Intiated following the amendment of the EGAT (Electricity Generating Authority of Thailand ) Act, the small power producer (SPP) purchase agreements were meant to initiate private participation in power sector development. The objectives of purchasing electricity from SPPs were: * to reduce the financial burden on the government of electricity generation and distribution; * to encourage participation by private producers in electricity generation; * to promote the use of indigenous by-product energy sources and renewable energies for electricity generation; * to promote the more efficient use of primary energy. The source of SPP generation must be from: * non-conventional energy such as wind, solar and mini-hydro energy; * waste or by-products from agricultural and industrial activities; * co-generation using natural gas or petroleum products under a number of conditions. At the end of 1996, there were 17 SPP contracts, three firm and 14 non-firm, with a total installed capacity of 910 MW. About 370 MW was sold to the national grid. Regulations on power purchase provisions from Very Small Renewable Energy Power Producers (VSREPP) were approved in May 2002. They allow for net metering and a streamlined interconnection process to minimise VSREPP connecting costs. A VSREPP is defined as a generator 1) with its own generating unit 2) which utilises renewable energy sources, agricultural and industrial wastes and residues, or by-product steam 3) which sells no more than 1 MW of electrical power to a distribution utility. There are fewer than 24 VSPP generators currently in operation and a total cumulative capacity of about 2 MW. Though they are insignificant in terms of the countrys energy production, they play an important role in promoting the participation of small generators in power generation, decentralising energy production and promoting the efficient use of domestic resources that are environmentally friendly.