Energy Conservation Promotion Fund

The implementation of the ENCON Program is overseen by the ENCON Fund Committee and the respective Sub-Committees, with the National Energy Policy Office (NEPO) and the Department of Energy Development and Promotion (DEDP) as implementing agencies, to achieve the objectives of the ENCON Fund allocation. During the fiscal period 1995-1999, the overall implementation can be summarized as follows:

The DEDP is the responsible agency of this program, comprising four main projects: Government Buildings, Existing Designated Factories and Buildings, Designated Factories and Buildings under Designing or Construction, and Existing Non-Designated Factories and Buildings.

The objective of this project is to promote energy conservation in government buildings that do not fall into the designated building category in order to be examples for the general public in energy conservation as well as to save the government budget for energy consumption. Emphasis has been put on projects that would yield an actual economic internal rate of return (EIRR) at no less than 9%.

This project was the first one carried out under the ENCON Program as it did not have to wait for any law amendment or consultant registration. The target in improving energy consumption in government buildings was achieved with lower budget than estimated. That is, the implementation of energy consumption improvement was completed for 413 buildings, with an exception for two places, where their own fiscal budget was used for the improvement. For this project implementation, the DEDP spent a total of 1,215 million baht, which was 387 million baht less than estimated. Phase 2 of the project is being carried out, with improvement in implementation pursuant to the outcome of Phase 1 evaluation undertaken by NEPO.

Activities	Plan		Achievement
	1995-1999		1995-1998
	Building	M. baht	Building	M. baht
Energy audit	415	29.05	415	32.36
Energy consumption improvement	415	1,245	413	1,110.87
Buildings under designing	50	265	-	-
Project administration expenditure	-	38.05	-	51.99
Follow-up & evaluation	415	6.225	149	1.05
Supervision on energy-efficient equipment installation	415	18.675	413	18.68
Total		1,602		1,214.95

When the project implementation is completed as planned, the expected amount of energy saved will reach 159 million kWh per year, equivalent to a savings of 273.5 million baht per year. Power demand will be reduced by about 60 MW, which will delay investment in power plant construction accounting for a value of about 1,800 million baht.

Activities	Plan		Achievement
	1999-2002		1999
	Building	M. baht	Building	M. baht
Energy audit	800	83.6	200	19.665
Energy consumption improvement	800	2,416	160	476.55
Buildings under designing	50	275	-	-
Project administration expenditure	-	115.4	-	21.495
Follow-up & evaluation	800	6.4	-	-
Supervision on energy-efficient equipment installation	800	39.6	160	7.37
Total		2,936		525.08

When the project implementation is completed as planned, the expected amount of energy saved will be 138 million kWh per year, equivalent to a savings of 346 million baht per year. Power demand will be reduced by about 52 MW, which will delay investment in power plant construction at an approximate amount of 2,340 million baht.

The project aims to support owners of existing designated factories and buildings to undertake energy conservation measures as specified by laws and regulations. A grant will be provided for the preliminary energy audit and a financial support for energy conservation planning and investment according to the plan.

The registration of consultants who are qualified to undertake energy audits and related work under this project was completed in 1998. However, the economic crisis had caused difficulties for owners of designated factories and buildings to find additional financial sources to implement energy audits and plan for energy consumption improvement. This conclusion is still controversial as the implementation is still at the initial stage.

There are 1,378 existing designated buildings where implementation of energy conservation measures is required according to the Royal Decree on Designated Buildings and relevant Ministerial Regulations effective since 12 December 1995. Owners of designated buildings shall undertake the following measures:

Appoint an energy manager and report to the DEDP. Reports from 1,045 buildings, or 76% of the total designated buildings, have been received, involving 1,726 energy managers. So far, the appointment of 1,139 energy managers for 711 designated facilities has been approved by the DEDP.

Submit data on energy consumption (Form Bor Oor Por 1) to the DEDP (every 6 months). In the first half of 1997 (January–June), 678 reports were received and in the second half of the year (July–December), 753 reports were received. In the first half of 1998 (January–June), 702 reports were received and in the second half of the year (July–December), 612 reports were received. In the first half of 1999 (January–June), 336 reports were received.

