Energy Conservation Promotion Fund

Section 8: THE ENERGY CONSERVATION PROGRAM DURING THE FISCAL PERIOD 2000-2004

The implementation strategies for Phase 2 of the Energy Conservation Program (Fiscal Period 2000-2004), as detailed in Section 7, are different from those for Phase 1 in the following aspects:

The budget for the Project on Non-Designated Factories and Buildings is shifted from the Compulsory Program to the Voluntary Program to be more practical and to speed up the materialization of energy conservation in small and medium-sized enterprises (SMEs). The total allocation from the ENCON Fund for this project implementation during 2000-2004 is 1,028 million baht.

The budget for Public Awareness Campaigns for projects under the DEDP’s responsibilities is shifted from the Complementary Program to the Compulsory Program to facilitate and correspond with the implementation under the Compulsory Program.

A new project is added to the Voluntary Program, i.e. the project on the “Promotion of Small Power Producers Using Renewable Energy,” in order to encourage SPPs to participate in the power supply industry by providing a financial subsidy from the ENCON Fund for the amount of power generated from renewable energy. A Request for Proposals will be announced to solicit proposals from those who are interested in generating power from renewable energy (generally biomass) in the form of bidding. Interested SPPs must propose their power prices for the portion that is in excess of the purchasing prices under the existing SPP Program. The SPP with the lowest offer, which is not over the specified rate, will receive a financial subsidy from the ENCON Fund. A pilot period is initially set for 5-7 years, targeting at 300 MW of electricity to be connected to the grid. An allocation of 2,060 million baht is provided for this project. Then, an evaluation will be made to determine appropriate implementation criteria, types of biomass, and location. The project implementation plan for the following period will be revised accordingly prior to submission to the ENCON Fund Committee for consideration and approval.

The implementation of the Project on Factories and Buildings under Designing or Construction will continue up to March 2000 only. However, assistance for government buildings currently under construction will continue. Evaluation of the project implementation will be carried out, and the outcome will be submitted to the ENCON Fund Committee for deliberation whether and how the implementation should go on after that.

Assistance from the ENCON Fund under the Renewable Energy and Rural Industry Project will not be limited only for small industries with energy consumption less than 300 kW and located outside the municipality areas.

Criteria, guidelines, conditions and priorities of the ENCON Program: Phase 2 (2000-2004) are mainly the same as those of Phase 1. However, there are some alterations in the guidelines on utilization of the ENCON Fund allocations for project implementation in order to create more effective use of the ENCON Fund. The alterations are detailed in Section 7 and can be briefed as follows:

Owners of existing designated factories and buildings will be provided with financial assistance both to develop a plan to improve energy efficiency and to invest in energy conservation. An energy manager will have to be appointed for each designated facility to prepare a report on the amount of energy production, consumption and conservation, including managing the installation or replacement of old equipment/appliances by energy-efficient ones. Such a report must be submitted to the DEDP. Within this five-year period, the DEDP has set a target of 875 designated factories and 1,074 designated buildings to be assisted in energy conservation investment under the ENCON Program.

Financial support will be given to promote energy conservation in 800 government buildings of which peak demand is greater than 100 kW and energy consumption is greater than 150,000 kWh/year, comprising 350 hospitals, 350 educational institutions and 100 government agencies.
In Phase 2 of the ENCON Program, government agencies who are owners of buildings in this category and who are ready to develop an energy conservation plan, improve designing plan, manage the work and invest in energy conservation in their buildings can submit a proposal for the ENCON Fund assistance to carry out the work by themselves.

There is an additional project plan to support and cooperate with government agencies and the private sector with an aim to achieve energy conservation in the transportation and agricultural sectors, as well as to promote reuse and recycling. Moreover, promotion will be made to help create and expand a market of energy-efficient products and services, for example, establishing energy efficiency standards and encouraging the “Green Labeling” – an energy conservation accrediting logo.

Support will be given to research and studies on reuse and recycling, as well as on proper solid waste management utilizing less energy and creating less impact on the environment.

The scope of policy studies has been extended to cover such topics as energy pricing; the energy supply industry and market reform, which will contribute to more efficient energy consumption; reuse and recycling; energy conservation in the industrial production; management on traffic and town-planning to reduce energy consumption in the transportation sector; energy and environmental policies; and taxation to promote energy conservation.

The topics of R&D work have been clearly set. Examples are:

R&D on appropriate and high-efficiency technology using biomass as fuel in power generation;

Research on the suitability of PV and R&D to increase PV efficiency as well as PV production efficiency;

Feasibility study on the utilization of hybrid power systems in remote areas or areas beyond the grid system;

Study, survey and improve energy efficiency in the transportation and agricultural sectors; and

Study on guidelines, measures and appropriate implementation strategies of reuse and recycling, including incentive measures to promote reuse and recycling in the commercial and service-providing businesses, and in communities. A pilot project will be launched to demonstrate to the general public the advantages and methods used.

The direction of human resources development is more specific than that in Phase 1, both in project details and in identifying target groups. More emphasis will be placed on encouraging Thai researchers to seriously put their research works into practice; supporting R&D on energy conservation in small and medium-sized industries; and training on energy conservation in the transportation sector to create understanding among concerned parties. Public awareness campaigns will be intensified to promote separation of municipal and industrial wastes to be reused or recycled. There will also be the establishment of energy and renewable energy laboratories to facilitate research and study in universities. In addition, courses on energy conservation will be promoted for architecture students. Support will be provided to expand and restructure the organization of the “Roong-arun” Project to become sustainable. Assistance is also available to finance energy conservation-related research initiated by folk wisdom that can be applied to the communities’ ways of life to help generate their income.

In Phase 2 of the ENCON Program, the ENCON Fund will provide 45 scholarships per year for undergraduate and post-graduate studies, both domestic and abroad. Domestic scholarships will cover bachelor’s degree, master’s degree and Ph.D. levels, totaling 30 scholarships per year. For oversee studies, 5 scholarships per year will be for the Ph.D. level and 10 scholarships per year will be for the master’s degree level. Moreover, non-profit organizations are also given opportunities to apply for scholarships from the ENCON Fund, and those who are granted scholarships do not have to work for the government upon their graduation.

The strategies of the public awareness campaigns under NEPO’s responsibility have been adjusted. Focus will be on dissemination of progress and achievement of various funded projects, under both the Voluntary Program and the Complementary Program. Also to be emphasized are research outcomes of energy conservation technologies and renewable energy utilization in Thailand; appraisal of manufacturers and service providers whose product manufacturing process, delivery and waste management are in line with energy conservation principles. Campaigns will continue to educate and create better understanding among the general public on energy situations, and necessity to conserve energy. Simple but subtle and practicable methods to conserve energy in daily life will be emphasized, using persuasive technique by illustrating the advantages that will be beneficial to individuals, the society, the environment and the country as a whole. The campaigns on energy conservation methods undertaken under the “Divide by Two” campaign will also continue to reinforce the public awareness that will eventually lead to behavioral changes in energy consumption.

In each year a specific theme will be chosen to reflect circumstances and priorities in that year. For example, in the beginning of the fiscal year 2000, the focus is on efficient use of fuel, by disseminating information on the oil prices which reflect the actual cost of energy. This is to make people understand that increasing domestic oil prices correspond to the volatility of the world oil prices and the variation of foreign exchange rates due to the devaluation of Thai baht. With the information given, people will be more conscious and realize that energy conservation and efficient use of energy will help reduce both investment in energy procurement and fuel costs of the country as well as save the foreign currency while the country is facing with economic problems.

At a meeting of the ENCON Fund Committee, Ref. 3/2542 (No. 18) of 21 September 1999, the ENCON Program, including guidelines, criteria, conditions and priorities of the ENCON Fund expenditures, during the fiscal period 2000-2004 was approved by the ENCON Fund Committee. The implementation plan of the ENCON Program: Phase 2 was submitted to the National Energy Policy Council at the meeting Ref. 4/2542 (No. 70) on 4 October 1999 for consideration. The plan was approved subject to improvement according to the comments of the NEPC meeting, especially the addition of energy conservation measures in the transportation and agricultural sectors.

In this manual on the implementation strategies of the ENCON Program, and guidelines, criteria, conditions and priorities of the ENCON Fund expenditures during the fiscal period 2000-2004, the strategies and the gist of the plan have been adjusted to be in line with the NEPC’s comments. The parts which have been improved/altered are shown in italics.

