Renewable Energy Targets and Policy Strategies in Mekong
Countries
Policy and Incentive Mechanism for Renewable Energy Development in EEP Mekong Countries
20 November 2012Melia Hotel Hanoi, Hanoi Vietnam
Dr. Romeo PacudanTeam Leader ADB TA 7679: Promoting RE, clean fuels and EE in the
GMSLahmeyer International GmbH
Structure of Presentation
• Formulating Policy Framework for RE Development
• RE Targets• Technology specific targets• RE technologies• Policy interventions• Support Mechanisms• Final Remarks
test
Preparatory Studies
• Resource assessments
• Site, project identification
• Technical, economic, financial studies
• Institutional and market studies
• Others (stakeholders)
Goal Setting
• RE targets• Objectives• Impact
studies• Financial
implications
Barriers Analysis
• Techno-Economic
• Non-economic barriers
Support Mechanisms
• Incentives• Risk
insurance• Soft loans
and guarantees
• Technical assistance and capacity building
• Technology transfer
• Sources of financing
1. Formulating Policy Framework for RE DevelopmentRE planning and policy setting process
2. RE Targets
Source: REN21, 2012
• 118 countries with targets in 2012
• More than half are from developing countries
• Mostly renewable electricity targets
• Others – (1) % share of final or primary energy supply; (2) installed capacity; (3) heat supply; (4) biofuels targets
• Recently, many countries have increased their targets
2. RE and Biofuels Policy Targets in the Mekong
Lao PDR (2025)
Thailand (2021)
Myanmar (2020)
Cambodia (2015)
ASEAN (2015)
Vietnam (2020)
0 5 10 15 20 25 30 35
30
25
20
15
15
5
9.5
2
percent (%)
Cam
bod
iaR
ura
l ele
ctr
icit
y
su
pp
ly b
y 2
01
5
Lao P
DR
Tota
l en
erg
y
con
su
mp
tion
by
20
25
Myan
mar
Tota
l p
ow
er
gen
era
tion
in
sta
lled
cap
acit
y
by 2
02
0
Th
ailan
dTo
tal
en
erg
y
con
su
mp
tion
by
20
21
Vie
tnam
Ele
ctr
icit
y
pro
du
cti
on
by 2
02
0
AS
EA
NEle
ctr
icit
y i
nsta
lled
cap
acit
y b
y 2
01
5
(in
clu
din
g
hyd
rop
ow
er
an
d
bio
fuels
)
Lao P
DR
Each
for
bio
die
sel
an
d b
ioeth
an
ol
20
25
10%
Myan
mar
Com
bin
ed
bio
fuels
b
y 2
02
0
8%
Th
ailan
dO
il s
ub
sti
tuti
on
by
20
21
44%
Biofuels Targets
RE Targets and achievements
3. Technology Specific TargetsThailand (2021) ‘Alternative Energy Development Plan’
biomass
solar
hydropower
wind
biogas
MSW
ocean and tidal
geothermal
0 500 1000 1500 2000 2500 3000 3500 4000
1796
257
96
7.3
170
27.5
0
0
3630
2000
1608
1200
600
160
2
1
MW
biodiesel
ethanol
new for diesel
0 5 10 15 20 25 30
2.79
1.25
0
5.97
9
25
million liters/day
Biofuels Targets and achievemen
ts
RE Targets and achievements
3. Technology Specific TargetsLao PDR (2025) ‘Renewable Energy Development Strategy’
small hydropower
wind
biomass
biogas
MSW
solar
0 50 100 150 200 250 300 350 400 450
11.3
0
3.5
x
0
0.1
400
73
58
51
36
33
MW
biodiesel
ethanol
0 50 100 150 200 250 300 350
0.5
0
300
150
million liters/year
Biofuels Targets and achievemen
ts
RE Targets and achievements
3. Technology Specific TargetsVietnam (2030) ‘Power Development Plan 7’
biomass
SHP + pumped
wind
0 1000 2000 3000 4000 5000 6000 7000 8000 9000
150
600
30
2000
8200
6200
MW
RE Targets and achievements
