United Nations Development Programme Country: Thailand
ADDENDUM TO THE ORIGINAL PROJECT DOCUMENT OF THE GEF RE MHS PROJECT
Project Title: Promoting Renewable Energy in Mae Hong Son Province
National Priority or Managing natural resources and environmental sustainability. UNDAF Goal: CP/UNDAF outcome Thailand is better prepared to coherently address climate change and environmental (2012-2016): security issues through the enhancement of national capacity and policy readiness.
Expected Outcome Power generation capacity from renewable energies in MHS increased both for on-grid Indicators (those that will as well as off-grid applications. result from the project): Renewable energy integrated into provincial development planning. Responsible Parties: The project will be implemented under DIM (Direct Implementation Modality) in close cooperation with the MHS office of the governor and the Provincial energy Office (PEO). Implementing Partner(s): MHS Office of the Governor; Provincial Energy Office (PEO), Ministry of Energy; Department of Alternative Energy Development and Efficiency (DEDE), Ministry of Energy; Electricity Generating Authority of Thailand (EGAT), Ministry of Energy; Department of National Parks, Wildlife, and Plants Conservation (DNP), Ministry of Natural Resources and Environment Royal Forest Department (RFD), Ministry of Natural Resources and Environment; Department of Public Administration MHS (DOPA); Provincial Administrative Organization (PAO); And other local government bodies.
Brief Description:
Despite the government’s commitment to Renewable Energy, there have been constraints to the wider and more sustained application of Renewable Energy Technologies in Thailand. This project will overcome barriers that currently prevent widespread and sustainable utilization of Renewable Energy
Technologies for the provision of energy services in rural areas of Thailand. The project will work in Mae Hong Son province, which the Ministry of Energy has identified as its target to be the first energy self- sufficixx ent province in Thailand, in conformity with the king’s sufficiency economy concept.
The project will facilitate an integrated RE planning xprocess Total at provincialresources required and local level, in $order xx to Programme Period: xx translate targets set at national level to local level and into real action. The four components of the Atlas Award ID: xx x Total allocated resources: $ xx projectProject ID:focus on (a) institutional capacityxx development for planning and implementing RE programmes; GEF $ xx (b)PIMS access # to financing; (c) technicalxx training and education and (d) policies for up-scaling and replication. x UNDP $ x Start date: xx Private Sector FollowingEnd Date a Mid-Term -Review (MTR) xx in Q3 of 2013, significant changes were made to the project x Total: $ xx frameworkManagement and Arrangements the implementation xx modality. In the second phase of the project the focus will be more PAC Meeting Date xx on off-grid renewable energy applications and the projectx implementation modality will be Direct Implementation (DIM).
Table of Contents
Table of Contents ...... 2 Acronyms ...... 3 0 Introduction ...... 4 Part 1: Situation analysis ...... 5 1. Context and Global Significance ...... 5 1.1 Energy sector in Thailand – supply ...... 5 1.2 Renewable Energy targets, policies/incentives and installed capacity ...... 7 1.3 Characteristics of Mae Hong Son province ...... 13 1.4 Current energy situation in Mae Hong Son province ...... 14 1.5 Renewable Energy potential in MHS ...... 22 2 Barrier Analysis ...... 24 3 Stakeholder Analysis ...... 29 4 Baseline Analysis ...... 32 Part 2: Strategy ...... 36 5 Design Principles and Strategic considerations ...... 36 6 Project Goal, objective, outcomes and outputs ...... 36 7 Key indicators, risks and assumptions ...... 44 8 Sustainability and replicability ...... 45 Part 3: Project Results Framework ...... 45
Annex I: CO2 emission reduction calculations...... 49
Acronyms
Acronym Meaning APR Annual Project Report AWP Annual Work Plan BGET Border Green Energy Team CBO Community-Based Organization CO Country Office/UNDP Country Office DEDE Department of Alternative Energy Development and Efficiency DOLA Department of Local Administration DOPA Department of Provincial Administration EGAT Electricity Generating Authority of Thailand EPPO Energy Policy and Planning Office GEF Global Environment Facility Gg Gigagrams GHG Greenhouse gases GW Gigawatts kWh Kilowatt hour LEP Local energy planning LPG Liquefied petroleum gas M&E Monitoring and Evaluation MDG Millennium Development Goals MEA Metropolitan Energy Agency MHS Mae Hong Son MOI Ministry of the Interior MSW Municipal Solid Waste MW Megawatt MWh Megawatt hour NEPC National Energy Policy Council NESDB National Economic and Social Development Board NEX National Execution NGO Non-governmental Organization OPS Office of the Permanent Secretary PAO Provincial Administration Office PEA Provincial Energy Agency PIR Project Implementation Review PPG Project Preparation Grant PRO-SE Provincial Programme for Sustainable Energy PSCO Policy and Strategy Coordination Office PV Photovoltaic RE Renewable Energy REO Renewable Energy Office RET Renewable Energy Technologies RTG Royal Thai Government SML Small, Medium and Large SP Strategic Programme SPP Small Power Producer TAO Tambon (Sub-district) Administrative Organization toe Tonnes of oil equivalent ToR Terms of Reference UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change UNPAF United Nations Partnership Framework VSPP Very Small Power Producer
0 Introduction
1. The underlying document titled: “Addendum to the original project document of the GEF RE MHS project” contains the results of the strategic review. It serves as an addendum to the original ProDoc as prepared for the project in 2009 and approved by the GEF. This addendum provides an updated situation and barrier analysis, project strategy, project framework and implementation modalities for the remaining time of the GEF RE MHS project, which will run from 1 January 2014 till 31 December 2016.
2. This addendum contains specifically: An updated situation analysis of the energy situation in Thailand and Mae Hong Son (baseline); An updated analysis of the policy and regulatory environment for clean energy technologies in Thailand and Mae Hong Son as well as a stakeholders analysis; An analysis of the current barriers for the uptake of renewable energy technologies in MHS as well as an assessment of the feasibility of the various Renewable Energy Technologies (RETs);
Part 1: Situation analysis
1. Context and Global Significance 1.1 Energy sector in Thailand – supply 3. Thailand is currently heavily dependent on imported fossil fuels and electricity for its energy supply, see Figure 1. Currently (figures from 2012), around 56% of the total energy demand is met from imported resources. Of the total oil consumption, 85% is imported. This makes Thailand very dependent on other countries for its energy supply and energy security is therefore high on the political agenda.
Figure 1: Overview energy import situation Thailand1
4. Over the last couple of years, the total value of imported energy sources has increased steadily, see 5. Figure 2. DEDE estimates that the total value of imported energy sources is around 1,400,000 million baht, which is 18% of GDP. Around 77% of this import value is from crude oil. From an economic point of view there is significant reason to try to reduce the amount of energy imported and explore using more domestic (renewable energy) sources.
Figure 2: Energy import values2
1 “Thailand’s Renewable Energy Development-Plans and Implementation at the community level”, Presentation by Dr. Twarath Sutabutr, DDG, DEDE, Ministry of Energy, Thailand, 2 September 2013. Further referred to as: “Thailand Renewable Energy Development…..”, presentation by Dr. Twarath Sutabutr, 2 September 2013. 2 “Thailand Renewable Energy Development…..”, presentation by Dr. Twarath Sutabutr, 2 September 2013.
6. Electricity is mainly generated from natural gas (64%), coal/lignite (28%), renewable energy (7%) and fuel oil/diesel (2%) (Figures for 2012). Compared to its ASEAN neighbors and the world, power generation in Thailand is relatively dependent on natural gas.
7. The total power generating capacity of Thailand stands currently at 32,395 MW (as of December 2011). The forecasted power peak demand in 2030 is around 52,256 Megawatt (MW)3, which means that Thailand will need to install significant new electricity generating resources in the coming years or increase its imports of power.
8. As per data from the Office of the Energy Regulatory Commission4 in 2013, 99% of the Thai population had access to the grid. In urban areas, access to the grid stood at 100%. In particular in remote provinces (such as MHS) regular brown- and black outs occur in the rainy season (as rain and wind can affect the long transmission lines) as well as the dry season (high peak demand from air conditioners and low supply e.g. due to limited capacity of hydropower plants).
9. The Ministry of Energy5 estimates that there are still 229,670 households without access to Electricity in Thailand. Of those, around 92,000 households will be served by the grid in the future via grid extensions. The remaining 138,000 households cannot be connected to the grid, e.g. because grid extensions are too expensive as they are too far from the grid or the households are located in protected areas. These households will need to be served with other sources of electricity.
10. Currently the main challenges for the (renewable) electricity/energy sector in Thailand are: Increased fluctuation of world oil & gas prices; Limited petroleum reserves (Thailand needs to import 85% of its consumption); 70% of the electricity supply depends on natural gas; Lack of public acceptance of large energy projects, which affects long term energy security; Developing and maintaining the right mix of government policies on renewable energy targets and the incentive schemes; How much decentralized renewable energy the national grid can take up; Grid parity: cost of electricity generation from renewable energy versus the electricity tariff.
11. The government has several strategies and policies which are directly and indirectly relevant for the developments in the (renewable) energy sector. In January 2013, the Prime Minster of Thailand had announced four national strategies to move Thailand forward. Among these are the “Green Growth” strategy which is explained as growth on the quality-of-life on environmentally-friendly basis and “Inclusive Growth” strategy which seeks to reduce social disparity between low-income and high-income earners in the country and provide greater opportunities for the people, based on economic, social, and political equality. Realization of renewable energy systems in remote areas fits well within these two strategies, as it contributes
3 Summary of Thailand Power Development Plan 2012 – 2030 (PDP2010: revision 3). 4 Safety, Standardization, Monitoring the Energy Market”, Presentation by The Office of Energy Regulatory Commission, Thailand, 23 August 2013. 5 Data over 2011, taken from “Draft Final Report, Conducting Renewable Energy Analysis and Implementing Project. Activities to Support the United Nations Joint Program on, Integrated Highland Livelihood Development in Mae Hong Son”, EforE, December 2012.
to green growth as well as inclusive growth. The national strategies are used as a guideline for public budget allocation since fiscal year 2014 (starting October 2013) onwards.
1.2 Renewable Energy targets, policies/incentives and installed capacity 12. Targets for electricity generation from renewable energy sources were laid down in the Renewable Energy Development Plan (REDP) in 2009, which was consequently revised in 2011. The REDP was approved in January 2009 and set a target of 20% of renewable energy for 2022. The REDP was revised in December 2011 and new, much more ambitious targets of 25% of renewable energy in 2021 were set and the plan was called Alternative Energy Development Plan. In July 2013 the AEDP was updated and even more ambitious targets were set. The exact targets are described in Figure 3.
Energy/Fuel REDP AEDP (2011) New AEDP (2013) Target in 2022 (MW) Target in 2021 (MW) Target in 2021 (MW)
Solar 500 2,000 3,000 Wind 800 1,200 1,800 Hydro Power 324 1,608 324 Biomass 3700 3,630 4,800 Biogas 120 600 3,600 MSW 160 160 400 New energy 3 3 3 Total 5,607 9,201 13,927
Figure 3: Renewable energy targets as per REDP and AEDP
13. The larger AEDP policy framework/targets are summarized in Figure 4.
Figure 4: AEDP policy framework6
6 “Thailand Renewable Energy Development…..”, presentation by Dr. Twarath Sutabutr, 2 September 2013.
14. The development of the REDP and AEDP, in particular the increased targets for renewable energy, shows that alternative energy is becoming more important for the government of Thailand to ensure energy security. Within the AEDP, promotion of alternative energy use in communities is an important component, as can be seen the box in the middle on the left. This underlying UNDP/GEF-project supports the RGoT in the realization of its objectives in this area.
15. To support the realization of renewable energies the several government agencies involved in the energy sector, such as Ministry of Energy, DEDE, EGAT and the Board of Investment established several policies and incentive schemes over the years, ranging from investment grants to tax breaks and from technical support for new technologies to the electricity “adder” for specific renewable energies. The main policies and incentive schemes are depicted in Figure 5 below. Recently the energy soft loan facility (revolving fund) has been ended as sufficient capital (debt or equity) for renewable energies and energy efficiency measures is available in the financial markets in Thailand.
Figure 5: Overview main Renewable Energy policies/incentive schemes7
16. When analyzing the policies and incentive schemes for renewable energies, it is clear that most of them are aimed at promoting grid-connected large scale investments. Small, community based systems, did not have much attention from the government until recently. Since a few years the interest for smaller systems has increased and more policies and incentive schemes are established aimed at smaller renewable energy systems and community based systems (on and/or off-grid systems).
17. The currently installed and operating renewable power generation capacity (on-grid) in Thailand is around 2,789 MW, while another 3,338 MW will soon start operation, see Figure 6 (figures for March 2013).
7 “Thailand Renewable Energy Development…..”, presentation by Dr. Twarath Sutabutr, 2 September 2013.
