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Thailand’s Renewable Energy Policy & Investment Opportunity

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Presentation on theme: "Thailand’s Renewable Energy Policy & Investment Opportunity"— Presentation transcript:

1 Thailand’s Renewable Energy Policy & Investment Opportunity
Prasert Sinsukprasert Ministry of Energy Thailand 19, March 2013

2 Content 1. 2. 3. Thailand’s Energy Situation and Energy policy
Alternative Energy Development Plan (AEDP) Measure for RE Promotion 1. 2. 3.

3 Power Development Plan
1. Energy policy and Power Development Plan

4 Thailand’s Energy situation in 2012
Total Energy Consumption in 2012 = 73,316 ktoe Total Energy Use 2.0 million barrels (oil equivalent) per day = 2.1 trillion baht Energy import value in = 1.12 trillion baht

5 Thailand’s Energy Supply by source
Thailand’s Energy Situation in 2012 Thailand’s Energy Supply by source Total Energy Use 1.98 million barrels (oil equivalent) per day NG Thailand main energy source are natural gas. More than 70% of consumption is in transportation and industrial sectors. Thailand relies heavily on imported energy Hydro Coal Source : Energy Policy and Planning Office

6 Thailand’s Energy Situation in 2012
Proportion of Import and Domestic Production Import Value (billion baht) Total Energy Import Value of 1,125 billion baht Import 85% of oil consumption Import 56% of overall energy demand

7 1. Thailand’s Energy Situation in 2012 Thai Energy Challenges
Increased and fluctuated world oil price Limited petroleum reserved  needs to import 85 % of supply 70% of electricity supply depends on Natural Gas Lacking of public agreement on Energy projects  affects long term energy security ประเด็นท้าทายด้านพลังงาน นอกจากความมั่นคงเป็นหลักแล้ว ยังคงต้องพิจารณาประเด็นท้าทายด้านอื่นๆที่เกี่ยวเนื่องด้วย เช่น ราคาน้ำมันที่มีความผันผวนสูง การมีปริมาณสำรองภายในประเทศที่ต่ำทำให้พึ่งพาการนำเข้าที่สูงมาก ความเสี่ยงจากการใช้เชื้อเพลิงเช่น ก๊าซธรรมชาติมากเกินไปในการผลิตกระแสไฟฟ้า เนื่องจากก๊าซธรรมชาติต้องการท่อส่ง หากท่อได้รับผลกระทบ จากเหตุการณ์ใดที่ไม่คาดคิดก็ตามอาจส่งผลให้เกิดการขาดแคลนไฟฟ้าได้ และปัญหาของการไม่ยอมรับของประชาชน

8 Renewable energy Plan & Policy
11th National Economic and Social Development Plan Balance of Food and Energy Security Sustainable Management of Natural Resources & Environment Develop Natural Resource to Strengthen Agricultural Base Enhance Agricultural Productivity & Value creation Enhance Food & Bio-energy security & Biomass -- at Household & community Level Develop Bio-Energy Security Improve Agricultural Management to Food & Energy Balance Shifting Development paradigm towards Low-Carbon Society

9 Renewable energy Plan & Policy Thailand’s Energy Policies
Enhance Energy-related Industries & Business to be next generation value creator Secure Thailand Energy supply Fair Energy Pricing Target Energy Intensity reduction by 25% within 20 years (based on 2010 level) Up-scaling RE mix to 25% in 10 years Prime Minister Yingluck Shinawatra

10 2. Alternative Energy Development Plan (AEDP)

11 Renewable energy potential
RE Potential wind Biomass & biogas Solar Ethanol & biodiesel Natural Solar Hydro Wind Crop Sugar cane (Molasses) Cassava Palm Waste Agricultural Industrial Municipal solid waste (MSW) Salween river = 15,000 MW Khong river = 10,000 MW *Total realisable potentials for RE in ASEAN-6 countries , by technology to ; IEA 2010

