Thailand

TH-2:Energy Conservation (ENCON) Program

Policy Description

The Energy Conservation (ENCON) Program was established in accordance with the ENCON Act (TH-1). It supports the implementation of the ENCON Act through a rolling five-year program of energy management and related activities which is updated to reflect latest developments in government strategies, policies and priorities. The Thailand 20-year Energy Efficiency Development Plan (EEDP, TH-3), launched in 2011, is also complementary to ENCON Program for promoting the energy efficiency. 

Description

The Energy Conservation (ENCON) Program was established in accordance with the ENCON Act (TH-1). It supports the implementation of the ENCON Act through a rolling five-year program of energy management and related activities which is updated to reflect latest developments in government strategies, policies and priorities. The Thailand 20-year Energy Efficiency Development Plan (EEDP, TH-3), launched in 2011, is also complementary to ENCON Program for promoting the energy efficiency.

The first 2 phases of the ENCON Program covered the periods 1995 to 1999 and 2000 to 2004, with Phase 3 being from 2005 to 2011. Phase 3 had a target (*1) to achieve an efficiency improvement of 20 % based on 2005 levels. Currently the ENCON Program has entered Phase 4 (2012-2016).  

Governance

The Energy Policy and Planning Office (EPPO) under the Ministry of Energy developed the ENCON Program (*2) and designed the policy framework and measures, as well as the ensuring the budget (*3) for the Energy Conservation Promotion Fund (ENCON Fund, TH-5). The EPPO ensures that the management of the ENCON Program and its financial support from the ENCON Fund (TH-5) is in line with the ENCON Act.

The Department of Alternative Energy Development and Efficiency (DEDE) under the Ministry of Energy is responsible for implementing, monitoring and evaluating the ENCON Program.

Phase 3 of ENCON Program

Phase 3 was updated in 2008 in order to reflect Thailand’s developments in government strategies, policies and priorities (*4).

The energy conservation target for the whole economy was to reduce energy consumption by about 10 million toe (tonnes oil equivalent) by 2011. For the industrial sector, specific targets included:

  • Industry sector energy consumption reduction by 20% compared to 2005;
  • Replace 5% oil consumption with natural gas in large industry factories
  • Promote gas district heating and co-generation in large industries and industry estates  

The revised Phase 3 (2008-2011) was divided into 3 main areas (*4):

  1. Renewable Energy Development Program;
  2. Energy Efficiency (EE) Improvement Program, which focused on intensifying energy efficiency improvements in small and medium-sized enterprises (SMEs). This consists of studies, R&D and promotional activities aimed at enhancing the efficient use of energy in the industrial and other sectors, and capacity-building and awareness-raising activities.
    • In 2010, a total amount of THB 2,034 million was allocated for the EE Improvement Program. This programme included several support measures to enhance the absorptive capacity of the enterprises, such as:
      • Provision for soft loans via commercial banks (Energy Efficiency Revolving Funds, TH-8), allocated from the ENCON Fund;
      • Tax incentives for industry, allowing expenses relating to investment in energy efficiency improvements to be treated as tax-deductible expenses; 
      • Energy efficiency investment promotion measures under the guidance of the Board of Investment  (BOI) of Thailand;
      • Funding to provide technical assistance on energy efficiency to foster energy conservation knowledge of the facility personnel.
  3. Strategic Management Program, for example including:
    • Policy research to implement lessons learned from previous phases.

The monitoring and management of the ENCON Program, including supportive work to enhance the implementation of important or urgent national energy agendas.

 

Phase 4 (2012-2016) focuses on the transport industry and other sectors similar to phase 3. It aims to support projects under the ENCON Act, technical research and development and demonstration and initiation of projects. The total implementation budget for phase 4 is 7000 million baht per year of which 50% is to be used for energy efficiency improvement program [4].

 

 

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Administrative, Economic, Information & Outreach

Position in the Pyramid

About Us

Participation: Mandatory

Period

Start Date: 1995

Policy Linkages

Supported By Energy Conservation Promotion Fund (ENCON Fund) Supporting Measure
Supported By Tax incentives Supporting Measure
Supported By ESCO Fund Supporting Measure
Supported By Energy Efficiency Revolving Fund (EERF) Supporting Measure
Supports Energy Conservation Promotion (ENCON) Act Effort Defining
Complements Thailand 20-Year Energy Efficiency Development Plan (2011 - 2030) (EEDP) Effort Defining

Agencies Responsible

Ministry of Energy: Department of Alternative Energy Development and Efficiency (DEDE)

Primary Objective: Energy

Objective

­Increase the energy efficiency of the economy

Target Group

Industry factories/buildings, high energy efficiency equipment (The same as defined in ENCON Act ), manufacturers or distributors

Driver of energy consumption or emissions affected by policy: Total energy use / Total emissions / Specific energy consumption / Carbon intensity / Relative efficiency

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Industry factories/buildings, high energy efficiency equipment (The same as defined in ENCON Act , Ibid APEC-EWG, Peer Review on Energy Efficiency in Thailand, 2010).