Submit a request for a grant from the ENCON Fund (Form Bor Por Tor 1) to carry out the preliminary audit. 1,012 requests were received, accounting for 75% of the total 1,378 designated buildings. Of these, 992 have been approved, comprising 653 private sector buildings and 339 government and state-enterprise buildings, with a total budget of 305.97 million baht.

Submit the preliminary energy audit report to the DEDP. A total of 788 audit reports were received, accounting for 79% of the buildings approved by the DEDP to carry out the implementation. Of these, 521 reports have been approved.

Submit a request for a financial support from the ENCON Fund (Form Bor Por Tor 2) to develop the targets and plans for energy conservation. A total of 135 of requests were received; of these 77 have been approved to carry out the implementation, comprising 66 private sector buildings and 11 designated government buildings, involving a budget of 41.22 million baht.

The DEDP has approved registration of 70 consultants to implement energy conservation in designated buildings, consisting of the following:

Category A Consultants 16 consultants have been entitled to undertake preliminary audits, to prepare audit reports, and to implement measures according to the energy conservation targets and plans.

Category B Consultants 54 consultants have been entitled to undertake preliminary and detailed audits, to prepare audit reports together with the energy conservation targets and plans, and to implement measures according to the energy conservation targets and plans.

Activities	Implementation Plan		Achievement
	1997-2000		1997-1999
	Buildings	Million baht	Buildings	Million baht
Preliminary audit	1,225	409.65	992	305.97
Target and plan development	1,234	977.9	77	41.22
Investment support	864	5,004	-	-
Total		6,391.55		347.19

When the project implementation is completed as planned, the expected amount of energy saved is 1,165 million kWh per year, equivalent to a savings of 2,330 million baht per year. Power demand will be reduced by about 403 MW, which will delay investment in power plant construction accounting for a value of about 18,135 million baht.

Existing designated factories The Royal Decree on Designated Factories and relevant Ministerial Regulations, issued under the ENCON Act, have been in effect since 17 July 1997. Hence, a total number of 2,557 designated factories will have to comply with the legislation. To date, 1151 facilities have become designated according to designated years of their energy consumption capacity. During 1995-1999, the following activities were carried out under the DEDP management:

Appoint an energy manager to be reported to the DEDP. Reports from 600 factories, or 52% of the total designated factories, have been received, involving 1,175 energy managers. So far, the appointment of 799 energy managers for 432 designated facilities has been approved by the DEDP.

Submit data on energy consumption (Form Bor Por Ror 1) to the DEDP (every 6 months). For factories that became designated in 1997, in the second half of 1997 (July-December) 165 facilities submitted the reports; in the first half of 1998 (January–June), 167 reports were received and in the second half of the year (July–December), 156 reports were received. For factories that became designated in 1998, 156 reports were received in the second half of 1998 (July–December). For factories that became designated in 1999, 121 reports were received in the first half of the 1999 (January–June).

Submit a request for a grant from the ENCON Fund (Form Bor Por Tor 1) to carry out the preliminary audit. 442 requests were received, accounting for 38% of the total 1,151 designated factories. Of these, 379 have been approved, comprising 374 private sector factories and 5 state-owned factories, with a total grant of 38 million baht.

The DEDP has approved registration of 47 consultants to undertake energy conservation implementation in designated factories, comprising 5 Category A consultants and 42 Category B consultants.

The past implementation of energy conservation-related activities during 1998-1999 can be shown as follows:

Activities	Implementation Plan		Achievement
	1998-2003		1998-1999
	Factories	Million baht	Factories	Million baht
Preliminary audit	3,626	362.6	379	37.9
Target and plan development	3,176	1,588	-	-
Investment support	1,791	8,955	-	-
Total		10,905.62		37.9

When the project implementation is completed as planned, it is expected that about 3,832 million kWh of energy can be saved per year, equivalent to a savings of 7,664 million baht per year. Power demand will be reduced by about 547 MW, which will delay investment in power plant construction accounting for a value of about 24,615 million baht.

