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Thailand’s Energy Conservation Policy : Industry Programs

Thailand’s Energy Conservation Policy : Industry Programs. Prasert Sinsukprasert Ph D Department of Alternative Energy Development and Efficiency. sinsukprasert@yahoo.co.th Tel. 662 226 3998 Fax. 662 226 4172. Welcome Delegates from METI, Japan 22 June 2006, Bangkok.

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Thailand’s Energy Conservation Policy : Industry Programs

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  1. Thailand’s Energy Conservation Policy :Industry Programs Prasert Sinsukprasert Ph D Department of Alternative Energy Development and Efficiency sinsukprasert@yahoo.co.th Tel. 662 226 3998 Fax. 662 226 4172 Welcome Delegates from METI, Japan 22 June 2006, Bangkok

  2. Thailand’s Energy Outlook Thailand consumes energy about 1 mill barrels of oil per day (0.75% of World energy consumption) Hydro Coal Agriculture 6% Transportation 37% Industrial 36% Oil Natural Gas Res & Com 21% Supply Demand

  3. Thailand’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 Agriculture 6% Resident & Commercial 21% Industry 36% Transport 37%

  4. Ratio of energy growth rate to GDP growth rate = 1.0 by 2008 Energy Efficiency Improvement Target Strategy Indicators Objective 1 Energy Efficiency Improvement 1. Improve EE in Transportation Energy Elasticity = 1:1 in 5 years 2. Improve EE in Industry 2 3. Awareness raising campaign ประเทศไทยมีพลังงานใช้อย่างต่อเนื่อง เพียงพอต่อความต้องการไปอีก 50 ปี Energy Elasticity = ∆tEnergy Consumption/ ∆tGDP 3 ประชาชนมีพลังงานใช้อย่างทั่วถึง ในราคาที่เป็นธรรมและเพื่อคุณภาพชีวิตที่ดีขึ้น Ave. Energy Elasticity 1.4 : 1.0 4 ประเทศไทยเป็นศูนย์กลางพลังงานในภูมิภาค

  5. Create Conducive Environment for EE Investment Customer Service Low Interest Source of Fund Access to Funds Workshop & Training Technical Assistance Grant for small investment Free Energy Audit and consulting Incentives & Subsidies Regulations Energy Codes Tax Incentives Raise up Confidence Perfect Information List Of Experts Promotion Campaign Promotion of ESCOs Directory of Technology Providers Demonstration Project

  6. 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

  7. Cooperative Efforts on Energy Management • Objective: Sustainable energy management through internal cooperative efforts • Methodologies • Educate on concept & method + evaluation • Help create and implement EC measures • Achievement • Implemented 500 facilities • Introduced house-keeping measures • Energy saving of 5-10% for each facility ( simple payback of 2.5 yrs)

  8. Revolving Fund for EC Projects 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 • 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)

  9. 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

  10. 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

  11. 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

  12. Promotion 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

  13. Holistic Approach Value Creation Mission Adjustment Organizational Restructure Paradigm Shift Enforcer / Regulator Facilitator / Supporter www.dede.go.th

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