Section 7: IMPLEMENTATION STRATEGIES DURING THE FISCAL PERIOD 2000-2004

 

Taking into consideration the policy studies to determine implementation strategies for Phase 2 of the Energy Conservation Program, as detailed in Section 6, and the evaluation of the past achievement together with the comments/recommendations from the Sub-Committee on the Energy Conservation Program Implementation Evaluation (the Evaluation Sub-Committee), an implementation plan for Phase 2 of the ENCON Program, covering the fiscal period 2000-2004, has been developed. The plan of each of the three main programs, i.e. Compulsory, Voluntary and Complementary Programs, has been approved by the respective Monitoring Sub-Committee. In brief, the objectives of the ENCON Program: Phase 2 (2000-2004) are to increase the role of the market mechanism and to reduce financial assistance from the ENCON Fund. Emphasis will, therefore, be placed on the human resources development, establishment of information centres, demonstration projects, and acceleration of the establishment of energy-efficiency standards and labeling.

However, during the next 5-10 years, immediate reduction of direct financial assistance from the ENCON Fund will not be practical as there remains a commitment, under the Compulsory Program, to undertake energy-efficiency improvement in designated factories and buildings to meet the total target of about 5,000 facilities. In addition, in order to achieve efficient energy consumption in the whole country by depending on the market mechanism and decreasing assistance from the ENCON Fund, it is essential that other necessary measures be put in place, such as a pricing policy that reflects the actual costs without any hidden subsidies, and relevant rules and standards, for example minimum energy-efficiency standards.

Criteria, guidelines, conditions and priorities of the ENCON Program: Phase 2 (2000-2004) are mainly in line with those of Phase 1 (1995-1999). There are some major alterations in the following five aspects:

  1. During Phase 1 of the ENCON Program, no action was taken on the Project on Non-Designated Factories and Buildings due to the insufficient personnel of the concerned agency as priorities had to be given to designated factories and buildings to make them comply with the laws first. Also, the target groups of this project are factories and buildings that are not “designated” by laws, and the nature of assistance from the ENCON Fund is different from that for designated facilities. Consequently, academics in various fields are of the opinion that, in Phase 2, the budget allocated for this project should be shifted from the Compulsory Program to the Voluntary Program.
     
  2. Since there has scarcely been public relations work on the implementation and achievement under the Compulsory Program, responsible by the DEDP, many owners of designated facilities are still not seriously interested in energy conservation measures. The Sub-Committee on the Compulsory Program, therefore, recommended that the PR budget for the work under the DEDP’s responsibility be transferred from the Complementary Program to the Compulsory Program. This will create more efficient public relations of the achievement made under the Compulsory Program in the Phase 2.
     
  3. According to the DANCED study on the determination of pricing incentive levels in the purchase of power generated from renewable energy, there is a vast potential in Thailand to use agricultural residues or wastes in power generation. Therefore, a new project under the Voluntary Program, i.e. the “Promotion of Small Power Producers Using Renewable Energy,” is proposed in order to promote the use of renewable energy in power generation. The ENCON Fund will financially support the project.
     
  4. According to a condition in applying for financial assistance from the ENCON Fund under the Project on Designated Factories and Buildings under Designing or Construction, the existing plan of such a facility must already comply with the energy consumption standards and criteria specified by relevant Ministerial Regulations. Such a condition has become a barrier for facilities that are now under construction to implement energy conservation measures in order to improve their overall energy consumption. As a result, there has not been much progress in this project.
     
    In addition, the DEDP has carried out so many training courses and much public relations work that it should help stimulate facilities’ owners to hire a person with expertise to improve the facilities’ designing for their own benefits. In this connection, experts, academics and concerned agencies have reached a consensus that allocations from the ENCON Fund for this project should be cancelled. Instead, support should be provided for training on energy conservation techniques for architects and engineers to have better understanding and profound knowledge on such techniques so that they can provide qualified services for facilities’ owners who wish to improve the design of their facilities with a view to energy conservation.
     
    As a result, the implementation of this project will continue up to March 2000 only. However, assistance for government buildings currently under construction will continue. Evaluation of the project implementation should be carried out, and the outcome is to be submitted to the ENCON Fund Committee for deliberation whether and how the project implementation should be continued in the future.
     
