thailand’s energy conservation policy and programs

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Thailand’s Thailand’s Energy Conservation Policy and Energy Conservation Policy and Programs Programs Prasert Sinsukprasert Prasert Sinsukprasert Bureau of Energy Conservation and Regulation Bureau of Energy Conservation and Regulation Dept. of Alternative Energy Development and Efficiency Dept. of Alternative Energy Development and Efficiency Ministry of Energy Ministry of Energy 20 October 2005 20 October 2005 Presented in the FIRST ASIA ESCO Conference, Bangkok, Thailand Presented in the FIRST ASIA ESCO Conference, Bangkok, Thailand

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Thailand’s Energy Conservation Policy and Programs. Prasert Sinsukprasert Bureau of Energy Conservation and Regulation Dept. of Alternative Energy Development and Efficiency Ministry of Energy 20 October 2005 Presented in the FIRST ASIA ESCO Conference, Bangkok, Thailand. - PowerPoint PPT Presentation

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Page 1: Thailand’s Energy Conservation Policy and Programs

Thailand’sThailand’sEnergy Conservation Policy and Energy Conservation Policy and

ProgramsProgramsPrasert SinsukprasertPrasert Sinsukprasert

Bureau of Energy Conservation and RegulationBureau of Energy Conservation and RegulationDept. of Alternative Energy Development and EfficiencyDept. of Alternative Energy Development and Efficiency

Ministry of EnergyMinistry of Energy

20 October 200520 October 2005Presented in the FIRST ASIA ESCO Conference, Bangkok, ThailandPresented in the FIRST ASIA ESCO Conference, Bangkok, Thailand

Page 2: Thailand’s Energy Conservation Policy and Programs

0.0

0.3

0.6

0.9

1.2

19801990200020102020

0

10

20

30

40

50

60

19801990200020102020

0

50

100

150

200

250

300

350

19801990200020102020

1.51.5

1.11.1

2.42.4

1.61.6

1.01.0

0.40.4

2.02.0

1414

1010

1.31.3

3.13.1

2.32.3

1.01.0

1.81.8

6.66.6

2.62.6

World Energy SituationWorld Energy Situation

Total Energy Other Wind and Solar

HydroHydro

NuclearNuclear

Biomass,MSW

Biomass,MSW

Wind & SolarWind & Solar

OilOil

GasGas

CoalCoal

OtherOther

Growth rate 2000-2020, %

Growth rate 2000-2020, %

SolarSolar

WindWind

MBDOE MBDOE MBDOE

Growth rate 1980-2000, %

Growth rate 1980-2000, %

1.71.7 1.71.7

Source : ExxonMobil Projection

Page 3: Thailand’s Energy Conservation Policy and Programs

Thailand’s Energy Outlook Thailand’s Energy Outlook

Transportation37%

Agriculture 6%

Industrial36%

Res & Com 21%

Thailand consumes energy about 1 mill bls of oil per day(0.75% of World energy consumption)

11.2

35.450.8

2

OilNatural Gas

Coal Hydro

Supply Demand

Page 4: Thailand’s Energy Conservation Policy and Programs

Thailand’s Energy SituationsThailand’s Energy Situations

Energy is basic Energy is basic factor of economic factor of economic developmentdevelopment

In 2002, energy costs In 2002, energy costs accounted to 14.31% accounted to 14.31% of GDPof GDP

Oil imports Oil imports accounted to 12% of accounted to 12% of total import valuestotal import values

60% of commercial 60% of commercial energy was importedenergy was imported

Still rooms for Still rooms for energy efficiency energy efficiency improvementimprovement 0

10,000

20,000

30,000

40,000

50,000

60,000

2535 2536 2537 2538 2539 2540 2541 2542 2543 2544 2545

ktoe

Transport 37%

Industry 36%

Resident & Commercial 21%

Agriculture 6%Agriculture 6%

Page 5: Thailand’s Energy Conservation Policy and Programs

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)

Page 6: Thailand’s Energy Conservation Policy and Programs

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)

Page 7: Thailand’s Energy Conservation Policy and Programs

New Vision for Energy New Vision for Energy DevelopmentDevelopment

“…Utilities sector is in transition …. focusing more on Economic Value, rather than revenue generation.”

