20-Year Energy Efficiency

Action Plan (2011 - 2030)

Mr. Tipakorn Poolsawad

Bureau of Energy Conservation and Renewable Energy Policy

June 18th, 2013

Promotion of Energy Conservation in Thailand

2

Energy Conservation

Promotion Fund (ENCON Fund)

Energy Conservation

Promotion Act

• Established under the Energy

Conservation Promotion Act

• The government tool to promote

energy conservation, energy

efficiency and renewable energy

development

• Established in 1992

• Royal decrees for designated

factories and buildings

• Ministerial regulations for

designates factories and

buildings to implement energy

conservation measures

Push

Pull

Thailand’s Policy on Energy Efficiency

3

From the Policy Statement delivered by PM Yingluck Shinawatra

to the National Assembly on 23 August 2011

Promote and Drive Energy Conservation

through reduction of energy intensity by 25% within the next

20 years as well as comprehensive development and

improvement. The use of high energy-efficiency equipment and

buildings will be promoted, while Clean Development Mechanism

(CDM) will be used to reduce greenhouse gas emissions and to

tackle global warming. Consumer awareness of economical and

efficient use of energy will be raised systematically and

continuously in order to save energy in the manufacturing,

transport and household sectors.

Thailand 20-Year Energy Efficiency

Development Plan 4

Fin

al Energ

y C

onsu

mption

(kto

e)

Energy Conservation Target (as per the present government policy statement on August 23rd, 2011)

BAU Case

With EE Plan

A target to reduce energy

intensity by 25% in 2030, compare with that in 2010

EI (2030)

11.7 ktoe/billion baht

EI (2010)

15.6 ktoe/billion baht

Annual Average Growth Rate (2010-2030)

GDP (*NESDB, November 29th, 2011) 4.3%

Population 0.3%

*GDP2030 at constant price 1988 = 355 billion Dollars (Exchange rate at 30 Baht/1 U.S. Dollar)

ktoe

162,715

124,515

38,200

The reduction of

final energy

consumption 38,200 ktoe in 2030

*Office of the National Economic and Social Development Board

25% Reduction

5

Comments of 20-Year EEAP Sub-Steering Committee

Public Hearing Stakeholder Meeting

4A’s Policy Balanced Score Card

PMQA SWOT & TOWS

67 Major Projects

Process of 20-Year EE Action Plan Formulating

34 Measures

Master Roadmap Phase

6

6-Year Short term (2011-2016) Emphasizing on existing proven projects as well as new projects with quick achievement

potential, law & regulation amendment and the study on raising funds for investment in

industry restructure for medium & long terms through public-private participation approach.

6-Year Medium term (2017-2022) The continuity of the successful projects in the short term phase as well as promoting of

using high energy efficiency equipment and increasing in industrial process efficiency,

together with prevention of low energy efficiency equipment importing and using.

8-Year Long term (2023-2030) Covering programmes and projects which will produce significant outcomes to achieve

the government’s goal in energy conservation in line with the 11th National Economic

and Social Development Plan on moving towards low carbon society.

7

Strategic Issues of the 20-Year EE Plan

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1 • Employ integrated compulsory measures through laws, regulations and

standards, together with promotion through various incentives.

2 • Employ energy measures which create widespread effects on awareness,

behavior change, decision-making of entrepreneurs & market transformation

3 • Promote public-private partnership for supporting and implementing

energy conservation measures

4 • Distribute promotion activities to various public and private organizations

which possess resources and experiences readiness

5 • Employ professionals and ESCO, as vital mechanisms, in terms of

consultation & implementation of EE projects requiring high technology

6 • Increase self-reliance on energy technology to foster technology accessibility,

together with promoting high EE products, manufacturers & businesses

5 Strategic Approaches

9

34 EE Measures

Enforcement of laws,

regulations & standards

Promotion of energy

efficiency activities

Creation of public

awareness & behavioral

change

Promotion of R&D in

technology and

innovation

Strengthening human

resources & institutional

capacity

Strategic Approach 1; Enforcement of laws, regulations & standards

10

Sector Measure/Programme

Cross cutting

1. Intensify enforcement of Energy Conservation Act 2. Mandatory labeling 3. Minimum Energy Performance Standard: MEPS 4. Energy Efficiency Resource Standard (EERS) for large energy businesses

Industry 5. Specific Energy Consumption benchmarking (SEC) Large Commercial

Building 6. Energy performance standards 7. Mandatory energy performance labeling

Transportation 8. Mandatory energy performance labeling 9. Minimum energy performance standards (MEPS) for vehicles 10. Fiscal measures to enhance market transformation