Figure 6: Renewable energy (on-grid) generation capacity in Thailand in 20138
18. In general for Thailand the most promising renewable energy sources are: Natural resources: solar, hydro and wind; Crops: sugar cane (molasses), cassava and palm; Waste: agricultural, industrial and municipal solid waste (MSW). The IEA (2010) estimated the total realizable potential for renewable energies in Thailand by 2030 at around 150 TWh.
19. With the costs for solar equipment coming down in the last couple of years, solar energy has become more a more attractive alternative energy source in Thailand. The past and current policies/incentive schemes of the government had a clear impact on the solar market. In particular for solar power, the targets were well over-subscribed. The 10 year AEDP target was 2,000 MW, the proposed installed capacity based on the proposals received amounts to 3,372 MW (Over-subscribed with 169%).
20. The government also developed an incentive scheme for solar rooftop systems on households and SMEs in 2013. This was very successful and continuation of the scheme is considered for 2014. In addition, the government is developing an incentive scheme for community based grid connected solar systems (solar farms).
8 “Safety, Standardization, Monitoring the Energy Market”, Presentation by The Office of Energy Regulatory Commission, Thailand, 23 August 2013.
21. For small hydro power the policies and incentive framework were less successful compared to the policies developed for promoting solar power. Several persistent barriers prevented the realization of small hydropower plants.9 While the AEDP had set a target of 1,608 MW for small hydro in 10 years, the current generation capacity is around 86.39 MW10. Reaching the target of 1,608 MW seems very challenging. The main challenge for micro and mini-hydro power plants is that in most cases the potential plants areas are located in sensitive/forest conservation areas. In 2010 new regulations were issued by the energy regulators, making operation of hydro power plants in these areas more difficult. Another barrier is the support of local communities for the power plants. Often they are negatively affected by it, but don’t receive any benefits, so they oppose the construction.
22. Recent figures (May 2013) from EPPO show that the government is well underway to achieve most of its targets set in the ‘new AEDP’, see Figure 7 . For wind, biomass and solar the targets in the new AEDP were increased. For hydropower, the targets were significantly reduced due to challenges in the realization of the plants.
Figure 7: Figures regarding proposed and planned renewable energy generation capacity (May 2013)11
23. Based on the results of the current policies and the market developments, the government of Thailand is considering making changes to its policy framework. Issues under discussion and/or agreed upon are:
9 In this report the following definitions are applied: 1) Large hydro: > 10 MW 2) Small hydro: between 1 and 10 MW, 3) Mini-hydropower: between 100 kW and 1 MW 4) Micro-hydropower: between 1 kW and 100 kW 5) Pico-hydropower: <1 kW. 10 The current capacity of 86.39 MW consists of: 1) 1.8 MW of installed micro-hydro capacity in 48 villages (which provides electricity to 4,115 households); 2) 43,32 MW of mini-hydro capacity (22 power projects). 4 new mini-hydropower projects are in the pipeline; 3) Around 41 MW of small hydro power from EGAT and DEDE, mostly related to irrigation schemes. 11 “Development of Renewable Energy for Power Generation”, Presentation by Energy Policy and Planning Office, DEDE, Ministry of Energy, 22 August 2013.
o The new Power Development Plan 2013 will focus more on renewable energy; o Expansion of the grid, adding 500 kV lines in both North-Eastern and Southern routes in order to be able to take up more renewable energy projects; o Demonstration projects of EGAT to try out new designs of renewable energy technologies; o Revision of FiT-scheme. The adder scheme is still valid, especially for wind power; o Shifting of the incentive programs, increased focus on community or household scaled projects, for instance solar-PV rooftop and Napier Grass Biogas Digester.
New policy initiatives/incentive schemes for rural RETs 24. From the policy description above, it is clear that until recently most incentive schemes and policies were targeting large grid connected systems. Since a few years the government has more attention for smaller community based systems and recently several initiatives are emerging with the aim to promote the use of small energy systems and community based systems. These are the 1) ‘Local Energy Planning Initiative/Community Scale Solar’, 2) the ‘Solar PV rooftop’ initiative and 3) Green Energy Mechanism by EfE.
25. The local energy planning/community scale solar initiative was approved by the National Energy Committee on 16 July 2013. It is a joint initiative of Ministry of Energy and National Village & Urban Community Fund Office. It has the objective to encourage community participation in energy generation, create jobs and generate income for communities and promote distribution of RE power or distributed green generation. The target for community scale solar is 800 MWp and the maximum size of solar plants is 1 MW.
26. The idea is that the community should propose, develop and invest themselves in a solar farm. For instance it invests 60 MBaht. In such a case the National Village & Urban Community Fund can provide a grant of 15 MBaht and a BAAC or GSB can provide of 45 MBaht. A feed-in tariff varying from 9.75 B/kWh to 4.5 B/kWh for 25 years would be provided by the government. For this example case DEDE expects an IRR of 13.6% and a payback time of 6 years. The window to submit proposals for this initiative should end by December 2014. The technical details of this initiative are depicted in Figure 8.
27. On the 16th of July, the National Energy Policy Committee also approved the solar rooftop resolution. This resolution is for solar PV rooftop applications for households and SMEs. A feed- in-tariff will be provided for solar rooftop of 6.96 baht/kWh for households (HH) with solar systems up to 10 kWp and 6.55 Baht/kWh for SMEs with solar systems up to 250 kWp. Total targeted capacity is 200 MWp (100 MWp for households and 100 MWp for SMEs). Supporting period is 25 years. The initial phase was a success, so the government is currently considering to expand the initiative.
Figure 8: Details community based solar12
28. To complement the national policy on promoting renewable energy, the Energy for Environment Foundation (EforE) with financial support from UNDP and the Energy Conservation Fund (ENCON) established the Green Energy Mechanism (GEM) in 2008. The mechanism aims to promote renewable energy development in remote areas by mobilizing fund from the private sector. Most private sector interested to invest in remote communities do that out of “Corporate Social Responsibility (CSR)” considerations.
29. GEM is aimed at community based green power projects that are owned and operated by local communities in remote areas, especially areas not electrified. The primary objective is to ensure long-term community ownership and participation and thus sustainability of the projects. Until now, there are 18 projects implemented under the cooperation among various agencies, such as local governments, UNDP, Department of National Parks, Wildlife and Plant Conservation, Department of Alternative Energy Development and Efficiency, Energy Policy and Planning Office, Energy Regulatory Commission (ERC), Thai Oil Plc. and Border Green Energy Team (BGET).
30. In 2009 The Ministry of Energy identified Mae Hong Son as its target to be the first energy self- sufficient province in Thailand, in conformity with the king’s sufficiency economy concept. To support the government, the project will focus on Mae Hong Son province. Lessons learned in this province will be shared to other provinces through (1) the integration of RE programmes and activities into the strategies of the upper north clustered provinces which include Mae Hong Son, Chiang Mai, Lamphun and Lampang, (2) establishing demonstration sites and learning center on appropriate RETs in Mae Hong Son through the MHS RE project, and (3) dissemination of knowledge and lessons learnt in promoting and managing RET schemes based on the project’s experiences to relevant ministries, line agencies, private sectors, CSOs and the general public.
12 “Thailand Renewable Energy Development…..”, presentation by Dr. Twarath Sutabutr, 2 September 2013.
1.3 Characteristics of Mae Hong Son province 31. Mae Hong Son province is located in the North of Thailand and its north and west borders Myanmar. The total area is 12,681 km2 and around 90% of the terrain is mountainous and/or covered by forest. Around 70% to 80% of the province is covered by forest and a large part of the province is classified as “Protected Areas” (for instance National Parks) in which activities are restricted or prohibited.
32. There are 4 National Parks (Mae Ngao National Park, Namtok Mae Surin National Park, Salawin National Park and Tham Pla Namtok Pha Suea National Park) and 3 other protected areas (such as wildlife sanctuaries or preserved forests) in Mae Hong Son. About 63% of the total area is classified as “Protected Areas - watershed Class 1A” area, resulting in restrictions on infrastructure development including transportation networks, power transmission systems, and distributed power generation, especially from hydro power.
33. Mae Hong Son is the poorest province of Thailand, according to the National Statistical Office. The average monthly income per household is 7,936 baht, while the average income of the North and the whole country are 15,727 and 20,904 baht13, respectively. A large part of the population relies on crop farming, but the available agricultural land is limited, only 3 to 5% of the total areas is suitable for agricultural purposes. This lack of suitable land for agriculture is a major source of poverty in the province.
34. In 2011 the total population of Mae Hong Son was 245,49614. More than half of the population is from ethnic minorities, including Karen, Lahu, Lisu, Lau Hmong and Haw. The range of cultural backgrounds and languages causes challenges in communication.
35. One key factor in the underperformance in terms of education, health, poverty, etc. is the limited access to energy in the province.
36. Mae Hong Son consists of 7 districts, 45 sub-districts and 415 villages see Figure 9.15
13 Data over 2011, taken from “Draft Final Report, Conducting Renewable Energy Analysis and Implementing Project. Activities to Support the United Nations Joint Program on, Integrated Highland Livelihood Development in Mae Hong Son”, EfE, December 2012 14 Source: www.maehongson.go.th 15 Source: www.maehongson.go.th
Figure 9: Mae Hong Son province 1.4 Current energy situation in Mae Hong Son province 37. Currently the total installed on-grid electricity generation capacity in Mae Hong Son is 29,220 MW, details are provided in Figure 10 (on-grid renewable energy sources) and Figure 11 (on-grid non-renewable energy sources).
No. Name of power plant Location Owner Capacity (kW) 1 Mae Sa-Nga mini-hydro project (stage 1) Muang MHS DEDE 5,040 District 2 Mae Hong Son Mini-hydro project Muang MHS DEDE 850 District 3 Mae Sa-Riang Mini-Hydro project Mae Sa-Riang DEDE 1,250 District 4 Pha Bong Solar Power Plant Muang MHS EGAT 500 District 5 Mae Sa-Riang Solar Cell (Stage 1) Mae Sa-Riang Mae Sa-Rieng Co. 960 District LTD 6 Mae Sa-Riang Solar Cell (Stage 2) Mae Sa-Riang Mae Sa-Rieng Co. 960 District LTD 7 Mae Sa-Riang Solar Cell (stage 3 = Na Mae Sa-Riang Mae Sa-Rieng Co. 960 (Jan. 2014) Phat/ Napas Solar farm) District LTD 8 Mae Pai Mini-Hydro Project Pai District PEA 2,000 9 Mae Sa-nga hydro II Muang MHS DEDE 5,300 (Dec. 2013) district Total 17,820 kW16
Figure 10: On-grid renewable energy capacity Mae Hong Son
16 At the beginning of the project (2010) the on-grid RE capacity was around: 17,820 – 5,300 – (960*3) = 9,640 MW.
No. Name of power plant Location Owner Capacity (kW) 1 Mae Hong Son Diesel Power Plant Muang MHS EGAT 5,400 District 2 Mae Sa-Riang Diesel Power Plant Mae Sa-Riang PEA 6,000 District Total 11,400 kW
Figure 11: On-grid non-renewable energy capacity Mae Hong Son
38. The total installed capacity of operational off-grid hydropower plants is 255 kW, see Figure 12.
No. Name of power plant Location Owner Capacity (kW) 1 Na Pu Pom micro-hydro project Pang Ma Pha DEDE 20 District 2 Huany Han Det micro-hydro project Pang Ma Pha DEDE 25 District 3 Huay Mark Lang micro-hydro project Muang MHS district DEDE 25 4 Por Nor Kee micro-hydro project Muang MHS district DEDE 20 5 Mae La Kah micro-hydro project Khun Yuam District DEDE 30 6 Mae Go Pee micro-hydro project Khun Yuam District DEDE 30 7 Huay Lang micro-hydro project Pang Ma Pha Mae Hong Son 58 District Province 8 Nam Phiang Din micro-hydro project Muang MHS district Mae Hong Son 40 Province 9 Pang Ung micro-hydro project Muang MHS district E for E 7 Total 255 kW17
Figure 12: Off-grid renewable energy capacity Mae Hong Son
39. Currently the renewable energy power plant depicted in Figure 13 is finished and might become operational, but when is unclear. An overview of all the existing plants is provided in Figure 14.
No. Name of power plant Location Owner Capacity Expected start date of operations (kW) 1 Huay Pong-on Hydro Muang DEDE 110 Realized but cannot operate due to (on-grid) MHS forest restrictions. Plant is within district 100 meter distance of boundary of a National Park. Unknown whether ever will operate. DEDE is maintaining the plant. Total 110 kW
Figure 13: On-grid Electricity generation capacity possibly to become operational in Mae Hong Son
17 At the beginning of the project, the off-grid RE installed capacity was around 255-7 kW = 248 kW.
.
