… Towards Light Handed Regulations for Small Power Producers (SPP) in Tanzania and Thailand The Infrastructure Regulation Thematic Group and the PPP-Global.

… Towards Light Handed Regulations for Small Power Producers (SPP) in Tanzania and Thailand The Infrastructure Regulation Thematic Group and the PPP-Global Expert Team, in collaboration with the AFR SDN Energy Team World Bank Washington, D.C. 24 June 2009 Chris Greacen Good afternoon. Small Power Producer reguations require utilities to purchase electricity from small customer-genenerators. In Tanzania – where there are electricity shortages, and emergency generation has pushed prices high; where there are abundant renewable energy resources in the form of falling water, wind, biomass, and sunlight; and where there are a number of enterprising people interested in developing domestic clean energy – these regulations promise to be win-win-win by providing electricity at lower prices, less reliance on imported fossil fuels, and greater economic benefits for local economies. I’m going to share with you some of Tanzanian’s work on regulations that facilitate development of renewable Small Power Producer (SPP) projects. These include both projects connected to Tanzania’s national grid as well as SPPs that will generate electricity for many of Tanzania’s remote mini-grids. The challenge we’re working on is how to put in place light handed regulations that are fair for all parties and don’t discourage entrants by too much red tape.

Outline Small Power Producer (SPP)– project examples
Overview of Tanzania SPP regulations Tanzania Legislative Framework Goals, definitions Table of SPP documents Tariffs for different SPP cases Main grid, mini grid, wholesale and retail sales Required permissions and approvals, procedures for application; process rules Comparison: Tanzanian SPP with Thai VSPP Evolution of Thai VSPP program This talk will cover a fair amount of ground – with material on an African country and one in SE Asia, and also addressing both the content of regulations as well as the process by which regulations are adopted and made part of day-to-day operating procedure by institutions like the Government and utilities. To minimize confusion, I’ll flag some of this terrain in this Outline. To start out, I will briefly show a few slides of projects and technologies that SPP regulations enable. Next we’ll have an overview of the Tanzanian SPP regulations, starting with the legislative framework that serves as the legal foundation for our country’s small power program. This is followed by goals and definitions of terms used to discuss SPPs. Next I will briefly try to provide a roadmap to the Tanzanian SPP program by discussing the objectives and showing a table that talks about the roles of various SPP documents – existing or under development. I will provide a simplified overview of the proposed tariffs for different combinations of whole-sale and retail sales, and main-grid and isolated mini-grid SPPs. This is followed by a review of the various approvals and permits required to build and commission an SPP, and also discuss some proposed process rules to keep the SPP process running smoothly. Because I lived most recently in Thailand for 8 years and helped draft Thailand’s successful VSPP regulations, I will compare Tanzania’s regulations with similar Thai regulations that have been in effect now for about 7 years and have led to substantial renewable energy deployment in Thailand. Finally, it is becoming somewhat clear adoption by the utilities – so that these regulations are not just pretty words on paper but are put in practice. I share some observations about the process by which the Thai VSPP regulations were created.

Small hydropower 1 MW Mae Ya, Thailand
Tanzania has excellent water resources in rural areas, and small hydro power can be among the most cost-effective renewable energy options. The Tanzanian SPP regulations allow projects up to 10 MW. Here is a 1-MW project in Thailand. 0.9 meter diameter, 370 meters long. Flow 1.37 m3/sec. 100 meter head.

Small hydropower 2 MW Sri Lanka
And this is a 2 MW hydropower project in Sri Lanka

Micro hydropower 40 kW Mae Kam Pong, Chiang Mai, Thailand
Micro-hydropower is suitable for village mini-grids as well as being connected to the main grid. This 40 kW project in Thailand initially powered a community mini-grid, but when the main grid arrived in the village the project switched over to supply the main grid. The project produces about $13,000 per year worth of electricity. 40 kW Mae Kam Pong, Chiang Mai, Thailand

Rice husk-fired power plant
9.8 MW Roi Et, Thailand In Thailand there are many rice mills. This is a 9.8 MW SPP that burns rice husk to generate electricity with a steam turbine.

Biomass (wood chips) 1 MW Landhanavi, Sri Lanka
Wood is grown specifically for electricity production This 1 MW biomass project in Sri Lanka uses a fast-growing wood variety grown.

