thailand energy policy

8/7/2019 Thailand Energy Policy

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THAILAND’S ENERGY POLICY delivered to the National Assembly on 30 December 2008 by Mr. Abhisit Vejjajiva,

Prime Minister of Thailand and

ENERGY STRATEGY directed by Mr. Wannarat Channukul, Minister of Energy, on 12 January 2009

STRATEGY 1: ENERGY SECURITY

Policy Directive Strategy Target/Outcome Implementation Methodology

Intensify energy developmentfor greater self-reliance of thecountry with a view to achievingsufficient and stable energysupply by expediting explorationand development of energyresources at both domestic andinternational levels; negotiating

with neighboring countries at thegovernment level for jointdevelopment of energyresources; creating energy mixin power development to reducerisks pertaining to supply, pricevolatility and production cost;encouraging electricity

production from potentialrenewable energy, particularlyfrom small or very small scaleelectricity generating projects,as well as studying theappropriateness of other alternative energy for electricitygeneration.

1.1 Promote domesticproduction of crudeoil and condensateand develop relatedinfrastructuresystems.

To be able to producecrude oil and condensateat more than 230,000barrels/day in 2009 and250,000 barrels/day in2011.

Expedite and promote greater investment in exploration andproduction (E&P) of crude oil fromdomestic resources.

Support the development of oil depotsystem and oil transportation pipelinesso as to reduce the cost of oil

distribution to various regions. Encourage the PTT and PTTEP to

invest in the utilization of the deep-seaport in Ranong province as a supplybase of petroleum E&P in the Gulf of Martaban.

Stimulate the PTT and PTTEP toinvest in overseas E&P of crude oil tobe supplied back to Thailand,particularly from oil resources instrategic partner countries havinggood relationship with Thailand, suchas Oman, Iran, Qatar, Bahrain,Algeria and Egypt.

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1.2 Procure natural gasfrom both domesticand foreign resourcesto sufficiently meet thedemand and developrelated infrastructuresystems.

To maintain the level of natural gas reserve (2P)that can be developed for domestic consumption for no less than 30 years.

Manage the procurement of naturalgas to be in balance with the domesticdemand.

Speed up natural gas procurement tomeet the domestic demand, especiallythe development of the 2

ndnatural gas

resource in the Thailand - Malaysia

Joint Development Area, i.e. JDA B17,to meet the schedule.

Follow up the progress of domesticnatural gas fields presently under development, e.g. Plathong 2 andSouth Bongkot, to be able to supply tothe system in 2011/2012.

Speed up the signing of a Gas SaleAgreement for the purchase of naturalgas from a new natural gas resourcein Myanmar, i.e. M9 gas field, toenable the commencement of naturalgas supply at 240 million cubic feetper day (MMSCFD) by 2011/2012.

Import LNG to accommodate thedemand of natural gas, starting in2011/2012; in this respect, the signingof LNG sale agreements with foreigncountries must be made and theconstruction of re-gasification facilitiesin Rayong province must beexpedited.

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Strategy Target/OutcomePolicy Directive Implementation Methodology

Initiate and speed up negotiation for natural gas supply from Natuna gasfield in Indonesia.

1.3 Develop theelectricity supplyindustry toadequately meet thedemand and promotediversification of fueltypes.

To have Thailand Power Development Plan (PDP)correspond with economicand social situations, witha reserve margin atapproximately 15-20%.

To maintain the share of power generation of theElectricity GeneratingAuthority of Thailand(EGAT) at more than 50%

of the total generatingcapacity of the country.

To impose a cap ondependency on naturalgas for power generation,not to exceed 70%.

Support power purchase from small-scale projects like SPPs (usingcogeneration system and renewableenergy) and VSPPs to increase power supply to the grid during 2009-2011,which will also boost domesticeconomic conditions and investment.

Postpone IPP projects that are notready to be connected to the grid for 1-3 years.

Review the purchase of power from

neighboring countries through re-negotiation.

Carry out public informationcampaigns to make people recognizethe importance and necessity of fueldiversification.

1.4 Conduct feasibilitystudy on thedevelopment of other fuel options for power generation, e.g. nuclear,clean coal and oil shale.