12 Current RE Share of 9.9% (March 2013)
Alternative Energy Development Plan (AEDP) Committed to the development of low-carbon society Government Funding On R & D & D Activities Private-Led Investment 10 years Alternative Eergy-Development Plan (AEDP-Master Plan ) Target 25 % of RE in Total Energy Consumption By 2021 New energy Ocean & Tidal Geothermal 2 MW 1 MW 3 MW solar wind 2,000 MW 1,200 MW 3,200 MW Hydro power plant Small Micro Pumped-Storage 324 MW 1,284 MW 1,608 MW Bio-energy biomass Bio-gas MSW 3,630 MW 600 MW 160 MW 4,390 MW Biofuels Ethanol Bio-diesel 2nd –Gen. 9 ML/day 5.97 25 Renewable fuel 44% Current RE Share of 9.9% (March 2013)

13 Trend and Opportunities
10 yrs AEDP Target Proposed Capacity Over-Subscribed Solar 2,000 MW 3, MW 160% Potential Area Approved and Waiting for PPA Under consideration Signed PPA Already sell to the grid MW 4.22 MW 1, MW MW Within 4 yr. Solar community 400 MW In the Future Solar Rooftop+ comminity 1,000 MW within10 yr Promote Small system project at household level ex. solar PV rooftop , Feed-in Tariff system (FIT) - is not yet approved by the NEPC. PV Recycle & Building code supporting 13

14 Trend and Opportunities
Wind 10 yrs AEDP Target Present Generating Capacity 1,200 MW MW Trend & Opportunities Promoting community collaboration Database management ex. Micro-scale wind map Request on Land Utilization by regulations of Ministry of Natural Resource & Environment Asking for exempt of 1-B area for Private sector project SW Wind 4 months/yr NE Wind 8 months/yr 14

15 Trend and Opportunities
10 yrs AEDP Target Hydro Power Present Generating Capacity 1,608 MW MW Generate hydro power at Village level Very small power plant 48 projects 1,807 KW Non-electrified household (Off-Grid) Solving barriers in sensitive / conserved area (1-B) Support construction at community level Small hydro power plant 22 projects MW Local Admin Organization/people collaboration project owner DEDE & EGAT develop small hydro power system of downstream irrigation dam

16 Trend and Opportunities
AEDP Target Current Capacity Bioenergy 1, MW 3,630 MW Biomass Promote “Distributed Green Generation” Promote Planting Fast Growing Trees Extending transmission & distribution lines AEDP Target Current Capacity MW 600 MW Biogas Promote biogas production in household level Promote “CBG” Compress Bio-Methane Gas Biogas Safety Campaign AEDP Target Current Capacity 42.72 MW 160 MW Municipal solid waste Promote MSW in medium/small size Local Admin Organization Speed up private sector for co-working or implementing government WTE projects Promote “RDF” Refuse-Derived Fuel 16

17 Trend and Opportunities Gasoline blended (Gasohol)
Biofuel status : Ethanol Molasses Cassava AEDP Target 2021 Ethanol uses 9×106 L/day 2.1 ×106 L/day Current level 62.8% Market share …. And Counting Gasoline blended (Gasohol) For the past few years, we have made quite a progress on biofuel in ground transportation front. We introduced ethanol that made from molasses and cassava to be mixed with fossil gasoline to form gasohol. Now we use about 1.24 million liter of ethanol or million liter of gasohol per day. At present, we have 3 grade of gasohol, E10, E20 and E85. The number behind the E denoted the ratio of ethanol in the fuel. Collectively, they take about 55% of market share of gasoline based family. Interesting facts Plenty of energy plants, cassava and sugarcane : for ethanol production system Promote plan of action to increase the usage of ethanol in transportation sector Amending the laws and regulations to support ethanol free trade in AEC 2015