Biogas from Pig Farms 8 x 70 kW generator Ratchaburi, Thailand
Thailand raises a lot of pigs, and the pigs make a lot of manure. Many large pig farms now have biogas digestor systems that convert pig manure into methane, which can be burned in modified diesel truck engines connected directly to induction generators.

Wind Wind electricity is one of the world’s fastest growing sources of electricity. Last year in the USA, for example, wind accounted for 35% of new generation added. Each of these wind turbine is 1.5 MW. I understand there is a 50 MW wind project in the pipeline here in Tanzania. While 50 MW is beyond the scale of the SPP program, many of the documents developed for this program can serve as templates for your project.

Solar Photovoltaic (PV)
1 MW Bangkok Solar, Thailand This solar electric SPP outside of Bangkok generates 1 MW in bright sunlight. To get a sense of scale, see the trucks and cars on the highway to the right. Applications in Thailand have been filed for over 200 projects of similar scale.

Tanzania SPP Legislative Framework
National Energy Policy, 2003 Rural electrification policy statement Energy and Water Utilities Regulatory Authority Act Establishing EWURA Rural Energy Act (2005) Establishing REA & REF The Electricity Act, 2008 These are the components of the Renewable energy legislative framework in Tanzania. The national Energy policy provides an umbrella for guidance on energy development and management. RE statement emphasizes importance of serving Tanzanian’s rural areas. Indicates all lower cost technical options should be considered including renewable energy EWURA act established EWURA with the duty to promote availability of energy services to all consumers including low income, rural and disadvantaged consumers. REA – promotion of improved access to modern energy services in the rural areas in Tanzania, and provide grants and subsidies to developers of rural energy projects Electricity Act A(2008) –Empowers EWURA to exercise light handed regulation to facilitate fast electrification and access in rural Tanzania

Legislative Framework, cont
Energy Policy Statement No. 36 Establish norms, codes of practice, guidelines and standards for renewable energy technologies, to facilitate the creation of an enabling environment for sustainable development of renewable energy sources This is a self explanatory statement which is backing all of the current initiatives on standardizing the process for Small Power Development in Tanzania

A goal: Light-handed regulation
Minimize amount of information that is required. Minimize the number of separate regulatory requirements and decisions. Use standardized documents, and make use of documents used by other agencies, to the maximum extent possible (reduce need for case-by-case negotiation) The Electricity Act of 2008 calls for light-handed regulation, and the SPP guidelines have been written with that directive in mind. Specifically, light handed regulation means first, minimizing the amount of information that is required (annual reporting requirement is a small fraction of traditional generator); second, minimizing the number of different regulatory requirements and decisions (projects under 1 MW exempt from Ewura licensing); and third using standardized documents as much as possible to minimize the need for case-by-case negociation. (SPPA example of standardized. Use of REA documents for cost of service and for EWURA license).

Definitions DNO: the licensee responsible for the operation of a distribution network in Tanzania. (Currently Tanesco) SPP: a power plant using a renewable energy source or waste heat, or cogeneration of heat and electricity, with an export capacity of up to ten (10) MW Embedded Generator: a single generator or a group of generating plant of total export capacity between 100 kW and 10 MW, connected to a Distribution Network in Tanzania, at 33 kV or below.

