1 Energy Efficiency and Conservation in Thailand Department of Alternative Energy Development and Efficiency (DEDE) Ministry of Energy March 2005

2 Presentation Outlines Thailand Energy Policy and Strategies Energy Situation in Thailand Energy Conservation Promotion Act Energy Conservation Scheme Renewable Energy Strategic Plan

3 Thailand Energy Policy and Vision To conserve, develop and promote the efficient consumption of energy, while balancing the development with indigenous Natural resources and the environment, with ultimate goal to Reduce the degree of reliance on energy imports HE. Dr. Thaksin Shinawatra, Feb 26, 2001 National Policy Strategic objectives Enhance competitiveness of the real sector Supply the kingdom with clean and continuous energy Energy for better living for all Thailand as SE ASIA Energy Hub 1 234

4 Thailand Energy Strategies for Economic Development and Regional Integration Strategy for Energy Security Ensure sufficient and reliable energy supply for at least 30 yrs Strategy for Efficient Use of Energy Reduce Energy Elasticity from 1.4:1 to 1:1 by 2007 Strategy for Renewable Energy Development Increase share of RE from 0.5% to 8% of total final energy by 2011 Strategy for Thailand as a Regional Energy Center Develop Strategic Energy Land Bridge and Energy Hub

5 Energy Consumption in Transportation Total Consumption of 20,927 ktoe in year 2003 Source: Thailand Energy Situation Report 2003, DEDE

6 Energy Consumption in Industry Total Consumption of 19,988 ktoe in year 2003 Source: Thailand Energy Situation Report 2003, DEDE

7 Energy Consumption in Residential Total consumption of 8,173 ktoe in year 2003 Source: Thailand Energy Situation Report 2003, DEDE

8 Total Consumption of 56,289 ktoe in year 2003 Source: Thailand Energy Situation Report 2003, DEDE Energy Situation in Thailand

9 Energy Intensity Thail and USA UK Ger man y Jap an (Compare with Developed Countries)

10 Energy Intensity (Compare with Developing Countries)

11 Regulation for Designated Facilities Established ENCON Fund Thailand ’ s Energy Conservation Act 1992

12 ENCON Fund approximately 450 million USD Sources –Initial from Oil Fund ~ 40 million USD –Small taxes from the use of benzine, diesel, fuel oil, kerosene ~ 60 million USD annually –Interests Uses –Grants for R&D, Pilot projects, Training, Studies –Low Interest Loan for Investment - Revolving Fund

13 Customer Service Workshop & Training Low Interest Source of Fund Low Interest Source of Fund List Of Experts List Of Experts Directory of Technology Providers Promotion of ESCOs Promotion Campaign Demonstration Project Access to Funds Technical Assistance Raise up Confidence Perfect Information Regulations Value engineerin g and EM Standards Tax Incentives Incentives & Subsidies Energy Codes Create Conducive Environment for EE Investment

14 Highlighted Programs

15 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

16 Cooperative Efforts on Energy Management Cooperative Efforts on Energy Management  Objective: Sustainable energy management through internal cooperative efforts  Methodologies oEducate on concept & method + evaluation oHelp 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)

17 Revolving Fund for EC Projects Revolving Fund for EC Projects  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) 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

18 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

19 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

20 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

21 Thank you