37467 WORLD BANK GEF Post-Implementation Impact Assessment Thailand Promotion of Electrical Energy Efficiency Project A WORLD BANK GROUP GLOBAL ENVIRONMENT FACILITY PROGRAM PUBLICATION WORLD BANK GEF Post-Implementation Impact Assessment THAILAND PROMOTION OF LECTRICAL E ENERGY EFFICIENCY PROJECT GLOBAL ENVIRONMENT FACILITY PROGRAM THE WORLD BANK © 2006 The International Bank for Reconstruction and Development/ THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Manufactured in the United States of America This report was prepared by Marbek Resource Consultants in association with Global Change Strategies International. Special thanks to Khun Napaporn Phumaraphand, Senior Economist at EGAT's DSMO, and her staff, Robin Broadfield of the World Bank East Asia Region, and Siv Tokle of the GEF Evaluation Office for their comments, and Esther Monier-Illouz, World Bank, for editorial assistance. The study was financed through the Canadian Consultant Trust Fund and the World Bank's Task Manager was Samuel Wedderburn. Cover and book design: The Word Express, Inc. and Esther Monier-Illouz; book design based on work by Jim Cantrell. Cover image: Stuart Gregory/Getty Images Images in text: Josh Westrich/zefa/Corbis All rights reserved The World Bank has used its best efforts to ensure that the information contained within this report is accurate, however, it cannot guarantee its accuracy. The representations, interpretations, and conclusions expressed herein do not necessarily reflect the views of the Executive Directors of the World Bank or the government that they represent. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permis- sion to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. CONTENTS EXECUTIVE SUMMARY 1 1. INTRODUCTION 7 2. PROJECT BACKGROUND 9 2.1 Project Objectives and Approach 9 2.2 Project Activities 10 3. IMPACT ASSESSMENT FRAMEWORK AND APPROACH 13 3.1 Impact Assessment Framework 13 3.2 Results Framework 13 3.3 Attribution 13 3.4 Methodology 17 4. PROJECT OUTPUTS AND OUTCOMES 19 5. CONTEXT 23 5.1 Economic Trends 23 5.2 Electricity Sector 23 5.3 Key Government Institutions 26 5.4 The DSMO 29 5.5 EE and DSM Programs 31 6. ASSESSMENT OF NTERMEDIATE I OUTCOMES 39 6.1 Strong DSMO 40 6.2 Behavior Change 41 6.3 Relationships with Allies in the Public Sector 42 iii Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project 6.4 Policies, Regulations, and Institutions Supporting EE 43 6.5 Strong Energy Services Sector 44 6.6 Strong EE Manufacturing Sector 46 7. ASSESSMENT OF ULTIMATE OUTCOMES 47 7.1 Residential Market Transformation 47 7.2 Commercial and Institutional 50 7.3 Industrial 50 7.4 Program Replication and Extension 51 8. ASSESSMENT OF MPACTS I 53 8.1 Energy Savings and Emission Reductions 53 8.2 Capacity Savings and Financial Benefits 60 9. CONCLUSIONS AND ESSONS EARNED L L 61 9.1 Replication and Extension 62 9.2 Sustainability 63 9.3 Ultimate Outcomes 63 9.4 Impacts 64 9.5 Lessons Learned 65 APPENDIXES Appendix A: Interviewees 67 Appendix B: Bibliography 71 Annex C: Data Analysis 73 TABLES Table 2.1 TPEEE Project (DSMO) Activities 11 Table 3.1 Results Framework 15 Table 4.1 Outcomes of TPEEE Project 19 Table 4.2 Summary of DSMO Initiated Activities, as of January 2005 21 Table 7.1 Sales Data 49 Table 7.2 Influence of TPEEE on Sales of EE Equipment 50 Table 8.1 Assumptions behind Baseline Scenarios (No TPEEE Project) 54 Table 8.2 Annual Energy Savings and Attribution to TPEEE under Conservative and Aggressive Scenarios (GWh) 56 Table 8.3 Annual and Cumulative Impact of TPEEE Against Baseline (GWh) 58 Table 8.4 Annual and Cumulative GHG Reductions of TPEEE Against Baseline (Mt) 59 Table 8.5 DSMO Impacts, 1993 to December 31, 2004 Based on afternoon peak (2:00 p.m.) 60 iv Contents FIGURES Figure 3.1 Impact Assessment Frameworks 14 Figure 5.1 Thailand's Current Demand Characteristics 26 Figure 5.2 Organizational Chart of the Ministry of Energy (est. October 2002) 27 Figure 8.1 Energy Savings Attributable to TPEEE (GWh) 58 Figure 8.2 GHG Reductions from TPEEE Project (Mt) 59 Box Energy Conservation Promotion Fund 28 v ACRONYMS AND ABBREVIATIONS A/C air conditioning CFL compact fluorescent lamp CPB Consumer Protection Board DEDE Department of Alternative Energy Development and Efficiency, Ministry of Energy DIW Department of Industrial Works DSM demand-side management DSMO Demand-Side Management Office ECF Energy Conservation Promotion Fund EE energy efficiency EEI Excellent Energy International EER energy efficiency rating EGAT Electricity Generating Authority of Thailand ENCON Energy Conservation Promotion Act EPPO Energy Policy and Planning Office, Ministry of Energy ESCO energy services company GEF Global Environment Facility GHG greenhouse gases GLR Green Learning Room GW giagwatt GWh gigawatt-hour (1 million kilowatt-hours) HEM high-efficiency motors HPS high-pressure sodium-vapor (bulbs) ICR Implementation Completion Report vii Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project IFCT Industrial Finance Corporation of Thailand IPP independent power producers Kt kiloton KWh kilowatt-hour MEA Metropolitan Electricity Authority MEPS minimum energy performance standards Mt megaton MW megawatt (1 million watts) NEPO National Energy Policy Office NGO nongovernmental organization NOx nitrogen oxide PEA Provincial Electricity Authority SME small and medium-size enterprises SOx sulfur oxide TISI Thailand Industrial Standards Institute ToU time of use TPEEE Thailand Promotion of Electrical Energy Efficiency TWh terawatt-hour Note: All dollar amounts are U.S. dollars unless otherwise indicated. viii EXECUTIVE SUMMARY Introduction cofinanced by a GEF grant of $9.5 million, The World Bank's Global Environment Facil- $5.4 million from the government of Aus- ity (GEF) Coordination Team has conducted tralia, a loan of up to $25 million from the a series of post-implementation impact as- Overseas Economic Cooperation Fund of sessments in order to better understand the Japan/Japan Bank for International Coopera- long-term impacts of GEF projects, the sus- tion, and funds from the state-owned public tainability of the impacts, the replicability of electricity utility, the Electricity Generating the projects, and lessons learned. Authority of Thailand (EGAT). The project, national in scope, consisted of a five-year demand-side management (DSM) plan. It Four climate change projects in the energy wasimplementedbytheDemand-SideMan- efficiency thematic area were selected for agement Office (DSMO) of EGAT. study in 2004--5: the Poland Efficient Light- ing Project, Mexico High Efficiency Lighting Framework and Approach Project, Jamaica Demand-Side Management Thestudyassessedthesuccess,sustainability, DemonstrationProject,andThailandPromo- and attribution of the following outcomes tion of Electricity Energy Efficiency (TPEEE) and impacts: Project, which is the subject of this report. Marbek Resource Consultants conducted · ProjectOutcomes:demonstrationoftech- the study in association with Global Change nicalandfinancialfeasibilityofavarietyof Strategies International. The field mission to programs in residential, commercial, and Bangkok took place January 17--28, 2005. industrial sectors The TPEEE Project was approved in 1993 · Intermediate Outcomes: continuation of and took place from 1993 to 2000. It was the DSMO and its programs, changes in 1 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project consumerpreferences,improvementinca- approach and established a model for future pacityandconfidenceofenergyefficiency programs. allies (distributors and retailers), increase in government institutional capacity, im- Intermediate Outcomes provement in the strength of the energy The DSMO has remained strong. In particu- servicessector(energyservicescompanies lar, the EGAT Label #5 (the highest energy (ESCOs) and financial organizations), a efficiency rating of a product) remains highly strengthened manufacturing sector successful, and the DSMO budget and staff- · Ultimate Outcomes: transformation of ing remain healthy. The DSMO has helped residential, commercial, and industrial EGAT's corporate image and has developed electricity appliance markets; program and maintained a strong internal evaluation replication and extension; improved load and testing capacity. On the other hand, the management rate of increase in DSMO activities has been · Impact: energy savings, greenhouse gas reduced since 2000, there is a sense of re- (GHG) reductions, reductions of air pol- duced leadership at the DSMO, and there is lutants of local concern, capacity savings, a poor understanding of the DSMO mandate financial benefits at EGAT. In addition, EGAT's privatization impasse has affected DSMO initiatives. Toidentifyandattributeimpacts,studiescon- ductedbytheDSMOwereused.DSMOdata DSMO activities have increased public were extrapolated to 2010, and two counter- awareness that energy is a measurable re- factual scenarios were designed to represent source. In particular, the energy efficiency a lower and upper bound of impacts in the labeling campaigns have achieved high absence of the project. These counter-factual recognition and have been highly effective scenarios were used to calculate the incre- in changing residential appliance purchasing mental impact of the project. Only impacts behavior.Behaviorchangeinthecommercial due to efficient T8 fluorescent lighting and and industrial sectors is much less evident. compact fluorescent lamps (CFLs) and to energy-efficient air conditioning (A/C) and The DSMO has retained relationships with refrigerators were assessed. a number of allies in the private and public sectors. In the public sector, the DSMO has Project Outcomes a mixed record of maintaining links. On the In addition to the direct impacts of energy- positive side, DSMO links to the Ministry of efficient appliance sales during the program, Energy's departments, such as the Depart- TPEEE demonstrated the technical and fi- mentofAlternativeEnergyDevelopmentand nancial feasibility of the technology and the EfficiencyandtheEnergyPolicyandPlanning 2 Executive Summary Office, are relatively strong. But there has activities,particularlyrelatedtoLabel#5,have been a decline in interdepartmental collabo- helped some Thailand manufacturers gain a ration, and DSMO links to other government stronger position in international markets. agencies have not been strong. Ultimate Outcomes DSMO program achievements have not be- DSMO programs have had a substantial come a significant factor in EGAT's power impact on the residential equipment appli- planning process, although the DSMO and ance market and it appears that this impact the TPEEE Project appear to have had a mod- has only strengthened since the project's est impact on certain areas of government close. The most significant impact concerns energy policy: the labeling program. In the long run, the government's recent move to minimum en- · The Ministry of Energy has realized the ergy performance standards (MEPS) may be importance of energy efficiency and has even more significant. brought all the important national insti- tutions, including EGAT, into a newly · Residential Market: With respect to light- reorganized Ministry structure that is still ing, market transformation is under way, evolving. though it is not yet complete for CFLs and · The programs and the policy instruments there is slower progress for low-loss bal- of the Ministry of Energy are also evolving lasts. For refrigerators, significant market quite quickly based on lessons learned transformation is under way, but it is not and new insights into the role of energy yet complete. For air conditioners market efficiency in economic development. transformation is under way, but not yet · The Minister of Energy has recognized complete. A significant challenge in the and emphasized that EGAT must seek to A/C market lies in the number of manu- reduce energy demand. facturers and the difficulties this poses for negotiationandproducttestingorverifica- The DSMO's earlier ESCO initiatives have tion. It is expected that the MEPS for A/C served as the spark for many of the current announced in March 2005 will greatly ESCO initiatives in the public and private increase the number of energy-efficient sectors. The DSMO can also be given some units being sold. Sales of Label #5 lights, credit for encouraging some specific private- refrigerators, and A/C units are estimated sector ESCOs. to have risen substantially in the period to 2004, including: The DSMO retains strong links to the manu- · 85 million T8 fluorescent tubes facturers it worked closely with, and DSMO · 5 million CFLs 3 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project · 12.4 million refrigerators transmission division). The operation of a · 2.8 million A/C units DSM program by a transmission company · Commercial/Institutional Market: The will be somewhat unique and may require TPEEE Project's medium-term impact on a clear government policy commitment to commercial energy efficiency has not keep the DSMO running. beennearlyassignificantasimpactsinthe residentialsector.DSMOandgovernment DSMO sustainability has also been strength- procurement policies have had some suc- ened by high consumer demand for services. cess in commercial and institutional en- With the program's high visibility and con- ergy-efficient lighting and A/C equipment sumerconfidenceinDSMOactivities(name- sales, but a significant potential remains. ly, in Label #5), it is in the government's and · Industrial: Although there is currently EGAT's interest to maintain the program. some activity under way in industrial energy efficiency, very little of this can be Impacts traced back to the DSMO or the TPEEE Over the period studied, sales of EE products Project. resulted in energy savings of approximately 28 terawatt-hours (TWh). Of this, 17.0--23.5 Sustainability TWh are attributable to TPEEE. This trans- The TPEEE Project has transformed the lates to GHG emission reductions of ap- market for residential appliances such as proximately21megatons(Mt)carbondioxide air conditioning, refrigerators, and lighting. equivalent from 1993 to 2004, of which an Theadventofminimumenergyperformance estimated 12.6--17.4 Mt are attributable to standards for these products and other the TPEEE Project. equipment will ensure sustainability of this transformation. In addition to the global benefits of reduced GHGemissions,theelectricitysavingsalsore- The successes of the project have been ducedemissionsofairpollutantsthatcontrib- sustained by EGAT's continued funding of utetosmogandacidification,includingsulfur the DSMO. At the end of the TPEEE Project, oxide emission reductions of approximately DSMO funding from a dedicated tariff was 9.4 kilotons (Kt) and nitrogen oxide emission removed, and EGAT elected to continue reductions of approximately 51 Kt. fundingatequivalentorhigherlevelsthrough its revenue base. However, the potential for The sales of energy-efficient products have privatization represented a significant threat also reduced peak demand by over 1,000 to the DSMO. Fortunately, the office is in a megawatts and produced a range of financial unit of EGAT that will not be privatized (the benefits. 4 Executive Summary Lessons Learned if and where the programs have the neces- Consumer and investor knowledge and sary outreach, education, and campaign confidenceinenergyefficiencyproductsisa components. key objective of an effective DSM program. · From the distribution utility perspective: Consumers and investors are motivated DSM can provide a business opportunity by cost savings. This motivation requires where ESCOs are set up. It also can assist knowledgethatisstrongenoughtoallowfor in planning and cost avoidance of system long-term energy cost-saving calculations expansion and can improve consumer to play an important factor in investment relations by providing added-value pro- decisions. grams. · From the consumer's perspective: DSM can provide regular and long-term cost- DSM programs must have a strong public saving opportunities through reduced awareness campaign, in part to build public power use and lower bills. support for the policies and investments Fromthemanufacturer'sperspective:DSM needed to support the programs. · provides an opportunity for increased competitiveness both in domestic and A program should be designed in a way international markets by creating a critical that allows "early wins" that then lead to mass of demand. expanded programs. This may mean tar- · For the government: DSM allows for en- geting residential markets (which are often vironmental improvements, fulfillment of easier to deal with than commercial or international environmental obligations, industrial), technologies with relatively low and a more competitive economy. It can incremental costs (such as fridges, air con- also lead to foreign investment opportuni- ditioners, and tube lighting), and programs ties (such as through the Clean Develop- that do not require collaboration with other ment Mechanism). departments or agencies (such as distribu- tion utilities). It is important to design a robust and flex- ible program that can be adapted to changes It is important to align programs with the such as economic shocks, deregulation, and interests of the key players: so on. An adaptive management approach is essential. · From the electrical generation/utility's perspective: DSM can delay costly con- Voluntary programs are useful as a necessary struction of added baseline capacity and step toward the development of minimum peaking plants. DSM can also bring sub- standards. This is relevant to both low and stantial benefits for the "corporate image" 5 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project high incremental cost products. To sustain DSM programs need strong leadership to energy efficiency achievements, however, get into the mainstream. EGAT's experience mandatory standards may be needed. suggests that this leadership is required at the most senior levels. 