Figure 14: Overview electricity generation capacity in Mae Hong Son18
40. DEDE has recently expanded capacity of Mae Sa-Nga hydropower plant. The first Mae Sa-Nga plant has a capacity of 5.04 MW (on-grid) which has been running since 1988. Another 5.3 MW has been added and is fully operational since late 2013.
41. DEDE is considering the expansion of another on-grid hydropower plant in Mae Sariang. Around 0.85 MW could be added. Currently a survey/feasibility study is conducted to assess the feasibility of the expansion. If feasible, DEDE expects that it would take another 10 years before the expansion would become operation. If would take around 2 years to get approval for the budget, then around 8 years for additional studies and construction.
42. DEDE identified potential for two off-grid hydropower plants. However, there is currently no budget for the realisation of these plants. It concerns a 35 kW plant in Hoey Keow and a 90 kW plant in Hoey Pooling .
43. DEDE conducted in 2010 a feasibility study for micro-hydro potential in Mae Hong Son particularly in national parks. In Mae Ngao national park areas they found a total potential of around 1 to 6.5 MW. In total around 20 potential sites were identified. In all these cases, no plants can be built due to forest protection rules.
18 Presentation by Mr.Nopphadon Chiamton, Head of Mae Sa-nga Hydroelectric Project, Department of Alternative Energy Development and Efficiency (DEDE), Ministry of Energy. August 2013.
44. In the first phase of the MHS project, Chiang Mai University did two feasibility studies on the potential for renewable energies in Mae Hong Son. The first study (report submitted in January 2012) conducted a survey in 16 villages in Muang district and another 11 villages in Khun Yuam districts and compiled information of the villages in 7 aspects: general info, demographic and socio-economic, infrastructure and social services, energy use, existing SHS and their functional capacity, potential/suitability for RETs, social and environmental potential of the villages for RETs. The survey team also made recommendations on 3 different strategies for RE usage, including: (1) grid-connected electricity generation for income generation, (2) non-grid electricity generation for community use, and non-electrical RE usage. They concluded that out of the 27 villages surveyed, 5 villages which had highest potential for RET projects were identified for further feasibility studies (technically, economically, socially and environmentally). It was concluded that Baan Mae La Ga, Baan Mae Kho Ju, and Baan Toong Makok were most feasible for solar-based grid-connected projects and Baan Mae Hua Surin was most appropriate for off-grid hydro power project.
45. The second study (submitted in June 2013) focused on resource assessment including hydro, biomass, solar, and waste in 16 areas/villages (9 on-grid and 7 off-grid) in 6 districts: Mae Sariang (4 villages), Sob-Meuy (4 villages), Pang Mapha (3 villages), Mae La Noi (2 villages), Muang (2 villages), and Pai (1 village). The study looks at availability of RE resources, environmental and social assets/potential of the areas, capacity of community organizations, and community's attitudes on RETs. Based on the study findings, 13 areas were identified as having potential for RE activities. These 13 areas were further investigated on financial/economic feasibility. Key findings indicated 5 potential areas for grid-connected projects; one 30 kW hydro power plant in Baan Mae La Luang in Mae La Noi district; and four solar-based electricity projects in Baan Rai, Mae Sariang (1,620 kW), Baan Ya Pa Nae, Pang Ma Pha (720 kW), Baan Huay Dua, Muang district (85 kW) and Baan Mae Talu, Sob Meay (75 kW).
46. There is one hydropower plant in Hoey Pong On, which was built 5 years ago (2008) by DEDE and ready to operate, but cannot operate due to the legal barriers, see Figure 13 above. At the time the construction started (2008), no licence from the Department of Industrial Works (DIW) was required to operate the plant. However, in 2010 the Regulator also required smaller hydropower plants to have a license from the DIW to operate. Obtaining this license in protected areas is very difficult to obtain. Also obtaining permission to build electricity lines to the public grid through protected areas is difficult to obtain. Currently DEDE tries to keep the plant in good condition, until someday operation might be allowed. On policy level DEDE tries to bring the issue to the forefront, but no solutions have been found so far.
47. There are three solar farms operational in Mae Hong Son. All 3 solar farms are constructed by Infinite Solar Group in Mae Sariang. Each solar farm has a capacity of 960 MW, so the total capacity is 2,880 MW see Figure 13. There are no other planned investments by the private sector in power generation capacity (e.g. solar farms) in Mae Hong Son known at this stage.
Solar Home Systems 48. During 2003-2005, PEA under the Ministry of Interior distributed SHS (120 Wp) for free in off- grid areas. Information on the total number of SHS distributed in MHS is not consistent, but are
around 15,790 units in 147 villages in MHS (PEA, 2009). Some sources indicate that fewer systems were distributed, as low as around 8,000. Around half of the off-grid households were reached by the SHS distributed at that time. Households which were not reached include new households after 2004 and households without house registration (e.g. in protected areas).
49. Many systems failed shortly after distribution. Main cause for this was that no after-sales service was provided and villages didn’t know how to make use of the warranties. Some stakeholders indicate that no warranties were provided at all. In addition, villagers were not trained on how to use the systems, so some of them used them wrongly resulting in failure (e.g. connecting the battery directly to the panels, without charge controller). Components which often failed were the charge controller and the batteries.
50. On the number of systems which can still be used, no consistent information is available. Stakeholders provide different figures, ranging from 50% to 90% broken or systems not being used. When visiting the villages it is clear that few systems are still being used and/or function properly, in many cases the batteries and charge controller have been broken. Panels can often still be used. In case systems are being used, it is often only for lighting, so only a small part of its capacity is being used.
51. In two districts in MHS the MHS RE project carried out a survey of the SHS distributed in 2004- 2005. According to the figures of PEA, in total 3,263 systems were installed 10 years ago in these two districts (2004-2005). Of these 3,263 systems, 2,564 systems were found during the survey and 699 disappeared. Of the 2,564 systems found, 1,231 systems were still (partly) functional. So of the total systems distributed in the 2 districts in 2004-2005 the survey concluded that around 37% of the systems were (partly) functional and could still (partly) be used.
52. If the survey results from the two districts are representative for the other districts in Mae Hong Son, then we can estimate that around 2/3 of the systems distributed 10 years ago are not functioning/not being used anymore currently. The main problem with the system is the charge controller and replacement of the batteries. The villagers didn’t receive training on how to use the systems and there was no after-sales service available if systems broke down. Also replacement of batteries was not available. People started using car batteries which are not suitable for providing light. Car batteries are designed to provide a high current during a short time, while for lighting purposes you need a deep cycle battery suitable to provide a constant current over a long period of time. From survey also clear that people are mainly interested in lighting and a few in radio or charging mobile phones. There is no demand (yet) for more advanced electrical equipment.
53. DEDE provided battery charging stations (PV) under the Renewable Energy for Rural Village Project. In practice the operation of the charging station is a challenge and therefore not many charging stations are (fully) operational.19
19 Data over 2011, taken from “Draft Final Report, Conducting Renewable Energy Analysis and Implementing Project. Activities to Support the United Nations Joint Program on, Integrated Highland Livelihood Development in Mae Hong Son”, EforE, December 2012
54. Over the years, around 2.3 MW20 in off-grid PV has been installed in MHS, ranging from the SHS in 2003 – 2005 (1.9 MW) to PV systems for schools, village learning centers, soldiers base and health clinics. It is not clear how much of it is still in operation or function properly. Transmission lines 55. MHS is the only province in Thailand that could not be reached by a high-voltage transmission line of EGAT, due to forest Protection area restrictions and because the area is mountainous and covered with forest. The two lower voltage lines which currently connect MHS with the main grid are managed by PEA.
56. Muang Mae Hong Son is connected to the main grid in Chiang Mai via one line managed by PEA which runs via Pai to Mae Taeng. From Mae Taeng to Pai this is a 115 kV line, and from Pai to Muang Mae Hong Son this is a 22 kV line. The line between Pai and Muang Mae Hong Son is currently being upgraded to a 115 kV line. Total line distance is 211 km.
57. Currently an additional 22 kV line connection line with the Chiang Mai grid is being constructed and will be managed by PEA. This line starts at Chom Tong and runs to Muang Mae Hong Son. The total line is 220 km long and goes over the hills in Mae Hong Son and through the forest and will therefore be relatively vulnerable to weather influences (rain, wind, trees, etc.). The new line should be finished by the end of 2013 or beginning of 2014. For the grid in MHS, see Figure 15.
Figure 15: Connecting lines power grid Mae Hong Son21
20 Data over 2011, taken from “Draft Final Report, Conducting Renewable Energy Analysis and Implementing Project. Activities to Support the United Nations Joint Program on, Integrated Highland Livelihood Development in Mae Hong Son”, EforE, December 2012
21 Presentation by Mr.Nopphadon Chiamton, Head of Mae Sa-nga Hydroelectric Project, Department of Alternative Energy Development and Efficiency (DEDE), Ministry of Energy. August 2013.
58. Regular brown- and black-outs are occurring in Mae Hong Son. There are several reasons for this, including: Not enough generation capacity in MHS, so there is a need to import from the main grid in Chiang Mai; Long distance between the main grid in Chiang Mai and Mae Hong Son; Vulnerability of the grid for weather events (rain) and trees falling on the grid lines.
59. Current grid peak demand in MHS is 22 MW. When all plants producing electricity at full capacity in theory they should be able to provide sufficient capacity to meet the demand, as the current total installed capacity is 29,220 MW. However during the dry season for instance, the hydropower plants cannot run at full capacity, so electricity needs to be imported from the main grid in Chiang Mai.
60. Growth rate demand is around 2.5% per year, it was anticipated 5% per year, so no additional power shortages are expected due to unforeseen growth.
61. The central government of Thailand as well as the local government organisations in MHS are becoming more interested in energy conservation. To avoid further installation of new power plants, a more cost-efficient solution could be efficient use of current electricity sources. EGAT has implemented several successful power saving programs in the country in the past years. For MHS the local government agencies indicate that most energy savings can be made in the tourism industry. The tourism industry uses relatively a large amount of electricity. Any activities in this area should therefore target the tourism sector. There is also the option to link with the tourism sector in terms of their attempt to become more eco-friendly. Eco-tourism offers an important source of income for MHS. In general, the tourism sector is one of the largest sources of income for MHS.
Grid connection and electrification in Mae Hong Son 62. Different stakeholders in MHS use different figures regarding grid connection and electrification. Also different definitions are used. In this report data from Provincial Electricity Agency (PEA) are applied. PEA indicates grid connection figures as depicted in Figure 16.22
Total no. of registered people in MHS province (2011) 245,496 Total no. of registered households in MHS (March 2013) 93,713 Estimated average no. of people per registered household 2.6 Total no. of registered households electrified by grid, via other households or SHS 76,554 distributed in 2004-2005 Total estimated no. of registered households which are electrified by grid, via other 67,700 households or still functioning SHS distributed in 2004-2005 Total estimated no. of registered households which are electrified by grid or via other 63,200 households Total no. of registered households already included in plans to be connected to the grid in 183 the next 5 years Estimated total no. of registered households for which grid connection costs are prohibitive 4,966 Total no. of registered households located in restricted areas and without access to grid 25,098 Estimated total no. of registered households for which grid connection in the future is 26,000 - 30,000 not very likely and which don’t have access to electricity at the moment
22 It should be noted that this concerns registered households. The actual figure might be much higher.
Estimated total no. of people for which grid connection in the future is not very likely 67,600 – 78,000 and which don’t have access to electricity at the moment Figure 16: Grid connection/electrification figures MHS23,24,25
63. From Figure 16 above it can be derived that currently around 67% of the registered households in Mae Hong Son have access to the grid. Further, in total 26,000 to 30,000 registered households in Mae Hong Son province will probably not be connected to the grid in the coming 5 to 10 years and don’t have access to electricity at the moment (either grid or other sources). The figures are summarized again in Figure 17.
Figure 17: Grid connections in MHS
64. PEA connected annually around 100 to 500 new households (HH) in the last couple of years. In theory it could connect more HH per year, but budget constraints, political influences, remoteness, legal procedures related to forest areas, etc. makes it challenging to increase the connection speed. PEA has a plan for future connections, but cannot share this plan publicly. PEA indicated that not all HH can and will be connected to the grid. Some are too remote (cost of connection is too high), other HH/villagers are in protected areas and are officially not allowed to live there so legally PEA cannot bring the grid there, and for others the grid need to go through protected areas and legal procedures prevent doing so.
65. In certain cases, e.g. in protected areas- class 1A watershed areas, the government tries to encourage HH to move to different areas. This is a (politically) sensitive issue and often villagers don’t want to move.
