1. 1 Renewable Energy and Energy Conservation Policy in Thailand Department of Alternative Energy Development and Efficiency (DEDE) (DEDE) Ministry of Energy Ministry of Energy (MOEN) (MOEN) October 2005 October 2005

2. 2 Presentation Outlines  Introduction to DEDE  Energy Situation in Thailand  Thailand Energy Policy and Strategies  Highlighted Programs Promotion on Renewable Energy Promotion on Renewable Energy Tax incentive Tax incentive Energy Efficiency in Residential Energy Efficiency in Residential

3. 3 Department of Alternative Energy Development and Efficiency ( DEDE )  Established in 1953 as a National Energy Office  Transfer to Department of Energy Development and Promotion (DEDP) under the Ministry of Science Technology and Environment in 1992  Transform to DEDE Under the Ministry of Energy due to a Major Thai Government Reform in 2002

4. 4 Mission “ Encouraging the Promoting Energy Efficiency and Conservation as well as Providing and Developing Sources of Alternative Energy to Serve all Energy Consuming Sectors with Competitive Cost and Good Quality of Life ” “ Encouraging the Promoting Energy Efficiency and Conservation as well as Providing and Developing Sources of Alternative Energy to Serve all Energy Consuming Sectors with Competitive Cost and Good Quality of Life ”

5. 5 Organization Structure DEDE DEDE Secretariat Bureau of Energy Regulation and Conservation Bureau of Energy Research Planning Division Bureau of Energy Efficiency Promotion Bureau of Energy Development Training Division Bureau of Energy Technology Transfer Bureau of Solar Energy

6. 6 Energy Demand Profile 2004 Transportation 37% Agriculture 6% Industrial 36% Res & Com 21% Thailand consumes energy about 1.45 million barrel of oil equivalent per day, 15% of GDP Consumption by Sector* Oil Natural Gas Coal Hydro Primary Energy consumption *2003 Figures

7. 7 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 by 2007 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 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 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 Develop Strategic Energy Land Bridge and Energy Hub Cabinet Resolution on September 2, 2003

8. 8 TE = Traditional Energy NRE = New & Renewable Energy 2554 81,753 KTOE TE 11% NRE 8% (6,540 KTOE) Commercial Energy 81% 52,939 KTOE 2003 (265 ktoe) Commercial Energy 2011 81,763 kTOE National Agenda Cabinet Resolution on June 8, 2004 Strategy for Renewable Energy Development Strategy for Renewable Energy Development

9. 9 Target and Strategy of RE RE 8% RE 0.5% Heat (Incentive ) 3,700 KTOE Bio Fuel (Incentive) 1,800 KTOE Ethanol 3.0 M liters/D Bio diesel 4.0 M liters/D Heat ~ 0.00 KTOE Bio fuel ~ 0.00 KTOE 20022011 R & D RPS INCENTIVE Electricity Facilitator RPS 437 MW - Solar - Wind - MSW - Biomass - Hydro Incentive 1,093 MW Electricity Solar 6 MW Wind 0.2 MW Biomass 560 MW Strategy for Renewable Energy Development Strategy for Renewable Energy Development

10. 10 Industrial based Biodiesel Development Biodiesel Strategic Plan 2004 20052006 20072008 2011 Community based Biodiesel Pilot Project Development Specification of B100 & B5, B10 Biodiesel Mandate 10% Blend Phase I: Specified areas Phase II: Whole country Research Demonstration 2009 2010 Incentive (Biodiesel Community base) Prod. Cap. 4.0 mill.lt/d

11. 11 Other Products Biodiesel : Business Model Biodiesel Plant Extraction Plant Power Plant Farmers 60,000 RaiBlending Facilities Will produce in the 4 th year and last 21 years Business Feasibility Value-added Glycerin Oleochemical Vitamin A,E Biodiesel Complex 100,000 Liters/day

12. 12 Biodiesel and Communities Electricity as Biofuels by- product  Potential for rural off- grid electricification  Distributed Generation  Renewable energy source for power generation Biodiesel Complex Biodiesel Factory Power Plant Crushing Factory Small-scale Biodiesel Project  Biodiesel production for using in community

13. 13 Opening Ceremony for Community Based Biodiesel Researching and Developing – Chiang Mai First in Thailand and ASEAN

14. 14 -Enforced government fleets use Gasohol -Gas stations in govern. must sell Gasohol Formulate policy on utilizing High Performance Vehicles for E10 and FFV - Spec. of Gasohol 95 & 91 - Emission test on using Gasohol 95 - Defined gasohol use in Spec. of new vehicle procurement - Requested governments’ vehicles to refill gasohol Formulated policy on fade out MTBE in ULG 95 and promote Gasohol 91 in some areas Gasohol Strategic Plan Phase I MTBE replacement Ethanol 1.0 mill. lts /d Ethanol 3.0 mill. lts /d Phase II Gasohol Mandate 20042005200620072008201120092010

15. 15 National Ethanol Program Pricing Policy Price Diff. by 0.4 Euro  Demand by 4 times Increase Outlets Good cooperation with oil companies  Expanding station to 4,000 by 2005 Compulsory Measures Compulsory distribution of E-10 on an national scale on Jan 1 st 2007 Promoting E-10 Gaining popularity and Already replace 25% of ULG 95