6 1 INTRODUCTION The World Bank's Global Environment Facil- Project, Jamaica Demand-Side Management ity (GEF) Coordination Team has identified DemonstrationProject,andThailandPromo- the need to assess post-implementation tion of Electricity Energy Efficiency (TPEEE) results of projects, especially in terms of Project. This report deals with the Thailand longer-term impacts, sustainability, repli- project. The results contribute lessons not cability, and lessons learned. In particular, only about the specific project and country there is a need to focus on lessons learned but more significantly for the thematic area. to better understand the extent of impacts and benefits, and the sustainability of these The objectives of this study were to assess impacts,inordertodeterminehowBank-GEF the long-term impacts of the TPEEE Project operational programs' long-term goals are and to draw out lessons for the development being addressed. of future GEF projects.1 The key issues ad- dressed included the following: ThisstudywasdesignedtosupporttheBank's MonitoringandEvaluationpolicy(OD10.70), · Contribution of outcomes to the achieve- which recommends that major impact stud- ment of expected impacts ies be conducted on a selective basis several · The project's impacts on the global envi- years after a project is completed to measure ronment changes brought about by the project. · The project's impacts on institutional de- velopment Four climate change projects in the energy · The project's impacts on beneficiaries efficiency(EE)thematicareawereselectedfor (such as savings or knowledge) study in 2004--5: the Poland Efficient Light- · The project's impacts on market develop- ing Project, Mexico High Efficiency Lighting ment in the energy efficiency sector 7 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project · Theproject'simpactsoncountryorganiza- · Chapter 2 provides background on the tions, including capacity development TPEEE Project · Lessons learned regarding the sustainabil- · Chapter 3 describes the results framework ity of project impacts used to link project activities to ultimate · Replicabilityofprojectoutcomesachieved impacts and catalytic effect of the project · Chapter 4 reviews and updates the proj- · Lessons learned regarding achievement ect's outputs and outcomes and measurement of impacts · Chapter5describesthecurrentcontextfor · The project's impacts on mainstreaming energy efficiency in Thailand, focusing on globalenvironmentconcernsinThailand's developmentsthathaveoccurredbetween national development and sector policies TPEEE Project closure (2000) and 2005 · Lessons learned for improving the design · Chapter 6 examines the impacts of the and management of future activities, an- TPEEE Project on the current context in swering the question, How can we do it terms of intermediate outcomes better? · Chapter 7 examines ultimate outcomes · Chapter 8 assesses the impacts of those The study also attempted to separate proj- outcomes ect-specific impacts from those due to other · Chapter 9 presents the study conclusions sources,includinganyfollow-upprojectsthat and provides lessons learned that may be were implemented in Thailand. applied in the development of future GEF- supported DSM projects InadditiontothisIntroduction,thereporthas eight chapters: 8 2 PROJECT BACKGROUND The Thailand Promotion of Electricity Energy 2.1 Project Objectives and Approach Efficiency Project was approved in 1993 and The TPEEE Project was approved by the took place from 1993 to 2000. It was cofi- World Bank in conjunction with the GEF nanced by a GEF grant of $9.5 million, $5.4 in 1993. The project had two major objec- milloin from the Government of Australia, a tives within the World Bank, which were loan of up to $25 million from the Overseas describedintheImplementationCompletion Economic Cooperation Fund of Japan/Japan Report (ICR): BankforInternationalCooperation,andfunds from the state-owned public electricity util- · To build sufficient institutional capability ity, the Electricity Generating Authority of within Thailand's electric power sector Thailand (EGAT). and the energy-related private sector to deliver cost-effective energy services The EGAT funding was made available throughout the economy through a special project-long automatic · To pursue policies and actions that would tariff. The global budget for the project lead to the development, manufacture, was $189 million, though when it was and adoption of energy-efficient equip- completed in 2000 only $59.3 million had ment and processes within the country been spent. The project, national in scope, consisted of a five-year demand-side man- The main GEF objectives in funding the agement (DSM) plan. It was implemented project were: by the Demand-Side Management Office (DSMO) of EGAT. · To demonstrate the potential for electric- ity savings to replace substantial fossil 9 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project fuel power generation, thereby avoiding The original project plan was based on DSM additional greenhouse gas (GHG) and air experience in other parts of the world, espe- pollutant emissions cially North America, and was intended to · To demonstrate the capacity of the test whether these DSM concepts could be electric power sector and other relevant successfully applied in developing regions agencies, public and private, to achieve as well. Thailand, with a rapidly growing de- those savings, with a broader global mandforenergy,wasdeemedanappropriate objective of generating among utilities placetotestsuchamodelanditspotentialfor in other developing countries a similar replication in other Asian countries. commitment to undertake large-scale DSM programs 2.2 Project Activities · To demonstrate DSM programs on a large TheTPEEEProjectworkedonawidevarietyof scale and within a reasonable time frame components and activities (see Table 2.1). The project had a four-pronged approach: TheTPEEEProjectwasdesignedwithconsid- erable input from Thai DSMO staff at EGAT, · Provide user and manufacturer incentives who developed a model for implementation andconsumereducationtoinfluenceprac- that was unique in terms of incentives that tices and attitudes toward energy-efficient were designed to work in the Thai cultural technologies context. A key attribute of the design was · Develop efficiency standards and testing reliance on voluntary measures, in particular capabilities to exercise control and moni- the voluntary use by manufacturers of labels tor efficiency improvements displaying product energy efficiency ratings. · Develop and promulgate building and In addition, the program paid for marketing appliance codes in order to enforce mini- and publicity campaigns, a range of informa- mum efficiency standards tion and communication measures, initial · Continue pursuing technological im- bulk purchasing of energy-efficient products provements and their adaptation to Thai (in the lighting components), and incentives conditions andofferingsthatcouldbeaccessedbytarget groups, especially in commercial and indus- The objectives and approach of the TPEEE trial components. The DSMO placed major Project were intended to demonstrate the emphasis on data collection. potential for cost-effective energy efficiency savings through utility-based DSM activities, Thelabelingprogramwasamongthemeasures thus saving fossil fuel and reducing GHG thatacquiredthehighestprofile.Thisinitiative emissions. saw manufacturers affix on their products la- 10 Project Background Table 2.1 TPEEE Project (DSMO) Activities Components Main Activities Fluorescent Tube Lamps T12 to T8 Negotiate the manufacture & sale of quality-tested EE T8 tubes Refrigerators Aggressively promote EE tested/labeled units using EGAT Label #5 Air Conditioners Aggressively promote EE tested/labeled units using EGAT Label #5 Compact Fluorescent Lamps (CFL) Aggressively promote EE tested/labeled units using EGAT Label #5 Street Lighting Subsidy to public lighting using high-pressure sodium-vapor bulbs (HPS) Green (designated commercial) Buildings Free energy audits and retrofit investment consultations Green Leaf Buildings Hotel Certification EE audits and certification of hotels New Commercial Buildings Demonstrate viability of EE measures exceeding code for new buildings Brown Rice Promote brown rice (Label #5) due to energy savings from milling High-efficiency Motors (HEM) Promote and demonstrate HEM with financing and set up motor-testing lab Low-loss Ballasts Promote low-loss magnetic ballasts mainly through green buildings/plants Pilot Energy Service Companies (ESCOs) Demonstration of investment grade audits Industrial Cost Reduction (retrofits) Promote audits and advice for retrofits and investment in end-user premises EE for Small and Medium-Size Enterprises (SMEs) Promote and demonstrate EE measures for SMEs with financing Load Management Promote standby generators, time-of-use meters, and interruptible load scheme Thermal Storage Construct and test demonstration facility to assess commercial viability Attitude Creation, including Green Learning Rooms Comprehensive media and school-based campaign (GLRs) in schools on EE and energy conservation Source: Implementation Completion Report. bels that indicated an energy efficiency rating andthefactthatconsumersandmanufacturers (EER) of the tested product on a scale from 1 quicklygravitatedtoLabel#5,thehighestEER, to 5. EGAT has over the years aggressively as a sign of greatest savings to be achieved. publicizedLabel#5.Thelabelingprogramhas Label#5alsobecameanindicatorofahigher- had visibility and considerable success in the quality product. residentialappliancecomponentoftheTPEEE program. Reference is made throughout this To generate results from these activities, the reporttoLabel#5,whichreferstothisprogram TPEEE Project and the DSMO worked with 11 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project a wide variety of partners in the manufactur- Promotion (as it was then known), special- ing sector. Specifically targeted were manu- ized energy conservation nongovernmental facturers and manufacturers' associations, organizations (NGOs), international and wholesalers and retailers of residential elec- national energy consultants, organizations trical appliances, commercial and industrial specializing in independent project monitor- establishments(includinghotelsandhotelas- ing and evaluation, and many others. Each sociations),andenterprisesandbuildingsthat collaboratingentitywasinvolvedinaspecific were designated by government as requiring program and set of activities. energy audits under the Energy Conservation Promotion (ENCON) Act of 1992. The project was aided considerably in its work by the support and leadership of the Also involved were several government de- AssistantGovernorofDSM,SittipornRatano- partments that dealt with energy policy and pas, who became the Governor of EGAT in theadministrationoftheEnergyConservation 2002--4. As an indication of his influence, Promotion Fund (ECF) (sometimes called the Ratanopas is cited in the recent EGAT DSM ENCOM Fund), the Consumers Protection report,2 one of the few publicly available Board,producttestingandcertificationunits, reports issued by EGAT on the efforts and the two large state-owned electrical distri- achievements of the DSMO. bution companies (the Provincial Electrical Authority and the Metropolitan Electrical The project also built up considerable hu- Authority), the Ministries of Education and man resource capacity, and by the end of the Health, the Prime Minister's Office, the projecttheDSMOconsistedofsome250staff Department of Energy Development and members in two divisions. 12 3 ASSESSMENT FRAMEWORK AND APPROACH 3.1 Impact Assessment Framework amongconsumers,increasedcapacityamong In the absence of a logical framework, the energy efficiency trade allies, improved StudyTeamdevelopedaresults-basedimpact policies supporting energy efficiency in the assessmentframeworktographicallyillustrate government,andastrongerenergyefficiency the linkages between project outcomes and manufacturing sector. theexpectedprojectimpacts.(SeeFigure3.1.) The framework provided the team with a fo- Ultimately these changes should lead to cus for investigation and provided an explicit broad market transformations, including andtransparentdescriptionofhowtheproject accompanying changes in sales, and to impactsmayhavebeenrealizedthroughlink- impacts on peak power demand, energy ages, attributions, and consequences, which use, GHG emissions and air pollution, and can be called "impact threads." financial benefits. They should also lead to program replication in Thailand and Figure 3.1 highlights the key project outputs elsewhere. in terms of sales, audits, testing, labeling, 3.2 Results Framework demonstrations, and education campaigns. These outputs were expected to lead to Table 3.1 lists the indicators used to assess a series of immediate project outcomes, each of the results in the assessment frame- demonstrating the potential for electricity work. savingsthroughouttheeconomy.Thosedem- 3.3 Attribution onstrations would in turn lead to increased institutional capacity in the DSMO and other We know that EE equipment sales were government agencies, behavioral change minuscule before TPEEE started (at least an 13 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project stuptu folortnoc )tcej O ni orp %001( noitavresnocygrenE1-MI sifeneblatnemnorivnE2-MI )GHG,stnatullopriadecuder( daolytilitudevorpmI3-MI tnemeganam rodetacilper rehto&dnalia seirt ydut stuptu folortnoc tne )tcej )doog srotaregirfeR-C/A- :noitamrofsnart stsallabssol-woL- laicre sgnidliub :noitamrofsnart lairtsudnisgnidliub Stcap O ni orp cilbup(noitavresnoCygrenE tekramlaitnediseR1-OU :noitamrofsnart cseroulftcapmoC- spmalebut8-T- tekramlaicremmoC-2-OU spmalebut8-T- mmocfoEEdevorpmI- tekramlairtsudnI3-OU srotoM- foEEdevorpmI- margorP-4OU hTnidednetxe nuoc mII %001( S C Frameworks G/kebra deunitnoc( Mfo se itcejorp moctuo n ,seicilop: )sruoivaheb OMSDgnortS1-OI lbats,smargorp )gnidnufe tcepserhtiwegnahcruoivaheB2-OI gnisahcrup,ygreneot ehtniseillahtiwspihsnoitaleR3-OI rotcescilbup ,snoitaluger,seiciloP4-OI laicnanifdnasnoitutitsni EEgnitroppussmsinahcem :rotcessecivresygrenegnortS5-OI snoitasinagrolaicnanifdnasOCSE rotcesgnirutcafunamEEgnortS6-OI Assessment suco y F etaide bdecn mret- dna mu s Impact mretnI eulfnI( idem margorp 3.1. Figure se ehtfo 8-Tot21-T 8-Tot21-T sgnidliub seitivitca srotom snoitaulave moctu Otcejor stluser C/A )dnamed etaide rp )tcejo laitnediseR sLFCdevorppafoselasdesaercnI ycneiciffe-hgihfoerahstekramdesaercnIsrotaregirfer ycneiciffehgihfoerahstekramdesaercnI morfhctiwsetomorP laicremmoC morfhctiwsetomorP stsallabssol-wolfoesudesaercnI sgnidliubdetangisedniEEdevorpmI WM1>( )faeLneerG(sletohniEEdevorpmI wenniEEdevorpmI OCSEdesaercnI tcejorpomedegarotslamrehT MEHfoesudesaercnI lairtsudnI sgnidliub/sesimerpEMSniEEtroppuS seitilicaflairtsudniniEEdevorpmI /aicremmocnitnemeganamdaoldevorpmI lairtsudni rehtO/noitacudE ecirnworbfoesudesaercnI gnithgilteertstneiciffeeroM smooRgninraeLneerG P m mret-trohs mI( dna R CIfo stuptu folortnoc )tcej sgnidliub suco O ni orp srotubirtsidhguorht slebalyratnulov )gnillebalot PDEDfotroppusnistidua smetsystmgm wen stiduAedarG TAGEta ecnatsissa sthgilteertsSPH F %001( selasdnasLFCfoesahcrupkluB esuotsrerutcafunamhtiwkroW ISITybgnitsettcudorP detalerton(srerutcafunamhtiwkroW sngiapmacnoitacudecilbuP mrofreP"sgnidliubdetangised" ygreneLORTNOCLEnoitartsnomeD sletohrofnoitacifitrec,stidua,spohskroW rofecnatsissahcetdnasomeD tnemtsevnIdnasOCSEtoliP ytilicafomedfonoitcurtsnoC snaoleerftseretni,noitomorp MEH laicnanif,stcejorpomed,spohskroW stiduagnidliublairtsudnI tnemeganamdaolegaruocnE )OPENybdeganam( ecirnworbrofngiapmaclanoitomorP etubirtsiddnayubotAEPhtiwkroW sngiapmaccilbupderosnops-TAGE 14 Impact Assessment Framework and Approach Table 3.1 Results Framework Result Statement Indicators Project Outcome: Switch to T8 fluorescent Manufacturers switch production to T8 lamps tube lamps Importers switch to T8 lamps Project Outcome: Use of low-loss ballast Use of labels distributed to manufacturers Project Outcome: Sales of approved CFLs Units sold Price of CFL lamps Project Outcome: HPS streetlights Procurement of lamps Installation of lamps Price of lamps Project Outcome: Labeling of refrigerators Market share of EE models Take-up rate of use of labels among 5 manufacturing Project Outcome: Labeling of air conditioners Market share of EE models Take-up rate of use of labels among 55 manufacturing Project Outcome: Test facilities for high-efficiency Viability of testing labs motors and low-loss ballasts Number of tasting labs Testing protocols and capabilities Project Outcome: Sales of high-efficiency motors Units sold Take-up rate of financial incentives (interest-free loans) Project Outcome: Use of brown jasmine rice Number of brands using labels Project Outcome: Load management Number of commercial & industrial customers participating in program Price differentials to induce load shifting behaviour Change in tariff structure Intermediate Outcome: Strong DSMO Lessons Learned by EGAT and participating institutions Experience gained by staff at EGAT and in other institutions Strength of partnerships with manufacturers, ESCOs etc. Level of confidence of key players in ability to continue programs or adopt similar programs Intermediate Outcome: Behavioral change Level of consumer awareness of EE products Level of consumer confidence in EE products Consumer attitudes to price premium Availability of products labeled EE Intermediate Outcome: Relationships with allies Number and strengths of alliances in the public sector Intermediate Outcome: Policies supporting EE Change in labeling policies Tax incentives Regulations Availability of subsidy, loan and grant programs Availability of promotional activities Availability of partnership promotion Intermediate Outcome: Strong energy services sector Number and strengths of ESCOs Intermediate Outcome: Strong EE manufacturing sector Competitiveness of the sector (continued on next page) 15 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Table 3.1 Results Framework (continued) Result Statement Indicators Ultimate Outcome: EE lighting and equipment Installed base of EE products by market position market transformation Sales and change in market share Sales and change in EE product prices Future outlook Ultimate Outcome: Program replicated or Number, type and scale of programs extended in Thailand or other countries Impact: Energy savings Gigawatt-hours (GWh) saved Impact: Local environmental benefits and Reductions in nitrogen oxide (NOx) and sulfur GHG reductions oxide (SOx) emissions Tons of GHG emissions reduced Impact: Load reduction Megawatts (MW) of capacity deferred order of magnitude smaller than they were good historical sales data for Thailand. But in 2004). But without objective data it is dif- many assumptions had to be made to project ficult to determine how much of the growth future sales data and to speculate on what was due to the project and how much to would have happened in the absence of the the worldwide market transformation and program. other factors. Nonetheless, using multiple lines of evidence, it is possible to assess the Nevertheless, in the interest of illustrating contribution of TPEEE to various changes in the quantitative implications of our assess- the relevant markets. ment, we attempted to estimate impacts by constructing three subjective scenarios: The indicators in Table 3.1 provide a means to describe the changes that have occurred · A With TPEEE scenario that incorporates since TPEEE. For each of these, we attempted all the available data on product sales to