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Laws in Thailand Promoting Renewable Energy: the Recent Developments (ҤԵ ԷǪ)

Laws in Thailand Promoting Renewable Energy: the Latest Development

Laws in Thailand Promoting
Renewable Energy:
the REcent Developments*

Chacrit Sitdhiwej

I          Introduction

A recent observation argues that the Thai energy laws, varying from the making of national energy policies and plans to the conservation of energy use, can be used to promote renewable energy in three aspects.[1] Firstly, the 1992 National Energy Policy Act empowers the National Energy Policy Council and the Office of Energy Policy and Planning to be responsible for the making and regulating Thailands energy policies and plans, including those of renewable energy. However, it is suggested that the incomplete modification of the component of the National Energy Policy Council under the 2002 public administration reform may create a difficult division of responsibility between the Minister of Energy and the top ranks in the Council of Ministers. As a result, the relevant provision of the Act needs an appropriate amendment.[2]

Secondly, the 1992 Promotion of Energy Conservation Act, which aims at the efficient and economical production and use of energy by providing incentives to those who put efforts into energy conservation measures and providing disincentives to those who fail to comply with such measures, can be used to promote renewable energy, especially by substituting non-renewable energy with renewable energy measures.[3]

Thirdly, the Department of Alternative Energy Development and Efficiency, which is the key state agency in relation to technical aspects and regulation of energy production, transmission and distribution under the 1992 Energy Development and Promotion Act, can play a significant role in renewable energy promotion. In addition, the measures related to regulated energy, if wisely used, can be useful in renewable energy promotion.[4]

This paper discusses the latest developments of the Thai governments initiatives over the above three aspects since last observation.

II       Laws in Thailand Promoting Renewable Energy

Thailand is a country rich in renewable energy sources. The potential renewable energy sources are biomass, biogas, solar electric energy, solar thermal energy and wind energy.[5]

Biomass and biogas sources in Thailand are abundant. As a result, Thailand has high potential for bioenergy use.[6] Wood, agricultural residues and wastes are used for heating in rural areas. Animal wastes are used to produce biogas.[7]

Because of its geographical location and landscape, Thailand has a high potential for solar energy use in terms of concentration and amount of utilisation areas. Approximately 50 per cent of Thailands terrain is exposed to concentrated sunlight all year round.[8] In addition, the eastern and western coasts of southern Thailand have a high potential for wind energy use.[9]

Despite the abundant and potential sources, renewable energy use in Thailand is only 0.5 per cent of commercial energy use.[10]

Before 1992, energy matters in Thailand were administered under the National Energy Act, BE 2496 (1953). In 1992, under an initiative of the coup détat government, the then National Legislative Assembly passed a series of new energy laws to replace the 1953 Act, comprising the laws on national energy policy and planning, promotion of energy conservation and energy development and promotion.

A       National Energy Policy and Planning Law

The national energy policy and planning law of Thailand are administered under the National Energy Policy Council Act, BE 2535 (1992). This Act established the National Energy Policy Council to be responsible for the making of Thailands energy policies and plans. It also established the Office of Energy Policy and Planning as its secretariat.

The Act defines the term renewable energy for the first time in Thai legal history.

1        Official Definition of Renewable Energy

Simultaneously and identically with section 3 of the Promotion of Energy Conservation Act, BE 2535 (1992) and section 5 of the Energy Development and Promotion Act, BE 2535 (1992), section 4 of this Act defines the term renewable energy to include energy obtained from wood, firewood, paddy husk, bagasse, biomass, hydropower, solar power, geothermal power, wind power, waves and tides. All these Acts also define another term that involves renewable energy sources, ie fuel, to include non-renewable, the above renewable energy sources, garbage and synthetic fuel. In addition, the term energy is defined to include renewable energy. As a result, all provisions of the said three Acts apply to renewable energy matters.

2        National Energy Policy Council

Section 5 established the National Energy Policy Council (NEPC), while section 6 provides that NEPC is responsible for the submission of national energy policies and national energy plans to the Council of Ministers, and is also responsible for the monitoring, supervision, coordination, support and expedition of operations of all bodies whose powers or duties are related to energy, including renewable energy, both in public and private sectors, in order that their operations are in accordance with the said national energy policies and plans.

