Overview Thailand’s Energy and Energy Conservation

by ESCO

Vice Chairman Executive Committee The Institute of Industrial

Energy

The Federation of Thai

Industries

November 21, 2007

Mr. Chen NamchaisiriMr. Chen Namchaisiri

22

• Overview Thailand’s Energy• Activities of ESCO Information Center

Topic

Consumption Consumption by Sectorby Sector

Consumption Consumption by Sectorby Sector

Primary Energy Primary Energy consumptionconsumption

Primary Energy Primary Energy consumptionconsumption

Overview Thailand’s Energy

ภาคขนส่�ง36.0%

ภาคเกษตร 5.3%ภาคอุ�ตส่าหกรรม

38.2%

ภาคบ้�านอุยู่��อุาศั�ยู่และธุ�รก�จการค�า 2 0.5%น� าม�น (ดิ�บ้และส่�าเร"จร�ป) 39%

ก$าซธุรรมชาต� 31%

พล�งงานหม�นเวี)ยู่น&อุ*+นๆ16 %

ถ่�านห�น 12%

ไฟฟ0า 2%

0

1,000

2,000

3,000

4,000

5,000

1985 1989 1993 1997 2001 2005 2009 2013 2017 2021

KBD (Oil Equivalent)

Oil

Natural Gas/LNG

Lignite/Coal

Hydro

Energy Consump tion Outlook

Energy Consump tion Outlook

65%

20% 50%

1 %

30%

18

%

5%

10%

Source : EPPO Note : Including Petchem Feedstocks

Source : EPPO Note : Including Petchem Feedstocks

4,793

53%

32%

2 %

13%

328

1,569

CAGR (’85-’0

3) 9%

CAGR (’04-’2

3) 6%

Actual Projection

Energy consumption expected to incr Energy consumption expected to incr ease ease 6%6% CAGR during the next CAGR during the next two two

decadesdecades years with oil and gas contrib years with oil and gas contrib uting on average uting on average 8080%%

Energy consumption expected to incr Energy consumption expected to incr ease ease 6%6% CAGR during the next CAGR during the next two two

decadesdecades years with oil and gas contrib years with oil and gas contrib uting on average uting on average 8080%%

55

Thailand Energy Strategies Thailand Energy Strategies for Economic Development and Regional for Economic Development and Regional

IntegrationIntegration

Strategy for Efficient Use of EnergyStrategy for Efficient Use of Energy Reduce Energy Elasticity from 1.4:1 to 1:1Reduce Energy Elasticity from 1.4:1 to 1:1 Strategy for Renewable Energy Development Strategy for Renewable Energy Development Increase share of RE from 0.5% to 8% of total final energy by Increase share of RE from 0.5% to 8% of total final energy by

20112011 Strategy for Energy SecurityStrategy for Energy Security Ensure sufficient and reliable energy supply for at least 30 yrsEnsure sufficient and reliable energy supply for at least 30 yrs Strategy for Thailand as a Regional Energy Strategy for Thailand as a Regional Energy

CenterCenter Develop Strategic Energy Land Bridge and Energy HubDevelop Strategic Energy Land Bridge and Energy Hub

Cabinet Resolution on September 2, 2003Cabinet Resolution on September 2, 2003

66

NRE0.5%

TE16.5%

พล�งงานเช�งพาณิ�ช ยู่2

83.0% TE = Traditional Energy

NRE = New & Renewable Energy

2554255481,753 KTOE81,753 KTOE

TE 11%

NRE8%(6,540 KTOE)

CommercialEnergy

81%

52,939 KTOE

2003 (265 ktoe)

CommercialEnergy

201181,763 kTOE

National Agenda

National Agenda

Cabinet Resolution

on June 8, 2004

Strategy for Renewable Energy Strategy for Renewable Energy DevelopmentDevelopment

77

Target and Target and Strategy of Strategy of

RERE

RE8%

RE0.5%

Heat(Incentive)

3,700 KTOE

Bio Fuel (Incentive) 1,800 KTOEEthanol 3.0 M liters/DBio diesel 4.0 M liters/D

Heat~ 0.00 KTOE

Bio fuel~ 0.00 KTOE

2002 2011

R & D

RPS

INCENTIVE

Electricity

Facilitator

RPS 437 MW- Solar- Wind- MSW- Biomass- Hydro Incentive 1,093 MW

ElectricitySolar 6 MWWind 0.2 MWBiomass 560 MW

Strategy for Renewable Energy Strategy for Renewable Energy DevelopmentDevelopment

88

Energy IntensityEnergy Intensity

6h t t p : / / w w w .e ia .d o e .g o v / p u b / in t e r n a t io n a l / ie a l f / t a b le e 1 g .x ls

E n e r g y I n t e n s i t y [ T o t a l P r im a r y E n e r g y C o n s u m p t io n P e r D o l la r o f G r o s s D o m e s t i c P r o d u c t ]

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002Btu

per 1

995

US D

ollar

s Us

ing M

arke

t Exc

hang

es R

ates

World Primary Energy Consumption Per Dollar of Gross Domestic Product, 1991-2002

ThailandUSAUK

GermanyJapan

(Compare with Developed Countries)

99

Energy IntensityEnergy Intensity

6h ttp : / / w w w .e ia .d o e .g o v / p u b / in te rn a tio n a l/ ie a lf / ta b le e 1 g .x lsE n e rg y I n te n s ity [ T o ta l P r im a ry E n e rg y C o n su m p tio n P e r D o lla r o f G ro ss D o m e stic P r o d u c t]

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002Btu pe

r 199

5 US

Doll

ars U

sing Ma

rket E

xcha

nges

Rate

s

Malaysia

China

India

Thailand

Vietnam

World Primary Energy Consumption Per Dollar of Gross Domestic Product, 1991-2002

(Compare with Developing Countries)

