Promotion Of RETs in Thailand: Renewable Energy Innovation ...€¦ · 2012 2016 Targets 2017 2002...

Promotion Of RETs in Thailand: Renewable Energy Innovation System

Professor S. Kumar

Asian Institute of Technology

Stakeholder’s workshop

EU-Thailand Policy Dialogue

15 August 2012, Bangkok, Thailand

Objective and analysis

• The objective of the presentation is to

• The steps of analysis are as follows:

review the current policy structure in Thailand for the promotion of

renewable energy technologies, and to enhance the implementation

strategy of policy formulation through ‘Sector Innovation System’ for

wide-scale deployement of renewable energy technologies.

1. Analysis on the policy structure of Thailand, and ‘Renewable Energy Innovation System’ to enhance the overall implementation of energy policies.

2. Current targets for the implementation and the current status of renewable energy in Thailand.

3. Case study on biofuels policies using the proposed framework.

Background

Energy Policy Structure - Thailand

Analysis of the implementation strategy of REDP

Renewable Energy Innovation System

Summary

Presentation outline

• Global energy demand continues to increase due to the impact of ongoing increases – in population

– in personal wealth (as reflected in GDP per capita), and

– urbanization throughout the developing world

The total primary energy demand in developing countries equaled demand in developed countries

Background

• The primary energy consumption of Thailand was 124,086 ktoe in 2011. The share of alternative energy accounted to about 18.2% of primary energy (DEDE, 2012).

• The share of renewable energy to the total electricity production of 153,392 GWh was 8.2% in 2011 (DEDE, 2012).

Energy situation in Thailand

Energy

Type

Technical

Potential

Capacity

2008

2008-2011

Targets

2012-2016

Targets

2017-2002

Targets

(Electric

power)

MW MW MW Ktoe MW Ktoe MW Ktoe

Solar 50,000 32 55 6 95 11 500 56

Wind 1,600 1 115 13 375 42 800 89

Hydro 700 56 165 43 281 73 324 85

Biomass 4,400 1,610 2,800 1,463 3,220 1,682 3,700 1,933

Biogas 190 46 60 27 90 40 120 54

MSW 400 5 78 35 130 58 160 72

Hydrogen 0 0 0 0 3.5 1

Total 57,290 1,750 3,273 1,587 4,191 1,906 5,607.5 2,290

• On-grid solar energy capacity is 101% more than the set target by government until 2011, i.e. 110.97 MW • Biogas plants generated 64.5% more than the set target of 60 MW as of December 2011 • Small and micro scale hydro plants and wind generation have current capacity of about 13.28 MW and 0.38 MW against the set target of 165MW and 115MW till 2011 respectively

Thailand Renewable Energy target and status

Source: Deploying of renewable energy in South East Asia, IEA data and analysis (2010)

Target and policy support for renewable energy in ASEAN – 6 countries

This ranking is based on the qualitative analysis of the policy support offered in the ASEAN-6

Policies for the support of renewable energy – Thailand and ASEAN countries

Financial incentives for renewable energy in ASEAN-6 (Source: Deploying renewables in South-East Asia-OECD/IEA, 2010)

Feed in tariffs Tax exemption Capital grants Other

Indonesia Feed-in tariff for geothermal power (2009)

Geothermal exploration equipments and activities exempt from taxes

Malaysia Comprehensive feed –in-tariff proposed for 10th Malaysian plan (2011-15)

Small Renewable Energy Power Programme: RES-E 10 years tax holidays

Philippines Draft rules on feed-in-tariffs published in January 2010

Renewable Energy Act (2008): RES-E receives 7 years tax holidays, after that reduced tax rates. No customs duty on imported materials, no VAT on renewable energy sold

Singapore R&D investment Clean Energy Research and Testbedding programme (CERT, 2007); Solar Capability Scheme (SCS, 2008)

Thailand Feed-in premium “Adders” on top of regular tariffs (2007)

Board Of Investment (BOI) tax holidays and import duty exemptions

National Energy Conservation Programme (ENCON, 1992): Funded by a fossil fuel tax, financial incentives for projects related to energy efficiency, renewable energy, R&D, public awareness and training Investment grants for solar

Renewable Energy: ASEAN countries and Thailand

• Ministry of Energy (MoE) is the responsible body for the proposal of policies related to energy, inclusive of electricity generation and renewable energy

• As of January 2012, Thailand has five separate long-term energy plans, prepared by different government divisions – Long-term Power Development Plan (PDP 2010-2030)

– 15-Year Renewable Energy Development Plan (REDP 2009-2022)

– 20-Year Energy efficiency Development Plan

– Natural Gas Plan, and Natural Gas Vehicle Roadmap

• The characteristics of the policies are: – Adequacy of energy resource to ensure reliability of the power system with a minimum

reserve margin of 15% until 2030

– Share of renewable energy must be increased to 25% in the total energy consumption by 2022