In draft form, under consultation
Table of SPP documents Main grid Mini-grid Process Guidelines (roadmap) Guidelines for Developers of Small Power Projects (SPP) in Tanzania (under consultation) Process rules In draft form, under consultation Interconnection Guidelines Guidelines for Grid Interconnection of Small Power Projects in Tanzania (Parts A, B, C) (under consultation) Interconnection rules Standardized PPA Standardized Power Purchase Agreement for Purchase of Grid-Connected Capacity and Associated Electric Energy Between Buyer and a Small Power Project Standardized Power Purchase Agreement for Purchase of Off-Grid Capacity and Associated Electric Energy Between Buyer and a Small Power Project Tariff methodology Standardized Tariff Methodology for the sale of Electricity to the Main Grid in Tanzania Under the Standardized Small Power Purchase Agreements. Standardized Tariff Methodology for the Sale of Electricity to the Mini-grids Under the Standardized Small Power Purchase Agreements Tariff calculations for year 2009 Detailed Tariff Calculations under the SPPA for the Main Grid for year 2009 Detailed Tariff Calculations under the SPPA for the Mini-grids for year 2009 The regulatory machinery for the SPP program involves a number of documents. To minimize confusion, I have put these documents into a single table. The Guidelines for Developers is meant to be an overall roadmap for developers, a step-by-step guide to the approval process. It makes reference to all the other documents. The guidelines for grid interconnection focuses on the engineering side of things –what is required for a safe and reliable electrical connection so that power flows between the SPP and the buyer and no one gets hurt and no equipment gets burned up. You will notice that these documents are the same for the case of interconnection with the main national grid, and the case of interconnection with isolated mini-grids. Standardized Power Purchase Agreement or PPA is the legal agreement between the SPP and the utility. This document was written in 2007 and has already been through the approval process. (A check mark on the table indicates that the document has been approved). The Tariff Methodology discusses the procedure or methodology by which tariffs will be determined for each year. The next document is the tariff calculations for This document applies the tariff methodology to current electrical and economic figures and prices to calculate the SPP tariff for year 2009. Finally, EWURA will soon issue a set of process rules and interconnection rules that have legal standing. These rules documents will tie in closely with the Guidelines documents (yellow). All approved documents will be available at the EWURA website shown. = “Approved”. Approved and proposed SPP documents will be made available at:

What are the Guidelines for Developers of Small Power Projects in Tanzania?
Audiences: SPP developers, EWURA, Tanesco, REA, bankers… Purpose: Guide to steps necessary to acquire necessary permits and clearances to develop and operate a SPP Selling electricity to the DNO (Tanesco) main grid Selling to an isolated mini-grid and/or Selling directly to retail customers (main grid-connected & isolated SPPs) Guidelines: roadmap to rules. There will be a separate ‘rules’ document. Now let me turn to the Guidelines for Developers of Small Power Projects in Tanzania. This is the one in the table highlighted in yellow. The key audience for this document is SPP developers. The purpose is to provide a roadmap to the steps necessary to acquire necessary permits and clearances to develop and operate a SPP. This might be an SPP selling to the TANESCO main grid, or to a mini-grid, or selling at retail directly to end-use customers. The guidelines also explain some ‘rules’ that will be part of the separate ‘rules’ document.

Contents of Guidelines for Developers of Small Power Projects in Tanzania
The Guidelines for Developers of Small Power Projects in Tanzania is meant to be the first document that SPP developers turn to, and it attempts to tie together other documents. The first section includes an introduction to the SPP program, and a summary of tariffs for SPPs in different cases. The second section is a step-by-step guide to the necessary permits and licenses and procedures for application. In appendices are templates for application forms, reporting forms. For example, Appendix 1 is a template for the letter a SPP developer might write to Tanesco to propose a SPP project and to request a letter of intent. Appendix 2 is an example of the LOI that Tanesco would send back to the developer.

Tariffs determined by SPP type
Connected to main grid Connected to isolated mini-grid Selling wholesale (to DNO*) Case 1 Case 2 Selling retail (directly to final customers) Case 3 Case 4 I’m going to briefly summarize the tariffs paid to SPPs. Tariffs are different whether the project is connected to the main grid, or to a mini-grid. They are also different depending on whether electricity is sold wholesale to a Distribution Network Operator (DNO), or whether it is sold at retail directly to end-users. All together, these form four cases. Case 2 might be a bit confusing – it refers to a case in Tanzania in which 11 isolated mini-grids where Tanesco is currently supplying consumers using diesel generators. It is possible for projects to be multiple cases at once – for example a main-grid-connected project selling both to Tanesco and to retail customers would be Cases 1 and 3. In the documents we use the term DNO rather than Tanesco so that it still applies in the case that in the future the grid operator is not Tanesco, or there is more than one regulated grid operator. * DNO: Distribution Network Operator (currently TANESCO)

Tariff Case 1: selling wholesale to main grid
Where Clrmc is the long run marginal cost as defined by Tanesco’s long-term power plan; and Csrmc is the budgeted cost of thermal generation in the next year. Note: the actual calculations are somewhat more complicated, taking into account: Transmission losses Seasonality Price floor & cap They are available in: Standardized Tariff Methodology Under the Standardized Small Power Purchase Agreements available from EWURA. Order on Dec Case 1 is selling wholesale electricity to the main grid. It is a variant of an avoided cost calculation with no subsidy going to the SPP. The general principle is that the SPP tariff is the average of the long-run and short-run marginal costs. The long-run marginal cost is the cost of electricity from an additional power plant in Tanzania’s long-term power development plan. The short-run marginal cost is the budgeted cost of thermal generation in the next year. In practice the short-run marginal costs are higher than the long-run marginal cost because of emergency power plants and other factors. Tariff – case 1 (2009) Tariff (TZS/kWh) Annual Average 85.49 Dry season (Aug – Nov) 102.58 Wet season (Jan-Jul and Dec) 75.94

