Compendium on Energy
Conservation Legislation
in Countries of the Asia and Pacific Region
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Part Two:
Country Profiles and Case Studies of National Legislation for
Promotion of Energy Conservation and Energy Efficiency
Energy Conservation Legislation in Thailand:
Concepts, Procedures and Challenges
by Dieter Brulez and Rudi Rauch*
SECTIONS IN THIS CHAPTER
Preface
The concept
Obligations and regulations of the Energy Conservation Promotion
Act pertaining to energy
management
Financial incentives to encourage energy management and
energy efficiency
Regulations on minimum performance standards/energy labels
Institutional and support infrastructure
The challenges
List of Selected Readings
This paper is based on the authors' experience, views and knowledge which they gained during their assignments as advisors to Thailand's Department of Energy Development and Promotion (DEDP) as part of the Thai-German Energy Efficiency Promotion Project (ENEP) sponsored by the Federal Government of Germany and implemented jointly with DEDP by the German Technical Cooperation Agency (GTZ) since March 1993. This paper does not necessarily reflect the views of DEDP or other Thai agencies and is the sole responsibility of the authors.
In the Kingdom of Thailand, energy development policy has been a significant part of the National Economic and Social Development Plan since the 5th planning period of 1982 to 1986 up to the present 8th Plan of 1997 to 2001. The various plans emphasize both adequate procurement and production of energy to meet the demand as well as conservation of energy and promotion of its efficient use.
The principle measures of the first decade of energy conservation are based on voluntary and incentive programmes and included some pricing restructuring. In 1987, the Energy Conservation Centre of Thailand (ECCT) was set up by the Government with some symbolic support by the Federation of Thai Industries. A World Bank loan was used to stimulate energy management in industry by providing training and services to customers on a paid basis but mainly through government-sponsored programmes.
During the boom period of the late 1980s and in the beginning of the 1990s, Thailand had double-digit growth in its energy consumption every year which was well beyond the GDP annual growth rates. Policymakers believed that progress in energy conservation was too slow. The Government of Thailand made a lot of effort to copy and implement the energy conservation laws of Japan and the Republic of Korea but failed because politicians and the public did not see a need for it. In the end, it became the privilege of the interim Government of Anand Panyarachun to set up and pass the Energy Conservation Promotion Act in April 1992 together with some other laws pertaining to the restructuring of energy administration and policy making.
The conceptual approach of the Energy Conservation Promotion Act is based on the principles of good energy management practice which it tries to instill in industry and commerce. Energy management is seen as an important part of the overall business management and decision making process which has to go through the cycle of:
a) Assigning responsible personnel;
b) Collecting information and data;
c) Assessing opportunities for improvements and investments;
d) Deciding on an investment and action plans;
e) Supervising and implementing the endorsed projects;
f) Monitoring and evaluating the results; and
g) Revising the plans accordingly. <return to top>
The Act uses a "carrot and stick" method to compel the business community to adopt the good energy management practices mentioned above. Big energy users are obligated to adopt the process cycle of energy management as part of their normal business practise. Compliance entitles them to various incentives — the carrots — provided by the Energy Conservation Promotion Fund (ECPF). Smaller industries are encouraged to use a similar approach but in a less stringent way. Non-compliance creates new difficulties, including additional costs — the sticks. Electricity surcharges are imposed as monetary penalties. In addition to this compulsory programme based on the Act, energy conservation and efficiency is promoted through various voluntary programmes also funded by the ECPF.
2.1 The government buildings programme
Government offices all over Thailand have been encouraged to adopt an energy audit and retrofit programme for their buildings. The programmes are completely financed by the ECPF.
More than 415 government buildings, including provincial halls, hospitals and state enterprise buildings as well as ministry and department offices have been audited and 274 have been retrofitted so far. Another 141 are to be retrofitted by October 1998. They serve as demonstration projects to the public as well.
2.2 The industrial liaison programme
The National Energy Policy Office (NEPO) has set up procedures to: a) fund capacity building of the industrial sector to produce energy efficient and renewable energy equipment, b) disseminate information on energy conservation, and c) support demonstration projects in buildings and factories. The most successful projects so far are the energy efficient kiln for the ceramic industry and the bio-gas plants for the large livestock farmers. Both technologies were initially introduced by German technical cooperation projects and are now implemented successfully by the respective Thai partner organizations. More projects and programmes are under consideration by the ECPF. For example, the Thailand Energy and Environment Network (TEE-NET) which will unite all providers of information on energy and environmental issues in a one-stop-shop service to clients in factories and buildings. <return to top>
2.3 The demand side management programme
The demand side management (DSM) programme is implemented by three state-owned utilities: the Electricity Generating Authority of Thailand (EGAT), the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA) in a joint DSM office within the EGAT structure. The DSM office was created by an official mandate from the Cabinet of the Royal Thai Government and a loan provided by the World Bank. It was officially and publicly launched on 20 September 1993.