3. Technology Specific TargetsFlexibility and ‘Raising the Bar’
Thailand’s REDP: Past
Source: Dr Sinsukprasert 2012
Source: Dr Sinsukprasert 2010
Vietnam’s Wind Power Planning
Thailand’s AEDP: Present
Source: Dr Nguyen Anh Tuan 2012
4. RE TechnologiesTechnology maturity, costs and rationale for policy interventions
so
lar
PV
bio
ma
ss
win
d
MS
W
ge
o-
the
rma
l
co
al
na
tura
l g
as
lan
dfi
ll
ga
s
$-
$50.00
$100.00
$150.00
$200.00
$250.00 $232.90
$138.10 $129.80 $104.40
$74.90 $70.10 $59.80 $57.30
conventional renewable
externalities
CostReductions from learning
PolicyInterventions
4. RE TechnologiesSolar PV technological learning curve
5. Policy InterventionsTechnology maturity and incentive mechanisms
Source: UNEP-SEFI 2008
R&D Funding Public FundingFiscal Policies
Regulatory Frameworks
5. Policy InterventionsTechnology maturity, financing and incentive mechanisms
Source: UNEP-SEFI 2008
R&D Funding Public FundingFiscal Policies
Regulatory Frameworks
6. Support MechanismsFinancial incentives
R&D FundingPublic Funding
Fiscal Policies
Regulatory Frameworks
• Public investments• Loans, grants• Competitive
bidding
• Capital subsidy, rebate
• Tax incentives• Energy payments
• Feed-in Tariff• RPS, Quota and
Obligations• Net Metering• Tradable Renewable
Energy Certificate
SWBHAUSNE ITA
DKA J
DK E HL
AUSACH
D
FI B NEITA SW
LJCAUS
DCH PUS ITA
HFALITAUK
PUS K NEDKE
B SWD
GRCH NOIR C
CZ
F UKNONEGR
LTUSC DK
SWAIR ITA P E
NZ
DK US ITAH
A PNE
C UKT K GR
SWD CH J NOF
LB
CBD K T H
NZGR
IRF L
USFI PAAUSITADK
UKJ
NZ F
IR
NOUK
EU
GR
CZ
J
K
NONECH
SWE
CZ KB
EFI
AUS
CZ
FID
FI K
NO UK
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003
Tradable
Certificates
Obligations
Incentive
Tariffs
Tax
Measures
Investment
Incentives
RD&D
Voluntary
Programs
AUS - Australia C - Canada FI - Finland GR - Greece ITA - Italy L - Luxembourg NO - Norway SW - Sweden UK - United Kingdom
A - Austria CZ - Czech RE F - France H - Hungary J - Japan NE - Netherlands P - Portugal CH - Switzerland US - United States
B - Belgium DK - Denmark D - Germany IR - Ireland K - Korea NZ - New Zealand E - Spain T - Turkey
SWBHAUSNE ITA
DKA J
DK E HL
AUSACH
D
FI B NEITA SW
LJCAUS
DCH PUS ITA
HFALITAUK
PUS K NEDKE
B SWD
GRCH NOIR C
CZ
F UKNONEGR
LTUSC DK
SWAIR ITA P E
NZ
DK US ITAH
A PNE
C UKT K GR
SWD CH J NOF
LB
CBD K T H
NZGR
IRF L
USFI PAAUSITADK
UKJ
NZ F
IR
NOUK
EU
GR
CZ
J
K
NONECH
SWE
CZ KB
EFI
AUS
CZ
FID
FI K
NO UK
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003
Tradable
Certificates
Obligations
Incentive
Tariffs
Tax
Measures
Investment
Incentives
RD&D
Voluntary
Programs
AUS - Australia C - Canada FI - Finland GR - Greece ITA - Italy L - Luxembourg NO - Norway SW - Sweden UK - United Kingdom
A - Austria CZ - Czech RE F - France H - Hungary J - Japan NE - Netherlands P - Portugal CH - Switzerland US - United States
B - Belgium DK - Denmark D - Germany IR - Ireland K - Korea NZ - New Zealand E - Spain T - Turkey
1970 1980 1990 2000
RD & D
Investment Incentives
Tax Measures
Feed-in Tariffs
Voluntary Programs
Obligations
TradableCertificates
Source: IEA 2005
6. Support MechanismsRE Policy Evolution in Developed Countries: Shift to regulatory policies supported by fiscal incentives
