a review of of renewable energy laws lessons for thailand
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3rd Mekong Forum on Water, Food & Energy 2013. Presentation from Session 12: Alternative electricity sources and planning for the MekongTRANSCRIPT
Thailand’s Country Case Study A Review of of Renewable Energy Laws: Lessons for Thailand
20 November 2013
Sopitsuda Tongsopit, ERI
Chris Greacen, Palang Thai
3rd Mekong Forum on Water, Food, and Energy,
Melia Hotel, Hanoi, Vietnam
Palang Thai
Outline
• Key Successes of Thailand’s RE Development
• Key barriers and bottlenecks
• Lessons learned from 4 Renewable Energy Laws
• Recommendations for the Development of
Thai law
2
Thailand: High Growth in Power Consumption; Limited Resources
3
0
20
40
60
80
100
120
140
160
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Bil
lio
n K
Wh
Total Electricity Net Consumption (Billion Kilowatt-Hours)
Thailand
Indonesia
Malaysia
Vietnam
Philippines
Singapore
Myanmar
Brunei
Cambodia
Laos
Source: EIA (2013)
Source: EPPO (2013) based on Jan-Feb 2013 generation data
Thailand’s Renewable Energy Status
4
THAILAND: Supportive RE Framework AEDP 2012-2021 goal: 25% of total consumption is RE by 2021
5
Low Interest Loan: Revolving Fund
Venture Capital: ESCO Fund
Tax Incentives: BOI Privilege
Investment Subsidy (Biogas)
Feed-in Tariff: Adder
Note: RF program was fully subscribed as of 2012
RE Power Status (SPP+VSPP): capacity fed into the grid)
6
Feed-in Tariffs
• Feed-in tariffs (FiT) has been recognized as one of the most effective and efficient drivers of renewable energy (RE) scale-up worldwide.
• A feed-in tariff (FIT) rate can be defined as a power purchasing rate per kilowatt-hour from eligible renewable power sources for a pre-specified period of time.
7
8
THAILAND’s Adder Rates 8
Trend of MW in the Pipeline (All Renewables)
9
Oversubscription
to the ADDER
program
has been followed
by governance
challenges
Key Barriers in Thailand’s RE Development
▫ Policy and regulatory uncertainties: Interruption of support for solar power
▫ Complicated permitting process Average > one year of permitting process for solar & WTE plants
▫ Lack of an effective monitoring and evaluation system
▫ Lack of a unified energy plan Many existing energy plans that do not synchronize
▫ Lack of integration of renewable energy with
other types of policies, including environmental,
agricultural, and water policies.
10
Thailand’s Alternative Energy Development Act
11
Thailand’s Alternative Energy Development Act
Chapter
1 General Provisions
2 The Alternative Energy Committee
3 Obtaining Alternative Energy Support -roles of responsibilities of the Committee and the alternative energy enterprise
4 Framework for Alternative Energy Support -Priviledge, Investment , and Incentives
5 Alternative Energy Support -RPS provision
6 Alternative Energy Fund
7 Enforcement
8 Transitional Provision
Comparisons of the RE Laws of 4 Countries
12
Country Name of the Law Year Enacted
Germany
The Act on granting priority to renewable energy sources (Renewable Energy Sources Act – EEG)
2000
Ontario Green Energy Act 2009
Malaysia Renewable Energy Act 2011 2011
Japan The Act on Special Measures Concerning the Procurement of Renewable Electric Energy by Operators of Electric Utilities
2012
Big Picture on the Reviewed Laws 1) The laws targeting RE use in the power sector and RE fuels are usually separate.
2) Some laws amend or repeal other laws and may have subsidiary legislations.
3) Balancing supportive measures and public interest (e.g., cost burden on taxpayers/ratepayers); prevention of fraud; many installations on one plot of land (Section 19 of German RE Law)
4) Policy and implementation details
-Certain laws such as the German RE Law include policy and implementation details.
-Other laws determine a broad framework to be followed by details from Ministerial Directives (Ontario’s Ministerial Directives guiding the OPA) or ordinances (Japan’s METI).
13
Germany
14
Germany
• Name of Law: Renewable Energy Sources Act (EEG)
• Enacted in 2000 (with recent updates in 2012)
• FIT: solar PV
wind
geothermal
hydropower
landfill gas
biomass.