16. 16 Ethanol – Gasohol Price Incentive - Gasohol is cheaper than the premium gasoline by 1.50 baht Target December 2005  Expanding gasohol station from 2,171 * stations to 4,000 stations nationwide  Gasohol 2.8 * to 4 million litre/day ( * as of Sep. 05) 1 January 2007  Gasohol 95 nationwide, remove gasoline 95 from the market 2008  Using gasohol 91 and 95 nationwide Target December 2005  Expanding gasohol station from 2,171 * stations to 4,000 stations nationwide  Gasohol 2.8 * to 4 million litre/day ( * as of Sep. 05) 1 January 2007  Gasohol 95 nationwide, remove gasoline 95 from the market 2008  Using gasohol 91 and 95 nationwide

17. 17 Gasohol Promotion

18. 18 1st Phase Molasses Cassava 2nd Phase Sugar cane juice & Molasses Cassava Ethanol plants 1st Phase (1.09 Mill. lts / day)  3 existing ethanol plants total production cap. 0.375 Mill. lts / day  3 plants under construction total cap. 0.715 Mill. lts/day 2 nd Phase (3.2 Mill. lts / day) 18 plants were approved:  14 sugar mills &  4 cassava mills Ethanol plant location No direct relation between sugar sector and distillery

19. 19 Solar Cell Strategic Plan Remote Area (38 MW) Stand alone System R&D - Increase Local Content Percentage - Reduce PV System Price 2010 2009 200820072006 2005 20042011 Solar Cell Industry Incentive (72 MW) - Feed In Tariff - Soft loan - Tax Incentive RPS (140 MW) 250 MW

20. 20 As of 2003, approximately 6 MW of PV systems have been installed. Water pumping1.14 MW Stand-alone systems0.26 MW Battery charging2.17 MW Telecommunication1.50 MW Schools0.30 MW Hospitals0.02 MW Ocean navigators0.02 MW Grid-connected systems0.31 MW Miscellaneous0.13 MW Source: Dusit Kruangam, et.al., Pre-Feasibility Study on Solar Cell Production in Thailand, Technical Digest of the International PVSEC-14, Bangkok, Thailand, 2004. Status of PV Installation in Thailand: End of the Year 2003 EGAT, by April 2004, has been conducting the biggest Grid-Connected system of 0.5 MW in Mae Hong Son. Newly government-initiated project, Solar Home System for 200,000 unelectrified houses in Thailand, of 24 MW will be conducted between 2004 (150,000 sets 120 Wp each in the first phase) and 2005 (50,000 sets in the second phase). It is expected that the PV market after 2007 will grow at the rate of 50 MW per year.

21. 21 Newly government-initiated project, Solar Home System for 200,000 unelectrified houses in Thailand, of 24 MW will be conducted between 2004 (150,000 sets 120 Wp each in the first phase) and 2005 (50,000 sets in the second phase). Implementation of a Renewable Portfolio Standard (RPS) would enforce IPPs (independent power producers) as well as SPPs (small power producers) to generate electricity from renewable energy sources. Net metering with government incentives will also be implemented. It is expected that the PV market after 2007 will grow at the rate of 50 MW per year. PV Market Trend in Thailand

22. 22 Tool to Overcome Barriers  Need government strongly support and encouragement to drive ethanol market  Clear policy and target  Market drive;  Incentive;  Specification.  Cooperation from all parties concerned  Car manufacturers;  Oil refineries and oil distributors;  Industries i.e. sugar mills, CPO mills, starch mills  Farmers and cooperatives.

23. 23 Renewable Energy Promotion Program  Former Projects - Small Power Producers (SPP) Project ( 1 st) - SPP Project ( 2 nd)  Ongoing Project - Very Small Power Producers (VSPP) Project  Future Projects - Renewable Portfolio Standard (RPS) - Incentive i.e. Feed-in Tariff & Tax Holidays - VSPP (Capacity Expansion)

24. 24 Energy conservation Strategies and Programs  Energy Intensity  Target of Energy Efficiency  Highlighted Programs Compulsory Program Compulsory Program Cooperative Efforts Cooperative Efforts Revolving Fund Revolving Fund Tax Incentives Tax Incentives

25. 25 Energy Intensity Thail and USA UK Germ any Japa n (Compare with Developed Countries)

26. 26 Energy Intensity (Compare with Developing Countries)

27. 27 Strategy Energy Efficiency Improvement Target 2. Improve EE in Industry Objective ประเทศไทยมี พลังงานใช้ อย่างต่อเนื่อง เพียงพอต่อ ความต้องการ ไปอีก 50 ปี ประชาชนมี พลังงานใช้ อย่างทั่วถึง ในราคาที่เป็น ธรรมและเพื่อ คุณภาพชีวิต ที่ดีขึ้น Energy Efficiency Improvement 1 1 2 2 ประเทศไทย เป็นศูนย์กลาง พลังงานใน ภูมิภาค 3 3 4 4 1. Improve EE in Transportation Energy Elasticity = 1:1 in 5 years Indicators 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 by 2008 3. Awareness raising campaign