Strategic Approach 2; Promotion of energy efficiency activities

11

Sector Measure/Programme

Cross cutting

1. Voluntary Agreement (VA) 2. Promotion of voluntary labeling 3. Financial support for energy performance achievement 4. Support ESCO Implementation

Industry 5. Support R&D in process improvement Large Commercial

Building 6. (1) Support and promote energy labeling for large commercial building

Small Commercial & Residential Building

6. (2) Support and promote energy labeling for residential building

7. Financing and fiscal measures to drive energy efficiency performance 8. Support high energy efficiency equipment and appliances

Transportation 9. Support energy labeling on vehicle parts 10. Support mass transport system and energy efficient logistics

Strategic Approach 3; Creation of public awareness & behavioral change 12

Sector Measure/Programme

Cross cutting

1. Publicity & dissemination of knowledge/information on energy efficiency 2. Push concept/practices in low-carbon economy & society development 3. Fiscal and financial measures to enhance behavior change and awareness in energy conservation and abating greenhouse effect.

Transportation 4. Publicity and dissemination of knowledge on eco-driving 5. Push concept and support on sustainable transport systems and improve air quality in urban areas

Strategic Approach 4; Promotion of R&D in technology and innovation

13

Sector Measure/Programme

Cross cutting 1. R&D promotion 2. Promotion on high energy performance technology demonstration

Large Commercial Building

3. Promotion on development of high performance building prototype

Small Commercial & Residential Building

4. Promotion on development of high performance residential building prototype

Transportation 5. R&D Promotion 6. Promotion on high efficiency equipment demonstration

Strategic Approach 5; Strengthening human resources & institutional capacity

14

Sector Measure/Programme

Cross cutting 1. Professional development promotion 2. Strengthen government and private personnel capability

Large Commercial Building

3. Promotion of Energy Efficiency Professional in building

Estimated Saving by Strategic Approach

under 20-Year EE Plan 15

Strategic Approach Project Saving

(ktoe)

Budget (million Baht)

Intensity enforcement through regulations

and standards (10 measures) 14 12,138 4,206

Support and promotion of energy efficiency

activities (10 measures) 24 26,561 97,690

Building awareness and enhancement of

behavioral change (5 measures) 16 146 10,749

Promotion of technology development and

Innovation (6 measures) 8 - 14,367

Human and institutional development and

Strengthening (3 measures) 5 - 1,728

Total 34 measures 67 38,845 128,740

16

Estimated Saving by Economic Sector

under 20-Year EE Plan

Economic Sector Specified

Target

(ktoe)

Saving

(ktoe) Budget

(million Baht)

Transportation 15,100 15,323 13,010* Industrial 16,100 16,257 69,066 Large commercial building 3,600 3,630 19,640 Small commercial &

residential building 3,400 3,635 27,024

Total 38,200 38,845 128,740

* Exclude investment in the infrastructure construction of transportation sector such as

mass transit, double track railway

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Final energy consumption saving 38,845 ktoe

in year 2013

Reducing of CO2 emission 140 million tons/annum

Total energy expenditures saving 1.11 trillion Baht

Environmental quality improvement

Positive impact on the macroeconomics

Expected Benefits

18

Energy Efficiency Measure

on Financial support for energy

performance achievement

Strategic Approach 2; Promotion of energy efficiency activities

19

Sector Measure/Programme

Cross cutting

1. Voluntary Agreement (VA) 2. Promotion of voluntary labeling 3. Financial support for energy performance achievement 4. Support ESCO Implementation

Industry 5. Support R&D in process improvement Large Commercial

Building 6. (1) Support and promote energy labeling for large commercial building

Small Commercial & Residential Building

6. (2) Support and promote energy labeling for residential building

7. Financing and fiscal measures to drive energy efficiency performance 8. Support high energy efficiency equipment and appliances

Transportation 9. Support energy labeling on vehicle parts 10. Support mass transport system and energy efficient logistics

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Measure: Financial support for energy performance achievement

Incentives to motivate implementing energy efficiency comprise of

Financial incentives;

Subsidy, soft loan, partial guarantee, ESCO Fund from the Energy

Conservation Fund, and Public-Private Participation raising Energy Trust

Fund DSM Bidding for large business, Standard Offer Program (SOP) for

small Business.

Tax incentives;

Tax reduction, based on energy saving performance, for building,

industrial, estate developer and investment incentives for equipment

and appliance manufactures.