The DSM office uses a collaborative approach in its market transformation strategy by stimulating local manufacturers, importers and distributors to consider the production and import of more efficient appliances and to encourage consumers to buy these new products as they become available in the market. Particularly, the energy efficient fluorescent lamp project (thin tube project) and the labelling project for refrigerators and air-conditioners are very successful examples of the DSM programme. A more recent project is trying to stimulate the market for energy service companies (ESCOs) to support the factories subject to the compulsory programme of the Energy Conservation Promotion Act with comprehensive energy services.
3 Obligations and regulations of the Energy Conservation Promotion Act pertaining to energy management
3.1 Designated buildings and factories
The main elements of the Energy Conservation Promotion Act are aimed into effect degree by ministerial orders and Royal Decrees. Together they build the legal framework for the Thai Energy Conservation Promotion Programme.
The Royal Decrees signed by King Bhumiphol Adulyadej of Thailand define the target group as well as the designated buildings and factories of the law and the related regulations. Only facilities which have an installed capacity of 1 MW and above, consume 20 million MJ or more of electricity annually, use steam power and other non-renewable energy sources are designated to comply with the regulations of the law.
The Royal Degree for designated buildings was signed and published on 14 August 1995 and came into effect 120 days later on 12 December 1995. For factories, it became effective on 17 July 1997. <return to top>
Enforcement for factories is to take effect in several stages. In 1998, the regulations will be imposed only on factories with an installed capacity of over 10 MW. Later, they will be imposed on factories with an installed capacity less than 10 MW. By 2001, they will be imposed on the largest group of facilities — those with an installed capacity of 1-3 MW. This approach was adopted to reduce the huge workload expected for the implementing and supervising agencies and their respective support structure. In mid-1998, a total of 1,127 buildings and 2,557 factories had been registered as designated facilities.
It is the duty of the owner to assess whether the facility is designated by this law or not. Except for the customer lists and their electricity bills provided by the utilities, no other data are available on the consumption of oil and other commercial fuels which can be used by the authorities to control compliance with the Royal Decree. In case of doubt, DEDP has the right to order the owner to provide the required data within one month. This presently seems sufficient to prevent factory owners from shirking their obligation.
3.2 The duties of designatedfacilities and the role of energy managers
The owners of designated facilities play a key role in implementing the energy conservation programme. Their duties are based on the good practise of energy management in the process cycle. The Energy Conservation Promotion Act calls for:
a) assigning least one qualified person to the full time position of Energy Manager or the "person responsible for energy" (PRE).
b) Keeping records on monthly energy consumption and data on other energy related matters;
c) Submitting information on energy production, consumption and conservation to DEDP;
d) Setting up targets and plans for the implementation of energy conservation as outlined in detail in the ministerial orders;
e) Implementing the energy conservation measures according to approved targets and plans; and
f) Assessing and monitoring the implementation and achievements from the energy conservation measures and reporting them annually to DEDP.
The practise of regularly reporting energy consumption to DEDP forces the owners to quantify continually the cost they pay for their energy consumption and encourages them to think of options to reduce it. This is expected to help them evaluate the impact of an energy savings project in the future. The core elements of their duties are:
a) the energy conservation plan which should be based on comprehensive auditing and analysis of the weak points and energy losses of their facilities; and
b) the careful monitoring of the impacts and achievements. <return to top>
The rationale behind this procedure is that doing a detailed assessment of their own energy saving opportunities, going through the planning of economic measures and monitoring the results will automatically lead to a dedicated commitment by the owners in the long term. In Thailand, the experience of owners and senior management with energy conservation projects and with the process cycle of energy management is very limited. Therefore, their confidence cannot be based on the paperwork of assessments alone. They are pushed by the law through the whole process cycle of management in order to see finally the results from the monitoring.
According to the law, the owners and their managers must take the initiative in the energy management process but will be assisted by both their energy managers, which they must assign by law (Section 12), and by outside energy consultants certified by DEDP.
