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Aligning climate change and sustainable energy development in
Thailand
Ram M. Shrestha
Asian Institute of TechnologySchool of Environment, Resources and Development Thailand
15 June 2006
Developing Visions for LCS through Sustainable Development, 13-16 June 2006, Tokyo, Japan.
2
Contents
I. Overview of Thailand’s energy and environmental situation
II. Potential for energy efficiency improvements
III. Climate-friendly energy strategies/policies
A. Road transport and biofuel program
B. Implications of CO2 reduction target
IV. Concluding remarks
3
Overview of Thailand’s energy and environment situation
4
Fast increasing of GDP, energy consumption and CO2 emissions
• Growing energy demand
• Per capita CO2 emission doubled in 2004 compared to 1990.
AAGR (1990-2004):
CO2 emissions: 6.6 %
Energy use: 6.4 %
GDP: 4.8%
Population: 1.1%
1.0
1.4
1.8
2.2
2.6
1990 1992 1994 1996 1998 2000 2002 2004
Ind
ex
(1
99
0=
1)
CO2
Energy useGDP
Population
5
Energy use per unit of GDP (“energy intensity”)
Primary energy intensity has been increasing (AAGR: 2.3%) in Thailand during 1994-2002.
=>Potential for energy efficiency improvements and reduction in the use of fossil energy and CO2 emissions.
Source: IEA (2004)
1.02-6.246China
1.28-2.485Vietnam
1.04-1.979India
0.64-1.064Asia excluding China
0.29-0.974World
0.19-0.840OECD total
0.090.004Japan
0.700.247Indonesia
0.300.857South Korea
0.430.906Philippines
0.451.135Thailand
Energy intensity(kgoe/US$ at 1995 prices)
AAGR (%)(1990-2002)
Country/region
6
Increasing share of fossil-fuels
0
20000
40000
60000
80000
100000
1990 1992 1994 1996 1998 2000 2002 2004
Oil
Natural gasNew and renewables
Coal
Electricity
Unit: ktoe
� Primary energy supply: 1990: 45 Mtoe 2004: 99 Mtoe
� Share of fossil fuels: 1990: 65% 2004: 83%
AAGR (1990-2004):
Coal: 8% ; Oil: 4.6% ; Natural gas: 11.1%
Electricity: 4.8% and New and renewable energy: 0.1%
7
Increasing energy import dependency
Source: IEA (2004) and DEDE (2005)
• In 2004 alone, energy import accounted for 8.6% of the total GDP (US$14 billion).
51.9%
55.6%55.1% 55.5%
57.4%
45%
50%
55%
60%
2000 2001 2002 2003 2004
8
Growth of CO2 emission per unit of GDP(“carbon intensity”)
0.4
0.8
1.2
1.6
2
1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Indonesia
Thailand
World
Asia (excluding China)
Japan
OECD
CO2 emission intensity (Index: 1972=1)
Increasing CO2 emission intensity (AAGR: 2.6%) in Thailand during 1990-2002.
Source: IEA (2004)
0.44OECD
1.37Indonesia
1.22Asia (ex. China)
0.68World
0.97Thailand
0.66South Korea
0.21Japan
2002Country/region
Carbon intensity in 2002(kg of CO2/US$ at 1995 prices)
9
Trends of local air pollutant emissions
0
500
1000
1500
2000
2500
3000
3500
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Unit: thousand tons
CO
NOx
SO2
SPM
29.1SPM*
0.5CO
5.4NOx
-8.4SO2
AAGR (1993-2004)
* AAGR (1993-1999)
Source: DEDE (2000-2004)
10
Potential for energy efficiency improvements
11
Potential to improve energy efficiency in coal-fired power plants.
26.8 28.0 29.1 30.0
33.134.8 35.9 36.6 36.7 36.9
41.9
0
5
10
15
20
25
30
35
40
45
Indi
aV
ietn
am Asi
aIn
dones
ia
Chin
a
World
US
AG
erm
any
OE
CD
Thaila
nd
Japa
n
Eff
icie
ncy (
%)
Sources: IEA (2004) based on public electricity plants. For Japan, Germany and USA data are from ECOFYS (2005)
5%
Potential efficiency improvement of 5% (compared to Japan) corresponds to about 12% reduction in coal requirements in power sector. This implies CO2 emission reduction of over 12%.
