11

Renewable Energy and Renewable Energy and Energy Conservation Policy Energy Conservation Policy

in Thailandin Thailand Department of Alternative Department of Alternative

Energy Development and Energy Development and Efficiency Efficiency

(DEDE)(DEDE)

Ministry of EnergyMinistry of Energy (MOEN)(MOEN)

OctoberOctober 2005 2005

22

Presentation Presentation OutlinesOutlines

Introduction to DEDEIntroduction to DEDE Energy Situation in ThailandEnergy Situation in Thailand Thailand Energy Policy and StrategiesThailand Energy Policy and Strategies Highlighted ProgramsHighlighted Programs

Promotion on Renewable EnergyPromotion on Renewable Energy Tax incentiveTax incentive Energy Efficiency in ResidentialEnergy Efficiency in Residential

33

Department of Alternative Energy Department of Alternative Energy Development and EfficiencyDevelopment and Efficiency

( DEDE )( DEDE )

Established in 1953 as a National Energy Established in 1953 as a National Energy OfficeOffice

Transfer to Department of Energy Transfer to Department of Energy Development and Promotion (DEDP) Development and Promotion (DEDP) under the Ministry of Science Technology under the Ministry of Science Technology and Environment in 1992and Environment in 1992

Transform to DEDE Under the Ministry of Transform to DEDE Under the Ministry of Energy due to a Major Thai Government Energy due to a Major Thai Government Reform in 2002Reform in 2002

44

MissionMission

“ “ Encouraging the Promoting Ener Encouraging the Promoting Ener gy Efficiency and Conservation as gy Efficiency and Conservation as

well as Providing and Developing well as Providing and Developing Sources of Alternative Energy to Sources of Alternative Energy to SS

erve erve aa ll ll EE nergy nergy CC onsuming onsuming SS ectors ectors with Competitive Cost and with Competitive Cost and GG ood ood QQ

uality of uality of LL ife ife ””

55

OrganizationOrganization StructureStructure

DEDE

DEDE Secretariat Bureau of Energy Regulation and Conservation

Bureau of Energy Research

Planning Division Bureau of Energy Efficiency Promotion

Bureau of Energy Development

Training Division Bureau of Energy Technology Transfer

Bureau of Solar Energy

66

Energy Demand Profile Energy Demand Profile 20042004

Transportation37%

Agriculture 6%

Industrial36%

Res & Com 21%

Thailand consumes energy about 1.45 million barrel of oil equivalent per day , 15% of GDP

Consumption by Sector*

15

35

48

2

OilNatural Gas

Coal Hydro

Primary Energy consumption

*2003

Figures

77

Thailand Energy Strategies Thailand Energy Strategies for Economic Development and Regional for Economic Development and Regional

IntegrationIntegration

Strategy for Efficient Use of EnergyStrategy for Efficient Use of Energy Reduce Energy Elasticity from 1.4:1 to 1:1 by 2007Reduce Energy Elasticity from 1.4:1 to 1:1 by 2007 Strategy for Renewable Energy Development Strategy for Renewable Energy Development Increase share of RE from 0.5% to 8% of total final energy by Increase share of RE from 0.5% to 8% of total final energy by

20112011 Strategy for Energy SecurityStrategy for Energy Security Ensure sufficient and reliable energy supply for at least 30 yrsEnsure sufficient and reliable energy supply for at least 30 yrs Strategy for Thailand as a Regional Energy Strategy for Thailand as a Regional Energy

CenterCenter Develop Strategic Energy Land Bridge and Energy HubDevelop Strategic Energy Land Bridge and Energy Hub

Cabinet Resolution on September 2, 2003Cabinet Resolution on September 2, 2003

88

NRE0.5%

TE16.5%

พลั�งงานเชิงพาณิชิ ย์�

83.0% TE = Traditional Energy

NRE = New & Renewable Energy

2554255481,753 KTOE81,753 KTOE

TE 11%

NRE8%(6,540 KTOE)

CommercialEnergy

81%

52,939 KTOE

2003 (265 ktoe)

