0
Thailand’s Country Case
Study
A Review of of Renewable Energy Laws:
Lessons for Thailand
20 November 2013
Sopitsuda Tongso...
2

Outline
• Key Successes of Thailand’s RE Development
• Key barriers and bottlenecks
• Lessons learned from 4 Renewable ...
Thailand: High Growth in Power Consumption; Limited
Resources
Total Electricity Net Consumption
(Billion Kilowatt-Hours)
1...
4

Thailand’s Renewable Energy Status
5

THAILAND: Supportive RE Framework
AEDP 2012-2021 goal: 25% of total consumption is RE by
2021
Low Interest Loan: Revolv...
6

RE Power Status (SPP+VSPP): capacity fed into the grid)
7

Feed-in Tariffs
• Feed-in tariffs (FiT) has been recognized as one
of the most effective and efficient drivers of
renew...
THAILAND’s Adder Rates

8

8
9

Trend of MW in the Pipeline (All Renewables)

Oversubscription
to the ADDER
program
has been followed
by governance
cha...
10

Key Barriers in Thailand’s RE Development
▫ Policy and regulatory uncertainties:
 Interruption of support for solar p...
11

Thailand’s Alternative Energy Development Act
Thailand’s Alternative Energy Development Act
Chapter
1

General Provisi...
12

Comparisons of the RE Laws of 4 Countries
Country

Name of the Law

The Act on granting priority to renewable
Germany ...
13

Big Picture on the Reviewed Laws
1) The laws targeting RE use in the power sector and RE fuels are usually
separate.
2...
14

Germany
Germany
• Name of Law: Renewable Energy Sources
Act (EEG)
• Enacted in 2000 (with recent updates in 2012)
• FIT: solar PV
...
German RE law: Objectives
•
•
•
•

Protect environment and climate
Reduce cost of energy supply
Conserve fossil fuels
Prom...
Note: Thai electricity consumption:
112,401 GWh in 2012

German RE law: impacts
1360000 GWh (2012)

20.35% of gross
electr...
Key feature 1:
Legally binding renewable energy
targets
35% by 2020;
50% by 2030;

65% by 2040;
80% by 2050;
Section 1(2):...
Key feature 2: Quantity of renewable energy is regulated
entirely by adjusting the price offered. (No MW caps)
7400
MW
ins...
Key feature 3: For solar: volume-based mechanism to
adjust degression in response to recent deployment

Increased degressi...
opportunity
to sell in
wholesale
market

Euro cent/kWh

Key feature 4: RE Generation incentivized when
most needed
Key feature 5: Market integration model for
installations generating electricity from solar
• “The tariff paid for [solar]...
Key feature 6: Priority Grid access
• “Grid system operators shall immediately and as a
priority connect installations gen...
24

Ontario
25

Ontario’s Green Energy Act (GEA) 2009
Context and Driving Forces:
▫ Aging power industry infrastructure
▫ Commitment t...
26

Objectives of Ontario’s Green Energy Act
• Foster the growth of renewable energy projects
• Remove barriers to and pro...
27

Components of Ontario’s Green Energy Act

Source: Renewable Energy Development Symposium, 2012
28

Key Feature 1: FiT with additional
incentives for energy efficiency
and communities
29
Ontario Power Authority's Feed-in Tariffs 2009
Effective Date 1 October 2009
1.35918
Years €/kWh $CAD/kWh
Wind
Onshore*...
30

Key Feature 2: Domestic Content
Requirements

Domestic Content Requirements under Ontario’s GEA
(Wind>10 kW and all so...
Repeal

Amendment

Key Features 3: Amendments of 12 existing laws
and Repeal of 2 existing laws, e.g.