Quantitative Target? yes

Target: For the industrial sector target in Phase 3 included: ­ Reduction in industrial sector energy consumption by 20% compared to 2005; ­ Replacement of 5% oil consumption with natural gas in large industry factories ­ Promotion of gas district heating and co-generation in large industries and industry estates

Progress Monitored? yes

Verification Required? yes

Enforced? yes

Sanctions: As stated in ENCON Act (TH-1), the necessary penalty in terms of fines or imprisonment will be given to entities who fail to comply with ENCON Act requirements (see ENCON Act TH-1, sanctions section) (*5)

Requirements on the Target Group

As outlined in the ENCON Act (TH-1),

  • The owner of a designated factory or building must conserve energy, audit and analyze energy usage in his factory/building, in accordance with the standards, criteria, and procedures prescribed by the regulations.
  • The owner of the designated factory or building shall have following duties:
  • assign at least one full-time energy manager;
  • report and submit energy production, consumption and conservation to the government;
  • track and monitor the facility/and equipment level energy consumption;
  • set energy conservation targets and plans;
  • conduct audits and operational analysis to monitor progress against the targets

Support by Government

  • Technical assistance and provision of information and training to energy managers in industry to better understand the ENCON Act and all the requirements in terms of energy consumption reporting, target setting and plans for submission to DEDE
  • Financial support / incentives (e.g. tax incentive, Energy Efficiency Revolving Fund, ESCO fund)
  • Public awareness: several public awareness campaigns have been carried out aimed at motivating consumers to use energy efficiently and to eliminate wasteful behaviour in energy consumption.
  • Management & monitoring: this provides financial support to executing agencies of the government for the implementation of the ENCON Program.
  • For EE improvement program in Phase 3:
    • Provision of soft loans via commercial banks, allocated from the ENCON Fund;
    • Tax incentives for industry, allowing expenses relating to investment in energy efficiency improvements to be treated as tax-deductible expenses;
    • Energy efficiency investment promotion measures under the guidance of the Board of Investment (BOI) of Thailand;
    • Provision of consultancy  services on energy efficiency to foster energy conservation knowledge of the facility personnel;
    • Technical assistance and collaboration with major private corporations  

Implementation Toolbox

Technical guidance and services, training and public campaigns are provided under the ENCON Program; and the financial sources for implementing the Program are from ENCON Funds.

Complexity of Implementation

Government

Multi-ministry involvement

Target Group

The program requires the target group to participate in various activities at many levels, such as allocating responsible personnel, target setting and planning, information collection, audit and capacity building, and financial application.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions ­- Phase 3 of the program finished in 2011 and, according to an intermediate assessment, the expected outcome is achievement of a reduction in energy consumption of 10 million toe and an increase in the share of renewable energy production to 9.2% ­- Particularly for the Energy Efficiency Improvement Program: energy saving for industry sector in Thailand has been measured at USD 160 million and USD 750 million in 2004 and 2008 respectively
Estimated costs/benefits for industry na
Estimated cost for government na

References & Footnotes

References

[1] EPPO (Energy Policy and Planning Office, Ministry of Energy, Thailand), n.d. Section 1: Background. Available at: http://www.eppo.go.th/encon/encon-fund01.html.

[2] APEC, 2010. Compendium of Energy Efficiency Policies of APEC Economies – Thailand. Tokyo. Available at: http://www.ieej.or.jp/aperc/CEEP/Thailand.pdf.

[3] APEC, Peer Review on Energy Efficiency in Thailand, 2010 March.

[4] Chirapaporn (2013). Possible Financial Support for Energy Efficiency Measures in Transport. March 2013 presentation by Ms Chirapaporn Laima. Available at http://transportandclimatechange.org/wp-content/uploads/2013/04/Possible-Financial-Support-For-Energy-Efficiency-measures-in-Transport-by-Ms.-Chirapaporn-Laima.pdf

Footnotes

(*1) Page 25, APEC- EWG,Peer Review on Energy Efficiency in Thailand, 2010

(*2) EPPO website: http://www.eppo.go.th/doc/strategy2546/strategy.html

(*3) Page 32, APEC-EWG, Peer Review on Energy Efficiency in Thailand, 2010

(*4) Page 25, APEC- EWG,Peer Review on Energy Efficiency in Thailand, 2010

(*5) From the TH-1, where states: ENCON Act contains punishment clauses for those who violate or fail to comply with the Ministerial Regulations. The penalties include imprisonment of not exceeding 3 months, and various level of financial penalties from 5,000 to 150,000THB