electricity is traded. After EPPO made
announcement to encourage interested investors and SPPs using non-conventional energy or renewable energy as fuel to submit
proposals to apply for subsidies from The Energy Conservation Promotion Fund. In July 2006, 74 SPPs which use biomass energy as
fuel to generate electricity have received notification of acceptance with total capacity about 1,295 MW and 44 SPPs have connected
to the grid with total capacity about 839 MW and total sale about 352 MW. Rice husk and rice husk mixed with other biomass based
power generation plant, 33 SPPs have received notification of acceptance with total capacity about 571 MW and 12 SPPs have
connected to the grid with total capacity about 229 MW and total sale about 163 MW [3]. For VSPPs [6], two VSPPs have connected
to the grid with total capacity 2.1 MW and total sale 1.85 MW. Table 1 and Table 2 show the status of biomass based power

F-022 (P)

The 2nd Joint International Conference on Sustainable Energy and Environment (SEE 2006)
21-23 November 2006, Bangkok, Thailand

generation plant of SPPs and VSPPs program respectively. Total number and generating capacity of rice husk and rice husk mixed
with other biomass based power generation plant is 14 power producers and 230.7 MW. Estimate of rice husk use as fuel source for
generating electricity is about 2.3 million tones per year (9800 ton per megawatt per year [3]).
Table 2 Status of SPPs on biomass based power generation plant (July 2006)[3]
Received Notification of Acceptance
Supplying Power to the Grid
Number of
Generating
Sale to
Number of
Generating
Sale to
Type of biomass
power plant
Capacity
EGAT
power plant
Capacity
EGAT
(MW)
(MW)
(MW)
(MW)
Bagasse
31
605.4
185.8
31
605.4
185.8
Paddy Husk
17
157.7
113.6
5
53.4
41.8
Rubber wood chip
2
27.8
24.2
Cassava root
1
3.0
2.8
Palm residue
4
43.4
31.8
Paddy Husk and other biomass
16
412.9
269.3
7
175.2
121.3
Bagasse, biomass (not include rice husk)
2
35.0
23.0
1
5.0
3.0
Corn cob, Cassava root
1
9.9
8.0
Table 3 Status of VSPPs on biomass based power generation plant (April 2006) [6]
Received Notification of Acceptance
Supplying Power to the Grid
Number of
Generating
Sale to
Number of
Generating
Sale to
Type of biomass
power plant
Capacity
PEA
power plant
Capacity
PEA
(kW)
(kW)
(kW)
Wood waste
1
1,200
400
Paddy Husk
3
2,725
2,350
2
2,100
1,850
Palm residue
4
4,913
2,500
2
2,660
1,500

4. CHARACTERISTICS OF RICE HUSK DEMAND AND SUPPY IN THAILAND

Usually rice husk based power generation plants are designed for using only rice husk as fuel. The most expensive rice husk price
for power plant is determined, not by investment cost, but by price for grid, rice husk transportation cost and subsidy. If the potential
of rice husk demand is more than maximum rice husk supply, the highest price may probably be realized. Otherwise, the price of rice
husk is kept at the level which is more than or equal to the price for other conventional usage, such as brick making. But in this case
new plant may be constructed. Some of rice husk produced at rice mill plant is consumed at the plant site and the other is sold to
traders (by bilateral transaction).The main income of rice mill plants is by selling rice. Rice husk price is not so important for rice
mill owner. If rice-husk based power generation plant is operated for auto-power supply and/or for power grid if the grid-power price
is greater than the plant operating cost. Stable operation of power plant needs appropriate amount of rice husk supply.