Tariff Case 2: selling wholesale to a mini-grid
Mini-grid SPP receives the average of Tanesco’s main grid and mini-grid avoided costs. CLmrcGrid = long run marginal cost for grid-power (adjusted for losses) CAveMini = average incremental cost of mini-grid power (levelized cost of electricity from a new mini-grid diesel generator). The proposed tariff for mini-grids has a similar methodology to the main-grid connected case. But here the short-run marginal cost is the marginal cost of new diesel generation for mini-grids. Note: the actual calculations are somewhat more complicated than this – and available in: Standardized Tariff Methodology for the Sale of Electricity to the Mini-grids Under the Standardized Small Power Purchase Agreements available from EWURA. Tariff – case 2 (2009) Tariff (TZS/kWh) Tariff (no seasonal variations) 334.83

Tariff Cases 3 (isolated) and 4 (main grid): selling at retail to end use customers
Tariff is proposed by SPP generator, subject to EWURA review Less oversight demanded in cases in which community is in agreement with proposed tariff Where possible, EWURA draws on financial analysis submitted to REA for rural electrification subsidy Cases 1 and 2 deal with wholesale tariffs (i.e., sales of electricity to an entity like TANESCO who will be reselling the power). Cases 3 and 4 deal with retail tariffs (i.e., sales to final or end use customers) In retail sales of rural electrification costs can vary considerably. This requires an approach in which the Seller will propose for EWURA approval a cost-based tariff based on its own actual or projected total costs. The information required for getting subsidy is essentially the same information required for tariff setting.

Necessary permits, clearances and procedures for application
EWURA license Business license, tax registration, etc. Power Purchase Agreement (PPA) Land title or lease Resource Rights (e.g. water rights from River Basin Water Office) Letter of Intent (LOI) Environmental and Social Clearance (NEMC) Building Permit Sequence is important to avoid competing claims on project sites The sequence of necessary permits, clearances and procedures for application is shown. For example, in order to obtain a Letter Of Intent it is necessary to demonstrate both rights to land, and rights to the resource. This looks daunting, and is may appear inconsistent with light handed regulations. But if you look at it closely, the only step that requires regulatory involvement is the last step. These are regulations required by other agencies. EWURA is trying to simplify its processes, but EWUAR has no authority to remove dictate the other agencies Many of these steps – particularly the environmental and social clearance - take a while to complete, so it is advised to research all steps and proceed in parallel.

LOI request to TANESCO Name and Address Locations
EWURA license Business license, tax registration, etc. PPA Land title or lease Resource Rights (e.g. water rights from River Basin Water Office) LOI with DNO (Tanesco) Environmental and Social Clearance (NEMC) Building Permit LOI request to TANESCO Name and Address Locations Fuel type (hydro, biomass, wind, gas, etc.) Power capacity (MW), planned power export (MW), annual energy generation (GWh). Copy of deed of title or lease agreement Rights to resource SPPs selling to a DNO ultimately do so through obtaining a Power Purchase Agreement (PPA). The Letter of Intent (LOI) is the first step in the process towards a PPA. The LOI indicates that the DNO has no objections in principle to interconnecting a power plant of the proposed type, size and power export capacity at the proposed location. To apply for a LOI, the SPP developer submits a Request for Letter of Intent to Interconnect an Embedded Generator to the DNO. No further LOIs will be issued to the same site, or if the project proposal conflicts with another proposal to which a LOI has been previously issued.

