Thailand’s cost-optimal pathway to a sustainable economy
Increasing solar and battery capacity can reduce electricity production costs, cut emissions, and improve energy security while supplying rising demand from EVs and data centres.
30 Sep 2025
29 Minutes Read
Executive summary
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Cost-optimal pathways for Thailand’s power sector development
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Supporting materials
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Highlights
$1.8 billion
Total cost savings for Thailand by 2037 from increasing solar capacity by 89% and battery storage by 60% compared to the RPDP targets
147 mtCO2
The cumulative avoided CO2 emissions by 2037
~2x
The cumulative avoided gas by 2037 is almost double that consumed in 2024 for power generation
Executive summary
Solar and batteries – key to powering Thailand’s EV and data centre growth
Rising electricity demand from data centres and electric vehicle (EV) charging could place significant pressure on an energy system still heavily reliant on fossil fuels. Expanding renewable energy can help accelerate the transition, attract clean investment, lower costs and emissions, and reduce dependence on imported fossil fuels.
Thailand’s draft revised power development plan (RPDP), released in 2024, is an important signal of the country’s ambition in energy transition. It seeks to reduce the country’s historical reliance on fossil fuels, especially natural gas, by aiming for 51% renewable energy generation by 2037. To achieve this, the plan targets to reduce 8 GW of net fossil fuel capacity and add 64 GW of renewables and energy storage. We estimate that implementing the plan will require a total fixed expenditure of $153 billion between 2024 and 2037.
The RPDP, formulated on the principles of energy security, economic efficiency and environmental sustainability, underscores the country’s commitment to carbon neutrality by 2050. While it is a big step in the right direction, Ember’s cost-optimal pathway finds that Thailand saves billions in electricity generation costs by aiming for an even cleaner power system.
Our model finds that raising the plan’s solar capacity targets by 89% and battery storage by 60% can help Thailand save $1.8 billion in power generation costs by 2037. This is despite the cost-optimal pathway requiring a higher total fixed expenditure of $168 billion over 2024 to 2037. But, given that it cuts gas imports equivalent to almost two times Thailand’s 2024 consumption, it saves nearly $16 billion in fuel costs. At the same time, the country’s ambitions of becoming a hub for EVs and data centres remain unaffected.
Ember’s proposed cost-optimal pathways also fit well with Thailand’s economic goals, as its export-oriented manufacturing strategy, rising demand from data centres and EV adoption require more clean energy. Global markets increasingly seek products with low carbon footprints. Aligning the power system with such trends is imperative to maintaining global competitiveness.
Despite factoring in higher EV charging and data centre electricity demand than the RPDP, our cost-optimal pathway finds that more solar and batteries can reliably meet the demand. Instead of adding more fossil fuel capacity and locking in capital with a stranded asset risk, diverting it to solar and batteries will better serve the country’s interests.
The pathway is achievable with the right policy changes that prioritise solar and battery storage, plan for flexible power systems, reduce fossil fuel imports and improve demand forecasting.
Thailand’s clean energy transition must strike the right balance between cost, emissions, and security—and this Ember analysis powerfully confirms that a least-cost, renewables-led approach delivers on all three. With decades of experience across ASEAN’s energy landscape, I believe this is Thailand’s moment to pivot from fossil dependence to a resilient system powered by solar, storage, and smart regional interconnections. By embracing this pathway, we can manage the surge in EV and data centre demand while ensuring affordability, stability, and sustainability for decades to come.
Dr. Weerawat Chantanakome
Senior Policy Counsel on Energy, ERIA; Former Honorary Counsellor to the Minister of Energy of Thailand; Former Executive Director, ASEAN Centre for Energy (ACE)
Senior Policy Counsel on Energy, ERIA; Former Honorary Counsellor to the Minister of Energy of Thailand; Former Executive Director, ASEAN Centre for Energy (ACE)
Emerging countries are at a crossroads of meeting a rising electricity demand at affordable costs to drive the economy while cutting emissions for sustainability goals. Solar, coupled with battery storage, represents the optimal pathway to address this trilemma. The energy transition of Thailand towards home-grown renewables could lower energy costs, cut emissions, and strengthen energy security by mitigating dependence on fossil fuel imports.
Lam Pham
Energy Analyst – Asia
Energy Analyst – Asia
Key takeaways
01
Adding 32 GW more solar and 6 GW / 15 GWh more battery storage capacity beyond RPDP targets can help reliably meet additional data centre and EV charging demand
We estimate 10 terawatt-hours (TWh) of additional electricity demand from the data centre boom and an extra 3.3 gigawatts (GW) of peak load from EV charging by 2037, compared to the RPDP projection. Despite these demand additions, our cost-optimal pathway does not add about 2 GW of new gas capacity. Instead, it recommends building an additional 32 GW of solar and 6 GW/ 15 GWh of battery storage by 2037, beyond the RPDP’s targets, to meet the higher demand reliably.
02
Cost-optimal pathway offers greater energy security and defence from gas market volatility
The cost-optimal pathway can significantly reduce Thailand’s gas use, compared to the RPDP. It cuts the power system’s gas use by 1,815 billion cubic feet by 2037, 11% lower than the RPDP trajectory or almost two times the consumption in 2024. This strengthens energy security and reduces exposure to gas price volatility. It also helps save nearly $16 billion over 2026-2037 in fuel costs compared to the RPDP.
03
Up to 6 GW/ 15 GWh of additional battery is required by 2037 to ensure a reserve margin of 15% throughout the timeframe
Our analysis uses reliability-adjusted reserve margin to optimize capacity expansion to ensure reliability in systems with high variable renewable energy penetration. Thailand’s peak load interval falls in the evening when there is no sunlight, making planning for reserve even more critical to ensure system reliability. The study shows that an additional 6 GW/ 15 GWh of battery can help the system meet the 15% reserve margin target throughout the planning horizon.
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