To provide the generalpublic with better knowledge andunderstanding of newenergy options.

Undertake detailed feasibility study onthe development of nuclear power plants, using relevant IAEA guidelinesas the implementation framework.

Carry out public information activitiesand disseminate clear and correctinformation to the general public,

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Strategy Target/Outcome Implementation MethodologyPolicy Directive

giving importance to educating theyoung generation about the benefits,advantages and disadvantages of nuclear power, coal and oil shale.

Get prepared for presentation to thegovernment to make a policy decisionregarding nuclear power

development, emphasizing theoutcome of in-depth study on theeconomic cost-effectiveness andpublic acceptance.

1.5 Explore energyresource overseas,emphasizing

cooperation betweenthe public sector andprivate Thai operators.

To enhance better bargaining power of Thailand in negotiating on

power purchase fromneighboring countries, byencouraging Thaientrepreneurs to enter intojoint ventures on power projects.

To pave the way for moving forward toinvestment in E&P of oiland natural gas resourcesin the Middle East, Africa,Asia Minor and the Pacific.

Policy towards neighboring countries:

- Negotiate on the plan for power purchase from Lao PDR to suit with

changing situations and costs;- Speed up the establishment of

integrated relationship (“EnergyDiplomacy”) with Indonesia.

Policy towards significant strategicpartners relative to energy issues:

- Maintain good relationship withmajor oil and natural gas producingcountries in the world market, suchas UAE, Oman, Iran and Qatar,including Algeria and Egypt;

- Strengthen relationship withstrategic partner countries in the

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Strategy Target/Outcome Implementation MethodologyPolicy Directive

field of alternative energy andcountries with advanced energytechnologies, e.g. Brazil, Germany,France, Japan and South Korea;

- Expedite relationship establishmentwith South Africa, Angola andKazakhstan – countries endowed

with various energy resources, e.g.coal and uranium.

Develop relationship between biofuelproducing and consuming countries inthe form of “International Dialogue onBiofuels,” with Thailand acting as amajor lead country.

1.6 Promote andstrengthen thedevelopment of energy industry aswell as downstreamindustry.

To get prepared for scaling up petrochemicaldevelopment together with biofuel developmentso as to create newindustry of the country,e.g. the development of oleochemical industry.

Undertake detailed study on theapproach to development of value-added creation of domestic petroleumresources, including a survey for potential sites for such development.

1.7 Devise a plan for energy emergencypreparedness.

To have in place a planand readiness to addressall forms of energy crises.

Devise an energy crisis preparednessplan together with a coordinationsystem and an exercise in addressingan oil shortage.

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STRATEGY 2: ALTERNATIVE ENERGY


Set the policy on alternativeenergy as a national agenda by encouraging production anduse of alternative energy,particularly bio-fuel and bio-mass, such as gasohol (E10,E20 and E85), bio-diesel, solidwaste and animal manure, toenhance energy security,reduce pollution, and for thebenefit of the farmers byencouraging production anduse of renewable energy at the

community level under appropriate incentivemeasures; encouraginggreater use of natural gas inthe transportation sector byexpanding natural gastransportation systemnationwide; and rigorously and

continuously promotingresearch and development of all forms of alternative energy.

2.1 Promote theproduction andutilization of biofuels,e.g. ethanol andbiodiesel, to replaceoil consumption.

To replace oil consumptionwith the use of ethanol at noless than 1.4 millionlitres/day in 2009.

12.361.39Total

5,0001.60.16> 10 millionMotorcycles

30-500.0050.0041,000- E85

1201.050.25318,000- E20

5,0009.70.97> 3 million- E10

GasoholEthanol

ServiceStation

Quantity

(M litres/day)Estimated

Number of

Vehicles

To forge ahead with thematerialization of the use of gasohol E85 and flexiblefuel vehicles (FFV) in

Thailand, with a promotionaltarget of at least 2,000 FFV.

The target in 2011 is asfollows:

Establish as a “National Agenda”the production and utilization of ethanol and biodiesel, with a RoadMap to provide clear implementationdirection.

Support the establishment of ethanol production plants, which willenhance Thailand to become the“Ethanol Hub” for ethanol productionand distribution in Asia.

