Thailand’s Energy Conservation Policy :Industry Programs

Thailand’s Energy Conservation Policy :Industry Programs

Prasert Sinsukprasert Ph DDepartment of Alternative Energy Development and Efficiency

3rd Policy Dialogue on Green Partnership Plan (GPP)24-25 April 2006, Bangkok

Thailand’s Energy Outlook Thailand’s Energy Outlook

Transportation37%

Agriculture 6%

Industrial36%

Res & Com 21%

Thailand consumes energy about 1 mill barrels of oil per day(0.75% of World energy consumption)

11.2

35.450.8

2

OilNatural Gas

Coal Hydro

Supply Demand

Thailand’s Energy SituationsThailand’s Energy Situations

• Energy is basic factor of economic development

• In 2005, energy costs accounted to about 15% of GDP

• Oil imports accounted to 12% of total import values

• 60% of commercial energy was imported or about 700 billion baht

• Still rooms for energy efficiency improvement

0

10,000

20,000

30,000

40,000

50,000

60,000

2535 2536 2537 2538 2539 2540 2541 2542 2543 2544 2545

ktoe

Transport 37%

Industry 36%

Resident & Commercial 21%

Agriculture 6%Agriculture 6%

Strategy

Energy Efficiency Improvement Target

Energy Efficiency Improvement Target

2. Improve EE in Industry

Objective

ประเทศไทยมีพลั งงานใช้�

อย�างต่�อเน��อง เพยงพอต่�อ

ความีต่�องการไปอก 50 ป�

ประช้าช้นมีพลั งงานใช้�

อย�างท �วถึ�ง ในราคาท�เป น

ธรรมีแลัะเพ��อค#ณภาพช้ว&ต่ท�

ดีขึ้�)น

Energy Efficiency

Improvement

11

22

ประเทศไทยเป นศ*นย+กลัาง

พลั งงานในภ*มี&ภาค

33

44

1. Improve EE in Transportation

Energy Elasticity= 1:1 in 5 years

Indicators

Energy Elasticity = Energy Elasticity = ∆∆tt Energy Consumption/ Energy Consumption/ ∆∆tt GDPGDP

Ave. Energy Elasticity1.4 : 1.0

Ratio of energy growth rate to GDP growth rate = 1.0 by 2008

3. Awareness raising

campaign

Customer Service

Customer Service

Workshop &

Training

Workshop &

Training

Low InterestSource of Fund

Low InterestSource of Fund

ListOf

Experts

ListOf

ExpertsDirectory

of Technolo

gy Provider

s

Directory of

Technology

Providers

Promotion of

ESCOs

Promotion of

ESCOs

Promotion

Campaign

Promotion

Campaign

Demonstration Project

Demonstration Project

Access to Funds

Technical Assistance

Raise up ConfidencePerfect Information

Regulations

Grant for small investm

ent

Grant for small investm

ent

Free Energy Audit and

consulting

Free Energy Audit and

consulting

Tax Incentive

s

Tax Incentive

s

Incentives & SubsidiesEnergy Codes

Energy Codes

Create Conducive Environment for EE Create Conducive Environment for EE InvestmentInvestment

Compulsory ProgramCompulsory 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

Cooperative Efforts on Energy Management Cooperative Efforts on Energy Management

Objective: Sustainable energy management through internal cooperative efforts

Methodologieso Educate on concept & method + evaluationo Help create and implement EC measures

Achievement Implemented 500 facilities Introduced house-keeping measuresEnergy saving of 5-10% for each facility

( simple payback of 2.5 yrs)

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 82 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

Cost Based Tax IncentiveCost 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

Performance Based Tax IncentivePerformance 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

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

Promotion of ESCOsPromotion of ESCOs

• BOI – Tax Incentive– 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

Holistic ApproachHolistic Approach

เพิ่��มม�ลค่าเปล��ยนโค่รงสร�างปร�บกระบวนทั�ศน�

Paradigm Shift

Enforcer / Regulator Facilitator / Supporter