Presentation on theme: "Presented by Dr. Prasert Sinsukprasert Director of Planning Division"— Presentation transcript:
1 Feed in Tariff grid-connected renewable energy technologies promotion in Thailand Presented by Dr. Prasert SinsukprasertDirector of Planning Division20 November 2012
2 Agenda Thai’s Power Generation Overview Renewable Energy Policy Renewable Energy Situation in ThailandThai’s Feed-in Tariff Program (Adder)Thailand’s Energy Policywhy do we need to promote renewable energy : Diversify Our Fuel Mix, running out of natural Gas in the gulf, Co2 Global Trend, Sustainable Energy DevelopmentGovernment PolicyThai’s Adder ProgramAdderDevelopment TimelineSituation of Solar Energy in ThailandProblems in Solar Energy DevelopmentTechnical : grid connecting and transmission system operationTarget Overshooting : Tariff BurdenProspects for Future Solar Energy in ThailandPut on hold to clear all the projects in pipeline : no new approvalFiT replaces Adder
3 World Fuel Mix in Power Generation Slide ;why do we need to promote renewable energy : Diversify Our Fuel Mix, running out of natural Gas in the gulf, Co2 Global Trend, Sustainable Energy Developmentเนื่องจาก 1. ปัจจุบัน พึ่งก๊าซธรรมชาติในอ่าวไทยมากในการผลิตไฟฟ้า แต่ก๊าซฯกำลังหมดลง 2. จึงต้องกระจายชนิดเชื้อเพลิง โดยส่งเสริมพลังงานหมุนเวียน 3.แสงอาทิตย์จึงเป็นทางเลือกหนึ่งSource: The Institute of Energy Economics, Japan
4 Power Generation in 2011 Total 162,343 GWH As shown in this pie chart, Thailand is heavily dependent upon natural gas as fuel for power generation. The government has set targets to diversify away from natural gas and increase the share of alternative energy, including solar energy. One mechanism for diversifying our energy resources is to encourage the private sector to participate in power generation. Such mechanism includes the introduction of the IPPs, SPPs, and VSPPs to compete with EGAT in power generation.Total 162,343 GWH
5 Thai’s Government Energy Policy Policy Statement of Prime Minister Yingluck Shinawatra to the National Assembly, Tuesday 23 August 2011Renewable Energy Policy“ Energy sources and types will also be diversified so that Thailand will be able to meet its energy needs from a variety of sustainable energy sources ”“ Support the production, use, research and development of renewable and alternative energy sources, with the objective of replacing 25% of the energy generated by fossil fuels within the next decade ”Slide; Government Energy Policy มาใส่แล้วอธิบายเหตุผลว่าต้องการแสดงให้เห็นถึงเหตุผลว่าทำไมประเทศไทยจำเป็นต้องส่งเสริมการผลิตไฟฟ้าจากพลังงานหมุนเวียนโดยคำนึงถึงความมั่นคงด้านพลังงานไฟฟ้า และการพัฒนาอย่างยั่งยืนในระยะยาว ซึ่งเป็นนโยบายของทุกรัฐบาลมาตลอด
7 Financial Mechanism in support of RE Low-Interest Loan: Revolving FundVenture Capital: ESCO FundTax Incentives: BOI privilegeFeed-in tariff: ADDEROne mechanism for diversifying our energy resources is to encourage the private sector to participate in power generation. Such mechanism includes the introduction of the IPPs, SPPs, and VSPPs to compete with EGAT in power generation. One way to promote greater use of RE is to provide financial assistance to kick start RE projects, which usually require high initial investment costs but are difficult to obtain financing from the banks.77
8 IRR % Adder Production cost Electricity price Adder program Adder rates vary, depending on the technology used.Support duration: 7 yrs from COD (10 yrs for solar and wind projects).Consumers pay in the form of Ft.Adder rates vary, depending on the technology used. The provision of adders will be for a period of 7 years as from the Commercial Operation Date (COD). For solar and wind power projects, the support period will be 10 years.Adders will be passed through to consumers in the form of Fuel tariff (Ft) which varies in accordance with the fuel cost. With this concept, consumers will have to take the burden of Adders.To balance the impact on Ft which is passed through to consumers, the Adder needs to be reviewed regularly. Details will be talked about later.Base tariff regulation + automatic tariff adjustment mechanism (Ft)