Promote wider use of E85 fuel, viasupporting the set-up of E85automobile manufacturing line in

Thailand, with an initial target tohave 1,000,000 E85 cars by 2018.

Forge ahead with the revision of regulations pertaining to ethanolexport.

Initiate aggressive marketing toinduce neighboring countries as well

as China, Japan and Korea, toseriously consider and increaseethanol use so as to expand ethanolexport markets in the future.

Efficiently monitor the pricedifference between biodiesel B2 andB5 in order to properly

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24.3263.0022.2 millionTotal

4.80.4818,522,000Motorcycles

0.3760.3290,000- E85

2.850.57609,823- E20

16.31.63> 3 million- E10

GasoholEthanol

Quantity (M litres/day)Estimated

Number of

Vehicles

To produce B100 at no lessthan 1.8 million litres/daywithin 2009 and promote the

increase in domesticproduction capacity of B100to sufficiently meet ademand of about 3 millionlitres/day in 2011.

accommodate the demand of biodiesel B100 to be in line with oilpalm production in each period of time.

Expeditiously promote expansion of oil palm plantations together withdevelopment of oil palm

species/varieties and yield per rai[0.16 hectare] .

Continuously promote the“community-scale biodiesel” project,emphasizing technology transfer and suitable technical managementso as not to cause environmentalimpact on the communities.

Make the use of biodiesel B5mandatory nationwide by 2011.

2.2 Promote the use of natural gas in the

transportation (NGV),industrial, commercialand householdsectors.

(A table illustrating thetarget of NGV utilization

and the estimated number of NGV vehicles is beingdeveloped.)

To increase NGV mother stations by a minimum of 7stations within 2009.

Forge full steam ahead andcontinuously with the application of

NGV to public fleets, focusing ontaxis, tuk-tuks (motored tricycles),public and private buses, andtrucks.

Prepare for NGV price review,taking into consideration the actualcosts and overall economic

situations of the country.

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Plan out the expansion of naturalgas transmission pipeline system tobe the backbone of NGV growth.

2.3 Promote all forms of renewable energy –wind, solar,

hydropower,biomass, biogas andenergy from waste.

The target of power generation by renewableenergy type is as follows:

785- Electricity from Waste

6045- Biogas

2,8001,609- Biomass

16555- Mini & Micro-hydropower

1151- Wind

5532- Solar

Target in

2011 (MW)

At Present

(MW)

Promote power generation fromrenewable energy in all forms, viaprovision of incentive measures,

e.g. the current provision of “Adder”[an additional energy purchasing priceon top of the normal prices that power producers will receive when selling electricity to the Power Utilities] .

Promote the conversion of plasticwaste into crude oil, in a way similar to the “Adder” provision, by using

the Oil Fund to provide support for the cost incurred from Adder provision to oil refineries thatpurchase oil derived from plasticwaste to be further processed.

Review “Adder” to better suit thedomestic situations.

2.4 Carry out researchand development of alternative energy,renewable energyand other innovativeenergy technologies.

To develop and integratethe plans for R&D onalternative energy of concerned agencies toenhance the capability torespond to the approach for

renewable energy

Support R&D necessary for thedevelopment of alternative energy,especially R&D on energy fromplants, in terms of both the 2nd Generation Biofuels and equipmentfor generating energy from biomass

and biogas.

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development as per thealready approved 15-year REDP framework.

R&D on modification of old-modeledcars to be able to use gasohol E20and E85.

R&D on car engines to beapplicable to biodiesel B10.

Support research on advancedtechnologies, e.g. hydrogen and

solar cells. Increase the share of domestic

technology utilization (localcontents).

2.5 Forge ahead to setalternative energy as

a national agendaand determineincentive measures.

To have the NationalAlternative Energy Master

Plan approved andpractically implemented.

Present the 15-year RenewableEnergy Development Plan (REDP)

to the NEPC/cabinet for approval tobe used as the master plan for promotion and support of alternativeenergy in all forms.

Develop an integrated Plan of Action to forge ahead withalternative energy development

pursuant to the targets set forth inthe 15-year REDP.