8.1 IMPLEMENTATION STRATEGIES AND GUIDELINES, CRITERIA, CONDITIONS AND PRIORITIES OF THE ENCON FUND EXPENDITURES DURING THE FISCAL PERIOD 2000-2004

1. THE ENCON PROGRAM AND GUIDELINES ON PROVISION OF THE ENCON FUND ASSISTANCE

Provision of financial assistance from the ENCON Fund is divided into three main sub-programs and 12 major projects, which are classified according to the nature of the work as shown in the following:

THE ENCON PROGRAM

COMPULSORY VOLUNTARY COMPLEMENTARY

Government Buildings

Existing Designated Factories and Buildings

Factories and Buildings under Designing or Construction

Public Awareness Campaign

Promotion of Renewable Energy Utilization

Promotion of Small Power Producers Using Renewable Energy

Industrial Liaison

Research and Development

Existing Non-Designated Factories and Buildings

Human Resources Development

Public Awareness Campaign

Management and Monitoring

Department of Energy Development and Promotion National Energy Policy Office National Energy Policy Office

1.1 COMPULSORY PROGRAM

This program deals with the implementation of compulsory energy conservation, as stipulated by the Energy Conservation Promotion Act (1992) and relevant legislation, in designated factories and buildings as well as energy conservation in government buildings wishing to implement energy conservation measures.

Eligible applicants are designated facilities or government buildings with an installed electrical capacity of more than 100 kW or its equivalent.

Criteria on the ENCON Fund assistance Non-binding grants are available to finance the expenses for the preliminary energy audits. Financial assistance will be provided for developing a comprehensive ENCON plan, and interest subsidies are provided for the investment cost for the actual energy conservation improvement according to the plan developed.

The main executing agency of this program is the Department of Energy Development and Promotion (DEDP). Eligible applicants for the ENCON Fund assistance shall submit their proposals to the DEDP, who will execute a contract with approved applicants and will follow up the implementation to ensure the contract conditions are complied with.

The Compulsory Program comprises four major projects as follows:

1.1.1 Government Building Project

Objective

To promote energy conservation in government buildings which are not designated by laws so as to be examples in energy conservation for the general public and to save the government budget for energy consumption.

Directions of the ENCON Fund support

The DEDP will contact the government agencies who are owners of the buildings that have a peak demand greater than 100 kW, except buildings under the designated category (which will receive assistance under a separate project on Existing Designated Factories and Buildings), to undertake an energy audit and then energy conservation improvement in such buildings. Consideration for assistance will be given to buildings of which the real economic internal rate of return (EIRR) is 9% or over. Exception is for the lighting system which will be improved to suit with the working conditions although the EIRR is less than 9%.

For buildings which are currently under designing or construction, the ENCON Fund will finance the expenses for improving the design and will fund the additional costs incurred. However, the project will accept applications for the ENCON Fund assistance until the end of March 2000. Then the project will be evaluated to improve further implementation.

Implementing Agency:

The DEDP.

1.1.2 Project on Existing Designated Factories and Buildings

Objective

To provide financial support to owners of existing designated factories and buildings for the development of a comprehensive ENCON plan and the investment to improve energy efficiency according to the plan as approved by the DEDP.

Directions of the ENCON Fund support

To enable designated factories and buildings to comply with the laws, designated facilities in the private sector and designated factories owned by the government or state-enterprises may apply for financial assistance from the ENCON Fund by sending their applications to the DEDP. Following assistance is available:

A grant is available to finance the expenses for the preliminary energy audit to be used in further planning on energy conservation of the facilities, not exceeding 100,000 baht per facility.

Financial assistance will be available to cover up to 50% of the cost of the comprehensive ENCON plan development according to Section 11 (4) of the ENCON Act, but not exceeding 500,000 baht per facility.

Interest subsidies are available up to 60% of the investment cost for energy conservation improvement but not exceeding 10 million baht per measure stipulated in the facility ENCON plan, including engineering design, so that the FIRR of each measure of the plan will increase to be equal to the Minimum Retail Rate (MRR) + 2%.

For designated buildings owned by the government or state-enterprises, the ENCON Fund will provide assistance to cover all costs for the preliminary energy audit, development of a comprehensive ENCON plan and the investment in ENCON improvement.

Implementing Agency:

The DEDP is responsible for this project. The owner of such a facility will have to submit a proposal to the DEDP for financial assistance from the ENCON Fund. The DEDP will consider and approve the grant for the preliminary audit and financial assistance for the development of the comprehensive ENCON plan. However, prior to granting interest subsidies for the energy conservation investment, the DEDP will have to assess and screen the proposal for further submission to the ENCON Fund Committee for approval according to the criteria set. Upon approval, the DEDP will execute a contract with the owner of the designated facility and will follow up to ensure actions are taken accordingly.

1.1.3 Project on Factories and Buildings under Designing or Construction

Objective

To provide financial support for the designing improvement to owners of factories or buildings which, after the construction is completed, are expected to consume energy at a level considered as designated by the laws, and hence will become designated facilities.

Directions of the ENCON Fund support

Owners of factories and buildings under designing or construction that would become “designated” are eligible for the following financial support:

A non-binding grant of no more than 2,000,000 baht per facility will be given for incremental engineering cost for modification of the facility design or of production process which will ensure greater energy efficiency than the minimum standards levels specified in the Ministerial Regulations. There is a condition that the former design must meet energy efficiency standards specified by law. The ENCON Fund will offer a grant to cover only the incremental cost related to the design improvement.

Financial assistance will be available for the incremental investment in line with the improved part of design. The same criteria as those applied to the existing designated facilities will be followed.

This project will be financed until the end of March 2000. After that the project evaluation will be made and the outcome will be submitted to the ENCON Fund Committee for consideration and decision on further implementation.

Implementing Agency

The DEDP is responsible for this project and will consider proposals submitted by facilities’ owners for approval of a grant only for the design improvement-related costs. With regard to the financial assistance for the incremental investment, the same criteria as those applied to the existing designated facilities will be followed, i.e. the DEDP will screen the proposals for further submission to the ENCON Fund Committee and, when approved, will execute a contract with the facility owners.

1.1.4 Public Awareness Campaign Project, under the DEDP’s Responsibility

Objective

To disseminate information to persons directly concerned with the ENCON Program, comprising facility owners, persons responsible for energy consumption of the facilities, and manufacturers of equipment, machinery and materials contributing to energy conservation. The campaigns will be on the information about the ENCON Program and the government financial assistance in implementing energy conservation measures under the Compulsory Program.

The ENCON Fund Committee will provide an allocation from the ENCON Fund for this project implementation. Concerned staff will be sent out to all designated facilities to inform the owners of their tasks as specified in the Ministerial Regulations as well as the criteria on granting the ENCON Fund assistance to promote energy conservation. The DEDP will have to submit a proposal and related PA expenses to the ENCON Fund Committee for approval on a case-by-case basis.

Implementing Agency

The DEDP will be the focal agency for proposals on public awareness campaigns and will screen the proposals prior to submission to the ENCON Fund Committee for approval on an individual basis.

1.2 VOLUNTARY PROGRAM

This program provides financial support to and cooperates with government agencies and the private sector to achieve the following objectives:

To promote efficient use of energy in the agricultural sector, small industries and existing non-designated factories and buildings, the transportation sector as well as in the reuse and recycling;

To create a sustainable market for products and services contributing to energy conservation in factories/buildings, in the transportation sector, and reuse and recycling; and

To promote studies, research and development on energy technology and energy conservation, and to apply the study/R&D outcomes to factories/buildings as well as households.

Accountable Organizations

Priority will be given to government agencies, academic institutions, or non-profit organizations to correspond with Section 25 of the ENCON Act.

A funded agency will be called “Project Owner” responsible for the project implementation. The project may have several “Project Participants” who will undertake energy conservation-related activities under the project. These “Project Participants” will receive both financial and technical assistance from the “Project Owner.” The ENCON Fund assistance will be provided to “Project Participants” through the Project Owner.

Directions of the ENCON Fund support “Project Owner” will be provided with two types of financial support for the project implementation under the Voluntary Program:

Financial support for the incremental operational cost for managing and administration; and

Financial assistance, through the Project Owner, for Project Participants who wish to invest in energy conserving equipment or use technology disseminated by the Project Owner. For example, under the Promotion of Renewable Energy Utilization Project, the Project Owner may require financial assistance to be provided to factory owners for improvement of the facilities. In this regard, financial assistance will be in line with the criteria set by the ENCON Fund Committee.