  5. The limited scope of work of the Renewable Energy and Rural Industry Project, i.e. only dealing with small-sized activities consuming less than 300 kW of electricity and located outside the municipality areas, has created a problem. It obstructed those facilities with energy consumption greater than 300 kW but not as high as that of designated facilities from being granted assistance from the ENCON Fund for their energy efficiency improvement. Therefore, in Phase 2 of the ENCON Program, assistance from the ENCON Fund under this project will be extended to cover industries with energy consumption greater than 300 kW but not falling into the “designated” category. Still, priorities will be given to small industries in rural areas.

Beside the major alterations stated above, improvement of guidelines on the ENCON Fund expenditures has also been made, as detailed in the following, in order that the implementation of funded projects contributing to efficient energy consumption will be more effective.

7.1 COMPULSORY PROGRAM

7.1.1 Government Building Project

In Phase 2 of the project, the DEDP has planned to improve energy conservation in 800 government buildings nationwide. In order to achieve the objective in terms of the amount of energy that can be saved, the problems and barriers encountered in Phase 1, as discussed in Section 5, have been taken into consideration in developing implementation strategies for Phase 2, which can be summarized as follows:

  1. The objective of the Government Building Project is to conserve energy in government buildings. If only 37% of the old, low energy-efficient air-conditioners were reinstalled elsewhere in the same buildings, the investment in replacing all existing old air-conditioners would not bear any energy conservation result. Therefore, it is very crucial to establish an effective measure to prohibit reinstallation of removed low energy-efficient air-conditioners. In this regard, the following should be implemented:
    • The DEDP should determine an appropriate method to deal with the removed low energy-efficient air-conditioners. There are various factors to consider, such as additional expenditures that may make the investment in high-efficiency air-conditioner installation not cost effective.
    • The procurement of materials, equipment and appliances as well as office equipment of all organizations should be in line with the Energy Conservation Promotion Act.
       
  2. The number of Implementing Agencies (IA) must be increased to be able to cope with the workload of the DEDP. Access must be opened for potential organizations to participate in the project implementation by offering competitive prices and service quality for the DEDP’s consideration.
     
  3. Speed up the enforcement of compulsory energy-efficiency standards for electrical appliances and support the energy-efficiency labeling, including the public relations work, so as to create the market for high-efficiency electrical appliances. As a consequence, it will be easy for owners of buildings where energy conservation measures have been implemented to find high-efficient appliances to replace the broken ones. This will indirectly enforce the use of high energy-efficiency products because in the future these will be the only products available in the market.

Besides, the DEDP has to take into account the comments/notes of the Evaluation Sub-Committee, as shown in Section 5, Item 5.1.1, in improving the implementation plan in Phase 2.

7.1.2 Project on Existing Designated Factories and Buildings

In Phase 2 of the project, the DEDP has planned to improve energy conservation in 1,074 designated buildings and 875 designated factories nationwide. Following several studies and seminars among concerned agencies, the implementation strategies for Phase 2 can be briefed as follows:

  1. The owners of designated factories and buildings themselves will have to invest in the preliminary energy audit and formulation of the energy conservation plan for their facilities first. Financial evidence (a loan contract) must be presented to the DEDP to confirm their readiness to make an investment in energy conservation improvement. When approved, financial support from the ENCON Fund for the preliminary audit and the energy conservation plan development will be reimbursed according to the criteria set by the ENCON Fund Committee. Further investment in energy conservation improvement will be reviewed for approval. When the investment is made, the DEDP will reimburse the financial assistance for the owners’ investment according to the criteria.
     
  2. If the preliminary audit shows that further investment in a facility will not be cost-effective, the DEDP will reimburse all preliminary audit costs to the facility’s owner, but not exceeding 100,000 baht per facility (according to the former criteria).
     
  3. Consideration is to be made on the introduction of the Energy Services Company (ESCO) to Thailand.

Prior to the implementation of the above, it is necessary to have the past implementation evaluated in order to learn about the problems encountered and what should be improved to achieve more effective outcomes. In this regard, NEPO will monitor the project evaluation, which will commence in the year 2000. If it is evident that the implementation in line with the recommendations will be beneficial to the ENCON Program, NEPO will then present the recommendations to the ENCON Fund Committee, via the Evaluation Sub-Committee, for further consideration and approval. In the meantime, it is suggested that in 2000 the DEDP should manage the ENCON Fund allocations according to the former criteria so as not to delay the work or create confusion among facilities’ owners.