18 Trend and Opportunities There are 64 E85 gas stations
Ethanol Demand policies Phase out ULG 91 (Jan.2013) Promote E10 uses in Motorcycle E20 cars since ~1 million cars Promote E20 awareness  E20 gas stations coverage  E20 price competitiveness E20 gas stations and counting 1,234 From the pie-chart of fuel consumption share in 2010, it is clear that E10 is already well accepted by car users both at octane 95 and octant 91. By October of this year, once we terminate the sale of gasoline octane 91 or ULG 91, we are certain that large portion of current ULG91 users will turn toward E10 as well as motorcycle users due to price advantages. To promote E20 usage, first step is to increase E20 awareness among the drivers of approximately 1 million E20 cars. Simultaneously, we will keep E20 price competitiveness while encouraging increase in E20 gas stations coverage, which are now more than 700 stations. As for E85, apart from the same tactics as E20, E85 needs more supports on the vehicle side. Because of its higher concentration of ethanol, normal cars can not readily use E85. Currently, there are 4 models of Flex fuel vehicles or FFV in Thailand. We are hoping to get support from the Excise department to give more tax incentives for FFV cars. To boost E85 consumptions from the existing non-FFV cars, we will work on testing FFV conversion kit, which allows current cars to run on E85, to make sure that it works properly. Additionally, we are also running tests on E85 uses in motorcycles as well. Promote E85 awareness Vehicles Flex fuel vehicles (FFV) incentives Evaluate FFV conversion kits Evaluate E85 uses in motorcycles Fuel access and price  E85 gas stations coverage  E85 price competitiveness There are 64 E85 gas stations There are 52,113 FFV cars Source : Department of Energy Business, Ministry of Energy

19 Trend and Opportunities
Biodiesel Palm Oil AEDP Target 2021 Current level Biodiesel uses 5.97×106 L/day 2.7×106 L/day Current level Average B100 daily production To replace diesel, we used biodiesel from our natively grown oil palm. The goal for AEDP plan is that we will use 5.97 million liter of biodiesel daily. We are now reaching toward 3 Million liter of day as a results of our recent mandate that every liter of diesel sold in gas station contains 5% of biodiesel. This graph show the average biodiesel B100 used daily in each quarter from Interesting facts Thailand is the only country that mandate biodiesel mixed in every liter of diesel sold, normally at 5% since 2012 Registered capacity = 5.21 ML/day

20 3. Measure for RE Promotion

21 “Adder” : Feed-in Premiums “Feed-in-Tariff system”
Technology based premiums More incentives for smaller projects Fuel Adder (Baht/kWh) VSPP SPP Adder-VSPP (USD Cents /kWh)** Special adder * Supporting period (Year) Biomass - Installed capacity <= 1 MW - Installed capacity > 1 MW 0.50 0.30 Bidding 1.54 0.93 1.00 7 Biogas (all categories of production sources) - Installed capacity <= 1 MW - Installed capacity > 1 MW Waste (community waste, not hazardous industrial waste, and inorganic waste) - AD &b LFG - Thermal Process 2.50 3.50 7.72 10.81 Wind power - Installed capacity <= 50 kW - Installed capacity > 50 kW 4.50 13.89 1.50 10 Mini and micro hydropower - capacity kW - capacity < 50 kW 0.80 -No- 2.47 4.63 Solar power 8.00/6.50 24.70 Now EPPO is studying to adjust the Adder to be “Feed-in-Tariff system”

22 Tax Incentives by Board of Investment : BOI
Import duty exemption 8-year income tax holidays Another 5 years (9th-13th yr) Provide capital cost grants Adder and soft loans A provision for a 50% tax reduction Advantages for investors Thailand leads strong policy support for RE comparing to other countries in the region Successful implementation of VSPP+SPP Offered the highest financial and non-financial support to RE projects Economy growth estimated to have grown at 5-6% per year China has emerged as the fifth largest overseas investor in the ASEAN 22

23 Co-Investing Scheme : ESCO Fund Investment Promotion Scheme
Energy Conservation Promotion Fund ESCO Venture Capital Investors Equity Investment Equipment Leasing Investment Committee Carbon Market Technical Assistant Credit Guarantee Facility Fund Manager mil.B allocated from Gov’s ENCON FUND 2 Fund Managers assigned & given 3 years window of investment Equity Investment 10-50% equity holding, Max. 50 mill. B./project , Investment period 5-7 years Equipment Leasing 100% of total cost with max. 10 mill. B. Maximum leasing period 5 years As of now, 54 projects invested with total investment of 6.1 billion Bt.(510 mill. B. from ESCO Fund) Total Energy saving of 1.06 billion B.