28. 28 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 Grant for small investmen t Free Energy Audit and consulting Tax Incentives Incentives & Subsidies Energy Codes Create Conducive Environment for EE Investment

29. 29 Industrial and Building sector ประเทศไทยมี พลังงานใช้ อย่างต่อเนื่อง เพียงพอต่อ ความต้องการ ไปอีก 50 ปี ประชาชนมี พลังงานใช้ อย่างทั่วถึง ในราคาที่เป็น ธรรมและเพื่อ คุณภาพชีวิต ที่ดีขึ้น 1 1 2 2 ประเทศไทย เป็นศูนย์กลาง พลังงานใน ภูมิภาค 3 3 4 4  Cooperate with Ministry of Industry to change industrial structure to be less energy intensive  Support by energy conservation promotion programs Regulation Incentives, subsidies Soft loans for EE investment Technical assistance Research and development Training, capacity development  Tax Incentives Tax breaks for ESCOs Import duty exemption for high energy efficient products, machines Performance-based incentives Basic Metal Chemical (ปี 2524 = 100) ทิศทางและมาตรการ ยังไม่ชัดเจน ทิศทางและมาตรการ ยังไม่ชัดเจน Paper Fabricated Metal Textiles Non Metalic Food and Beverages Energy Intensity = Energy GDP Improve end- use energy efficiency 2. Improve EE in Industrial and building Sector Strategy Objective Programs

30. 30 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 Assign Energy Manager Report Monthly Energy Use Report Monthly Energy Use Develop EE Target and Plan Develop EE Target and Plan Compile all energy codes Compile all energy codes

31. 31 Cooperative Efforts on Energy Management Cooperative Efforts on Energy Management  Objective: Sustainable energy management through internal cooperative efforts  Methodologies o Educate on concept & method + evaluation o Help create and implement EC measures  Achievement Implemented factory 95 plants Implemented factory 95 plants Introduced house-keeping measures Introduced house-keeping measures Energy saving of 5-10% for each facility Energy saving of 5-10% for each facility ( simple payback of 2.5 yrs) ( simple payback of 2.5 yrs)

32. 32 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 Loan size < 1.2 mill USD/project Interest rate less than 4% (fixed rate) Interest rate less than 4% (fixed rate) Repayment in the defined time frame (7yr) 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

33. 33 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

34. 34 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

35. 35 Incentive through Board of Investment ( BOI )  Import duties and Cooperate tax exemption on new investment in Energy conservation business Energy conservation business High efficiency machine or equipment and renewable energy equipment manufacturing High efficiency machine or equipment and renewable energy equipment manufacturing Solar PV manufacturing Solar PV manufacturing Energy Service Company – ESCO Energy Service Company – ESCO Renewable energy production business Renewable energy production business Alcohol or fuels from agricultural products Alcohol or fuels from agricultural products Electricity or steam generation Electricity or steam generation  Incentive last for the max period of 8 years

36. 36 Promotion of ESCOs  BOI – Tax Incentive Maximum 8 years tax exemption for ESCO projects – Cooperate Income tax 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 Eligible to borrow the low-interest loan from RF program on project-by-project basis  ESCO promotion activities Website Website Seminars, workshop Seminars, workshop Publications Publications Lists of ESCOs and successful cases Lists of ESCOs and successful cases

37. 37 Holistic Approach เพิ่มมูลค่าเปลี่ยนโครงสร้างปรับกระบวนทัศน์ Paradigm Shift Enforcer / RegulatorFacilitator / Supporter

38. 38 EE in Residential Sector  Promotion on energy efficient houses Provide 3 different models of energy efficient houses with a focus on Provide 3 different models of energy efficient houses with a focus on Housing design ( Site allocation / Shape )Housing design ( Site allocation / Shape ) Roof designRoof design WallsWalls FloorFloor CeilingCeiling Openings ( Door and Windows )Openings ( Door and Windows ) Sunshade EquipmentSunshade Equipment VentilationVentilation Natural light utilizationNatural light utilization

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42. 42 Energy saving estimation Model Electricity Cost Total (kwh/year) Estimated Saving (kwh/year) A/C system (kwh/year) Lighting (kwh/year) 1. Model A One-storey 84 sq.m. 17,000 USD Conventional design 6,4991,1257,624 27.3 % New design 4,4201,1255,545 2. Model B Two-storey 135 sq.m. 33,600 USD 10,2932,42212,751 19.9 % New design 7,3502,4229,772 3. Model C Two-storey 183 sq.m. 40,800 USD 13,3533,3866,739 29.5 % 10,1263,38613,512 Conventional design Conventional design New design

43. 43  Promoting Energy Efficiency Housing Single Family Houses Single Family Houses Townhouses Townhouses  The Study of Building Codes for Energy Efficiency House and Buildings with the Promotional Scheme On going projects for Residential On going projects for Residential

44. 44 More Information Visit www.dede.go.th More Information Visit www.dede.go.th www.dede.go.th Thank you