2.6 Establish andstrengthen renewableenergy networksthrough encouraging

a participation

To establish one prototypeof village/community-basedenergy source in eachprovince, totaling 75

prototypes, within 2009,

Set up the “Community EnergyVolunteers” by selecting communityleaders/mentors who are interestedin energy issues and who are willing

to conduct campaigns promoting

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process at thecommunity, districtand provincial levelsin order to createenergy security fromthe foundations.

giving importance to theapplication of local culture tothe fostering of economicaland wise usage of energy ina community and to theincrease in the economicvalue of the community.

To speed up the expansionand further development of prototype communities soas to popularize theconcept, by integrating thisinto the community energyplanning project with atarget of “one district, one

community energy source”by 2011.

energy activities at the communitylevel.

Devise an alternative energydevelopment plan at the provinciallevel and at the provincial cluster level, using the “cluster concept” inorder to expeditiously and practically

convert the existing potential in eacharea into energy according to the15-year REDP framework, asapproved.

Accelerate the implementation of community-scale energy projects inan addition of 300 Tambon (sub-district) Administration

Organizations nationwide – to be anew channel focusing on grassrootsparticipation in the thinking, planning,implementing and problem solvingrelated to energy for thecommunities, targeting to reduce theenergy cost of each community by

15-20%. Promote “Appropriate Technology”

that suits the way of living of people,particularly those in rural communities,so that the acquired technologycould be practically applied to solveenergy problems in each locality,e.g. community-scale biodiesel,

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training course on manual productionof biodiesel, 200-litre charcoal-makingstoves, high-efficiency stoves,charcoal briquette-making machinesand household biogas digesters,etc.

Develop the “Green Home Concept”

for “urban communities,” bydeveloping technologies appropriatefor urban communities, housingestates and condominiums.

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STRATEGY 3: SUPERVISE ENERGY PRICES AND SAFETY


Supervise and maintainenergy prices at appropriate,stable and affordable levels by setting an appropriate fuelprice structure which supports

the development of energycrops and which best reflectsactual production cost;managing prices through themarket mechanism and the OilFund to promote economicaluse of energy; andencouraging competition and

investment in energy business,including improvement of service quality and safety.

3.1 Supervise energyprices to ensure stabilityand fairness, whilereflecting actualproduction cost, through

the market mechanism.

To attain fair/affordabledomestic energy prices –the energy cost for Thaipeople must not be higher than that in neighboring

countries.

Supervise the pricing policy andprice structures of oil, LPG andnatural gas to be in line with theworld market mechanisms and toreflect the actual costs; ensure

fairness for the general public viaefficient use of the Oil Fundmechanism; and monitor the refiningand marketing margins to be atappropriate levels.

As for LPG and NGV prices,implementation will be in line with theresolutions of the NEPC/cabinet,

which will not place a burden onconsumers.

Regarding the calculation of ethanolprice, the Energy Policy andPlanning Office (EPPO) has beenentrusted to solicit the EthanolProducer Association for a more

suitable pricing formula for monitoring domestic ethanol prices.

3.2 Promote service qualityand safety improvement of energy-related business,facilities, service stations

and equipment.

Absolute Zero-Accident.

To complete theestablishment of anProvincial Energy Office in

Accelerate capacity building of Provincial Energy Offices (PEOs) toenhance efficiency of their dutyexecution, particularly the protection

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Target/Outcome Implementation MethodologyPolicy Directive Strategy

each province by 2011 (todate 36 PEOs have beenapproved) to enable their practical duty executionand efficient protection of energy consumers’benefits.

To establish NGV qualitystandards to ensure safety,including supervision onthe installation cost of NGVkits to be appropriate, fair and in line with theeconomic conditions.

To establish an energy

technique developmentinstitute, includingprocurement of testingequipment.

To develop safetystandards of energybusiness operation which

are suitable for Thailand,and disseminate thestandards to provincialareas and localadministrationorganizations.

of energy consumers’ benefits. Upgrade the Regional Energy

Coordination Offices of PEOs to beRegional Energy Learning Centers inorder to create knowledge andunderstanding of the government’senergy policy.

Establish the quality and safetystandards of the NGV business chainas a whole.

