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Thailand’s Energy Conservation Policy and Programs

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.

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Thailand’s Energy Conservation Policy and Programs

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  1. Thailand’sEnergy 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

  2. World Energy Situation Total Energy Other Wind and Solar MBDOE MBDOE MBDOE Growth rate 1980-2000, % Growth rate 2000-2020, % 1.7 1.7 Wind & Solar 1.1 1.5 1.0 Other Biomass, MSW 3.1 14 Wind Coal 1.8 2.4 1.3 Gas 2.3 0.4 Nuclear 6.6 Oil 1.0 1.6 10 Solar Hydro 2.6 2.0 Source : ExxonMobil Projection

  3. Thailand’s Energy Outlook Thailand consumes energy about 1 mill bls of oil per day (0.75% of World energy consumption) Hydro Coal Agriculture 6% Transportation 37% Industrial 36% Oil Natural Gas Res & Com 21% Supply Demand

  4. Thailand’s Energy Situations • Energy is basic factor of economic development • In 2002, energy costs accounted to 14.31% of GDP • Oil imports accounted to 12% of total import values • 60% of commercial energy was imported • Still rooms for energy efficiency improvement Agriculture 6% Resident & Commercial 21% Industry 36% Transport 37%

  5. Energy Intensity (Compare with Developed Countries) Thailand USA UK Germany Japan

  6. Energy Intensity (Compare with Developing Countries)

  7. “…Utilities sector is in transition …. focusing more onEconomic Value, rather than revenue generation.” Prof. Michael E. Porter International Utilities and Energy Conference 2003 “…In the future, the competitive advantage of nations will partly depend onEnergy Efficiencyof the domestic real sectors…” William Ramsey Exe. VP of International Energy Agency (IEA) New Vision for Energy Development

  8. Energy Strategies for Better Competitiveness28 August 2003 2003

  9. Transportation sector Programs Strategy Objective 1 • Improve EE in Transportation Sector • 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. Improve end-use energy efficiency 2 ประเทศไทยมีพลังงานใช้อย่างต่อเนื่อง เพียงพอต่อความต้องการไปอีก 50 ปี 3 ประชาชนมีพลังงานใช้อย่างทั่วถึง ในราคาที่เป็นธรรมและเพื่อคุณภาพชีวิตที่ดีขึ้น 4 ประเทศไทยเป็นศูนย์กลางพลังงานในภูมิภาค

  10. Energy Energy Intensity = GDP Industrial and Building sector Programs Strategy Objective 1 • 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 2. Improve EE in Industrial and building Sector Improve end-use energy efficiency 2 ประเทศไทยมีพลังงานใช้อย่างต่อเนื่อง เพียงพอต่อความต้องการไปอีก 50 ปี ทิศทางและมาตรการ ยังไม่ชัดเจน 3 ประชาชนมีพลังงานใช้อย่างทั่วถึง ในราคาที่เป็นธรรมและเพื่อคุณภาพชีวิตที่ดีขึ้น Basic Metal Chemical Fabricated Metal 4 Food and Beverages ประเทศไทยเป็นศูนย์กลางพลังงานในภูมิภาค (ปี 2524 = 100) Non Metalic Textiles Paper

  11. Create Conducive Environment for EE Investment Customer Service Low Interest Source of Fund Access to Funds Workshop & Training Technical Assistance Grant for small investment Free Energy Audit and consulting Incentives & Subsidies Regulations Energy Codes Tax Incentives Raise up Confidence Perfect Information List Of Experts Promotion Campaign Promotion of ESCOs Directory of Technology Providers Demonstration Project

  12. Ratio of energy growth rate to GDP growth rate = 1.0 by 2008 Energy Efficiency Improvement Target Strategy Indicators Objective 1 Energy Efficiency Improvement 1. Improve EE in Transportation Energy Elasticity = 1:1 in 5 years 2. Improve EE in Industry 2 3. Awareness raising campaign ประเทศไทยมีพลังงานใช้อย่างต่อเนื่อง เพียงพอต่อความต้องการไปอีก 50 ปี Energy Elasticity = ∆tEnergy Consumption/ ∆tGDP 3 ประชาชนมีพลังงานใช้อย่างทั่วถึง ในราคาที่เป็นธรรมและเพื่อคุณภาพชีวิตที่ดีขึ้น Ave. Energy Elasticity 1.4 : 1.0 4 ประเทศไทยเป็นศูนย์กลางพลังงานในภูมิภาค

  13. Compulsory Program • Over 1 MW peak demand or consume more than 20 TJ annually • More than 4000 large buildings and factories (so called Designated Facilities) • Mandatory Tasks • Assign Energy Manager • Report Monthly Energy Use • Develop EE Target and Plan • Compile all energy codes

  14. Cooperative Efforts on Energy Management • Objective: Sustainable energy management through internal cooperative efforts • Methodologies • Educate on concept & method + evaluation • Help create and implement EC measures • Achievement • Implemented factory 95 plants • Introduced house-keeping measures • Energy saving of 5-10% for each facility ( simple payback of 2.5 yrs)

  15. Revolving Fund for EC Projects 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 • Budgets allocation from ECP Fund • Loan approval by Bank • Technical assistance by DEDE • Key conditions • Loan size < 1.2 mill USD/project • Interest rate less than 4% (fixed rate) • Repayment in the defined time frame (7yr)

  16. Cost Based Tax Incentive • 25% Tax Break for the Investment in EE Projects Result in Efficiency Improvement • Applicable for the First 50 mill baht Investment ( 1.25 mill USD ) • Incentive Spread Over 5 Years

  17. Performance Based Tax Incentive • 100% of achieved energy saving will become tax deduction • Max Incentive of 2 mill baht (50,000 USD) / Facility • Pre and Post Audit will be required

  18. Incentive through Board of Investment ( BOI ) • Import duties and Cooperate tax exemption on new investment in • Energy conservation business • High efficiency machine or equipment and renewable energy equipment manufacturing • Solar PV manufacturing • Energy Service Company – ESCO • Renewable energy production business • Alcohol or fuels from agricultural products • Electricity or steam generation • Incentive last for the max period of 8 years

  19. Promotion of ESCOs • BOI – Tax Incentive • Maximum 8 years tax exemption for ESCO projects – Cooperate Income tax • Access to Revolving Fund • Eligible to borrow the low-interest loan from RF program on project-by-project basis • ESCO promotion activities • Website • Seminars, workshop • Publications • Lists of ESCOs and successful cases

  20. Holistic Approach ปรับกระบวนทัศน์ เปลี่ยนโครงสร้าง เพิ่มมูลค่า Paradigm Shift Enforcer / Regulator Facilitator / Supporter

  21. www.energy.go.th For More Information www.dede.go.th Thank You for your attention

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