Bundit Fungtammasan - Thailand's Experience

8/6/2019 Bundit Fungtammasan - Thailand's Experience

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Taking Stock: Thailand's Experience

in Scaling up the Implementation ofRenewable Energy

6th Asia Clean Energy Forum

Session 15 Renewable Energy: Policy,Regulation and Institutional IssuesADB, Manila, 23 June 2011

Bundit FungtammasanThe Joint Graduate School of Energy and Environment(JGSEE) andCenter for Energy Technology and Environment (CEE)King Mongkuts University of Technology Thonburi, Thailand


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Thailand is at the forefrontof RE deployment in the

region.

IEA Report: Deploying RE in SEA,

2010


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Indonesia Malaysia Philippines Singapore Thailand Vietnam

RE targets

(quantitative

objectives)

Not

applicable

Financial incentives

Non-financial

incentivesHigh

Medium

Low

Source: Samantha Olz and Milou Beerepoot, IEA, 2010

Leading in RE targets and policy

support


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Source: Samantha Olz and Milou Beerepoot, IEA, 2010

Indonesia Malaysia Philippines Singapore Thailand Vietnam

Administrative &

regulatoryMarket-related

Technical &

infrastructure

Financial

Socio-cultural

Low importanceMedium importance

High importance

Less significant deploymentchallenges


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Source: DEDE

Tangible results in new REdeployment

7% of total PES (11%

traditional biomass)

1,850 MW installed

capacity (1.5% of

total generation)

Biofuels accounts for

2.5% of transport fuel

- 1.37 Ml/d ethanol

- 1.7 Ml/d biodiesel

Naturalgas

31%

Oil37%

Coal13%

RE &biofuels

18%

Hydro1%

Total PES: 114 Mtoe (2009)


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Scope of this talk

Driving forces for RE deployment

Support policies

Results on RE deployment

Barriers and challenges


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Driving forces for REdeployment

Import dependence: half of its energy needs

Transport sector consumes 37% of finalenergy

Vulnerable to oil price volatility

Abundant RE resources, biomass in particular

Need for balancing agricultural commodityprices and prospects for sustainable ruraldevelopment

Need for clean cities and GHG mitigation


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Support policies in place

Regulatory framework

Policy targets

Financial incentives

Non-financial incentives


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Regulatory framework since 1992for renewable heat and power

Energy Conservation and PromotionAct (1992), amended 2007 Basis for ENCON programs and ENCON Fund

(1995) Power Purchase Regulation for SPPs (1992,

< 60MW, later 90 MW) obligating grid operatorsto accept SPPs to the grid

Power Purchase Regulation for VSPPs (2002,initially < 1 MW, later 10 MW)

Energy Business Act (2007) (oil & gas) Energy Regulatory Commission (ERC)


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Regulatory framework forbiofuels

National Ethanol Committee (2002)

Grant licenses for the construction ofethanol production plants and the

distribution of fuel ethanol

Biofuel mandates:

B3 for biodiesel

E10 initially proposed, later backtrackedBiofuel standards

Biofuel pricing structure


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Setting policy targets toaccelerate RE deployment

First significant RE targets under the EnergyStrategy for Competitiveness (2003)

8% RE share of final energy consumption by

2011 (from < 1%), with specific targets forelectricity, heating and biofuels

RE Development Plan (2008 2022) targets

14% RE by 2022

- Renewable electricity; 6,000 MW (3Xpresent)

- Renewable heat: 7,400 ktoe (3X present)

- Biofuels: 13.5 Ml/d (4.5 present)


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Financial Incentives

Tariff subsidies forfirm and non-firmSPPs, pricing based on bids and other criteria

Feed-in premiums (adder) (2007) forVSPPs and SPPs

additional purchasing price guaranteed ontop of normal tariff for 7 10 years

technology and capacity differentiated(price fixed for VSPPs; for SPPs, fixed forsome fuels, otherwise bidding required)


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Adder for renewable electricity (on top ofnormal tariff of ~ 10 US Cents/kWh)

Technology Us Cents/kWh Duration (y)Biomass 1MW 1.0 7

Biogas 1MW 1.0 7Wastes Landfill/anaerobicdigestion

8.3 7

Wastes - Thermal Process 11.6 7

Wind 50kW 11.6 10

Hydro 50-


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Other financial incentives

Tax exemptions

Import duty exemptions and 8-year taxholidays on RE equipment

Reduction of excise tax and Oil Fundcontribution for biofuels, excise tax reductionfor E20 and E85 vehicles

Capital grants

Projects related to RE, R&D, public awareness

and and training

30% investment grants for commercial solarthermal systems, biogas installations, and10% for MSW


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Other incentives

CDM

Thailand Greenhouse Gas ManagementOffice (TGO) set up as part of national

strategy on climate change in 2009

Information provision

One-stop clearing house e.g. Energy forEnvironment Foundation set up with GEFsupport to provide technical and financialinformation on RE


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Results on RE deployment

Early SPP and VSPP schemes (until mid-2008)promoted on-grid generation

Since redefining capacity range and introducing addersin 2007 (as od March 2011)

No.Generators

InstalledCapacity (MW)

Fuel

SPP 35 615 Biomass

VSPP 100 215 Biomass, biogas

No.Generators

InstalledCapacity (MW)

Fuel

SPP 26 637 Biomass

VSPP 221 954 Biomass, biogas,

solar, MSW


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Huge interest in wind farmapplications for SPPs (up to 90MW)

Source: EPPO 2011

As of March 2011

0

200

400

600

8001000

1200

1400

1600

Operating: 637 MW

Accepted: 427 MW

Pending: 2,394 MW

MW


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VSPPs (


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CDM projects on the rise but yetto see real dollars (as of 7 June 2011)

No. ofProjects

CERs(MtCO2eq/y)

LoI 261 N.A.

LoA 138 8.5

Registered 51 3.1

CERs issued 5 0.85

Type of project dominated by biogas and biomass

Source: TGO, June 2011


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Rapid rise in ethanol productionwith surplus

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2006 2007 2008 2009 2010

ml/d (average)

Source: DEDE

17 plants:100,000 200,000 l/d

Total capacity:2.8 ml/d

11 molasses

1 sugar5 cassava (2 inoperation)

Mainly from molasses, somefrom cassava


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Biodiesel production constrainedby domestic palm oil supply

0

0.20.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2007 2008 2009 2010

Ml/d (average)

Source: DEDE

13 plants:100,000 300,000 l/d

range, also600,000 &1,200,000 l/d

Total capacity:4.5 ml/d

Mostly palmstearine, CPO,some used VO


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Major concerns and possiblesolutions renewable electricity

Technical and infrastructural, economics

grid-code puts too much cost burden on

Concerns Possible solutions

Grid stability: current grid

code burdensome forconnectors

Grid access

Adder too high for someRETs, too low for others

Land use (wind)

Role of regulators;

infrastructure upgrade;capacity building

Micro-grid; smart grid

Review adder (regression,differentiate type ofbiomass resource);Review land use policy


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Major concerns and possiblesolutions biofuels

grid-code puts too much cost burden on

Concerns Possible solutions

Low demand

High feedstock

cost

Food security vsfuel

Get rid of subsidies for petroleumproducts with special measures to

address the disadvantaged sector;introduce fuel mandates and subsidizeconversion kits

Energy crop production yield

improvement,

Crop yield improvement, ecological-economic zoning, 2nd generationbiofuels


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Thank [email protected]

Bundit Fungtammasan - Thailand's Experience

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