7.1.3 Project on Factories and Buildings under Designing or Construction

Since many training courses and much public relations work have been carried out under the Human Resources Development and Public Awareness Projects of the Complementary Program, it should help stimulate facilities’ owners to hire a person with expertise to improve their facilities’ designing for their own benefits. As a result, experts, academics and concerned agencies have agreed that allocations from the ENCON Fund for this project should be cancelled. Instead, support should be provided for training on energy conservation techniques for architects and engineers so that they can provide qualified services for facilities’ owners who wish to improve the design of their facilities with a view to energy conservation.

However, for government buildings currently under construction, all parties are of the opinion that assistance should continue as many of them will not have an alternative budget source to undertake energy conservation improvement. As a result, the DEDP should continue screening proposals for the ENCON Fund assistance under this project from government agencies up to the end of March 2000. It is expected by the DEDP that energy conservation improvement can be carried out in 35 more buildings. After that, an evaluation of the project implementation should be made, and the outcome is to be submitted to the ENCON Fund Committee for deliberation whether and how the implementation should continue in the future.

7.1.4 Public Awareness Campaigns, under the DEDP’s Responsibility

Since public relations work on the implementation and achievement of the projects under the DEDP’s responsibility has scarcely been carried out, many owners of designated facilities still do not know what they have to do and are not seriously interested in energy conservation measures. The Sub-Committee on the Monitoring of the Compulsory Program, therefore, recommended that the PR budget under the DEDP’s responsibility be transferred from the Complementary Program to the Compulsory Program so that the public relations of the progress and/or achievement made under the Compulsory Program in the Phase 2 would be more efficient.

During 2000-2004, the target of the DEDP’s public awareness campaigns will focus on designated factories and buildings, together with other related groups. It is hoped that the aggressive approach focusing on specific target groups in a form of direct communications will give the most efficient outcome, not a waste of time and effort, and PR via other media will be used as a backup channel. In order to create better understanding among the target groups, the major issues that the DEDP must make known to them shall include information on the Energy Conservation Promotion Act, roles and duties of the DEDP, and assistance provided by the ENCON Fund. Besides, the DEDP should promptly respond to queries for information, in particular information on energy conservation techniques and methods via appropriate media and activities, in order to encourage those concerned to take action on energy conservation.

7.2 VOLUNTARY PROGRAM

7.2.1 Renewable Energy and Rural Industry Project

The scope of work of this project should not be limited to small rural facilities consuming less than 300 kW of electricity and located outside the municipality areas. However, priorities are still given to rural industries. In addition, support will be provided to promotion of renewable energy utilization in non-designated factories and buildings, focusing on increasing production efficiency of existing renewable energy-fueled industries. In this connection, it is recommended that the name of this project should be changed to Promotion of Renewable Energy Utilization Project. Some major industries with high-energy consumption which should be assisted in energy-efficiency improvement under this project are, for example, fish processing industry, rubber smoking, tobacco curing, brick-firing, ceramic, and dried food.

Since there is a vast potential in Thailand to use agricultural residues or wastes in power generation, in the study on Investigation of Pricing Incentive in Renewable Energy Strategy, DANCED has proposed a new project, the “Promotion of Small Power Producers Using Renewable Energy,” to be under the Voluntary Program. The ENCON Fund will financially support the project in order to promote the use of renewable energy in power generation. At present, many SPPs have withdrawn from the existing SPP Program (of the Electricity Generating Authority of Thailand) because there is no incentive from the government to encourage SPP participation in the power supply industry since the power purchasing price is at a rate of 1.25 baht/kWh. Under this circumstance, it is a good opportunity for the ENCON Fund to launch a trial project by providing financial support to stimulate the market for electricity generated from renewable energy, in particular, agricultural residues or wastes (biomass). A Request for Proposals will be announced to solicit proposals in the form of bidding from those who are interested in generating power from biomass. Interested SPPs must propose their power selling prices for the portion that is in excess of the normal purchasing prices under the existing SPP Program. The SPP with the lowest offer, which is not higher than a specified rate, will receive a financial subsidy from the ENCON Fund. This project period is initially set for 5-7 years, with a pilot period targeting at 300 MW of electricity to be connected to the grid. Then, an evaluation will be made to determine appropriate implementation criteria, types of biomass, and location of the plants. The project implementation plan for the following period will be revised accordingly prior to submission to the ENCON Fund Committee for consideration and approval.