Under Section 14 of the Act, PREs have the responsibility to:
a) Periodically maintain and inspect the efficiency of machinery and equipment;
b) Reduce energy consumption (good housekeeping);
c) Verify the information and data the owner of the designated facility submits to DEDP;
d) Oversee the recording of information;
e) Assist the owner in setting targets and plans for the designated facility; and
f) Verify the results of the energy audits.
In order to assure a minimum standard of quality, the Section 13 of the Act outlines the necessary qualification of a PRE. They must:
a) Possess at least a higher vocational certificate and should have at least three years experience in the factory, with evidence of work in energy conservation verified by the owner of the designated facility;
b) Possess a degree in science or engineering, with evidence of work in energy conservation verified by the owner of the facility;
c) Have taken a training course in energy conservation, or a training course with similar objectives, organized or approved by the Ministry of Science, Technology and Environment. <return to top>
At the time of preparation of this paper, only PREs from designated buildings had been appointed. For designated factories it was too early to tell. Nearly 80 per cent of 1,127 designated buildings had nominated PREs. The rest had not yet complied with the Act and had not reported appointment of any PREs. Nearly 40 per cent of the 1,442 appointed PREs (bigger buildings usually appoint more than one PRE) still had to attend training courses in order to get approval from DEDP.
Those PREs with an acceptable qualification under the law are still far from being "energy managers" by international standards _ neither by their qualifications nor by the positions they hold within the facilities' management organization. This is because many facilities have not yet truly established good energy management practice and they are not truly part of company policy.
Energy audit reports, which must also assess management and staff qualifications regarding energy management at the designated facilities, show that both are far from satisfactory in many facilities. Nearly all reports estimated that savings of 10 to 20 per cent are achievable, without any investment in new energy efficient technologies, just by managing energy use more efficiently and improving everyday operating practices. This indicates that many energy users still pay little attention to their energy costs and fail to recognize the potential of energy housekeeping at all.
In order to establish good energy management, awareness by owners and management about the benefits of energy conservation for their companies must be increased first, followed by staff qualification measures. The law alone may be insufficient to raise awareness and convince the owners. Further promotional activities are needed in order to establish good energy management practices as company policy. In this context, further training should be available and strongly promoted as an important energy conservation measure — maybe the most important measure and the one with the best cost/benefit ratio.
3.3 The role of the external auditor
Article 4 of Ministerial Regulation Number Three says that: "the owner of a designated facility (building or factory) shall assign a consultant in energy conservation who has been registered with the DEDP to help set energy conservation targets and plans". <return to top>
This help might consist of support in the obligatory preliminary and detailed audits as outlined in Annex One and Two of the same regulation and in the technical and economic preparations of the plan itself. But it need not be limited to these tasks. Every other task the owner feels appropriate can be contracted to and provided by (outside) consultants (e.g., implementing the energy conservation projects as described in the approved plan and/or monitoring and reporting the results).
The regulation states that these consultants must be registered and licensed by DEDP to offer the minimum services needed (e.g.; energy audits and preparing the energy conservation plans in the compulsory programme). The consultants need not be outsiders. Any designated facility which is large enough to have a competent engineering department with staff who meet the minimum criteria can register as an energy conservation consultant with the department and do the work for their company — or even for others as a new business opportunity.
A registered consultant company, offering full energy services, including detailed audits for buildings and factories, must have at least one energy specialist to be responsible for and supervise the team which should have at least one financial analysis specialist. The energy specialist should have at least a bachelor degree from an accredited academic institution and substantial work experience, such as having:
a) Completed an approved building design, including an energy conservation concept;
b) Designed HVAC systems or lighting systems;
c) Managed a building and controlled energy systems for at least five years;
d) Conducted at least ten approved audit reports equivalent to the standard prescribed in the ministerial orders; and
e) Project management experience with at least five projects with a minimum value of one million Thai baht.
The financial specialist needs a bachelor degree as well and work experience in project investment analysis for at least five bank-approved projects worth a minimum one million baht each. Additionally, the company needs to have three or more permanent staff to do the energy audits, the analysis and prepare the reports. <return to top>
As of March 1998, DEDP had certified and registered 103 consultant companies: 79 for designated buildings services and 25 for designated factories services. The responsible managers at DEDP hoped to trigger a market for consultancy services in Thailand by forcing the owners of the designated facilities to use experts to help them fulfill their obligations under the law and related ministerial orders. On the other hand, the standards for the registration and certification of energy consultants were to ensure a minimum quality of these services and leave the rest to the market itself. What are the results?
