The Current Policy and Investment Opportunities in Laos

Transcription

1 International Conference Renewable Energy Asia 2013-New Opportunities in the ASEAN Community-Focus on Renewable Energy and Energy Efficiency The Current Policy and Investment Opportunities in Laos Chantho Milattanapheng Deputy Director General Institute of Renewable Energy Promotion (IREP) Ministry of Energy and Mines (MEM) 5 th June, 2013/ BITEC, Bangkok, Thailand

2 PRESENTATION CONTENT CURRENT POLICY AND STRATEGY STATUS OF RENEWABLE ENERGY DEVELOPMENT INVESTMENT OPPORTUNITIES AND CHALLENGES

3 POLICY The promotion and development of renewable energies is one of the priority policies of the Government to stabilize energy supply and to assist in the social and economic improvement of the country. Promote sustainable renewable energy development as an important part of ensuring energy supply for social and economic development Provide financial incentives to investors who aim to produce clean energies to meet domestic demand and, who take socially and environmental corporate responsibility in order to increase investments in renewable energy projects Formulate and improve laws and regulations to facilitate renewable energy development

4 POLICY Prioritization of policies which facilitate private sector investments in rural electrification such as provision of incentives and financing, Development of small hydropower systems, biofuels, solar and biomass energy at the village level to provide electricity and energy to rural and remote communities. Generation of electricity for productive uses at the village level using waste materials from agriculture, biogas, hydropower or other local resources. People in rural areas will be encouraged to use renewable energy to enhance self-sufficiency and the GoL will seek cooperation with private sector, NGO and development partners to encourage investment support for processing equipment and necessary machinery adjustments.

5 STRATEGICAL TARGET Objective: Ensure energy security, sustain socio-economic development, and enhance environmental and social sustainability Financial Incentive for Investors Renewable Energy Strategy Development ( ) Develop and Modify Legal documents (laws, regulations and guidelines) Target: increase RE use to 30 % of national demand by 2025 (bio-fuel production to account 10 %) Solar+ Wind 106 MW Solar 33 MW Wind 73 MW Support Mechanism SHP 400 MW Bio-Energy Biomass-electric Biogas Waste 58 MW 51 MW 36 MW Biomass Biofuels (ML) Ethanol 150 Biodiesel 300 Establish Renewable Energy Fund Financial Mechanism: - Import duty free on production machinery, equipment and raw materials - Import duty free on chemical materials necessary for biofuels production within 7 years - Profit tax is divided in to 3 categories: 20%, 15% and 10%. Profit tax exemption is possible for a certain period depending on activities, investment areas and size investment Subsidies on unit product price depending on energy type and times period

6 Renewable Energy Development Plan SHORT TERM ( ) Develop legal documents (laws, regulations and guidelines), Study development models, Market assessment and energy source studies, Rural energy planning, Develop model projects, capacity building and raising awareness on renewable energy technology, Financing and marketing at both national and local levels (promote the use of approved renewable energy technologies)

7 RE DEVELOPMENT PLAN (CONTD.): Promote the renewable energy technology industry, Formulate a clear framework for a midterm program (through focus on increased competition) Support the full development of renewable energy: biodiesel and bio-ethanol production from crops, production of biomass, biogas for household use and industrial purposes at community level. Increased competition and reduced dependency

8 RE DEV. PLAN (CONTD.): Promote new, economically viable, renewable energy technologies and encourage full competition based on equality. Promote Lao PDR to become a regional biofuel exporter

9 INVESTMENT OPPORTUNITY BIOFUEL Kolao Farm and Bioenergy Co., Ltd Kenthao, district Sayabury Province Facility Capacity: 10,000L/d Feedstock: Jatropha Lao-Agrotech Co., Ltd Naxaythong, district Vientiane Capital Facility Capacity: 10,000-20,000L/d Feedstock: Palm oil Biodiesel-Makao Lao Co., Ltd Luangprabang, district Luangprabang Province Facility Capacity: ,000 L/d Feedstock: Vernicia Montana

10 IMPLEMENTATION Production B5 Demonstration B5 from Jatropha; Demonstration B5 from Palm Oil; Demonstration B5 from VERNICIA MONTANA.