1010

Strategy

Energy Efficiency Improvement TargetEnergy Efficiency Improvement Target

2. Improve EE in Industry

Energy Efficiency

Improvement

1. Improve EE in Transportation

Energy Elasticity= 1:1 in 5 years

Indicators

Energy Elasticity = Energy Elasticity = ∆∆tt Energy Consumption/ Energy Consumption/ ∆∆tt GDPGDP

Ave. Energy Elasticity1.4 : 1.0

Ratio of energy growth rate to GDP growth

rate = 1.0

3. Awareness raising

campaign

1111

Promotion of ESCOsPromotion of ESCOs

BOI – Tax IncentiveBOI – Tax Incentive Maximum 8 years tax exemption for ESCO projects – Maximum 8 years tax exemption for ESCO projects –

Cooperate Income taxCooperate Income tax Access to Revolving FundAccess to Revolving Fund

Eligible to borrow the low-interest loan from RF Eligible to borrow the low-interest loan from RF program on project-by-project basisprogram on project-by-project basis

ESCO promotion activitiesESCO promotion activities WebsiteWebsite Seminars, workshopSeminars, workshop PublicationsPublications Lists of ESCOs and successful casesLists of ESCOs and successful cases

1212

Incentive through Board of Investment ( BOI )

Import duties and Cooperate tax exemption on new Import duties and Cooperate tax exemption on new investment ininvestment in

• Energy conservation business Energy conservation business

• High efficiency machine or equipment and renewable energy High efficiency machine or equipment and renewable energy equipment manufacturingequipment manufacturing

• Solar PV manufacturingSolar PV manufacturing

• Energy Service Company – ESCO Energy Service Company – ESCO

Renewable energy production businessRenewable energy production business

• Alcohol or fuels from agricultural productsAlcohol or fuels from agricultural products

• Electricity or steam generation Electricity or steam generation

Incentive last for the max period of 8 years Incentive last for the max period of 8 years

1313

Promotion of ESCO Business and Promotion of ESCO Business and Cluster Development ProjectCluster Development Project

Drawing from a store of experiences and Drawing from a store of experiences and expertise in analyzing energy usage expertise in analyzing energy usage capabilities, the Energy Service Company capabilities, the Energy Service Company (ESCO) can help to reduce energy (ESCO) can help to reduce energy consumption by adapting equipment and consumption by adapting equipment and machinery in line with measures that have machinery in line with measures that have been selected to suit each factory. been selected to suit each factory.

1414

Energy Conservation by ESCO

1515

The definition of an The definition of an Energy Services Energy Services

company company ESCO are most often private ESCO are most often private

company that provide company that provide comprehensive energy efficiency or comprehensive energy efficiency or

load reduction services to customers load reduction services to customers that own or operate facilities such as that own or operate facilities such as factories and buildings to improved factories and buildings to improved

efficiency, functionality and efficiency, functionality and productivity of client’s facility, ESCO productivity of client’s facility, ESCO

generally act as developers for a generally act as developers for a wide of tasks and assume the wide of tasks and assume the

technical and performance risk technical and performance risk associated with the project.associated with the project.

1616

ESCO typically offer the ESCO typically offer the following service:following service:

Find out the target (building or industrial factory) for implementation.

Conduct a preliminary investigation and analyze the present energy consumption in details.

Propose the turn key systems that suit to user’s requirements and occupancy patterns.

Source out the financial support. Project management. Install and maintain the energy efficient equipment

involved. Measure, monitor, and verify the project’s energy savings. Commissioned to optimize performance guaranteed

service. Conduct staff training and provide the related services.

1717

The working term of ESCO The working term of ESCO & Pattern of investment & Pattern of investment

The working term of ESCOThe working term of ESCO ESCO operate on Energy Performance ESCO operate on Energy Performance

Contract; the term EPC is an abbreviation for energy Contract; the term EPC is an abbreviation for energy performance contracting, meaning that the contract performance contracting, meaning that the contract

and the finance are related to the performance of the and the finance are related to the performance of the project. So that the payments to the performance project. So that the payments to the performance

contractor are contingent on the actual level of contractor are contingent on the actual level of savings achieved, it is in the contractor’s interest to savings achieved, it is in the contractor’s interest to maximize the energy savings. This translates into maximize the energy savings. This translates into

increased money savings for the client.increased money savings for the client.

1818

Pattern of investmentPattern of investment

1.1. Guaranteed SavingGuaranteed Saving - Client invest themselves - Client invest themselves

2.2. Shared Saving -Shared Saving - ESCO provide financial loan ESCO provide financial loan serviceservice

3.3. AnotherAnother

1919

Thailand ESCO Fair 2007Thailand ESCO Fair 2007

The exhibition and seminar on conservation of energy The exhibition and seminar on conservation of energy in order to decrease the manufacturing cost and save in order to decrease the manufacturing cost and save the energy in the industrythe energy in the industry

ObjectivesObjectives:: - - To support and publicize the knowledge of Energy To support and publicize the knowledge of Energy Service Company Service Company ((ESCOESCO) ) businessbusiness. .

Activities:Activities: ESCO exhibitionESCO exhibition,Seminar on the topic of ESCO ,,Seminar on the topic of ESCO , Ene Energy Clinic rgy Clinic and and ESCO Information CenterESCO Information Center

2020

ESCO-Bank networkingESCO-Bank networking

2121

ESCO-Bank networkingESCO-Bank networking

www.iie.or.thwww.iie.or.th www.fti.or.thwww.fti.or.th

Tel. 02-3451250-56 FAX. 02-3451258-9

Thank youThank you