quantify or describe the change and the and extrapolates these data to provide way in which TPEEE had a role. a complete time series of sales from the start of TPEEE until 2010 (this year was To calculate the impact of TPEEE on energy chosen because it provides a reasonable use and emissions, we needed to know what period of time to allow for the differ- had happened since the program (and what ences between the scenarios to become is projected to happen in the near term), evident) as well as what would have happened in · A No TPEEE ­ High Baseline scenario the absence of TPEEE (the counter-factual that sets a high boundary of the range of scenario). The difference between these two estimates of sales that would have hap- cases constitutes the incremental impact pened in the absence of TPEEE and hence of TPEEE. Fortunately, we have reasonably representsthelowerboundaryoftherange 16 Impact Assessment Framework and Approach of estimates of the incremental impact of first draft study plan, made contact with TPEEE EGAT's DSMO staff, and established a · A No TPEEE ­ Low Baseline scenario working relationship with the person who that sets a low boundary of the range of became our key contact person at EGAT, estimates of sales that would have hap- a Senior Economist in the Planning Unit pened in the absence of TPEEE and hence of the DSMO. representsthehigherboundaryoftherange · Study plan revision: On the basis of feed- of estimates of the incremental impact of backreceivedfromtheDSMO,werevised TPEEE the study plan and identified documenta- tionavailableinthefield,peopleavailable Although these scenarios ­ particularly the for interviews, and the level of assistance two counter-factual ones--are necessarily that the DSMO and the Bank office in based on "educated best guesses" and many Bangkok would provide. assumptions, we expected that by using a · Document search and acquisition and wide range of scenarios, as well as conser- in-depthdocumentreview:Withtheassis- vative assumptions, the results would be tanceoftheDSMO,afullrangeofsources reasonably credible. was acquired. These were reviewed to assist in building familiarity with the pro- 3.4 Methodology gram and to sharpen the questions to be The methodology involved the following pursued in Thailand. tasks: · Field work preparation: We prepared let- ters of introduction and questions for the interviews, based on the documents and · Initial document review and initial con- sultations: We read the ICR and gathered the study plan. documents from the World Bank in · Field mission: The field mission to Thai- Washington. We interviewed the former land took place January 17--28, 2005. Project Team Leader and reviewed cor- Three days were spent at EGAT's DSMO respondence on follow-up activities since and seven days in other interviews and the end of the project. meetings. A site visit was made to an air conditioner retailer, Siam Air, and im- · Development of impact assessment framework: Using initial documenta- promptu excursions were made to shops tion available, we drafted an initial log tolookattheprevalenceoflabelsonlights frame to represent what we understood and appliances. as the project activities leading through · Interview documentation: Notes on all to impacts. interviews and meetings were typed and filed. · Preparation of study plan: We prepared a 17 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project · Report drafting: A draft report was pre- incorporates changes in response to those pared and submitted for comment by the comments. World Bank and EGAT. This final version 18 4 PROJECT OUTPUTS ANDOUTCOMES Project outputs and outcomes were assessed pletion Report. The key outcomes reported throughtheBeneficiary'sProjectCompletion are listed in Table 4.1. Report and the Bank's Implementation Com- Table 4.1 Outcomes of TPEEE Project Components Outcomes at project completion Fluorescent Tube Lamps T12 to T8 All manufacturers switched production to T8; market transformation complete Refrigerators 100% of domestically produced fridges and 82% of all fridges sold are Label #5 (EE) Air Conditioners Label #5 (EE) AC units account for nearly 40% of units sold Compact Fluorescent Lamps Large volume of units sold (900,000) at 40% below prevailing market price (that is, subsidized) Street Lighting (HPS bulbs) Lamps procured (275,000) and installed; high cost of local HPS bulbs halts promotion Green (designated commercial) Buildings Conducted more than 250 commercial and industrial building audits; installed more than 120 control systems; complete four demo project sites Green Leaf Buildings Hotel Certification More than 85 audits completed; just under 60 hotels rated--5 were at highest level; results disseminated widely New Commercial Buildings Program on hold due financial crisis and related construction halt since 1997 Brown Rice 59 brands of brown jasmine rice using Label #5 High-efficiency Motors More than 60 demonstration/test motors procured, but only four HEM motors purchased; lab set up (continued on next page) 19 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Table 4.1 Outcomes of TPEEE Project (continued) Components Outcomes at project completion Low-loss Ballasts Distributed more than 545,000 units of Label #5 to 11 manufacturers; no promotion; on hold Pilot ESCOs Four investment grade audits done; negotiations with banks under way Components Outcomes at project completion Industrial Cost Reduction (retrofits) 30 audits conducted; future depends on ESCO viability, uptake of HEMs, funding EE for Small and Medium-size Enterprises 14 demo projects conducted; negotiations ongoing with ECF for large-scale financing Load Management Interest among more than 190 customers; program on hold due large power capacity surpluses Thermal Storage Financial viability deemed marginal; on hold Attitude Creation, includng Green Learning Surveys show significant awareness of EE issues; Rooms in schools more than 200 GLRs operational nationwide Source: Implementation Completion Report. The ICR also reported on the impact of these Table 4.2.) Evidence acquired formally and outcomes, including: informally during this study confirmed that these immediate outcomes were realized by · Energy savings: 3,140 GWh per year the project. Everyone we spoke with knew of · Peak reduction: 566 MW theresultsoftheTPEEEProjectandtheworkof · GHGemissionreductions:2.32megatons the DSMO, with individuals usually knowing (Mt) per year somecomponentsingreaterdetailthanothers. The best known outcome was the residential AlltheseoutcomeswerereviewedwithEGAT's appliance labeling program. DSMO staff and updates were acquired. (See 20 Project Outputs And Outcomes Table 4.2 Summary of DSMO Initiated Activities, as of January 2005 Sector Program Status(these programs and agencies are described in Chapter 5) Residential Refrigerators Ongoing/Label #5 with minimum energy performance standards (MEPS) in two years Residential A/C units Ongoing/Label #5 with MEPS as of March 2005 Residential Compact fluorescent lamps Ongoing/Label #5 ­ MEPS standards set Residential Brown rice Ongoing/Label #5 Residential/Commercial T8 fluorescent tubes Ongoing/Label #5 ­ MEPS standards set Residential Fans New program/Label #5 ­ MEPS standards set Residential Rice cookers New program /Label #5 Residential/Commercial Low-loss ballasts Transferred to SME-focused EE programs, such as Department of Industrial Works (DIW) Commercial Green leaf hotel certification Transferred to U.N. Environment Programme, environmental NGOs, and so on Commercial Green buildings­energy audits Transferred to Department of Alternative Energy Development and Efficiency (DEDE) and non-EGAT ESCO units Commercial SME audits and EE solutions Transferred to DIW and non-EGAT ESCO units Industrial High efficiency motors Transferred to EGAT's ESCO unit and DIW ­ MEPS standards set Industrial ESCOs Recently renewed at EGAT Industrial Chillers Transferred to EGAT's ESCO unit Other/Municipal Streetlights Cancelled Other/Education Green Learning Room Ongoing 21 5 CONTEXT This chapter examines the context for energy with it, interest in energy efficiency and de- efficiency in Thailand, with a focus on macro- mand-sidemanagement.Sincethen,demand scale developments that occurred since the has increased to near 1997 levels, and EGAT projectclosedin2000.Specifically,itexamines has been more actively seeking solutions to developments in the economy, the electricity its projected supply shortfall. sector, government institutions, the DSMO, and energy efficiency and DSM programs. 5.2 Electricity Sector Thecontextforelectricitysupplyanddemand 5.1 Economic Trends changedconsiderablysince1999,dueinpart In 1997 Thailand experienced an economic to the economic trends just noted and in part crisis that had a severe impact on the coun- to organizational changes. The remainder of try'sgrowthanddevelopment.Thiseventhad this subsection examines developments in a direct impact on the TPEEE Project (greatly supply, demand, and government policies reduced activity, as noted in the ICR) and on that affect the sector. the uptake of EE technologies in later years. As an indication, interviewees suggested that 5.2.1 Electricity Supply and Distribution businesses involved in the EE market (suppli- Thailand's energy supply is currently 25.6 ers,retailers,energyservicecompanies)were gigawatts (GW), 59 percent of which (15 reducedto50percentcapacityandhaveonly GW) is generated by EGAT, with most of the recovered to 70--80 percent of their levels remainder generated by the country's inde- before 1997. pendent power producers (IPPs) augmented by small amounts from sources outside the Following the 1997 economic collapse, country.4 The IPPs provide much of the electricitydemanddroppedsignificantlyand, country's base load through diesel and natu- 23 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project ral gas as well as through lignite coal-fired workers and a sensitive political environ- thermal generating stations. In contrast to ment related to the selling of state assets.5 many other countries, Thailand's peak load At the same time, the utility has concerns is generally satisfied through hydroelectric regardingitsabilitytomeetdemandbased power. Four years ago, following the period on the experiences of privatization in ofeconomiccollapse,EGAThada40percent Australia, California, and elsewhere. surplusgenerationcapacity.Nowthereserve margin is only 20 percent, and the govern- · Tariff changes: In 2000, the utility moved ment has been seeking ways of developing to implement time of use (ToU) rates. New new generation capacity. commercial and industrial customers are requiredtouseToU;existingcustomerscan EGAT has 10--15 direct customers--industrial choose to switch to ToU but cannot there- plants with 10 MW or more of peak demand after switch back to time of day rates.6 each. The remainder of Thailand's electricity · Barriers to the construction of new power is supplied through the country's two distri- generation plants: In the past few years, bution utilities: the Metropolitan Electricity EGAT attempted to build two thermal Authority(MEA)andtheProvincialElectricity plants in the country's southern areas, but Authority (PEA). these were shut down by public protest. The protests were primarily based on con- The key change in government policy has cerns for air quality, water, tourism, and been the adoption of the 2002 National income loss. In addition, the government Energy Strategy. As a result, Thailand's elec- has refused to provide construction loan tricity supply context has changed in a num- guarantees to EGAT, effectively disabling ber of ways that affect the country's energy theutilityfrombuildingfurthergeneration efficiency directions: capacity of its own. Under current laws, EGAT can build and own up to four new · Privatization: The government has de- power plants by the end of 2008. Yet the clareditsintentiontoprivatizeEGAT,with lack of government loan guarantees and theencouragementandsupportoftheThai public opinion effectively prevents that. business sector, the Asian Development EGAT's alternative strategy is to buy from Bank, and the World Bank. At the time of IPPs. After 2008, EGAT's legal option to theimpactstudy,theprivatizationprocess buildexpires;fromthenon,allnewpower was behind schedule--a contentious issue plants will be built by IPPs on a 100 per- both within and outside of EGAT. There cent competitive basis. are a number of reasons for the delays, · Constraints on EGAT activities: EGAT is including strikes and protest by EGAT subject to a number of constraints. First, 24 Context as a state enterprise, EGAT is not permit- view of Thailand's daily load characteristics. ted to make a profit; second, after 2008 it There are currently three peak times: two is not permitted to make investments in peaks at roughly 10 a.m. and 4 p.m. (primar- new power plants; third, it is not allowed ily from industrial and commercial demand) to make upstream investments (such as and a third peak at 7 p.m. (primarily from natural gas for its power plants); finally, residential demand). During the 4 p.m. peak, it does not control tariff levels. residential demand represents 20 percent · Tax incentives and procurement policies of the load, commercial is 35 percent, and for energy efficiency: At present, the gov- industrial is 45 percent. ernment does not have a stated energy policy that clearly indicates its priorities 5.2.3 Minimum Energy Performance with respect to energy efficiency or DSM. Standards However, it appears that the government In the past three years, Thailand has be- is focusing on investment incentives for gun the development of minimum energy EE without using loans and grants, prefer- performance standards for six appliance ring instead to use tax incentives as the categories: air conditioners, refrigerators, key economic instruments to achieve its motors, ballasts, compact fluorescent lights, EE policy objectives. In recent years the and fluorescent tubes. For these, the MEPS government has adopted a green procure- mainly follow United States Environmental mentpolicythatrequiresenergyefficiency Protection Agency guidelines and also draw in the purchase of labeled products. For on DSMO standards for Label #5. The MEPS example, all A/C units under about 3 tons are being implemented by the Department must have Label #5. of Alternative Energy Development and Ef- ficiency and the Energy Policy and Planning 5.2.2 Electricity Demand Office (EPPO) of the Ministry of Energy, with Over the past 15 years Thailand's energy the support of the Thailand Industrial Stan- use has risen 40 percent more than GDP. dards Institute (TISI). The government has now set a target of a 1 percent increase in energy use for every 1 The MEPS implementation schedule for air percentincreaseinGDPby2007.Thiswould conditioners began in March 2005 and was bring the country in line with the average effective as of May 2005. The standard for among members of the Organisation for Eco- A/C is equivalent to what EGAT calls a Level nomic Co-operation and Development. 3 EER (8.6--9.6 Btuh/W). MEPS for fridges are intended to follow in 2007. It was decided to Peak seasonal energy demand occurs from apply MEPS to A/C units first, as experience March to May. Figure 5.1 provides an over- indicates that these are the most difficult to 25 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Figure 5.1 Thailand's Current Demand Characteristics 14,000 12,000 Total 10,000 Consumption Industrial 8,000 Commercial 6,000 Residential Direct 4,000 Customer 2,000 0 0 4 8 12 16 20 24 Years Source: EGAT DSMO, 2005 affect through voluntary labels. Thailand has From 1992 to 2002, and during the life of many manufacturers and models of A/C, and the TPEEE Project, energy matters were the the DSMO found it difficult to ensure that all responsibility of the Prime Minister's Office. labeledunitswereincompliance.Thereforea At that time the National Energy Policy Office standards approach was deemed necessary. (NEPO) was located in the Prime Minister's Office and EGAT, being the responsibil- Atthetimeofthisstudy,therewerenodetailed ity of NEPO, reported directly to the Prime plans to implement the five other MEPS. Minister's Office. 5.3 Key Government Institutions In 2002 the Thai government began imple- The ENCON Act of 1992 (which became mentation of the National Energy Strategy effective in 1995) has been a critical piece and created the Ministry of Energy, which in the development of EE in Thailand and is includes the Energy Policy and Planning considered particularly progressive. It was Office (known as NEPO during the TPEEE especially notable for its establishment of the Project) and the Department of Alternative Energy Conservation Promotion Fund. Energy Development and Efficiency (known 26 Context Figure 5.2 Organizational Chart of the Ministry of Energy (est. October 2002) Ministry of Energy Office of the Energy Policy and Office Department of Permanent Secretary (Energy Policy) Mineral (Natural Gas and petroleum) Department of Energy Department of Alternative Business (Licensing) Energy Development Efficiency (Implementation) With 1 Enterprise and 2 autonomo us public companies 1) Electricity Generating Authority of Thailand (EGA T) 2) Petroleum Authority of Thailand Plc. 3) Bangkok Petroleum Plc. as the Department of Energy Development overseeing the activities of EGAT, DEDE, and and Promotion during TPEEE). Overseeing EPPO as well as MEA and PEA. these structures is the National Energy Policy Council, which is normally chaired by the By most accounts, this reorganization has Prime Minister. helpedcentralizeresponsibilityforelectricity and EE issues within the government, though From 2002 to 2005, the Metropolitan Elec- the organizational structure and responsibili- tricity Authority and the Provincial Electrical ties are still maturing. In broad terms, EPPO Authority ­ both publicly owned and distrib- handles load management, policy, research, uting35percentand63percent,respectively, anddevelopment,whileDEDEisresponsible of the nation's electricity ­ reported to the for program implementation. Interior Minister. In 2005, they began report- ingtotheMinistryofEnergy.Figure5.2shows It is useful to review briefly the responsi- theMinistryofEnergy'soverviewresponsibili- bilities of EPPO and DEDE, as well as other ties up to 2005; as of 2005, the Ministry was organizations involved in EE. 27 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project 5.3.1 Energy Planning and Policy Office designatedfactoriesandbuildings).Asof2005, EPPO has been very active since 2002 as EPPO took on responsibility for the "strategic the implementer of "voluntary" programs administration program" (including policy (including renewable energy, industrial research and management), while DEDE as- liaison, R&D projects, and promotion of sumedresponsibilityfortherenewableenergy small power production generation) and programandenergyefficiencyprogram,anew "supplementary"programs(includinghuman areaforDEDE.TheEEprogramincludesDSM, resource development and public aware- labeling, and MEPS. Both programs include ness). Under a recently revised allocation of R&D,demonstrationprojects,humanresource responsibilities (which took effect in 2005), development, and public relations and aware- EPPO focuses almost exclusively on strategic ness. From an organizational perspective, it is issues, including policy research and coordi- expected that this arrangement will simplify nation. The Energy Conservation Promotion the interaction between the DSMO and the FundisamajorinstrumentforEPPOinpolicy ECF, as all energy efficiency ­ related activi- implementation. (See Box.) ties have now been centralized. 