As of March 1998, only about 40 registered consultants of the 79 listed could do at least one audit report of the 497 reports received by DEDP. At the same time, many consultants claim that it is hard for them to compete against well-known companies and those which enjoy good customer relations. For example, EGAT is well-known by the business community and recently set up a subsidiary consultant company to tap this new market of energy services.
It will be interesting to see how the market responds to the new initiative and approach by the DSM office to stimulate and encourage ESCOs to provide full services for designated factories. They will have to fulfil all the obligations of the Act and the related ministerial orders and try to sell the idea of performance contracting to the owners at the same time. An interesting new combination.
4 Financial incentives to encourage energy management and energy efficiency
Besides the "sticks" outlined in the law and the ministerial orders, the financial support for the designated facilities is considered to be an incentive for the designated facilities to start and proceed with the process cycle of energy management in their own interests. The incentives provided by the Energy Conservation Promotion Fund are as follows:
a) 100 per cent of the cost, but not exceeding 100,000 baht per facility (US$2,500 in March 1998) for the preparation of the preliminary energy audit report;
b) 50 per cent of the cost, but not exceeding 500,000 baht per facility (US$12,500 in March 1998) for the formulation of an energy conservation plan based on a detailed energy audit; and
c) up to 60 per cent but not exceeding 10 million baht per measure (U.S.$250,000 in March 1998) for any implementation of any approved energy efficiency measures in the form of interest subsidies. <return to top>
The two main criteria which facilities must meet for each energy conservation measure are a minimum economic internal rate of return (EIRR) of at least 9 per cent and a maximum financial internal rate of return not higher than market interest rates plus 2 per cent. These incentives in the Thai compulsory programme are considered to be the largest incentives for energy efficiency in all Asia, if not in the entire world. They are provided by the Energy Conservation Fund which was set up in 1992 with 15 billion baht from the Oil Fund as working capital. Additional income has come from a 0.07 baht/litre tax on the sale of petroleum products, amounting to about US$100 million per year. The Asian economic crisis which began in mid-1997 caused the Government to reduce the tax to 0.01baht/litre.
The approach to use money collected and provided from the consumption of energy to directly and indirectly stimulate energy conservation and efficiency in industry is unique and considered very effective. But do the procedures deserve the same praise? Due to the large amounts of money involved, the Government, and particularly the Fund Committee, wanted strict rules applied to disbursements, especially for the investment subsidies. This is understandable and the intention should be highly praised. However, the procedures became quite complicated and therefore difficult to understand, especially for facility owners and managers. It results in lengthy computations of the EIRR based on dubious and outdated indicators for shadow pricing which still leaves considerable space for manipulations or "flexible adjustments".
The incentives were set by the Fund Committee years ago when the currency exchange rate was constantly about 25 baht to the United States dollar. The devaluation of the baht in June 1997 by 30-40 per cent also devalued the incentives for energy management procedures and investment, especially when foreign expertise and technologies were involved or being considered. Thailand's economic downturn hampered the general investment climate in general and investments in energy efficiency improvements in particular. As the Fund provides only part of the investments needed to improve energy efficiency, the commercial banks have to be convinced to support the projects as well — not an easy task in times of restricted access to commercial loans.
The stimulation of the market for energy services might be still too low to attract foreign ESCOs to provide services under the performance contracting approach. Therefore, new incentives are being considered under the DSM programme. <return to top>
Owners claim the procedures set by the fund committee are too strict and difficult and offset the advantages of investments in energy conservation, especially in the present economic situation where they are struggling to survive. In addition, the approval mechanism for applications makes the process tedious and the funding flow in a slow trickle stretched over a long period of time. As a result, it only weakly stimulates energy management and the market for energy services. Initial enthusiasm is being choked by the red tape of bureaucracy.
5 Regulations on minimum performance standards/energy labels
Section 23 of the Energy Conservation Promotion Act provides for the National Energy Policy Council to set up ministerial orders to regulate the minimum energy efficiency and consumption standards of machinery, equipment and materials. Also, a clause provides the opportunity for producers and distributors of highly efficient machinery, equipment or materials to ask for support and assistance from the ECPF.