The objective of the project is to support the owners of factories or buildings, which are currently under designing or construction and the energy consumption of which, when the construction is completed, is expected to fall into the “designated” category, to improve the design with a view to energy conservation.

In 1999, there are 40 factories and buildings that are required to implement energy conservation measures. The implementation can be shown as follows:

Activities	Implementation Plan		Achievement
	1999		1999
	Facilities	Million baht	Facilities	Million baht
Designing improvement	20	40	-	-
Investment in line with the improved design	20	140	1	1.3
Total		180		1.3

The implementation just commenced in 1999 since the DEDP has given priority to supporting existing designated factories and buildings to implement required measures as stipulated by laws. So far, only one facility under this project has requested financial assistance from the ENCON Fund, accounting for 1.3 million baht.

It is expected that, when the project implementation is completed as planned, approximately 14 million kWh of energy can be saved per year, equivalent to a savings of 35 million baht per year.

The objective of the project is to support the owners of existing factories and buildings, which are not classified as “designated” who wish to implement energy conservation measures in their facilities.

The implementation of this project has not started yet, awaiting availability of the responsible agency, which is currently dealing with the implementation of energy conservation in existing designated facilities to comply with the laws first.

NEPO is the implementing agency of this program. The objective of this program is to support and to collaborate with other agencies, in both the public and the private sectors, to achieve the following:

The Voluntary Program comprises three main projects, namely: Renewable Energy and Rural Industries, Industrial Liaison, and Research and Development. The ENCON Fund Committee allocated a total budget of 2,781 million baht for the implementation of the Voluntary Program during the fiscal period 1995-1999 as detailed below:

Expenditure Plan of the Voluntary Program Implementation (Fiscal Period 1995-1999)
Unit: million baht

Project/ Fiscal Year	1995	1996	1997	1998	1999	Total
1. Renewable Energy and Rural Industries	105	293	296	305	312	1,311
2. Industrial Liaison	70	160	210	210	210	860
3. R&D	100	100	120	140	150	610
Total	275	553	626	655	672	2,781

Since 1995, the number of project proposals for financial support or assistance from the ENCON Fund has been increasing. So far, 91 projects have received grants or financial assistance from the ENCON Fund, accounting for 1,605 million baht. Details are shown in the following table.

Actual Expenditures on the Voluntary Program Implementation (Fiscal Period 1995-1999)

Project/ Fiscal Year	1995		1996		1997		1998		1999		Total
Project/ Fiscal Year	No.	M. baht	No.	M. baht	No.	M. baht	No.	M. baht	No.	M. baht	No.	M. baht
Renewable Energy and Rural Industries	1	22	4	124	-	-	3	380	1	72	9	598
Industrial Liaison	-	-	-	-	2	9	2	263	19	210	23	482
R&D	3	30	2	11	11	31	23	213	20	240	59	525
Total	4	52	6	135	13	40	28	856	40	522	91	1,605

The project promotes utilization of renewable energy, which has less adverse impact on the environment, and energy conservation in agricultural and industrial activities in rural areas. Emphasis is placed on projects on renewable technology introduction, dissemination and transfer; projects on improvement of energy consumption efficiency by using proven technologies; and projects on utilization of residues (e.g. bagasse, rice husk) or agricultural wastes (e.g. animal manure) to produce energy.

During the past five years, the ENCON Fund allocated 598 million baht to support nine projects on renewable energy technology dissemination.

It can be noted that three pilot projects have been completed and proven to be very successful. The ENCON Fund Committee, therefore, has approved of Phase 2 implementation of these projects to disseminate the technologies nationwide.

It is expected that when the implementation of these projects is completed, given the project lifetime of 5 years, 15 years or 25 years depending on the type of equipment or technology used, the following amounts of commercial energy can be substituted:

The project aims at disseminating energy conservation technologies by enhancing the market of high energy-efficient equipment and energy conservation materials, which will indirectly support producers and distributors of such equipment and materials. Emphasis is placed on technologies that have not been widely utilized in Thailand.