5.3.2 Department of Alternative Energy DEDE currently operates three divisions: Development and Efficiency From 1995 to 2004, DEDE only had respon- · Bureau of Energy Regulation and Con- sibility for "compulsory programs" (including servation, which handles "designated Energy Conservation Promotion Fund The ECF was established in 1995 under the Energy Conservation Promotion Act, based on revenues from domestic sales of gasoline, diesel, kerosene, and fuel oil. The ECF has an average annual income of 2 billion baht ($50 million) and a current balance of approximately $25 million. Government agen- cies, state enterprises (including EGAT), educational institutions, and nonprofit organizations may apply for funding. The ECF operates under the authority of the Minister and the high-level National Energy Policy Coun- cil. The fund is managed by the ECF Committee and chaired by the Deputy Prime Minister. While in the past this fund has been a source of revenues for programs and subsidies, the government's new direction favors offering tax incentives to end users rather than providing direct subsidies and grants from government. Administrative responsibility for the ECF is changing, and these changes may have a significant impact on future DSMO programs. As of 2005, the ECF Committee delegated its operating authority to the ECF Administration Committee. This Committee will review and decide on funding requests greater than 50 million baht (approximately $1.31 million). EPPO will plan the use of ECF funds and set priorities. 28 Context facilities" (factories and buildings) under the end of the TPEEE Project. The DSMO the ENCON Act maintains a staff of approximately 250 peo- · Bureau of Energy Efficiency Promotion, ple, slightly larger than when the project was which handles nondesignated facilities in operation. For the most part it maintains (including government buildings) and the programs that at the end of the project some public awareness activities were seen as successful, as reported in the · Training division (about 40 staff). December 2000 ICR. 5.3.3 Consumer Protection Board The DSMO is now located institutionally The Consumer Protection Board (CPB) has within the Transmission Division of EGAT, a clear role and mandate in enforcing the a unit that is not likely to be privatized.7 It is product labeling aspects of DSM. However, headed by an Assistant Governor--one of 19 it does not test appliances or assure consum- who report to the Deputy Governor of the ers of product quality. Rather, the CPB relies Transmission Division. The DSMO has two on the Thailand Industrial Standards Institute units, each with a Director: a Management and various universities for this. The CPB and Planning Unit and an Implementation is situated within the Office of the Prime Unit. Minister. · The Management and Planning Unit plans 5.3.4 Electrical and Electronics Institute andmonitorsallaspectsofDSMOprogram The mandate of the Electrical and Elec- implementation and reports according to tronics Institute is to increase Thailand's formats established during the TPEEE Proj- exports by enhancing the competitiveness ect.Newandadditionalprogramactivities of Thailand's products. The Institute tests have been incorporated into the reports. products for use not only within Thailand · The Implementation Unit undertakes the but internationally, as these EE products are residential appliances labeling and testing also exported to neighboring countries. The program,theECSOdevelopmentprogram current Executive Director of the organiza- in the industrial sector, and the Green tion is a champion of energy efficiency for Learning Room Program. Thailand's industrial sector as a strategy for improving Thailand's competitiveness and Under the current leadership, the DSMO is promoting exports. being asked to trim staff and budget and has no identified organization-wide "champion" 5.4 The DSMO beyond its own Assistant Governor and staff. 5.4.1 Structure and Reporting Relationships This is the case despite the strong and widely EGAT's DSMO has remained in place since held perception that the DSMO Label #5 29 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project program is the face of EGAT for most people evaluation of its own programs. In some in Thailand. instances, the office does this on its own, while in others it teams up with outside It is worth noting that the overall privatiza- organizations.TheDSMOhasdeveloped tion issue and the uncertainty surrounding it a particularly strong capacity in quantify- appear to have had a significant impact on ingtheenergyandenvironmentalimpacts the DSMO. Several interviewees indicated of its own programs. that a number of programs were frozen as a · Compliance Testing: The DSMO has con- result of this uncertainty. There is also some tinued to test, with third-party labs, com- uncertainty with respect to the role of the pliance in the use of its Label #5 on the DSMO in relation to the policy structure of full range of labeled products. The office EPPO and the implementation responsibili- works with Excellent Energy International ties of DEDE. As a result, the DSMO's future Co., Ltd. (EEI) to do appliance testing and roleinachievingenergyefficiencyobjectives with the Thailand Industrial Standards in Thailand is not clear. Institute on equipment standards. Since 2000, the number of equipment tests has Also complicating the outlook for the DSMO increased as more manufacturers seek are its links, along with overall EGAT links, the EGAT #5 label. In the past four years, to the EPPO and the structures for energy EEI has tested 1,200 sets of A/C and 970 planning. The DSMO formerly chaired an refrigerators. The Consumer Protection interministerial DSM committee, but this Board supports the DSMO program. The has not met in four years. The office is very CPB receives complaints, while EGAT much on its own at the present time in a fluid does random testing. policy environment, which is affecting sev- eral aspects of DSMO work. In certain cases, 5.4.3 Financing and Reporting otheragenciesareassumingresponsibilityfor During the life of the TPEEE Project, EGAT DSMO areas of expertise (such as residential funded the DSMO budget through a fuel tax areas), and this causes some tension. adjustment tariff. This tariff was removed shortly after October 2000, and thereafter 5.4.2 DSMO Capacity EGAT took on the funding of the DSMO The DSMO has developed competencies in and its programs through its base tariff. The a number of significant areas: DSMO now has an annual budget ceiling of some 300 million baht (approximately $7.9 · Monitoring and Evaluation: The DSMO million), although the actual amount spent has developed the human resources each year in the last four years has been necessary to do detailed monitoring and about 60--70 percent of budget, depending 30 Context on approval of activity or project budgets. labelthroughvoluntaryagreementswithEGAT The DSMO budget represents approximately and now sell few (if any) domestically pro- 1 percent of EGAT's operating budget of duced appliances that are below the standard 30--40 billion baht (EGAT's revenues are of Label #5. EGAT has worked with manu- approximately 250 billion baht). facturers to increase the EE rating of all the appliances since the labeling program began. The current DSMO five-year plan (2006--10) Label#5forA/CisEERof10.6,butthiswillbe was approved in March 2005. movingto11inthenearfuture(inconsultation with industry). The DSMO has also rescaled 5.5 EE and DSM Programs the Label #5 threshold for fridges. This section reviews efficiency-related ac- tivities undertaken by the DSMO and other From May to July 2002, EGAT launched organizations since closure of the TPEEE a campaign offering interest-free loans of Project, with in particular an examination 10,000 baht (paid through credit cards; the of developments in the residential sector, DSMO paid the interest) for each purchase commercial and institutional sectors, in- of an energy-efficient #5 A/C. They subse- dustrial sector, load management and peak quently dropped the program due to the low shifting, education and awareness-raising, levelofuptake.Similarly,theDSMOdropped and energy service companies. Note that itsmagneticballastlabelingprogrambecause in certain cases there are overlaps between it discovered that long-life items such as bal- programs. For example, the fluorescent tube lasts are harder for people to adopt due to program applies equally to both residential infrequent changes and the high incremental and commercial sectors. cost of low-loss ballasts. (A 4-watt ballast initially costs more than three times as much 5.5.1 Residential Sector as a standard 10-watt ballast.) Overall, EE activity in the residential sector has increased since 2000, primarily through The DSMO has added three new labeling the activities of the DSMO and, to a lesser programs since the end of the TPEEE Project degree, DEDE. in 2000: DSMO · Domestic electric fans:The DSMO imple- The DSMO has continued the use of its Label mented labeling of domestic electric fans #5 on EE appliances used in homes across across Thailand. The program was based Thailand, and Label #5 has become a recog- on a full cost-benefit analysis that esti- nizable symbol of EE and EGAT nationwide. mated impacts based on experience with Manufacturers have adopted the use of the other labeling programs. 31 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project · Brown rice promotion: The DSMO also the area of home energy efficiency, only engaged in a program to encourage the appliances.) use of brown rice, which requires less · Standards and Labeling Working Com- energy in milling but requires longer mittee: DEDE also established a working cooking times, although the net energy committee for EE standards and labeling use has not yet been studied. The main consisting of DEDE, EGAT, EPPO, the driver behind this program is health, and Consumer Protection Bureau, and TISI. the program was substantially aided by EGAT and DEDE worked together to thedirectendorsementbytheKing.EGAT set up standards and testing procedures. categorizesthisinitiativewithinitsattitude DEDE also developed a promotional and creation program. subsidy plan, including publications and · Rice cookers: The DSMO launched a brochures for buyers. program to label domestic rice cookers · Harmonized EE standards: DEDE is cur- (not related to brown rice promotion). rently cooperating with the DSMO on This program was only launched recently developing harmonized EE standards for and has not had time to gain substantial appliances, over and above work that has market presence. been done on MEPS. DEDE is also consid- ering a tax incentive for appliances. DEDE Programs (independent and in col- laboration with the DSMO) 5.5.2 Commercial and Institutional Sectors Prior to government restructuring in 2002, From 2000 to 2005 there was little activity DEDEprogramsexclusivelytargetedcommer- aimed at the commercial and institutional cialandindustrialenergyusers.DEDE'sfocus sectors outside of the ESCO work described has since shifted to include residential and here. transportation sectors. DEDE has undertaken thefollowing,eitheraloneorincollaboration DSMO with the DSMO and other organizations: DSMO activities in the commercial sector have not been significant. EGAT continues · Energy-efficient housing: Under its resi- to do certification of Green Leaf hotels in dential program, DEDE has come up with collaboration with the Hotel Association of energy criteria for houses and developed Thailand, the United Nations Environment three types of demonstration homes. The Programme, and a number of environmental officeisconsideringanawardprogramfor NGOs. Green Leaf is as a voluntary certifica- EEhousesandthedevelopmentofamodel tion program with a checklist of activities to EE community. (It is worth noting that, so reduce environmental impacts pertaining to far, DSMO activities have not addressed energy, water, and so on. 32 Assessment of Intermediate Outcomes In 2002, EGAT provided technical assistance motors. The office found that the program in performing energy audits ­ designing and was ineffective as it only affected the domes- retrofitting energy-efficient air condition- tic production of small motors. The DSMO ing and lighting systems for the head office realized that the main efficiency gains were buildings of Bangkok Bank and the Bank of tobehadintheimportedlargemotormarket, Thailand as well as the latter's Surawongse anareaunaffectedbyvoluntarylabeling.The branch office. These pilot projects were office opted to drop the program and try to intended as a showcase for energy and cost address it through MEPS at a later date (as saving for the commercial sector. noted earlier, the government has developed aMEPSformotorsbutitisnotknownwhenit DEDE will be put in place). Note that in this period DEDEiscurrentlyrevisingthebuildingcodes the DSMO also stopped its industrial audit (which came into effect in 1995) for new programs. buildings, including an explicit section on energy. The code will include offices, edu- Department of Industrial Works cational institutions, and hospitals. DEDE is In recent years the DIW has increased its also providing training for building owners interest and involvement in industrial en- on how to save energy. ergy efficiency programs. The majority of these efforts focus on reduced fossil fuel 5.5.3 Industrial Sector use, although there are some initiatives that The Thailand industrial sector accounts for consider electricity EE. These include: approximately45--50percentofallelectricity use. Within this sector, heavy electric motors · Energy Guidelines: The DIW has de- are responsible for 80 percent of electricity veloped energy guidelines for six light use. Although a number of initiatives have industries, including canning, textiles, targeted the industrial sector and motors in cold storage (freezing), plastics, rubber particular, there has been relatively little EE products,andsmelters.Althoughthefocus activity since 1999. Activities of the DSMO, of the work is primarily on fossil fuel cost the Department of Industrial Works, DEDE, savings, some consideration is given to and the International Finance Corporation of electricity energy efficiency. The program Thailand (IFCT) are described briefly here. employs four DIW staff and will run until 2009. DSMO · Audits: The DIW sends consultants to DSMOactivityintheindustrialareadropped industries to assist in EE projects (both significantly after 2000, when the office dis- electricityandfossilfueluse).EPPO/DEDE continued its efforts to label high-efficiency then funds 30 percent of the retrofit cost, 33 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project and the customer must obtain the other thanawiderfocusondesignatedcommercial 70 percent. This presents a significant facilities), and a better system in place that challenge, as financing is not easy to get incorporated lessons learned from earlier due to banks wanting cost reduction guar- program. DEDE funded 390 projects under antees. this program (including 200 industrial facili- · Staff training: The DIW has done training ties) and reduced audit approval time from in energy efficiency for 1,800 of its own six months to one month. This experience staff in the provinces who are promoting allowed them to build capacity and confi- DIW guidelines for EE in the SME sector, dence that was needed to implement audits where there are 60,000 enterprises. and retrofits. DEDE The DEDE-operated ECF has funded 45 During the TPEEE Project, 80 percent of des- projects to date, including 35 industrial and ignated commercial and industrial facilities 10 commercial/institutional ones. Projects underwent a preliminary or walk-through include chillers, process improvements, audit. But DEDE experienced severe difficul- controls, cogeneration, biogas, and fuel ties in processing these audits, approving switching.Mostprojectsuseasingletechnol- retrofit programs, and implementing actual ogy, with very few integrating more than one retrofits (financing proved to be a significant technology, in part because few consultants barrier). DEDE staff found that it was difficult or ESCOs are able to provide integrated to fully enforce the regulation on the energy design. efficiency investment, especially within the industrial sector (factories claimed that their International Finance Corporation energy consumption was already efficient, of Thailand and the law was not specific enough to say The IFCT manages the Chiller Replacement otherwise).Since2003,DEDEhasstreamlined Fund, a project originally developed by the system to provide a more results-oriented EGAT in 2002. The program is done in col- approach (for example, there is no longer a laborationwiththeDepartmentofIndustrial needforregisteredconsultantstodothewalk- Works and has a budget of $5 million from throughaudits,andthepartiescannowreport the World Bank (with half the funds coming their audit results electronically). fromtheGEFandhalffromtheMontrealPro- tocol Fund, with chlorofluorocarbon emis- From 2002 to 2004, DEDE also ran a "30% sion reductions as the main objective). Subsidy Program." This was a revised pro- gram that had easier access to financial To date the IFCT has arranged for the re- subsidies, a focus on industrial plants (rather placement of 20 chillers using World Bank 34 Context funding, and 36 more using other funding. DSMO The completion date for the program was EGAT has maintained a high level of activity June 2005. inEEeducationandawarenessraising.These activities include continued advertising of 5.5.4 Load Management and Peak Shifting Label #5 and expansion of programs such as The TPEEE Project was originally intended as the Green Learning Room, operated in con- both an energy efficiency and load manage- junction with the Ministry of Education. At ment project. As EGAT did not have knowl- present there are 424 classrooms across the edgeofthefundamentaldifferencesbetween