With support from the Thai-German ENEP project, a market survey was recently conducted regarding the mean energy efficiency of different technologies and the results were discussed with various manufacturers and importers of equipment. They concluded that by setting up an expert panel that includes consumers, manufacturers and government agencies, ministerial orders could be drafted immediately to establish minimum performance standards for the following appliances and equipment:
a) Various types and sizes of air-conditioners;
b) Induction motors;
c) Various types and sizes of alternating fans;
d) Fluorescent lamps; and
e) Various types of ballast for fluorescent lamps.
The expert panel also proposed a 5-10 per cent reduction of import duty on appliances and equipment and a subsidy scheme for buyers of highly efficient technologies. They also proposed forms and the wording for labels on: a) central air-conditioners, b) boilers, c) blowers, and d) commercial freezers.
The overall process of implementing the standards and labels is still not established as the various committees are still considering proposals. However, it will hopefully continue and complement the already successful voluntary labelling programme of the DSM office. (See also the paper by Kristina Egan on the role of regulatory mechanisms in building standard regimes.) <return to top>
6 Institutional and support infrastructure
6.1 The implementation scheme under the compulsory energy conservation programme
The implementation of the Act and related ministerial orders is the task of DEDP. When the Act became effective in 1992, DEDP had only a small group of officers working in the energy conservation section. Compared to the private sector, these officers have gained profound insights on energy conservation in the past 10 years. But the measures they dealt with were limited to supporting preliminary audits and small retrofitting projects. Most importantly, DEDP had limited management capabilities to quickly build up a large energy conservation promotion programme and effective implementation measures. It was the driving spirit of the responsible deputy director general coupled with some management and staff training programmes which created the task force of about 100 professional and support staff to implement the energy conservation programme and which set up the new Bureau of Energy Regulation and Conservation (BERC) with a detailed outline of the work process. (See Figure 2.4.1 "The implementation scheme for compulsory energy conservation programme in Thailand")
For more than two years, DEDP has tried hard to support the implementation of energy conservation measures by speeding up the approval process. They hired additional external consultants and in-house advisors to scrutinize the various reports and applications submitted by the owners. However, because the Government has no accreditation scheme in place which allows external consultants to act and approve on behalf of a government agency, the approval records of the consultants helping DEDP must be scrutinized again by the officer in charge. Instead of supporting the approval process and speeding it up, it made it slower. One positive result of this practise was that it made the officers concerned more confident in the decisionmaking process as it was backed up with some external expertise. <return to top>
A new initiative is on the way now. DEDP will hire several so called Accredited Consultants (AC) with international reputation to act on behalf of DEDP and scrutinize the various documents and proposals from the designated facilities for its correctness and feasibility. As these AC's will be responsible for the whole scrutiny process of the compulsory programme this might release the DEDP officers who can then concentrate on core governmental tasks of supervising the overall implementation and monitoring. The Thai-German Energy Efficiency Promotion Project (ENEP) has supported DEDP in this outsourcing process and will initiate a human resource development plan for all level officers of BERC to streamline the work process and to improve the quality of governmental services in this programme.
6.2 Training, information, advice and services for users
The market for energy services for users and customers in industry and
commerce is in its infancy. Demand is still insufficient to leave it to the private sector
alone to provide good services, such as further and specialized training, technology
information, and consultant services. Stimulation of demand is still needed and providers
need to be encouraged to create new and high quality services.
As an initial step, DEDP will hire training institutions to provide free basic training
for PREs as an incentive to business owners to appoint them and to support smooth
implementation of obligations under the Act. So far, about 400 PREs have joined various
training courses of up to five days duration, organized by the Training Division of DEDP.
The development of a new three-week basic training course for PREs is to be started in
1998. The training will be compulsory for PREs who lack the required qualification and
voluntary for all others.
The new three-week training course has been developed and tailored to the basic needs of PREs. Each one-week training block is to be followed by a two-week project assignment where the trainees are encouraged to apply what they have learned. PREs from buildings will be trained separately from those from factories. Training consists of lecture modules addressing general management issues and modules specific to procedures or technologies in industry or buildings.
In addition, the need for Thais to acquire expertise and skills in energy auditing and energy efficient technologies has been addressed through various expert training courses, tailored to the needs of energy consultants, experienced energy managers and engineers. The Training Division of DEDP also provides training courses for other target groups which address various topics related to energy management and technology. <return to top>
7.1 Overcoming bureaucratic tendencies by institutional development
Setting up the rules and regulations in the Act and the related
ministerial orders which designated facilities have to follow to reach the ultimate goal
of energy efficiency improvement and stimulating the market for energy services were the
first two major steps of DEDP's implementation work. Setting up an efficient approval
process to accomplish implementation effectively according to the Act was the first
obstacle to overcome.