•
German RE law: Objectives
• Protect environment and climate
• Reduce cost of energy supply
• Conserve fossil fuels
• Promote development of renewable energy technology
German RE law: impacts
20.35% of gross electricity consumption
1360000 GWh (2012)
Note: Thai electricity consumption:
112,401 GWh in 2012
Key feature 1:
Legally binding renewable energy
targets
35% by 2020;
50% by 2030;
65% by 2040;
80% by 2050;
Section 1(2): Purpose
Key feature 2: Quantity of renewable energy is regulated
entirely by adjusting the price offered. (No MW caps)
2013
Freestanding Rooftop <30 kW
Rooftop 30-100 kW Rooftop >100 kW
7400 MW
installed in 2010
and 2011.
Section 20b: Reduction in tariffs paid for electricity generated from solar radiation
Section 20: Reductions in tariffs and bonuses
13.5
ct/kWh
Key feature 3: For solar: volume-based mechanism to
adjust degression in response to recent deployment
Section 20b: Reduction in tariffs paid for electricity generated from solar radiation
Target: 2500-3500 MW per year
Increased degression rate if target exceeded
Key feature 4: RE Generation incentivized when
most needed
opportunity to sell in
wholesale market
Eu
ro c
ent/
kW
h
Key feature 5: Market integration model for
installations generating electricity from solar
• “The tariff paid for [solar] electricity larger than 10 kilowatts… shall be limited to 90 percent of the total quantity of electricity generated in the installation in that calendar year.”
• (This incentivizes installations where the remaining 10% is used locally)
Section 33: Market integration model for installations generating electricity from solar radiation
Key feature 6: Priority Grid access
• “Grid system operators shall immediately and as a priority connect installations generating electricity from renewable energy sources.”
Section 5: Connection
Ontario
24
Ontario’s Green Energy Act (GEA) 2009 Context and Driving Forces:
▫ Aging power industry infrastructure
▫ Commitment to phase out coal since 2003 (unique in North America)
▫ Economic recession & job losses
25
Objectives of Ontario’s Green Energy Act
• Foster the growth of renewable energy projects
• Remove barriers to and promote opportunities for renewable energy projects
• Promote and expand energy conservation
• Promote a green economy
26
Components of Ontario’s Green Energy Act
27
Source: Renewable Energy Development Symposium, 2012
Key Feature 1: FiT with additional incentives for energy efficiency and communities
28
Ontario’s FiT Ontario Power Authority's Feed-in Tariffs 2009
Effective Date 1 October 2009
1.35918 1.309
Years €/kWh $CAD/kWh USD/kWh
Wind
Onshore* 20 0.10 0.135 0.13
Offshore* 20 0.14 0.19 0.183
Photovoltaics
MicroFIT
Rooftop <10 kW 20 0.59 0.802 0.7724
Groundmounted <10 kW (2 July 2010) 20 0.47 0.642 0.6183
Rooftop >10 kW<250 kW 20 0.52 0.713 0.6867
Rooftop >250 kW<500 kW 20 0.47 0.635 0.6116
Rooftop >500 kW 20 0.40 0.539 0.5191
Groundmounted <10 MW* 20 0.33 0.443 0.4267
Hydro
<10 MW* 40 0.10 0.131 0.1262
>10 MW<50 MW* 40 0.09 0.122 0.1175
Landfill Gas
<10 MW* 20 0.08 0.111 0.1069
>10 MW* 20 0.08 0.103 0.0992
Biogas*
On-Farm <100 kW 20 0.14 0.195 0.1878
On-Farm >100 kW<250 kW 20 0.14 0.185 0.1782
<500 kW 20 0.12 0.16 0.1541
>500 kW<10 MW 20 0.11 0.147 0.1416
>10 MW 20 0.08 0.104 0.1002
Biomass
<10 MW* 20 0.10 0.138 0.1329
>10 MW* 20 0.10 0.13 0.1252
29
• Eligible Technologies
• Wind
• Solar PV <10 MW
• Hydro <50 MW
• Biogas
• Biomass
•Adder on top of base rates:
-35% premium for power supply during peak periods
-price adder for aboriginal participation
-price adder for community based projects
• Local Content Requirements
Key Feature 2: Domestic Content Requirements
30
From October
1, 2009
From January
1, 2011
From January
1, 2012
Wind (> 10
kW)
25% 25% 50%
Solar (> 10
KW)
50% 60% 60%
Solar (≤ 10
kW)
40% 60% 60%
Domestic Content Requirements under Ontario’s GEA (Wind>10 kW and all solar projects are subject to domestic content requirements)
Notes: • December 2012: the World Trade Organization (WTO) ruled that the domestic
content requirements of Ontario’s GEA violated trade rules • May 2013: Ontario’s Minister of Energy announced the elimination of domestic
content requirements
Key Features 3: Amendments of 12 existing laws and Repeal of 2 existing laws, e.g.