11 I. Biofuel production 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 2,000,000 2,000,000 50,000,000 41,000,000 79,000,000 79,000, Biodiesel (ML) Target Biodiesel (ML) Target Bio-ethanol (ML) 2,500,000 2,000,000 1,500,000 1,000, ,000 2,100,000 2,000,000 Biodiesel (ML) Target Biodiesel (ML) Bio-ethanol (ML) Target Bio-ethanol (ML) Data: 11/2/2013

12 II. Small Hydropower Development Potential: 2,000 MW (Less than 15 MW) Developed: 30 MW Under Construction 85 MW Under study: 500 MW PICO Hydro: More than 1,000 units (in isolated areas) - Low efficiency; - Not safety; and - Not appropriate management

13 Small Hydro Existing (MW) Target (MW)

14 III. Solar Energy

15 III. Solar Development Existing (MW) Target (MW)

16 Biomass for Power Generation Mit Lao Sugar Mill Xaibury, district Savannakhet Province Install Capacity: 9.7 MW Feedstock: Bagasse Hoang Anh Sugar Mill Phouvong, district Savannakhet Province Install Capacity: 30 MW Feedstock: Bagasse

17 IV. Biomass for Power Generation Existing (MW) Target (MW)

18 V. Biogas 60,000 50,000 40,000 30,000 20,000 10, ,400 2,850 25,000 50, Existing of HH Target of HH (MW) Target (MW) SNV, 2,400 HHs (2011)

19 V. Biogas Plant (Lao Indochina Group (LIG) Public Company) Million m Production Plant (m3/y) Concession Waste water treatment from Cassava and produce biogas 7 million m3/y Production of biogas 90 Million (Nm3) or million normal cubic meters (Nm3), approximately at 175 million liters, of heavy fuel oil (HFO) reducing as much as 300,000 tones of greenhouse gas per year and 60,000 tones of CO2 on an annual basis.

20 VI. Wind Development Existing (MW) Target (MW)

21 INVESTMENT OPPORTUNITIES (3) Energy crops Fuel crops plantation for biofuels production has also progressed, especially Jatropha, Vernicia Montana, Palm, Sugarcane, Cassava plantation. Organic wastes: Agriculture-Forestry production, By-products of agro-forestry industry (sawdust, wood chips, rice husk, corn cobs, livestock manures...) and municipal wastes Production of biomass, biogas for household use and industrial purposes at community level.

22 INCNETIVES The Government will provide financial incentives and financing assistance to renewable energy projects and investors. Financial Incentives Import duty free on production machinery, equipment and raw materials; Import duty free on chemical materials necessary for biofuels production within 7 years; Profit tax is divided in to 3 categories: 20%, 15% and 10%. Profit tax exemption is possible for a certain period depending on activities, investment areas and size investment; Subsidies on unit product price depending on energy type and times period.

23 INCENTIVES The government has policies to support renewable energy, especially financial measures which include: Subsidizing tariffs (FIT IS UNDER STUDY) Project Condition basic, project by project The government is responsible for basic infrastructures to accommodate the expansion of renewable energy such as: transmission line systems

24 CHALLENGES Lack of regulations and laws on renewable energies Limited knowledge and understanding on various aspects of renewable energies Limited number of people with strong knowledge of renewable energy technologies as well as limited access to equipment and supply of materials for projects Lack of public funding for the renewable energy sector. Limited budget allocated for research and development. Lack of information concerning off-take tariffs which represent significant financial risk for investors. Lack of information on renewable energy potential for each province

25 MANY THANKS FOR YOUR KIND ATTENTION