5. PRICE FLUCTUATION OF RICE HUSK

The serious characteristics of biomass for energy are (1) seasonal fluctuation of the amount of production, (2) spatial fluctuation
of the amount of production, (3) limited amount of production and (4) difficulty in substitution between different types of biomass, in
addition to the problem of the biomass collection cost. The price of biomass for energy is usually very cheap if the profitable ways of
utilization have not been developed yet. It is partly because the collection of biomass and its conversion product needs so much cost
due to their spatial fluctuations that its massive use may be often difficult. It should be noted that the technological development is
sometimes evaluated based on the cheap biomass price at the beginning stage of biomass utilization. The price, however, jumps just
after the useful ways of utilization such as new effective technologies are found. The price may also skyrocket due to the biomass
promotion policy such as the subsidy for biomass-based power generation plants. Price of rice husk is high price in rainy season
(October to December) and low price in hot season (April to May). Moreover price of rice husk is high if the big consumers of rice
husk such as power plants are close to the rice mill plant. Small scale of rice mill in rural area, rice husk is given for free to farmer or
villagers. Price of rice husk increase from 200 bahts per ton (US$5 per ton) in the year 2001 to 1,000 baht per ton (US$25 per ton) in
the year 2006 as show in Fig 2. One thousand bahts is considered high price for rice husk based power plant. At the central region the
rice husk demand potential is considered more than the maximum amount of rice husk supply. Increasing of rice husk price the
reason is not clear but one of the reasons for skyrocketing of rice husk price is increasing of power generation plant. It is not only rice
husk and rice husk mixed with other biomass based power generation plant that used rice husk as fuel but paper mill, cement
companies, brick companies, vegetable oil companies, sugar mill and etc are also use rice husk as fuel. The investment in rice husk
plant will not be preferred in near future. Fig 3 shows numbers of rice husk and rice husk mixed with other biomass based power
generation plant in the year of 1999 to 2006 (July). Increasing of power generation plant is caused from governments policy in order
to promote to use biomass as fuel for generating electricity.

F-022 (P)

The 2nd Joint International Conference on Sustainable Energy and Environment (SEE 2006)
21-23 November 2006, Bangkok, Thailand

Price of rice husk (Baht/tonne)

1200
1000
800
600
400
200
0
2001

2002

2003

2004

2005

2006

Year

Fig 2 Rice husk price in central region

16
230.7 MW

Number of power plant

14

217.2 MW

12

193.8 MW

10
8

83.9 MW

72.8 MW
63.8 MW

4
2

57.8 MW

0
1999

2000

2001

2002

2003

2004

2005

2006

Year

Fig 3 Number and total capacity of rice husk and rice husk mixed with other biomassbased power generation plant in each year (both SPPs and VSPPs)

6. CONCLUSION
A survey, in the form of questionnaires and interview, of rice husk utilization in Thailand was undertaken. At present, there are
many usages of rice husk in Thailand. Rice husk is not only used as fuel but also used as fertilizer, duck and chickens litter and etc.
However, rice husk has become an important fuel source for generating electricity. Number of power plant is rapidly increasing but
amount of rice husk is limited. Appropriate energy policy should be made by considering characteristics of biomass in order to avoid
the risk in investment. Necessary about the policy for managing the efficient use of rice husk are (1) to control the total capacity of
biomass plant directly or indirectly, (2) to develop technologies for bio-energy conversion so that the biomass can be easily replaced
with some appropriate cheap resources and (3) to increase the scale of rice husk plant be merger and then, install the power plant at
the same site (no need for selling biomass). We are trying to evaluate variety of measures for Biomass use by using the simulation
model.

7. ACKNOWLEDGEMENTS
This paper supported partly by Kyoto University 21 COE Establishment of COE on Sustainable Energy System (COE program
by the Ministry of Education, Culture, Sports, Science and Technology, Japan). The authors thank Mr. Wirat Nakkrongdee, Mrs.
Sasiwan Intarawong, Mrs. Ketsara Sonwong, Mr. Teerapol Mounkhaow, Mr. Nattabhat Pankong and Mr. Pitak Satitwattana for their
kindness in distribution and collection of questionnaires and interview to rice mill owner, farmer and villagers.

8. REFERENCES
[1] Biomass, www.nrel.gov/research/industrial_tech/biomass.html
[2] Black & Veatch (Thailand), Thailand biomass-based power generation and cogeneration within small rural industries
(final report), November 2000.
[3] Status of SPPs (July 2006), Electric Generation Authority of Thailand (EGAT), www.egat.com (Thai version)
[4] Department of Industrial Works, www.diw.go.th/diw/query.asp (Thai version)
[5] Current energy situation in Thailand 2004, Energy Policy and Planning Office (EPPO), Ministry of Energy, (p.34)
[6] Status of VSPPs (April 2006), Energy Policy and Planning Office (EPPO), www.eppo.go.th/index-T.html (Thai version)
[7] National statistic office, www.nso.go.th.