If there are requests from small entrepreneurs who wish to implement energy conservation measures or increase the use of renewable energy or improve energy consumption in facilities which are not designated, and if such requests are deemed appropriate by the ENCON Fund Committee, NEPO may help identify an agency which can liaise with other small entrepreneurs with similar requirements and a person who can manage the project implementation to be the Project Owner.

Implementing Agency of the Voluntary Program is NEPO. NEPO will screen proposals for the ENCON Fund assistance from eligible organizations as defined by the ENCON Fund Committee prior to submission to the Committee for consideration and approval on an individual basis. If a proposal is approved, NEPO will execute a contract with the project owner who is neither a government agency nor state-enterprise and will reimburse an allocation from the ENCON Fund for the project owner to carry out the project. NEPO is also responsible for the project implementation follow-ups.

The Voluntary Program consists of five major projects as follows:

Promotion of Renewable Energy Utilization Project

Promotion of Small Power Producers Using Renewable Energy Project

Industrial Liaison Project

Research and Development Project

Energy Conservation in Non-Designated Factories and Buildings Project

1.2.1 Promotion of Renewable Energy Utilization Project

Objective

To promote utilization of renewable energy, which has less impact on the environment, and to assist in energy conservation in rural industries, both in the agricultural and industrial sectors. Emphasis will be placed on projects related with introduction, dissemination and transfer of renewable energy technologies, projects on energy efficiency improvement using proven technologies, and projects utilizing agricultural processing residues (e.g. bagasse, rice husks and municipal waste) or agricultural wastes (e.g. animal manure) to produce energy.

Directions of the ENCON Fund support

The ENCON Fund will provide financial assistance for the following:

Expenses for preparation of a comprehensive project plan once the conceptual plan of the project has already been approved by the ENCON Fund Committee.

Expenses for the project administration of the Project Owner.

Interest subsidies for investments of “Project Participants” according to the criteria and budget set by the ENCON Fund Committee.

If there is any renewable energy technology or any specific technology that is considered appropriate by the ENCON Fund Committee to be disseminated, but no relevant project proposal is received, the ENCON Fund Committee may have a feasibility study undertaken and publicize the project to select a potential project owner.

Implementing Agency

NEPO is the implementing agency of this project. Potential project owners shall submit their proposals to NEPO for the ENCON Fund assistance. NEPO will screen and evaluate the proposals before submission to the ENCON Fund Committee for further consideration. In addition, NEPO is responsible for the project implementation follow-ups.

1.2.2 Promotion of Small Power Producers Using Renewable Energy Project

Objective

To promote utilization of renewable energy in power generation, enhancing the existing policy on power purchase from Small Power Producers (SPPs) using renewable energy as fuel. Renewable energy here includes solar, wind, biomass, biogas, municipal wastes, agricultural residues or industrial or agro-industrial residues.

Directions of the ENCON Fund support

The ENCON Fund will provide assistance in the form of pricing subsidies per unit of electricity (kWh) generated by renewable energy at a rate to be specified by the ENCON Fund Committee on an individual basis.

Implementing Agency

NEPO is responsible for this project. The Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority, and the Provincial Electricity Authority can be Project Owners and submit proposals for pricing subsidies to NEPO. NEPO will then screen and evaluate the proposals before submission to the ENCON Fund Committee for further consideration. In addition, NEPO is responsible for the project implementation follow-ups.

1.2.3 Industrial Liaison Project

Objective

This project aims at disseminating energy conservation technologies, creating a market for high energy-efficiency equipment, appliance as well as materials contributing to energy conservation. This will indirectly assist manufacturers and distributors of such equipment and appliances. Emphasis will be placed on technologies that have not been well known in Thailand.

Directions of the ENCON Fund support

Financial assistance can be classified into six categories:

Support for energy conservation–related demonstration centers and information centers.

Support for energy conservation–related demonstration projects in order to disseminate high energy-efficiency technologies, equipment and appliances, including materials contributing to energy conservation in factories, buildings and in the transportation sector, such as energy-efficient buildings and hybrid-fuelled engines.

Support for the expansion of market for high energy-efficient equipment and appliances, including materials contributing to energy conservation by financing expenses for such expenditures as follows:

Study on the market demand and development of strategies for market expansion;

Provision of financial support to manufacturers/distributors of such equipment and appliances to bring down the product prices which will become more attractive to consumers;

Provision of subsidies to consumers of high-efficiency products to encourage more utilization of such products;

Dissemination and pubic relations work on such products and materials;

Implementation of the energy-efficiency labeling program;

Establishment of energy-efficiency standards; and

Implementation in support of “Green Labeling” to accredit the energy-efficiency quality.

Support for demonstration projects on reuse and recycling as well as appropriate municipal solid waste management, using less energy and creating less impact on the environment.

Support for the Demand Side Management Program, for example, the load leveling.

Promotion of clean energy utilization as fuel in the transportation sector instead of petroleum products.

Implementing Agency

NEPO is the implementing agency of this project. Potential project owners shall submit their proposals to NEPO for the ENCON Fund assistance. NEPO will screen and evaluate the proposals before submitting to the ENCON Fund Committee for further consideration. In addition, NEPO is responsible for the project implementation follow-ups.

1.2.4 Research and Development Project

Objective

To finance expenditures for studies, research and development of energy conservation technologies, including small-scaled demonstration projects, as follows:

Policy studies on, for example, energy prices, energy market and industry restructuring which will lead to more efficient use of energy, reuse and recycling, study on reduction of energy consumption in the industrial and agricultural sectors, traffic and city-planning management to reduce energy consumption in the transportation sector, policies on energy and environment, policy on taxation to encourage energy conservation, energy conservation potentials in various activities, as well as appropriate energy conservation technologies and strategies for applying such technologies to the manufacturing process.

R&D on energy-efficient and renewable energy technologies, for example, R&D on process that increase energy efficiency and R&D on energy-efficient equipment such as energy-efficient firing kilns, baking kilns, and dryers using solar energy and cogeneration, improvement and development of agricultural machinery and equipment efficiency including research on high-efficiency engine prototypes.

Transfer and adaptation of proven technologies in other countries to suit Thailand conditions.

Transfer and dissemination of research outcomes through small-scaled demonstration projects, workshops, seminars, information publications and brochures, etc.

Directions of the ENCON Fund support

In order to be in line with the objectives of Sections 25 (3) and 26 of the ENCON Act, eligible applicants for the ENCON Fund assistance must be government agencies, state-enterprises, academic institutions or non-profit organizations. These agencies (“Project Owners”) can submit their conceptual plans to NEPO for assistance from the ENCON Fund.

Examples of research works

Biomass Energy

R&D on appropriate and high-efficiency technology using biomass as fuel in power generation

R&D on technology generating biogas from industrial wastewater

Study and demonstration of utilization of industrial wastes as fuel in thermal/power generation

R&D on utilization of agricultural waste as an energy source

R&D on utilization of municipal waste as an energy source

Study and research on energy crop, for example, short rotation plants and oil bearing plants

R&D biomass technology using direct combustion

R&D on briquetting machines to produce Green Fuel Briquette

R&D on biogas-fueled equipment

Solar Energy

Research on the suitability of PV and R&D to increase of PV efficiency as well as PV production efficiency

Feasibility study on the utilization of hybrid power systems in remote areas or areas beyond the grid system

Energy Consumption Efficiency

R&D on molten carbonate fuel cell

R&D on building envelope and design

Energy Conservation in the Transportation Sector

Study on the pricing systems of each mode of transportation for future application.

Determination on domestic transportation charges to reflect the actual economic costs, and collection of taxes and tolls corresponding with environmental and public health-related costs.

Study, survey and develop a data base of domestic transportation systems as well as the city planning of Bangkok and major cities, including their vicinities, to systematically correspond with each other.

Study, survey and improve efficiency of transportation and services, and routes for bus-lanes, HOV-lanes, and bicycle-lanes to be in line with the town plan and the changing need of the general public.

Study, survey and develop a system on information of transportation agencies.

Creation of systematic linkages of transportation data bases among various agencies to efficiently share information.

Reuse and Recycling

Study on guidelines, measures and appropriate implementation strategies of reuse and recycle, including incentive measures to promote reuse and recycle in the industrial sector, in businesses and services, and in communities. A pilot project will be launched to demonstrate to the public the advantages and methods used in order to stimulate wider practice.

