Promotion Of RETs in Thailand: Renewable Energy Innovation System Professor S. Kumar Asian Institute of Technology
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1 Promotion Of RETs in Thailand: Renewable Energy Innovation System Professor S. Kumar Asian Institute of Technology Stakeholder s workshop EU-Thailand Policy Dialogue 15 August 2012, Bangkok, Thailand
2 Objective and analysis The objective of the presentation is to review the current policy structure in Thailand for the promotion of renewable energy technologies, and to enhance the implementation strategy of policy formulation through Sector Innovation System for wide-scale deployement of renewable energy technologies. The steps of analysis are as follows: 1. Analysis on the policy structure of Thailand, and Renewable Energy Innovation System to enhance the overall implementation of energy policies. 2. Current targets for the implementation and the current status of renewable energy in Thailand. 3. Case study on biofuels policies using the proposed framework.
3 Presentation outline Background Energy Policy Structure - Thailand Analysis of the implementation strategy of REDP Renewable Energy Innovation System Summary
4 Background Global energy demand continues to increase due to the impact of ongoing increases in population in personal wealth (as reflected in GDP per capita), and urbanization throughout the developing world The total primary energy demand in developing countries equaled demand in developed countries
5 Energy situation in Thailand The primary energy consumption of Thailand was 124,086 ktoe in The share of alternative energy accounted to about 18.2% of primary energy (DEDE, 2012). The share of renewable energy to the total electricity production of 153,392 GWh was 8.2% in 2011 (DEDE, 2012). Energy Type Technical Potential Capacity Targets Targets Targets (Electric power) MW MW MW Ktoe MW Ktoe MW Ktoe Solar 50, Wind 1, Hydro Biomass 4,400 1,610 2,800 1,463 3,220 1,682 3,700 1,933 Biogas MSW Hydrogen Total 57,290 1,750 3,273 1,587 4,191 1,906 5, ,290
6 Thailand Renewable Energy target and status On-grid solar energy capacity is 101% more than the set target by government until 2011, i.e MW Biogas plants generated 64.5% more than the set target of 60 MW as of December 2011 Small and micro scale hydro plants and wind generation have current capacity of about MW and 0.38 MW against the set target of 165MW and 115MW till 2011 respectively
7 Policies for the support of renewable energy Thailand and ASEAN countries Target and policy support for renewable energy in ASEAN 6 countries Source: Deploying of renewable energy in South East Asia, IEA data and analysis (2010) This ranking is based on the qualitative analysis of the policy support offered in the ASEAN-6
8 Renewable Energy: ASEAN countries and Thailand Financial incentives for renewable energy in ASEAN-6 (Source: Deploying renewables in South-East Asia-OECD/IEA, 2010) Feed in tariffs Tax exemption Capital grants Other Indonesia Malaysia Philippines Feed-in tariff for geothermal power (2009) Comprehensive feed intariff proposed for 10 th Malaysian plan ( ) Draft rules on feed-in-tariffs published in January 2010 Geothermal exploration equipments and activities exempt from taxes Small Renewable Energy Power Programme: RES-E 10 years tax holidays Renewable Energy Act (2008): RES-E receives 7 years tax holidays, after that reduced tax rates. No customs duty on imported materials, no VAT on renewable energy sold Singapore R&D investment Clean Energy Research and Testbedding programme (CERT, 2007); Solar Capability Scheme (SCS, 2008) Thailand Feed-in premium Adders on top of regular tariffs (2007) Board Of Investment (BOI) tax holidays and import duty exemptions National Energy Conservation Programme (ENCON, 1992): Funded by a fossil fuel tax, financial incentives for projects related to energy efficiency, renewable energy, R&D, public awareness and training
9 Energy Policy formulation structure in Thailand Ministry of Energy (MoE) is the responsible body for the proposal of policies related to energy, inclusive of electricity generation and renewable energy As of January 2012, Thailand has five separate long-term energy plans, prepared by different government divisions Long-term Power Development Plan (PDP ) 15-Year Renewable Energy Development Plan (REDP ) 20-Year Energy efficiency Development Plan Natural Gas Plan, and Natural Gas Vehicle Roadmap The characteristics of the policies are: Adequacy of energy resource to ensure reliability of the power system with a minimum reserve margin of 15% until 2030 Share of renewable energy must be increased to 25% in the total energy consumption by 2022 Reduction of energy intensity by 25% in 2030, as compared to 2005 Promoting the use of natural gas in the power production and transportation sector
10 Energy Policy formulation structure in Thailand A case of REDP is considered for the analysis of the strategy of implementation by the government bodies in Thailand Ministry of Energy established the roadmap as strategy to promote renewable and alternative energy development for 25 percent in 10 years (AEDP: ) through the following six strategic issues: 1. Promoting the community to collaborate in broadening production and consumption of renewable energy 2. Adjusting the incentive measure on investment from private sector appropriated with the situation 3. Amending the laws and regulations which do not benefit to renewable energy development 4. Improving the infrastructure as system of transmission line, power distribution line, including a development towards Smart Grid System 5. Public relations and building up comprehensive knowledge for the people 6. Promoting the research work as mechanism to develop the integrated renewable energy industry Source: DEDE (2012)