– Reduction of energy intensity by 25% in 2030, as compared to 2005

– Promoting the use of natural gas in the power production and transportation sector

Energy Policy formulation structure in Thailand

A case of REDP is considered for the analysis of the strategy of implementation by the government bodies in Thailand

Ministry of Energy established the roadmap as strategy to promote renewable and alternative energy development for 25 percent in 10 years (AEDP: 2012-2021) through the following six strategic issues:

1. Promoting the community to collaborate in broadening production and consumption of renewable energy

2. Adjusting the incentive measure on investment from private sector appropriated with the situation

3. Amending the laws and regulations which do not benefit to renewable energy development

4. Improving the infrastructure as system of transmission line, power distribution line, including a development towards Smart Grid System

5. Public relations and building up comprehensive knowledge for the people

6. Promoting the research work as mechanism to develop the integrated renewable energy industry

Source: DEDE (2012)


Enhanced collaboration b/w Industries and R&D


Source: OECD/IEA, 2010

Renewable Energy Policy Implementation

• National innovation system as traditionally defined by OECD (1997)-

“A complex set of relationships among actors producing, distributing and supplying various kinds of knowledge”

• The characteristics of NIS are:

Innovation and Development

•Successful transformation of ‘innovation’ to a end use product or process is important in the overall country development

Holistic and Interdisciplinary

•Holistic approach towards various technologies, from different sectors through a common body plays a vital role in the design of an NIS

•This understanding is very important for the effective design and successful operation of an NIS

Interaction between different entities

•The government, R&D institutions, academia and industries are the major actors in an NIS

•Flow of information through the interaction of these actors is considered the lifeline of NIS, as innovation process involves combining new and existing knowledge

•The level of interaction – the depth and breadth – between the various actors involved in the NIS will, to a large extent, determine the efficiency of the system

National Innovation System, a pathway towards Sector Innovation System

• The term National Innovation system originated from ‘Christopher Freeman’ to describe the success of Japan

• As a case study, thus NIS of Japan is described as follows:

Central Government

Long term Strategic Plans

• Started as a big importer of technology through technology transfer

• Simultaneously became self-reliant

• It is "the ability to absorb all needed technologies"

Communications and IT

• A special priority amongst generic technologies was

given to communications and information technologies (IT)

Technology Forecasting

• Identify the upcoming technological trends through interactive surveys and discussions with scientists, engineers, policy makers and

people from industry about likely future technological developments

Research and Development

• Research, development and innovation are seen as a strategic priority by the Japanese central

government as well as by industry


Central Government

Technology goals developed at policy level

‘Intermediate zone’ facilitated the implementation of policies

Large corporations

• The horizontal links between departments is an important factor contributing to innovation which by itself is a multifaceted process requiring strong cooperation



• Case of SWH systems in Tunisia through the PROSOL programme. • Actors and institutions work as a network to facilitate the

deployment of technology

Olz and Agbemabiese, 2012

Fully developed

and implemented

• Japan

• Korea

Fully developed

Partly implemented

• Singapore

• China

• Selected countries in APAC

Developing

Being implemented

• Thailand

• Other Asian regions


• Innovation is a collective process. This is different from traditional indicators of technological change, labor productivity, growth of turnover, etc.

• According to OECD, National Innovation System is a complex set of relationships among actors producing, distributing and supplying various kinds of knowledge

• Sectoral Innovation system (SIS) complements this process at a defined sector level rather than at the national boundary level comprising of various sectors

• REIS narrows down this to the development of renewable energy (eg. SWH in Tunisia)

Renewable energy innovation system - Thailand

Actors for the

promotion of REIS

Firms

Government

R&D Institutions

Universities

Renewable energy innovation system - Thailand

• Institutions – rules that influence the activities and decisions of the actors. These could be laws, regulations, culture, etc

• The barriers for the implementation of NIS in Thailand,

according to a survey conducted by NSTDA and co-researchers

are:

– Weak users-producers linkage

– Weak co-operation between firms in the same and related industries

– Low technological spill-overs from TNCs

– Weak industry-university link

– Weak links between public Research Technology Organizations (RTOs)

and industrial firms

– Training by government institutions fails to upgrade technical expertise

of firms’ employees to higher end

– Government fiscal and financial incentives are ineffective in stimulating

private sector’s demand for investment in technology development

Barriers for the implementation of NIS- Thailand

GOVERNMENT (Enterprises &

Institution)

RESEARCH & DEV. (Centers/

Institutions)

INDUSTRY & BUSINESS

(Market Creation & Mechanism)

HUMAN CAPITAL AND RESOURCES DEVELOPMENT (Universities)

Link

Boost Through Incentives &

Mechanisms?