9 “Adder” Provision -- Evolution 2006Adder measure approved by the NEPC2007Adder provision implemented by utilitiesAdder rate for wind power projects increased and support period for wind & solar power projects extended (10 yrs)2009Adder rates adjusted to promote very small-scale generationSome rules ®ulations adjusted (bid bond, dispatch and rooftop solar)2010Adder rate for (new) solar power projects was reducedThe suspension of power purchase from solar power projects was approved by the NEPC.“Feed-in Tariff” research in progressTo further promote power generation using renewable energy, especially by VSPPs, the ADDER measure was initiated in The main purpose of ADDER is to stimulate power generation competition. Eligible power producers are those using renewable resources and co-generation facilities.The National Energy Policy Council (NEPC) approved ADDER rates in late 2006 in order to induce more investors to produce electricity from renewable energy. After the announcement on the provision of “Adder,” overwhelming response has been received.However, no SPP/VSPP using wind or solar energy participated in the power purchase program. Following a policy research study, it was found that the adder rates for power generation using wind or solar energy were not attractive because the investment in such projects was still not cost-effective. To address this problem and to enhance fuel diversification, on 16 November 2007, the NEPC approved the adjustment of adder provision to encourage investment in power generation using wind or solar energy as fuel. That is, for wind-energy power generation, the adder was increased from 2.50 to 3.50 Baht/kWh; for solar-energy power generation, the adder is 8.00 Baht/kWh still, but the duration of adder provision for both wind and solar energy projects was extended from 7 years to 10 years as from the COD.Adder was again revised in 2009 aiming to (1) promote renewable energy in order to reduce environmental impact; (2) stimulate local technology development and local employment; (3) promote distribution of power generation to remote areas, focusing very small-scale projects; (4) motivate forest and watershed conservation projects.Moreover, former ceilings imposed on power purchase from renewable SPPs have been lifted and replaced by relevant renewable energy targets specified in the 15-year Renewable Energy Development Plan.Because “Adder” is a payment on top of normal power rates and it is passed on to consumers through the Ft mechanism (automatic power tariff adjustment), the higher amount of adders given to power producers, the higher tariffs for consumers.Also, the cost of some technologies has considerably decreased from the time Adder rates were set.“Feed-in Tariff” will be introduced for all new RE generation.It will be calculated based on real investment costs & appropriate rate of return on investment for power producers.Producers have to propose and negotiate tariffs with state utilities.It will be part of the base tariff, and hence less impact on consumers.Now, the appropriate application of Feed-in Tariff is being developed in detail.
12 Renewable Energy Target Development Approved in Jan 2009RE Target: 20% in 2022Electricity Target: 5,608 MWREDPApproved in Dec 2011RE Target: 25% in 2021Electricity Target: 9,201 MWAEDPEnergy/FuelREDPTarget in 2022 (MW)AEDPTarget in 2021 (MW)Solar5002,000Wind8001,200Hydro Power3241,608Biomass37003,630Biogas120600MSW160New energy3Total5,6079,201REDP was submitted to the National Energy Policy Council (NEPC) in Jan 2009 and further presented and approved by the cabinet in the same month. AEDP was submitted to NEPC in Nov and further presented and approved by the cabinet in Dec 2011.AEDP: 2555 as based year
13 Power Purchased from Renewable Energy As of August 2012COD
15 Thai’s Feed-in Tariff Program (Adder) It was recognized that capital cost for renewable energy was the most important barrier affecting the competitiveness and hence the viability of renewable energy power generation. Therefore, the government initiated “Adder Provision” -- an additional energy purchasing price on top of the normal prices that power producers will receive when selling electricity to the Power Utilities.
16 Feed-in Tariff Implementation Future prospectsAdder provisionExisting proposed project continually receive adder till the subsidy durationFeed-in Tariff Implementation2. RE Project Screening CommitteeTo oversee, support and accelerate the consideration of power purchase from RE in order to meet with the national RE targetปัจจุบันมีการดำเนินงานคู่ขนานกันดังนี้1. โครงการที่ยื่นขอขายไฟด้วยมาตรการAdder ยังคงได้รับการพิจารณาตามมาตรการ Adder2. มีการคัดกรองโครงการ โดยคณะกรรมการบริหารฯ3. ศึกษาผลกระทบต่างๆที่เกี่ยวข้อง เช่นผลกระทบทางด้านเทคนิค สิ่งแวดล้อม เศรษฐกิจทั้งนี้ เพื่อเตรียมไปสู่การประกาศใช้ Feed-in Tariff3. Study on impact of RE promotionSystem reliability, environmental impact, Ft Impact, etc.
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