Regulate the safety of LPGutilization, by preventing misuse of LPG and guarding against transfer of household LPG to be used in the

transport sector while ensuring leastimpact on taxis, via the mechanismentrusted to five committeesappointed by the NEPC.

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3.3 Encourage competitionand investment inenergy business.

To create goodenvironments for investment in energybusiness, with transparentcompetition andinternationally acceptedstandards.

Designate an agency in the form of an “Investor Relation Office” to beexclusively responsible for procedures and process of investment in energy industry.

Create a mechanism for enhancing acompany to be a “service company”

in operation and maintenance (O&M)in such business as electricityindustry, refineries, gas separationplants and oil/gas rigs, both domesticand overseas.

Create a favorable atmosphere for investment in energy business, with

transparent competition andinternationally accepted standards.

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STRATEGY 4: ENERGY CONSERVATION AND EFFICIENCY


4.1 National energydevelopment andenergy conservation.

To increase the energyconservation targetstipulated in the EnergyConservation Program to20%, focusing on

increasing energy-savingachievement in theindustrial andtransportation sectors.

Prepare the drafting of EnergyConservation Program, Phase 4(2012-2016) to be intensive to beable to address future crises causedby oil price volatility, climate change

and world food crisis, underlyingparticipation of people andconcerned parties at all levels.

Encourage energyconservation and efficiencyin the household, industrial,service and transportationsectors through campaigns

fostering energy-savingdiscipline and conscience andpromoting effective energy use;providing incentives to induceprivate sector investment inopting for energy-savingappliances; setting incentivemeasures for the household

sector to reduce electricityconsumption during the peakperiod; supporting researchand development and standardsetting for electrical appliancesand energy-saving buildings;and supporting thedevelopment of mass publictransportation and railwaysystem to improve energyefficiency which will help defer the country’s investment inenergy procurement.

4.2 Organize campaignsto create energy-saving conscienceand provideknowledge aboutenergy conservation.

To forge ahead with theimplementation of “11Energy-Saving Measuresfor the People” to rapidlyattain practicalachievement and set an

energy-saving target at100,000 million Baht/year.

Improve the implementationapproach of the “11 Energy-SavingMeasures” by placing emphasis onpilot provinces at three scales (SML,i.e. large-scale province: NakhornRatchasima; medium-scale provinces:

Phitsanulok and Krabi; small-scaleprovince: Mae Hong Sorn), and bypushing forwards energy-savingmeasures emphasizing aparticipation process, mainly throughthe “Community Energy Volunteers”mechanism, prior to expansion toother provinces in 2011.

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To enhance LocalAdministrationOrganizations (LAOs) to befocal agencies in creatingand disseminating “energy-saving culture” via suchtarget groups as children

and juveniles, housewivesand senior citizens under the “Community EnergyVolunteers” mechanism.

To attain participation of 100,000 households in the“Household Energy Credit”project, which willcontribute to energy-savingat no less than 1,000million Baht/year.

A target of energy creditprovision is set to reach60,000 million Baht/year,contributing to energy-

saving at no less than40,000 million Baht/year.

Enforce measures on mandatoryenergy performance labeling within2009, starting with refrigerators andair-conditioners byupgrading/increasing efficiency of No. 5 refrigerators and air-conditioners by at least 10%.

Expedite coordination with the Officeof the Consumer Protection Board(OCPB) and concerned agencies toenable issuance of the mandatorymeasure on “Standby Power 1-Watt”within early-2010 for pilot appliancessuch as televisions and air-conditioners, and set a target of electricity saving worth 4,000 millionBaht/year.

Accelerate the replacement of lightbulbs by energy-saving lights (No. 5and T5 fluorescent tubes) in 100sample temples/mosques within2009, and complete such

replacement in 500 facilities by 2011,to achieve a change to the use of energy-saving light tubes totaling1,000,000 units, including creation of a sensitizing presenter in eachfacility.

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Speed up the issuance of relevantministerial orders and announcementspursuant to the Building EnergyCode within 2009, together withorganizing training/conferences for architects, engineers and concernedinstitutions so as to attain at least10% energy-saving in new buildings,accounting for electricity saving at2,365 GWh/year.