CommercialEnergy

201181,763 kTOE

National Agenda

National Agenda

Cabinet Resolution

on June 8, 2004

Strategy for Renewable Energy Strategy for Renewable Energy DevelopmentDevelopment

99

Target and Target and Strategy of Strategy of

RERE

RE8%

RE0.5%

Heat(Incentive)

3,700 KTOE

Bio Fuel (Incentive) 1,800 KTOEEthanol 3.0 M liters/DBio diesel 4.0 M liters/D

Heat~ 0.00 KTOE

Bio fuel~ 0.00 KTOE

2002 2011

R & D

RPS

INCENTIVE

Electricity

Facilitator

RPS 437 MW- Solar- Wind- MSW- Biomass- Hydro Incentive 1,093 MW

ElectricitySolar 6 MWWind 0.2 MWBiomass 560 MW

Strategy for Renewable Energy Strategy for Renewable Energy DevelopmentDevelopment

1010

Industrial basedBiodiesel

Development

Biodiesel Strategic Plan

2004

2005 2006 2007

2008 2011

Community Community basedbased

Biodiesel Pilot Biodiesel Pilot Project Project

DevelopmentDevelopment

Specification of Specification of B100 & B5, B10B100 & B5, B10

Biodiesel Mandate 10% Blend

Phase I: Specified areas

Phase II: Whole country

Research Demonstration

2009 2010

Incentive (Biodiesel Community base)

Prod. Cap.4.0

mill.lt/d

1111

Other Products

Biodiesel : Business ModelBiodiesel : Business Model

Biodiesel Plant

Extraction Plant

Power Plant

Farmers 60,000 RaiBlending Facilities

Will produce in the 4th year and last 21 years

Business

Feasibility

Value-added

Glycerin

Oleochemical

Vitamin A,E Biodiesel Complex

100,000 Liters/day

1212

Biodiesel and CommunitiesBiodiesel and Communities

Electricity as Biofuels Electricity as Biofuels by-productby-product

Potential for rural off-Potential for rural off-grid electricification grid electricification Distributed GenerationDistributed Generation

Renewable energy Renewable energy source for power source for power generationgeneration

Biodiesel Complex

Biodiesel Factory

Power Plant

Crushing Factory

Small-scale Biodiesel ProjectSmall-scale Biodiesel Project Biodiesel production for Biodiesel production for

using in communityusing in community

1313

Opening Ceremony for Community Based Opening Ceremony for Community Based Biodiesel Researching and Developing – Chiang Biodiesel Researching and Developing – Chiang

MaiMai

First in Thailand and ASEAN

1414

- Enforced government fleets use Gasohol

- Gas stations in govern. must sell Gasohol

Formulate policy on utilizing High Performance Vehicles for E10 and FFV

- Spec. of Gasohol 95 & 91- Emission test on using Gasohol 95-Defined gasohol use in Spec. of new vehicle procurement- Requested governments’ vehicles to refill gasohol

Formulated policy on fade out MTBE in ULG 95 and promote Gasohol 91 in some areas

Gasohol Strategic Plan

Phase IMTBE

replacement

Ethanol 1.0 mill. lts /d

Ethanol3.0 mill. lts /d

Phase IIGasohol Mandate

2004

2005 2006 2007

2008 20112009 2010

1515

National Ethanol ProgramNational Ethanol Program

Pricing Policy

Price Diff. by 0.4 Euro Demand by 4 times

Increase Outlets

Good cooperation with oil companies Expanding station to 4,000 by 2005

Compulsory Measures

Compulsory distribution of E-10 on an national scale on Jan 1st 2007

Promoting E-10

Gaining popularity and Already replace 25% of ULG 95

1616

Ethanol – GasoholEthanol – Gasohol

Price Incentive - Gasohol is cheaper than the premium gasoline by 1.50

baht

TargetTargetDecember 2005December 2005 Expanding gasohol station Expanding gasohol station

from 2,171 * stations to from 2,171 * stations to 4,000 stations nationwide4,000 stations nationwide

Gasohol 2.8 * to 4 million Gasohol 2.8 * to 4 million litre/day ( * as of Sep. 05)litre/day ( * as of Sep. 05)