2002
12
There is also a potential to improve energy efficiency in gas-fired power plants.
31.2
39.5 40.4 40.9 41.0 41.8 41.943.8 44.2
47.5
52.1
0
10
20
30
40
50
60
Vietn
am
Ger
man
y
Thai
land
Wor
ldIn
done
sia Asia
USA
OEC
D
Japa
n
Chi
na
Indi
a
Sources: IEA (2004) based on public electricity plants. For Japan, Germany and USA data are from ECOFYS (2005)
Potential efficiency improvement of 3.8% (compared to Japan) corresponds to about 8.6% reduction in natural gas requirements in power sector.
13
Specific thermal energy consumption of cement production
Note: * Best available technology (BAT) is based on dry-6 stage pre-heater twin stream pre-calcinator pyro-step cooler technology.
The reduction in specific energy consumption by 18.5% could reduce total industry sector energy use by 2% (438 ktoe) in 2004.
788
665
770
690
600
650
700
750
800
Thailand BAT* India Japan
Th
erm
al
co
ns
um
pti
on
(k
ca
l/k
g o
f c
lin
ke
r)
Source: Siam Cement Group Sustainability report (2005); NCCBM (2004); Worrell and Galitsky (2004)
18.5%
14
3.34
2.91
2.6
2.7
2.8
2.9
3
3.1
3.2
3.3
3.4
Thailand BAT*
Gcal/ton of paper production
14.8%
Note: * Best available technology (BAT) is based on Modern Kraft Market Pulp Mill. Source: SCG (2005); NRC (2002)
Specific energy consumption of paper production
This 14.8% translate to reduction of 0.2% (i.e., 40 ktoe) of total energy use in industry sector in 2004.
15
Energy cost reduction in commercial sector:An example
Source: http://www.rrcap.unep.org/ecohouse/
� About 20 million Baht (0.5 million US$) per year could be saved.(About 15 US$ saving per sq. m. per year)
� About 82.6% reduction in electricity requirement. � Energy use for air conditioning is growing rapidly.
-
0.0050
0.0100
0.0150
0.0200
0.0250
0.0300
0.0350
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004
Commercial and public services
Electricity intensity
(kWh per Baht at 1988 price)
16
Climate-friendly energy strategies/policies:More a response to economic and energy
security concerns
17
Five energy strategies of Thai government
� Enhancing efficiency in the transport sector;
� Enhancing efficiency in the industry sector;� ENCON fund
� Enhancing national energy security;
� Enhancing overall capability in energy management and integration; and
� Becoming a regional energy hub.
18
� Establishment of 1992 Energy Conservation Promotion Act
� Establishment of ENCON Fund�to support activities related to energy efficiency
and energy conservation
Specific national energy targets/“strategies”:
� to reduce oil consumption by 20% by 2009;
� To increase the share of new and renewable energy use to 8% by 2011.
� Renewable Portfolio Standard (RPS): to increase the share of RE based power generation capacity to 6% of total capacity by 2011
Energy strategies (contd.)
19
Thailand’s ambitious renewable energy policy
Strategies
RE
8%
RE
0.5%
Heat(Incentive)
3,910 KTOE
Biofuels (Incentive)3,100 ktoe
Ethanol 3.0 M liters/dayBio diesel 4.0 M liters/day
Heat~ 0.00 ktoe
Biofuels~ 0.00 ktoe
2002 2011
R & D
RPSINCENTIVE
Electricity
Facilitator
RPS 140 MW- Solar- Wind- MSW- Biomass- Hydro
Incentive
1,425 MW
ElectricitySolar 6 MWWind 0.2 MWBiomass 560 MW
TargetTarget52,939 ktoe 81,763 ktoeTotal demand
20
Biofuels program in Transport sector
21
Key characteristics of transport sector
� Transport accounts for 37% of total final energy demand in 2004.
� High share of road transport in transport energy demand (78% in 2004)
� Low share of public transport
� Low share of MRT/rail transport
Note: * 1998 data. Source: World Bank Railway database 2001
1901
1105906 884
655458 412
323164 76
0200400600800
100012001400160018002000
Jap
an
Fra
nce
Net
herla
nds
Ger
man
ySou
th K
orea
*
Spa
in
Indi
a*
Chi
na T
haila
nd In
done
sia*
Rail passenger-km per capita in 1999
22
� Utilization of 3.0 million liters of ethanol per day by 2011;
� Utilization 8.5 million liters of bio-diesel per day by
2011;
� Subsidy of 1.5 Baht per liter of gasohol.