Cooking fuels 66. Stakeholders estimate that the majority of households (> 65% ) in Mae Hong Son use firewood for cooking. In urban areas charcoal and LPG are used as well (mainly by wealthier people/small SMEs/restaurants), but not in large quantities. As per data from DEDE in 2007 each household consumed around 165 kg of firewood per year. DEDE estimated the total LPG consumption in
23 This table only refers to registered households. The total no. of unregistered households/unregistered people is not known. 24 The information in the table is not fully consistent as it is derived from various sources and includes estimates. 25 Data/estimates on grid connection, electrification plans, no. of households in restricted areas and no. of households for which grid connection is (prohibitive) expensive is provided by PEA (March 2013 overview). Estimates on functioning SHS are made by the authors of this report based on the results of a survey conducted in 2013.
MHS between 2005 and 2009 at around 250,000 kg per year. This information indicates that firewood is still the main source of thermal energy for cooking & heating in MHS.
67. Biomass is abundant in MHS and therefore rural villagers in MHS usually don’t have any expenditure for biomass sources for cooking/thermal energy needs. In rural villages, villagers maximally spend 200 – 300 baht per year for transporting biomass from the forest or agriculture land to their house (in case they have to hire a truck). Usually they collect once a year biomass which is sufficient for their annual thermal energy demand.
68. The Livestock Technology Promotion Unit in MHS is planning to implement a project to support Princess Sirinthorn's ongoing project to develop schools and children in remote/difficult to reach areas. Since most of the schools under the Princess project raise pigs for students' luncheon programme, there is abundant pig's waste in these schools. In addition, there is organic food waste. The idea is to construct small to large biodigesters to provide biogas for cooking purposes (cost per biodigester around Baht 25,000). There are around 60 schools in MHS which could potentially benefit from biodigesters. Currently there is budget from the governor and the Office of livestock to support installation of biodigesters at 25 schools.
Household spending 69. HH spending on lighting in rural off-grid areas varies, but on average it is around 200 to 300 baht per month. EfE indicates that it varies from 100 to 400 baht per month, while a study carried out by BGET in Tak province carried out a few years back (2010-2011) indicated on average a spending of 208 baht per month. A very small survey performed by the MHS project in the Ban Hua Ha village indicated that several villagers spend around 300 baht per month on candles. Villagers usually buy candles for lighting, no LPG or kerosene is used for lighting. In some villagers they use wood from a certain type of oily tree for lighting.
1.5 Renewable Energy potential in MHS 70. According to a wind energy potential study conducted by the Research Centre of Mae Jo University in 2009, it can be concluded that the potential for wind power in Mae Hong Son is very limited. They concluded that there is one potential wind site in Mae Hong Son. This potential site is located at Ban kew Lom (Pai district) with a wind speed of around 6.24 meters per second and capacity of 50 kW. Wind power will therefore not be the focus of the GEF MHS RE project.
71. As per the established practices of the SNV Biogas Network, requirements for successful application of domestic biodigesters for rural households (with a few animals) require that: Farming practices involve holding animals in confined areas. Free roaming animals make collection of dung cumbersome and practically not feasible; Fuel wood is scarce and households have expenses for fuel wood. When fuel wood is abundantly available, there is no (financial) incentive for households to invest in alternative options for cooking. In general in MHS, both requirements are not met. Farming practices involve free roaming animals and fuel wood is abundantly available. Therefore the feasibility of domestic biogas is limited.
72. For commercial farms having larger numbers of animals (>10), there might be additional incentives to use biodigesters. In particular the management of waste, as well as odor pollution can be an incentive to apply a biodigester.
73. There are not many commercial scale farms in MHS, except in Mae Sa Riang. For several farms in Mae Sa Riang application of biodigesters might be a good solution for the waste and odor problems caused by them. EfE has been testing this concept in a number of farms in Mae Sa Riang. They indicate that more farms are interested in Mae Sa Riang to apply this concept.
74. For hydropower several sites in MHS have been identified over the years with sufficient water flow to build hydropower plants. This applies to larger plants with a capacity more than 1 MW as well as smaller plants, grid or not grid connected. However, the challenge for hydropower is to find locations with sufficient water resources during the entire year. During the rainy season there is a lot of rain, while in the dry season there is insufficient water. Local people indicate that over the years the amount of water resources is decreasing.
75. Mae Hong Son province has around 80% forest cover and includes several protected areas. To avoid forest degradation and deforestation, demand for wood and timber should be reduced as much as possible. So installation of a (small) biomass power plant, using wood from dedicated plantations could in theory work, but in practices such power plant could increase pressure on forest areas to ensure sufficient biomass supply to the power plant. For instance in cases the dedicated plantation is not providing sufficient biomass.
76. Another source of biomass (besides dedicated plantations) could be agricultural waste, such as rice husk or corncob. Relatively, compared to other provinces in Thailand, there is little agricultural waste available in Mae Hong Son. Approximately only 3-5% of the land area is currently used for agricultural purposes, while maximally around 5 to 10% could in theory be used for agriculture. In addition, several of the agricultural waste is currently used for other purposes, e.g. rice husk & straw is used for livestock feed and fertilizer while corncob is used for livestock feed and fuel.
77. Relatively in Mae Hong Son there is not much corncob as most corn is sold unprocessed. Rice mills in Mae Hong Son are small and only serve local farmers. So the amount of rice husk left to decay is limited. Using the agricultural waste in a biomass plant, would force the current users of the biomass waste to find other sources, which might increase the pressure on forests as well. So in practice not much biomass waste products (which are currently not being used) are available for a biomass power plant. An additional complication for a biomass plant in Mae Hong Son would be the transport costs of agricultural waste. The terrain is hilly and the waste would need to be transported over a long distance. So installation of a (small) biomass power plant is not recommended in Mae Hong Son as a source of electricity.
78. PEO and PEA consider solar as the most promising technology for MHS. There are several reasons for this. First of all, as per data from DEDE solar irradiation in MHS is sufficient to develop solar solutions. The average solar irradiation in Mae Hong Son is comparable to Thailand. Solar irradiation in Thailand varies between 17 and 19 MJ/m2/day (or 4.7 to 5.3
kW/m2/day). Another reason that PEO and PEA consider solar as promising, is its flexibility. It can be applied in different ways depending on the local circumstances (e.g. in the form of solar farms or SHS). In addition, SHS are not faced with legal restrictions such as hydropower plants. A concern for certain areas in MHS is mist/fog/clouds. Before installing solar systems it should be ensured sufficient irradiation is available.
79. With support from the UN joint project, the PEO promoted the use of gasifiers/ICS which use biomass waste products. The aim of promoting this stove was to convince villagers to shift from using wood logs for cooking (on three-stone stoves) to this new stove. In this way, forest would be protected. The stove promoted use as much as possible local materials and would cost around 600 baht. Experiences show that it was very challenging to convince villagers and hill tribes to use different kinds of stoves. They are used to cook in a certain way for many years; they don’t see directly the need to change. Also the costs of the stoves were prohibitive.
80. So far the ICS promoted by PEO has not been adopted by villagers because of several reasons: It is different from what the villagers are used to. It takes lots of effort and convincing to change their behavior; The ICS needs to be refilled a few times during cooking (around 3 times), which is different from the current cooking practices of villages in which no refilling is required. Refilling is not practical, as the pan in which food or water is prepared need to be taken off the fire; The ICS cost 600 baht, while cooking on a three-stone stove is for free; Collecting agricultural waste products and/or suitable small leaves and twigs can be some work and has to be done every day, while collecting wood logs is only done one time each year; The ICS produces a lot of smoke, in particular in the wet season, as the biomass is wet.
81. An alternative potential source of fuel to replace the use of firewood is making charcoal of the rice husk left to decay at rice mills. This amount is relatively small (compared to other milling operations in Thailand), but potentially a good source as local fuel in a village. A challenge will be however that most people are used to cook on fuel wood which is for free. Cooking on charcoal will require a different stove and processing the rice husk to charcoal involves labor and therefore costs. In areas where there is plenty of biomass, it will be very difficult to achieve this change. Also the collection of the biomass resources will be a challenge and costly. All in all it is not recommended to focus on charcoal making from biomass waste products.
2 Barrier Analysis
82. Realization of renewable energies in Mae Hong Son is hampered by several barriers. For a full barrier analysis please refer to the original prodoc, but in Figure 18 below a summary of the main barriers is provided. Sustainable deployment of renewable energy in Mae Hong Son is constrained by a variety of factors which can be grouped into five categories: (1) Capacity, (2) Policy/regulatory/legal, (3) Organizational, (4) Economic and financial, and (5) Technical/environmental.
Barrier Solar Micro-hydro Biomass/ Waste electricity 1. Capacity (institutional and individual) Lack of awareness Little or no Equipment failures Capacity to properly about correct Training accompanied associated with operate and maintain biomass operations & installation. Equipment inadequate maintenance. power plants do not exist yet in maintenance failures due to inadequate In designing the system MHS. Maintenance issues related procedures maintenance: i.e. distilled and tariff structure, to tars (bio- gasifiers) or water needed for batteries; provisions were not made desulfurization (biogas). Limited shading of panels to align collective user knowledge about manufacturing behaviour with the system and operation of ICS using limits. agricultural waste products. Lack of awareness In most cases, villagers haven’t Yes, Many villages with Yes of appropriate replaced worn-out solar home potential micro- technology for batteries for two reasons: hydropower resources are economic/social context (1) its high price. unaware of power and lack of knowledge (2) remoteness of the areas potential. on how to use/maintain from the service shops Lack of awareness on Especially about economic and environmental benefits (i.e. reduced costs spent on candles, reduced benefits of RETs time spent on collecting fire wood, and more forest conservation in watershed areas)
Limited Not sufficient lessons and demonstrations on RE in school curriculum/activities. RE is only a small educational topic in the whole curriculum. Schools do not have enough technical and financial support to run opportunities in RE intensive RE campaigns/lessons. Lack of local N o renewable energy companies in MHS. No knowledge or expertise centre easily accessible. competent human resources to design/build/install/repair Limited capacity Industry is at early stages of development; few companies sell RE equipment; RE companies of RE private advertise very little in newspapers, magazines, or broadcast media, and companies have not industry; had a strong retail customer orientation, partly due to past focus on the government as a excessive focus on customer through off-grid hand-out programs. government contracts Limited capacity Changwat (provincial) and tambon (county) governments lack knowledge about how to of government to identify survey and quantify resource potentials, and also lack familiarity with renewable energy and support the technologies to identify applications that make sense. development and use of renewable energy resources 2. Policy/regulatory/legal Lack of legal Existing forestry Existing forestry rights to resources regulations restrict use of regulations restrict use of forest water without approval. products without approval. Agro New regulations from the residue belongs to agro- processing Energy Regulator requiring industries (e.g. rice mills), No an additional permit for benefits for the farmers. operation of hydropower plant in protected areas. Technology users Especially not aware of warranty problem for SHS rights Difficulties or Exempt, but in practice “pay upfront and reclaim later”. “Reclaiming later” is uncertain & delays in getting difficult reimbursement for import tax on RE equipment
Metering Thai utilities typically arrange meters so that self-consumption (consumption of electricity on arrangements mean that the customer premises) is subtracted from electricity generated by the renewable energy subsidies only apply to generator before the electricity goes through the meter that is used to calculate cumulative renewable energy subsidies. In contrast, in Germany, Spain, and other countries with feed-in tariff policies, the production in excess of renewable energy generator (turbine, solar panel, etc.) is metered separately so that all customer consumption electricity produced by the renewable energy generator receives a subsidy and electricity consumed on the customer premises is purchased separately. Tariff structural FT charge lowers risk for fossil-fuelled generators by passing fuel price volatility to bias towards fossil- consumers, high discount rate in planning discounts future payment streams making choices fuel generation with low upfront costs appear attractive. 3. Organizational Lack of Efficient coordination between different levels of government (central, provincial, coordination among community) as well as in between government institutions involved in RE planning and government implementation (DEDE, EGAT, PEA, etc) is lacking. organizations/ministries Involved agencies lack the financial resources to invest and need to wait a long time before resources are allocated by the central level. Sustainability of staff High turnover of government staff. MHS is a remote province and people prefer to move to another province. Manufacturer A manufacturer association would be an important lobbying voice for regulatory and tariff Association of RE changes in favour of RE, but such an association is absent at this point. technologies does not exist Differing local vs. Climate change mitigation does not matter much to local communities, but does to the national priorities national government. Lack of tradition RE installations are considered government assets which cannot be easily transferred to of cooperatively- owned private or communal ownership. Cooperative ownership has been key in development of renewable energy wind power in particular in Europe, and is promising for micro-hydropower which uses water systems flows that are community resources. 4. Economic/financial High High equipment High equipment High equipment costs for equipment/installa tion/ costs costs small systems. Fuel (or operational costs collection) costs can also be high. Financial Production Production subsidy Production subsidy incentives (VSPP tariffs, subsidy not commercially may or may not be may or may not be attractive. adder, etc.) provided to RE attractive given high upfront attractive; DEDE’s often insufficient to costs investment support is motivate investment limited by budget High transaction Yes Yes Yes costs for small systems High cost for realization due Yes Yes Yes to remoteness of province and mountains Lack of access to Yes Yes Yes favourable financing High import tax 30% tax but refundable (in theory) import tax on imported equipment on equipment Low purchasing Small scale technologies too expensive for poor communities power/income/ ability to pay 5. Technical/environmental
Limitations of Clouds / smoke / Insufficient water Detailed assessments of renewable energy Fog (in particular in certain areas) (especially in dry biomass resources (are not resource season) available. For non- biomass waste products: available resources may be in restricted areas or may be hard to collect and sustainable supply may be an issue. MHS has several protected areas. Biomass based electricity generation might cause pressure on forest in case of lack of supply of regular biomass. Technology SHS: Inverters & Failure of Different technologies available in Thailand has ballasts have automatic voltage needed for different kinds of quality control or high failure rates regulator (AVR) is biomass. Not all the technologies durability challenges. SBCS: Bypass diodes should have common. This is are available or have been tested been removed compounded by in Thailand. collective over- ICS models available for use of consumption. agricultural waste products not fully accepted by users. Lack of proven cases Few long-term successes, lots of No single project No/few projects in Mae failed systems in remote areas developed by private Hong Song sector in Thailand. Many failed government projects
Figure 18: Overview barriers for RE realization in Mae Hong
83. For hydropower the situation has changed significantly compared to when the original Project Document was written. The Energy Regulator is requiring operators of small grid connected hydropower plants to obtain an additional permit from the Department of Industrial Works (under the Ministry of Industry). This regulation was implemented at the end of 2010. This permit is very difficult to obtain and takes a long time. In practise it is a barrier which is impossible to take, especially for grid connected plants. For off-grid plants the situation is less clear/more flexible and depends on each situation whether the Forestry Authorities agree with construction or not. Their assessment is (amongst others) based on the potential damage the hydropower will cause to the forest and whether it actually contributes to forest conservation.