During the past implementation, the following demonstration projects and technology dissemination were promoted:

The overall outcome of these demonstration projects is expected to help create the market for energy-efficient equipment and renewable energy technologies, which will enhance the market mechanism to stimulate energy conservation promotion instead of the ENCON Fund in the future. During the past implementation, 482 million baht was allocated from the ENCON Fund to support 23 projects. It is expected that when the implementation of these projects is completed, taking into consideration the project lifetime of 5 years, 15 years or 25 years depending on the type of equipment or technology used, the following amounts of commercial energy can be substituted:

The project aims at developing new or improving existing technologies, information dissemination, adaptation of proven technologies as well as small-scale demonstration projects.

The outcomes of the above R&D will be used to develop energy-efficiency and renewable energy technologies, and to develop policies promoting wider use of such technologies. To date, the ENCON Fund has provided grants for 59 R&D projects, accounting for a total budget of 525 million baht. It is expected that when the implementation of these projects is completed, given the project lifetime of 5 years, 15 years or 25 years depending on the type of equipment or technology used, the following amounts of non-renewable energy can be substituted:

Compared with the total estimated budget of 2,781 million baht for the implementation of the Voluntary Program during the fiscal period 1995-1999, the actual expenditures to support 91 projects were 1,605 million baht, equivalent to 58% of the estimated budget. Of this, the Renewable Energy and Rural Industries Project accounts for 37%, Industrial Liaison Project for 30%, and R&D Project for 33%.

If compared with the budget estimated for each main project, the Renewable Energy and Rural Industries Project spent 46%, Industrial Liaison Project 56%, and R&D Project 86% of the estimated budget.

It is expected that when the implementation of all 91 funded projects is completed, given the project lifetime of 5 years, 15 years or 25 years depending on the type of equipment or technology used, it will help reduce energy consumption by 375 thousand tons of oil equivalent (Ktoe), accounting for a value of 2,946 million baht or 184% of the investment from the ENCON Fund. Other benefits include mitigation of impact on the environment, by-products in the form of organic fertilizer, labour employment, cooperation from both the public and the private sectors in more efficient use of energy from the production process to the end-use, and development of researchers in the country. Energy conservation potential can be shown in the following:

Energy Conservation Potential under the Voluntary Program (Fiscal Period 1995-1999)

Project/ Fiscal Year	1995		1996		1997		1998		1999		Total
Project/ Fiscal Year	ktoe	M. baht	ktoe	M. baht	ktoe	M. baht	ktoe	M. baht	ktoe	M. baht	ktoe	M. baht
Renewable Energy	1	11	9	105	9	105	27	190	27	191	73	602
Industrial Liaison	-	-	-	-	0	1	0	7	4	138	4	144
R&D	-	-	-	-	0	0	0	3	2	19	2	22
Total	1	11	9	105	9	106	27	200	33	348	79	768
Total energy conservation potential (throughout the project life)											375	2,946

The following R&D on renewable energy technologies undertaken by government agencies and universities, funded by the ENCON Fund, have proven to be successful. Promotion and dissemination of these technologies have been planned for Phase 2 of the ENCON Program.

An amount of 1,176 million baht, or 42% of the estimated budget for the Voluntary Program implementation, remained unused. One reason was the unpredictable level of financial requirement at the initial stage of the program implementation, which would depend much on the number of project proposals. Given the limited number of energy-related experts and their availability to carry out or supervise projects under this program, it had been foreseen that the total actual expenditure at the end of the first phase would be lower than that initially estimated.

However, there are currently 52 projects of which the proposals for financial assistance from the ENCON Fund have been submitted and are still under consideration for approval, accounting for a total budget of 370 million baht. In addition, the Electricity Generating Authority of Thailand has a project to construct a 4-MW PV power plant in Mae Hong Sorn province; the project proposal is being prepared for the ENCON Fund Committee consideration, involving a budget of 1,000 million baht.

To enable an effective implementation of the ENCON Program, the Complementary Program has been set up, comprising three main projects: Human Resources Development, Public Awareness Campaign, and Management and Monitoring.