11 Energy Policy formulation structure in Thailand Enhanced collaboration b/w Industries and R&D
12 Renewable Energy Policy Implementation Source: OECD/IEA, 2010
13 National Innovation System, a pathway towards Sector Innovation System National innovation system as traditionally defined by OECD (1997)- A complex set of relationships among actors producing, distributing and supplying various kinds of knowledge The characteristics of NIS are: Innovation and Development Successful transformation of innovation to a end use product or process is important in the overall country development Holistic and Interdisciplinary Holistic approach towards various technologies, from different sectors through a common body plays a vital role in the design of an NIS This understanding is very important for the effective design and successful operation of an NIS Interaction between different entities The government, R&D institutions, academia and industries are the major actors in an NIS Flow of information through the interaction of these actors is considered the lifeline of NIS, as innovation process involves combining new and existing knowledge The level of interaction the depth and breadth between the various actors involved in the NIS will, to a large extent, determine the efficiency of the system
14 National Innovation System, a pathway towards Sector Innovation System The term National Innovation system originated from Christopher Freeman to describe the success of Japan As a case study, thus NIS of Japan is described as follows: Communications and IT A special priority amongst generic technologies was given to communications and information technologies (IT) Technology Forecasting Identify the upcoming technological trends through interactive surveys and discussions with scientists, engineers, policy makers and people from industry about likely future technological developments Long term Strategic Plans Started as a big importer of technology through technology transfer Simultaneously became self-reliant It is "the ability to absorb all needed technologies" Central Government Research and Development Research, development and innovation are seen as a strategic priority by the Japanese central government as well as by industry
15 National Innovation System, a pathway towards Sector Innovation System Central Government Intermediate zone facilitated the implementation of policies Technology goals developed at policy level Large corporations The horizontal links between departments is an important factor contributing to innovation which by itself is a multifaceted process requiring strong cooperation
16 National Innovation System, a pathway towards Sector Innovation System Case of SWH systems in Tunisia through the PROSOL programme. Actors and institutions work as a network to facilitate the deployment of technology Olz and Agbemabiese, 2012
17 National Innovation System, a pathway towards Sector Innovation System Fully developed and implemented Japan Korea Fully developed Partly implemented Singapore China Selected countries in APAC Developing Being implemented Thailand Other Asian regions
18 Renewable energy innovation system - Thailand Innovation is a collective process. This is different from traditional indicators of technological change, labor productivity, growth of turnover, etc. According to OECD, National Innovation System is a complex set of relationships among actors producing, distributing and supplying various kinds of knowledge Sectoral Innovation system (SIS) complements this process at a defined sector level rather than at the national boundary level comprising of various sectors REIS narrows down this to the development of renewable energy (eg. SWH in Tunisia)
19 Renewable energy innovation system - Thailand Firms Universities Actors for the promotion of REIS Government R&D Institutions Institutions rules that influence the activities and decisions of the actors. These could be laws, regulations, culture, etc
20 Barriers for the implementation of NIS- Thailand The barriers for the implementation of NIS in Thailand, according to a survey conducted by NSTDA and co-researchers are: Weak users-producers linkage Weak co-operation between firms in the same and related industries Low technological spill-overs from TNCs Weak industry-university link Weak links between public Research Technology Organizations (RTOs) and industrial firms Training by government institutions fails to upgrade technical expertise of firms employees to higher end Government fiscal and financial incentives are ineffective in stimulating private sector s demand for investment in technology development
21 Barriers for the implementation of NIS- Thailand RESEARCH & DEV. (Centers/ Institutions) Link Boost Through Incentives & Mechanisms? GOVERNMENT (Enterprises & Institution) INDUSTRY & BUSINESS (Market Creation & Mechanism) HUMAN CAPITAL AND RESOURCES DEVELOPMENT (Universities)