nationwithspecificequipmentandresources theseprimaryobjectivesandtheimplications to teach about electricity production and en- for the organization, the latter area received ergy efficiency. EGAT pays for the expansion relatively little attention. of the program, at the rate of approximately 10newGLRseachyearat$13,750perroom. Prior to 1997, the DSMO engaged MEA Nationalandregionalcompetitionsarerunto in a pilot project focused on load manage- engage students. DSMO staff indicated that ment through peak shifting. Following the students and families in rural areas take an economic crisis, however, interest in peak even greater interest than urbanites in GLR. reduction fell and the MEA/EGAT project was dropped. The goal of GLR is to raise awareness of electricity first (for instance, how it is gener- In 2002, the EGAT Governor (Khun Sittiporn, ated) and environment second. GLR's focus the former head of the DSMO) recognized is on behavior change: unplug appliances, the important role of load management and turnofflights,andbuyEEproducts.Thepro- started the Peak Cutting Program. Under gramreinforcesotheraspectsoftheDSMO's this, the DSMO encourages large customers public campaign: EE labeling and consumer with standby generation to use their genera- choice. It tries to reach the household level tors rather than grid power during on-peak through students with activities that involve periods. their parents, such as household EE audits. TheDSMOhasseenmanysecondaryeffects 5.5.5 Public Education and Awareness of from GLR ­ for example, families of chil- Energy Efficiency dren attending GLRs are much more likely Ingeneral,thelevelofpublicawarenessofEE to buy Label #5 A/C and appliances. has increased in the past five years through continuous campaigns around Label #5 as The GLR program has partnered with the well as through related initiatives by both the Ministry of Education and one IPP, Ratcha- DSMO and EPPO. buri Power Co. Ltd. GLR won an interna- 35 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project tional recognition award in Austria in 2001. costs/investments.Rather,allThaiESCOsbut In terms of replication, one GLR has been one are affiliated with a particular supplier constructed in Cambodia, and Chinese au- (such as Honeywell or Siemens) and only thorities have also expressed interest. supply that company's products. EPPO The only independent ESCO is Excellent En- Under the ENCON Act, EPPO had respon- ergy International, a company that has been sibility for education and awareness-raising in business for about five years and has En- (though this changed in 2005). To date, ef- ergy Purchasing Contracts worth around $20 forts have focused on the "Divide by Two" million.EEIhasabout13full-timeemployees campaign that includes TV spots, with the and two or three subcontractors with whom theme "Save electricity, save money in your the company works regularly. EEI's clients pocket." EPPO has also promoted activities are quite diverse, but most are industrial. foryoungpeopleanddistributedbookletson The clients include the agriculture sector energyconservationingovernmentbuildings (palmoilproduction),thefoodindustry(tapi- andhouseholds.Themessagetohouseholds, oca), and institutions (hospitals and hotels). running from June 2004, is "Save electricity, EEI does not work with offices, schools, or double profit." The objective is to urge peo- universities. ple to change their electricity consumption behavior. The project provides an incentive EEI'sbusinessmodelisthatthecompanywill to all households (14 million) if they reduce do investment-grade energy audits, offer the electricity use by more than 10 percent. client a range of payback periods, and agree These incentives involve an electricity tariff on a regular payment. EEI proposes a slate of reduction of 20 percent for the units saved, measures, including biomass and cogenera- which must be equal to or more that 10 tion options (particularly for hospitals with percent of the electricity consumption in the large domestic hot water loads), and will same month the year before. This program is guarantee system performance. EEI then usu- open to all MEA and PEA households. ally takes care of all utility payments under a performance guarantee contract. Work is 5.5.6 Energy Service Companies normally financed either by the client or by There are at present 12--15 private sector EEI.EEIarrangesfundsthroughlocalbanksor ESCOs in Thailand. The majority of these are off-shore groups like the Global Energy Fund not "conventional" in the North American (in the United States). sense; they are not independent companies that do retrofits involving a variety of tech- A number of government institutions have nologies and brands or provide financing for sought to promote ESCOs: 36 Context ·In the past five years, DEDE has been closelywithESCOs(mainlywithExcellent promoting ESCO concepts through semi- Energy International). The IFCT process is nars, brochures, broadcasts, and so on that it identifies a client (such as a hotel), and through an ESCO network. DEDE has talks to the CEO, and guarantees three also been developing an ESCO Web site things: a payback period of usually not and setting up a database to be a tool for more than four or five years, an internal potentialclientstodoapreliminarysearch rate of return of 15--20 percent, and a set for ESCOs. (maximum) investment cost. The parties ·The DSMO's own ESCO Unit was revived then enter into a contract. IFCT gets the in 2002 in anticipation of privatization. ESCO to do an Investment Grade Audit of This unit was designed to work mainly in the facility and provide a menu of choices the industrial sector and to be spun off as for investment. IFCT provides the capital an independent self-financing unit. to the client, who hires the ESCO to do ·The Metropolitan Electrical Authority the technical work with a performance (with some funding from the World Bank) guarantee. IFCT generally deals with undertook a series of ESCO projects in only three EE technologies: chillers, heat 2000. MEA's ESCO activities died down pumps, and domestic hot water systems. until 2003, when MEA formed an ESCO IFCT's efforts to enter the ECSO business departmentwiththreestaff.MEA'scurrent can be attributed in large part to the EGAT concern is to spin off the ESCO unit so ChillerReplacementProgram(doneunder that it can operate on a "for-profit" basis. the DSMO but separately funded by the The ESCO unit has a plan to work with 11 GEFthroughtheWorldBankin1998)and customers. toencouragementfromaFrenchgroup(FE ·TheIFCTprovidesconcessionalloansand Clear Energy Group) that usually helps set equitytoESCOsandthereforeactsasboth up ESCOs. IFCT involvement in ESCOs a lending institute and an investor. IFCT is therefore an indirect result of DSMO spreads its ECSO work across several sec- activities. tors and regions of Thailand and works 37 6 ASSESSMENT OF INTERMEDIATE OUTCOMES This chapter examines the intermediate out- effectivemethodologies,andasaresultthe comes of the project (that is, the elements design of new and successful programs influencedbytheprojectinthemediumterm, improved during the life of the project. such as policies, programs, and behaviors). ·There was ongoing staff training in the As described in the results framework, there Planning and Evaluation Unit. This in- are six intermediate outcomes. creased DSMO staff's capabilities con- siderably, enabling excellent reporting The sustainable outcomes of the TPEEE Proj- internally and to the Board of EGAT. ect, such as the continuation of the DSMO ·Funding of the TPEEE Project was not de- and the influence on consumers and suppli- pendant on the budget of EGAT. During ers, have been achieved in large measure the life of the project, the tariff that sup- due to design features of the original project. ported the Project provided the necessary Several design elements have been critical revenue without taxing the revenue base in this regard: of EGAT or its partners, the MEA and the PEA. · Theprojecthadasufficientlylonglifespan. ·Therewerenocostlyorongoingsubsidies The project lasted seven years, during for EE products. This saved significant re- whichitresultedinsignificantoutcomesin sources and ensured that the project was severalareaswithsolidevidencethatcould seen as cost-effective. be verified. A shorter project would not ·There was strong empirical evidence of have allowed the successes to emerge. DSMO program impacts. The evidence · The DSMO Management and Planning was obtained through detailed measure- Division was sufficiently skilled and well ments and evaluations, indicating signifi- resourcedtodoitsjobwell. TheUnitused cant results. 39 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project · Public campaigns developed a great risen appreciably in relationship to other amount of public good will. They were DSM components in the TPEEE Project. widely successful and provided an image Theprimaryfeatureoftheresidentialfocus for EGAT that was aligned with consumer is the labeling program. Not only has this savings through product choice (the Label program been maintained, it has been #5 program). widenedtoincludeotherappliances,such as fans and rice cookers. While there are DSMO staff and observers are clear that EE standards for Labels #1--4, the highest without the TPEEE Project the organization EE standard is Label #5. But manufactur- would not have developed capacity for re- ers and consumers have shunned Labels search, evaluation, load management, and #1--4 and only apply and buy Label #5. integratedresourcemanagement.Asaresult, Standards for energy efficiency related to theDSMOwouldhavehadlimitedinfluence theEGATlabelshavealsorisenduringthis and would probably have dissolved into, at period. most, a single division within EGAT. · The DSMO budget and staffing remain strong. Following the end of the TPEEE 6.1 Strong DSMO Project,EGATshiftedfundingoftheDSMO Over the past five years the DSMO has away from the automatic tariff and toward remained quite strong, and it has built on the general revenue base. Yet the DSMO many of the successes of the TPEEE Project budget of 300 million baht is not allocated to become what appears to be a focal point but rather considered a cap (the office still for EE in Thailand. At the same time, there needs to apply for funds on a project-by- are a number of indications that the DSMO project basis), and this hinders its abilities is not as strong as it could be and that it to develop long-term initiatives. has not yet succeeded in promoting EE in · The DSMO has helped EGAT's corporate all sectors. image. It appears that DSMO activities, and in particular its Label #5, have done a The following summarizes the positive as- great deal to improve the general public's pects of the current DSMO: positive perception of EGAT. At a time when EGAT is under scrutiny, largely · The EGAT "Label #5" Program remains related to the plans for its privatization, strong. Following the end of the TPEEE this is a very critical factor, and EGAT Project and with the continuation of management appears to be very aware EGAT's DSMO, the residential appliance of its value. On the other side, it also ap- energy efficiency program has continued pears that this perception of the DSMO as unabated. The role of this program has a public relations tool may be preventing 40 Assessment of Intermediate Outcomes DSMO load reduction efforts from being stem from both the uncertainty associated considered seriously in integrated power with privatization and the loss of a strong planning (as discussed later). champion within EGAT. · The DSMO has developed and maintains · DSMO objectives are not aligned with a strong internal evaluation and testing those of EGAT. Within senior levels of capacity. This tracks a variety of success EGAT, it appears that the DSMO is often factors:GHGemissionsreduction,energy seen as being in conflict with EGAT's pri- reduction,peakcoincidencefactor,andso marymandate(producingandsellingelec- on. Much of this capacity was obtained tricity). When the TPEEE Project started, it by bringing in qualified consultants who wasrecommendedthattheDSMOengage helped train DSMO staff. At the same in two types of activities: load manage- time, the DSMO has not established a ment and conservation. It appears that the solid third-party evaluation capacity--an distinction was not well understood, and independent monitoring and evaluation the DSMO focused on conservation, with capacity--to validate results and give cred- feweffortsaimedatloadmanagementand ibility to statements on the size of project peak shifting. A number of interviewees impact. This is due to both a lack of funds feltthattheDSMOshouldhavepaidmore and an apparent cultural resistance to the attention to the latter; some even felt that idea of outside critiques. load management and load reshaping should be the primary goals of any DSM Despite the positive points just described, program. In general terms, energy conser- there are indications that the DSMO lacks vation is "in the public good" while load strength in a number of areas: management is in "the utility's good," so an emphasis on the former meant that the · TherateofincreaseinDSMOactivitieshas utility saw DSMO activities as primarily been reduced since 2000. Since then, the good public relations. DSMO has reduced the size and volume ofEEprogramsitinitiatesandadministers. 6.2 Behavior Change From 1993 to 1999, the DSMO started 19 DSMOactivitieshaveincreasedpublicaware- programs,butfrom2000to2005onlyfour ness that energy is a measurable resource. new programs were initiated: Label #5 for This plus consumer and political awareness rice cookers, brown rice, and household of EE may be among the DSMO's greatest fans and the Peak Cutting Program. In impacts. At the same time, it should be noted addition, it cut a number of existing pro- that the public does not appear to link energy grams (such as Label #5 for motors). This efficiency to the avoidance of power plants, reducedlevelofnewinitiativesappearsto nor do people make a strong link between 41 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project energy use and environmental impacts (such reduction, ASEAN Energy Cooperation on as clean air and GHG reductions). Standards and Labeling, and the ESCO Pilot project). The DSMO also retains a strong al- DSMO energy efficiency labeling campaigns liance with the Consumer Protection Board, havehighrecognition;theyhavebeenhighly whichcontinuestoactasapublicmonitoring effective in changing residential appliance agentinsupportoftheLabel#5program.The purchasing behavior. It appears that con- successofDSMappearstohavecreatedacer- sumer behavior has changed significantly tain level of competition among government with regards to EE equipment and appliance agencies that in turn has pressured DEDE to purchasing. Both the DSMO and EPPO have put more focus on EE in all sectors. launched public awareness campaigns, although it appears that DSMO work has There has been a decline in broader inter- achieved higher recognition. Interviewees departmental collaboration, however. For indicated that DSMO campaigns have high example, the DSM Committee (created to recognition and that the Label #5 has ef- coordinate DSM programs among agencies fectively become a "seal of approval" and a and the utility) has largely ceased function- sign not only of energy efficiency, but also ing, which appears to have impeded the sys- of quality and durability, as indicated earlier. tematic and consistent collaboration among This success seems to have translated into an DSMstakeholdersthatwasenvisionedduring improved overall public image of EGAT. the TPEEE Project. Other working groups, although still active, have not been able to Behavior change in the commercial and provide momentum. For example, the rice industrial sectors is much less evident, and cookerlabelingprogramfellundertheEGAT/ it appears that the DSMO's impacts in this DEDE Standards & Labeling working group, case are limited to indirect "runoff" from the which met only once in 2004. As EGAT is residential campaigns. constrained by the decisions of the group, this inactivity caused a number of delays. 