1 January 20071 January 2007 Gasohol 95 nationwide, Gasohol 95 nationwide,

remove gasoline 95 from the remove gasoline 95 from the marketmarket

20082008 Using gasohol 91 and 95 Using gasohol 91 and 95

nationwidenationwide

TargetTargetDecember 2005December 2005 Expanding gasohol station Expanding gasohol station

from 2,171 * stations to from 2,171 * stations to 4,000 stations nationwide4,000 stations nationwide

Gasohol 2.8 * to 4 million Gasohol 2.8 * to 4 million litre/day ( * as of Sep. 05)litre/day ( * as of Sep. 05)

1 January 20071 January 2007 Gasohol 95 nationwide, Gasohol 95 nationwide,

remove gasoline 95 from the remove gasoline 95 from the marketmarket

20082008 Using gasohol 91 and 95 Using gasohol 91 and 95

nationwidenationwide

1717

Gasohol PromotionGasohol Promotion

1818

1 st PhaseMolassesCassava

2 nd PhaseSugar cane juice & MolassesCassava

Ethanol Ethanol plantsplants

1st Phase (1.09 Mill. lts / day) 3 existing ethanol plants total production cap. 0.375 Mill. lts / day 3 plants under construction total cap. 0715Mill. lts/day

2nd Phase (3.2 Mill. lts / day) 1 8 plants were approved: 14 sugar mills & 4 cassava mills

Ethanol plant location

No direct relation between sugar sector and distillery

1919

Solar Cell Strategic Plan

Remote Area (38 MW)

Stand alone System

R&D- Increase Local Content Percentage- Reduce PV System Price

201020092008200720062005

2004 2011

Solar Cell Industry

Incentive (72 MW)- Feed In Tariff- Soft loan- Tax Incentive

RPS (140 MW)

250 MW

2020

As of 2003, approximately 6 MW of PV systems have been installed. Water pumping 1.14 MWStand-alone systems 0.26 MWBattery charging 2.17 MWTelecommunication 1.50 MWSchools 0.30 MWHospitals 0.02 MWOcean navigators 0.02 MWGrid-connected systems 0.31 MWMiscellaneous 0.13 MWSource: Dusit Kruangam, et.al., Pre-Feasibility Study on Solar Cell Production in Thailand, Technical

Digest of the International PVSEC-14, Bangkok, Thailand, 2004.

Status of PV Installation in Thailand: End of the Year 2003

EGAT, by April 2004, has been conducting the biggest Grid-Connected system of 0.5 MW in Mae Hong Son.Newly government-initiated project, Solar Home System for 200,000 unelectrified houses in Thailand, of 24 MW will be conducted between 2004 (150,000 sets 120 Wp each in the first phase) and 2005 (50,000 sets in the second phase).It is expected that the PV market after 2007 will grow at the rate of 50 MW per year.

2121

Newly government-initiated project, Solar Home System for 200,000 unelectrified houses in Thailand, of 24 MW will be conducted between 2004 (150,000 sets 120 Wp each in the first phase) and 2005 (50,000 sets in the second phase).Implementation of a Renewable Portfolio Standard (RPS) would enforce IPPs (independent power producers) as well as SPPs (small power producers) to generate electricity from renewable energy sources. Net metering with government incentives will also be implemented.It is expected that the PV market after 2007 will grow at the rate of 50 MW per year.

PV Market Trend in Thailand

2222

Tool to Overcome BarriersTool to Overcome Barriers Need government strongly support and Need government strongly support and

encouragement to drive ethanol encouragement to drive ethanol marketmarket Clear policy and targetClear policy and target Market drive;Market drive; Incentive;Incentive; Specification.Specification.

Cooperation from all parties concernedCooperation from all parties concerned Car manufacturers;Car manufacturers; Oil refineries and oil distributors;Oil refineries and oil distributors; Industries i.e. sugar mills, CPO mills, Industries i.e. sugar mills, CPO mills,

starch millsstarch mills Farmers and cooperatives.Farmers and cooperatives.