Proposed rules regarding LOI process: response times, cost estimates
Acknowledgement of receipt: The rules require that within seven days of receiving the LOI request, the DNO will acknowledge receipt of the request. Notice of decision: Within 30 days of receiving the complete LOI request, the DNO will send the project developer notice of its decision. Reasons for disapproval by DNO stated: If DNO disapproves of the project, the reasons for disapproval must be clearly stated in writing. Reservation of Network Capacity: The LOI in the case of sites operating on hydroelectric or wind power, or any other primary source of energy which is site-specific by way of its availability, will also imply the exclusivity of the interconnection to the Developer, within the period of validity of the LOI. Estimate of interconnection costs: Within 30 days of sending the LOI, the DNO shall send the Seller a rough initial estimate of the interconnection costs. There are a number of rules concerning the LOI process – about how long utilities can take to respond, or that if the utility disapproves they must explain the reasons. The utility also must reserve capacity for the SPP project, and make an estimate of interconnection costs. More detail is available in the full Guidelines document, available on the Ewura website.

Standardized Power Purchase Agreement (PPA)
EWURA license Business license, tax registration, etc. PPA Land title or lease Resource Rights (e.g. water rights from River Basin Water Office) LOI with DNO (Tanesco) Environmental and Social Clearance (NEMC) Building Permit Standardized Power Purchase Agreement (PPA) To initiate the PPA agreement process, the Seller completes and submits to TANESCO an “Application for Interconnection and Sale of Electricity” technical engineering information (one-line diagrams, specifications of key equipment) that DNO needs in order to determine if the proposed project is in compliance with the Interconnection Rules and Guidelines A standardized PPA has been completed, approved and is available on the EWURA website.

Granting/rejecting a PPA based solely on technical considerations
The rules specify that the DNO’s decision to sign or reject the standardized PPA is based solely on its evaluation of whether the design of the Seller’s facility is in compliance with the “Guide for Grid Interconnection of Embedded Generators to the Main Grid and Isolated Mini-Grids in Tanzania”. The DNO doesn’t need to evaluate the SPPs business plan or finances. Rather, SPPs may connect as long as they meet specified technical engineering requirements.

EWURA license Business license, tax registration, etc. PPA Land title or lease Resource Rights (e.g. water rights from River Basin Water Office) LOI with DNO (Tanesco) Environmental and Social Clearance (NEMC) Building Permit EWURA license SPPs up to 1 MW are exempt from EWURA’s licensure requirements Must submit completed registration form Location, business registration, capacity of facility, GWh/yr, date of planned construction Non-exempt (>1 MW) Submit license application Same as registration, plus Section on managerial competence Feasibility study Business plan Permits and clearances (NEMC, water rights, etc.) Where possible, EWURA draws on financial analysis submitted to REA for rural electrification subsidy

Where we are now… Completed Ongoing
Tariffs and tariff methodology and Standardized Power Purchase Agreement have all been approved. Process Guidelines and Interconnection Guidelines are finishing public review Ongoing discussions between EWURA and REA on how to coordinate better, done, but may be refined further. Study tours to Sri Lanka (done) and Thailand (planned) to visit SPP programs in action First PPA applications to Tanesco submitted. At least one SPP developer discouraged by delays in signing PPA. application for license for first project has been received

Comparison of Tanzania & Thai regulations
Thailand Name of regulation SPP VSPP Year in effect Expected 2009 2002 (1 MW)  2006 (10 MW) Types of generation Renewable energy, cogeneration Capacity Up to 10 MW export MW as of Dec 08 Selling power Approved Applied Approx 30 (?) 576 MW 2101 MW 4765 MW Utility Tanesco PEA and MEA Term of PPA 15 years 1 year (renewable) LOI (SPP & utility) Required Not required License Required if >1 MW Will probably be required

Comparison of Tanzania & Thai regulations
Thailand Tariff basis Average of LRMC and SRMC SRMC (gen + trans) + fuel volatility charge + adders On-grid Tariff (2009) 120.5 TZS/kWh (dry) = $0.094 90.4 TZS /kWh (wet) = $0.071 $0.088 to $0.344 depending on technology, time of day Utility incentive (Cheaper than SRMC) Utility only pays for 98% of electricity when > 1MW Key documents Model PPA 25 pages 5 pages Guide for Interconnection of Embedded Generators 54 pages Technical regulations 6 pages + not including one-line diagrams Guidelines/rules for Developers of Small Power Projects (SPP) in Tanzania Commercial Regulations 11 pages Standardized Tariff methodology

Context and evolution of Thailand’s Very Small Power Producer (VSPP) regulations: Success through low-key and local approach The Thai VSPP program developed in a particular historic context. It is not possible to replicate this context in Tanzania, but nevertheless the context and the evolution of the VSPP regulations offer interesting lessons. The work we’re doing in Tanzania highlights the importance that must be placed on the process of institutionalizing these regulations. I offer my perspective on the Thai VSPP process as a contribution in this regards.