Biofuels utilization target and policy
23
Effects of biofuels on CO2 emissions: An
AIM/Enduse Model Analysis
No limit on biofuels production and no subsidy II
Doubling the blend of biofuels + Scenario IIIII
Base case with limited production of biofuels(Government plan)
I
DescriptionScenario
24
Reduction in CO2 emissions with biofuel program in 2035
About 5% of total CO2 emissions from road transportation could be reduced with the government plan.
Without any limits on domestic production of biofuels, 9%of total CO2 emissions could be reduced.
5
9
18
-
2
4
6
8
10
12
14
16
18
20
I II III
Scenario
Pe
rce
nt R
ed
uctio
n w
rt n
o b
iofu
els
in 2
03
5
25
Reduction in oil imports with biofuels promotion (2035)
95
91
82
74
76
78
80
82
84
86
88
90
92
94
96
I II III
Perc
enta
ge o
f Im
po
rted F
uels
in R
oad
Tra
nsport
Secto
r
With the government plan, about 5% of the fuel import in road transport could be reduced in 2035.
As high as 18% of the fuel imports could be reduced if the blend of biofuels is doubled.
26
Implications of a CO2 emissions reduction target:
An AIM/Enduse Model Analysis
27
What changes in primary energy mix are needed to
attain 10% CO2 emission reduction during 2010-2030?
� With a 10% CO2 emissions reduction target,
� coal share to decrease by 22%
� natural gas to share increase by 8%
� Biomass share to increase by 3%
(25)
(20)
(15)
(10)
(5)
-
5
10
15
Coal Oil Natural gas BiomassPercentage change with base case
28
Sectoral shares in cumulative CO2 emissions reduction during 2011-2030 (reduction target: 10%)
Power sector will have the highest share (58%), followed by transport (28%) and industry (15%) sectors.
58
15
28
0
10
20
30
40
50
60
70
Power Industrial Transport
Contribution of each sector to
cumulative CO2 emissions reduction (%
)
29
Co-benefits: Reduction of SO2 and NOx emissions during 2011-2030
6
27
0
5
10
15
20
25
30
NOx SO2
Percentage reduction in ER10
compared to base case
30
Role of energy from biomass including waste in future?
2 7.4
2 4 .3
19 .9
17.7
16 .4
16 .3
1.4
1.4
Indonesia
Brazil
Finland
China
Thailand
Sweden
Korea
JapanShare of biomass including waste
in total TPES in 2002 (%)
31
Regional energy development
� Hydropower in Thailand almost fully exploited
� Low fossil energy reserve, negligible wind power and geothermal potential
� Regional cooperation on cleaner energy (e.g., hydropower in Laos and Myanmar, natural gas in Myanmar, Malaysia, Indonesia) an option
32
Effects of Carbon tax:
An AIM/CGE Analysis
33
Percentage change in CO2 emissions from industry and transport sectors with carbon tax compared to base case
-0.52
-2.11
-2.96
-4.52
-1.48
-2.84
-0.32
-0.06
-8 -7 -6 -5 -4 -3 -2 -1 0
CT5
CT25
CT100
CT200
Industry Transport
• In industry sector, the range of CO2 emission reduction varies from about 0.5% (3
million tons) with CT5 to 4.5% (26 million tons) with CT200.
• Reduction in CO2 emissions mainly comes from fuel switching and reduction in energy
consumption in the industry sector through structure change.
34
Concluding remarks
� There exists large potential for energy efficiency improvements in Thailand which can promote climate friendly sustainable energy development.
� Renewable energy (biomass) is already playing a significant role in the energy system and may have limited role in the long term. Wind, hydro and geo-thermal have limited potential in the country.
� Shift towards biofuels in road transportation and increased share of public transportation (MRT): potential climate friendly sustainable options in the long run.
� Besides energy efficiency improvements, new and renewable technologies will have to be considered for GHG reduction.
� Regional clean energy development an option.