Feed-in tariffs and south-south policy/technology transfer: The evolution and implementation of Very Small Power Producer (VSPP/SPP) Regulations in Thailand and Tanzania Monterey Institute for International Studies Monterey, California, USA 8 May 2010 Chris Greacen

Palang Thai พลังไท Thailand NGO Objective: – To ensure that the transformations that occur in the region's energy sector: augment, rather than undermine, social and environmental justice and sustainability. Key approaches: – We teach hands-on energy technology – We draft / comment on policies – We work to empower citizens to look critically at government and industry projects and plans – We advocate structural reform พลัง (palang): n 1. Power. 2. Empowerment. ไท (thai): adj. 1. Independence. 2. Self-reliance

Can’t we hook it up and sell power back? Mae Kam Pong village microhydro

Meeting between National Energy Policy Offic (NEPO) and Mae Kam Pong villgers to discuss grid interconnection of their village micro-hydro

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Technical regulations: Allowable voltage, frequency, THD variations Protective relays – 1-line diagrams for all cases: Induction Synchronous Inverters Single/multiple Connecting at different voltage levels (LV or MV) Communication channels Commercial regulations: Definitions of renewable energy, and efficient cogeneration Contract parties Cost allocation Principle of standardized tariff determination Invoicing and payment arrangements Arbitration $ + Standardized Power Purchase Agreement (PPA)

Import (3%)‏ EGAT (45%)‏ IPPs (42%)‏ Generation (% share)‏ Transmission Distribution EGAT (100%) PEA (66%)‏ MEA (32%)‏ Direct Customers (2%)‏ Users SPPs (10%)‏ Thailand’s Electricity Industry Structure

Import (3%)‏ EGAT (45%)‏ IPPs (42%)‏ Generation (% share)‏ Transmission Distribution EGAT (100%) PEA (66%)‏ MEA (32%)‏ Direct Customers (2%)‏ Users VSPPs (<1%)‏ SPPs (10%)‏ Thailand’s Electricity Industry Structure

Import (3%)‏ EGAT (45%)‏ IPPs (42%)‏ Generation (% share)‏ Transmission Distribution EGAT (100%) PEA (66%)‏ MEA (32%)‏ Direct Customers (2%)‏ Users VSPPs (<1%)‏ SPPs (10%)‏ Thailand’s Electricity Industry Structure Firm / non-firmPeak / off-peak

Evolution of Thai VSPP regulations 2002 – VSPP regulations drafted, approved by Cabinet – Up to 1 MW export, renewables only – Tariffs set at avoided cost (bulk supply tariff + FT)

Biogas from Pig Farms Reduces air and water pollution Produces fertilizer Produces electricity 8 x 70 kW generator Ratchaburi

Biogas from Pig Farms

40 kW Mae Kam Pong, Chiang Mai, Thailand Micro hydropower

Uses waste water from cassava to make methane Produces gas for all factory heat (30 MW thermal) + 3 MW of electricity 3 x 1 MW gas generators Korat Waste to Energy – biogas … an early Thai VSPP project

Evolution of Thai VSPP regulations 2002 – VSPP regulations drafted, approved by Cabinet – Up to 1 MW export, renewables only – Tariffs set at avoided cost (bulk supply tariff + FT) 2006 – Up to 10 MW export, renewables + cogeneration – Feed-in tariff “adder” – If > 1 MW then utility only pays for 98% of energy

Rice husk-fired power plant 9.8 MW Roi Et, Thailand

Bangkok Solar 1 MW PV Project size: 1 MW Uses self-manufactured a-Si

Evolution of Thai VSPP regulations 2002 – VSPP regulations drafted, approved by Cabinet – Up to 1 MW export, renewables only – Tariffs set at avoided cost (bulk supply tariff + FT) 2006 – Up to 10 MW export, renewables + cogeneration – Feed-in tariff “adder” – If > 1 MW then utility only pays for 98% of energy 2009 – Tariff adder increase, more for projects that offset diesel for English version of regulations, and model PPA

Thai VSPP feed-in tariffs Assumes exchange rate 1 Thai baht = U.S. dollars FuelAdderAdditional for diesel offsetting areas Additional for 3 southern provinces Years effective Biomass Capacity <= 1 MW $ $ Capacity > 1 MW $ $ Biogas <= 1 MW $ $ > 1 MW $ $ Waste (community waste, non-hazardous industrial and not organic matter) Fermentation $ $ Thermal process $ $ Wind <= 50 kW $ $ > 50 kW $ $ Micro-hydro 50 kW - <200 kW $ $ <50 kW $ $ Solar $ $ Tariff = adder(s) + bulk supply tariff + FT charge Biomass tariff = $ $ $0.027 = $0.085/kWh

call center การไฟฟ้าส่วนภูมิภาค การไฟฟ้าส่วนภูมิภาค PROVINCIAL ELECTRICITY AUTHORITY Generating Capacity supply to Grid from August 2009

