Dr. Twarath SutabutrDr. Twarath Sutabutr

DirectorDirector

Policy and Strategy Coordination OfficePolicy and Strategy Coordination Office

Friday 15Friday 15thth December 2006 December 2006

Policy and Strategy Coordination Office

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Thailand’s National Energy PolicyThailand’s National Energy Policy

…….. “ Government will support energy saving and promote energy efficiency as well as enhance more use of renewable energy. Promotion of exploration and develop domestic energy as well as international petroleum resources will be accelerated including those within overlap pig-claim areas with neighboring countries. Emphasis is also given to promote clean energy are establish market-based pricing structure. Reform of energy management scheme by clearly separating policy from regulatory foundations is priority along with ensuring competition in energy business as well as better feasibility R&D activities on Energy Technology” ….

H.E. General Surayud ChulanontNovember 3rd, 2006

Short Term

Long Term

Set direction toward

sustainable development

Immediate Actions

And Implementations

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1. Establish the regulatory framework for Electricity and Natural Gas Industries

2. Enhance Energy Supply Energy Security (Self Sufficiency)

3. Promote Energy Saving & Energy Efficiency

4. Promote Renewable and Alternative Energy Reduce Imports and diversify fuel types and sources

5. Market-based Pricing Structure Reflect true cost in a transparent manner and promote competition

6. Set mandate on Clean Energy Alleviate impacts on environment

Energy CDM Project

7. Promote Public and Private Participation in Policy Formulation Sustainable Development

Thailand’s National Energy PolicyThailand’s National Energy Policy

Immediate Actions and

Implementation

Set direction toward sustainable

development

+

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Establish Regulatory Framework for Electricity and Natural Gas Industries

• Enactment the Energy Industry Act to regulate the electricity and natural gas supply industries:

– The regulatory function to be separated from policy making

– Establishment of independent regulatory body

• Regulatory framework during the transitional period

– Dissolution of the temporary Electricity Regulatory Board. Responsibilities for electricity tariff, load forecast, power development plan, interconnection regulations and IPP bidding to come under National Energy Policy Council

– Establish a “Natural Gas Regulator” as a committee under Corporatization Act to take over any “state power” currently given to PTT Plc.

Enhance Energy Supply : Proposed Amendments

to the Petroleum Act B.E. 2514Objective

sObjective

s

• To change certain provisions in line with advancement in technology

• To provide incentives for marginal and declining petroleum fields by royalty reduction

• To introduce criteria on decommissioning of offshore platforms

• To revise composition of the Petroleum-Committee Members

• To streamline and shorten approval processes under the Petroleum Law

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Long-Term Natural Gas Procurement PlanLong-Term Natural Gas Procurement Plan

500

1500

2500

3500

4500

5500

6500

7500

2005 2007 2009 2011 2013 2015 2017 2019 2021

MMscfd @ 1000 btu/scf

Current NGResources in Thailand

New NG Resources in Thailand

Myanmar

LNG/Regional Gas

3,115

5,252

28%72%

28%

43%

19%

34% 27%

13%

32%

Average Growth

6%

(2006-2021)7,130

7,500

LNG (MTA) 1.3 7 9 10 10 10

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Preliminary Power Development PlanPreliminary Power Development Plan (New Capacity after 2010: Gas 40%, Coal 40%, Import 20%)(New Capacity after 2010: Gas 40%, Coal 40%, Import 20%)

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The Status of IPP, SPP and VSPP(Already Supplied to Grid as of September 2006)

Type of Fuel

IPPsInstalled

Cap.(MW)

SPPs(MW)

Installed Cap.

Sell to Grid

NG 2,463 2,278 1,465

Coal 673 868 429

Bunker Oil

10 9

Biomass 988 430

Total 3,136 4,144 2,333

Type of Fuel

VSPP(MW)

Installed Cap.

