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8/14/2019 Thailand Experience: Feed in Tariffs (FITs) Policy for promoting Renewable Energy
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Dr.Montchai Pinitjitsamut (B.Elec.Eng./ PhD.Economics)Faculty of Economics, Kasetsart University, Bangkok
Thailand
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RenewableEnergy
Thermal Energy
ElectricityGeneration (RE-E)
As a Fuel (e.g.Transportation)
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Environmental Protection
Reduce GHG Emission / Risk - Nuclear Power / Investmenton Fossil Power Plant
Energy Supply Security
Reduce Import Dependence of the Energy System (Scarcityof Fossil and Nuclear Fuels)
Economic Competitiveness Enhancing Agricultural Sector Energy Crop /
Technological Leadership / Private Investment / EconomicGrowth /Job Creation/ etc.
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Initiated and be approved by Government
Entitlement => Increase Renewable Energy in 20% Proportion of
Final Energy Consumption of Thailand
With 3 Stages of Development Framework
Year 2011
15.6%
Year 2016
19.1%
Year 2022
20.3%
Year 2030
25%
1 st Stage
FinancialMechanism tosupport proven
RE technology
2 nd Stage
Promote in-housetechnology &investment
R & D in Technology
/BiofuelsDevelop GreenCommunity
3 rd Stage
Promote Advancetech.-Hydrogen
Develop RE Market
Extent GreenCommunity
AdditionExpand RE Electricity
Expand BiofuelsBattery systemGeothermal
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6Source: Department of Alternative Energy Development and Efficiency
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RE forElectricity
Potential(MW)
2007Existing
Target Installed
2008-2011
2012-2016
2017-2022
2012
(MW) (MW) (MW) (MW) (MW)Solar 50,000 32 55 95 500 376.72
Wind 1,600 1 115 375 800 111.73
Hydro 700 56 165 281 324 101.75
Biomass 4,400 1,610 2,800 3,220 3,700 1,959.95
Biogas 190 46 60 90 120 193.40
Waste 400 5 78 130 160 42.72
Hydrogen 0 0 0 0 3.5 0
TOTAL 57,290 1,750 3,273 4,191 5,608 2,786.27
Source: Annual Report -Department of Alternative Energy Development and Efficiency & Author Calculation
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Distribution System
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Generation System Transmission System
Small PowerProducers
(SPPs) 8.26%
Electricity GenerationAuthority of Thailand
(EGAT) 49.05%
Independent PowerProducers
(IPPs) 40.5%
Electricity Import
(Laos & Malaysia)2.2%
Very Small PowerProducers
(VSPP)
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(1) Electricity generationcosts
Investment for theplant
Other costs related tothe project
Operation andMaintenance
Fuel costs Inflation Invested capital Interest payment for
invested capital Profit margin
(2) Avoided external costs Climate change Health damage from sir
pollutants Agricultural yield loss Material damage Effect on the energy
supply security
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Optimal return on
investment
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Stepped FITs
Technologyspecific
Plant Capacity
Local Condition
Degression
Others
Specific details in each type of RE-Ee.g. Storage & Run-off.
To group/ categorize each type of RE-Ebased on the distribution of total cost.
Difference among local conditionsrelating to total cost, e.g. On-Grid/Off-Grid.
-Annual reduction create an opportunityFor new power plant (higher efficiency)-Learning curve
-Technology Improvement
Additional Premiums-Certain policy goals (e.g. reduce DieselPower plant in provincial area)-Promote Innovative technology-Community Involvement
Difference in RE-E (Type of Fuel)
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ADDER: First implemented in 2007 and revisedin 2010
Avoided cost basis Calculation conditions : IRR 11%
D/E ratio = 3:1
Interest rate 6%
Exchange rate 40 THB/ USD (Now about 30 THB/USD)
Project period 15-25 year
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RE for Electricity
ADDER 2007 ADDER 2010
Normal(THB/kWH)
+ Extra 1(THB/kWH)
+ Extra 2(THB/kWH)
Duration(Year)
Normal(THB/kWH)
+ Extra 1(THB/kWH)
+ Extra 2(THB/kWH)
Duration(Year)
1. Biomass
Installed Capacity 1 MW 0.30 1.00 1.00 7 0.30 1.00 1.00 7
2. Biogas
Installed Capacity 1 MW 0.30 1.00 1.00 7 0.30 1.00 1.00 7
3. Waste
Anaerobic Digestion/Land Fill 2.50 1.00 1.00 7 2.50 1.00 1.00 7
Thermal Process 2.50 1.00 1.00 7 3.50 1.00 1.00 7
4. Wind
Installed Capacity 50 kW 3.50 1.50 1.50 10 3.50 1.50 1.50 10
5. Small HydroInstalled Capacity 50 kW -
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Base Tariff + Ft (Avg.Generation)
Feed-in Tariff (Fixed)
Year
Price
ADDER = Feed-in Tariff (Premium)
Purchase Price = Base Tariff + Ft (Average Generation)+ ADDER
Ft* = Float time cost = uncontrollable component in generation cost,such as fuel cost, exchange rate, Inflation rate, etc., including RE-E.
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MW
Result of the Policy: RE-E Estimate Installed Capacity
Source: Power Development Plan 2010-2030(PDP2010 Rev3 June 2012) 16
-
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
Waste
Biogas
Biomass
Hydro
Wind
Solar
2022 Target
RE-E =16,892.5 MW
Year Solar Wind Hydro Biomass Biogas Waste
2011 138.0 3.0 5,322.5 747.3 106.0 21.42012-2022 1,806.4 1,774.3 3,061.4 2,378.7 22.1 334.5
ACTUAL
ACTUAL 2012:RE-E=
2,786.92 MW
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Sector CO2 CO NOx CH4 SO2
Transportation 53,379 514 237 20 11
Electricity 83,370 68 261 7 353
Manufacturing 45,023 200 219 5 295Residence &
Commerce 6,389 2,484 35 52 0Others 10,984 105 171 1 4
GAS Emission fromEnergy by Sector(x1,000 ton) in 2008Source: Energy Planningand Policy Office (2011)
1997-
20062007 2008 2009 2010 2011 2012
Private Investment (mil.THB) 38,500 11,000 20,000 13,800 13,900 5,900
RE-Electricity (mil. kWH) 2,645.5 6,519.4 9,474.3 11,599. 13,360.
Accumulated CO2 Reduction(mil.KG.)
1,264.5 4,380.8 8,909.5 14,454. 20,840.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000 RE-E Investment / RE-E Production amount /Acc. CO2 Reduction
Source: Annual Report -Department of Alternative Energy Development and Efficiency & Author Calculation
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Burden to End User -> Higher adopt Higher electricity cost Fluctuation/ Uncertainty to Electric Grid (e.g. solar PV)
EGAT have to control the system by investing additionalcapacity.
Protest against Biomass power plant. Current mechanism not favor an adoption of high efficiency
technology, since its fixed in the same group & purchaseprice.
Waste Segregation / Waste ManagementLocalAdministration; political issues Information about existing RE-E generation cost to revise
FITs Equally distribution of support mechanism among RE-E
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Revised FITs More Market Compatible with lowtransaction cost.
Set-up Incentive mechanism for technologyimprovement and/or cost reduction.
Create suitable supporting scheme that allow to adoptmore variety of technologyespecially, New/ Highefficiency; High cost but low emission; e.g. for Biomass.
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fecomcp@ku.ac.th