31

Environmental P...
32

45,000 45,000
45,000

45,000 45,00
45,000
40,500 MW
38,300 MW

40,000 40,000
40,000
35,000 35,000
35,000

670 MW

31,6...
33

Impact: The Reviews of the GEA has been
mixed and currently subject to debate
• Pros:
 >40 new manufacturing faciliti...
34

Recent Changes
1. Elimination of domestic content requirements:
Following the WTO’s December 2012 ruling that Ontario’...
35

Lessons learned from Ontario
• RE law can be an instrument for fulfilling development objectives, such as
economic ren...
Malaysia: Renewable Energy Act 2011
37

Objectives of the Law:
“an Act to provide for the establishment and
implementation of a special tariff system to catal...
Renewable Energy Act 2011
Targets: Cumulative renewable energy capacity
♦ 73
MW by no later than 2010;
♦ 985 MW by no late...
Impact of the Law

Source: SEDA Malaysia
Key Feature 1: Designated Authority
Sustainable Energy Development Authority Act
(SEDA Malaysia)
♦ SEDA Malaysia establish...
Key Feature 2: e-FIT System Allows
Real-Time Monitoring

Source: Adapted from Leong (2012)
42

Recommendations for Thailand’s Renewable
Energy Law
Current Problems

Remedies through the law

1. Oversubscription to...
Thank you
Sopitsuda Tongsopit
tongsopit@gmail.com
Chris Greacen
chrisgreacen@palangthai.org

Palang
Thai
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3rd Mekong Forum on Water, Food & Energy 2013. Presentation from Session 12: Alternative electricity sources and planning for the Mekong

