Chapter 1 Introduction

Transcription

1 Chapter 1 Introduction 1.1 Programme rationale and objective Programme Rationale Provincial Electricity Authority (PEA) is a state enterprise established under Provincial Electricity Authority Act It acquired the debts, liabilities and responsibilities of all local electricity authorities at that time into its management. The PEA main mandates include electricity generation, electricity transfer and distribution to the public as well as conducting other electricityrelated business activities in 73 provinces nationwide, excluding Bangkok, Nonthaburi and Samutprakan. In total, PEA service covers 510,000 square kilometers or 99% of the whole country. With the mandate to serve the public with electricity nationwide, the PEA sets three essential goals: 1. Striving to improve electricity sourcing and service which is safe, secure, consistent, reliable and ample as well as keeping pace with the growing demand for electricity. 2. Aiming at enabling the business operations to become self-reliant with increased and reasonable revenue for business expansion. 3. Developing organization and human resource management as well as optimizing resources. The PEA has provided street lighting service for roads of Department of Highways (DOH) and Department of Rural Roads (DORR). The lighting service in the areas of local government bodies under the Department of Local Administration (DOLA) including municipalities, Tambon Administrative Organizations (TAO), Provincial Administrative Organizations (PAO), is also under the PEA s responsibility. Such services lead to annually growing cost due to the expansion of public facilities. Against this background, PEA has the initiative for efficient and safe use of public lighting by the adjustment of electricity consumption and the luminance of lights to serve for different time periods and different types of roads as required by the DOH, DORR and DOLA. So far, PEA has completed two projects installing energy-efficient equipment for street lights as following: 1. Project to install energy-efficient equipment for high pressure sodium (HPS) street lights, which is a collaboration between PEA and King Mongkut s University of Technology Thonburi. 2. Project to install energy-efficient equipment for street lamps which is a collaboration between PEA and Kasetsat University. This proposed programme of activities (PoA) is in accordance with Power Development Plan of Thailand (PDP 2010), which concentrates on the conservation and efficient use of electricity as well as the reduction of CO 2 emission resulting from electricity generation. Provincial Electricity Authority (PEA) Page 1

2 As per the current operating scenario of street lighting on roads and highways, the existing lamps are owned and managed by the Department of Highways (DOH) and Department of Rural Road (DORR), Ministry of Transport. However, the electricity for the lighting system is provided by Provincial Electricity Authority (PEA) free of charge. But, PEA has the obligation to pay its electricity supplier, Electricity Generating Authority of Thailand (EGAT). Although, PEA has no obligation to implement this programme, it has seriously considered options to reduce the financial losses due to non-revenue electricity supply to public service such as DOH and DORR lighting systems. PEA has designed this programme to respond to need to reduce energy consumption in street lighting while providing the same or better service. The installation of LED is expected to substantially reduce the electricity consumption charges paid by PEA to power lighting on street and roads. PEA is the investor for this programme. PEA will also implement this programme. PEA will coordinate this Small-Scale Programme of Activities (SSC-PoA) and also implement the CDM Programme Activities (CPAs) in different parts of Thailand. This energy efficiency programme implementation is expected to result in the reduction of electricity consumption in street lighting systems and hence reduction in GHG emissions due to the displacement of equivalent grid electricity that is dominated by fossil fuel power stations. Under this scheme, PEA will undertake energy saving measures in street lights by replacing HPS units with LED units. By implementing this project, the electricity charges that PEA pays to its electricity supplier, EGAT, are expected to be reduced. However, compared to the cost of implementing this programme, the cost saving resulting from electricity saving is not adequate to justify high upfront capital investments and implementation barriers. Some of the barriers and incremental costs could only be offset by the additional revenues through the sale of Certified Emissions Reductions (CER) in Clean Development Mechanism (CDM). Hence, PEA needs to harness CDM for the successful implementation of this programme. The LED equipment supplier will install the LED units for the project activity. They will perform the maintenance activities as per instructions received from PEA. Only PEA will be responsible for monitoring the LED units installed Programme Objective To improve the energy efficiency of street lights within the Provincial Electricity Authority (PEA) service area by replacing W High Pressure Sodium (HPS) units with 110 W 2 Light Emitting Diode (LED) units Scope and Objectives of IEE-SD study The targeted implementing areas include existing roads under the responsibilities of the DOH, DORR and DOLA located throughout the country within the north, north-eastern, west and central and south regions. The pilot project will be implemented to test technological characteristics, qualities of products and project implementation. Location of roads for the pilot project has been selected, one of which is located within Pathumthani province and being included in CPA1 of the PoA. However, location of others CPAs will be selected at later stage. A CPA under the PoA is required to fulfilled eligibility criteria outlined in the SSC-PoA PDD Document. PEA will be responsible for screening and accepting CPAs, identifying and finalizing CPA boundaries. 1 The total HPS unit typically consumes 315 W including ballast. 2 This value may change in CPAs depending upon the LED units/supplier contracted during that time. Provincial Electricity Authority (PEA) Page 2