In August 2003, Prime Minister Thaksin Shinnawatra and the Ministry of Energy launched the Energy Strategy for Competitiveness at the Workshop on Energy Strategy for Competitiveness to set out Thailands strategic plans for energy efficiency, renewable energy development, energy security enhancement and Thailand to be the regional energy centre.[11]

Under section 5, the Prime Minister chairs NEPC. Other members include those of high ranks in the administrative branch, ie a Deputy Prime Minister designated by the Prime Minister as Vice-Chairperson, all other Deputies Prime Minister, a Minister Attached to the Office of the Prime Minister designated by the Prime Minister, Minister of Defence, Minister of Finance, Minister of Foreign Affairs, Minister of Agriculture and Cooperatives, Minister of Transport and Communications, Minister of Commerce, Minister of Interior, Minister of Energy,[12] Minister of Industry, Permanent Secretary of the Ministry of Industry,[13] Secretary-General of the Council of State, Secretary-General of the National Economic and Social Development Board, Director of the Bureau of the Budget and Director-General of the Department of Alternative Energy Development and Efficiency.[14]

The Council-of-Ministers-like component of NEPC clearly indicates the importance of energy and NEPC to Thailand. Besides the result of the definition of the term energy, the powers and duties provided to NEPC are broad themselves. As a result, NEPC may include the promotion of renewable energy into the national energy policies and plans, and may make efforts to monitor, supervise, coordinate, support and expedite the operations of all renewable energy related bodies to ensure the harmonisation of their operations and the said national energy policies and plans.

NEPC meetings are often conducted alongside Council of Ministers meetings. On many occasions, the Council of Ministers directly brings into its consideration a number of energy-related policies, plans or projects proposed by competent Ministries or state agencies, rather than waiting until such policies, plans or projects come through the regular bureaucratic lines of command. For example, on 18 May 2004, the Council of Ministers approved the gasohol and bio-diesel development projects jointly proposed by the Ministry of Energy and Ministry of Agriculture and Cooperatives as part of the promotion of alternative energy use to counter the recent oil price crisis in Thailand.[15]

It should be noted, however, that as part of the recent public administration reform in October 2002, there was an attempt to enact a royal decree[16] to amend section 5 to modify the composition of NEPC and to transfer the powers and duties of the Prime Minister in NEPC to the newly established Ministry of Energy,[17] by removing the Prime Minister, all Deputies Prime Minister and the Minister Attached to the Office of Prime Minister, and replacing them with the Minister of Energy as Chairperson of NEPC. However, owing to a concern as to the constitutionality of the delegation of powers in the enactment of the Royal Decree Amending Provisions to be Consistent with the State Agency Organisation Act, BE 2545, BE 2545 (2002), ie the extent to which the Royal Decree could affect the provisions of the Act, the attempt to transfer powers was suspended.[18] As a result, the Prime Minister, Deputies Prime Minister and the Minister Attached to the Office of Prime Minister[19] are still lawful members of NEPC. Thus, oddly, the Prime Minister and Deputies Prime Ministers still hold most powers and duties under this Act whereas the Minister of Energy, who was attempted to exercise such powers and duties, plays no significant role under this Act. Undoubtedly, section 5 needs proper amendment by way of legislation to eliminate such an incomplete and awkward transfer of the aforesaid powers and duties by removing the Prime Minister, all Deputies Prime Ministers and the Minister Attached to the Office of Prime Minister from NEPC, then replacing them with the Minister of Energy as Chairperson of NEPC.

3        Office of Energy Policy and Planning

Section 9 established the Office of the National Energy Policy Council (ONEP) as the secretariat of NEPC. ONEPs powers and duties include the preparation of the national energy policies mentioned above and plans for NEPC. The Secretary-General of NEPC was also established under section 5 generally to supervise the performance of the official affairs of ONEP, whereas section 10 requires the Secretary-General to be responsible directly to the Prime Minister and to be a member and secretary of NEPC. As a result of the 2002 public administration reform, however, ONEP and its Secretary-General have been converted to the Office of Energy Policy and Planning (OEPP) and the Director-General of the Office of Energy Policy and Planning, respectively.[20] In addition to this Act, OEPP is administered under the Ministerial Regulation Organising the Office of Energy Policy and Planning, Ministry of Energy, BE 2545 (2002). Clause 1 provides missions, powers and duties to OEPP similar to those given to NEPC.

In March 2004, OEPP published a report entitled Thailand Energy Policy and Measures, 2546 (2003). This report presents Thailands energy situation in 2003 and projects the 2004 energy trend. Part 4, Energy Strategies: Energy for Thailands Competitiveness, includes the Alternative Energy Development Strategy: A New Opportunity for Thailand. This particular strategy recognises the importance of decreasing Thailands dependency on imported fossil fuel and its adverse impacts on the environment. As a result, and to be inline with the Energy Strategy for Competitiveness,[21]  OEPP has established a goal to increase the use of alternative energy[22] from 0.5 per cent of commercial energy use in Thailand in 2002 to eight per cent by the year 2011. To achieve this goal, OEPP proposes that the following measures should be implemented:

(1)   legislation requiring the renewable portfolio standard (RPS) should be enacted to require all newly built power plants to generate at least four per cent of their electricity from solar or wind energy or biomass;

(2)   incentives promoting power purchase from alternative energy sources, including renewable energy sources;

(3)   research and development of high potential renewable energy sources in Thailand; and

(4)   promotion to the community of share ownership of renewable energy power plants.[23]

In addition, Part 5 of the report, entitled Energy Policies and Measures for 2546 (2003), includes the Very Small Power Producers Purchase Project and Small Power Producers from Renewable Energy Project. Both projects promote small-scale generation and the purchase of electricity from domestic renewable energy sources, such as solar cells, agricultural residues and biogas.