84. The exact requirements for small hydropower plants to be able to sign a contract to sell electricity to PEA under the VSPP scheme are the following (since end of 2010): 1) The project must have a license from the REGULATOR; 2) In order to get a license from the REGULATOR, the owner must submit a “License” from the Department of Industrial Work (DIW); 3) To receive the license from DIW, one must meet the following requirements. One requirement is that “the project must be located at least 100 meter from schools or academic institutes, temples or religion centers, hospitals, historical sites, and public offices. This also applies to natural conservations areas as identified by the Cabinet”(Industrial Ministry’s Regulation, issued in 1992, based on the Industrial Factory Act, 1992). 4) In addition, for VSPP facilities located in forestry areas two forestry regulations are applicable:
a. Use of “Protected Areas and/ or National Reserved Forest26 can be allowed in certain cases including for construction of hydro-power plants. However the approval process is quite lengthy and cumbersome. Applications must be submitted to the Minister of Environment and Natural Resources for approval. The process of approval generally takes quite a long time (about 2 years). i. Alternatively, there are also other approval channels including: • Engagement of Forestry officials in the hydro-power project formulation and implementation. The project must be submitted by forestry official with proof that it has direct/indirect benefits to forest conservation. The approval authority is with Director General of Forestry Department. • Proof that the project is a continuation or expansion of Royal Initiatives/Projects or projects for national security purpose. According to the Cabinet’s resolutions on 28 September 1995 and 30 January 1996 respectively, these projects will have to submit for approval with 15 days after they start using protected forest areas for the project activities. b. Use of “National Park Reserves”. There are no laws which allow for the use of national park reserves.
85. Within ‘Protected Areas’, watershed areas are classified according to the slope. There are exemptions in using Watershed areas. There are criteria for exemption which include: a. For national security reason (e.g. along the border); b. For poverty reduction and development purposes (e.g. royally initiated project).
86. The right to use’ the national reserves can be obtained by getting the area registered as community forests with the RFD.
87. Recent disagreement and legal issues between ministries have complicated the situation.
88. In short, the laws to conserve Protected Areas in Thailand have not changed since 2010, but the legal environment did change. Since 2010 an additional permit for grid connected plants is required from DIW, which is very difficult to obtain.
89. In addition to the legal barrier for hydropower, other barriers include unreliable water resources. During the rainy season sufficient water resources might be available, but during the dry season for many hydropower plants there are insufficient water resources and local people indicate that water resources are diminishing over the years.
90. Laws to protect forests are made with a clear reason. If anybody would be allowed to carry out activities in protected areas, then the forest would disappear quickly in Thailand. Obviously, large and small grid connected hydropower plants would potentially cause the most damage to forest areas, in case a dam is required to hold the water. However, off-grid micro- and mini- hydro power plants could have very small or negligible negative effect for the forest. In fact, they
26 Protected Areas covers: National Parks, Wildlife Sanctuaries, Non-Hunting Areas and Botanical Parks. These fall under the jurisdiction of the Department of National Parks, Wildlife, and Plants Conservation (DNP). The National Reserved Forests are under the responsibility of the Royal Forest Department (RFD). Both RFD and DNP are under the Ministry of Natural Resources and Environment (MONRE).
could contribute to forest protection if villages operate the plant, as they would encourage forest protection to ensure conservation of the water catchment area. In addition, they could provide off-grid villagers with electricity. It is therefore suggested that the project could focus on starting a policy dialogue between all government agencies involved to find an acceptable and legal way to realize mini- and micro-hydro power plants in forest areas without damaging the forest, in order to promote the protection of the forest. The forestry department will be an important actor in this.
91. The intervention of the underlying GEF project concerning hydropower will therefore need to be very specific and focused, aimed at overcoming the legal barrier for realization of community based off-grid micro- and mini- hydropower plants.
3 Stakeholder Analysis
92. At central (national) level, the executive branch of the government comprises 20 ministries, including the Office of the Prime Minister. Regarding the development of rural RE systems, three Ministries are particularly relevant, which are the Ministry of Energy (MoE), the Ministry of Interior (MoI) and the Ministry of Natural Resources and Environment (MONRE).
93. The Ministry of Natural Resources and Environment (MONRE) has usually no direct participation in national RE projects, but in the case of projects in protected or forest areas, they play an important role as they need to provide permission for activities in these areas. In addition, MONRE functions as the Focal Point for GEF projects.
94. The Ministry of Energy is relatively young, established in 2002, with a mission to: 1) Study, survey, analyse, assess, monitor, and evaluate energy-relating situations; as well as serve as an information centre on energy; 2) Determine energy-relating policies, planning, and measures, 3) Procure energy, alternative energy, and renewable energy, 4) Supervise and control as well as prescribe measures, rules and regulations, governing energy-relating operations, 5) Conduct research and development on energy 6) Promote and support the procurement, development and conservation of energy, 7) Transfer technological know-how and develop personnel who possess in-depth knowledge of energy- relating issues, 8) Act as coordinator in managing energy- relating affairs at international level.
95. Four key agencies under the jurisdiction of the Ministry of Energy are the Department of Alternative Energy Development and Efficiency (DEDE), the Energy Policy and Planning Office (EPPO), Policy Strategy Co- ordination Office (PSCO) and the Electricity Generating Authority of Thailand (EGAT).
96. The role of DEDE is to: 1) Promote, support and regulate energy conservation Research and develop alternative energy, 2) Establish rules, standards, dissemination and technology transfer on energy production, transformation, transmission, utilization and conservation, 3) Monitor and evaluate alternative energy development and energy conservation, 4) Promotion of the development of the SPP and VSPP schemes.
97. The roles and responsibilities of EPPO mainly focus on recommending and setting energy policies, measures and plans so as to effectively satisfy energy needs of the country and leads to sustainable energy security. This includes setting tariffs for the SPP and VSPP schemes. EPPO has the following roles: 1) Recommend policies and measures on national management and development of energy, 2) Establish measures on energy conservation and make budget allocation plan for energy conservation, 3) Establish measures to prevent shortage of fuels, 4) Coordinate, monitor and evaluate implementation according to policies and measures on national management and development of energy.
98. EGAT is a state enterprise under the Ministry of Energy whose mission is to: 1) Generate, acquire, and transmit electric energy to the Metropolitan Electricity Authority (MEA), the Provincial Electricity (PEA), other electric energy consumers under the law thereon and neighboring countries, 2) Undertake various activities concerning electric energy, 3) Energy sources deriving from natural resource for the production of electric energy and other activities which will promote the purposes of EGAT, 4) Undertake businesses concerning electric energy and other businesses concerning with the activities of EGAT, or collaborate with other persons for the said activities. 5) Produce and sell lignite, or collaborate with other persons for the said activities.
99. EGAT presently builds, owns and operates several types and sizes of power plants across the country with a combined installed capacity of over 15,000 MW. EGAT also purchases electric power from private power companies and neighboring countries. EGAT develops, owns and operates the national transmission network. Its grid system mainly operates at 500 kV, 230 kV and 115 kV voltages; EGAT’s power system operation is divided into five geographical areas: metropolitan, central, northeastern, southern and northern regions. From the National Control Center based at EGAT’s Headquarters and other five regional control centers, EGAT plans, operates and controls the least cost dispatch of generated power from its power plants as well as from private power plants to load centers via its high voltage transmission lines. EGAT’s grid system is presently linked to Laos by 115 kV and 230 kV lines and to Malaysia by 115 kV, 132 kV and 300 kV HVDC lines.
100. EGAT is obliged to supply and sell virtually all of the energy output from its own generation facilities and from private power sources to two distributing authorities, namely the Metropolitan Electricity Authority (about 35% of the total supply) and the Provincial Electricity Authority (about 63%) which then deliver electricity to end users across the country. EGAT’s direct customers also include a small number of large industries prescribed by Royal Decree. Cross-border power trades are also made with Laos and Malaysia.
101. At the sub-national (provincial level), the Ministry of Interior is responsible for staffing the positions of provincial governors and chief district officials. The provincial governor supervises the overall administration of the province, maintains law and order and coordinates the work of ministerial field staffs who are based in the province. These field staffs carry out the policies and programmes of their respective ministries as line administrators. In principle, ministerial
programmes in each province are guided by national and ministerial level policies as well as provincial strategies which address local development priorities.
102. District administration is under the charge of a chief district official, who is also appointed by the Ministry of Interior and reports to the governor. Ministerial staffs based at district level serve the same function as their respective provincial offices and report to the chief district officials and their provincial chiefs respectively.
103. This system described above is called ‘provincial administration system’.
104. The Ministry of Interior is also responsible for the Provincial Electricity Authority (PEA), which is a government enterprise primarily concerned with the generation, distribution, sales and provision of electric energy services to the business and industrial sectors as well as to the general public in provincial areas. The PEA's three major objectives are: 1) to continue to improve its provision and distribution services of electric energy for customers, to achieve the highest possible level of sufficiency, efficiency and reliability in power distribution commensurate with safety practices, to meet the timely need of customers; and to keep pace with changing circumstances (this includes expansion of grid lines and selling of electricity to clients in all provinces across the country except Nontaburi, Samutprakarn and Bangkok), 2) To optimize its business and operations in order to be more profitable and thereby achieve sufficient revenues to facilitate further development, 3) To develop its organizational structure, man power and resources management in order to achieve the highest level of efficiency and effectiveness.
105. Provincial Energy Office (PEO) is a government organization under the office of Permanent Secretary, Ministry of Energy. Its key mandate is to coordinate and provide technical support to the implementation of energy policies/programmes within respective province.
106. A small number of NGOs are also active in different parts of Thailand promoting sustainable energy options. Close to Mae Hong Son province, in Tak Province, The Border Green Energy Team (BGET) is active. The Border Green Energy Team (BGET) provides hands-on appropriate technology training and financial support to village innovators in ethnic minority areas on both sides of the Thai/Burma border. BGET works to increase awareness and practical knowledge regarding renewable energy applications, to promote the use of renewable energy, and to ensure that where these technologies are used, they work as effectively as possible. Specifically, BGET works to identify promising potential micro-hydro sites in Tak province, and to cooperate with villagers and, if necessary, local experts to install micro-hydro systems at these sites. BGET also works to improve the sustainability of the Thai SHS program by conducting training to increase awareness about the warrantees for the components of the solar systems, as well as to train local technicians who will be qualified to perform routine maintenance and troubleshooting of the SHS. Recently BGET established SunSawang which focuses on SHS and solar lanterns.
Local level 107. Thailand’s 76 provinces (75 regional provinces plus Bangkok) are subdivided into districts (amphoe), subdistricts (tambon) and villages (moo bahn). Head of the villages and sub- districts are elected and then confirmed in office by the provincial governor to assist with the work of Department of Public Administration (DOPA) at village and sub-district levels. Chiefs of the village and sub-district receive a small monthly stipend and report to the district officer.