Energy Conservation in the Agricultural Sector

Study on the structure of primary commercial energy and traditional energy consumption in the agricultural sector, including fisheries, and on increasing production efficiency.

Improvement of efficiency of agricultural machinery and engines, such as tractors, motored-ploughs, water-pumps, and herbicide injectors, etc.

Others

Study on energy prices, and the energy supply industry and energy market restructuring.

Study on policies on energy and environment to identify which activities or sectors account for high energy consumption in order to determine the approaches by which the ENCON Fund can directly get involved to help or stimulate energy conservation and efficient use of energy.

NEPO may periodically announce the fields of studies and research that are encouraged by the ENCON Fund in order to select appropriate project owners to be financed. At the same time, those who are interested in R&D on the fields other than those announced may submit their proposals, which may be in the form of the conceptual plans of the projects, to NEPO.

Implementing Agency

NEPO is the implementing agency of this project. Interested agencies shall submit their proposals to NEPO for the ENCON Fund assistance. NEPO will screen and evaluate the proposals before submission to the ENCON Fund Committee for further consideration and approval. In addition, NEPO is responsible for the project implementation follow-ups.

1.2.5 Project on Existing Non-Designated Factories and Buildings

Objective

To provide financial assistance to owners of existing non-designated factories and buildings, wishing to implement energy conservation measures in their facilities.

Directions of the ENCON Fund support

Assistance under this project will be in the form of financial support to undertake an energy audit, develop a comprehensive energy conservation plan, and invest in energy conservation implementation according to the plan. The financial support may be in proportion to the investment capital for equipment, materials and machinery or in the form of soft-loans.

Implementing Agency

NEPO is responsible for the monitoring and evaluation of the activities undertaken.

Examples of energy conservation technologies

Electronic ballast

High-efficiency motor

Variable speed motor control

Excess air control for combustion chamber

Air-to-air heat exchanger

Process heat exchanger

Thermal insulation in piping and surface

High-efficiency electric lamp fixtures

High-efficiency split-typed air conditioners (EER ³ 10.6)

Demand controller

Voltage regulator

Absorption chiller

Lighting controller

Power Factor improvement

Utilization of “Value Engineering” management technique

1.3 COMPLEMENTARY PROGRAM

The Complementary Program oversees the planning, monitoring, and evaluation of human resources development and public awareness campaigns so as to achieve the most efficient outcomes of the Energy Conservation Program.

Expenditures to be funded by the ENCON Fund include:

Expenses for human resources development in the public and private sectors to enable effective implementation according to the ENCON Program.

Expenses for the public relations work to stimulate the general public to understand the importance of energy conservation and its impact on the economics and environment, to provide information on laws and the ENCON Fund Committee’s announcements to those who are directly concerned with the ENCON Program, criteria and guidelines on energy conservation funding, and public relations activities on the work of energy conservation projects.

Expenditures on the management costs of agencies, including office premises, equipment, staff as well as engagement of consultants to assist in the planning, project improvement, assessment, monitoring and evaluation.

Eligible Organizations: NEPO, DEDP, and the Comptroller General’s Department (CGD), who are by law in charge of the planning and monitoring of the ENCON Program; educational institutes; other government agencies; and non-profit organizations dealing with energy conservation.

Types of Support: Non-binding grants for the expenditures of the above-mentioned agencies in relation to the implementation of the ENCON Program.

Implementing Agency: NEPO. Interested agencies can submit project proposals for funding to NEPO who will arrange for final approval by the ENCON Fund Committee.

The Complementary Program consists of three main projects as follows:

1.3.1 Human Resources Development Project

Objective

To develop human resources to be able to effectively handle the implementation of the ENCON Program.

Support for this project is in the form of non-binding grants for expenses on human resources development in both the public and private sectors according to the guidelines and procedures stated in the Human Resources Development Master Plan that has been approved by the ENCON Fund Committee.

Directions of the ENCON Fund Support

Human resources development under the ENCON Program includes a variety of activities as follows:

Development of curriculum, teaching materials, educational activities, etc. related to energy conservation and environment in primary and secondary school levels.

Promotion of energy conservation courses at the university level by supporting the establishment of a graduate school in energy to strengthen teaching and learning activities in energy-related areas. Also, development of curriculum on energy conservation should be promoted in the Faculty of Architecture and the Faculty of Engineering in both public and private universities, teachers’ colleges, vocational colleges and other educational institutes.

Seminar and training for owners/energy managers of designated and non-designated factories and buildings, energy consultants, and technicians, etc. by developing a long-term curriculum and training plan on energy conservation issues as well as setting up a Training Centre in energy conservation and energy management.

Support for demonstration and dissemination of energy conservation technologies in buildings and factories including training for engineers, architects, and relevant target groups on such technologies and on choosing construction materials and designing for energy conservation.

Training of government officials to increase their capability to carry out their work as assigned by the Act. The training will include, for example, the assessment, monitoring and evaluation of energy conservation projects, training on English language and other skills, such as computer, to increase their working efficiency.

Activities to promote energy conservation awareness in various agencies.

R&D grants for university students, in both public and private universities, to carry out research on energy technology, energy conservation, renewable energy, etc. to create qualified personnel in various energy branches to work in the energy sector in the future.

Grants for university students and researchers to carry out research on energy technology, energy conservation, renewable energy, etc. related to the industrial sector so as to develop practical research work to meet the demand in the industry to improve production process and energy consumption in the industry.

Scholarships for government officials and students wishing to take a career path in energy to further their study either in Thailand or abroad.

Production of printed matters disseminating energy information.

Seminars and meetings on energy conservation and renewable energy issues.

Campaigns, public awareness building and information dissemination for agencies and the general public so that they would recognize the impact of recycling on energy saving; human resources development to handle recycling projects; and initiatives to materialize projects on recycling in communities and in the industrial sector.

Human resources development for agencies with direct responsibilities to handle the project on Energy Conservation in the Transportation Sector including other related agencies, and the production of materials and handbooks to educate people on energy efficient transportation.

Government agencies interested in implementing activities as described above can submit project proposals to NEPO. Human resources development for the private sector will be implemented in collaboration with government agencies and educational institutes. In particular, assistance for energy manager training, overseen by the DEDP, will be considered according to the guidelines as stated in the Human Resources Development Master Plan.

Implementing Agency

NEPO is responsible for this project. NEPO has to review project proposals prior to submission for approval by the ENCON Fund Committee and follow up on progress of the project implementation.

1.3.2 Public Awareness Campaign Project, under NEPO’s Responsibility

Objectives

This PA project aims at creating the general public’s consciousness in energy conservation and promoting their participation in the ENCON Program. The general public will be informed of the actual economic, social and environmental costs relating to energy consumption, and benefits to be gained from energy conservation. The government efforts to promote efficient use of energy will also be publicized. Activities will focus on campaigns via such media as TV, radio and printed matters.

Directions of the ENCON Fund Support

The ENCON Fund Committee will provide an appropriation from the ENCON Fund for the implementation of PA campaigns to promote energy consumption efficiency among the general public through various media, in order to increase efficiency in their energy consumption habits.

Implementing Agency

NEPO is responsible for reviewing project proposals before submission to the ENCON Fund Committee for approval on a case-by-case basis.

1.3.3 Management and Monitoring Project

Objectives

This project is to oversee the disbursement from the ENCON Fund for the expenditures of NEPO, DEDP and CGD in implementing the ENCON Program as assigned by the Act, including additional expenses, not covered by the annual fiscal budget of these agencies.

Such expenditures include hiring of consultants for planning of energy conservation projects, developing the MIS program, monitoring and evaluating proposed projects, expenses for renting office spaces, fees and equipment necessary to run the ENCON Program.

Directions of the ENCON Fund Support

NEPO, DEDP, and CGD shall submit requests for funding for the management and monitoring expenditures through NEPO who will review and arrange for approval from the ENCON Fund Committee on an annual basis, based on the government’s fiscal year.

Implementing Agency

NEPO is responsible for this project.

8.2 CRITERIA, CONDITIONS, AND PROCEDURES OF PROVISION OF THE ENCON FUND ASSISTANCE

Criteria, conditions and procedures of provision of the ENCON Fund assistance for each project under the ENCON Program are as follows:

1. GOVERNMENT BUILDING PROJECT

1.1 Eligible Applicants

Government agencies or state-enterprises who are owners of non-designated buildings with energy consumption of more than 100 kW as well as government buildings under designing or construction.