EE Measure; Financial support for energy performance achievement

21

(continued)

Measure 7 Project

Financial support for

energy performance

achievement

1. Financial support for achieved and verified energy-saving as per the project proposals approved under the DSM Bidding scheme 2. Financial support for achieved and verified energy-saving or reduced peak load for SMEs as per the project proposals approved under non-bidding scheme; Standard Offer Programme (SOP) 3. Tax Intensive for the investment in energy efficiency projects 4. Provide soft loan through revolving fun for the investment in energy efficiency projects 5. Provide tax incentive to push customers towards behavioral change, create awareness on energy conservation and Green House Gas reduction

EE Measure; Financial support for energy performance achievement

22

Recent Implementation

for Financial Incentive Project

Major Achievement of EE Improvement Activity

in the Industrial and Commercial Sector

Under EPPO Management

“Demand Site Management

by Bidding Mechanism

(DSM Bidding)”

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DSM Bidding

Provide financial support to encourage business operators to invest in higher energy efficiency machines/equipment.

Subsidy is based on actual units of energy saving achieved in a year. [subsidy = annual energy saving x subsidy rate (as bid by each company)]

Max. subsidy rate for each energy type is shown in the table:

Energy Type Maximum Subsidy Rate

Electricity 1 Baht/kWh

Heat

From Liquid and Gas Fuels

75 Baht/MMBtu

From Solid Fuels

15 Baht/MMBtu

MMBtu = Million British Thermal Unit = 1,055 MJ

Saving Target

75.00 GWh/year

1.70 MMBtu/year

74.40 ktoe/year

Company requesting lower weighted subsidy rate will be subsidized first,

i.e. bidding mechanism.

Therefore, this program will result in higher energy saving to subsidy ratio.

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Status of DSM Bidding

2008 2009 2010 2011 2012

Request for Proposals

Rounds 4-6 Rounds 7-8

Approved/completed proposals 216 proposals 132 Companies

Company investment 2,241.42 Mil Baht ENCON Fund support 307.46 Mil Baht 30% of the budget

Change of equipment, verification

& measurement of actual saving

to be undertaken. Completed: 216 proposals Actual saving: 162.76% of the

amount proposed

Saving Achieved Compared with Target Heat energy saving 3.99 Mil MMBTU/yr 234.92% Electricity saving 250.77 GWh/yr 66.87% Total energy saving 121.09 ktoe/yr 162.76%

Rounds 1-3

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Measure 7 Project

Financial support for

energy performance

achievement

1. Financial support for achieved and verified energy-saving as per the project proposals approved under the DSM Bidding scheme 2. Financial support for achieved and verified energy-saving or reduced peak load for SMEs as per the project proposals approved under non-bidding scheme; Standard Offer Programme (SOP) 3. Tax Intensive for the investment in energy efficiency projects 4. Provide soft loan through revolving fun for the investment in energy efficiency projects 5. Provide tax incentive to push customers towards behavioral change, create awareness on energy conservation and Green House Gas reduction

EE Measure

on Standard Offer Programme (SOP)

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Why SOP?

Lots of SMEs and end-users in Thailand, but no

financial support for energy performance

achievement

Limited investment and potential human resource

Verified energy-saving as per the project proposals

approved under non-bidding scheme Quick operating

Transparent subsidizing

Motivating high potential SMEs for energy

efficiency implementation

Energy saving ~ 5,800 ktoe

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SOP International Practices

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Issues Option Examples

1. Project Owner 1) Utility

2) Government Agency

USA

South Africa

2. Source of fund 1) Utility

2) Energy fund

USA

South Africa

3. Motive 1) To comply with utility law

2) Energy policy

USA

South Africa

4. Structure 1) Use agency / ESCO

2) Direct to customer

USA, South Africa

Canada

5. Target groups

1) Commercial & Industrial

2) Residential

3) Hard to reach

4) Renewable Energy

USA

USA

USA

Canada, South Africa

6. Consider saving

1) Electricity only

2) Fuels only

3) Peak demand only

4) More than one type

USA

South Africa

USA

7. Purchasing period 1) Summer / System peak

2) Whole year

USA, South Africa

Canada

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Issues Option Examples

8. M&V

1) Deemed saving

2) Simple M&V

3) Full M&V

USA, South Africa,

Canada

9. Compensation rate

depend on

1) Type of energy

2) Type of technology

3) Customer group

USA, South Africa,

Canada

10. Payment

1) Single payment

2) Multiple payment;

- Installation payment

- Performance payment

USA

South Africa

11. Technology

1) Air conditioning & ventilation

2) Lighting equipment

3) Building envelop

4) Hot water heater & heat pump

5) Household equipment

6) Process equipment

7) Renewable energy

USA, South Africa,

Canada

South Africa, Canada

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Which Option is Suitable

for Thailand?

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Thank you for your kind attention