6.3 Relationships with Allies in the Furthermore,EGAThasnosignificantcontact Public Sector with the Department of Industrial Works or In the public sector, the DSMO has a mixed the Department of Industrial Promotion in record of maintaining links. The links to the theMinistryofIndustry,despitetheirinvolve- Ministry of Energy's Departments such as mentinEEprograms,auditsonbuildings,and DEDE and EPPO are relatively strong. This focus on motors and equipment. is supported by the number of collaborative programs instituted (including the minimum There are few solid indications of programs energy performance standards, SME cost where the DSMO and the Metropolitan Elec- 42 Assessment of Intermediate Outcomes tricity Authority have collaborated in recent is not separated from other initiatives, and by years.IntervieweesatMEAindicatedthatDSM most indications even the aggregate figure programs (specifically Label #5) had greatly "gets lost" among other considerations in benefited EGAT, while the benefits for MEA power planning. (The 2002 load forecast were uncertain. At the same time, the DSMO counts on 900 MW of peak reduction from hadlittleinvolvementinMEA'sactivities,even energyefficiency,includingDSMOactivities though the office had been brought in years and others). The former Governor suggests earlier to assist MEA in launching its DSM ini- that the DSM concept (and the DSMO itself) tiatives. It was noted by one interviewee that is not yet strong enough to influence supply- this was unusual, given that the distribution side management. It should be noted that utilities have direct access to consumers, who within EGAT, the DSMO Assistant Governor are the DSMO's primary audience. is just one voice among 19 Assistant Gover- nors, and it is therefore a challenge to have 6.4 Policies, Regulations, and Institutions DSMO figures clearly worked into the Power Supporting EE Development Plan. Similarly, the DSMO is ThissectionexaminestheimpactoftheTPEEE not represented on EGAT's Load Forecasting Project on policies and regulations of both Committee or on the Tariff Setting Commit- EGAT and the government of Thailand. tee, which is chaired at a political level and made up of MEA, PEA, EGAT, IPPO, and 6.4.1 Impacts on EGAT Policies others. and Planning DSMO program achievements have not be- It appears that DSMO figures are limited to come a significant factor in EGAT's power the marginal reserve section of the power planning process. It was the view of a num- planning figures by both integrated resource ber of interviewees that this would be the planning exercises. As EGAT's marginal "litmustest"formeasuringhigh-levelimpact. reserves get smaller each year, given the Notably, the demand and load reductions rapid rise in demand, the DSMO contribu- achieved by the DSMO are not significant tion is more significant. However, there is in development of its Power Development a widespread sense that the attention to the PlananditsIntegratedResourcePlan,though DSM information by the integrated resource they are somewhat considered. At present, it planning processes is negligible. appears that this high-level objective has not been achieved. The government of Thailand is in the middle of planning a national low-energy intensive First,althoughEEfiguresdoappearinEGAT's industrial growth policy under the direction Power Development Plan, the DSMO figure of the EPPO. But there are no plans to meet 43 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project new demand with an enlargement of DSMO DSMO work. The EPPO was putting new activities.Itwillbeachallengeforthegovern- structural initiatives in place at the time of ment to have the right mix of policy instru- this study. ments to achieve its goals without greater investmentinEE.Oneareaforclarityisforthe The programs and the policy instruments of DSMOtohavespecificEEorpowerreduction the Ministry of Energy are also evolving quite targets and to have these targets included in quickly based on lessons learned and new the integrated power planning processes of insights into the role of energy efficiency in both EGAT and the country. economic development. The imposition of national MEPS is a significant policy change It is worth noting the impact of the 2002 at the Ministry of Energy--one of the first vis- government restructuring and the continued ible shifts since the Bank's DSMO project potential for privatization on EGAT's plan- ended--and it was made possible by the ning. These have had the effect of making DSMO's important work with manufacturers long-term planning difficult within EGAT, over several previous years. EPPO's policies thus "drowning out" the DSMO impacts. can be promoted largely due to the success of EGAT's successful DSMO programs. Also, 6.4.2 Impacts on Government Policies EPPO'senergyefficiencyrecommendationsto The DSMO and the TPEEE Project appear to the Minister are seen as appropriate in the na- havehadasignificantimpactoncertainareas tional context of emerging energy demand. ofgovernmentenergypolicy.TheMinistryof Energyhasrealizedtheimportanceofenergy The Minister of Energy has recognized and efficiency and has brought all the important emphasized that EGAT must seek to reduce national institutions, including EGAT, into peakenergydemand.Thereisaclearrecogni- a newly reorganized ministry structure that tionthat theneed fornew electricity capacity is still evolving. The recent government re- should be reduced and that EGAT should organization marked a positive change con- undertake peak cutting. cerning the coordination of efforts between EGAT and DEDE. The Directors of DEDE DSMO staff and other observers believe that and EGAT were brought together to work verylittleofthiswouldhavehappenedinthe out their differences. While the relationship absence of the TPEEE Project or that it would still has difficulties, areas of responsibility have happened much more slowly. and lines of reporting are becoming clearer. DEDE has recently undertaken changed 6.5 Strong Energy Services Sector policies--for example, setting standards for The TPEEE Project has had a modest influ- building codes--that are based on results of ence on the development of this sector. 44 Assessment of Intermediate Outcomes The DSMO's earlier ESCO initiatives served EEI was the only ESCO that really worked. as the spark for many of the current ESCO The biggest issue here is trust: industry is not initiatives in the public and private sector. sure about ESCOs that promise energy sav- Initiativessuchasthosebeingundertakenby ings. To quote from an interview, "Amongst MEA and DEDE are encouraging. Although the biggest barriers now are the recognition the Thailand ESCO market is not yet well andcredibilityofESCOs.Banksareonboard, developed, some interviewees indicated everything is ready to go ... they just need that public and private ESCOs would not the factory owners to believe that it's the exist in Thailand if it were not for the TPEEE right thing." Project. ESCO work by the DSMO did help create capacity and sow the seed for later The DSMO's ESCO activities provided key public and private ESCO development. It demonstrations and tools to support ESCOs. is assumed that current public ESCO initia- First,theDSMOprovidedpromotionalvalue, tives will be spun off from the institutions basically to show that ESCOs work. Second, that now house them. Time will tell if they its Energy Purchase Contract and its monitor- will be private enterprises or independent ingandverificationplanweregoodexamples public enterprises, though privatization for other ESCO projects of measures and pre- policieswilllikelyaffectESCOdevelopment cision quality control. This knowledge and in Thailand. The Ministry of Energy plans these systems have helped give rise anew to to have ESCOs involved in the retrofit of an interest in ESCOs. The current ESCO pilot government buildings. EGAT will be able project may help EGAT to see some business to take credit for DEDE's change in policy, opportunities in this area. If EGAT steps into with some input into financing decisions this business more seriously, it will again on how ECSO activities can be handled in make a major difference. Thailand. There is an emerging international interest in The DSMO can be given some credit for EGAT's ESCO activities. This includes recent encouraging some specific private sector queries from Japan, where ESCOs are quite ESCOs as well. These companies, though strong.InOctober2005,anESCOconference few in number, probably would not exist if it convened in Japan, with an effort to start a weren't for the TPEEE Project, which helped regional ESCO association. lay the groundwork for the establishment of ESCOsinThailandandsparkedtheinterestof Once again, DSMO staff and observers be- some banks, including IFTC and Thai Bank. lieve that very little activity on ESCOs would EEI was one of the groups that participated in have happened in the absence of the TPEE the original ESCO pilot, and it appears that Project. 45 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project 6.6 Strong EE Manufacturing Sector 54 percent of air conditioners, mostly to the The DSMO has had a significant impact Middle East; and 73 percent of fans. As the on raising the competitiveness of the Thai demand for EE appliances and equipment EE product manufacturing sector. Its efforts increases in Asia, Thailand is in a good posi- made the domestic appliance manufactur- tion to sell such products. ing sector more competitive, thus putting it in a better position for strong export market The DSMO retains strong links to the activity. manufacturers it has worked closely with. Interviewees indicated that the positive Thailand's EE products, such as Label #5 experience of the TPEEE Project helped A/Cs, are sold in Sri Lanka and Indonesia, nurture these alliances. Interviewees also among other markets. Australia now imports indicated that EGAT had developed solid many Thai A/C units, and these actually have human resources on EE and that many of a higher efficiency than the units produced thesestaffhadinturnmovedtoprivatesector in Australia. Thailand's equipment exports companies, where their experience helped are significant: 55 percent of refrigerators; develop capacity. 46 7 ASSESSMENT OF ULTIMATE OUTCOMES Ultimate outcomes are elements that are quality products are also being imported that influenced by projects in the long term. This compete with Thai products. includes elements such as market transfor- mation and program replication. Each of As an example of the effectiveness of Label these is directly or indirectly affected by #5, the Consumer Protection Board recently the intermediate outcomes described in the caught a local distributor with an imported previous chapter. product affixing a fraudulent Label #5 sticker and claiming huge cost reductions due en- 7.1 Residential Market Transformation ergy savings. There have also been cases of DSMO programs had a substantial impact false labeling of A/C units. on the residential equipment appliance mar- ket, and it appears that this impact has only 7.1.1 Lighting strengthened since the project's close. All indications are that the Thailand lighting market has been permanently transformed The Label #5 program has been particularly for fluorescent tube lighting (thin tubes). (In successful. It has promoted the most energy Thailand, fluorescent tubes are used in both efficient products, consumers are buying residential and commercial markets.) By them, and Thai manufacturers have stopped 2004,85millionunitsofT8fluorescenttubes making many less energy-efficient products. had been sold in Thailand, and T8 sales ac- In terms of domestic production, assessed counted for 100 percent of all sales (no other through test results, EEI found that the perfor- tubesaremanufacturedorimportedintoThai- mance of equipment improved significantly land).ItappearsthatDSMOeffortsatlabeling in the past five years. However, some lower- andvoluntarymanufactureragreementswere sufficient to make this change happen. 47 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Market transformation for CFLs has been In the case of fridges, there are still a rela- slower and less than complete, but it has tively small number of imported units sold in still been widely seen as very successful with Thailand. Imported refrigerators do not use the issuance of 4.96 million labels since the the EGAT labeling system and represent a beginningofthelabelingprogramforCFLsin small though significant share of the market. June 2003. By 2004, 5.97 million CFLs had Indicationsarethattheseunitswillbephased been sold in Thailand, whereas only 1.01 out within a few years. million were sold before the introduction of the EE label. 7.1.3 Air Conditioners Market transformation is also under way Inthecaseofballasts,markettransformation but not yet complete for air conditioners. is at a relatively early stage. EGAT's labeling Market penetration of Label #5 A/C units program has been somewhat successful, continues to increase, although the DSMO although the long turnover time in equip- faces a significant challenge in dealing with ment and the larger initial purchase costs the large number of manufacturers and the have necessarily slowed progress in sales. difficulty in verifying labels. By November By 2004, the DSMO had distributed 2.85 2004, EGAT had distributed 2.8 million la- million labels for high-efficiency ballasts. bels for A/Cs, and most residential A/C units sold in Thailand had the #5 label. There are 7.1.2 Refrigerators some continuing sales of residential equip- Significant market transformation is under ment not using Label #5. This often relates way for refrigerators, but it is not yet com- to AC units in condos, where the units are plete. Labeling became mandatory for all supplied and the developers do not pay the domestically produced refrigerators (single related electricity bills. door units in 1998 and double door units in 2002). By 2002, all domestically manu- A big problem with A/C equipment is that factured fridges sold in Thailand used the for smaller units there are more than 10 #5 label, and this continued through to the manufacturers producing over 200 models. latest reports dated November 2004. From This makes it difficult to negotiate improve- the launch of labels for fridges in 1995 to ments and harder to verify label compliance. the end of 2004, the DSMO had distributed However,itisexpectedthattheMEPSforA/C a total of more than 13.8 million labels for in March 2005 will have greatly increased fridges;ofthese,morethan12.4millionwere the number of EE units being sold, although Label #5 ­ the highest EE rating. Labeling this will depend on the resources available continues at the rate of more than 2 million for standards enforcement. Years of DSMO labels issued each year. voluntary labeling programs contributed 48 Assessment of Ultimate Outcomes to the recent move to mandatory labeling a dominant role in generating these sales, and MEPS, as described at the end of this although other factors such as energy prices chapter. andreductionsinpricesfortheEEequipment also played a role. Our overall assessment of Table 7.1 presents sales data for the main the attribution of sales to TPEEE is presented markets that have been transformed by the in Table 7.2. This assessment is based on the TPEEE Project. logic of the impact chain presented in Chap- ter 3, the results of the interviews, and the There is little doubt among various market overall effect of the intermediate outcomes observers in Thailand that TPEEE played described in Chapter 6. Table 7.1 Sales Data Lighting Refrigerators Air Conditioners EE Label Label Label Label Label Label T8s CFLs Ballasts #3 #4 #5 Total #3 #4 #5 Total# 1993 6.35 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 6.48 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1995 6.61 0.00 0.00 0.08 0.42 0.07 0.56 0.00 0.00 0.00 0.00 1996 6.74 0.13 0.00 0.05 0.41 0.58 1.04 0.00 0.02 0.09 0.11 1997 6.87 0.13 0.00 0.08 0.14 1.07 1.29 0.00 0.01 0.11 0.12 1998 7.01 0.13 0.42 0.00 0.03 0.85 0.88 0.00 0.01 0.16 0.17 1999 7.15 0.13 0.42 0.00 0.01 0.96 0.97 0.00 0.00 0.14 0.14 2000 7.29 0.13 0.42 0.00 0.00 1.31 1.32 0.00 0.00 0.17 0.17 2001 7.44 0.13 0.42 0.00 0.00 1.70 1.70 0.00 0.00 0.30 0.30 2002 7.59 0.13 0.42 0.00 0.00 1.77 1.77 0.00 0.00 0.39 0.39 2003 7.74 0.13 0.42 0.00 0.00 2.05 2.05 0.00 0.00 0.72 0.72 2004 7.90 4.96 0.40 0.00 0.00 2.04 2.04 0.00 0.00 0.82 0.82 2005 8.05 5.06 0.41 0.00 0.00 2.08 2.08 0.00 0.00 0.83 0.83 2006 8.21 5.16 0.42 0.00 0.00 2.12 2.12 0.00 0.00 0.85 0.85 2007 8.38 5.26 0.42 0.00 0.00 2.16 2.16 0.00 0.00 0.87 0.87 2008 8.55 5.37 0.43 0.00 0.00 2.21 2.21 0.00 0.00 0.88 0.88 2009 8.72 5.48 0.44 0.00 0.00 2.25 2.25 0.00 0.00 0.90 0.90 2010 8.89 5.59 0.45 0.00 0.00 2.30 2.30 0.00 0.00 0.92 0.92 Totals 135.97 37.88 5.47 0.21 1.02 25.54 26.76 0.00 0.04 8.14 8.18 Note: Sales data provided by the DSMO. Fridges and A/C sales are as reported from 1993 to 2004. Lighting sales are based on totals reported by the DSMO for the period, with annual time series estimated by the Study Team. Sales for 2005­10 are based on a 2 percent increase, which is conservative (given recent 5 percent average GDP growth). 49 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Table 7.2 Influence of TPEEE on Sales of EE Equipment Key Factors Factor's Influence TPEEE Influence Composite Attribution on Sales on Factor Electricity Prices High Nil Nil EE Prices Moderate Moderate Moderate Availability and Moderate (as a result High Moderate/High Marketing of work with manufacturers) Consumer Awareness Moderate (as a result High Moderate/High and Interest of labeling) pears to be growing, and there are signs that 7.2 Commercial and Institutional the government is planning to use ESCOs as With the exception of the adoption of T8 the delivery agent for commercial and insti- fluorescent lighting, the TPEEE Project's tutional EE programs. The DSMO has helped medium-term impact on commercial energy EE equipment suppliers substantially, par- efficiencyhasnotbeennearlyassignificantas ticularly with supplying government offices impacts in the residential sector. The DSMO where government procurement regulations commercial program focused on a narrow require Label #5 A/C equipment or an EER target(hotels,pilotchillerprograms),noneof under 9.6 for 1--3 ton units. which appear to have had a wide-ranging or enduring impact. A number of interviewees 7.3 Industrial indicatedthatthismaybeduetotheDSMO's Although there is currently some activity un- preference for a voluntary approach, which der way in industrial energy efficiency, very works well in the residential sector but is not little of this can be traced back to the DSMO as effective in the commercial context. or the TPEEE Project. TPEEE had a limited number of initiatives in the industrial sector. DSMO and government procurement poli- Programs such as the high-efficiency motor cies have had some success in commercial program did not work as well as hoped and and institutional energy-efficient A/C equip- were dropped. ment sales. For example, certain commercial air conditioning units have an increased The most influential actor in the industrial efficiency as a direct result of the DSMO sector is DEDE through the designated fa- campaign. It can also be said that the DSMO cilities program and the ECF. However, this has had an impact on EE A/C installations program has had limited effectiveness. through the activities of ESCOs that service the commercial sector. As indicated earlier, The Department of Industrial Works has also the ESCO sector is not yet strong but it ap- played a role in industrial energy efficiency. 50 Assessment of Ultimate Outcomes However, the DIW seems to be fairly new to A ripple effect has occurred from EGAT's EE. The program started in 2003 as a result DMS programs to other countries, including of lessons learned from the promotion of Vietnam, Indonesia, China, Laos, Sri Lanka, environmental management systems. In the India, Bangladesh, South Africa, Ethiopia, textile industry, for example, there are op- and Myanmar. The World Bank's Vietnam tions for more energy efficiency with the use DSM program is a 12-year effort now in of high-efficiency electrical motors, and the Phase 2, and it uses a number of lessons technology is available. EGAT, however, is learned from Thailand's experience. The not promoting EE yet with this industry, nor regional office of the International Institute is it working with the DIW. for Energy Conservation provides a direct link among several DSM initiatives in the 7.4 Program Replication and Extension Southeast Asia region and has noted these Significant results are being achieved both in ripple effects. Also, the World Bank has Thailand and neighboring countries. Perhaps been involved in several energy efficiency the most significant impact of DSM activities projects, some involving GEF cofinancing. is the government's recent move to minimum Furthermore, EGAT is providing consider- energy performance standards, the first of able confidence to other utilities that they which (for A/C) came into effect in March can undertake DSM activities and achieve 2005. Although not a replication of the label- a variety of results, including peak shaving ingprogram,theadoptionofstandardsisalog- as well as customer relations and consumer ical extension of that program. The DSMO's knowledge. As a major player in the region, Label #5 program was instrumental in getting EGAT's endorsement provides DSM with the government to implement MEPS, and the significant credibility. government could not have achieved manda- tory MEPS without doing the earlier voluntary DSMOstaffandobserversareclearthatwith- program.Sincethereisstillalotofopportunity out TPEEE, there would not have been either for energy-efficiency improvements in the the impacts or the recognition (domestically residential sector and there is a 15 percent and internationally) that were necessary for increaseeveryyearinthenumberofA/Cunits program replication or extension. sold,theMEPSshouldhaveasignificanteffect in reducing electricity demand. 