5. Policy InterventionsRE economic and non-economic barriers
Source: IEA 2011
6. Support MechanismsMekong countries
Cambodia Myanmar Lao PDR Vietnam Thailand
Investments by Ministries involved
UtilityInvestments
UtilityInvestments
UtilityInvestments
UtilityInvestments
DemonstrationProjects
DemonstrationProjects
DemonstrationProjects
S & T FundDemonstration
Research,Prototype
Demonstration
Tax Incentives
BOI incentives, low interest loan, capital support
Tax incentives, soft loan, exempt land & environ fees
Feed-in Adder solar, wind, biomass, MSW, biogas
Feed-in tariff (wind), avoided costs for other RE
Information on energy potential
Wind potential information
6. Support MechanismsThailand
Source: Thailand PV Status Report 2012
Investor
PM, MPIPeople Committee
MOIT, MPIPeoples Committee
MPIPeoples Committee
Appropriate MinistriesDept’s
Pre-InvestmentStudy (PFS)
Investment ApprovalFeasibility Study
Approval to Construct Investment License
EvaluationCommittee
Construction
B
CD
E
A
Sign PPAEVN,PC
6. Support MechanismsVietnam
Land and environmental fees exemptions
Tax incentives, duty exemptions
Wind information
Wind Feed-in-Tariff
Source: adapted from Dr Nguyen Anh Tuan 2012
Indonesia FIT
Geothermal 2
00
3
Thailand Adder
(solar,
wind,
SMHP,
bioenergy,
biofuels) 2
00
6Indonesia FIT
small RE 2
00
9
Malaysia FIT
(biogas,
biomass,
SHP,
PV) 2
01
1
Vietnam FIT
wind 2
01
1
Philippines FIT
(wind,
solar,
ROR
hydro,
biomass,
ocean
thermal) 2
01
2
Thailand FIT 2
01
2?
6. Support MechanismsIncreasing use of FIT in the ASEAN
6. Support MechanismsThailand’s feed-in adder and solar PV investments
Source: Thailand PV Status Report 2012
6. Support MechanismsVietnam’s wind policies and wind power development
Binh DinhPhu Yen
Lam DongNinh ThuanBinh Thuan
BR-VTTien Giang
Ben TreTra Vinh
Soc TrangBac LieuCa Mau
0 200 400 600 800 10001200140016001800
51
50
70
1068
1541
6
100
280
93
350
99
300
MW
Wind Power Projects under DevelopmentOver 4,000 MW
Source: adapted from Dr Nguyen Anh Tuan 2012
Ratepayer Funding• E
quivalent Distribution
• Customer Differentiation
• System Benefit Charge
Taxpayer Funding
Supplementary Funding• G
reenhouse gas revenue
• Utility tax credit
Inter-Utility Cost Sharing
Feed-in Tariff Funding
Key Issue:consumer impacts
Key Issue:politicallysensitive
Key Issue:Sufficiencyof funding
Key Issue:disagreementsfrom constituencies
6. Support MechanismsFeed-in tariff funding
Ex: Republic of Korea
Thailand, Malaysia, Indonesia, Japan, Philippines, PR China, India, etc
Ex: Mongolia
7. Final Remarks
Setting of targets
• Ambitious but achievable technology-specific targets founded on realistic technical, economic and market studies
• Responsive to market developments• Supported by a policy or a regulatory decision• Integrated in a RE Plan or Power Development Plan
Mechanisms to achieve the targets• Technology-specific support• Mix of instruments addressing various types of
barriers• Feed-in tariff (FIT) (and its variants) appears to be
gaining acceptance in the ASEAN in general – but its effectiveness needs to be further demonstrated
• Predictable and transparent