This project aims at supporting and developing human resources (HR) in the country with the right skills and knowledge in the energy field in order to increase manpower to facilitate effective implementation of the ENCON Program. Main activities of this project consist of the following: the development of curriculum on energy conservation and teaching materials, research grants, seminars, scholarship scheme, and financial support for educational institutes or universities to provide courses related to energy conservation.

During 1995-1999 the project implementation included, for example, development of curriculum and training manuals, and scholarships for interested persons who wish to continue their studies in the fields of energy in line with the three-year “Human Resources Development Master Plan.” At the end of each fiscal year, the plan was evaluated and revised before implementation in the following year. During the mentioned period, a total budget of 594.89 million baht was allocated from the ENCON Fund to support the following six main activities:

Project Unit: million baht	Implementation Plan 1995-1999	Achievement 1995-1999
1) Development of curriculum and training manuals	677.2	422.59
2) Local short-term training	302.7	52.55
3) Short-term training and technical visits abroad	70.0	16.92
4) Graduate and post-graduate scholarships, local and abroad	191.2	84.72
5) Research grants for university students	14.0	10.46
6) Others	69.4	7.66
Total	1,324.4	594.89

There are two main target groups under this project: 1) those who are directly concerned with the Energy Conservation Program, responsible by the DEDP; and 2) the general public, responsible by NEPO. During the past implementation, a total budget of 785.1 million baht was allocated from the ENCON Fund to carry out various public awareness (PA) campaigns.

Public Awareness Campaigns 1995-1999	Approved Plan (Million baht)	Achievement
Public Awareness Campaigns 1995-1999	Approved Plan (Million baht)	No. of Projects	Million baht
General public (by NEPO)	681.5	116	591.4
Designated factories and buildings, government buildings and concerned persons (by DEDP)	388.3	49	193.7
Total	1,069.8		785.1

The PA campaigns under NEPO responsibilities aim at changing consumers’ behavior and attitude towards energy consumption with a view to achieving efficient use of energy. An annual evaluation of project implementation is made prior to carrying out the implementation in the following year. The evaluation of the PA campaigns launched by NEPO has indicated that the behavior and attitude towards energy consumption of the general public have changed; they have recognized benefits from energy conservation and have learned simple ways to reduce energy consumption in their daily activities. The PA project is implemented under the “Divide by Two” campaign, popularly known as “Harn Song ( ÷ 2).”

At the initial stage, NEPO emphasized on information dissemination to educate the general public of the energy utilization impact on economics and the environment. Campaigns were launched to raise the public awareness on efficient use of energy, including provision of simple methods to save energy in daily practice. During 1999, benefits obtained by those who did follow energy conservation methods were disseminated to the general public so that they could follow the practice. The “Divide by Two” campaign has been made public through educational and community-oriented activities, such as energy conservation contests among all provinces in Thailand and among schools, various talks/debates on energy conservation themes among educational institutes. This will allow various organizations, public and private, to initiate and implement their own projects or activities in order to create energy conservation consciousness, which will lead to other self-generated energy conservation projects in the future.

The PA campaigns responsible by the DEDP aim at those who are directly involved with the Compulsory Program, i.e. owners and energy managers of designated factories and buildings, manufacturers of energy conservation equipment, machinery and materials, as well as project owners under the Voluntary Program. Therefore, emphasis would be on the information about the ENCON Program, and the government’s support or subsidies for energy conservation-related improvement. The results of PA activities carried out by the DEDP have been satisfactory, in particular the introduction of experts to designated factories and buildings to provide advice on implementation of energy conservation measures as stipulated by laws. In addition, various activities aiming at creating energy conservation consciousness on energy consumption in designated factories and buildings were undertaken, for example, a contest on the most prominent energy-efficient facility, and seminars on energy conservation themes.

This project covers the expenditures of all government agencies responsible for the implementation of the ENCON Program, i.e. NEPO, the DEDP and the Comptroller-General’s Department (CGD). The expenditures consist of fees for engaging consultants to develop implementation plans to achieve the objectives of the ENCON Program, consultancy services and evaluation, expenditures on the premises, per diem, non-disposable office equipment and other materials necessary for the implementation of various programs/projects.

