Energy Efficiency Workshop June 20-21, 2011 ADB Headquarters, Manila Thailand: A Civil Society Perspective on Institutionalizing EE in Power

Planning Witoon Permpongsacharoen Director Mekong Energy and Ecology Network (MEE Net)/ Towards Ecologic Recovery and Regional Alliance (TERRA) Foundation for Ecological Recovery (FER) Thailand witoon@terraper.org

What are the key barriers to EE in Thailand.

The dominance concept is based on the belief of growth and security on the supply side, or more new generation to create a high reserve margin. The interests of the key actors have been embedded and developed in the planning systems, promoting over projection of demand and over investment with all the costs being passed on to consumers. Conflicts of interest: The system monopoly and tariff system create profits for the utilities by selling more units of KWh. EE has been under the responsibility of the utilities that make a profit from high energy consumption.

What are the key barriers to EE in Thailand. (cont)

The potential of EE has been underestimated and underutilized. EE programs are not included in the Power Development Plan (PDP) in the same way as generation investment projects. However, EE is mentioned as a process of future demand forecast, which means no profit gain for EE investments, and therefore less priority is given to EE and the targets are unclear. Lack of public education on EE. There are no clear messages on the potential of EE, how EE is comparable with new generation investment, and how end-users will benefit from EE.

Energy demand forecast vs. actual 1992-2011

56,000 52,000 48,000 44,000 40,000 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 1992 ..-93 ..-94 ..-95 ..-96 ..-96 ..-97 ..-97 Sep-98(MER) ..-01 ..-02 Jan-04(LEG) Jan-04(MEG) Jan-04(TEG) Apr-06 (MEG) ..-07 ..-07 ..-08 2010 (High) ACTUAL

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

Comparison of Demand Forecast and Actual

2553 16
Peak demand forecasted for 2010

(MW)
Demand Forecast

(MW)
Difference of Forecast and Actual

(%)
Difference of Forecast and Actual

Jun-93 Dec-94 Oct-95 Oct 96 (Base) Jun 97 (Low) Sep-97 Sep 98 (MER) Feb 01 (Base) Aug-02 Jan 04 (MEG) Apr 06 (Base) Aug-06 Jan-07 Mar 07 (Low) Dec-08 Feb-10

31,749 31,749 32,756 39,247 37,075 34,883 28,912 28,912 27,711 29,808 27,761 27,711 26,635 25,956 23,936 23,249

7,739.10 7,739.10 8,746.10 15,237.10 13,065.10 10,873.10 4,902.10 4,902.10 3,701.10 5,798.10 3,751.10 3,701.10 2,625.10 1,946.10 - 73.90 - 760.90

32.23 % 32.23 % 36.4 % 63.46 % 54.42 % 45.29 % 20.42 % 20.42 % 15.41 % 24.15 % 15.62 % 15.41 % 10.93 % 8.11 % -0.31 % -3.17 %

Actual demand 2010 =

24,000 MW

Yearly peak demand growth since 1986 to 2011 (actual) and future demand forecast from 2012 to 2030 in PDP 2010

1,000

1,500

2,000

-500 500 0

Actual Forecast

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Thailand electricity demand & reserve margin in 2011

34,000.00

Actual Demand 2010 31,516.61 Actual Demand 2011 Forecasted Demand 2011 Installed Capacity Reserve Margin 15%

32,000.00

Installed capacity 2011

30,000.00

28,000.00

Current Reserve Margin = 31.868%

26,000.00

24,100.00
24,000.00

Forecasted demand 2011

23,900.21

22,000.00

Actual demand 2010

Actual demand 2011

20,000.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Factors contributing to cycle of over-investment

Investment planning that is based on high demand forecast and favors capital-intensive options Projections that tend to over-estimate actual power demand
Justified in media by evoking shortage psychosis

Utilities profits and benefits 3

Cost-plus tariff structure that enables utilities to pass on unnecessary costs to consumers

Recommendations
The tariff should not allow the over investment costs of generation capacities to be passed on to consumers. In the Thai case, the system security policy is based on the peak demand plus a reserve margin of 15%. The cost of the reserve margin over 15% should not be passed on to consumers. Requests for large additional demand (e.g. 10MW) should come under the Contracted Demand System. Integrated Resources Planning (IRP) should be introduced into the PDP. EE should be prioritized and included in the PDP in the same way as other generation investment projects, and EE projects should be indicated clearly with a capacity (MW) and a time frame. In this way, the implementers would gain a profit from EE.

Recommendations
To avoid conflicts of interest, EE programs should not be monopolized by EGAT, but should be open to more competition as well as be transparent. The utilities should be evaluated by their overall performance and not on the basis of the assets they own or profits (performance-based regulation). Good EE studies and planning are needed. Public education is needed as well. All stakeholders should be given correct information and high-quality messages on EE. The regulator should function better and promote peoples participation in the PDP process and in all aspects of power sector development.

Thank you

Email: witoon@terraper.org