7.2.2 Industrial Liaison Project

The same approach as that in Phase 1, i.e. giving support to various activities, will continue. However, focus will be on additional establishment of energy-efficiency technology demonstration centers. Expansion of the energy information network will be promoted. Other activities that will be funded are, for instance, establishment of additional energy-efficiency testing laboratories for electrical equipment and appliances; encouraging private manufacturers of electrical appliances to improve their product efficiency to meet, or exceed, the minimum energy efficiency standards that will be enforced; demonstration of energy conservation technologies in the transportation sector; supporting businesses that perform engine inspection and maintenance services; promoting energy conservation in the agricultural sector; demonstration of recycling projects with a view to energy conservation; promotion of production and sale of high-efficiency cooking stoves; demonstration of solar evaporators; demonstration of energy-efficiency rubber smoking chamber; and demonstration of high-efficiency crematoriums, etc.

In the policy study on energy conservation in the transportation sector and on energy conservation strategies for vehicles, it is proposed that utilization of clean energy, such as natural gas, as fuel should be promoted. Also, demonstrations of energy conservation technologies related to transportation should be organized, such as a demonstration of hybrid technology using fuel and battery for vehicles and a demonstration of an engine using vegetable oil as fuel. Promotion should also be made to encourage inspection of vehicle engines and tuning of the engines to improve their performance and consume less energy.

According to the study on Domestic Energy Demand and Supply Balance and Adjustment of the Energy Conservation Program by the Energy Research Institute (ERI), it is proposed that the ENCON Fund support a demonstration project on solid waste separation for reuse/recycling. The demonstration project may be carried out in a small scale at any one district in Bangkok to be example for other districts or other provinces.

In the study to establish the minimum energy efficiency standards of electrical appliances, the ERM-Siam has proposed minimum standards for refrigerators, air-conditioners, motors, ballasts, fluorescent tubes, and compact fluorescents. It has also been recommended that the ENCON Fund support the establishment of energy efficiency laboratories to ensure that the quality of electrical equipment and appliances meet the standards. Energy-efficiency labeling, public relations on such labeling, and production improvement to be higher than the specified standards should also be supported by the ENCON Fund.

7.2.3 Research and Development Project

Financial support will be provided for studies, research and development on various topics derived from meetings/seminars with academics who wish to do R&D work. The following are examples of main R&D fields and their specific topics:

Biomass Energy

Solar Energy

Energy Consumption Efficiency

Energy Conservation in the Transportation Sector

Energy Conservation in the Agricultural Sector

Reuse and Recycling

Others

In the case where it is evident that the actual implementation of any particular project will bring about high energy saving, an announcement will be made to provide grants or financial support from the ENCON Fund for such a project on a case-by-case basis.

7.2.4 Project on Existing Non-Designated Factories and Buildings

This project was initially under the Compulsory Program. However, following several meetings and seminars with experts, academics and concerned agencies, it has been agreed that, since the target groups of this project are not “designated” by laws, the project should be shifted to be under the Voluntary Program instead. A pilot project has been recommended in order to determine appropriate approaches to provide support to non-designated facilities, which should be different from those applied to designated ones. With regard to the project management, the existing procedures under the Voluntary Program can be applied. Government agencies, state-enterprises, universities and non-profit organizations are urged to be “Project Owners.” Allocations from the ENCON Fund will be made available to assist with energy consumption improvement in non-designated facilities.

In implementing a pilot project on energy conservation promotion in non-designated facilities, NEPO will use the outcomes of feasibility studies undertaken by three agencies as guidelines, namely:

1) Department of Industrial Promotion (DIP)

Appropriate demand side management will be introduced. DIP will cooperate with the Electricity Generating Authority of Thailand to encourage manufacturers of equipment or spare-parts to use energy-efficient technology in their production process. Surveys on the demand and promotion on energy-efficient equipment utilization in the industrial sector will be carried out. Campaigns will be launched to make entrepreneurs recognize the importance and benefits to be obtained from energy efficiency improvement. An announcement will then be made for entrepreneurs interested in improving energy efficiency in their facilities to apply for assistance from the ENCON Fund. Selection of applications will be made and improvement implementation will be carried out, with a target of 100 facilities at the initial stage.