24 Technical Assistances
Maps Tech. Catalogues 1-Stop Service Solar Map Wind Map

25 Thank you for Your attention

26 Back Up Sheets

27 Thailand’s RE Private Power Producers
SPP : Small power producer VSPP : Very small power producer ≤10 MW sold to MEA or PEA can be - renewable energy - Cogeneration Incentive in the past : Net metering (Fuel saving , Renewable energy promotion , Adder) Aims to promote local resource consumption/ waste to energy  MW sold to EGAT with any installed capacity can be - renewable energy - Cogeneration Connection point : any EGAT, MEA or PEA system. Needs Environmental Impact Assessment (EIA) Firm Non-firm ≥ 5 years contract (20–25 yrs.) can be - Combustible fuels form - Residue Energy Price structure = capacity payment + energy payment + fuel saving + renewable promotion + Adder less than 5 years contract can be - Combustible fuels form - Residue Energy - non-conventional energy ex. Wind turbine , Solar , Mini hydro Price structure = Wholesale kV + Ft + Adder

28 Electricity purchasing process
Step 1 Preparing all documents and permission before starting the project ( days) Feasibility study Licensing for Juristic person / Company limited Licensing for energy production and grid connection Power plant design Licensing for industry operation Granting of permission under land use and building control law Signing contact with the authorities Step 2 Constructing the power plant (60-90 days) To construct the power plant and install equipment Step 3 Checking the system (15 days) Licensing for regulated energy production Licensing for the energy industry operation License submission Step 4 Guarantee by the authorities and COD (60 days) System checking and quality control report by the authorities Commercial operation date (COD) Step 5 Starting the system and connecting to the grid (90 days) Max. total = 435 days Issuing receipt Payment by the authorities

29 AEDP targets and Current Situations
Types Units Goal 2021 Current Capacity Feb 2013 Electricity MW ktoe 9,201 2,786 Solar 2,000 376.72 Wind 1,200 111.73 Small Hydro 1,608 101.75 Biomass 3,630 1,959.95 Biogas 600 193.40 MSW 160 42.72 Heating Ktoe 9,335 4,882 100 4.0 8,200 4,342 1,000 458 35 78 Biofuel ML/day 39.97 Ethanol 9 1.6 Biodiesel 5.97 2.7 Total RE (ktoe) 7,290.1 Now 9.9% of RE in Total Energy Consumption

30 PDP2010 Rev#3 (2010-2030) PDP2010 Rev3 Renewable energy power plants
- power purchase from domestic (9,481) - power purchase from neighboring countries (5,099) Cogeneration Combined cycle power plants Thermal power plants - coal-fired power plant (4,400) - Nuclear power plant (2,000) - Gas turbine power plant (750) - Power purchase from neighboring countries (1,473) 14,580 6,476 25,451 8,623 Unit : MW PDP2010 Rev3 Comprising total capacity (Dec.2011) Total added capacity Deduction of the retired capacity Grand total capacity 32,395 55,130 16,839 70,686 Classification of added capacity during of 55,130 MW

31 Power Generation by Plant Type
เมกะวัตต์ Thermal Renewable Energy Combined cycle Cogeneration 24% 23% 18% 19% 20% 17% 47% 44% 49% 48% 46% 43% 41% 39% 37% 38% 42% 7% 10% 11% 12% 13% 21% 25% 27% 28% 30% 29% PDP2010 : Rev#3 ( ) MW

32 Power Generation by Fuel Type
Million Unit 65% 66% 68% 67% 64% 63% 62% 61% 59% 60% 57% 55% 56% 58% 9% 8% 10% 11% 12% 13% 18% 15% 16% 2% 4% 5% 14% 7% PDP2010 : Rev#3 ( ) RE Natural Gas Imported Coal Lignite Nuclear

33 Thailand Power Development Plan
(PDP2010 Rev#3) Major Assumptions Load Forecast - By Thailand Load Forecast formulated by Ministry of Energy System Security - Reserve Margin : 20% Future electricity acquiring - Fuel diversification to reduce dependence on natural gas Electricity acquiring from Renewable Energy - 10-year Alternative Energy Development Plan Electricity acquiring from nuclear power plant - SCOD of the first unit project from Electricity acquiring from coal power plant - development in appropriate proportion , focus on clean coal technology Foreign power purchase - 15% of total generating capacity Efficient power generation by Cogeneration system Target of CO2 Emission from power sector

34 Trend and Opportunities
1 MW AEDP Target New RE Geo-Thermal Geo-thermal in Northern part of Thailand (Chiang Mai) 2 MW AEDP Target Tidal Phuket island Samui island Promote Material Research Researches on Vanadium Redox Flow & Lithium-ion Battery R & D 34

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