Speed up the enforcement of lawsand announcements related to theregulation of energy conservation infactories (ISO – Energy) within 2009,aiming to attain energy saving worth

90,000 million Baht by 2011.

Assign the Energy Mobile Units, viathe Regional Energy CoordinationOffices of all 12 Provincial EnergyOffices, to carry out their field work inat least 576 sub-districts nationwide.

Review the projects on “Clean Air-conditioners Increase Money for Households” and “Engine Tune-up toReduce Oil Consumption” to beimplemented continuously on anannual basis, especially in summer.

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4.3 Devise incentives andprovide privileges toinduce investment inenergy saving.

To set a target to reduce“Energy Intensity,” or energy consumption per production unit, in theindustrial sector by 20%compared with the baseyear (2006).

Promotion via 4 major measures, i.e.- Energy Credit and Revolving Fund

to promote energy efficiency andalternative energy;

- Tax measures and privileges onboth cost-based and performance-based basis;

- Joint ventures via the use of ESCO Fund;

- DSM Bidding.

4.4 R&D on energy-savingsystems andtechnologies.

To have in place anIntegrated ResourcesPlanning with regard to

energy conservation R&D.

Gather information about energy-saving innovations in each localityand encourage further development.

Consider clearer determination of theratio of state budget and budget fromthe Energy Conservation PromotionFund to be used for R&D promotion.

4.5 Set standards, rules

and regulations for energy-savingequipment, materialsas well as energymanagement.

To announce the Minimum

Energy PerformanceStandards (MEPS) of 15electrical appliances by2009.

Expedite the issuance of Ministerial Orders, particularlyon the Building EnergyCode and ISO - Energy.

Expedite the issuance of Ministerial

Orders with immediate effect.

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4.6 Promote the creationof prototypenetworking, e.g. SMEswith distinguishingfeatures or withinterest in energy-saving.

To make “Thailand EnergyAwards” recognized bygeneral target groups.

Intensify the implementation via the“Thailand Energy Awards” project.

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STRATEGY 5: ENVIRONMENTAL PROTECTION


Encourage energyprocurement andconsumption which attachimportance to theenvironment, with public

participation, by settingrelevant standards andpromoting greater CleanDevelopment Mechanism(CDM) projects to reducesocial and environmentalimpact as well as greenhousegas emission.

5.1 Monitor environmentalimpact caused byenergy production,conversion and

utilization.

To set a target together with a plan to boost themanagement of greenhouse gas emissionrate in the energy sector.

Select pilot power plants and conduct astudy on the reduction of GHGemission from:

1) one natural gas-fired thermal power plant;

2) one coal-fired thermal power plant;and

3) one combined cycle power plant,

and, devise a plan to reduce GHGemission in the energy industry, e.g.determination of the baseline,together with a clear response plan.

5.2 Promote the CleanDevelopmentMechanism (CDM)in the energy sector to reducegreenhouse gasemission.

To enable Thailand tosubmit energy projects for certification under theCDM, at a total of onemillion tons CO2 per year.

To enhance Thailand to bea leading country inexporting carbon credits inAsia.

Promote wider use of flare gas, e.g. asa substitute for LPG in the productionprocess of community products or asfuel in community-scale power generation.

Manage to keep the level of flare gasat the minimum, or prepare theannouncement on “Zero Flare” policy,particularly for on-shore petroleum sites.

Promote study and research on thecarbon capture and storage (CCS)technology to compress and storecarbon dioxide underground.

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Conduct a feasibility study on CCStechnology application in Thailand,together with the development of a pilotproject for actual operation trial.

5.3 Control and monitor

the VOC emissionstandards frompetrochemical andrefining industries soas not to createenvironmentalimpact.

To control the VOC

emission of all factories tomeet the standards.

To create low cost“Appropriate Technology”innovations, which areenvironmentally friendlyand easy for O&M, at leastfive innovations per year,with support from theEnergy ConservationPromotion Fund.

Expand the implementation of the

policy on vapor recovery unit fromcurrently four provinces to cover anaddition of seven provinces in areaswhere a large number of oil reservedepots are located.

Prepare for consultations withrefineries regarding the enforcementschedule of the EURO 4 standards.

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