Government Policy and Supports for Energy Efficiency in Industry Sector

1. Government Policy and Supports for Energy Efficiency in Industry Sector Krairit Nilukuha Director General Department of Alternative Energy Development and Efficiency Ministry of Energy, Thailand www.dede.go.th 16 September 2009

2. Primary Energy Supply 2008 Renewables 20.1%(including hydro) Oil 36.8% Coal 13.6% NG 29.6% Total Primary Energy Supplpy 110,074 ktoe Source: Statistic Division, DEDE

3. Energy Consumption in 2008 Basic metal 4.7% Total Final Energy Consumption 66,284 ktoe Metal Frab 6.9% mining 0.2 % other 7.2% agricultural 5.3% transport 35.1% Food&Bev 27.6% Industry 37.0% textile 3.4% Commercial 7.1% residential 15.1% construction 0.2 % chemical 15.7% Non Metal 31.3% paper 2.3% Wood & Furniture 0.8% Energy Consumption in Industry and Business29,222 ktoe ( about 16.7 billion USD) Source: Statistic Division, DEDE

4. Thailand’s Energy Situations • Energy is basic factor of economic development • In 2008, energy costs accounted to about 14% of GDP • Oil imports accounted to 10% of total import values • 44% of commercial energy was imported or about 800 billion baht • Still rooms for energy efficiency improvement Agriculture 5% Resident & Commercial 21% Industry 36% Transport 37%

5. Energy Conservation Target(industry and commercial sector only) 25% savings by 2022 (17,862 ktoe) Ktoe Business as Usual Business as Usual Target Target Consumption in 2003 23,614 ktoe Consumption in 2003 23,614 ktoe Actual Actual

6. EE Conceptual Framework Conceptual Framework Demonstration & Dissemination Tax Incentive ESCO Fund High Tech. Revolving Fund Process Improvement Training Energy Management Data/Information Regulation Energy Management Practice Energy Conservation Promotion Fund

7. Energy Conservation Promotion Fund Objective and Source of Fund • collect small levy (0.04 – 0.25 baht per liter) from the sell of gasoline, diesel, fuel oil, and kerosene • Annual Revenue around2 – 5billion baht • Supervised by Energy Conservation Promotion Fund committee – chaired by Deputy Prime Minister • To be used for energy conservation promotion including research, study, development, demonstration, incentives (grants/soft loan), capacity building, and policy study

8. Measure/Program - Results and Plan Law and Regulation Results 2003 - 2008 Main components Plan in Progress • Appointment of Energy manager (PRE) • Reporting energy consumption and EE project implementation • Development of Target and Plan • Enforce only large energy consuming buildings and factories (over 1 MW peak) • Modify the law • - Use different measures/criteria for public / private buildings • - Issue Energy Management Standards • - Issues new building codes for each type of buildings (Hotel, Office, Hospital, Department store) • Overall compliance rate of 84% • 1,964 Designated Buildings • - PRE appointed 93% • - EC Report 92% • - T&P submitted 82% • 3,313 Designated Factories • - PRE appointed 86% • - EC Report 83% • - T&P submitted 69% Energy Saving Potential261 ktoe/year

9. Measure/Program - Results and Plan Revolving Fund Program Description Results 2002-2008 Future Plan • Low interest loan for Energy Efficiency via financial institutes • Less than 4% interest • Loan period of 7 years with one year grace period • Up to 50 million baht (1.3 milion USD) • 2009 • Secured additonal 60 million USD of budget • Long term Plan • Reduce DEDE roles on Funding Sources – providing more technical assistance • More co-financing from the banks • Training banking officers on EE technical knowledge • Supportover 240EE/RE projects • Total investment around500 million USD – of 150 million USD of Government’s Revolving Fund • Energy savings of 120 million USD per year. Participating Banks

10. Measure/Program - Results and Plan ESCO Fund Program Description Results 2008 Future Plan • Co-investment fund with private sector/investors • Equity Investment • Venture Capital • Equipment Leasing • Carbon Credit Trading • Technical Assistance • Credit Guarantee Facility • 2009 • Promoting and Marketing the Fund • Support at least 20 projects • Leverage minimum of 50 million USD • Energy Savings of 10 million USD • Long term Plan • Increase the Fund to 100 to 200 million USD • Corporatise the program to be Investment Company • Open for private investors • Set up the Fund (initial budget of 15 million USD • Selected 2 Fund Managers • - Energy Conservation of Thailand Foundation • - Energy for Environment Foundation • Approved 5 projects for the total investment of 25 million USD (co-invest by ESCO Fund for 4 million USD)

11. Measure/Program - Results and Plan EE Training and Capacity Building Curriculum • General courses • PRE • Senior PRE • Specialized Courses - Energy Management - Energy Audit - Energy Efficiency in Major Systems such as airconditioning, lighting, heating, etc - Energy Efficiency in Specific groups of industries (e.g. Textile, paper, Cement, etc.0 • Cooperate with Vocational Study Department to add EE study in regular curriculum Results 2002-2008 Future Plan • Trained over 4,000PREs • Trained 250 Senior PREs • Trainedover 15,000 people in other courses • Added 4 EE courses in vocational study • Train 40 college teachers to deliver EE course • Train over12,000 engineers and building operators • Over 10,000 students attend EE courses every year • Next Step • DEDE develop Curriculums and allow private sectors to deliver the courses and charge trainees • Train 500 vocational school teachers all over the country

12. Measure/Program - Results and Plan Cooperative Efforts for Energy Conservation Main Components Results 2002-2008 Future plan • 2009 • Implement in over 600buildings and factories • saving 450 million baht per year • Long term plan • Cost Sharing between government and private sector • Develop Energy Management Standards as Ministerial Orders • implemented over 3,000 facilities including • 1250 Designated factories (Metallic, Food, Chemical, Textile) • 600 Designated buildings (hospitals, hotels) • over 1200 SMEs • energy savings 80 million USD/ y • (Housekeeping, Low cost measures) • On-siteTechnical Assistance to embed Sustainableenergy management system in facilities • Establish EC Team and assess energy situation • Identify EE opportunities • Implement EE Projects • M&E

13. Measure/Program - Results and Plan Information and Knowledge Dissemination Various ways to provide information and consultation Future Plan • Develop Thailand EE/RE Knowledge Network • EE Display Center • display over 54 EE technologies for building industry and residential sector • EE Demonstration houses • Energy Conservation building • EE and RE Knowledge center : • Center of Data and Information concerning EE and RE development • Compile EE/RE data for planning and evaluation • Disseminate information through internet web-based • EE Cliniques • EE One Stop Service • EE Consulting Centers and Branches Results 2002 - 2008 • Over 20,000 people have used the services • Completion of EE Display Center

14. Finance Transport Industry Foreign Affairs Cooperation and Integration Science&Tech Education Agriculture Environment Minstry of Energy Private Sector

15. Committed for All “มุ่งมั่น ตั้งใจ เพื่อไทยทุกคน” 15