Prof. Michael E. PorterInternational Utilities and Energy Conference 2003

“ …In the future, the competitive advantage of nations will partly

depend on Energy Efficiency of the domestic real sectors…”

William RamseyExe. VP of International Energy Agency (IEA)

Page 8: Thailand’s Energy Conservation Policy and Programs

Energy Strategies for Better Energy Strategies for Better CompetitivenessCompetitiveness28 August 200328 August 2003

20032003

Page 9: Thailand’s Energy Conservation Policy and Programs

Strategy

1.Improve EE in Transportation Sector

Objective

ประเทศไทยมีพลั งงานใช้�

อย�างต่�อเน��อง เพยงพอต่�อ

ความีต่�องการไปอก 50 ป�ประช้าช้นมีพลั งงานใช้�

อย�างท �วถึ�ง ในราคาท�เป น

ธรรมีแลัะเพ��อค#ณภาพช้ว&ต่ท�

ดีขึ้�)น

Improve end-use energy

efficiency

11

22

ประเทศไทยเป นศ*นย+กลัาง

พลั งงานในภ*มี&ภาค

33

44

• Cooperate with Ministry of Transportation to improve structure of public transports

• Changing Modes from roads to rails

• Good Management of mass transportation

• Comprehensive development of transportation system – integration of water and railways

• Enhance City planning• Promote high efficient cars

using tax incentives• Promotion campaign to

change behaviors• Ect.

Transportation sectorTransportation sectorPrograms

Page 10: Thailand’s Energy Conservation Policy and Programs

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

ประเทศไทยมีพลั งงานใช้�

อย�างต่�อเน��อง เพยงพอต่�อ

ความีต่�องการไปอก 50 ป�ประช้าช้นมีพลั งงานใช้�

อย�างท �วถึ�ง ในราคาท�เป น

ธรรมีแลัะเพ��อค#ณภาพช้ว&ต่ท�

ดีขึ้�)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

)

ทิ�ศทิางและมาตรการยั�งไม�ชั�ดเจน

ทิ�ศทิางและมาตรการยั�งไม�ชั�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

Page 11: Thailand’s Energy Conservation Policy and Programs

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

Page 12: Thailand’s Energy Conservation Policy and Programs

Strategy

Energy Efficiency Energy Efficiency Improvement Improvement

TargetTarget

2. Improve EE in Industry

Objective

ประเทศไทยมีพลั งงานใช้�

อย�างต่�อเน��อง เพยงพอต่�อ

ความีต่�องการไปอก 50 ป�ประช้าช้นมีพลั งงานใช้�

อย�างท �วถึ�ง ในราคาท�เป น

ธรรมีแลัะเพ��อค#ณภาพช้ว&ต่ท�

ดีขึ้�)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

Page 13: Thailand’s Energy Conservation Policy and Programs

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

Page 14: Thailand’s Energy Conservation Policy and Programs

Cooperative Efforts on Energy ManagementCooperative Efforts on Energy Management

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)

Page 15: Thailand’s Energy Conservation Policy and Programs

Revolving Fund for EC ProjectsRevolving Fund for EC Projects

Budgets allocation Budgets allocation from ECP Fund from ECP Fund

Loan approval by BankLoan approval by Bank Technical assistance Technical assistance

by DEDEby DEDE Key conditionsKey conditions

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

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

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

Page 16: Thailand’s Energy Conservation Policy and Programs

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 ImprovementProjects Result in Efficiency Improvement

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

Page 17: Thailand’s Energy Conservation Policy and Programs

Performance Based Tax IncentivePerformance Based Tax Incentive

100% of achieved energy saving will 100% of achieved energy saving will become tax deductionbecome 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

Page 18: Thailand’s Energy Conservation Policy and Programs

Incentive through Board of Investment ( BOI )

Import duties and Cooperate tax exemption on Import duties and Cooperate tax exemption on new investment innew investment in• Energy conservation business Energy conservation business

High efficiency machine or equipment and High efficiency machine or equipment and renewable energy equipment manufacturingrenewable energy 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 Incentive last for the max period of 8 years years

Page 19: Thailand’s Energy Conservation Policy and Programs

Promotion of ESCOsPromotion of ESCOs

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

projects – Cooperate Income taxprojects – Cooperate Income tax Access to Revolving FundAccess to Revolving Fund

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

Page 20: Thailand’s Energy Conservation Policy and Programs

Holistic ApproachHolistic Approach

เพิ่��มม�ลค่�าเพิ่��มม�ลค่�าเปล��ยันโค่รงสร�างเปล��ยันโค่รงสร�างปร�บกระบวนทิ�ศน!ปร�บกระบวนทิ�ศน!

Paradigm Shift

Enforcer / Regulator Facilitator / Supporter

Page 21: Thailand’s Energy Conservation Policy and Programs

For More InformationFor More Information

www.energy.go.thwww.energy.go.th

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