1.2 Types of Expenses to Be Funded and the Funding Criteria

The ENCON Fund assistance allocated for this project is in line with Section 25 (1) of the Energy Conservation Promotion Act. The assistance will be in the form of grants for the study, development of a comprehensive ENCON plan, management and investment in energy conservation according to the plan for existing buildings, and for incremental cost of designing improvement for those under designing. Each energy conservation measure implemented must yield the real economic internal rate of return (EIRR) at 9% or over. Exception is for the lighting system which will be improved to suit with the working conditions although the EIRR is less than 9%.

1.3 Funding Methods and Procedures

The implementation procedures under this project are not complicated since the DEDP will contact the government agencies who are owners of such buildings to provide all energy conservation improvement services or to provide financial support to those agencies who are ready to undertake the improvement by themselves.

The DEDP will develop an action plan, details of the required budget and the ENCON Fund expenditure plan to be submitted to the ENCON Fund Committee for approval of the expenses related to the energy audit, planning, management and the budget for the energy conservation investment. When the ENCON Fund Committee’s approval is received, the DEDP will commence the energy audit in order to develop the comprehensive energy conservation plan for each individual building by reimbursing the expenditures from the ENCON Fund. For the investment assistance, the DEDP will present the outcome of the audit to the ENCON Fund Committee for approval of the budget for the energy conservation investment in each government building on a case-by-case basis.

In addition, the DEDP will be charged with the screening of requests from government agencies who want to undertake the energy improvement by themselves and submit the estimated budget to the ENCON Fund Committee for approval. The DEDP will also have to supervise to ensure that the implementation is in line with the specified objectives and targets.

In carrying out the implementation, the DEDP has to take into account the following comments of the Sub-Committee on the Energy Conservation Program Implementation Evaluation:

The objective of the Government Building Project is to conserve energy in government buildings. If, according to the evaluation, only 37% of the old, low energy-efficient air-conditioners were reinstalled elsewhere in the same buildings (with an assumption that the new ones are 37% more energy-efficient than the old ones), 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 demolishing the removed old air-conditioners, there must be a preventive measure not to create impact on the environment. A university or a Rajamangala Institute of Technology may be assigned to carry out the demolition. The number of demolished air-conditioners must be checked against the number of air-conditioners replaced to ensure that all replaced ones are properly demolished.

To measure the project achievement, the amount of energy that can be reduced must be the primary indicator, not the number of buildings participating in the project or the number of the appliances replaced, or the investment budget used.

Owners of the buildings should be encouraged to take a greater role in the implementation, by:

supporting those owners who are ready or willing to carry out energy consumption improvement to do it by themselves, with financial assistance from the ENCON Fund; and

providing training on proper utilization of energy in buildings to create energy conservation consciousness since the users of the buildings play a key role in the achievement of efficient energy consumption.

The number of IA must be increased. Access must be opened for potential organizations to undertake the implementation by giving them opportunities to offer competitive prices and service quality for the DEDP’s consideration. In the contract between the DEDP and an IA, it must be clearly stipulated that “no stakeholders shall be hired to jointly undertake the implementation” and the DEDP must check whether the IA “hires any stakeholder to jointly undertake the implementation”. The increase of environmental consultants of the Ministry of Science, Technology and Environment should be used as a guideline on increasing the number of IA.

Request the Bureau of the Budget to seriously support energy conservation measures by providing government agencies with a budget for the air-conditioning system maintenance and encouraging the replacement by high-efficiency air-conditioners.

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 of this, it will be easy for the owners of the buildings where energy conservation measures have been implemented to find high-efficient appliances to replace the broken ones in the future.

The study outcome of a pilot project on the Energy Services Company (ESCO) of the Electricity Generating Authority of Thailand should be taken into consideration in order to determine feasibility to have ESCOs participate in the implementation of the Government Building Project.

1.4 Conditions

The agencies responsible for the government buildings participating in this project will have to cooperate with the DEDP in carrying out the energy audit and energy conservation improvement. Staff of the concerned agencies will have to attend training on the maintenance of equipment and building materials as well as the most efficient energy utilization in the buildings.

2. PROJECT ON EXISTING DESIGNATED FACTORIES AND BUILDINGS

2.1 Eligible Applicants

The private sector, government agencies, and state-enterprises who are owners of designated factories and buildings.

2.2 Types of Expenses to Be Funded

The ENCON Fund assistance allocated for this project is in line with Section 25 (1) and Section 25 (2) of the ENCON Act, divided into the following:

A grant for the preparation of the preliminary energy audit and preliminary energy conservation measures of a designated factory or building. The information will be used in the development of a comprehensive ENCON plan of that facility.

The preliminary energy audit must be in accordance with details prescribed in the Ministerial Regulations issued in accordance with Section 11(4) and 11(5) of the ENCON Act, which include:

Basic information on the factory/building;

Information on energy production, consumption, and conservation;

Evaluation of the past energy conservation measures;

Assessment of the energy conservation potential of various measures;

Evaluation of the problems and barriers encountered; and

Suggestions on energy conservation measures which should be implemented and are cost-effective.

Financial assistance for the formulation of a comprehensive ENCON plan of the facility, as prescribed in Section 11(4) of the ENCON Act. The facility ENCON plan must incorporate details stipulated in the Ministerial Regulations issued in accordance with Section 11(4) and 11(5) of the 1992 Act, which are divided into two parts:

Detailed energy audit

Energy conservation targets and plan

The essence of the detailed energy audit will have to cover the following aspects:

Basic information on the factory/building;

Information on energy consumption of the factory/building;

Evaluation of the past energy conservation measures;

Details on energy consumption of machinery and equipment used;

Assessment of the energy conservation potential of various measures;

Other measures that should be implemented;

Evaluation of the problems and barriers encountered;

Appraisal of personnel qualifications and human resources development; and

Suggestions on energy conservation potential and measures which should be implemented. There may be many measures in each plan to improve energy conservation of the facility, for example, a measure on the air-conditioning system efficiency improvement and another on the improvement of the overall thermal transfer value (OTTV) of the facility.

With regard to the facility ENCON plan, the essence will have to consist of the following:

The targets of the ENCON plan in order to achieve the level specified by the Ministerial Regulations, and an implementation plan during the next four years, including the targets of any project other than those specified by the Ministerial Regulations, and its four-year implementation plan.

Energy consumption level in comparison with the level prescribed in the relevant Ministerial Regulations;

The quantitative target of the energy conservation improvement;

The facility energy conservation plan;

Detailed implementation plan to achieve the targets set;

Expected energy conservation potential;

Financial analysis of each measure, showing the calculation of both the Financial Internal Rate of Return (FIRR) and the Economic Internal Rate of Return (EIRR), and cash-flow analysis, with and without the ENCON Fund assistance.

Application Form for financial assistance from the ENCON Fund for each individual measure.

Financial assistance in the form of Interest Subsidies for investments in energy conservation measures, including the formulation of the engineering design, according to the facility ENCON plan as approved by the DEDP. The plan may comprise several measures contributing to energy conservation in the facility. The appropriateness of each measure will be taken into consideration to finance the investment cost. The financial assistance may be granted for some or all measures in the presented ENCON plan. Moreover, the ENCON Fund assistance will be provided only for the incremental investment cost with a view to energy conservation. That is, the Project Owner may submit a facility ENCON plan comprising several measures on the increase of production efficiency and on energy conservation at the same time. However, the criteria on the investment rate of return calculation will base on the amount of energy saved, excluding the increase of the production.

2.3 Funding Criteria and Financial Incentives

1) A grant to finance the expenses for the preparation of the preliminary energy audit, but not exceeding 100,000 baht per facility. The reimbursement of this portion is to be in line with the procedures prescribed by the ENCON Fund Committee.

2) Financial assistance to cover up to 50% of the cost of the comprehensive ENCON plan development, but not exceeding 500,000 baht per facility. The reimbursement of this portion is to be in line with the procedures prescribed by the ENCON Fund Committee.

3) Interest subsidies for the investment cost of each measure of the facility ENCON plan as approved by the DEDP, under the following criteria:

Each energy conservation measure must yield a higher Real Economic Internal Rate of Return (EIRR) than the level specified by the ENCON Fund Committee. At the initial stage, the minimum rate is set at 9%.

The ENCON Fund will provide a subsidy to raise the Financial Internal Rate of Return (FIRR) of each measure to be equal to the average Minimum Retail Rate (MRR) of Krung Thai Bank (in the past three months) plus 2%. However, the subsidy will not exceed the maximum rate for each measure as shown in Table 1, except for the case where the ENCON Fund Committee has specially granted an exemption of the maximum amount.