2323

Renewable Energy PromotionRenewable Energy Promotion ProgramProgram

Former ProjectsFormer Projects- - Small Power ProducersSmall Power Producers (SPP)(SPP) Project Project ((11 stst))- - SPP ProjectSPP Project ( (22 ndnd))

Ongoing ProjectOngoing Project- - Very Small Power ProducersVery Small Power Producers (VSPP) Project(VSPP) Project

Future ProjectsFuture Projects- - Renewable Portfolio Standard (RPS)Renewable Portfolio Standard (RPS)- - IncentiveIncentive i.e.i.e. Feed-in Tariff &Feed-in Tariff & Tax HolidaysTax Holidays- VSPP - VSPP ((Capacity ExpansionCapacity Expansion))

2424

Energy conservation Strategies and Energy conservation Strategies and ProgramsPrograms

Energy IntensityEnergy Intensity Target of Energy EfficiencyTarget of Energy Efficiency Highlighted ProgramsHighlighted Programs

Compulsory ProgramCompulsory Program Cooperative EffortsCooperative Efforts Revolving FundRevolving Fund Tax IncentivesTax Incentives

2525

Energy IntensityEnergy Intensity

6h t t p : / / w w w .e ia .d o e .g o v / p u b / in t e r n a t io n a l / ie a l f / t a b le e 1 g .x ls

E n e r g y I n t e n s i t y [ T o t a l P r im a r y E n e r g y C o n s u m p t io n P e r D o l la r o f G r o s s D o m e s t i c P r o d u c t ]

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002Btu

per 1

995

US D

ollar

s Us

ing M

arke

t Exc

hang

es R

ates

World Primary Energy Consumption Per Dollar of Gross Domestic Product, 1991-2002

ThailandUSAUKGermanyJapan

(Compare with Developed Countries)

2626

Energy IntensityEnergy Intensity

6h ttp : / / w w w .e ia .d o e .g o v / p u b / in te rn a tio n a l/ ie a lf / ta b le e 1 g .x lsE n e rg y I n te n s ity [ T o ta l P r im a ry E n e rg y C o n su m p tio n P e r D o lla r o f G ro ss D o m e stic P r o d u c t]

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002Btu pe

r 199

5 US

Doll

ars U

sing Ma

rket E

xcha

nges

Rate

s

Malaysia

China

India

Thailand

Vietnam

World Primary Energy Consumption Per Dollar of Gross Domestic Product, 1991-2002

(Compare with Developing Countries)

2727

Strategy

Energy Efficiency Improvement TargetEnergy Efficiency Improvement Target

2. Improve EE in Industry

Objective

ประเทศไทยมี�พลั�งงานใช้�

อย�างต่�อเน��อง เพ�ยงพอต่�อ

ความีต่�องการไปอ�ก 50 ป�ประช้าช้นมี�พลั�งงานใช้�

อย�างท��วถึ ง ในราคาท��เป!น

ธรรมีแลัะเพ��อค$ณภาพช้�ว'ต่ท��

ดี�ขึ้ *น

Energy Efficiency

Improvement

11

22

ประเทศไทยเป!นศ+นย,กลัาง

พลั�งงานในภ+มี'ภาค

33

44

1. Improve EE in Transportation

Energy Elasticity= 1:1 in 5 years

Indicators

Energy Elasticity = Energy Elasticity = ∆∆tt Energy Energy Consumption/ Consumption/ ∆∆tt GDPGDP

Ave. Energy Elasticity1.4 : 1.0

Ratio of energy growth rate to GDP growth rate = 1.0 by 2008

3. Awareness raising

campaign

2828

Customer Service

Customer Service

Workshop &

Training

Workshop &

Training

Low InterestSource of Fund

Low InterestSource of Fund

ListOf

Experts

ListOf

ExpertsDirectory

of Technolo

gy Provider

s

Directory of

Technology

Providers

Promotion of

ESCOs

Promotion of

ESCOs

Promotion

Campaign

Promotion

Campaign

Demonstration Project

Demonstration Project

Access to Funds

Technical Assistance

Raise up Confidence Perfect Information

Regulations

Grant for small investm

ent

Grant for small investm

ent

Free Energy Audit and

consulting

Free Energy Audit and

consulting

Tax Incentive

s

Tax Incentive

s

Incentives & SubsidiesEnergy Codes

Energy Codes

Create Conducive Environment for EE Create Conducive Environment for EE InvestmentInvestment