DEDP had to grow and develop with the huge controlling task outlined by the Act. In 1993,
it was estimated that the number of professional staff needed to cope with the supervision
of the designated facilities would have to be more than tenfold the staff then available,
not to mention the huge training effort needed to make them aware of their roles and
tasks. This was impossible, mainly because of the general government policy to slim down
the bureaucracy. But the directors brought in some professionals from other divisions and
filled gaps with non-permanent staff recruited with support from the ECPF. Also, the
performance standards and working styles of the old and new staff had to be developed.
The management of DEDP understood from the beginning that implementing the Act would not be an easy task. The limited qualifications and experience of the government employees were too obvious. Additionally, the governmental set-up and administrative procedures are in many ways very complicated and inflexible. It depends on the initiative, courage and confidence of individuals to overcome difficulties and to start and use new approaches.
Even with the backing of senior management, it is quite difficult in a Thai government environment to change the working procedures from strongly hierarchical, controlled decisionmaking into a team approach with delegation of power and responsibility. It requires that the staff develop new attitudes and working habits which may be difficult, especially if they have learned to work in the traditional government environment for the past 20 years.
Although gradually gaining some speed, implementation is still slow. To some extent, this might be due to the complicated administrative procedures already mentioned, but above all it is due to the splintered nature and multitude of steps in the approval process applied by DEDP. Management thought that only with this approach could they control the process. <return to top>
Because of the limited experience of their staff and the registered consultants coupled with slow approval by DEDP, by mid-1998 only 50 per cent of building owners received approval of their preliminary audit reports and were able to proceed in requesting the respective subsidy. In the long term, DEDP senior managers see the only chance for improvement is by reducing the whole approval process into a one-step procedure which is contracted out to "accredited consultants" who work on behalf of the Government while at the same time giving all groups the opportunity for further training and to gain more experience.
After setting up BERC within DEDP to deal with all matters of energy efficiency and conservation, a new initiative, supported by ENEP, was taken in 1995/96 to manage the change in the work process of BERC. The institutional development project started to guide management through the process of developing a vision and communicating a mission statement throughout the whole organization, basing it on good management practices and customer orientation. Then, assessment tools to develop their own efficiency as well as the effectiveness of the work process were introduced. New means of communication and decisionmaking were developed, staff appraisals and participation were elaborated, and training in various management skills were provided.
The first, most significant result of the initiative was the growing readiness of management and staff to permit outsourcing of non-essential governmental tasks, giving key tasks in the approval process to accredited consultants (AC) which work closely with them and on their behalf. The second result was their expressed willingness to improve their quality of work by:
a) Streamlining the approval process;
b) Setting up detailed job descriptions and assignments with performance indicators;
c) Writing quality manuals; and
d) Training staff accordingly.
The third result was a new management information system — a computer on each officer's desk, networked and with links to the accredited consultants which supports management and staff in monitoring the process and bottlenecks carefully. It will also help to speed the approval process, resulting in faster feedback to the applicants. <return to top>
At the time of preparation of this paper, the whole scrutiny and approval process is being outsourced to accredited consultants. The pre-qualification process started in March 1998. Soon, a qualified international and Thai consortia will be selected to support the DEDP in approving applications based on agreed upon performance standards. DEDP's supervision and monitoring of this outsourcing process which uses performance standards and indicators is the next big concern. This is a rather new and modern management and contracting concept which DEDP has not tried before and which is difficult to apply under general government regulations.
In addition to supervising and controlling the implementation process, DEDP is adopting a service approach to the users of energy and all the other groups involved in complying with the Act. The ENEP Project is assisting them in applying a customer-oriented strategy and encouraging private participation and partnerships in their promotional efforts.
7.2 Huge training need tackled by new approach
Implementation of the Act still in its initial stage. The low awareness of energy conservation benefits and the insufficient qualifications of all key players of the ECP Programme (designated facilities, energy consultants, DEDP) are identified as the next most serious obstacles to overcome. About 4,000 PREs at designated facilities need basic or advanced training in energy management.
Over 100,000 technicians are involved in the operation and maintenance of major energy consuming equipment. The owners and management of the facilities are unaware of the benefits of good energy management practices and of energy efficient technologies. The energy consultants still lack business experience. The DEDP has to cope with new administrative tasks and its role to promote energy conservation. <return to top>
In our opinion, it is obvious that this huge need for training cannot be addressed properly without a training master plan that specifically considers each target group and provides them with training courses according to their needs. This should not be the role of the Government, nor can it be efficiently managed and implemented in a timely manner by government offices.