Sell to Grid

Paddy Husk 2.83 2.50

Palm Shell 4.91 3.00

Rice husk 0.16 0.15

Biogas 8.16 5.37

PV 0.007 0.007

Total 15.54 11.00

Remark: Including the Pre-COD of BLCP

Promote Private Sector Investment Promote Private Sector Investment in Power Generationin Power Generation

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To encourage biddersto submit bids offering: competitive power prices

risk allocation terms attractive to the Government

capacities and related CODs that meet solicited capacity requirements

Tentative ScheduleTentative Schedule

- RFP issued April 2007April 2007

- IPPs submit bid Oct. 2007Oct. 2007

- Evaluate & select winner

April 2008April 2008

- PPA & GSA negotiations concluded

Oct. 2008Oct. 2008

Next IPP Bid SolicitationNext IPP Bid Solicitation for Generation Capacity during 2011- for Generation Capacity during 2011-

20152015

Issues still to be clarified: Amount of solicitation Eligibility of EGAT’s subsidiaries How to encourage fuel diversity, particularly coal

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Project Sale to Thailand (MW) COD

Already supplying power to Thailand

1. Nam Theun-Hinboun 187 31 March 1998

2. Houay Hoa 1263 September

1999Sub-total 313

PPA signed but not yet supplying power to Thailand

1. Nam Theun 2 920 December 2009

2. Nam Ngum 2 615 March 2011

Sub-total 1,535

Power Purchase from Lao PDR

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SPPs and VSPPs: Cogeneration and Electricity from SPPs and VSPPs: Cogeneration and Electricity from Renewable EnergyRenewable Energy

• Renewable electricity produced from biogas, biomass, MSW, Wind, Solar and other renewable energy

• Revise the VSPP’s regulation to expand the power purchase to grid from <= 1 MW to <= 10 MW and to include cogeneration facilities

• In case of VSPP’s, provide “Adder” to normal purchase price for renewable energy

• In case of SPP’s, use the bidding system for energy payment adder to the normal purchase price

• Community-scale project development– Bio-diesel– MSW fired power plants

• Development guidelines and implementation of CDM projects

Adder for VSPP Programme•Biomass 0.30 Baht/kWh•Micro Hydro (< 50 kW) 0.80 Baht/kWh•Micro Hydro (50-200 kW) 0.40 Baht/kWh•Wind 2.50 Baht/kWh•MSW 2.50 Baht/kWh

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Promote Energy Saving and Efficient Promote Energy Saving and Efficient Use of EnergyUse of Energy

• Cogeneration via SPP,VSPP, and DG

Air

Natural Gas 10 MMSCFD

Feed

Exhaust GasVent to ATM

ElectricityTotal of 50 MW

supply to the Airport

12,500 RTCooling Water

Supply to the Airport

2x 63 Ton/HrBoiler (HRSG)

2 x 20 MWGenerators

1 x 15 MWGenerator

2 x Gas TurbineEngines

WaterCondenser

Drum

Separator Drum

Liquid LiBr + Vapour H2O

Liquid Libr Conc.6x 2,500RTAbsorption

Chiller(SAC)

Low pressureEvaporateChamber

AbsorptionChamber

CombustionChamber

CoolingTower

Steam TurbineEngine

5-7 degree C Building Supply Cooling Water

12-15 degree C Building Return Cooling Water

Chiller Cooling Water

Liquid H2O Vapour H2O

Processed Steam(Waste Heat)

Flue Gas

Supplementary FiringNatural Gas/Diesel

and Fresh Air

Natural GasH2O LiquidH2O VapourFlue GasLibr Conc.Libr+H2O VapourDieselFresh AirCooling Waterfor Building

District Cooling System Power Plant Process Flow Diagram District Cooling System Power PlantDistrict Cooling System Power Plant Process Flow Diagram

Air

Natural Gas 10 MMSCFD

Feed

Exhaust GasVent to ATM

ElectricityTotal of 50 MW

supply to the Airport

12,500 RTCooling Water

Supply to the Airport

2x 63 Ton/HrBoiler (HRSG)

2 x 20 MWGenerators

1 x 15 MWGenerator

2 x Gas TurbineEngines

WaterCondenser

Drum

Separator Drum

Liquid LiBr + Vapour H2O

Liquid Libr Conc.6x 2,500RTAbsorption

Chiller(SAC)

Low pressureEvaporateChamber

AbsorptionChamber

CombustionChamber

CoolingTower

Steam TurbineEngine

5-7 degree C Building Supply Cooling Water

12-15 degree C Building Return Cooling Water

Chiller Cooling Water

Liquid H2O Vapour H2O

Processed Steam(Waste Heat)