Table 1
Maximum Financial Subsidy for Each ENCON Measure

Size of Investment (million baht) Maximum Subsidy (million baht) Maximum Percentage of Investment Subsidy

0 up to 2 1.20 60%

More than 2 up to 5 2.55 45%

More than 5 up to 10 4.15 32%

More than 10 up to 20 6.35 22%

More than 20 up to 50 9.95 12%

More than 50 10.00 -

No subsidy will be granted for any energy conservation measure that yields the FIRR greater than the MRR of Krung Thai Bank +2%.

The payment of interest subsidies shall be made in installments as follows:

Installment 1 Upon delivery of the machinery, equipment and energy saving materials at the facility. The DEDP will inspect the delivery and will request the Comptroller-General’s Department (CGD) to release 30% of the total amount of subsidy as approved by the ENCON Fund Committee.

Installment 2 After completion of installation and successful start-up, and the DEDP’s inspection of the results of the facility in operation, the DEDP will request the CGD to release 40% of the approved amount of subsidy.

Installment 3 After completion of the commissioning period of the machines, equipment and/or materials and it is proven to produce the anticipated energy savings, the DEDP will reimburse the remaining 30% of the subsidy to the facility owner.

The ENCON Fund will not provide financial assistance for the expenses on the applicant’s execution of a loan agreement with his bank.

2.4 Conditions

The preliminary energy audit and the facility ENCON plan formulation must be done by a consultant on the DEDP’s list of approved consultants who are entitled to carry out energy audits in designated factories and buildings.

The facility owner having been granted the ENCON Fund assistance will have to execute a contract with the DEDP and will have to undertake energy conservation measures to achieve the targets as set in the facility ENCON plan. The contract will include the following:

Detailed ENCON plan of the facility and the targeted savings;

Timeframe for the investment and the commissioning date;

Investment cost and the amount to be financed by the ENCON Fund, including the payment schedule;

The project management system and data filing system; and

Details of the audit/inspection and penalty clauses in case the facility owner does not comply with the contract.

The facility owner who receives the ENCON Fund assistance will have to secure adequate financial sources to finance the remaining portion of the investment for the measures stipulated in the facility ENCON plan. A loan agreement with a financial institution or other evidences showing the financial status of the owner shall be presented to the DEDP, certifying that the owner can successfully comply with the ENCON plan.

2.5 Funding Methods and Procedures

Step 1 After the ENCON Fund Committee has issued the ENCON Fund Committee Announcements concerning the provision of the ENCON Fund assistance to designated factories and buildings, the DEDP will present the annual budget together with an action plan to implement this project to the ENCON Fund Committee for consideration. The annual budget will be divided into two parts, i.e. Part 1 will be the expenses for financing the preparation of the preliminary audit and the formulation of the facility ENCON plan; Part 2 will be the expenses for investment subsidy in energy conservation. For Part 1 budget, after approval by the ENCON Fund Committee, the DEDP will monitor further allocations to designated facilities. For Part 2 budget, the ENCON Fund Committee will approve the total budget amount, but the actual payments will have to be made after the projects have been approved by the ENCON Fund Committee on a case-by-case basis. After approval by the ENCON Fund Committee, NEPO will inform the CGD to transfer the Part 1 budget from the ENCON Fund account to the DEDP account at a Krung Thai Bank.

Step 2 The DEDP will contact designated factories and buildings to inform them of their tasks as stipulated by law and their eligibility to receive financial assistance from the ENCON Fund. The facility owners will be informed of the criteria on the provision of the ENCON Fund assistance, in particular technical assistance and financial assistance in carrying out the preliminary energy audit, formulation of the facility ENCON plan and the investment in energy conservation in existing designated facilities.

Step 3 The facility owner submits a proposal to carry out the preliminary energy audit to the DEDP together with the name of the consultant, who must be approved by the DEDP. After approval, the facility owner will hire the consultant to undertake the audit and send the audit outcome to the DEDP for consideration. If the DEDP is satisfied with the quality of the audit outcome, the grant will be reimbursed to the facility owner at the amount agreed upon, but not exceeding 100,000 baht per facility. The method of payment must be in line with the ENCON Fund Committee guidelines.

Step 4 After completion of the preliminary energy audit, the facility owner may request for financial assistance in the preparation of the facility ENCON plan by submitting a proposal to the DEDP together with the name of the consultant, who must be approved by the DEDP. After approval, the facility owner will then proceed with the hiring of the consultant.

When the facility ENCON plan is finished, it must be presented to the DEDP for consideration. If the DEDP considers that the plan is in line with the Ministerial Regulations and the quality is acceptable, the financial assistance will be reimbursed to the facility owner at the amount agreed upon (50% of the plan preparation, but not exceeding 500,000 per facility). The method of payment must be in line with the ENCON Fund Committee guidelines.

Step 5 Based on the facility ENCON plan, the designated facility owner may submit a proposal to the DEDP for financial assistance from the ENCON Fund for the energy conservation investment. The DEDP will appraise the proposal prior to submission to the ENCON Fund Committee for further consideration.

Step 6 When the ENCON Fund Committee approves the designated facility owner’s proposal, the DEDP will execute a contract with the owner.

Step 7 As a condition on granting financial assistance from the ENCON Fund, the designated facility owner who has been granted financial assistance by the ENCON Fund Committee will have to contact a financial institution for a loan arrangement for investment in energy conservation measures in accordance with the proposed plan. If the owner does not want to secure a loan from a bank, he will have to present to the DEDP evidences to prove that he is financially capable of undertaking the energy conservation measures specified in the contract.

Step 8 The DEDP will pay the first installment to the facility owner upon delivery of the machinery, equipment and energy saving materials on the facility site. The DEDP may reimburse the payment on a monthly basis from the CGD. In this regard, the DEDP will compile a list of owners who have been granted assistance in a given month and present it to the CGD.

Step 9 After completion and successful start-up of the machinery/equipment or completion of energy saving material installation, the DEDP will have to inspect if the implementation is in accordance with the contract and then pay the facility owner the second installment. The DEDP will pay the third installment after the machines and/or equipment have proven to operate successfully beyond the commissioning period and the anticipated energy savings is achieved.

For the payments of the second and third installments to the designated facility owner, the same procedures as those for the first installment shall be followed. That is, the DEDP will reimburse the money from the CGD and pay to the owner later.

Step 10 The DEDP will have to report the outcomes of the project implementation to the ENCON Fund Committee every three months.

3. PROJECT ON FACTORIES AND BUILDINGS UNDER DESIGNING OR CONSTRUCTION

3.1 Eligible Applicants

Owners of construction projects of factories or buildings, of which the energy consumption, when the construction is completed, is expected to fall into the “designated” category.

Requests for funding shall be submitted by the end of March 2000. After that, a project evaluation will be made and the outcome will be presented to the ENCON Fund Committee for consideration and advice on how this project should proceed.

3.2 Types of Expenses to Be Funded

The ENCON Fund assistance allocated for this project is in line with Section 25 (1) and Section 25 (2) of the ENCON Act, divided into the following:

A grant for the design improvement so that the facility will have greater energy efficiency than the standards stipulated in the Ministerial Regulations. This is subject to a condition that the initial design must yield the energy efficiency level according to the stipulated standards and the ENCON Fund will offer a grant to cover only the incremental cost related to the design improvement.

Financial assistance for the incremental investment according to the improved design.

3.3 Funding Criteria and Financial Incentives

A grant of no more than 2,000,000 baht per facility will be provided for the modification of the facility design. The payment will be made after the design improvement is completed and approved by the DEDP.

A financial assistance for the incremental investment in line with the improved design will be provided under the same funding criteria as those applied to existing designated factories and buildings.

3.4 Funding Methods and Procedures

Step 1 A facility owner submits his proposal on the facility design improvement to the DEDP together with the construction plan. The DEDP will screen and analyze the proposal for further submission to the ENCON Fund Committee for approval of the funding for expenditures incurred in improving the design.

Step 2 When the design improvement is completed, the facility owner will have to submit the improved design to the DEDP for consideration. When it is approved, the DEDP will reimburse money from the CGD to pay to the owner at the amount agreed upon.