VSPP project pipeline as recorded in EPPO data Application under consideration Permission received, awaiting PPA PPA signed Generating & selling electricity Leakage (Project abandoned)

Jun 2009 Thailand VSPP Status

Dec 2009 Thailand VSPP Status

Mar 2010 Thailand VSPP Status

Mar 2010 Thailand VSPP Status 811 MW online

Mar 2010 Thailand VSPP Status 811 MW online PPAs signed for additional 4159 MW

Import (3%)‏ EGAT (45%)‏ IPPs (42%)‏ Generation (% share of GWh)‏ Transmission Distribution EGAT (100%) PEA (66%)‏ MEA (32%)‏ Direct Customers (2%)‏ Users VSPPs (<1%)‏ SPPs (10%)‏ … but it’s still a tiny part of Thailand’s electrical energy

Evolution of Tanzania SPP regulations Approved by regulator August 2009 Up to 10 MW export, renewables & cogeneration SPP Tariffs at average of LRMC and SRMC – Grid-connected SPP tariff (2009): $0.066/kWh – In rural mini-grid areas offsetting diesel (2009): $0.26/kWh 5 PPAs signed by March for English versions of regulations, and model PPAs

Wealthy countries pay Feed-in tariff incremental costs?

GET FiT proposed mechanism

South-south policy/technology transfer: Technical Visit of the Delegation from the United Republic of Tanzania to Thailand regarding Thailand’s Very Small Power Producer (VSPP) program March 2010

call center การไฟฟ้าส่วนภูมิภาค การไฟฟ้าส่วนภูมิภาค PROVINCIAL ELECTRICITY AUTHORITY How we have done? Submitted Proposals Line connecting construction Meter installation Meter reading Billing Acceptance Letter PPA signedFirst synch.CODEvery 1 ft Meter reading license check All test PPA Check Document check Identify circuit connection System study All license check VSPP will get first settlement within 3 month after COD.

call center การไฟฟ้าส่วนภูมิภาค การไฟฟ้าส่วนภูมิภาค PROVINCIAL ELECTRICITY AUTHORITY Who have involved in PEA ? DG office Technical & System Analysis Document Coordinator Research Div. PQ test Relay Div. Switchgear & Relay test Meter Div. Meter installation System Operation Div. First synch. test System Operation Area Office 1-12 Identify circuit connection Control & Operation Communication Area Office 1-12 & Local Office Line connecting construction Meter reading Tariff Div. Billing Finance Dep. Settlement Legal Div. PPA check

Thailand VSPP Tanzania Vietnam? Philippines?

Winter … community built, community-owned, profitable VSPP micro-hydro in Thailand

Unlimited living?

Office of the National Economic and Social Development Board O F F I C E O F T H E P R I M E M I N I S T E R Low Quality Education Low Quality labour Insufficient in R&D Investment Slow Technology Development Low Quality for Raw-material, machinery and equipment (Low margin/return) Low Basic infrastructure and Logistic development Enabling factors: MACROECONOMIC MANAGEMENT No immunity/ High volatility Financial System Lack of Saving Lack of regulation on industrial product’s quality control Low Value Creation High Import Contents & Sheer size of export to GDP High Energy Intensity & Low Efficiency & Unsustainable structure Macroeconomic Analysis

Electricity production and consumption (GWh) 1700 families relocated Loss of livelihood for >6200 families Loss of 116 fish species (44%) Fishery yield down 80% 65 Mae Hong Song Source: MEA, EGAT, Searin, Graphic: Green World Foundation Dams Malls Province Pak Mun Impacts of Pak Mun Dam alone

Bonok-Ban Krud story

Bonok Bankrud

Power Demand: Projections vs. Actual 1992 – 2009 If no systemic bias, the chance of over-projecting demand 15 times in a row = (½) 15 = 1/32,768 MW

E x c e s s c a p a c i t y Generation capacity in excess of demand ( ) Fictional power demand did lead to real investments that become waste & burden (not to mention disturbed ecology, communities) Excess gas/ pipeline capacity/ generation capacity economic waste + excess burden for consumers Under centralized monopoly structure Source of data: EGAT หมายเหตุ คำนวณจากกำลังผลิตติดตั้งและความต้องการไฟฟ้าสูงสุดรายเดือน Very little incentives to do energy efficiency/conservation

Linear versus exponential extrapolation

Fuel mix in power generation - power development plan 2007 GWh Import Nuke RE Gas Coal Lignite Hydro

PDPs of the Pacific Northwest, USA Source: Seattle City Light

Concluding thoughts VSPP regulations enable small generators together to profitably make substantial contributions to electricity generation. Zero / small carbon footprint Useful for decreasing diesel expenditures for rural electrification VSPP projects help develop local engineering / project development capacity. South-South policy/technology exchange English versions of regulations available online Still a drop in the bucket in Thailand… IRP needed

Thank you This presentation available at: VSPP regulations available at: And