During 1995-1999, a total budget of 1,128.18 million baht was allocated from the ENCON Fund for the management and monitoring of the ENCON Program as described below.

Management and Monitoring Project Unit: million baht	Approved Budget for 1995-1999	Actual Expenditure during the period 1995-1999
NEPO	732.64	712.14
DEDP	914.77	413.02
CGD	6.60	3.02
Total	1,654.01	1,128.18

NEPO has received allocations from the ENCON Fund for the management and monitoring expenditures, including studies to establish policies related to energy conservation. Examples are a survey on energy consumption in the agricultural sector, energy conservation in the transportation sector, guidelines on policy making to promote utilization of solar cells, a study on energy demand and supply balance to improve the ENCON Program, guidelines on the promotion of biomass energy utilization, a study on establishment of energy efficiency standards and labeling of electrical appliances, and a study on the electric power tariff structure.

Moreover, the ENCON Fund Committee has approved a financial support for the purchase of a permanent office building of NEPO located at 121/1-2 Petchaburi road, Tung Phya Thai, Rajthevee district, Bangkok. This office building will also house a demonstration center of energy conservation technologies. At the initial stage, NEPO and the Association for the Development of Environmental Quality (ADEQ) will jointly monitor the center. Later, NEPO will be the sole operator the center.

For the DEDP, allocations from the ENCON Fund have been provided for the management and monitoring expenditures, and for office spaces renting at Bangkok Thai Tower Building, on 8^th, 18^th, and 19^th Floors, Rangnam Road, Rajthevee District, for a three-year period at a renting rate of 7.3 million baht/year. The ENCON Fund has also supported the engagement of Accredited Consultants during Phase 2 of the ENCON Program implementation to pre-screen project proposals and to evaluate the implementation outcome so as to ensure that designated factories and buildings comply with the legislation issued under the ENCON Act.

The CGD has received allocations from the ENCON Fund for the management and procurement of non-disposable office equipment as well as salaries of temporary employees working on activities related to the ENCON Fund.

In implementing the ENCON Program under the support and assistance from the ENCON Fund during the fiscal period 1995-1999, a total of 6,237 million baht was spent. The following table shows the expected outcome on energy conservation, efficient utilization of energy, and replacement of non-renewable energy.

	Compulsory	Voluntary	Complementary	Total
1. Approved budget from the Fund (million baht)	2,124	1,605	2,508	6,237
2. Energy Conservation Potential			**
2.1 Electricity
- Replace electrical energy
Per year (million kWh/year)	88	51		139
Throughout project life* (million kWh)	1,320	298		1,618
Money saved (M. baht/year)	177	128		305
Money saved throughout project life (M. baht)	2,655	745		3,400
- Reduce capacity demand
MW	33	14		47
Investment capital (M. baht)	1,485	630		2,115
*2.2 Fuel*
- Replace fuel
Per year (million litres of crude oil/year)	-	26		26
Throughout project life (million litres of crude oil)	-	357		357
Money saved (M. baht/year)	-	220		220
Money saved throughout project life (M. baht)	-	2,231		2,231
Total Energy Conservation Potential
Money saved (M. baht/year)	177	348		525
Money saved throughout project life (M. baht)	2,655	2,976		5,631
and reduce capacity demand
Investment capital (M. baht)	1,485	630		2,115

Electricity :	Electrical energy	89	million kWh
	Equivalent to	222	million baht
Fuel :	LPG	109	million kilograms
	Lignite	616,613	tons
	Equivalent to	1,892	million baht
	Total money saved	2,114	million baht

Electricity :	Electrical energy	209	million kWh
	Equivalent to	522	million baht
Fuel :	Diesel	5	million litres
	Firewood	203	tons
	LPG	1	million kilograms
	Equivalent to	61	million baht
	Total money saved	583	million baht

Fuel :	Fuel oil	305,550	litres
	Diesel	5	million litres
	LPG	14	million kilograms
	Total money saved	193	million baht

Section 4: OUTCOME OF THE ENERGY CONSERVATION PROGRAM IMPLEMENTATION DURING THE FISCAL PERIOD 1995-1999