Thai VSPP MW applied, permission, and selling – as of December 2008
I wanted to show this slide to motivate why we might be interested in looking at the Thai case. They have sparked considerable deployment of renewable energy that is now online, and even more phenominal applications for planned projects. These figures are as of December 2008. A June 09 newspaper article reports that 1,265 very small power producers proposed selling a combined 6,300MW to the system. Of that, 3,352MW would be contributed by biomass, 2,947MW from solar power and 841 megawatts from wind power. Whether or not these projects are ultimately built is another question. I think that concentrating solar power is most questionable since none have been built to date. A colleague who works in RE finance in Thailand estimates that 50% will never be built. In Tanzania (and Sri Lanka) considerable attention has been paid to having PPAs expire if the project is not built within a two years of signing the PPA. The main concern is that small hydropower developers might tie up key sites, hampering development in the sector. In Thailand this issue has been less of a concern. Resources are either owned by the developer (biomass in cases of agro-industry) or are widely distributed (sun, wind).

Thai electricity supply industry structure
Electricity sector in Thailand is dominated by three big government players: EGAT – which controls 48% of all generation and 100% of transmission; and PEA and MEA that distribute 98% of the electricity. MEA serves the Bangkok metropolitan area. PEA serves everywhere else. Rural electrification reaches 99% of communities. These are big state-owned monopolies. EGAT and PEA both have about 30,000 employees. MEA has about 15,000. Source: EPPO 2006

SPP: early history of private-sector renewable energy in Thailand
1992 Small Power Producer (SPP) program Based on PURPA Fossil-fuel cogeneration and renewables up to 90 MW Low tariff offered for “non-firm” generators made it difficult for most renewables. (In practice >75% SPPs are fossil cogeneration) This might be a bit confusing because I have been comparing the Thai VSPP with the Tanzanian SPP. Now I’m introducing the history of the Thai SPP program. The first crack in the door for renewable energy happened in 1992 when a military government in Thailand initiated a privatization program implemented to reduce the government’s debt burden for EGAT by encouraging private investment. The privatization efforts included calving off some of EGAT’s most profitable plants for private-sector equity, and also ushering in the SPP program – that allowed private-sector participation in generation for “small” cogeneration and renewable energy. “Small” in this context meant ‘up to 90MW’ – which is small compared to most EGAT power plants. The regulations were very similar to America’s Public Utilities Regulatory Policies Act (PURPA) legislation. Unfortunately, bureacratic barriers to entry remained high – so that only plants of 10 MW or larger generally bothered to apply for the program. The tariff offered for ‘non-firm generation’ was about 1/3 that for ‘firm’ generation, making it impossible for all but a few renewable energy plants to participate in the program profitably.

VSPP evolution 2000: EPPO politically powerful, pushing for greater private participation in power sector Main focus = formation of Power Pool (spot market) EPPO also got verbal agreement that PEA & MEA would develop VSPP regulations 2001: California crisis, utility & labor opposition sink Power Pool prospects PEA & MEA also stall on VSPP regulations EPPO asks mid-level bureaucrat and volunteer graduate student, “want to draft VSPP regs?” Technical: Delaware Net Metering laws + SPP Commercial: simplification of SPP Tariffs: Based on existing “Bulk Supply Tariff” (Gen + Trans) for purchases by PEA/MEA from EGAT. The

VSPP evolution 2002 2002: VSPP working group goes line-by-line through regulations Chaired by Power Engineering Professor from Chulalongkorn University All discussion in Thai language 3-4 representatives each from MEA, PEA, EPPO Utilities largely perceive 1 MW non-threatening May 2002 Cabinet approval

