1. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 1 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 NATIONAL POLICIES THE WORLD BANK Future Energy Scenarios Toward Sustainable Energy Policies and Practice in Thailand On Renewable Energy and Energy Efficiency with International Experiences Deputy Secretary General Mr. Arkhom Termpittayapaisith

2. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 2 1. Thailand Energy Problems 2. Energy Self-Sufficiency? 3. 10 th National Plan 4. National Energy Development Plan 1. Thailand Energy Problems 2. Energy Self-Sufficiency? 3. 10 th National Plan 4. National Energy Development Plan 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 Table of Content

3. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 3 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 Thailand Energy Problems I Oil Price Movement II Trade balance & Current Account III Price VS Quantity July=70.21 July=69.16 July=85.50 15 25 35 45 55 65 75 85 95 20012002200320042005 OMAN Dubai Singapore 95 Singapore HSD $/bbl July=86.29 Source : Ministry of Energy 20002006 64,702 43,760 36,428 64,847 571,687 1,229,719 50,494 202,907 (RHS) (LHS) More than 80% of Thailand’s energy consumption depends on huge oil import bills. Hence, the continuous oil price hike and volatility inevitably leads to national account imbalances.

4. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 4 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 Thailand vs International Energy Intensity Thailand Energy Elasticity Energy Consumption by Sector % 20 01 20 02 20 03 20 04 20 05 Av e. 5 ysr 1. GDP Growth Rate2.15.46.76.24.54.9 8 2. Energy Consumption Growth 4.97.35.89.62.56.0 2 3. Energy Elasticity2.31.40.91.60.61.3 6 1 2 3 Thailand Energy Problems

5. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 5 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 Transportation Mode Logistic Structure 46’ Pak Bara Seaport Phuket Suwanna bhum Airport Lam Chabu ng Seapo rt Donmu ang Chiang mai Source: Study from NESDB and Thamasart University Transport 38% Manufacturing 35% Residential & Commercial 20% Agriculture 6% Energy Consumption Structure Road 70.4% Rail 0.7% Inland waterway 4.1% Air: 20.7% Road: 88.3% Rail: 2.8% Costal transport 4.0% Air: 0.2% Pipes: 2.1% Rail: 88.3% mining&const. materials 40% rice, rubber, agriculture 35% petroleum 14% manuf’g 12% Rail: 88.3% mining&const. materials 40% rice, rubber, agriculture 35% petroleum 14% manuf’g 12% Rail: 2.8% petroleum 36% cement 20% agriculture 3% const. Materials 2% Rail: 2.8% petroleum 36% cement 20% agriculture 3% const. Materials 2% Inland waterway: 4.8% Costal transport: 3.7% const. materials 47% rice, tapioca, sugar, agri. 35% petroleum 12% Inland waterway: 4.8% Costal transport: 3.7% const. materials 47% rice, tapioca, sugar, agri. 35% petroleum 12% Air: 0.2% perishable products gems & jewelry electronic parts Air: 0.2% perishable products gems & jewelry electronic parts Pipe: 2.1% oil 98% gas 2% Pipe: 2.1% oil 98% gas 2% Transportation Sector consume 38% of total energy consumption. Transportation on road consume 70% of all transport consumption. Inland waterway: 4.8% Costal transport: 3.7%

6. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 6 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 To become more Self- Sufficient, either reduce consumption or increase domestic production. However, the consumption behavior will determine what type of fuel is needed to be produce. Self-Sufficiency for Sustainable Development How much Energy Self-Sufficiency does Thailand have?

7. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 7 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 10 th National Plan by NESDB

8. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 8 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

9. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 9 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 Philosophy of “Sufficiency Economy” from His Majesty the King Framework for 10 th Plan Middle Path Sufficient (Enough) ReasonableSelf-Immunity “Sufficiency Economy is a philosophy that stresses appropriate conduct and way of life while incorporating moderation, due consideration in all modes of conduct,and the need for sufficient protection from internal and external shocks.” Self-Sufficiency for Sustainable Development

10. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 10 Having moral and knowledge, self- immunity, discipline and responsibility Maintaining Thai culture and local wisdom Having moral and knowledge, self- immunity, discipline and responsibility Maintaining Thai culture and local wisdom Having stability with happiness under diversification of culture and resources Having growth with stabilization Being self-reliant / competitive Equal distribution Transparent / fair Collaboration from all sectors Culture and democracy Visions of Nation‘s Development Thai People Community Institutes Economic System Administrative System The philosophy of Sufficiency Economy Green and Happiness Society

11. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 11 New Issues ….. Technology Social Environment Consumer Trend Economic Integration Knowledge Based Economy Aging Society, (Savings and Productivity) Energy Security and Efficiency Opportunities from Global Consumer Trends Unbalanced growth Social risks Natural resources constraints More quantity than quality capitals Past development 5 Major Changes Asia Century

12. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 12 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 Energy Development Plan Guiding Principles for National Energy Policy

13. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 13 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 Three main goals to be achieved by: 1. Reducing energy import 2. Leveling down the energy production cost (public energy expenditure) 3. Minimizing all pollution created by all economic sectors Targeting by the end of 10th National plan: - To increase consumption level of new alternative source of energy to 8% - To increase energy security of the nation for the next 50 years - To increase efficiency in energy consumption of all economic sectors - To reduce the energy elasticity from 1.4:1.0 - To reduce the energy intensity in transport sector Targeting by the end of 10th National plan: - To increase consumption level of new alternative source of energy to 8% - To increase energy security of the nation for the next 50 years - To increase efficiency in energy consumption of all economic sectors - To reduce the energy elasticity from 1.4:1.0 - To reduce the energy intensity in transport sector Energy Development Plan

14. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 14 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 1.Short-term management in transportation sector; for example, rail for merchandise transportation in the Eastern-seaboard area. 2.New investment; long-term management in modal shift. To illustrate, a redesign of rail system and mass transit. This includes consideration and serious study about DC, ICD, and CY. 3.New sources of energy supply from both local and international to strengthen energy security. Thailand is negotiated a long-term contract for natural gas supply from neighboring countries. Thailand will purchase additional some thousand Megawatts of electricity from neighboring countries. 1.Short-term management in transportation sector; for example, rail for merchandise transportation in the Eastern-seaboard area. 2.New investment; long-term management in modal shift. To illustrate, a redesign of rail system and mass transit. This includes consideration and serious study about DC, ICD, and CY. 3.New sources of energy supply from both local and international to strengthen energy security. Thailand is negotiated a long-term contract for natural gas supply from neighboring countries. Thailand will purchase additional some thousand Megawatts of electricity from neighboring countries. Main action plans: Energy Development Plan

15. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 15 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 4.Usage of alternative energy in order to increase knowledge and participation. This is to produce and to implement alternative sources of energy by both general public and private. 5.Demand management like energy saving and electrical appliances. 6.Research and development on alternative sources of energy and renewable sources of energy. This also includes improving technology on energy saving. 4.Usage of alternative energy in order to increase knowledge and participation. This is to produce and to implement alternative sources of energy by both general public and private. 5.Demand management like energy saving and electrical appliances. 6.Research and development on alternative sources of energy and renewable sources of energy. This also includes improving technology on energy saving. Main action plans (cont.): Energy Development Plan

16. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 16 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 7.Seriously planning for domestic production of bio-diesel from palm oil. As well, contract farming in neighboring countries. 8.Private participation in financing projects. 9.Value creation in Petrochemical industries. 7.Seriously planning for domestic production of bio-diesel from palm oil. As well, contract farming in neighboring countries. 8.Private participation in financing projects. 9.Value creation in Petrochemical industries. Main action plans (cont.): Energy Development Plan

17. 28 August 2006 28 August 2006 WWW.NESDB.GO.THPage 17 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 Thank you THE WORLD BANK