108. As part of the decentralization system, there are local governments which are elective bodies at both sub-district and provincial levels. At sub-district level, there are either Tambon Municipalities or Tambon Administrative Organizations-TAO, depending on population numbers and size of tax revenue. They comprise two elected representatives from each village within the sub-district and are responsible for the planning and administration of locally initiated socio- economic development programmes. More specifically, they are mandated with 31 functions, including resource management and environmental protection. Their income is from local tax revenue and partial subsidy from the central government.
109. The Provincial Administrative Organization (PAO) is another layer of local government, comprising an elected provincial council that functions as a legislative branch, and an executive board. Until 1997 the provincial governor was by law the chief executive of a PAO. The amendment of the Provincial Administrative Organization Act in 1997 established the position of an elected chair-person, who is elected by the councilors. There are 75 councils in the country and thus 75 provincial administrative organizations. The Provincial Administrative Organization represents all rural areas of a province.
Project Implementation 110. The project will be implemented with engagement of key stakeholders from both provincial administration and local government systems. While the day-to-day operation of the project will fall under the responsibility of the project team hired by UNDP, they will be closely supervised by the provincial project board chaired by the governor and comprising representatives of concerned line ministries/agencies at provincial level, PAO, civil society and local educational /research institutes. In addition to supervisory function, the provincial board will facilitate the integration of RE programmes in the provincial development plan based on experiences of the project.
111. Actual implementation of project activities will be joint responsibilities of the project team and the district-based working groups, which are chaired by the chief district officials and comprises representatives of line agencies at district level, TAO or Tambon Municipality, and CSO.
4 Baseline Analysis
Grid connection/access to electricity baseline 112. From all the information above it is clear that a significant number of HH in MHS are not connected to the grid and will never be connected. Around 26,000 - 30,000 HH don’t have access
to electricity at the moment and probably will never be connected (see Figure 16). Off-grid electricity solutions are therefore required to electrify all HH in Mae Hong Son.
113. Currently the government agencies have only plans to connect 183 households to the grid in the next 5 years. There are no other concrete plans to provide off-grid solutions (such as SHS or solar lanterns) to HH in MHS. In addition, given the challenges in realization of off-grid hydropower plants they don’t expect that any off-grid mini- or micro-hydropower plant will be realized in the coming 5 to 10 years. Further it can be assumed that slowly more SHS which were distributed in 2004/2005 will stop functioning, as the equipment is getting older. On average from 2005 till 2014, it is estimated that around 1,250 SHS systems stopped working each year in MHS (from the systems distributed in 2004/2005). Based on this, the baseline grid connection and baseline electrification scenario in MHS are identified as depicted in Figure 19 and Figure 20.
Figure 19: Baseline scenario: grid connection rate
Figure 20: Baseline scenario: electrification rate27
114. In Figure 19 and Figure 20 it can be seen that access to the grid will hardly increase in the coming years, while the actual electrification rate will go down due to SHS which stop
27 For figure 20, it is assumed that the annual number of SHS breaking down per year is 1,260 before 2014 and after 2014 around 600 per year. Further it is assumed that around 1,500 SHS systems will keep on functioning after 2019.
functioning. Given the high number of HH without access to the grid or electricity, the project should work on increasing access to electricity in the province. Technologies which suit this purpose include: off-grid micro-hydro, rehabilitation of SHS and solar lanterns.
Electricity supply and demand baseline 115. The electricity baseline scenario for the coming years concerning maximal grid capacity is depicted in Figure 21.
Figure 21: Baseline scenario for grid capacity and demand28
116. The government stakeholders in MHS indicate that full self-reliance is probably not feasible the coming years. There is currently not sufficient generation capacity to meet the demand at all times and demand is slowly growing. The current peak demand is around 22 MW (during the dry and hot season). During the rainy season this demand can be met by the installed hydropower plants in MHS. The grid connection with the main grid in Chiang Mai will support a stable grid and possibly MHS can sometimes supply electricity to the main grid. During the dry season however, the hydropower plants can’t operate at full capacity and the installed fossil fuelled power plants in MHS need to supply additional electricity. In addition, import of electricity from the main grid in Chiang Mai is required. The government expect that demand will grow quicker than the current 2.5 to 5%, once the road connection with Burma will improve. This road connection will increase economic activity in MHS and with that electricity use. Another reason why demand can probably not be met by supply is that in the last couple of years, the amount of water available for the hydropower plants have been decreasing. In addition, weather patterns have changed; there are more peaks with high rain fall and longer periods with droughts. So the hydropower plants cannot operate at full capacity. The annual average capacity of the hydropower plants is estimated at 60 to 70%, depending on the local situation. This means that sometimes in the dry season plant capacity can go down to as low as 30%.
117. In the rainy season there are problems with the supply of electricity in case landslides and falling trees damage the transmission lines, causing blackouts in Mae Hong Son.
28 For the baseline scenario it is assumed that all energy generation capacity as presented in Figure 13 will be realized. In addition an electricity demand growth rate of 2.5% per year is assumed (this is the current annual growth rate).
118. The supply of electricity from the main grid and from the fossil fuelled power plants during the dry season should be reduced and replaced with renewable energy when and where possible. The project should therefore look at technologies like solar rooftop (which provide electricity mainly during the dry season), solar farms and energy efficiency interventions.
Cooking fuels (ICS and biogas) 119. More than 65% of the households in MHS use firewood for cooking. Given the importance of forests in the region and the annual haze problems from forest burning, it is important to ensure that biomass sources are used as efficiently as possible and forests are protected. The project should therefore look at technologies such as biodigesters (for households, farms and schools) and improved cookstoves (preferably using agricultural waste products).
120. The livestock department of MHS is planning to support a project of Princess Sirinthorn to support schools in remote/difficult to access areas and to provide them with biodigesters to generate biogas for cooking. With the currently available resources from the government in MHS around 25 biodigesters will be installed at schools.
Part 2: Strategy
5 Design Principles and Strategic considerations
121. Information on Project Rationale and Policy Conformity, Country Ownership: Country Eligibility and Country Drivenness can be found in the original project document.
122. During this second phase of the project very limited financial resources are available. The project need therefore be very strategic in which activities it focuses on. Also the geographic locations where the project can work will be limited, in particular as the geographic conditions in Mae Hong Son province are challenging (mountainous and forest areas). The project therefore concentrates its efforts in three locations, in the North and South of Mae Hong Son and Muang Mae Hong Son (where the government offices are located). Surrounding areas can learn from the lessons learned in these areas. In this way the largest number of beneficiaries can be reached.
123. In accordance with the recommendations from the MTR, the second phase of the project will focus more on off-grid areas as the highest need and potential for renewable energy solutions are found in these areas, while the project will focus to a lesser extent on on-grid solutions.
124. The project will focus on establishing models which can serve as an example for other locations. Basically it will try to pave the way for others. E.g. for off-grid hydropower, it will try to establish a procedure to obtain permission from the authorities to operate these plants by local villagers in protected areas. Once the procedure is established and all stakeholders went through it once, others can follow. There are insufficient resources available to upscale the activities. Similarly, by introducing a model and showing how it can work regarding solar lanterns and a business model for SHS rehabilitation, others can follow.
125. There are several types of renewable energies which can be used in Mae Hong Son. However, resources are limited. In terms of renewable energies to realize on the ground, the stakeholders expressed the wish to work on as many renewable energy technologies as possible. To keep a balance between the preferences of the stakeholders and the limited resources, it was decided to focus on: 2 off-grid hydro, 1 solar farm, solar rooftop, SHS rehab & solar lanterns, biodigesters and ICS.
6 Project Goal, objective, outcomes and outputs
126. The Project Objective is “To overcome barriers to the provision of Renewable Energy (RE) services in integrated provincial renewable energy programmes in Thailand”. This will contribute to the broader Goal of reducing GHG emissions in Thailand. Importantly, it will also contribute to the Goal of Thailand’s GEF strategy, which is to mobilize GEF resources in support
of the implementation of Sufficiency Economy principles, as enshrined in the 10th National Economic and Social Development Plan.
Project Outcome, Outputs and Activities
127. In order to realize the project objective, the project was designed to comprise of four components, each of which addressing a specific category of barriers to renewable energy development in MHS. The project components and outputs for the remaining period of the project are: Component 1: Strengthened institutional, organizational and social capacity results in planning, management and implementation of integrated RE programmes in MHS o Output 1.1: Strengthened capacities, mobilization and co-ordination mechanisms for integrated RE planning in MHS Component 2: Financially sustainable RE systems operational in MHS o Output 2.1: Awareness raised of all stakeholders involved in RE projects regarding social, economic and environmental costs and benefits of RE systems o Output 2.2: Grid-linked RE systems established consistent with integrated provincial development plans o Output 2.3: Off-grid renewable energy electrical systems to local communities established o Output 2.4: Non-electrical renewable energy promoted Component 3: Technical support is available locally for the development, management and maintenance of RE applications in MHS o Output 3.1: Completed trainings in maintenance and repair of RE systems Component 4: Policies facilitate up-scaling and replication of RE systems in Thailand. o Output 4.1: Lessons learned documented and disseminated to policy makers and included in national policies o Output 4.2: Centre of learning in MHS promoting RE as part of the Sufficiency Economy established
128. The MTR recommended that the project activities will be more focussed around certain technologies. This recommendation was taken over and included in the project document. Therefore below the activities of the project are described per technology. For reference the same activities are presented in annex V per component, as per the outcome/output structure. In the below description of activities, in the first column it is indicated in what component the activity falls.
129. Some of the outputs formulated in the original document were merged based on the recommendations of the MTR and because of budgetary reasons. The outcome/output structure can also be seen in annex V. In chapter 8 the exact changes to the outputs and activities are described.
130. The technology focussed approach has 7 items: 1. Off-grid micro-hydropower 2. On-grid solar farm
3. SHS rehabilitation and solar lanterns 4. Improved cookstoves 5. Provincial integrated RE planning 6. Solar rooftop and Energy Efficiency measures in government buildings 7. Biodigesters
1. Off-grid Microhydro 131. The activities related to off-grid micro-hydro will try to overcome the barriers in MHS and other provinces in Thailand for the realization of these systems. The main barriers are 1) the legal barriers for obtaining permission to construct and operate a micro-hydro power plant in protected areas, 2) the organisation & capacities of communities to manage and operate these plants.
132. The activities will try to identify a legal process/procedure to obtain permission to construct and operate these plans and to work out a model for communities to operate and maintain these plants. Both the legal procedure and the community model will serve as an example for other locations in Thailand. The lessons learned and the identified procedures/models will carefully be documented and shared with governmental agencies, communities and fed into the policy making process at central level. 133. The project aims to work at two locations, one in the North of Mae Hong Son and one location in the South. In this way most communities can see an example not too far away.
134. The envisaged activities include:
Means of Indicator: Result by which year: verification:
Output no. Output
Outcome no. Outcome Outputs & activities 1. Micro-hydropower
List of potential locations for micro-hydro made (based on available info), selection criteria established, selection of 2 No. of demonstration sites 2 demonstration sites selected Project demonstration sites completed (incl. verification of existing selected by end of Q2 2014 reports 2 1.1 info) and plan for each site prepared. For each demonstration site, at No. of preparatory meetings Project Preparatory meetings to familiarize/train the communities least 5 preparatory meetings with communities organised reports 2 1.2 on micro-hydro power organised organised by Q4 2014 No. of technical designs 2 technical designs and financial Project Technical design for 2 microhydro demonstration sites completed and financial closures achieved by end of Q3 reports 2 1.3 prepared, including financial plan/financial closure closures achieved 2014 2 permissions to build and Permission to realize mini-/micro-hydropower plant No. of permissions to build operate the mini/micro- Project obtained from Forestry Department (Forestry Department and operate the plants hydropower plants obtained by reports leads and obtains internal permission and liaise with other obtained 2 1.4 government agencies) end of Q4 2014 2 villages fully prepared to No. of villages fully Village technicians trained on micro-hydro, management operate and manage mini- Project prepared for operation and plan & user rules & payment scheme developed and /micro hydro power plants by reports maintenance of plants 3 1.5 supported by villagers end of Q2 2015
Technical support in realisation of two micro-hydro power No. of plants commissioned 2 plants commissioned and Project 2 1.6 plants. and operational operational by end of Q2 2015 reports No. of plants operating 2 plants operating sustainably sustainably with regular Project with regular maintenance by Maintenance of mini-/micro- hydropower plants carried out maintenance and reports end of Q4 2015 3 1.7 and a sustainable model achieved sustainable financial model
2. On-grid Solar Farm 135. The activities related to a solar farm will try to overcome the barriers in MHS for the realization of these systems in a way that benefits are shared with communities and government agencies. In Thailand solar farms are being established by the private sector. However, hardly any benefits go to the local communities. For this solar farm a PPP structure will be worked out in which local government, private sector and communities can work together. In addition, the solar farm will address the electricity shortages in the province, especially during the dry season. It will also contribute to stabilizing the grid, as it is a remote grid.