Barriers for the implementation of NIS- Thailand

Renewable Energy

Development

Entrepreneurial activities

Knowledge Development

Knowledge diffusion

Guidance for search

Market formation

Resource Mobilization

Law and legitimacy

Functions of SIS for renewable energy development

Conceptual innovation and ancillary benefits promotion

Sector level (renewable) goals at primary levels

Existing renewable energy technology development

Development of horizontal links within the innovation structure

Better co-operation amongst the entities

Better recognition of problems

Better policies & frameworks

Multifaceted matrix origin innovation

Well defined and guided faster implementation

Industry wide recognition and diffusion

Preliminary level of

implementation

Intermediate level of

implementation

Final level of implementation

Progress of renewable technologies through REIS

• Thailand is one of the leading ASEAN countries to establish policies to promote biofuel production to reduce its dependency on oil imports and to capitalize on its supplies of feedstock from vast agricultural production

• Principles to the ‘Energy policy of Thailand’ are built as follows:

To establish sustainable energy security

To expedite and promote alternative energy

To monitor energy prices and ensure appropriate levels, in line

with wide and investment situation

To effectively save energy and promote energy

efficiency

To support energy development while

simultaneously protecting the environment

Thailand : Biofuels Policy

• Renewable energy consumption is expected to grow from 10.7% in 2011 to 14.1% in 2022 and the share of alternative energy consumption (including the NGV) is expected to grow from 15.6% in 2011 to 20.3% in 2022 respectively • Biofuels have an important role to play as their contribution in the renewable energy mix is expected to grow up to 4.1% by 2022


Biofuel industries

R&D universities focusing on biofuels

End-users

Government policy makers

Collaboration

Promotion of Biofuels through REIS

Co benefits quantification

Renewable Energy

Development

Entrepreneurial activities

Knowledge Development

Guidance for search

Market formation

Resource Mobilization

Law and legitimacy

•Monitoring through indicators on formal R&D, patents, education and training

•Constant forums between industries, government and Universities on current biofuel technology developments

•Support entrepreneurs to take risky experiments with the combination of knowledge development, applications and markets

•Without entrepreneurs, no innovation would take place

•Legitimizing new biofuel technologies

•Counteracting current resistance against biofuels

•Financial incentives

•Knowledge development

•Governments must create protected spaces for incumbent technologies

•Examples include, favorable tax regimes, include the cost of negative externalities such as health hazards on energy prices

•Governments must set biofuel targets to be reviewed between participants

•Understanding current industry requirements

Promotion of Biofuels through REIS

• Solar thermal technologies – low and medium temperature systems – hotels, industries and residences.

• Solar radiation - Efficient day lighting systems – commercial buildings

• Wind - Low speed wind generators – rural and isolated communities

• Biogas systems – heating - households

Promotion needed

Renewables are beautiful

• REIS is a process characterized by diffusion of innovative renewable energy technologies with the help of enhanced interactions between various entities and through a holistic approach towards various technologies.

• A framework for the formulation of REIS in a country is unique and depends upon the type of government, functioning of large, medium and small corporations, R&D institutions, and culture and people of a country.

• Based upon the characteristics of REIS, policy makers should try to formulate a framework to overcome the barriers of

– Interactions between different government bodies

– Communication between end user, industries, firms, institutions and the policy makers

• Innovation is a collective process and thus, diffusion of a innovative technology is effective with the collective involvement of all players.

Summary

Thank you [email protected]

• DEDE (2011). The Renewable and Alternative Development Plan for 25 percent in 10 years (AEDP 2012-2021). Thailand

• MOE (2011). Thailand 20 year energy development plan (2011-2030). Thailand

• Chuenchom Sangarasri Greacen and Chris Greacen (2010). Proposed power development plan (PDP) 2012 and a Framework for improving Accountability and performance of power sector planning. King Mongkut University

• IEA (2010). Deploying Renewables in Southeast Asia, trends and analysis. IEA. Paris

• Sopitsuda Tongsopit and Chris Greacen (2012). Thailand’s Renewable Energy Policy: FiTs and Opportunities for International Support. King Mongkut University

References

• USAID (2011). Energy trends in developing Asia: Priorities for a low carbon future.

• Patarapong Intarakamnerd, Pun-arj Chairatana and Tipawan Tangchitpiboon. National innovation System in Less Successful Developing Countries: The case of Thailand . NSTDA. Thailand

• Yasser M Al-Saleh (2010). Systems Of Innovation As A Conceptual Framework For Studying The Emergence Of National Renewable Energy Industries. Masder Institute of Science and Technology. UAE

References

Promotion Of RETs in Thailand: Renewable Energy Innovation ...€¦ · 2012 2016 Targets 2017 2002...

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