A manufacturer/distributor of energy-efficient equipment and appliances will undertake the installation work of such equipment/appliances as well as the energy audit. A report on the energy-efficiency outcome of the facility has to be submitted to the DIP in order for the facility to be reimbursed by a financial institution for the investment in energy-efficient equipment/appliances.

The industrial entrepreneur will have to sign a contract with the financial institution to pay back the money in installments according to the contract conditions within the payback period of the project. Manufacturers/distributors can estimate the market demand and present the outcome to the DIP for consideration and coordination with financial institutions to support their investment in the production or expansion of the production of energy-efficient equipment/appliances or spare-parts.

There are more than 100 manufacturers/distributors of energy-efficient equipment and appliances participating in the project. Support has first been provided to proven energy-efficient technologies of seven product types, namely:

For the pilot project aiming at 100 participants, DIP requests the ENCON Fund assistance only for the management expenditures. The outcome of the pilot project will be used to determine guidelines on providing assistance for energy conservation improvement in small and medium-sized factories and buildings in the next stage.

2) Department of Energy Development and Promotion (DEDP)

The Bureau of Energy Regulation and Conservation of the DEDP, in cooperation with the Danish Co-operation on Environment and Development (DANCED) of Denmark, has undertaken a study on energy conservation technology standards of Thailand, to be applied to the following products:

The DEDP will try out the management process and implementation procedures, from application submission to reimbursement of financial assistance to factories and commercial buildings. This is to learn about problems and barriers to the project implementation and how to solve them as well as the interest of the facilities, which will reflect the market demand given the number of applicants in each product type.

For the pilot project aiming at 20 participants, the DEDP will provide financial assistance equivalent to 30% of the standard prices of equipment and appliances in each category, including installation costs. The standard prices are determined by the DEDP and will be periodically adjusted as appropriate.

3) The Federation of Thai Industries (FTI)

The Energy Research Institute (ERI) of Chulalongkorn University received a financial assistance under the Research and Development Project of the ENCON Fund to undertake a study on a trial application of the Value Engineering (VE) management technique to 10 factories in order to reduce their energy cost. The outcome has been very satisfactory.

The FTI has found that the VE is a simple technique and that small-sized industries can immediately carry out energy conservation improvement, with no investment cost required. The FTI has, therefore, disseminated the technique to member companies with a view to undertaking energy audit and energy consumption improvement for project participants who do not fall into the designated category by laws. The application of the VE technique to help increase energy efficiency can reduce both capital costs and energy consumption. In addition, it helps develop human resources in the facilities, both those who directly deal with energy and those who do not, as they must form a team and perform tasks under supervision of an expert. In this way, they will quickly understand the process and can later do the task by themselves. Importantly, this will also develop problem-solving skills in a constructive manner for personnel in the industrial sector. Also, the ERI staff selected to be responsible for this project can develop their skills which can be applied to other business branches in the industrial sector.

At the initial stage, the FTI will carry out a pilot project covering only 30 facilities. The outcome of the implementation will be available by March 2000, together with those of the DIP and the DEDP. The overall outcomes of the pilot projects will be presented to a meeting of experts and academics to be arranged by NEPO so as to establish the most appropriate guidelines for further project implementation.

In carrying out projects under the Voluntary Program, importance has also been given to the development of human resources or workforces to be equipped with renewable energy technology skills so that they could provide services and advice to others on how to efficiently use renewable energy. Skilled personnel have been assigned to every region of the country, in such fields as bio-technology engineers, advisors on biogas system construction, producers and distributors of high-efficiency cooking stoves, solar system installation and maintenance services, domestic production and sale of solar cells, and production of solar water heaters. Besides, support has been provided under the Project on Non-Designated Factories and Buildings to stimulate a market force for high-efficiency equipment and appliances.

When market mechanisms, including personnel with renewable energy expertise, field personnel, and sufficient demand of the market, is in good shape, financial assistance will gradually be reduced in proportion to the circumstances and necessity until individual activities reach their breakeven point and can run by themselves without further assistance from the ENCON Fund.

