Challenges of Energy Efficiency Promoting Policy in Thailand

Energy efficiency enhancement is well recognized worldwide as the efficient measures to deal with energy-related challenges, which are economic growth and development, energy security, and climate change. For Thailand to accelerate energy efficiency implementation, the energy development plan is set to meet the national targets including the Energy Efficiency Plan target and to achieve the Greenhouse Gas emission reduction target. In many countries, financing energy efficiency promoting policy is critically important strategy to provide financial incentive for mitigating clean energy investment barrier. For long-term public support, there is an emerging body of evidence on the on-going practice and performance of the financial incentive programs, which offers an opportunity to improve our understanding of the energy efficiency promoting policy. This study reviewed the latest situation of three energy efficiency financial incentive programs that governed by Department of Alternative Energy Development and Energy Efficiency (DEDE), which are (1) Energy Efficiency Revolving Fund (EERF), (2) Energy Service Company Revolving Fund (ESCO Fund), (3) DEDE Demand Side Management Bidding (DSM Bidding). The study aims to examine the positive and negative challenges posed by existing policies that need to be overcome and to identify the opportunities for policy improvement to more effectively promote energy efficiency implementation. EERF and DSM Bidding are suitably designed for large company who has strong financial capacity. ESCO Fund is well-designed for low collateral capacity company. EE measures under EERF are mostly well-known technologies that are proven generating energy savings. ESCO Fund is suitable for promoting new technologies according to project-based analysing basis. DSM Bidding can be designed for wide-range EE measures from simple to complex measures. However, there are some main challenges that can be improved, i.e., technical and financial risks bearing by customers from EERF, default projects risk taken by government and insufficient to encourage EE investment of low interest rate from ESCO Fund, and expanding to support more for complex technology instead of only well-known technology for DSM Bidding. (paper)