2929

50

100

150

200

250

300

2524 2525 2526 2527 2528 2529 2530 2531 2532 2533 2534 2535 2536 2537 2538 2539 2540 2541 2542 2543 2544

Industrial and Building sectorIndustrial and Building sector

ประเทศไทยมี�พลั�งงานใช้�

อย�างต่�อเน��อง เพ�ยงพอต่�อ

ความีต่�องการไปอ�ก 50 ป�ประช้าช้นมี�พลั�งงานใช้�

อย�างท��วถึ ง ในราคาท��เป!น

ธรรมีแลัะเพ��อค$ณภาพช้�ว'ต่ท��

ดี�ขึ้ *น

11

22

ประเทศไทยเป!นศ+นย,กลัาง

พลั�งงานในภ+มี'ภาค

33

44

Cooperate with Ministry of Industry to change industrial structure to be less energy intensive

Support by energy conservation promotion programs

Regulation Incentives, subsidies Soft loans for EE investment Technical assistance Research and development Training, capacity development

Tax Incentives Tax breaks for ESCOs Import duty exemption for high energy efficient products, machines

Performance-based incentives

Basic Metal

Chemical

(ป� 2

52

4 =

100

)

ทิศทิางแลัะมาตรการย์�งไม�ชิ�ดเจน

ทิศทิางแลัะมาตรการย์�งไม�ชิ�ดเจน

Paper

Fabricated Metal

Textiles

Non Metalic

Food and Beverages

Energy Intensity =EnergyGDP

Improve end-use energy

efficiency

2. Improve EE in Industrial and building

Sector

StrategyObjective Programs

3030

Compulsory ProgramCompulsory Program

Over 1 MW peak demand or consume Over 1 MW peak demand or consume more than 20 TJ annuallymore than 20 TJ annually

More than 4000 large buildings and More than 4000 large buildings and factories (so called Designated Facilities) factories (so called Designated Facilities)

Mandatory TasksMandatory Tasks Assign Energy ManagerAssign Energy Manager Report Monthly Energy UseReport Monthly Energy Use Develop EE Target and PlanDevelop EE Target and Plan Compile all energy codesCompile all energy codes

3131

Cooperative Efforts on Energy Cooperative Efforts on Energy ManagementManagement

Objective: Sustainable energy management Objective: Sustainable energy management through internal cooperative efforts through internal cooperative efforts

MethodologiesMethodologieso Educate on concept & method + evaluationEducate on concept & method + evaluationo Help create and implement EC measures Help create and implement EC measures

AchievementAchievement Implemented factory 95 plantsImplemented factory 95 plants Introduced house-keeping measuresIntroduced house-keeping measures Energy saving of 5-10% for each facilityEnergy saving of 5-10% for each facility

( simple payback of 2.5 yrs)( simple payback of 2.5 yrs)

3232

Revolving Fund for EC ProjectsRevolving Fund for EC Projects

Budgets allocation from Budgets allocation from ECP Fund ECP Fund

Loan approval by BankLoan approval by Bank Technical assistance by Technical assistance by

DEDEDEDE Key conditionsKey conditions

Loan size Loan size << 1.2 mill 1.2 mill USDUSD//projectproject

Interest rate less than 4% Interest rate less than 4% (fixed rate)(fixed rate)

Repayment in the defined Repayment in the defined time frame (7yr)time frame (7yr)

Present Status 79 approved and under construction projects with leverage 80 million USD of EC Investment

Average investment 1 mill USD / a project & average payback 2.3 yrs

Annual savings > 250 GWh and 91 mill. liter of fuel oil

3333

Cost Based Tax IncentiveCost Based Tax Incentive

25% Tax Break for the Investment in EE 25% Tax Break for the Investment in EE Projects Result in Efficiency Projects Result in Efficiency ImprovementImprovement