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  1. 1. Thailand’s Country Case Study A Review of of Renewable Energy Laws: Lessons for Thailand 20 November 2013 Sopitsuda Tongsopit, ERI Chris Greacen, Palang Thai 3rd Mekong Forum on Water, Food, and Energy, Melia Hotel, Hanoi, Vietnam Palang Thai
  2. 2. 2 Outline • Key Successes of Thailand’s RE Development • Key barriers and bottlenecks • Lessons learned from 4 Renewable Energy Laws • Recommendations for the Development of Thai law
  3. 3. Thailand: High Growth in Power Consumption; Limited Resources Total Electricity Net Consumption (Billion Kilowatt-Hours) 160 140 120 Thailand Indonesia 100 Malaysia Vietnam Philippines 80 Singapore Myanmar 60 Brunei Cambodia 40 Laos 20 Source: EIA (2013) 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 1984 1982 0 1980 Billion KWh 3 Source: EPPO (2013) based on Jan-Feb 2013 generation data
  4. 4. 4 Thailand’s Renewable Energy Status
  5. 5. 5 THAILAND: Supportive RE Framework AEDP 2012-2021 goal: 25% of total consumption is RE by 2021 Low Interest Loan: Revolving Fund Note: RF program was fully subscribed as of 2012 Venture Capital: ESCO Fund Tax Incentives: BOI Privilege Investment Subsidy (Biogas) Feed-in Tariff: Adder
  6. 6. 6 RE Power Status (SPP+VSPP): capacity fed into the grid)
  7. 7. 7 Feed-in Tariffs • Feed-in tariffs (FiT) has been recognized as one of the most effective and efficient drivers of renewable energy (RE) scale-up worldwide. • A feed-in tariff (FIT) rate can be defined as a power purchasing rate per kilowatt-hour from eligible renewable power sources for a prespecified period of time.
  8. 8. THAILAND’s Adder Rates 8 8
  9. 9. 9 Trend of MW in the Pipeline (All Renewables) Oversubscription to the ADDER program has been followed by governance challenges
  10. 10. 10 Key Barriers in Thailand’s RE Development ▫ Policy and regulatory uncertainties:  Interruption of support for solar power ▫ Complicated permitting process  Average > one year of permitting process for solar & WTE plants ▫ Lack of an effective monitoring and evaluation system ▫ Lack of a unified energy plan  Many existing energy plans that do not synchronize ▫ Lack of integration of renewable energy with other types of policies, including environmental,
  11. 11. 11 Thailand’s Alternative Energy Development Act Thailand’s Alternative Energy Development Act Chapter 1 General Provisions 2 The Alternative Energy Committee 3 Obtaining Alternative Energy Support -roles of responsibilities of the Committee and the alternative energy enterprise 4 Framework for Alternative Energy Support -Priviledge, Investment , and Incentives 5 Alternative Energy Support -RPS provision 6 Alternative Energy Fund 7 Enforcement 8 Transitional Provision
  12. 12. 12 Comparisons of the RE Laws of 4 Countries Country Name of the Law The Act on granting priority to renewable Germany energy sources (Renewable Energy Sources Act – EEG) Ontario Green Energy Act Malaysia Renewable Energy Act 2011 Japan The Act on Special Measures Concerning the Procurement of Renewable Electric Energy by Operators of Electric Utilities Year Enacted 2000 2009 2011 2012
  13. 13. 13 Big Picture on the Reviewed Laws 1) The laws targeting RE use in the power sector and RE fuels are usually separate. 2) Some laws amend or repeal other laws and may have subsidiary legislations. 3) Balancing supportive measures and public interest (e.g., cost burden on taxpayers/ratepayers); prevention of fraud; many installations on one plot of land (Section 19 of German RE Law) 4) Policy and implementation details -Certain laws such as the German RE Law include policy and implementation details. -Other laws determine a broad framework to be followed by details from Ministerial Directives (Ontario’s Ministerial Directives guiding the OPA) or ordinances (Japan’s METI).
  14. 14. 14 Germany
  15. 15. Germany • Name of Law: Renewable Energy Sources Act (EEG) • Enacted in 2000 (with recent updates in 2012) • FIT: solar PV wind geothermal hydropower landfill gas biomass. •
  16. 16. German RE law: Objectives • • • • Protect environment and climate Reduce cost of energy supply Conserve fossil fuels Promote development of renewable energy technology
  17. 17. Note: Thai electricity consumption: 112,401 GWh in 2012 German RE law: impacts 1360000 GWh (2012) 20.35% of gross electricity consumption
  18. 18. Key feature 1: Legally binding renewable energy targets 35% by 2020; 50% by 2030; 65% by 2040; 80% by 2050; Section 1(2): Purpose