Step 3 For the investment cost, the DEDP will screen the proposal under the same criteria as those applied to existing designated factories and buildings prior to submission to the ENCON Fund Committee. When approved, a contract will be executed with the facility owner for further implementation.

4. PUBLIC AWARENESS CAMPAIGN PROJECT UNDER THE DEDP’S RESPONSIBILITY

4.1 Eligible Applicant

The DEDP.

4.2 Funding Criteria

The ENCON Fund assistance allocated for this project is in line with Section 25 (3)(d), Section 25 (3)(e) and Section 25 (4) of the ENCON Act. The assistance will be in the form of a grant for the project implementation.

4.3 Funding Methods and Procedures

The DEDP will screen and evaluate proposals received and further submit them to the ENCON Fund Committee for consideration on a case-by-case basis. The payment will be reimbursed by the DEDP according to the installments specified for each project.

The comments of the Evaluation Sub-Committee must be taken into consideration by the DEDP in implementing the project.

5. PROMOTION OF RENEWABLE ENERGY UTILIZATION PROJECT

5.1 Eligible Applicants

According to Section 26 of the ENCON Act, Project Owners must be government agencies, state-enterprises, educational institutions, or non-profit organizations.

Project Participants who are owners of agricultural and/or industrial industries and the general public who wish to implement energy conservation measures or utilize renewable energy.

5.2 Types of Expenses to Be Funded

The ENCON Fund assistance allocated for this project is in line with Section 25 (1), Section 25 (2), Section 25 (3)(a) and Section 25 (3)(c) of the ENCON Act. The assistance will be for the following:

Expenses for the preparation of a comprehensive project plan once the conceptual plan of the project has already been approved by the ENCON Fund Committee.

Expenses for the project management which includes:

Expenses for advisory services and assessment of cost effectiveness for those who are interested in using renewable energy technologies;

Investment cost, including expenses for supervision on the construction or installation of machinery and equipment; and

Expenses for the project evaluation.

Financial assistance for investments of “Project Participants” in renewable energy or non-renewable technologies or energy conservation in rural industries.

5.3 Funding Criteria and Financial Incentives

A grant will be provided for the formulation of a comprehensive project plan;

A grant will be provided to the “Project Owner” for the expenses on the project management, but not exceeding 20 million baht per project per year, except for the case that the ENCON Fund Committee has granted a special exemption.

Financial assistance will be given to the “Project Owner” to be used in supporting “Project Participants” under the following criteria:

The renewable energy/energy conservation project of each “Project Participant” must have a higher Real Economic Internal Rate of Return (EIRR) than the minimum rate set by the ENCON Fund Committee. At the initial stage, the minimum rate is set at 9%.

The ENCON Fund Committee will set the revolving capital for the project investment on a case-by-case basis.

Financial support from the ENCON Fund will be provided to help increase the FIRR of each project of “Project Participants” to a level that equals the previous three-month average of the MRR of Krung Thai Bank + 5%. However, the maximum financial support for each project will not exceed the criteria set in Table 2, except the case where the ENCON Fund Committee grants a special exemption.

Table 2
Maximum Financial Support for Each "Project Participant"

Size of Investment (million baht) Maximum Financial Support (million baht) Maximum Percentage of Investment

0 up to 2 1.20 60%

More than 2 up to 5 2.55 45%

More than 5 up to 10 4.15 32%

More than 10 up to 20 6.35 22%

More than 20 up to 50 9.95 12%

More than 50 10.00 -

Any energy conservation-related project with an FIRR higher than the three-month average of the MRR of Krung Thai Bank + 5% will not receive interest subsidies from the ENCON Fund under this clause.

d) The financial support from the ENCON Fund will not cover the cost for making a loan contract with the Bank.

e) Financial support will be given in installments according to the conditions prescribed by the ENCON Fund Committee on a case-by-case basis. In cases where each “Project Participant” is entitled to receive more than 5 million baht, the conditions for designated factories and buildings shall be applied.

4) Financial support for the project investment will be given in the form of interest subsidies to eligible Project Participants under the criteria mentioned in 3) a)-e) above.

5.4 Conditions

Funded organizations that are government agencies or state-enterprises will have to sign a Letter of Confirmation with NEPO and those in the private sector will have to sign a contract with NEPO as a commitment to accomplish the targeted objectives. Stipulated in the Letter of Confirmation or contract are the following:

Detailed project plan and the objective(s) to be achieved;

Timeframe for the project implementation;

Expenses for the project management and the financing received or expected to be received from other financial sources;

The project management system and data filing system;

Details of the audit/inspection and penalty clauses in case the project owners fail to comply with the Letter of Confirmation/contract; and

The rights to terminate the Letter of Confirmation/contract on the grounds of proven incompetence of the project owners to achieve the project objective(s).

In implementing the project, NEPO must also take into consideration the comments of the Evaluation Sub-Committee.

5.5 Funding Methods and Procedures

Step 1 Organizations wishing to receive the ENCON Fund assistance (Project Owner) shall submit their proposals to NEPO. NEPO will screen and evaluate the proposals prior to submission to the ENCON Fund Committee for further consideration.

Step 2 When the proposal is approved by the ENCON Fund Committee, NEPO will inform the CGD and the Project Owner of the ENCON Fund Committee resolution. Then, if the Project Owner is a government agency or state-enterprise, a Letter of Confirmation will have to be signed with NEPO. NEPO will sign a contract with a Project Owner who is in the private sector. Then, NEPO will reimburse from the CGD the first installment as indicated in the Letter of Confirmation or contract. Once the money is received, NEPO will disburse it to the Project Owner.

Step 3 The Project Owner contacts persons interested in the technology used to participate in the project as “Project Participants” and provides support to these Project Participants according to the criteria and conditions stipulated by the ENCON Fund Committee.

Step 4 The Project Owner carries out the project according to the plan/Letter of Confirmation or contract and periodically report the outcome to NEPO.

Step 5 When the installments are due, as scheduled in the Letter of Confirmation or contract, NEPO will reimburse the money from the CGD for further disbursement to the Project Owner. Prior to each installment payment, however, NEPO must review and ensure that the Project Owner has satisfactorily complied with the implementation as stipulated in the Letter of Confirmation or contract.

Step 6 NEPO will have to periodically report the progress and outcome of the project to the ENCON Fund Committee and to undertake the project evaluation.

6. PROMOTION OF SMALL POWER PRODUCERS USING RENEWABLE ENERGY PROJECT

6.1 Eligible Applicants

The Electricity Generating Authority of Thailand (EGAT), the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA) can be the Project Owners.

6.2 Types of Expenses to Be Funded

The ENCON Fund assistance allocated for this project is in line with Section 25 (3)(a) of the ENCON Act with a view to subsidizing the purchasing prices for electricity generated by Small Power Producers (SPPs) using renewable energy as fuel.

6.3 Funding Criteria and Financial Incentives

The amount of subsidy for the purchase of power generated by SPPs depends on the types of renewable energy used in the generation, but not exceeding 60 satangs/kWh, except the ENCON Fund Committee has instructed otherwise.

6.4 Funding Methods and Procedures

Step 1 NEPO or the Project Owner issues a Request for Proposals for those who are interested in generating power using renewable energy to send in project proposals. In the Request for Proposals, the types of renewable energy and the purchase amount shall be indicated.

Step 2 NEPO and the Project Owner jointly evaluate and select projects according to the Regulations for the Purchase of Power from Small Power Producers, and present the selection outcome to the ENCON Fund Committee for consideration.

Step 3 When the approval is received from the ENCON Fund Committee, NEPO will inform the CGD and the Project Owner of the Committee resolution. Then, a Letter of Confirmation will be executed with the Project Owner.

Step 4 NEPO will reimburse the money from the CGD for disbursement to the Project Owner in installments to pay the SPPs in proportion to the units of power sold.

Step 5 NEPO will have to periodically report the progress and outcome of the project to the ENCON Fund Committee for information and to ultimately evaluate the project.

7. INDUSTRIAL LIAISON PROJECT

7.1 Eligible Applicants

Government agencies, state-enterprises, educational institutions, and non-profit organizations, according to Section 26 of the ENCON Act.

