Alternative Energy Development Plan (2008 – 2022), Medium - and Long – term Investment Plan and the Role of the Private Sector Mr. Rangsan Sarochawikasit Executive Director, Bureau of Energy Research Department of Alternative Energy Development and Efficiency, Ministry of Energy 15 July 2009 Presented to Climate Financing: Clean Technology Fund (CTF) and the Role of the Private Sector Workshop

Alternative Energy Development Plan (2008-2022) Objectives To utilize alternative energy as a major energy supply of the country for replacing oil import, To increase energy security of the country, To promote an integrated green energy utilization in communities, To enhance the development of alternative energy technology industry , To research, develop and encourage high efficiency alternative energy technologies. Goal “To increase a share of alternative energy mixed to be 20% of the country final energy demand in the year 2022”

Measures Alternative Energy Development Plan; AEDP (2008 - 2022) ESCO Fund CDM Target 5,608 MW Existing 1,750 MW Measures BOI / Revolving Fund Adder cost 3,858 MW Biomass / Biogas / MSW Mini-Hydroo / Wind / Solar /Hydrogen Power 2.4% Adder cost R&D Target 7,433 ktoe Existing 3,007 Ktoe Process Heat 7.6% 6.4% 15.6% 19.1% 20.3% Ethanol Target 9.0 MLPD Existing 1.0 MLPD Biodiesel Target 4.5 MLPD Existing 1.4 MLPD Hydrogen Target 0.1 Million ks. Bio fuel 4.1% Target 19,800 ktoe Currency Saving 461 Billion Baht GHG reduction 42 Million Tons 6.2% Target 690 mmscfd (6,090 ktoe) Existing 108 mmscfd NGV 2008 2011 2016 2022 As of Jan 2009

Overview of Alternative Energy Development Plan; AEDP Short term (2008 – 2011) Emphasis on promotion of commercial alternative energy technologies and high potential energy sources such as biofuels, co-generation from biomass and biogas with fully supports from measures provided. Mid term (2012 – 2016) Focus on development of alternative energy technology industry, encourage new alternative energy R&D to achieve economic viability including new technologies for biofuels production and introduce a model development of Green City to communities for sufficient economy and sustainability development. Long term (2017 – 2022) Enhance utilization of new available alternative energy technologies i.e. hydrogen, bio hydrogenated (BHD), extend green city models throughout Thai communities and encourage to be hub of biofuel and alternative energy technology exports in ASEAN regions.

RE Potential and Target 5 5 5

Alternative Energy Development Plan; AEDP (2008 - 2022) Key Success Factors Subject RE as a “National Agenda”. Government continuously and strongly support RE, especially, Incentive of BOI, ESCO Fund, Revolving Fund and adder cost. Government provides infrastructure for the RE expansion. Revise of the obstructive legislation. Fully allocate the budget for research, development, demonstration, dissemination and public relation of RE. Accessibility of RE data, e.g. Potential and raw material management. RE technology standards. 6 6

Alternative Energy Development Plan; AEDP (2008 - 2022) Output and Outcome (1) Economics aspect Currency saving on energy import 460,000 M฿/year within 2565 Increase investment of private sector 382,240 M฿ Creates 40,000 clean and new jobs. Opportunity to earn 14,000 M฿/year form Carbon Credit trading. Delay the construction of new fossil fuel power plant 3,800 MW (equivalent to 100,000 M฿) Create Country's incomes by exporting biofuels, RE technologies (Gasification, biogas fermentation system). (2) Social aspect Migration mitigation due to job creation in rural areas. Extra income to farmers. Improve quality of life for Thai people. (3) Environmental aspect Low Carbon Society to mitigate the global warming. 7 7

Measures for RE promotion 1. BOI Privilege: waive import duty on equipment and income corporate taxes; 2. Adder cost of power generation from RE. SPP (> 10 MW-< 90 MW VSPP (< 10 MW) 1,600 MW Cogeneration Renewable Quotation 1,030 MW 500 MW 530 MW Promotion Fixed Adder cost Cogeneration Renewable Adder cost for Renewable power producers by term of support 7 years and 10 years for power generation from wind and solar; *special cost in 3 provinces in Southern of Thailand SPP 115 3.50 Wind 15 8.00 Solar 0.30 2.50 Adder (Baht/kWh) 300 Other Renewable 100 MSW 530 Total Capacity (MW) Type Fixed Bidding Fuel ฿ /kWh Special* Biomass 0.30 – 0.50 1.00 + 1.00 Biogas Mini-Hydro (50-200 kW) 0.80 Micro-Hydro (< 50 kW) 1.50 MSW 2.50 – 3.50 Wind 3.50 - 4.50 1.50 + 1.50 Solar 8.0

Measures for RE promotion Project feature: set up fund to joint capital promote investment in energy conservation and renewable energy development projects 3. Revolving Fund with 4% interest rate & 7 years of payment term; 4. Encourage RE project to be CDM project; 5. ESCO Venture Capital Investor Technical Assistance ESCO Venture Capital Equipment Leasing Carbon Market Equity Investment Credit Guarantee Facility Energy Conservation Promotion Fund ESCO Fund Investment Committee Results 1. Stimulate investment energy conservation & renewable energy development with total value > 2,500 million ฿ /year 2. Provide energy conservation & renewable energy development with total value > 500 million ฿ /year Budget year 2008-09 500 million Baht Financial support Status: Be in action Fund manager EFE ECFT

Adder Cost approved by the Cabinet on 24th March, 2009 Fuel Types / Size Adder (Baht/kwh) Extra Adder1 Extra Adder2 Period (Years) 1. Biomass Capacity ≤ 1 MW 0.50 1.00 7 Capacity > 1 MW 0.30 2. Biogas 3. MSW AD / Land Fill Gas 2.50 Thermal Process 3.50 4. Wind Energy Capacity ≤ 50 kW 4.50 1.50 10 Capacity > 50 kW 5. Mini Hydro Capacity 50 kW - < 200 kW 0.80 Capacity < 50 kW 6. Solar PV 8.00 1 USD = 35 THB 2 = For 3 Southern Provinces Notes 1 = Electricity from Renewable Energy for diesel oil replacing

AEDP and Private Investment (million THB) Short - term Medium - term (12 – 16) Long – term (17 - 22) Total   2009 2010 2011 Solar 1,045 695 4,726 56,159 63,320 Wind 280 2,800 4,900 18,200 29,750 55,930 Biomass 21,925 20,340 35,050 45,510 30,640 153,465 Biogas 3,600 4,125 4,500 6,750 9,000 27,975 Municipal Solid Waste 1,350 6,600 4,000 7,800 24,250 Ethanol 770 3,850 4,620 15,400 13,860 38,500 Biodiesel 3,500 6,020 4,340 1,440 18,800 32,470 41,910 59,785 134,165 102,726 145,349 382,240 11 11

17 Rama 1 Road, Patumwan Bangkok 10330 www.dede.go.th Department of Alternative Energy Development and Efficiency (DEDE) Ministry of Energy 17 Rama 1 Road, Patumwan Bangkok 10330