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Overview Thailand’s Energy and Energy Conservation

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1 Overview Thailand’s Energy and Energy Conservation
by ESCO 01/04/60 Mr. Chen Namchaisiri Vice Chairman Executive Committee The Institute of Industrial Energy The Federation of Thai Industries November 21, 2007

2 Topic Overview Thailand’s Energy Activities of ESCO Information Center
01/04/60 Topic Overview Thailand’s Energy Activities of ESCO Information Center

3 พลังงานหมุนเวียน&อื่นๆ
01/04/60 Overview Thailand’s Energy ภาคขนส่ง 36.0% ภาคเกษตร 5.3% ภาคอุตสาหกรรม 38.2% ภาคบ้านอยู่อาศัยและธุรกิจการค้า 20.5% พลังงานหมุนเวียน&อื่นๆ 16 % ถ่านหิน 12% ไฟฟ้า 2% ก๊าซธรรมชาติ 31% น้ำมัน (ดิบและสำเร็จรูป) 39% Consumption by Sector Primary Energy consumption

4 Energy Consumption Outlook
01/04/60 Energy Consumption Outlook Energy consumption expected to increase 6% CAGR during the next two decades years with oil and gas contributing on average 80% KBD (Oil Equivalent) Actual Projection 4,793 1% 18% Hydro CAGR (’04-’23) 6% Lignite/Coal 30% Natural Gas/LNG 5% CAGR (’85-’03) 9% 1,569 2% 10% 20% 13% 50% Oil 65% 32% 328 53% Source : EPPO Note : Including Petchem Feedstocks

5 Energy Strategies for Thailand’s competition
01/04/60 Thailand Energy Strategies for Economic Development and Regional Integration Strategy for Efficient Use of Energy Reduce Energy Elasticity from 1.4:1 to 1:1 Strategy for Renewable Energy Development Increase share of RE from 0.5% to 8% of total final energy by 2011 Strategy for Energy Security Ensure sufficient and reliable energy supply for at least 30 yrs Strategy for Thailand as a Regional Energy Center Develop Strategic Energy Land Bridge and Energy Hub Cabinet Resolution on September 2, 2003 Energy Strategies for Thailand’s competition Strategy for Efficient Use of Energy In order to strengthen national competitiveness potential, Thailand has set the goal to reduce Energy Elasticity or the growth rate of energy consumption per GDP from 1.4:1 to 1:1 by AS a result, the country can save energy expenditure for up to 3.1 billion Baht within 10 years. Strategy for Energy Security To ensure that Thailand has energy supplies sufficiently and reliable for at least 30 years and identify the goal to increase reliability of energy supplies, esp. natural gas for the next 50 years. Strategy for Thailand as a Regional Energy Center To improve tax structures in order to eliminate duplication of tax leverage and to develop a linkage of oil production and transportation from Middle East to the Southeast Asia and East Asia though Energy Land Bridge Project Strategy for Renewable Energy Development Ministry of Energy identifies the goal to increase the share of renewable energy from 0.5% to 8% of total final energy demand in the next 10 years.

6 Strategy for Renewable Energy Development
01/04/60 Commercial Energy TE = Traditional Energy NRE = New & Renewable Energy (265 ktoe) 2003 TE 52,939 KTOE 11% Commercial Energy National Agenda NRE Renewable Energy Policy Present final energy consumption in 2003 consist of conventional energy about 83% of total consumption, the rest about 16.5% was traditional fuel such as fuel wood, char coal and paddy husk. And 0.5% was transformed into commercial energy like electricity. It is expected that the amount of traditional energy will remain the same portion but the total future demand will still increase. Thus the share of tradition fuel will reduce to be 11% by the year The use of renewable energy with new technologies will forecast to increase and penetrate into the total energy production in Thailand. Therefore the strategy of renewable energy development will aim to rise the utilization from 0.5% to 8% by the year 2011. 8% (6,540 KTOE) 81% Cabinet Resolution on June 8, 2004 2011 81,763 kTOE 2554 81,753 KTOE