Flue Gas

Supplementary FiringNatural Gas/Diesel

and Fresh Air

Natural GasH2O LiquidH2O VapourFlue GasLibr Conc.Libr+H2O VapourDieselFresh AirCooling Waterfor Building

District Cooling System Power Plant Process Flow Diagram District Cooling System Power PlantDistrict Cooling System Power Plant Process Flow Diagram

• Awareness Campaign

• Set targets for energy saving in both public and private sectors

Logistics•Promote mass transit and use of rail for transportation •Energy efficiency and labelings of vehicles

•Establish National Demand Side Management Office•Speed up energy efficiency labeling program•Expand scope of building codes for energy conservation•Establish minimum energy efficiency standards equipments

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Promote Alternative Transport Fuels Promote Alternative Transport Fuels : Gasohol and Bio-diesel: Gasohol and Bio-diesel

• Liberalize ethanol production Liberalize ethanol production and investmentand investment

• Promote competition in supply of ethanol and regulate ethanol price to ensure fair price for consumers

• Apply tax incentive to ensure Apply tax incentive to ensure that retail price of gasohol is that retail price of gasohol is lower than ULG-95lower than ULG-95

• Postpone ULG-95 phase out until– Ethanol production is sufficientEthanol production is sufficient– Fair alternatives exist for old Fair alternatives exist for old

carscars– Assurance of Gasohol qualities Assurance of Gasohol qualities

at all petrol stationsat all petrol stations

• Encourage production Encourage production and consumption taking and consumption taking into account the into account the economic cost and economic cost and potentialpotential

• Set clear policy and Set clear policy and direction to promote bio-direction to promote bio-diesel as new alternative diesel as new alternative for transportation fuelfor transportation fuel

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Measures to Promote NGVMeasures to Promote NGV

• Import Duty Exemption for NGV equipment and container until 2008 NGV engine

• Excise Tax Reduction for NGV- OEM from 30 % to 20%

• Excise Tax Reduction for NGV-Retrofit from 30 % to 22% but not exceed 50,000 Baht

• BOI Privileges

• ENCON Fund 2 Billion Baht

To change the NGV engine for BMTA’s vehicles and coaches.

• PTT fund 5 Billion Baht

To change the NGV engine for private transportation companies

• Truck

• BMTA vans

• Coaches

• Conversion of LPG taxies to NGV taxies

Establish clear and fair NGV pricing structure

TaxationTaxation Revolving FundRevolving Fund

Target of NGV Promotion Present 2010

No. of installed NGV in vehicles 23,193 500,000 cars

No. of NGV Filling Station 76 740

stations

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Measures to Support Clean Fuel Measures to Support Clean Fuel for Environmentfor Environment

Oil Vapor Recovery SystemOil Vapor Recovery System

Petrol stations, oil depots and oil trucks in Bangkok, Nontaburi, Pathumtani and Samutprakarn areas must install the vapor recovering units (VRU)

The regulation is expected to be approved by Cabinet by the end of November 2007. New facilities must comply immediately and existing facilities have one year to comply.

Implementation of Euro-IV Implementation of Euro-IV oil specificationoil specification Present Specification New Specification (Effective in 2012)

1. Gasoline/Gasohol1. Gasoline/Gasohol

• Lead <= 0.013 g/litre 0.005 g/litre

• Olefin - <= 18% Vol

• Sulphur <= 500 ppm <= 50 ppm

• Benzene <= 3.5% Vol <= 1% Vol

2. Diesel2. Diesel

• Sulphur <= 350 ppm <= 50 ppm

• Cetane No. >= 47 >= 50

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Market-Based Pricing structure

MARKETING MARGIN OF PRETROLEUM PRODUCTS(10 JAN 04 - 8 NOV 06)

LPG CONSUMPTION BY TYPE 2004 - 2006 (9 MONTHS)

124.4

4

36.7

1

17.4

9

140.7

0

42.0

8

36.1

5

-

25

50

75

100

125

150

COOKING INDUSTRY AUTO

M.KGS./ MONTH

+6.6%+6.0%

+0.3%+14.3%

+34.5%

+53.7%

• Promote Promote

competition and competition and

efficiency to ensure efficiency to ensure

competitive and competitive and

transparent energy transparent energy

pricesprices

For more information, log on http://www.energy.go.th