In order to ensure that unfulfilled training needs do not become a major setback in the implementation of the ECP Act, a new market-oriented approach to training is being considered. The new training concept, developed by ENEP with support by DEDP, is based on the understanding that training should be an essential measure of the energy conservation plans of the designated facilities. The basic idea is to make the owners of buildings and factories responsible for the training of their staff related to energy efficiency such as PREs, engineers, technicians and management. Their needs must be assessed by the energy auditor (registered consultant) and will be part of the proposed energy plan. This plan shall only be approved if appropriate training is included. The basic steps of the integrated training concept are shown below.
a) Registered consultants must assess energy management and staff qualifications during their energy audits.
b) Shortcomings in energy management and staff qualifications must be addressed by setting adequate training measures which are recommended as energy conservation measures (along with measures to implement energy efficient technology) in the energy conservation plan;
c) Accredited consultants will check if energy management and staff qualifications are properly addressed by training measures.
d) Once the energy conservation plans are approved, the owners are free to choose an appropriate training provider, which of course could be also a supplier or manufacturer, especially if the training is related to specific technologies or equipment. The training will be supported like any other energy conservation measure by the ECPF.
e) The funding mechanism should be easy to handle and encourage early applications (e.g.; by setting the initial support at 75 per cent of total training costs in the first year and lowering it by 15 per cent each year after that.
f) The training will be carried out by suitable training providers (e.g., manufacturers, suppliers, training institutions, professionals), at the right time (e.g., when new equipment is installed), at the right place (e.g., at the facility, on their own equipment), addressing the right and concerned people and their individual training needs.
g) The implementation of the training will be monitored by accredited consultants and BERC like any other ECM.
A precondition to the success of this concept is that training must be seen as an important energy conservation measure to improve energy management and to make optimum use of energy efficient technologies for the benefit of the company. An important role of DEDP will be to promote further training and to support the build up of local training resources in the initial stage until private sector activities pick up. <return to top>
7.3 Speeding up demonstration of good practices
Demonstration projects are an effective tool to introduce new energy efficient technologies to the market and to promote good energy efficiency practices. The ECPF provides additional financial support for demonstration projects. NEPO is the implementing agency.
Detailed guidelines and criteria have been established to regulate the submission and assessment of demonstration project proposals. The proposed projects have to show high energy-saving potential, good internal rate of return and good replication potential. They have to be submitted with a detailed technology transfer plan, which is an essential part of the proposal. Funding up to 100 per cent is theoretically possible, depending on risks and criteria specified in the guidelines. Some new demonstration projects have been screened and detailed proposals for funding have been worked out with the support of ENEP and the relevant consultants. The most promising one will be submitted for funding in mid-1998.
A unique demonstration of an energy conserving building will be the new Training, Display and Information Centre of DEDP, designed and presently being constructed under the ECP Programme. The construction had some severe delays because the original contractor could not cope with the new features and construction standards but a new contractor has made significant progress. <return to top>
7.4 Using new media to fill the information gap
Easy access to current information on energy efficient technologies, consultant services, training resources, training providers, manufacturers and suppliers of energy efficient technology as well as information on the progress and success stories of the ENCON Programme will be essential for its success. In order to provide information services for the various target groups, ENEP has provided an overall concept to establish a Thai Energy and Environment Network (TEE-NET). to ensure easy access to various information sources via the Internet. Hopefully, the ECPF Committee will follow the approach outlined and will ensure initial funding to set up TEE-NET. Within this network, DEDP will set up a "one-stop" connection for information services on energy efficiency. Links to international sources and databases will guarantee access to state of the art technologies and expertise. Technology providers will be encouraged to use TEE-NET to submit practical information on their energy efficient products and services for industrial users.
DEDP's activities aim to ensure smooth administration of the energy conservation plans submitted by the facilities and promote energy conservation. This is covered by a variety of activities, including the setting up of a management information system, customer support service and human resource development. The management information system has been designed to provide DEDP and NEPO with the needed information about their customers and the progress of the ENCON Programme in order to plan and target promotional activities efficiently. A good customer support service is seen as an essential part of sustainable promotion. The outsourcing of non-governmental tasks to the private sector, like scrutinizing energy conservation plans and providing training, will hopefully allow DEDP to focus on promotion of energy conservation strongly in the future. Awareness building and stimulating market forces by creating business opportunities for the private sector are core elements of the promotion strategy.