7.3 COMPLEMENTARY PROGRAM

7.3.1 Human Resources Development Project

The next five years (2000-2004) will see more concerted efforts to increase training for energy managers in designated factories and buildings as well as personnel in small and medium enterprises (SMEs). Human resources development to prepare qualified personnel to handle recycling and energy efficiency improvement in the transportation sector will also be highlighted. The number of scholarship grants to pursue studying, both in Thailand and abroad, will be increased. Training will be extended to cover personnel of non-designated factories and buildings, and staff from non-profit organizations will now be eligible to apply for the ENCON Fund scholarships.

The application and selection procedures for the granting of ENCON Fund scholarships abroad, previously overseen by the Office of the Civil Service Commission, were complicated and time-consuming; hence only 8 out of 15 scholarships available were granted during Phase 1 of the ENCON Program. Therefore, it has been considered more appropriate for NEPO to take over the application and selection procedures. Relevant criteria and regulations for the granting of scholarships abroad will be set up by the Sub-Committee on the Complementary Program. A working group consisting of experts in various fields will be formed to take charge of interviewing and selection of applicants according to the criteria and regulations for further submission to the Sub-Committee on the Complementary Program for final approval.

The following directions will be undertaken to strengthen human resources capacity in energy conservation in Phase 2 of the ENCON Program:

7.3.2 Public Awareness Campaign Project, under NEPO’s Responsibility

During Phase 2 of the ENCON Program, the “Divide by Two (¸ 2)” campaign under the public awareness (PA) project will be in line with the implementation of the Voluntary and Complementary Programs. Public relations activities will focus on the progress and success of projects under these two Programs, as well as the outcomes of R&D projects on energy conservation and renewable energy utilization in Thailand. For public awareness campaigns in each year, a specific theme will be developed and activities will revolve around that topic so that PA initiatives will be moving in a more coherent direction. The themes will include the following: home construction designing and improvement, efficient use of household electrical appliances, energy conservation in transportation, recycling, and “Green Labeling” to accredit manufacturers/distributors of products and services, using energy efficient production process, transportation and waste management in compliance with energy conservation principles.

Information for each topic will derive from studies and research undertaken under the Voluntary Program so as to ensure that reliable and up-to-date information is disseminated. In addition, the general public will be encouraged to take greater participation in energy conservation efforts and projects. Campaigns on energy conservation tips that were implemented in Phase 1 will continue their course throughout Phase 2 of the ENCON Program to motivate and remind the general public to save energy in their daily activities.

The following strategies, both general and annually specific, will be used for the PA Project during the next five years to maintain the momentum of energy conservation behavior:

  1. General strategy
  1. Specific strategy

Fiscal year 2000 : Home construction designing and improvement
Fiscal year 2001 : Efficient use of household electrical appliances
Fiscal year 2001 : Energy conservation in the transportation sector
Fiscal year 2003 : Reuse and recycling
Fiscal year 2004 : “Green Labeling” for products contributed to energy conservation.

7.3.3 Management and Monitoring Project

Under this project, the main task of NEPO will be focused on increasing efficiency in screening, monitoring and evaluating projects proposals for financial assistance from the ENCON Fund under the Voluntary and Complementary Programs. Some of additional projects to be implemented during Phase 2 of the ENCON Program include the following: SPPs using renewable energy as fuel, non-designated factories and buildings, R&D and demonstration projects on energy-efficient transportation and recycling, human resources development to facilitate the implementation of both programs, as well as PA activities as mentioned above.

Furthermore, NEPO has the responsibility to co-ordinate with relevant agencies to enforce the minimum energy performance standards for electrical appliances currently under study and to set up laboratories to test such appliances. NEPO is also in charge of recommending policies with regard to energy conservation and promotion of renewable energy, such as labeling of energy efficient equipment, carpool, power purchase from SPPs using renewable energy, recycling, etc.

For the DEDP, the main task will be to administer 5,000 designated factories and buildings to comply with the Energy Conservation Promotion Act and to support investment in energy conservation measures, and to increase energy efficiency in government buildings. Besides, the capability of energy managers in designated facilities has to be developed to effectively perform their duties according to the Act.