  19. 19. Key feature 2: Quantity of renewable energy is regulated entirely by adjusting the price offered. (No MW caps) 7400 MW installed in 2010 and 2011. 13.5 ct/kWh 2013 Freestanding Rooftop 30-100 kW Rooftop <30 kW Rooftop >100 kW Section 20: Reductions in tariffs and bonuses Section 20b: Reduction in tariffs paid for electricity generated from solar radiation
  20. 20. Key feature 3: For solar: volume-based mechanism to adjust degression in response to recent deployment Increased degression rate if target exceeded Target: 2500-3500 MW per year Section 20b: Reduction in tariffs paid for electricity generated from solar radiation
  21. 21. opportunity to sell in wholesale market Euro cent/kWh Key feature 4: RE Generation incentivized when most needed
  22. 22. Key feature 5: Market integration model for installations generating electricity from solar • “The tariff paid for [solar] electricity larger than 10 kilowatts… shall be limited to 90 percent of the total quantity of electricity generated in the installation in that calendar year.” • (This incentivizes installations where the remaining 10% is used locally) Section 33: Market integration model for installations generating electricity from solar radiation
  23. 23. Key feature 6: Priority Grid access • “Grid system operators shall immediately and as a priority connect installations generating electricity from renewable energy sources.” Section 5: Connection
  24. 24. 24 Ontario
  25. 25. 25 Ontario’s Green Energy Act (GEA) 2009 Context and Driving Forces: ▫ Aging power industry infrastructure ▫ Commitment to phase out coal since 2003 (unique in North America) ▫ Economic recession & job losses
  26. 26. 26 Objectives of Ontario’s Green Energy Act • Foster the growth of renewable energy projects • Remove barriers to and promote opportunities for renewable energy projects • Promote and expand energy conservation • Promote a green economy
  27. 27. 27 Components of Ontario’s Green Energy Act Source: Renewable Energy Development Symposium, 2012
  28. 28. 28 Key Feature 1: FiT with additional incentives for energy efficiency and communities
  29. 29. 29 Ontario Power Authority's Feed-in Tariffs 2009 Effective Date 1 October 2009 1.35918 Years €/kWh $CAD/kWh Wind Onshore* Offshore* 20 20 0.10 0.14 0.135 0.19 Ontario’s FiT 1.309 USD/kWh 0.13 0.183 Photovoltaics MicroFIT Rooftop <10 kW Groundmounted <10 kW (2 July 2010) 20 20 0.59 0.47 0.802 0.642 0.7724 0.6183 Rooftop >10 kW<250 kW Rooftop >250 kW<500 kW Rooftop >500 kW Groundmounted <10 MW* 20 20 20 20 0.52 0.47 0.40 0.33 0.713 0.635 0.539 0.443 0.6867 0.6116 0.5191 0.4267 Hydro <10 MW* >10 MW<50 MW* 40 40 0.10 0.09 0.131 0.122 0.1262 0.1175 Landfill Gas <10 MW* >10 MW* 20 20 0.08 0.08 0.111 0.103 0.1069 0.0992 Biogas* On-Farm <100 kW On-Farm >100 kW<250 kW <500 kW >500 kW<10 MW >10 MW 20 20 20 20 20 0.14 0.14 0.12 0.11 0.08 0.195 0.185 0.16 0.147 0.104 0.1878 0.1782 0.1541 0.1416 0.1002 Biomass <10 MW* 20 0.10 0.138 0.1329 • Eligible Technologies • Wind • Solar PV <10 MW • Hydro <50 MW • Biogas • Biomass •Adder on top of base rates: -35% premium for power supply during peak periods -price adder for aboriginal participation -price adder for community based projects • Local Content Requirements
  30. 30. 30 Key Feature 2: Domestic Content Requirements Domestic Content Requirements under Ontario’s GEA (Wind>10 kW and all solar projects are subject to domestic content requirements) Wind (> 10 kW) Solar (> 10 KW) Solar (≤ 10 kW) From October From January From January 1, 2009 1, 2011 1, 2012 25% 25% 50% 50% 60% 60% 40% 60% 60% Notes: • December 2012: the World Trade Organization (WTO) ruled that the domestic content requirements of Ontario’s GEA violated trade rules • May 2013: Ontario’s Minister of Energy announced the elimination of domestic content requirements
  31. 31. Repeal Amendment Key Features 3: Amendments of 12 existing laws and Repeal of 2 existing laws, e.g. 31 Environmental Protection Act (EPA) *One permit (renewable project approval) replaces all other permits previously required under the EPA Planning Act *Curtailing the power of municipalities to block renewable energy projects Electricity Act *Giving the authority of the Ministry to direct the OPA on RE support and FiT programs Ontario Energy Board Act *adjusting the purposes of Ontario Energy Board to emphasize RE support Energy Conservation Leadership Act Energy Efficiency Act