51 8 ASSESSMENT OF IMPACTS This chapter examines the overall quan- (suchastheGreenLeafprogram)orindustrial titative impacts of the TPEEE Project and motors. In both of these cases, the relative assesses which impacts can be attributed impacts were quite low (representing under to TPEEE and which would have likely oc- 5percentoftheprogram'simpacts),andthey curred under a business-as-usual scenario. were therefore left out. As described in Chapter 3, three scenarios were used: a with TPEEE scenario, based on 8.1 Energy Savings and Emission Reductions EGAT figures as of June 2004,8 including those on sales presented in Table 7.1; a no In order to calculate the energy savings, we TPEEE ­ High Baseline scenario that repre- first calculated the number of reported units sents the lower boundary of the estimates sold through the DSMO (largely based on of the incremental impact of the program; the number of labels issued by EGAT for the and a no TPEEE ­ Low Baseline scenario various supported units). The total stock in that represents the higher boundary of the service at any one time is determined by the incremental impact. average lifetime of each unit and the prod- ucts sold in the preceding years that would These scenarios are defined on the basis of still be in service. theinterviewsandourassessmentsofTPEEE's impact (Table 7.2). The key assumptions of The key assumptions were as follows: thetwocounter-factualscenariosareoutlined in Table 8.1. · Compact fluorescent lamps: We assumed that the average lifetime of a CFL is 6,000 Note that the scenarios do not take into ac- hours (consistent with assumptions used countTPEEEimpactsincommercialbuildings in the Mexico and Jamaica programs). It is 53 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Table 8.1 Assumptions behind Baseline Scenarios (No TPEEE Project) High Baseline Sales­Low Impact Low Baseline Sales­High Impact T8 lamps Sales delayed five years, then rising by Sales delayed eight years, then rising by 500,000 units per year until 2010, when 500,000 units per year until 2010 sales are nearly that of TPEEE scenario CFLs Assume CFLs would have not have been Assume CFLs would have not have been introduced until 2004, when a "second push" introduced until 2004, when a "second push" occurred (note that sales of CFLs under occurred; at that point, modest sales would TPEEE until 2004 were not significant) start at 1 million units per year, rising by 500,000 units per year to 2010 EE Ballasts Assume that a few ballasts were sold in Assume that EE ballasts would not be sold 1998, slowly rising to TPEEE scenario until 2000, then slowly rising by 50,000 units levels by 2010 per year Refrigerators Assume all fridges would have remained Assume all fridges would have remained at # at # 3 level until 1996, after which half of 3 level until 2000, after which half of sales sales would have shifted over to # 4; by would have shifted over to # 4; by 2003, there 2000, no # 3 fridges are sold; by 2003, would be a slight shift over to # 5 fridges, but there would be a shift over to # 5 fridges sales would still be dominated by # 4 until until 2010, when the majority of fridges 2010 would be # 5 Air Conditioning Assume that all A/C units sold to 2000 Assume that all A/C units sold to 2000 are half are # 4 level units; after that, sales are #3 and half # 4 level units; after that, sales are split between #4 and #5 split between #4 and #5 assumed that average utilization is three 1992baselinereport).ForLabel#3fridges, hours per day. we assumed that annual energy use is 485 · T8 lamps: We assumed that use of T8 kWh per year (average of range provided lamps saved, on average, 23 kilowatt- by the DSMO of 534--437 kWh per year). hours (kWh) per year. This is based on For Label #4 fridge, we assumed annual DSMO analysis that estimated savings of energy use of 400 kWh (average of range 1,957 GWh from sales of 85 million T8s. given by the DSMO of 364--437 kWh/yr). It is assumed that the average lifetime is For Label #5 fridge, we assumed energy five years. use of 330 kWh/yr. Assume that lifetime · EE ballasts: We assumed that each ballast is 20 years. saves, on average, 19 kWh per year. This · Air conditioners: We assumed that the is based on DSMO analysis that estimates baseline A/C units have an EER of 7.4 savings of 54 GWh from sales of 2.5 mil- Btuh/W. Label #4 A/Cs are assumed to lion EE ballasts. It is assumed that the have an efficiency of 10.1 (average of lifetime of each ballast is 10 years. range designated by the DSMO), while · Refrigerators: We assumed a baseline Label#5unitsareassumedtohaveanEER (business-as-usual) energy consumption of 10.6. Annual usage is assumed as 560 of 492 kWh per year (from World Bank hours. 54 Assessment of Impacts · Transmission and distribution losses: This 45.2 Mt to 2010. Of this total, 12.6--17.4 Mt factor identifies the amount of energy lost are attributable to TPEEE in 1993--2004 and between generation and the lighting fix- an additional 14.7--27.6 Mt in the period to ture, providing a basis for calculating the 2010. amountofenergysavingsatthegenerating station. For the purposes of this study, we 8.1.2 Local Environmental Benefits used 18.6 percent. In addition to the global benefits of reduced GHGs, the electricity savings have also Table 8.2 provides the annual energy sav- lowered emissions of air pollutants that con- ingsundereachscenarioforthethreemajor tribute to smog and acidification. Emission TPEEE focus areas: lighting (including CFLs, factors for NOx and SOx were obtained from T8s, and EE ballasts), refrigerators, and air the DSMO Planning and Evaluation Unit, as conditioning units. Table 8.3 provides the follows:9 total savings under each scenario, and Figure 8.1 provides these data in graphic SOx: 0.331 t/GWh form. NOx: 1.808 t/GWh. Basedontheseestimates,energysavingsfrom Based on these figures, the use of EE lighting, all programs (including lighting, fridges, and fridges, and A/C resulted in SOx emission A/C)amountedtoapproximately28terawatt- reductions of approximately 9.4 kilotons (Kt) hours (TWh) in the period 1993--2004 and from 1993 to 2004, with 5.6 --7.8 Kt attribut- will save an additional 61 TWh to 2010. Of able to TPEEE. It is estimated that use of the this total, 17.0--23.5 TWh are attributable EE equipment will result in an additional 20 to TPEEE in 1993--2004 and an additional Kt of SOx reductions to 2010. Of this total, 19.8--37.4 TWh in 2005--10. 6.6--12.4 Kt are attributable to TPEEE in the period to 2010. 8.1.1 GHG Emission Reductions Table 8.4 provides the GHG emission reduc- The use of EE lighting, fridges, and A/C tionswithTPEEE(actual)andthosethatcould resulted in NOx emission reductions of ap- have been expected under conservative and proximately 51 Kt in the period 1993--2004 aggressive scenarios, while Figure 8.2 pro- and an additional 110 Kt to 2010. Of this vides these in graphic form. Based on these total, 30.8--52.3 Kt are attributable to TPEEE estimates, the use of EE lighting, fridges, and in 1993--2004 and an additional 35.9--67.6 A/C resulted in GHG emission reductions of Kt in the period to 2010. approximately 20.9 megatons in the period 1993--2004 and additional reductions of 55 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project ) 17 313 page 2010 2,646 5,198 5,273 13,1 1,300 3,361 4,959 9,620 1,346 1,838 3,497 next on 303 2009 2,584 4,741 4,680 12,005 1,135 2,947 4,377 8,459 1,449 1,794 3,546 continued( 985 293 2008 2,522 4,293 4,099 10,915 2,542 3,807 7,334 1,537 1,751 3,581 828 272 2007 2,399 3,854 3,530 9,782 TPEEE) 2,190 3,258 6,276 1,571 1,664 3,507 to (GWh) 11 706 242 2006 2,1 3,423 2,972 8,506 due 1,846 2,730 5,282 1,405 1,577 3,224 Scenario) 2010) Scenarios 2005 to vings 591 212 1,830 3,000 2,424 7,255 sa 1,553 2,212 4,355 1,239 1,448 2,899 Impact the 480 182 2004 ojected 1,555 2,586 1,888 6,030 of 1,266 1,706 3,452 w 1,075 1,321 2,578 pr Aggressive te 1 376 985 91 141 2003 1,287 2,181 1,362 4,829 1,221 2,581 1,196 2,248 and then estima 899 300 728 795 Baseline--Lo 787 104 2002 1,087 1,773 3,758 e 1,823 1,044 1,936 2004, tiv to va High 647 209 529 563 848 891 84 2001 1,057 1,420 3,123 1,301 1,823 Conservative DSMO 456 (conser (under 134 337 388 859 894 743 68 2000 the 1,028 1,080 2,564 1,705 under by 997 819 344 Impact 74 189 293 557 TPEEE 923 630 51 1999 ted 2,160 w to 1,603 TPEEE to eporr 967 626 251 Lo­ 29 135 214 378 937 491 36 1998 1,843 1,465 vings -- 937 453 142 86 122 208 937 367 20 1997 Sa 1,532 Baseline Attribution­ 1,324 Attribution yg 741 222 66 -- 13 58 70 9 and 1996 1,030 High­ vings 741 210 959 Ener Sa 549 61 -- -- 4 -- 4 yg -- 610 vings 549 56 605 1995 Savings (Actual Sa Ener -- -- 362 362 yg -- -- -- -- -- -- 362 362 1994 Energy Ener -- -- -- -- -- -- -- -- 1993 ithTPEEE 179 179 179 179 W Annual to with 8.2 Table Lighting Refrigerators A/C Energy Savings TPEEE Lighting Refrigerators A/C Energy Savings without TPEEE (Conservative) Lighting Refrigerators A/C Attribution TPEEE (Conservative) 56 Assessment of Impacts 884 2,581 2,226 5,690 1,762 2,617 3,047 7,427 763 2,236 1,976 4,975 1,820 2,505 2,704 7,030 659 1,897 1,731 4,286 1,864 2,396 2,369 6,629 continued)( 546 1,562 1,490 3,598 1,853 2,292 2,040 6,184 (GWh) 439 1,232 1,255 2,926 1,672 2,191 1,717 5,580 338 939 Scenarios 1,024 2,301 1,492 2,061 1,401 4,954 242 653 797 1,693 1,313 1,933 1,091 4,337 Aggressive 153 429 575 787 1,157 1,134 1,751 3,672 and 92 230 380 702 995 519 TPEEE) 1,542 3,056 to 46 1 due 136 274 455 373 1,01 1,284 2,668 Conservative 15 48 Scenario) savings 194 258 262 1,012 1,032 2,307 under the Impact of -- 38 147 185 997 781 197 High 1,975 TPEEE ­ to estimate -- 30 107 137 967 596 143 1,706 -- 23 61 84 937 430 81 (aggressive Low--Baseline 1,448 Attribution -- 13 29 42 38 and Impact (under 741 210 988 High -- 4 -- 4 -- ­ TPEEE 549 56 605 Savings to -- -- -- -- -- -- 362 362 Baseline Energy Low Attribution ­ -- -- -- -- -- -- -- 179 179 Annual to 8.2 Savings Savings Table Energy Lighting Refrigerators A/C Energy Savings without TPEEE (Aggressive) Energy Lighting Refrigerators A/C Attribution TPEEE (Aggressive) 57 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Table 8.3 Annual and Cumulative Impact of TPEEE Against Baseline (GWh) High Baseline Low Baseline Energy Savings Energy Incremental Energy Incremental with TPEEE Savings savings Savings savings (actual) w/o TPEEE due to TPEEE w/o TPEEE due to TPEEE 1993 179 -- 179 -- 179 1994 362 -- 362 -- 362 1995 610 4 605 4 605 1996 1,030 70 959 42 988 1997 1,532 208 1,324 84 1,448 1998 1,843 378 1,465 137 1,706 1999 2,160 557 1,603 185 1,975 2000 2,564 859 1,705 258 2,307 2001 3,123 1,301 1,823 455 2,668 2002 3,758 1,823 1,936 702 3,056 2003 4,829 2,581 2,248 1,157 3,672 2004 6,030 3,452 2,578 1,693 4,337 2005 7,255 4,355 2,899 2,301 4,954 2006 8,506 5,282 3,224 2,926 5,580 2007 9,782 6,276 3,507 3,598 6,184 2008 10,915 7,334 3,581 4,286 6,629 2009 12,005 8,459 3,546 4,975 7,030 2010 13,117 9,620 3,497 5,690 7,427 Total 89,601 52,560 37,041 28,493 61,107 Figure 8.1 Energy Savings Attributable to TPEEE (GWh) 14,000 Energy Savings 12,000 with TPEEE 10,000 Energy Savings year without TPEEE 8,000 (Conservative) per Energy Savings 6,000 without TPEEE GWh (Aggressive) 4,000 Attribution to 2,000 TPEEE (Conservative) 0 Attribution to 93 94 95 96 9798 99 00 01 02 03 04 05 0607 08 09 10 TPEEE (Aggressive) Year 58 Assessment of Impacts Table 8.4 Annual and Cumulative GHG Reductions of TPEEE Against Baseline (Mt) High Baseline Low Baseline GHG GHG GHG Reductions Incremental Reductions Reductions Incremental w/o TPEEE GHG Reductions under TPEEE w/o TPEEE Reductions due to TPEEE due to TPEEE 1993 133 -- 133 -- 133 1994 268 -- 268 -- 268 1995 451 3 447 3 447 1996 761 52 709 31 730 1997 1,132 153 979 62 1,070 1998 1,362 280 1,083 101 1,261 1999 1,596 411 1,185 136 1,460 2000 1,895 635 1,260 190 1,705 2001 2,308 961 1,347 336 1,972 2002 2,777 1,347 1,430 519 2,258 2003 3,569 1,907 1,661 855 2,714 2004 4,456 2,551 1,905 1,251 3,205 2005 5,361 3,219 2,142 1,700 3,661 2006 6,286 3,903 2,383 2,162 4,124 2007 7,229 4,638 2,591 2,659 4,570 2008 8,066 5,420 2,646 3,167 4,899 2009 8,872 6,251 2,620 3,677 5,195 2010 9,693 7,109 2,584 4,205 5,488 Total 66,215 38,840 27,373 21,054 45,160 Figure 8.2 GHG Reductions from TPEEE Project (Mt) 12,000 With TPEEE 10,000 year GHG Emission Reductions - per 8,000 Conservative Scenario CO2e 6,000 Attribution to TPEEE (Conservative) Reductions (kilotones 4,000 GHG Emission Reductions - Aggressive Scenario GHG 2,000 Attribution to TPEEE 0 (Aggressive) 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Year 59 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project 8.2 Capacity Savings and Financial 8.2.2 Financial Impacts Benefits 8.2.1 Capacity Savings TheICRestimatedthatasof2000,theproject In order to estimate capacity savings, EGAT resulted in a total resource cost-benefit ratio conducted load research and developed fac- of 1.7, including savings of over $144 mil- tors for each category of appliance, ranging lion but not counting the value of the GHG from 8.4 percent in residential A/C units to reductions. The Study Team was unable to 85 percent in commercial A/C units, from obtainmorerecentcostinformationtoupdate 13.7 percent in residential lighting to 71.2 these estimates, but the expanding benefits percent in commercial lighting, and at 22 would suggest that both the value of the net percent for refrigerators. savings and the ratio would have increased significantly. Table8.5outlinesthetotalcumulativeannual savings as of December 2004. Table 8.5 DSMO Impacts, 1993 to December 31, 2004 Based on afternoon peak (2:00 p.m.) Peak Demand Annual Energy Consumption Reduction (MW) Reduction (GWh/yr) Lighting 420.5 2,087.4 Refrigerator 209.5 2,129.8 A/C 420.4 1,598.8 Motor 0.2 1.2 Commercial 2.6 10.3 Building Total 1,053.2 5,827.5 60 9 CONCLUSIONS AND ESSONS EARNED L L Without the WB/GEF initiative, the Thailand Promotion of Electrical Energy Efficiency Project, DSM would either not have happened in Thailand or it would have come in much more slowly. Peter du Pont former director of Thailand Office of International Institute for Energy Conservation Thailand's DSMO program is considered by Intheresidentialsector,theprogramachieved many to be one of the most successful DSM substantial gains, including a complete mar- programs in the world. Through coopera- ket transformation of tube lighting and refrig- tion with manufacturers and an aggressive erators. The program also had strong success marketing campaign, the program achieved a in the areas of CFLs and air conditioners. numberofearlywinsthatallowedittoexpand Perhapsthemostsignificantlong-termimpact rapidly and focus on increasingly difficult tar- (though not quantified) is evidenced by the gets. The key features of the program were: Thai government's recent move to minimum energyperformancestandards;manyobserv- · A focus on cooperation and education ers indicated that this would not have been rather than subsidies possible without the DSMO's long-term vol- · Broad focus with programs in the residen- untary labeling program. When the DSMO tial, commercial, and industrial sectors began,EEapplianceswereexpensive,hardto · Use of voluntary labeling find,andhadverysmallsalesvolumes.Today · Aggressive marketing campaigns to bring they are visible in most retail outlets selling about behavioral change lamps and appliances for the residential mar- 61 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project ket, and they dominate shelf and floor space fair to say that many similar programs might over less energy-efficient appliances. not have survived either circumstance. The DSMOhasenjoyedstrongpublicsupportand In the commercial sector, the program had strong leadership (at critical times), which only a modest impact. Although the lighting allowed it to survive. market has been transformed and programs such as the Green Leaf initiative and pilot In addition to the direct impacts of the ESCO project were reasonably successful, residential, commercial, industrial, and edu- their impact on the entire sector was not cational initiatives of the program, energy substantial. Nonetheless, it appears that the efficiency has become an important policy DSMOlaidthegroundworkforfutureexpan- objective of the government within its eco- sion of commercial EE initiatives (many of nomic development goals and strategies. whichwilllikelytakeplacethroughorganiza- tions outside the DSMO). The main example 9.1 Replication and Extension is the ESCO program; depending on market The TPEEE (DSMO) Project has proved that restructuringandtheplayersthatemerge,the the features just described have substantial lessons learned from DSMO programs may replication value. Countries in the region prove to be seminal. have shown great respect for Thailand's DSM/EE programs. EGAT is providing the Intheindustrialsector,theTPEEEProjectand experiential basis for other utilities to un- the DSMO had very little impact. The sector dertake DSM activities and achieve results proved to be very difficult to gain access to related to peak shaving, customer relations, for a variety of reasons, including equipment and consumer knowledge. importing (difficult to get to makers of large motors, which dominate industrial energy A ripple effect has occurred from EGAT's consumption) and decision making (equip- DMS programs to programs in Vietnam, ment purchasers are not the ones who "pay Indonesia, China, Laos, Sri Lanka, Australia, the bills," unlike in the residential sector). India, Bangladesh, South Africa, Ethiopia, Nonetheless, if at a future date the MEPS are andMyanmar.Andorganizationssuchasthe imposed on motors, then the DSMO's indi- Regional Office of the International Institute rect impact will have been substantial. for Energy Conservation provide a direct link amongseveralDSMinitiativesintheSouthest Two factors had a significant impact on Asia region. TPEEE/DSMO: the economic crisis of 1997 and the planned privatization of EGAT. Both Foreign utilities see EGAT as an example of have presented unique challenges, and it is why a utility may be interested in embrac- 62 Conclusions and Lessons Learned ing DSM (a concept not normally associated sumerconfidenceinDSMOactivities(name- with traditional utility interests). This aspect ly, Label #5), it is in the