22 Functions of SIS for renewable energy development Entrepreneurial activities Law and legitimacy Knowledge Development Resource Mobilization Renewable Energy Development Knowledge diffusion Market formation Guidance for search
23 Progress of renewable technologies through REIS Final level of implementation Preliminary level of implementation Intermediate level of implementation Conceptual innovation and ancillary benefits promotion Sector level (renewable) goals at primary levels Existing renewable energy technology development Development of horizontal links within the innovation structure Better co-operation amongst the entities Better recognition of problems Better policies & frameworks Multifaceted matrix origin innovation Well defined and guided faster implementation Industry wide recognition and diffusion
24 Thailand : Biofuels Policy Thailand is one of the leading ASEAN countries to establish policies to promote biofuel production to reduce its dependency on oil imports and to capitalize on its supplies of feedstock from vast agricultural production Principles to the Energy policy of Thailand are built as follows: To establish sustainable energy security To support energy development while simultaneously protecting the environment To expedite and promote alternative energy To effectively save energy and promote energy efficiency To monitor energy prices and ensure appropriate levels, in line with wide and investment situation
25 Thailand : Biofuels Policy Renewable energy consumption is expected to grow from 10.7% in 2011 to 14.1% in 2022 and the share of alternative energy consumption (including the NGV) is expected to grow from 15.6% in 2011 to 20.3% in 2022 respectively Biofuels have an important role to play as their contribution in the renewable energy mix is expected to grow up to 4.1% by 2022
26 Thailand : Biofuels Policy
27 Promotion of Biofuels through REIS Biofuel industries Co benefits quantification Government policy makers R&D universities focusing on biofuels Collaboration End-users
28 Promotion of Biofuels through REIS Legitimizing new biofuel technologies Counteracting current resistance against biofuels Support entrepreneurs to take risky experiments with the combination of knowledge development, applications and markets Without entrepreneurs, no innovation would take place Law and legitimacy Entrepreneurial activities Knowledge Development Monitoring through indicators on formal R&D, patents, education and training Constant forums between industries, government and Universities on current biofuel technology developments Financial incentives Knowledge development Resource Mobilization Market formation Renewable Energy Development Governments must create protected spaces for incumbent technologies Examples include, favorable tax regimes, include the cost of negative externalities such as health hazards on energy prices Guidance for search Governments must set biofuel targets to be reviewed between participants Understanding current industry requirements
29 Promotion needed Solar thermal technologies low and medium temperature systems hotels, industries and residences. Solar radiation - Efficient day lighting systems commercial buildings Wind - Low speed wind generators rural and isolated communities Biogas systems heating - households Renewables are beautiful
30 Summary REIS is a process characterized by diffusion of innovative renewable energy technologies with the help of enhanced interactions between various entities and through a holistic approach towards various technologies. A framework for the formulation of REIS in a country is unique and depends upon the type of government, functioning of large, medium and small corporations, R&D institutions, and culture and people of a country. Based upon the characteristics of REIS, policy makers should try to formulate a framework to overcome the barriers of Interactions between different government bodies Communication between end user, industries, firms, institutions and the policy makers Innovation is a collective process and thus, diffusion of a innovative technology is effective with the collective involvement of all players. Thank you kumar@ait.ac.th
31 References DEDE (2011). The Renewable and Alternative Development Plan for 25 percent in 10 years (AEDP ). Thailand MOE (2011). Thailand 20 year energy development plan ( ). Thailand Chuenchom Sangarasri Greacen and Chris Greacen (2010). Proposed power development plan (PDP) 2012 and a Framework for improving Accountability and performance of power sector planning. King Mongkut University IEA (2010). Deploying Renewables in Southeast Asia, trends and analysis. IEA. Paris Sopitsuda Tongsopit and Chris Greacen (2012). Thailand s Renewable Energy Policy: FiTs and Opportunities for International Support. King Mongkut University
32 References USAID (2011). Energy trends in developing Asia: Priorities for a low carbon future. Patarapong Intarakamnerd, Pun-arj Chairatana and Tipawan Tangchitpiboon. National innovation System in Less Successful Developing Countries: The case of Thailand. NSTDA. Thailand Yasser M Al-Saleh (2010). Systems Of Innovation As A Conceptual Framework For Studying The Emergence Of National Renewable Energy Industries. Masder Institute of Science and Technology. UAE
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