136. The activities will try to identify a legal structure to effectively operate the solar farm and share the benefits with local organsiations and communities. Both the legal structure and the PPP model will serve as an example for other locations in Thailand. The lessons learned and the identified procedures/models will carefully be documented and shared with governmental agencies, communities and fed into the policy making process at central level.
137. The envisaged activities include:
Means of Indicator: Result by which year: verification:
Output no. Output
Outcome no. Outcome Outputs & activities 2. Solar farm Assessment of potential locations for solar farm Location of solar farm 1 site selected by end of Q4 carried out, selection criteria established, selection of selected and plan Project reports 2014 2 2.1 1 site completed and plan prepared prepared Technical design and Project reports, Technical design and feasibility study completed feasibility study Feasibility study and technical design prepared for feasibility study for solar farm by end of Q4 and technical 2 2.2 solar farm 2014 design All legal permissions to Legal permissions Project reports, All required legal permissions for construction and construct and operate solar obtained legal permissions 2 2.3 operation of solar farm obtained, including PPA. farm obtained by Q1 2015 Study tour organized by Q1 study tour organized Project reports 1 2.4 Study tour to solar farm in other province organized 2015 Project reports, Financial closure and Financial closure by end of Financial closure of solar farm achieved including signed agreements signed Q1 2015 2 2.5 agreements signed with all partners agreements Team of technicians trained Technicians trained to maintain and operate solar Training of technicians to operate and maintain Project reports 3 2.6 farm solar farm by Q3 2015 solar farm commissioned Commissioning of solar and operational by end of Project reports farm 2 2.7 Solar farm commissioned and operational Q4 2015
3. SHS rehabilitation and solar lantern 138. The activities related to the rehabilitation of solar home systems and establishing a market for solar lanterns will try to overcome the barriers in MHS for the realization of these systems. In 2004/2005 many solar home systems were distributed in the North, but only around 1/3 is still operational and hardly any after sales service is available. In the project, a rehabilitation business model will be introduced, which would provide after-sales service and guaranteed service. Most solar panels can still be used, but the inventor and charge controller often need to be replaced. Solar lanterns are not yet been sold in Mae Hong Son, although they would offer a very good solution for the lighting challenges. Households do spend a considerable amount on
candles (often around 200 to 300 baht per month), so solar lanterns offer a good and financially attractive alternative. There are more than 26,000 households in MHS without access to the grid or any other source of electricity. The activities under this component will try to establish a business model and technical solution to address this.
139. The business model established will serve as an example for other locations in Mae Hong Son and other remote provinces in Thailand. The lessons learned and the identified models and experiences will carefully be documented and shared with governmental agencies, communities and fed into the policy making process at central level.
140. The envisaged activities include:
Means of Indicator: Result by which year: verification:
Output no. Output
Outcome no. Outcome Outputs & activities 3. SHS rehab and solar lanterns 4 (sub-)district meetings by Familiarisation/planning workshops on solar systems end of 2014, and 2 (sub- at district level and sub-district level organised, incl. No. Of familiarisation )district meetings by end of 2 3.1 selection of (sub-)districts to work. workshops Q2 2015 Project reports Preparatory meetings to familiarize/train the 5 villages by end of 2014, communities on solar systems organised, incl. selection No. Of community and 5 villages by end of Q2 2 3.2 of villages to work preparatory meetings 2015 Project reports Marketing solar demo-systems installed and No. Of marketing demo- 5 by end of 2014, and 5 by 3 3.3 operational systems end of Q3 2015 Project reports 1 flyer detailing benefits and 1 instruction material Promotional materials detailing benefits and on how to use SHS and 1 operational instructions of solar systems developed No. Of promotional instruction material for SL 2 3.4 and disseminated materials by Q3 2014 Project reports Functioning credit Credit mechanism to support sales of solar systems mechanism with more than Project reports, (SHS and solar lanterns) in MHS province established Functioning credit 95% repayment rate by end customer 2 3.5 and operational mechanism of 2014 and 2015 reviews Support mechanism Financial support mechanism (to lower solar system available for each costs - subsidy) established for each community/sub- community where solar district (options: TAO, project, CSR by private Support mechanism systems are rehabilitated & 2 3.6 companies) operational sold (by 2014 and 2015) Project reports
Trainings of village technicians on solar systems carried No. Of trainings of village 5 by end of Q1 2015 and 5 3 3.7 out (incl. Regular refreshments) technicians by end of Q3 2015 Project reports 25 systems by end of 2014, additional 50 systems by end of 2015 and additional SHS rehabilitation service established in MHS province 25 systems by end of Q2 2 3.8 and taking place at significant scale No. Of SHS rehabilitated 2016 Project reports 50 by end of Q4 2014, and additional 100 by end Q4 Solar lantern sales points established and sales takes 2015 and additional 50 by 2 3.9 place at significant scale No. Of solar lanterns sold end of q2 2016 Project reports Studytour to Tak province on SHS/solar lanterns Study tour organized by Q1 1 3.13 business model SunSawang organised Study tour organized 2015 Project reports
4. Improved Cook stoves 141. The activities related to improved cook-stoves will try to overcome the barriers in MHS related to the use of agricultural waste products for cooking. Agricultural waste products are abundant in Mae Hong Son but villagers are not inclined to use those. Rather wood logs,
sometimes even teak wood, are used for cooking. Under this component research will be carried out to identify the most suitable improved cook-stove model for the different hill tribes as well as urban/rural areas. Each hill tribe has its own customs, live in different circumstances and has different agricultural waste products available, so tailor made solutions will need to be found. In addition awareness will be raised regarding forest conservation and use of wood for cooking. The activities will be implemented in close cooperation with the Provincial Energy Office, which has a program on improved cookstoves.
142. The experiences with the different types of improved cookstoves will serve as an example for other locations in Mae Hong Son and other remote provinces in Thailand. The lessons learned and the identified models and experiences will carefully be documented and shared with governmental agencies, communities and fed into the policy making process at central level.
143. The envisaged activities include:
Means of Indicator: Result by which year: verification:
Output no. Output
Outcome no. Outcome Outputs & activities 4. ICS Available ICS models in Thailand and other countries using agricultural waste products as fuel identified ICS models identified and ICS models identified and 3 4.1 and procured procured procured by Q2 2014 Project reports 10 households tried out different ICS under different No. of households in which circumstances (different hill Available ICS models tried out in rural households in ICS models were tried out tribes) with fully different circumstances (and tribes) and experiences and experienced fully documented experiences by 3 4.2 documented in detail (research stage) documented Q4 014 Project reports Most suitable ICS models selected and designs Improvements of designs Improved designs of ICS by 3 4.3 improved (if required) completed Q2 2015 Project reports 100 households reached by No. of households reached awareness campaign by Q2 2 4.4 Awareness campaign on ICS implemented by awareness campaign 2015 Project reports No. of villages in which trial out of ICS was 5 villages by Q4 2014 and 5 2 4.5 Trial out of ICS in villages implemented (Pilot stage) conducted villages by Q4 2015 Project reports 2 4.8 Community worker on ICS Support to activities - Project reports
5. Provincial integrated RE planning 144. The activities under this component try to overcome the barriers in MHS related to the integrated planning of renewable energy solutions. There are many different agencies involved in renewable energy and coordination is often lacking. Also clean energy is not systematically included in the provincial development plan. Capacities of government agencies involved will be enhanced to enable them to integrate renewable energy issues in the provincial development plan. But not only inclusion in the plan is an objective, also follow up actions to propose new renewable energy systems and fund these proposals are being supported.
145. The experiences with the integrated renewable energy planning will serve as an example for other locations in Thailand. The lessons learned and experiences will carefully be documented
and shared with governmental agencies, communities and fed into the policy making process at central level.
146. The envisaged activities include:
Means of Indicator: Result by which year: verification:
Output no. Output
Outcome no. Outcome Outputs & activities 5. Provincial integrated RE planning Project reports, TA provided to follow up and implement the No. of workshops and 1 meeting in 2014 and 1 workshop 1 5.1 provincial renewable energy plan coordination meetings workshop in 2015 materials 2 projects proposed for 2015 budget by Q3 2014, 2 Renewable energy projects proposed by government No. of projects proposed projects proposed for 2016 1 5.2 agencies in line with provincial plan by government agencies budget by Q2 2015 Project reports Project reports, Materials for learning Materials for learning materials for 4 5.3 Materials to be used in learning centre prepared centre centre prepared by Q2 2015 learning centre Management plan for learning centre prepared Management plan for learning centre prepared and and agreed upon by Q3 4 5.4 agreed upon Management plan 2014 Project reports Each year 4 Provincial Board 1 5.5 Provincial Board meetings on RE organized Board meetings held meetings organized Project report Each year 4 district meetings organized in 2 areas, total 8 meetings per 1 5.6 District meetings on RE organized District meetings held year Project reports WS to share all lessons learned with the national level WS on policy linkages (policy linkages) incl. publication of lessons learned WS organized and report organized in Q1 2016 and 4 5.7 report. published report published in Q4 2015 Project reports 2 national steering National Steering committee meetings per 4 5.8 National Steering Committee meetings Committee meetings held year Project reports 1 5.9 Visits to RE sites for gov. staff organised Visits organized Visits to sites by gov. staff Project reports General advice on RE 1 5.10 General RE advice Advise provided provided Project reports
6. Solar rooftop and energy efficiency measures in government building 147. The activities related to solar rooftop and energy efficiency measures in a government building will try to overcome the barriers in MHS for the realization of these systems. SMEs, households and government officials are not aware about the advantages of installing solar rooftop systems, the procedures which have to be followed to get approval or how to access the available incentive schemes of the government. To project will provide support to these organisations and will help them along the way, from design, getting approvals, financing till commissioning and maintenance. Also implementing energy efficiency measures has the attention of the government, but again they don’t know how to do this. The project will provide support to the implementation of EE measures in 1 government building. Once the knowledge is built in MHS, other SMEs/households/government offices can follow.
148. The lessons learned and the identified procedures will carefully be documented and shared with governmental agencies, communities and fed into the policy making process at central level.
149. The envisaged activities include:
Means of Indicator: Result by which year: verification:
Output no. Output
Outcome no. Outcome Outputs & activities 6. solar rooftop and EE measures in gov. building Awareness campaign on DEDEs incentive scheme for Project reports, solar rooftop implemented (incl. explanation of Awareness campaign campaign 2 6.1 incentive schemes) Awareness campaign implemented by Q4 2014 materials Feasibility study and technical design of solar rooftop scheme and EE measures in government building Feasibility study on solar study completed by Q4 Project reports, 2 6.2 completed rooftop and EE measures 2014 feasibility study Approval and financing of solar rooftop scheme and EE Project reports, measures in government building achieved (support Approval for EE measures approval achieved by Q1 approval 2 6.3 during entire process) and solar rooftop achieved 2015 documents Solar rooftop scheme and EE measures in government building implemented (support during whole process, Solar systems and EE Systems operational by Q3 2 6.4 permit, commissioning, etc.) measures operational 2015 Project reports Support to individuals/SMEs in permit applications, Solar rooftop systems on procurement and installation of solar rooftop systems individual houses/SMEs 10 SHS on household 2 6.6 (technical support during whole process) realized roofs/SME roofs realized Project reports
7. Biodigesters 150. The activities related to biodigesters will try to overcome the knowledge barriers in MHS for the realization and maintenance of these systems. SMEs and households are interested in biodigesters, but don’t know how to assess whether it is feasible for their particular situation and how to construct and maintain it. In addition, the project will support the biodigesters which recently were built under a project supported by Princess Sirindhorn in the maintenance and trouble shooting.
151. The lessons learned will carefully be documented and shared with governmental agencies, communities and schools.
152. The envisaged activities include:
Means of Indicator: Result by which year: verification:
Output no. Output
Outcome no. Outcome Outputs & activities 7. Biodigesters 10 locations identified by Q3 Awareness campaign and identification of suitable 2014, 10 locations identified Project 2 7.1 locations for biodigesters No. of locations identified by Q1 2015 = total 20 reports Users (farms, SMEs) trained in operation and 20 users trained; 10 by Q4 Project 3 7.2 maintenance of biodigesters No. of trainings provided 2014 and 10 by Q2 2015 reports 10 biodigesters operational by Q4 2014 and 10 additional Realization of biodigesters biodigesters operational by Q3 Project 2 7.4 TA for construction and operation of biodigesters at SMEs/farms 2015 reports Assistance in maintenance and trouble shooting of biodigesters installed during project of princess Trouble shooting carried Project 2 7.5 Sirinthon out Trouble shooting carried out reports 10 biodigesters operational by 20 Biodigesters installed and operational at farms and No. of biodigesters Q4 2014 and 10 biodigesters Project 2 7.6 SMEs, involvement of gov. officials/travel costs operational operational by Q3 2015 reports Feasibility assessed of Technical support for assessment of feasibility of Technical support SMEs/hh interested in building Project 2 7.7 digesters including permits etc. mechanism established biodigester reports
Alternative scenario
153. As described earlier, the scale of the activities will be limited, due to budget constraints. The project focusses on establishing models and procedures, which can be followed by others. All the lessons learned will be documented carefully.