Making the compulsory programme outlined by the Energy Conservation Promotion Act and the related ministerial orders work is a huge challenge. The majority of observers from industrialized countries say it will never work. We think that with additional and professional promotion and huge training support it could work. Let the programme run for a few more years as intended, let it go through its complete cycle, and then evaluate whether it was worth the effort it took. All premature evaluations are only biased and will hardly be based on facts but instead only on expectations on wishful thinking.
One of the most outstanding demonstration projects in Thailand so far -- the energy efficient ceramic kiln -- has been successfully implemented and evaluated. The project was initiated in 1991 by the Thai-German Energy Efficiency Promotion Project with the demonstration of a new fibre lined kiln for the ceramic industry in Lampang province. Designed under ENEP by a German ceramic engineer, the 2.5 m3 kiln could use as little as half the energy of a traditional brick kiln. The demonstration was followed by training four local kiln builders and joint promotional activities with the ECCT and the Ceramic Research Institute of the University of Chiang Mai. In 1996/97 alone, 300 new kilns were erected by the trained kiln builders, reducing fuel consumption by 5,200 tons of LPG and reducing costs by US$1.6 million each year. For more than one year, the ECP-Fund has supported implementation of the energy efficient kiln in the ceramic sector with investment subsidies to overcome the initial costs.
Chapter Three Table of Contents
List of Selected Readings
The Energy Conservation Promotion Act. Bureau of Energy Regulation and Conservation, Department of Energy Development and Promotion, April 1995.
Royal Decree on Designated Buildings. Ministerial Regulation Issued under the Energy Conservation Promotion Act. Department of Energy Development and Promotion (DEDP), Ministry of Science, Technology and Environment (MOSTE), 1995.
Criteria for the Registration of Energy Conservation Consultants for Designated Buildings. Announcement of the Ministry of Science, Technology and Environment, 1995.
Demand Side Management in Thailand, Experience and Perspective. Demand Side Management Office, Electricity Generating Authority of Thailand, November 1997.
Prapat Wangskarn: Success of Energy Efficiency and Energy Conservation in Thailand. Paper presented at the Energy Day, November 13, 1997, Bangkok, Thailand. Department of Energy Development and Promotion, Ministry of Science, Technology and Environment, 1997.
Pravit Teetakeaw: Energy Conservation Experience of Thailand. Paper presented at the International Seminar on Energy Efficiency Strategies, Madras, India, November 1997.
Pongpisit Viseshakul: Thailand's Experience in Energy Conservation and Efficiency Programme. Paper presented at the Second National Seminar on Energy Conservation and Efficiency Programme in Viet Nam, Hanoi, 10-11 March 1998. <return to top>
Dieter Brulez: Ministerial Orders Regarding Energy Conservation in Buildings Put Into Effect. ENEP Project Notes, December 1995.
Dieter Brulez: The Energy Efficient Ceramic Kiln Project. ENEP Project Notes, January 1996.
Bernd Pfannkuche et al: The Energy Efficient Kiln Construction and Operation Manual for LPG Fired and Fibre Lined Kilns to Fire Ceramics. Two Volumes. The Thai-German Energy Efficiency Promotion Project. Bangkok, January 1997.
Rudolf Rauch: A Strategic Approach to an Integrated Training Concept of the Training Division of DEDP. ENEP Project, May 1997.
Dieter Brulez: The Thailand Energy and Environment Network (TEE-NET). Proposal for the Intermediate Central Secretariat and the Energy Efficiency Services (TEE-IS). ENEP Project, June 1997.
*German Technical Cooperation Agency (GTZ)
Advisors to the Department of Energy Development and Promotion
Ministry of Science, Technology and Environment, Thailand
Mr. Dieter Brulez
Chief Management Advisor
Thai German Energy Efficiency Promotion Project
108 Rangnam Road
Bangkok Thai Tower, 10th Floor
Phayathai Road, Rajthevi
Bangkok, Thailand 10400
Phone: (66)(2) 642-7121
Fax: (66)(2) 642-7120
E-mail: brulez@mozart.inet.co.th
Dr. Rudolf Rauch, Senior
Adviser
Thai German Energy Efficiency Promotion Project
Training Division Bang-Gruay
Nonthaburi 11130, Thailand
Phone: (66)(2) 447-2087
E-mail: rrauch@mozart.inet.co.th
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