  32. 32. 32 45,000 45,000 45,000 45,000 45,00 45,000 40,500 MW 38,300 MW 40,000 40,000 40,000 35,000 35,000 35,000 670 MW 31,600 MW 300 MW 8,700 3,000 3,300 MW 2,900 MW 700 MW 500 MW 30,000 30,00 30,000 8,900 4,300 MW 2,000 MW 4,900 35,000 35,00 35,000 5,700 MW 5,100 MW 8,100 25,000 25,000 25,000 40,000 40,00 40,000 8,400 30,000 30,000 30,000 20,000 20,000 20,000 700 30 MW 670 100 Installed Capacity (MW) Installed Capacity (MW) Installed Capacity (MW) Reduction of Coal and increasing RE 25,000 25,00 25,000 10,000 20,000 20,000 20,00 9,300 15,000 15,000 15,000 15,000 15,000 15,00 10,900 10,000 10,000 10,000 10,000 10,000 10,00 12,900 12,900 5,000 5,000 5,000 0 5,000 5,000 5,000 7,600 0 0 2005 2005 2005 3,300 2012 2012 2012 2015 0 0 0 2015 Coal Coal Nuclear Nuclear Natural GasGas Hydro Non-Hydro Renewables Coal Nuclear Natural Gas Response Natural Hydro Hydro Non-Hydro Renewables DemandDemand Response Non-Hydro Renewables Demand Response Source: IESO/OPA. Figures have been rounded. Source: Shalaby, Amir. 2012. Outlook for Electricity Demand and Supply in Ontario APPrO 2012 Conference, Ontario Power Authority
  33. 33. 33 Impact: The Reviews of the GEA has been mixed and currently subject to debate • Pros:  >40 new manufacturing facilities  >28,000 new jobs • Cons:  Increasing electricity prices (increase 4060% by 2015)  Net job losses in other sectors (mining, manufacturing, and forestry sector)
  34. 34. 34 Recent Changes 1. Elimination of domestic content requirements: Following the WTO’s December 2012 ruling that Ontario’s GEA violated international trade rules 2. Ending Large-Scale FiT program and replace it by a competitive procurement process
  35. 35. 35 Lessons learned from Ontario • RE law can be an instrument for fulfilling development objectives, such as economic renewal & green job creation, but this has to be accompanied by well-structured policy design and support measures. In the case of Ontario, this includes FiT rate adder for communities and domestic content requirements. • RE law can be an opportunity for revising existing laws to remove barriers. In the case of Ontario, this took a year of lobbying effort and lessons learned from experiments with an early form of FiT since 2006. • Ontario’s OPA early success was attributable to the power industry structure, with a government owned company as the main generation company (See, e.g., Stokes (2013: 494), but public support declines over time. • Increasing ratepayers’ costs invite political intervention and public scrutiny, so a FiT program should be able to demonstrate net benefits to society
  36. 36. Malaysia: Renewable Energy Act 2011
  37. 37. 37 Objectives of the Law: “an Act to provide for the establishment and implementation of a special tariff system to catalyse the generation of renewable energy and to provide for related matters.” (Renewable Energy Law 2011)
  38. 38. Renewable Energy Act 2011 Targets: Cumulative renewable energy capacity ♦ 73 MW by no later than 2010; ♦ 985 MW by no later than 2015; ♦ 2,080 MW by no later than 2020; and ♦ 4,000 MW by no later than 2030
  39. 39. Impact of the Law Source: SEDA Malaysia
  40. 40. Key Feature 1: Designated Authority Sustainable Energy Development Authority Act (SEDA Malaysia) ♦ SEDA Malaysia established on 1st September 2011 under the SEDA ACT 2011 ♦ a one stop Renewable Energy (RE) centre. ♦ Functions: -implement, manage, monitor, and review the Feed-in-Tariff system -advice the Minister and Government entities on all matters relating to sustainable energy -carry out investigations, collect, record and maintain data, information and statistics concerning the feed-in tariff system
  41. 41. Key Feature 2: e-FIT System Allows Real-Time Monitoring Source: Adapted from Leong (2012)
  42. 42. 42 Recommendations for Thailand’s Renewable Energy Law Current Problems Remedies through the law 1. Oversubscription to Quota causes policy interruption No capacity caps/quota. Instead moderate supply by adjusting FIT price 2. If there’s no quota, there’s concerns about impact on ratepayers. Price signals to encourage production where/when needed. Peak/off-peak 3. Complex permitting process involving Simplify permit process by allowing exemption for certain classes of renewable energy projects many agencies 4. Manual application process and lack of A transparent online system with realtransparency of the queuing system, time monitoring and real-time reporting of application process raising question whether it is first-comefirst-serve
  43. 43. Thank you Sopitsuda Tongsopit tongsopit@gmail.com Chris Greacen chrisgreacen@palangthai.org Palang Thai
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