154. The project will not work on supporting grid connections. So there is no alternative scenario in this regard.
155. The project will provide access to electricity for households which did not have access to electricity previously. It is estimated that around: 2*100 hh (2 microhydro power plants of 30 kW each can reach 2 * 100 households) + 100 rehabilitated SHS + 200 solar lanterns = 400 households will get access to electricity during the project and as direct result of the project interventions.
156. The supply of grid-connected renewable energy in Mae Hong Son will increase with 500 kW (due to the realization of a solar farm) during the project and as direct result of the project interventions.
157. In terms of clean cooking fuels, during the project around 20 households will get access to biogas and improved cookstoves using agricultural waste products will be tried out in 50 households.
7 Key indicators, risks and assumptions
158. The project success indicators are shown in the Project Results framework in Section III below of this document. These form part of the parameters that will be monitored during the course of the project implementation. The target values for these indicators, based on the PPM, are summarized in Section III.
159. At the end of the second phase of the project, the following are the expected outcomes on the ground: 1 on-grid solar farm project approved, installed and operational (500 kW); 100 SHS rehabilitated (100*120 Wp); 200 solar lanterns sold (200*2.5W); 20 additional biodigesters at schools, SMEs and farms installed and operational; 2 off-grid hydropower plants approved, installed and operational (2 * 30 kW); 10 solar rooftop systems approved, installed and operational (10 * 200 W); 1 EE project in gov. building approved, implemented and operational (RE capacity 600 W savings); 10 villages in which ICS have been tried out and being used in MHS by end of 2016 (50 systems). Direct reduction of GHG emissions due to operation of these systems is about 14,216 tonnes CO2.
160. The different risks that were identified during the project formulation and the recommended mitigation measures and comments on the need for mitigation measures are provided in detail in Annex IV. These are mainly those with risk levels rated medium.
8 Sustainability and replicability
161. The project will have a strong knowledge management element. Project activities will be implemented and systematically documented with the engagement of key stakeholders to ensure that the knowledge generated from implementing RETs schemes/activities is well understood and appreciated by key stakeholders who will replicate the activities under the regular government budget after the project ends. One core activity to ensure the project sustainability is the integration of RE needs into provincial development and operational plan by line agencies sitting on the project board. Additionally, RE demonstration and learning centre will be established in Mae Hong Son town to provide information and demonstrations on RETs, especially those successfully implemented by the project. Materials such as guideline for RET implementation will be made available to interested agencies, NGOs, schools and general public.
Part 3: Project Results Framework
Project results framework (For the remaining period of the project)
Indicator Baseline Targets Source of Assumptions End of Project verification Overall Goal: The reduction of GHG emissions in Thailand Project Objective: . Increase of power . RE power . By the end of the project RE . Project Reports, . Economic growth in the country To overcome barriers generation capacity generation power generation capacity in DEDE statistics will continue to the provision of and usage from RE capacity in MHS MHS amounts to 29,720 MW (on Renewable Energy systems in MHS both amounts to 29,220 grid) and more than 315 kW (off- . Government support for RE (RE) services in on-grid and off-grid MW (on grid) and grid). Additional RE power development and utilization will integrated provincial . Models for RE 255 kW (off-grid). generation capacity of 500 kW not change renewable energy generation & . No new models for (solar farm) and 60 kW (off grid programmes in application which can RE generation & hydro) and several solar Thailand be replicated in other application. applications realized. areas demonstrated. . At least 3 new models for RE generation & application developed and operational. Models ready to be replicated in other areas (hydro, solar and biodigesters) Outcome 1: Strengthened . No. of RE projects institutional, . Continued government support proposed by . At least 2 RE projects proposed organizational and . 0 for RE government agencies by government agencies in line social capacity . Project reports, in line with provincial with provincial plan results in planning, meeting . Capacity of government does plan . At least 3 management models management and reports not substantially delay . No. of working RE established (off-grid hydro, implementation of . 0 approval of RE policies and RE management models biodigesters, solar) integrated RE projects established programmes in MHS
Outcome 2: . 3 . 1 additional on-grid solar farm . Continued government support Financially project approved, installed and and support from communities sustainable RE . No. of on-grid solar operational in MHS by end of for RE systems operational farm projects 2016 (capacity 500 kW). in MHS approved, installed and . Capacity of government and operational in MHS by . 0 . 100 SHS rehabilitated in MHS by communities does not end of 2016 end of 2016 (100*120 Wp) . Project reports, substantially delay approval of . No. of SHS approval RE policies and implementation rehabilitated in MHS by . 0 . 200 solar lanterns sold in MHS by documents, of RE projects end of 2016 end of 2016 (200*2.5W) surveys
Indicator Baseline Targets Source of Assumptions End of Project verification . No. of solar lanterns sold in MHS by end of . 10 . 20 additional biodigesters at 2016 schools, SMEs and farms . No. of biodigesters installed and operational in MHS installed at schools, by end of 2016 with support from SMEs and farms in project (average size 8 m3) MHS by end of 2016 with support from . 0 . 2 off-grid hydropower plants project approved, installed and . No. of off-grid micro- operational in MHS by end of hydropower projects 2016 (2 * 30 kW). approved, installed and operational in MHS by . 0 . 10 solar rooftop systems end of 2016 approved, installed and . No. of solar rooftop operational in MHS by end of installations approved, 2016 (with support from the installed and project) (10 * 200 W) operational in MHS by . 0 end of 2016 . 1 EE project in gov. building . No. of EE projects in approved, implemented and gov. buildings operational in MHS by end of approved, 2016 (RE capacity 600 W implemented and savings) operational in MHS by . 0 end of 2016 . 10 villages in which ICS have . No. of villages in which been tried out and being used in ICS have been tried out MHS by end of 2016 (50 systems) and are being used in MHS by end of 2016 Outcome 3: Technical . 0 . 4 village technicians trained to . Project reports, . Continued government support support is available . No. of village operate and maintain off-grid training for RE locally for the technicians trained to hydropower plant by end of 2016 evaluations development, operate and maintain . Capacity of government does management and off-grid hydropower not substantially delay approval maintenance of RE plants . 0 . 10 village technicians trained to of RE policies and RE projects applications in MHS . No. of village maintain rehabilitated SHS by technicians trained to end of 2016 maintain rehabilitated SHS . 0 . 2 government technicians trained . No. of technicians . 0 on EE measures and solar trained on EE rooftop installation
Indicator Baseline Targets Source of Assumptions End of Project verification measures and solar rooftop installatino . 0 . 20 users of biodigesters trained . No. of users trained in to operate and maintain the the operation and systems maintenance of biodigesters . Improved design for ICS suitable . An improved design of for MHS finalized an ICS suitable for situation in MHS Outcome 4: Policies . Documented and . 0 . By end of 2016 all lessons . Sufficient annual facilitate up-scaling published learned documented and replenishment of RE and replication of RE experiences/lessons published development and investment systems in Thailand learned from all funds technologies . Centre of learning approved and . Project reports, implemented by end of operational by end of 2016 . Capacity of government does Centre of 2016 . At least 2 guidelines for not substantially delay learning . Centre of learning . 0 replication published e.g. a) on approval of RE policies and RE reports and approved and management models for off-grid projects lessons operational in MHS by . 0 applications b) incentive learned report. end of 2016 schemes/financial model for RE . Guidelines published . No. of lessons learned . At least 2 important lessons included in policy . 0 learned included in policy making making at central level at central level
Annex I: CO2 emission reduction calculations
163. The below emission reductions figures are estimates based on the anticipated project interventions. Once the interventions are finalized (and for example the exact capacities of the systems are determined), the below calculations need to be updated.
164. Direct emission reductions are calculated by assessing the emission savings attributable to the investments made during the project’s supervised implementation period. In accordance with the guidance in the GEF GHG emissions manual, direct emission reductions can be calculated by multiplying the displaced demand for thermally produced energy (measured in kWh or MWh) by the corresponding emissions factor of the marginal technology that would supply the on- grid electricity in lieu of the project.
CO2 direct = E * C
Where;
E = cumulative energy saved or substituted
C = CO2 intensity of the marginal technology or electricity saved
The direct emission reductions are calculated as follows:
3) SHS/solar lanterns in off grid areas
No. of SHS systems rehab 100 # Capacity of each system 120 W 1) Off-gird mini-/micro- hydropower Operating hours per day 5.0 hours
Lifetime 5 years No. of systems 2 # Emission factor system Capacity of each system 30 kW providing same service (diesel Load factor 60% grid taken, see CDM methodology AMS I.F) 1.40 t CO2/MWh Lifetime 20 years Conversion factor 0.000001 W to MW Emission factor grid (source TGO/IGES, normal projects) 0.51 t CO2/MWh Days per year 365 days Hours per year 8760 Hours
Conversion factor 0.001 kW to MW No of solar lanterns 200 # Total GHG emission reductions 3217 tCO2 Capacity of each system 2.5 W
6) solar rooftop
No. of SHS systems 10 # Capacity of each system 200 W
Operating hours per day 5.0 hours Lifetime 10 years Emission factor grid (source TGO/IGES, solar projects) 0.55 t CO2/MWh Conversion factor 0.000001 W to MW Days per year 365 days Total GHG emission reductions 20 tCO2
7) EE measure in Gov. building 4) Solar farm (energy savings + RE installation) No. of systems 1 # Capacity of each system 500 kW
Total RE generation capacity Operating hours per day 5.0 hours (or savings equivalent) installed 600 Watt Lifetime 20 years Operating hours per day 5 hours Emission factor grid (source TGO/IGES, solar projects) 0.55 t CO2/MWh Lifetime 10 years Days per year 365 days Emission factor grid (source Conversion factor 0.001 kW to MW TGO/IGES, solar projects) 0.55 t CO2/MWh Days per year 365 days Total GHG emission reductions 10,038 tCO2 Conversion factor 0.000001 W to MW
Total GHG emission reductions 6.02 tCO2 5) Biodigesters
No. of systems at farms/SMEs 20 # Lifetime 3 years Estimated CO2 savings per system per year 3 t CO2/year
# only those supported No. of systems at schools 10 by project
Lifetime 3 years Estimated CO2 savings per system per year (larger systems at schools) 10 t CO2/year
165. The total direct emission reductions are estimated at: 14,216 t CO2.
166. No direct post-project emission reductions are claimed. A small revolving fund/credit mechanism for the rehabilitation of SHS and sales of solar lanterns is set up, but as the emission reductions per systems from SHS rehabilitation and solar lantern sales are very small these emission reductions are not calculated. By doing so, the emission reductions are underestimated.
167. Indirect emission reductions are long-term GHG savings achieved after the GEF project’s completion. The project includes sharing of lessons learned of the activities implemented in Mae Hong Son to other provinces. It is very difficult to quantify those, therefore they are not considered as direct emission reductions. As a conservative approach these emission reductions are being calculated as indirect emission reductions in the bottom- up approach. By doing so, the emission reductions are underestimated.
168. The bottom-up approach for indirect emission reductions aims to calculate how many times the investments made during the project might be replicated and can be calculated using the following formula:
CO2 indirect BU = CO2 direct * RF;
Where;
CO2 indirect BU = emission reductions following the project close, calculated using the bottom-up methodology
CO2 direct = estimate for total direct (including post-project) emission reductions RF = replication factor
169. A suitable replication factor must be determined. The results of the project will be carefully documented and disseminated in Thailand (outcome 4). The default “influence period” of 10 years and the default replication factor for a demonstration project with capacity building is assumed; i.e. 3.
These assumptions mean: CO2 indirect BU = CO2 direct * RF = 14,216 * 3 = 42,648 tCO2e
170. Applying the top-down information, bottom-up methodology for indirect emission reductions is difficult in this particular situation. In this methodology the total market size of the country is taken multiplied by a causality factor. The project is implemented in Mae Hong Son which is unique for Thailand. The barriers for renewable energy generation are high and not applicable to many parts of the rest of the country. For instance Mae Hong Son has many national parks, in which realisation of renewable energy is difficult or not allowed. In addition, the project focusses on off-grid areas. 99% of Thailand has access to the grid, so the situation in Mae Hong Son is not representative for the rest of the country. Therefore the top down information bottom up approach for calculating emission reductions is not considered suitable for this situation.