31
Am
en
dm
en
t Environmental Protection Act (EPA)
Planning Act
Electricity Act
Ontario Energy Board Act
Re
pe
al Energy Conservation
Leadership Act
Energy Efficiency Act
*One permit (renewable project approval) replaces all other permits previously required under the EPA
*Curtailing the power of municipalities to block renewable energy projects
*Giving the authority of the Ministry to direct the OPA on RE support and FiT programs
*adjusting the purposes of Ontario Energy Board to emphasize RE support
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2005 2012 2015
Inst
alle
d C
apac
ity
(MW
)
Coal Nuclear Natural Gas Hydro Non-Hydro Renewables Demand Response
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2005 2012 2015
Inst
alle
d C
apac
ity
(MW
)
Coal Nuclear Natural Gas Hydro Non-Hydro Renewables Demand Response
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2005 2012
Inst
alle
d C
apac
ity
(MW
)
Coal Nuclear Natural Gas Hydro Non-Hydro Renewables Demand Response
Reduction of Coal and increasing RE 32
7,600
10,900
4,900
8,100
31,600 MW
10,000
8,400
3,000
670
38,300 MW
12,900
3,300
3,300 MW
100
4,300 MW 2,000 MW
5,100 MW
300 MW 2,900 MW
670 MW
12,900
9,300
8,900
8,700
700
40,500 MW
700 MW 500 MW 5,700 MW
30 MW
Source: IESO/OPA. Figures have been rounded.
Source: Shalaby, Amir. 2012. Outlook for Electricity Demand and Supply in Ontario
APPrO 2012 Conference, Ontario Power Authority
Impact: The Reviews of the GEA has been mixed and currently subject to debate
• Pros: >40 new manufacturing facilities >28,000 new jobs
• Cons: Increasing electricity prices (increase 40-
60% by 2015) Net job losses in other sectors (mining,
manufacturing, and forestry sector)
33
Recent Changes 1. Elimination of domestic content requirements:
Following the WTO’s December 2012 ruling that Ontario’s GEA violated international trade rules
2. Ending Large-Scale FiT program and replace it by a competitive procurement process
34
Lessons learned from Ontario • RE law can be an instrument for fulfilling development objectives, such as
economic renewal & green job creation, but this has to be accompanied by well-structured policy design and support measures. In the case of Ontario, this includes FiT rate adder for communities and domestic content requirements.
• RE law can be an opportunity for revising existing laws to remove barriers. In the case of Ontario, this took a year of lobbying effort and lessons learned from experiments with an early form of FiT since 2006.
• Ontario’s OPA early success was attributable to the power industry structure, with a government owned company as the main generation company (See, e.g., Stokes (2013: 494), but public support declines over time.
• Increasing ratepayers’ costs invite political intervention and public scrutiny, so a FiT program should be able to demonstrate net benefits to society
35
Malaysia: Renewable Energy Act 2011
Objectives of the Law:
“an Act to provide for the establishment and implementation of a special tariff system to catalyse the generation of renewable energy and to provide for related matters.” (Renewable Energy Law 2011)
37
Targets: Cumulative renewable energy capacity ♦ 73 MW by no later than 2010; ♦ 985 MW by no later than 2015; ♦ 2,080 MW by no later than 2020; and ♦ 4,000 MW by no later than 2030
Renewable Energy Act 2011
Impact of the Law
Source: SEDA Malaysia
Sustainable Energy Development Authority Act (SEDA Malaysia) ♦ SEDA Malaysia established on 1st September 2011 under the SEDA ACT 2011
Key Feature 1: Designated Authority
♦ a one stop Renewable Energy (RE) centre.
♦ Functions:
-implement, manage, monitor, and review the Feed-in-Tariff system -advice the Minister and Government entities on all matters relating to sustainable energy -carry out investigations, collect, record and maintain data, information and statistics concerning the feed-in tariff system
Key Feature 2: e-FIT System Allows Real-Time Monitoring
Source: Adapted from Leong (2012)
Recommendations for Thailand’s Renewable Energy Law
42
Current Problems Remedies through the law
1. Oversubscription to Quota causes policy interruption
No capacity caps/quota. Instead moderate supply by adjusting FIT price
2. If there’s no quota, there’s concerns about impact on ratepayers.
Price signals to encourage production where/when needed. Peak/off-peak
3. Complex permitting process involving
many agencies
Simplify permit process by allowing exemption for certain classes of renewable energy projects
4. Manual application process and lack of transparency of the queuing system,
raising question whether it is first-come-first-serve
A transparent online system with real-time monitoring and real-time reporting of application process