7.2 Types of Expenses to Be Funded and Criteria

The ENCON Fund assistance allocated for this project is in line with Section 25 (1), Section 25 (2), Section 25 (3)(a), Section 25 (3)(c), Section 25 (3)(e), and Section 41 of the ENCON Act. The assistance will be for the following:

A grant for the formulation of a comprehensive project plan;

A grant to finance the project management expenditures of the Project Owner;

A grant for demonstration projects;

A grant for market research and formulation of a marketing plan for energy-efficient machinery, equipment or materials contributing to energy conservation;

A grant/financial support for establishing centers for dissemination of information on energy conservation;

Financial support for investment in projects promoting energy-efficient machinery, equipment, and materials contributing to energy conservation. In this regard, the ENCON Fund Committee will establish the payment criteria on a case-by-case basis.

A grant/financial support for demonstration projects on reuse and recycling; and

A grant for the Demand Side Management Program.

7.3 Funding Methods and Procedures

A Project Owner will submit his proposal to NEPO. NEPO will screen and evaluate the proposal before submitting it to the ENCON Fund Committee for further consideration. When the ENCON Fund Committee approves the proposal, if the Project Owner is a government agency or state-enterprise, a Letter of Confirmation will have to be signed with NEPO. If the Project Owner is in the private sector, a contract will be executed with NEPO. Then, NEPO will reimburse from the CGD the installments as scheduled in the Letter of Confirmation or contract. Once the money is received, NEPO will disburse it to the Project Owner.

(Same methods and procedures as those in the case under the Promotion of Utilization of Renewable Energy Project are applied.)

8. RESEARCH AND DEVELOPMENT PROJECT

8.1 Eligible Applicants

Government agencies, state-enterprises, educational institutions, and non-profit organizations.

8.2 Types of Expenses to Be Funded

The ENCON Fund assistance allocated for this project is in line with Section 25 (3)(b) (c) of the ENCON Act. The assistance will be in the form of grants for studies, research and development, and small-scaled demonstration projects.

8.3 Funding Criteria and Financial Incentives

Grants will be provided according to the payment schedules to be determined by the ENCON Fund Committee on a case-by-case basis.

8.4 Funding Methods and Procedures

Step 1 Those who are interested may submit their proposals to NEPO.

Step 2 NEPO will screen and evaluate the proposals and present them to the ENCON Fund Committee for further consideration.

Step 3 When the ENCON Fund Committee approves the proposals, NEPO will inform the CGD and the concerned applicants of the ENCON Fund Committee resolutions. The applicants who are government agencies or state-enterprises will have to sign a Letter of Confirmation with NEPO and those who are not will have to sign a contract with NEPO.

Step 4 When the installments are due, as scheduled in the Letter of Confirmation or contract, NEPO will reimburse the money from the CGD for further disbursement to the Project Owners. Prior to each installment payment, however, NEPO must review and ensure that the Project Owner has satisfactorily complied with the implementation as stipulated in the Letter of Confirmation or contract.

Step 5 NEPO will have to carry out follow-up investigations as well as project evaluation and periodically report the progress and outcome of the project to the ENCON Fund Committee.

9. PROJECT ON EXISTING NON-DESIGNATED FACTORIES AND BUILDINGS

9.1 Eligible Applicants

9.1 Eligible Applicants

Government agencies, state-enterprises, educational institutions, and non-profit organizations, according to Section 26 of the ENCON Act. These organizations will be “Project Owners” responsible for the management with a view to improving energy conservation in non-designated factories and buildings.

9.2 Types of Expenses to Be Funded

The ENCON Fund assistance allocated for this project is in line with Section 25 (2), Section 25 (3)(a), Section 25 (3)(c), Section 25 (3)(d), Section 25 (3)(e), and Section 41 of the ENCON Act. The assistance will be for the following:

A grant for the formulation of a comprehensive project plan;

A grant to finance the project management expenditures of the Project Owner; and

A grant in the form of interest subsidies to promote the use of energy-efficient machinery, equipment and materials or the application of proven energy efficiency technologies that are used worldwide.

Conditions

The projects must have the Real Economic Internal Rate of Return (EIRR) higher than 9%.

The payback period is no longer than 7 years.

9.3 Funding Methods and Procedures

A Project Owner will submit his proposal to NEPO. NEPO will screen and evaluate the proposal before submitting it to the ENCON Fund Committee for further consideration. When the approval is received from the ENCON Fund Committee, if the Project Owner is a government agency or state-enterprise, a Letter of Confirmation will have to be signed with NEPO. If the Project Owner is in the private sector, a contract will be executed with NEPO. Then, NEPO will reimburse from the CGD the installments as scheduled in the Letter of Confirmation or contract. Once the money is received, NEPO will disburse it to the Project Owner.
(Same methods and procedures as those in the case under the Promotion of Utilization of Renewable Energy Project are applied.)

9.4 Funding Criteria and Financial Incentives

The funding criteria and levels of financial incentives are to be presented to the ENCON Fund Committee for approval at a later stage. This has to await the results of the pilot projects, implemented by the DEDP, the Federation of Thai Industries (FTI), and the Department of Industrial Promotion (DIP) in cooperation with the Project Owners. The Project Owners, in turn, are comprised of the Demand Side Management Office of the EGAT and the FTI itself.

10. HUMAN RESOURCES DEVELOPMENT PROJECT

10.1 Eligible Applicants

NEPO

DEDP

CGD

Educational institutions

Other government agencies and state-enterprises

Non-profit organizations

10.2 Funding Criteria and Financial Incentives

The ENCON Fund assistance allocated for this project is in line with Section 25-sub (3)(d) of the ENCON Act. The assistance will be in the form of grants for human resources development in energy conservation-related fields.

10.3 Funding Methods and Procedures

NEPO, DEDP, CGD and those who are interested will have to submit their proposals to NEPO. NEPO will screen and assess the proposals prior to submission to the ENCON Fund Committee for consideration on an individual basis. NEPO will execute a Letter of Confirmation or contract with those who are granted financial assistance from the ENCON Fund. Then, NEPO will reimburse the grants from the CGD according to the installment schedules stipulated in the Letter of Confirmation or contract for disbursement to the funded agencies.

(Same methods and procedures as those in the case under the Research and Development Project are applied.)

11. PUBLIC AWARENESS CAMPAIGN PROJECT UNDER NEPO’S RESPONSIBILITY

11.1 Eligible Applicant

NEPO.

11.2 Funding Criteria

The ENCON Fund assistance allocated for this project is in line with Section 25 (3)(d), Section 25 (3)(e), and Section 25 (4) of the ENCON Act. The assistance will be in the form of grants for the project implementation.

11.3 Funding Methods and Procedures

NEPO will screen and assess the proposals received prior to submission to the ENCON Fund Committee for consideration on a case-by-case basis. NEPO will reimburse the grants from the CGD to finance the expenses in installments according to the payment schedule of each project.

In implementing the project, NEPO must take into consideration the comments of the Evaluation Sub-Committee.

12. MANAGEMENT AND MONITORING PROJECT

12.1 Eligible Applicants

NEPO

DEDP

CGD

12.2 Funding Criteria

The ENCON Fund assistance allocated for this project is in line with Section 25 (3)(d), Section 25 (3)(e), and Section 25 (4) of the ENCON Act. The assistance will be in the form of grants for the project implementation.

12.3 Funding Methods and Procedures

NEPO will screen and assess the proposals received from eligible applicants, i.e. NEPO, DEDP, and CGD, prior to submission to the ENCON Fund Committee for consideration on a case-by-case basis. The agencies of which the proposals have been approved will directly reimburse the grants from the CGD.

COMPULSORY	VOLUNTARY	COMPLEMENTARY
Government Buildings Existing Designated Factories and Buildings Factories and Buildings under Designing or Construction *Public Awareness Campaign*	*Promotion of Renewable Energy Utilization* *Promotion of Small Power Producers Using Renewable Energy* Industrial Liaison Research and Development *Existing Non-Designated Factories and Buildings*	Human Resources Development Public Awareness Campaign Management and Monitoring
Department of Energy Development and Promotion	National Energy Policy Office	National Energy Policy Office

Size of Investment (million baht)	Maximum Subsidy (million baht)	Maximum Percentage of Investment Subsidy
0 up to 2	1.20	60%
More than 2 up to 5	2.55	45%
More than 5 up to 10	4.15	32%
More than 10 up to 20	6.35	22%
More than 20 up to 50	9.95	12%
More than 50	10.00	-

Size of Investment (million baht)	Maximum Financial Support (million baht)	Maximum Percentage of Investment
0 up to 2	1.20	60%
More than 2 up to 5	2.55	45%
More than 5 up to 10	4.15	32%
More than 10 up to 20	6.35	22%
More than 20 up to 50	9.95	12%
More than 50	10.00	-