7 Target and Strategy of RE
Strategy for Renewable Energy Development 01/04/60 Electricity Target and Strategy of RE RPS 437 MW - Solar - Wind - MSW - Biomass - Hydro INCENTIVE Electricity Solar MW Wind MW Biomass MW RPS Incentive 1,093 MW RE 8% Heat (Incentive) 3,700 KTOE Heat ~ 0.00 KTOE RE 0.5% Target and strategy of RE In order to achieve the target of RE strategic plan several measures have been introduced. There are RPS or Renewable Portfolio Standard: the new fossil fuel fired power plants that plan to construction must invest on RE power plant at 4-5% of their plant capacity. Incentive: the government will provide financial support such as feed-in tariff to supplement the price of selling electricity. R&D: this will narrow the gap of production cost from uneconomic RE technologies, increase the local part of the RE production system and ect.. Facilitator: Most of this part will deal wilt the cooperation and facilitation works among the public and private sectors and investors. Bio Fuel (Incentive) 1,800 KTOE Ethanol M liters/D Bio diesel 4.0 M liters/D Bio fuel ~ 0.00 KTOE R & D Facilitator 2002 2011

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

9 Energy Intensity (Compare with Developing Countries)

10 Energy Efficiency Improvement Target
Strategy Indicators Energy Efficiency Improvement 1. Improve EE in Transportation Energy Elasticity = 1:1 in 5 years 2. Improve EE in Industry 3. Awareness raising campaign Energy Elasticity = ∆t Energy Consumption/ ∆t GDP Ave. Energy Elasticity 1.4 : 1.0 Ratio of energy growth rate to GDP growth rate = 1.0

11 Promotion of ESCOs BOI – Tax Incentive Access to Revolving Fund
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

12 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

13 Promotion of ESCO Business and Cluster Development Project
Drawing from a store of experiences and expertise in analyzing energy usage capabilities, the Energy Service Company (ESCO) can help to reduce energy consumption by adapting equipment and machinery in line with measures that have been selected to suit each factory.

14 Energy Conservation by ESCO

15 The definition of an Energy Services company
ESCO are most often private company that provide comprehensive energy efficiency or load reduction services to customers that own or operate facilities such as factories and buildings to improved efficiency, functionality and productivity of client’s facility, ESCO generally act as developers for a wide of tasks and assume the technical and performance risk associated with the project.

16 ESCO typically offer the following service:
Find out the target (building or industrial factory) for implementation. Conduct a preliminary investigation and analyze the present energy consumption in details. Propose the turn key systems that suit to user’s requirements and occupancy patterns. Source out the financial support. Project management. Install and maintain the energy efficient equipment involved. Measure, monitor, and verify the project’s energy savings. Commissioned to optimize performance guaranteed service. Conduct staff training and provide the related services.

17 The working term of ESCO & Pattern of investment
ESCO operate on Energy Performance Contract; the term EPC is an abbreviation for energy performance contracting, meaning that the contract and the finance are related to the performance of the project. So that the payments to the performance contractor are contingent on the actual level of savings achieved, it is in the contractor’s interest to maximize the energy savings. This translates into increased money savings for the client.

18 Pattern of investment Guaranteed Saving - Client invest themselves
Shared Saving - ESCO provide financial loan service Another

19 Thailand ESCO Fair 2007 The exhibition and seminar on conservation of energy in order to decrease the manufacturing cost and save the energy in the industry Objectives: - To support and publicize the knowledge of Energy Service Company (ESCO) business. Activities: ESCO exhibition,Seminar on the topic of ESCO , Energy Clinic and ESCO Information Center

20 ESCO-Bank networking

21 ESCO-Bank networking

01/04/60 Thank you Thank you very much for your attention. Tel FAX

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