government's and may assist replication in the future. In addi- EGAT's interest to maintain the program. tion, the labeling program has provided the foundation for the adoption of MEPS in a 9.3 Ultimate Outcomes number of areas. DSMO programs have had a substantial impact on the residential equipment appli- 9.2 Sustainability ance market and it appears that this impact The TPEEE Project has established market has only strengthened since the project's transformationforresidentialappliancessuch close. asairconditioning,refrigerators,andlighting. The advent of minimum energy performance 9.3.1 Residential Market standards for these and other equipment will With respect to lighting, market transforma- ensure sustainability of savings. tion is under way, though it is not yet com- pleteforCFLsandthereisslowerprogressfor The successes of the project have been sus- low-loss ballasts. For refrigerators, significant tained by EGAT's continued funding of the market transformation is under way, but it is DSMO. At the end of the TPEEE Project, the not yet complete. For air conditioners mar- DSMO's funding from the dedicated tariff ket transformation is under way but not yet was removed, and EGAT elected to con- complete. A significant challenge in the A/C tinue funding at equivalent (or higher levels) market lies in the number of manufacturers, through EGAT's revenue base. and the difficulties this poses in terms of both negotiation and product testing/verification. The potential for privatization represented a It is expected that the MEPS for A/C in March significant threat to the DSMO. In response, 2005 will greatly increase the number of EE the DSMO has been located in a unit of units being sold. EGAT that will not be privatized (the trans- mission division). The operation of a DSM SalesofLabel#5lights,refrigerators,andA/C program by a transmission company will be unitsareestimatedtohaverisensubstantially somewhat unique and may require a clear in the period to 2004, including: government policy commitment to keep the DSMO running. · 85 million T8 fluorescent tubes · 5 million CFLs DSMO sustainability has been strengthened · 12.4 million refrigerators by high consumer demand for its services. · 2.8 million A/C units With the program's high visibility and con- 63 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project 9.3.2 Commercial/Institutional Market to play an important factor in investment With the exception of lighting (included decisions. in the above figures), the TPEEE Project's medium-term impact on commercial energy DSM programs must have a strong public efficiency has not been nearly as significant awareness campaign, in part to build public in the residential sector. DSMO and govern- support for the policies and investments ment procurement policies have had some needed to support the programs. success in commercial and institutional energy-efficient lighting and A/C equipment 9.5.2 Capacity Building sales, but a significant potential remains. In order to build capacity, it may be helpful to begin with programs that do not require 9.3.3 Industrial extensive cooperation with other agencies Although there is currently some activity un- to be successful. DSMO programs proved to der way in industrial energy efficiency, very be less effective when they depended on the little of this can be traced back to the DSMO cooperation of other agencies (such as DEDE or the TPEEE Project. or NEPO/EPPO). 9.4 Impacts 9.5.3 Program Design Over the period, sales of EE products re- A program should be designed in a way sulted in reductions of approximately 21 that allows "early wins" that then lead to Mt of GHG emissions from 1993 to 2004. expanded programs. This may mean target- Of this it is estimated that 12.6--17.4 Mt are ing residential markets (they are often easier directly attributable to the TPEEE Project. EE to deal with than commercial or industrial products also reduced peak demand by over markets), technologies with relatively low 1,000MWandproducedarangeoffinancial incremental costs (such as fridges, air con- benefits. ditioners, and tube lighting), and programs that do not require collaboration with other 9.5 Lessons Learned departmentsoragencies(suchasdistribution utilities). 9.5.1 Consumer Awareness Consumer and investor knowledge and It is important to understand that DSM con- confidenceinenergyefficiencyproductsisa sists of both conservation and load manage- keyobjectiveforaneffectiveDSMprogram. ment. Each presents unique benefits to those Consumers and investors are motivated involved in the program, and it is critical that by cost savings. This motivation requires all players build their involvement in the knowledgethatisstrongenoughtoallowfor program through self-interest: long-term energy cost-savings calculations 64 Conclusions and Lessons Learned · Fromtheelectricalgeneration/utility'sper- scandal hits the utility, and so on. Given the spective: DSM can delay costly construc- highly political nature of the power sector, tion of added baseline capacity and peak- such events appear to be likely over the long ing plants. DSM can also bring substantial term. It is important to design a robust and benefitsfor"corporateimage"ifandwhere flexible program that can be adapted to such theprogramshavethenecessaryoutreach, changes. education, and campaign components. · From the distribution utility's perspective: Inordertoachievethegreatestbenefits,DSM DSM can provide a business opportunity programs need to target specific products where ESCOs are set up. It also can assist and technologies to gain early momentum. in planning and cost avoidance of system For example: expansion and can improve consumer relations by providing added-value pro- · Where the incremental cost for the EE ver- grams. sion of the technology is relatively low · From the consumer's perspective: DSM · Where the DSM program has a high can provide regular and long-term cost- degree of control by the implementing saving opportunities through reduced agency and where the implementation is power use and lower bills. not relying on other departments or agen- · Fromthemanufacturer'sperspective:DSM cies to overcome barriers provides an opportunity for increased · Where the technology is manufactured competitiveness both in domestic and locally and in sufficiently high volumes international markets by creating a critical to allow for product turnover mass of demand. · For the government: DSM allows for en- 9.5.4 Commercial Markets vironmental improvements, fulfillment of ESCO development requires long timelines. international environmental obligations, The ESCO model must be developed to suit and a more competitive economy. It can thelocalornationalbusinessculture.Ithelps also lead to foreign investment opportuni- to experiment with different ESCO models ties (such as through the Clean Develop- (financial, technical) and then to build on ment Mechanism). lessons learned in the particular jurisdiction and economic environment. "Expect the worst" in designing a DSM program. In designing the program, it is 9.5.5 Sustainability important to consider what could happen Voluntary programs are useful as a necessary if the economy collapses, the government step toward the development of minimum falls, the power sector gets deregulated, a standards. This is relevant to both low and 65 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project high incremental cost products. To sustain of leadership in DSM is to recognize that one energy efficiency achievements, however, of the most significant indicators of a DSM mandatory standards may be required. program's success is the integration of DSM results into the utility load forecasting and DSM programs need strong leadership to power development plan. get into the mainstream. EGAT's experience suggests that this leadership is required at Thorough planning (that is, cost/benefit the level of the Governor or Chief Executive analysis) of a new DSM initiative should be Officer, at the level of Assistant Governor, done prior to program launch. This helps to and at the departmental level. The top-level set targets that can be tracked as the program leadership must be provided internally as is under way and when it is completed. This well as externally. Internally, the leadership will facilitate an easier determination of the provides assurance of funding and use of successesoftheprogram.Alongwithinternal DSM information in organizational design planning, it is important to have an external, and staffing and in power planning. External- third-party monitor and an evaluation pro- ly, the leadership must extend to the political cess/agency involved on a regular basis. This level, the relevant Minister or Ministers, and leads to credible data and confidence in the to the chiefs of relevant departments in those reported results of the programs. ministries. The most important contribution 66 APPENDIX A: INTERVIEWEES Demand-Side Management Office, Khun Sudarat Sasunee, Chief, Attitude Cre- Electrical Generating Authority of Thailand ation Department ­ www.egat.or.th/dsm and pr.egat.co.th Khun Sittiporn, ex-Governor, EGAT, ex-As- Khun Pitarn Chaichinda, Assistant Director, sistant Governor, DSM DSM Implementation Khun Srinual Suksod, Chief, Appliances Ef- KhunSarawuthChandharath,AssistantDirec- ficiency and Chief, Labelling Program tor, Management and Planning Division KhunBunditUmpornsrisupap,ESCOProject, Khun Apichart Dilogsopon, Assistant Gov- Implementation Division ernor, DSMO Khun Trong-art Wongwatanyou, ESCO Proj- Khun Pornuma Harabutra, Economist, Man- ect unit, Implementation Division agement and Planning Division Khun Anake Phanthumitre, Chief, Planning Energy Policy and Planning Office ­ and Evaluation, Management and Plan- www.eppo.go.th and www.industry.go.th ning Division KhunWathanyuAmatayakul,PlanandPolicy Khun Napaporn Phumaraphand, Senior Analyst Economist, Management and Planning Khun Chavalit Pichalai, Director of Energy Division Systems Analysis Bureau Khun Suphan Puapong, Director, DSM Man- agement and Planning Division Department of Alternative Energy Develop- KhunThanaPutarungsi,DirectorDSMImple- ment and Efficiency ­ www.dede.go.th mentation Division Khun Mana Nitikul, Executive Director, Bu- Khun Nophdol Salisdisouk, Chief, Technol- reau of EE Promotion ogy Department 67 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Dr. Prasert Sinsukprasert, Bureau of Energy Ministry of Natural Resources and Environ- Regulation and Conservation ment ­ www.monre.go.th Khun Pornchai Ungpinitpong, Electrical Khun Ampan Pintukanok, Director, Office Engineer of International Cooperation, GEF Focal Khun Sirinthorn Vongsoasup, Chief, Energy Point Efficiency Promotion Electrical and Electronics Institute ­ Department of Industrial Works ­ www.thaieei.com www.diw.go.th KhunThanasakChaiyavech,Director,Opera- Khun Helen Arromadee, Senior expert tion and Standards Khun Supakit Boonsiri, Electrical Engineer Khun Charuek Hengrasmee, President Khun Issra Shoatburakarn, Director-General Khun Supachai Siriwattanacharoenchai, Di- Industrial Finance Corporation of Thailand/ rector, Safety Technology Bureau Thai Military Bank Public Company Limited ­ www.ifct.co.th and www.tmb.co.th Metropolitan Electricity Authority ­ Khun Anat Prapasawad, Business Develop- www.mea.or.th ment Department Khun Nives Aroonrat, Assistant Governor, MEA Danish Energy Management ­ Khun Anusak Mitrabhuckdi www.dem.dk Khun Napadol Prasertkanchana, ESCO Peter du Pont, Chief Executive Officer, Project Thailand KhunSutidaSindhvananda,Secretary,Finan- cial Management Division Excellent Energy International Company Khun Bandhit Tawanwong, Director of Load ­ www.eei.co.th Analysis and DSM Division Khun Arthit Vechakij, Managing Director Khun Anna Thornthip, Financial Manage- ment Division International Institute for Energy Conserva- tion, Asia Regional Office ­ www.iiec.org Office of Consumer Protection Board, Felix Gooneratne, Asia Director Office of the Prime Minister ­ Sommai Phon-Amnuaisuk, Senior Project www.ocpb.go.th Manager (representing the Secretary General of the CPB, Khun Rasamee Vistaveth) Siam Inter Air Company Khun Pairuj Kanungsup, staff member Khun Boonchoo Wongkitrungruang, Khun Chuensuke Methakulawat, Secretary Director 68 Appendix A Trane Thailand/AIRCO Limited Individuals Khun Mahitorn Vipattipumiprathet, Senior Jas Singh, former Project Team Leader and Marketing Manager coauthor of Implementation Completion Report, World Bank 69 APPENDIX B: BIBLIOGRAPHY AGRA Monenco. 2000. DSM Program land's DSM Initiative: A Practical Re- Evaluation ­ Conservation Program: Fi- sponse to Global Warming. In The Global nal Report, Volumes 1, 4, and 5. AGRA Greenhouse Regime ­ Who Pays? Peter Monenco, Canada. Hayes and Kirk Smith (eds.). United Na- Birner, Sabrina, and Eric Martinot. 2002.The tions University Press. GEF Energy-Efficient Product Portfolio: Electrical Generating Authority of Thailand. Emerging Experience and Lessons. Moni- 2000. Assessment of Public Energy Con- toring and Evaluation Working Paper 9, servationAttitude.ThammasatUniversity, Pre-PublicationDraft.GlobalEnvironment Bangkok, Thailand. Facility. Washington, DC. May. Electrical Generating Authority of Thai- Convector Consulting, NA, Inc. 2000. DSM land, 2000. IMEA Quarterly Reviews in a Privatized Electricity Supply Industry of DSMO, Barakat and Chamberlin, in Thailand. June. United States, and Hagler-Bailly, United Department of Alternative Energy Develop- States. ment and Efficiency, Energy Efficiency, Electrical Generating Authority of Thailand, Conservation and Renewable Energy in 2001. "DSM Plan 2002--2006." mimeo. Thailand (Power-point presentation to Electrical Generating Authority of Thailand. WEC by Khun Siriporn Sailasuta, Direc- 2004. Demand-Side Management (DSM) tor General, DEDE). Available at www. Thailand, 1993--2004. worldenergy.org/wec-geis/wec_info/ Government of Thailand. 2000. Thailand's work_programme2007/regional/devcous/ InitialNationalCommunicationunderthe sydney2004/DevCos0904Sailasuta.pdf. United Nations Framework Convention du Pont, Peter, Michael Philips, and on Climate Change. Available at unfccc. Somthawin Patanavanichm. 1993. Thai- int/resource/docs/natc/thainc1.pdf. 71 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project Martinot, Eric. 2002. Power Sector Restruc- raphand, , K. H. Tiedemann, G. Wikler, turing and Environment: Trends, Policies and S. Zariffa. 2000. Taking the Pulse of and GEF Experience. Global Environment Thailand's DSM Market Transformation Facility. Washington, DC. May. Programs. Presented at ACEEE Summer Martinot, Eric, and Nils Borg. 1998. Energy- Study on Energy Efficiency in Buildings. efficient Lighting Programs: Experience August 20--25. Available at www.aceee. and Lessons from Eight Countries. Energy org/conf/00ss/00sstoc8.pdf. Policy 26(14): 1071--81. World Bank. 1993. Thailand Promotion of Na Phuket, S. R., and C. Prijyanonda. 2000. ElectricalEnergyEfficiency,ProjectDocu- How Energy Labelling Affected Produc- ment. Washington, DC. April. tion Decisions of Appliance Manufactur- ers in Thailand. International Institute for World Bank. 1996. Thailand Promotion of Energy Conservation ­ Asia Regional Electricity Energy Efficiency ­ Mid-Term Office. Review. Washington, DC. September. Nichols, David, and Eric Martinot. 2000. World Bank. 1999. Aide Memoire. World Measuring Results from Climate Change Bank Mission ­ Supervision: GEF ­ Pro- Programs: Performance Indicators for motion of Electricity Energy Efficiency GEF. Monitoring and Evaluation Work- Project. Mehta and Singh. Washington, ing Paper. Global Environment Facility, DC. Washington, DC. 4 September. World Bank. 2000. Implementation Com- Singh,Jas,andCarolMulholland.2000.DSM pletion Report, Thailand Promotion of in Thailand: A Case Study. World Bank. Electrical Energy Efficiency (GEF Project). Washington, DC. Washington, DC. December. Sulyma, Iris M., F. K. H. Chin, P. T. du Pont, D. Ference, J. Martin, N. Phuma- 72 APPENDIX C: DATA ANALYSIS Available online at www.worldbank.org/gef 73 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project 74 NOTES 1. Note that the term TPEEE Project is used throughsaleofpublicshares.Theseshares in this report to denote the GEF-sup- were purchased within seconds and the ported initiative. However, in Thailand public was not given a chance to bid. As theGEF-supportedprojectwasnotseenas a result, the public became distrustful of a distinct initiative, but rather part of the privatization plans at EGAT, suspecting national utility's larger demand side man- that "insiders" were aiming to acquire agement activities, housed under the De- EGAT's subsidiaries. Also in 2004, on the mand Side Management Office (DSMO). intended eve of privatization, newspapers Therefore, the term TPEEE Project is used reported share trading related to a compo- here to distinguish the GEF-supported nent of EGAT, which immediately raised project from ongoing DSMO activities. public concerns. This resulted in a halt to 2. Electrical Generating Authority of Thai- the intended sale of shares. land (EGAT) 2004; see also pr.egat.co.th/ 6. Time of day rates started in 1990 and prweb/new/demandSideManagement. were compulsory for larger and medium htm. enterprises, using more than 355,000 3. See also Singh and Mulholland 2000. kWh per hour. The rate consists of a This document focuses on lessons learned demand charge for peak and partial peak during the program at the point of project periods (8:30 am--9:30 pm daily). Time of completion and discusses the program's use rates started in 1997 with peak and future prospects. non-peak periods and rates. Peak period 4. See pr.egat.co.th/prweb/new/generation. is essentially 9 am--10 pm Monday to htm for details. Friday. The rate includes both demand 5. In 2004 the government privatized the and energy charges (amount used and Petroleum Authority of Thailand (PTT) when it is used). These rates are com- 75 Post-implementation Impact Assessment ­ Thailand Promotion of Electrical Energy Efficiency Project pulsory for new large enterprises and for unitonitsown,itissomewhat"sheltered" medium enterprises consuming more or protected in its current structural loca- than 250,000kWh/m . tion within the current climate of pending 7. ThislocationwasarrangedundertheGov- privatization (as discussed later). ernorship of Khun Sittiporn who resigned 8. EGAT 2004. in 2004. Khun Sittiporn had earlier been 9. DSMO Planning and Evaluation Unit, The the Deputy Governor of the DSMO. Al- Estimation of GHG Emission Reduction, though the DSMO might normally be in a unpublished slides, January 2005. 76 World Bank Global Environment Facility Coordination Team Environment Department THE WORLD BANK 1818 H Street, NW Washington, D.C. 20433, USA Telephone: 202.473.1816 Fax: 202.522.3256 Email: GEOnline@worldbank.org Web: www.worldbank.org/gef