Applicable for the First 50 mill baht Applicable for the First 50 mill baht Investment ( 1.25 mill USD )Investment ( 1.25 mill USD )

Incentive Spread Over 5 YearsIncentive Spread Over 5 Years

3434

Performance Based Tax IncentivePerformance Based Tax Incentive

100% of achieved energy saving 100% of achieved energy saving will become tax deductionwill become tax deduction

Max Incentive of 2 mill baht (50,000 Max Incentive of 2 mill baht (50,000 USD) / FacilityUSD) / Facility

Pre and Post Audit will be requiredPre and Post Audit will be required

3535

Incentive through Board of Investment ( BOI )

Import duties and Cooperate tax exemption on new Import duties and Cooperate tax exemption on new investment ininvestment in

• Energy conservation business Energy conservation business

• High efficiency machine or equipment and renewable High efficiency machine or equipment and renewable energy equipment manufacturingenergy equipment manufacturing

• Solar PV manufacturingSolar PV manufacturing

• Energy Service Company – ESCO Energy Service Company – ESCO

Renewable energy production businessRenewable energy production business

• Alcohol or fuels from agricultural productsAlcohol or fuels from agricultural products

• Electricity or steam generation Electricity or steam generation

Incentive last for the max period of 8 years Incentive last for the max period of 8 years

3636

Promotion of ESCOsPromotion of ESCOs

BOI – Tax IncentiveBOI – Tax Incentive Maximum 8 years tax exemption for ESCO projects – Maximum 8 years tax exemption for ESCO projects –

Cooperate Income taxCooperate Income tax Access to Revolving FundAccess to Revolving Fund

Eligible to borrow the low-interest loan from RF Eligible to borrow the low-interest loan from RF program on project-by-project basisprogram on project-by-project basis

ESCO promotion activitiesESCO promotion activities WebsiteWebsite Seminars, workshopSeminars, workshop PublicationsPublications Lists of ESCOs and successful casesLists of ESCOs and successful cases

3737

Holistic ApproachHolistic Approach

เพ�มม�ลัค่�าเพ�มม�ลัค่�าเปลั��ย์นโค่รงสร!างเปลั��ย์นโค่รงสร!างปร�บกระบวนทิ�ศน�ปร�บกระบวนทิ�ศน�

Paradigm Shift

Enforcer / Regulator Facilitator / Supporter

3838

EE in Residential SectorEE in Residential Sector

Promotion on energy efficient housesPromotion on energy efficient houses Provide 3 different models of energy efficient Provide 3 different models of energy efficient

houses with a focus onhouses with a focus on• Housing design ( Site allocation / Shape )Housing design ( Site allocation / Shape )• Roof designRoof design• WallsWalls• Floor Floor • Ceiling Ceiling • Openings ( Door and Windows )Openings ( Door and Windows )• Sunshade EquipmentSunshade Equipment• Ventilation Ventilation • Natural light utilizationNatural light utilization

3939

4040

4141

4242

Energy saving estimation

ModelElectricity Cost

Total(kwh/year)

Estimated Saving

(kwh/year)

A/C system(kwh/year)

Lighting (kwh/year)

1. Model A• One-storey• 84 sq.m.• 17,000 USD

Conventional design 6,499 1,125 7,624

27.3 % New design 4,420 1,125 5,545

2. Model B• Two-storey• 135 sq.m.• 33,600 USD

10,293 2,422 12,751

19.9 % New

design7,350 2,422 9,772

3. Model C• Two-storey• 183 sq.m.• 40,800 USD

13,353 3,386 6,739

29.5 %

10,126 3,386 13,512

Conventional

design

Conventional design

New design

4343

Promoting Energy Efficiency Promoting Energy Efficiency Housing Housing Single Family HousesSingle Family Houses Townhouses Townhouses

The Study of Building Codes for The Study of Building Codes for Energy Efficiency House and Energy Efficiency House and Buildings with the Promotional Buildings with the Promotional SchemeScheme

On going projects for ResidentialOn going projects for Residential

4444

More Information More Information VisitVisit

www.dede.go.thwww.dede.go.th

Thank you