3 Scope of the IEE-SD study for the PoA level covers an initial environmental evaluation and self-evaluation on sustainable development of the programme activities and propose mitigation measures or Environmental Management Framework for typical CPAs under the programme Additionality As per the decision 17/CP.7 Para 43, a CDM project activity is additional if anthropogenic emissions of greenhouse gases by sources are reduced below those that would have occurred in the absence of the SSC-CPA. The proposed programme reduces the anthropogenic emissions of GHG by sources below those that would have occurred in the absence of the registered SSC-CPA. PEA wishes to prove the additionality of the project using the Standard for demonstration of additionality, development of eligibility criteria and application of multiple methodologies for programme of activities, Attachment A of the Appendix B and Non-binding best practice examples to demonstrate additionality for SSC project activities Version 01, EB 35. According to Attachment A of the Appendix B, the project participants shall provide an explanation to show that the project activity would not have occurred anyway due to at least one of the following barriers: (a) Investment barrier: A financially more viable alternative to the project activity would have led to higher emissions. (b) Technological barrier: A less technologically advanced alternative to the project activity involves lower risks due to the performance uncertainty or low market share of the new technology adopted for the project activity and so would have led to higher emissions. (c) Barrier due to prevailing practice: Prevailing practice or existing regulatory or policy requirements would have led to implementation of a technology with higher emissions. (d) Other barriers: Without the project activity, for another specific reason identified by the project participant, such as institutional barriers or limited information, managerial resources, organizational capacity, financial resources, or capacity to absorb new technologies, emissions would have been higher. Among the multiple barriers identified in the implementation of the project activity, the investment barrier is used to demonstrate the financial non-viability of the project activity in a conservative manner. The project activity involves high investment cost. The returns generated from the project activity are low and hence the CDM funds are considered essential for improving the returns generated from the project. As the investment barriers are found to be more prominent for this project, investment analysis has been carried out as per Guidelines on the Assessment of Investment Analysis version 05, EB 62, Annex 5. Investment barrier As the project activity is reducing the energy consumption, Alternative options are available which can provide similar type of energy reduction. PEA proposed the project activity under a programme of activity in which it will be replacing the conventional HPS street lights with high quality LED units in the identified regions of Thailand. The investment comparison analysis will be carried out with the most plausible alternatives for the project activity. The data and calculation for investment comparison analysis are specific to the individual project activity and hence, the detailed investment comparison analysis will be done in the SSC-CPA under this PoA. Provincial Electricity Authority (PEA) Page 3

4 On the basis of investment comparison analysis, it will be proven in the CPAs under this PoA, that the project activity, i.e., the proposed SSC-CPA, is not financially attractive. The CER revenue helps the CPA to reach the acceptable rate of return. This significant increase would allow the proposed project activity to overcome the financial barriers, enabling its implementation. 1.2 Programme activity plan The programme activities plan for installation of approximately 450,000 LED units are separated into 3 phases, phase I consist installation of 20% of the total units, phase II and phase III each consists of installation of 40% of the total units. More details of activities plan is presented in the Table 1.1 below. Table 1.1 Programme Activities Plan Order Phase I Phase II Phase III Detail 20 % of the entire installation 1. Pilot Project 1,672 set 2. The rest of 20% Preparation of specifications, TOR and Public Hearing TOR authorization Preparation of tender documents and tender procurement Preparation of agreements Installation and testing Commissioning 40% of the entire installation Preparation of specifications, TOR and Public Hearing Preparation of tender documents and tender procurement Preparation of agreements Installation and testing Commissioning 40% of the entire installation Preparation of specifications, TOR and Public Hearing Preparation of tender documents and tender procurement Preparation of agreements Installation and testing Commissioning Monitoring and assessment Public relations Training Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1.3 Institutional Arrangement PEA will be the PoA coordinating and managing entity. The street lights are managed and maintained by DOH and DORR in the current situation (prior project implementation). The responsibility of managing and maintaining the streetlights will be taken by PEA after project implementation. In the implementation model to be employed, PEA will outsource the supply, installation and maintenance to LED supplier. Nevertheless, PEA will be responsible for monitoring and overseeing all the activities through its dedicated staff in charge at both CPA level and PoA level. The institutional arrangement is as shown in Figure Provincial Electricity Authority (PEA) Page 4

5 Figure 1.1 CFO Institutional Arrangement The role and responsibility of each party involved is described below: 1) Provincial Electricity Authority (PEA) will (a) serve as the project leader with overall responsibility for PoA preparation and implementation; (b) provide technical advice and guidance to personnel s involved in the PoA during the course of Project preparation and implementation; and (c) supervision of PoA as well as and prepare the initial verification report. PEA is in the process of setting up Office of Energy Efficiency Management (OE 2 M) within PEA which would be responsible for the implementation and monitoring of the PoA. PEA deputy governor will be the director of OE 2 M and there will be two manager assistants one of which will be responsible for the POA. PEA will also be responsible for selection of LED supplier through competitive bidding process. The institutional arrangement within PEA is illustrated in the following figure: Provincial Electricity Authority (PEA) Page 5

6 Figure 1.2 PEA Institutional Arrangements 2) Department of highways (DOH): responsible for site selection and monitoring of highways in accordance with road safety standard 3) Department of Rural Roads (DORR): responsible for site selection and monitoring of rural roads in accordance with road safety standard 4) Department of Local Administration (DOLA): responsible for site selection and monitoring of road condition within the responsibility area of the local government. 1.4 Current programme status (18/06/2012) The programme is currently under preparation of the specification and Terms of Reference (TOR) of the CPA1, one of a pilot programme implementation. Provincial Electricity Authority (PEA) Page 6