Net metering study tours to USA
2002 and 2004. CA (SMUD, PG&E, CEC, CPUC, Powerlight, Kenetech Wind) OR (PGE, Ashland Muni, Home Power, Grid-connected micro-hydro) WA (Seattle City Light, PSE, OPALCO) Peer-to-peer exchange Target mid-level Thai utility & government people in charge of VSPP implementation After Cabinet approved the regulations it became clear that utilities needed to feel comfortable about them. In Thailand, existence of a law or regulation doesn’t guarantee compliance or implementation. We organized and led two study trip to the USA to visit progressive utilities that had implemented, and were positive about, net metering. We also visited government agencies involved. Study tours proved to be a very effective tool in furthering the regulations, for several reasons. Since we designed the study tour, we got to set the agenda and select utilities that had a positive attitude about net metering. These tended to be smaller customer-owned cooperatives and municipal utilities in which utilities were motivated to satisfy customers and citizens, rather than be beholden to shareholders. The study tours enabled a peer-to-peer exchange. Thai people in charge of implementing the regulations were able to meet with their US counterparts. This was especially powerful for utility people, because no matter how much we communicated that connecting small renewable energy generators to their grid won’t bring their system crashing down, they were much more comfortable hearing this message from fellow utility people. The study tour facilitated Thai people to speak to each other who needed to communicate in order to make the program successful, but who – in their usual working lives – were buffered by bureaucratic walls. In Thailand, as many countries, big ministries and utlities can be like giant vertical fiefdoms. Communication occurs across bureaucracies among high level people, and underlings are expected to implement directives from above. To make the project work, though, we needed mid-level bureaucrats to talk to each other. EPPO mid-level people needed to talk to mid-level PEA and MEA folks. The study tour put them all in the same bus, same hotels.

After study tours, invite US utility practitioners to Thailand
Experts from Sacramento Municipal Utility District (SMUD) and PG&E Main message: “Our hardest part was simply setting up administrative machinery to process the flood of applications” After Cabinet approved the regulations it became clear that utilities needed to feel comfortable about them. In Thailand, existence of a law or regulation doesn’t guarantee compliance or implementation. We organized and led two study trip to the USA to visit progressive utilities that had implemented, and were positive about, net metering. We also visited government agencies involved. Study tours proved to be a very effective tool in furthering the regulations, for several reasons. Since we designed the study tour, we got to set the agenda and select utilities that had a positive attitude about net metering. These tended to be smaller customer-owned cooperatives and municipal utilities in which utilities were motivated to satisfy customers and citizens, rather than be beholden to shareholders. The study tours enabled a peer-to-peer exchange. Thai people in charge of implementing the regulations were able to meet with their US counterparts. This was especially powerful for utility people, because no matter how much we communicated that connecting small renewable energy generators to their grid won’t bring their system crashing down, they were much more comfortable hearing this message from fellow utility people. The study tour facilitated Thai people to speak to each other who needed to communicate in order to make the program successful, but who – in their usual working lives – were buffered by bureaucratic walls. In Thailand, as many countries, big ministries and utlities can be like giant vertical fiefdoms. Communication occurs across bureaucracies among high level people, and underlings are expected to implement directives from above. To make the project work, though, we needed mid-level bureaucrats to talk to each other. EPPO mid-level people needed to talk to mid-level PEA and MEA folks. The study tour put them all in the same bus, same hotels.

VSPP expansion 2006 December 2006: 1 MW 10 MW
Efficient Cogeneation permitted (PSE > 10%) Feed-in “adder” tariffs The

VSPP Tariffs (as of 2006) VSPP tariff = Bulk Supply Tariff (TOU) + FT + Adder Bulk Supply Tariff = price EGAT sells bulk electricity to PEA/MEA. Onpeak: 2.9 baht/kWh = $0.085 /kWh Offpeak: 1.1 baht/kWh = $0.032 / kWh FT – fuel price volatility. Currently: baht = $0.018/kwh Adder: Adder (per kWh) For 3 southern provinces THB $ Biomass 0.3 0.0088 1.3 0.0381 Biogas Mini-hydro ( kW) 0.4 0.0117 1.4 0.0411 Micro-hydro (<50 kW) 0.8 0.0235 1.8 0.0528 MSW 2.5 0.0733 3.5 0.1026 Wind 4 0.1173 Solar 8 0.2346 9.5 0.2786 Solar = $ $ $ = /kWh = $0.34/kWh Micro-hydro (<50 kW): $0.0963/kWh Biomass: $0.088/kWh

Lessons from Thai VSPP Low-key, local approach kept utilities from being threatened Peer-to-peer exchange Build mid-level relationships across bureaucracies Utility folks like to listen to other utility folks Status, recognition, travel Incentivize utility Feed-in adder very successful in attracting projects

Thank you For more information, please contact chrisgreacen@gmail.com
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