There is also a law on the promotion of energy conservation, the Promotion of Energy Conservation Act, BE 2535 (1992), which can apply to the promotion of renewable energy in Thailand.

B       Promotion of Energy Conservation Law

Energy conservation promotion in Thailand is administered under the 1992 Promotion of Energy Conservation Act. Section 4 empowers NEPC to promote energy conservation. Its powers include the submission of policies, goals or measures related to energy conservation to the Council of Ministers, and the prescription of guidelines, rules and conditions for the promotion and assistance to factories, buildings, producers or distributors of highly energy efficient machineries, equipments or materials used for energy conservation. By virtue of section 3, which defines the term energy to include renewable energy, certain provisions of this Act apply to renewable energy where they are applicable.

As its title denotes, the Act aims to promote energy conservation. Only the regulated factories, regulated buildings, and prescribed machineries, equipments and energy efficient materials are required to implement the given measures. The Act provides incentives in terms of support and assistance to those who comply with the designated energy conservation measures. On the other hand, it provides disincentives to those who fail to comply with the designated energy conservation measures.

Although most of the provisions of the Act are dedicated to energy conservation, particularly the conservation of conventional energy, some provisions are worth exploring in detail as they can be used to promote renewable energy use in Thailand.

1        Energy Conservation in the Regulated Factories

Part 1 of the Act provides energy conservation measures for regulated factories. Section 8 provides that regulated factories shall be prescribed, by royal decree, by either types or sizes of factories, or by quantities or methods of energy use.

The Royal Decree Prescribing the Regulated Factories, BE 2540 (1997) prescribes the factories by quantities of energy use. Section 3 of the Royal Decree provides that, after 120 days of its entry into force, the following organisations were defined as regulated factories:

(1)   a factory or group of factories with an electricity installation of at least 10,000 kW or 11,750 KVA; and

(2)   a factory or group of factories whose electricity, steam heat or any other non-renewable energy consumption is at least two million mega Jules (MJ) of electricity equivalent.

Section 4 of the Royal Decree prescribes additional regulated factories, ie one year after its entry into force, factories in category (1) above whose electricity installation is from 3,000 kW to 10,000 kW or from 3,530 KVA to 11,750 KVA; and factories in category (2) above whose energy consumption is from 60 million to 200 million MJ of electricity equivalent were defined as regulated factories. Sections 5 and 6 prescribe further additional regulated factories two and three years after the entry into force of the Royal Decree, respectively.

As from July 2000, as a result of section 6, the followings are regulated factories:

(1)   a factory or group of factories whose electricity installation is at least 1,000 kW or 1,175 KVA; and

(2)   a factory or group of factories whose electricity, steam heat or any other non-renewable energy consumption is 20 million MJ of electricity equivalent.

Section 3 of the Act defines the term energy conservation as the production and use of energy efficiently and economically, and also defines the term energy as an ability to perform work inherent in the sources capable of generating powers, which are renewable and non-renewable energy, and shall include the sources which may generate powers, such as fuel, heat and electricity.

Section 7 of the Act provides energy conservation measures for the regulated factories. Interestingly, one of the energy conservation measures provided under section 7(4) is the substitution of one type of energy by another type. According to the above definitions of the terms energy conservation and fuel, the substitution of power generated from non-renewable energy by another power generated from renewable energy can be a renewable energy conservation measure. For example, a regulated factory may substitute electricity purchased from diesel power plants, which is a non-renewable energy source, with electricity purchased from hydropower or solar power plants, which are renewable energy sources. As a result, the owners of regulated factories that employ such substitutions of energy benefit from the promotion or assistance provided in Part 5 of the Act, ie an exemption from paying surcharges, grants or subsidies from the Fund for Promotion of Energy Conservation under section 25. Under this section, any successful applicant will be funded grants or subsidies for investment in operation of his/her energy conservation programme, for solving environmental problems resulting from energy conservation programme, for research and development on energy development or environmental protection, or for education, training or conferences with respect to energy.

2        Energy Conservation in Regulated Buildings

Part 2 of the Act provides energy conservation measures for regulated buildings prescribed by royal decree enacted under section 18. Section 18 provides that the royal decree will prescribe regulated buildings by types or sizes of buildings or quantities or methods of energy use.

The Royal Decree Prescribing the Regulated Buildings, BE 2538 (1995) prescribes regulated buildings by quantities of energy use. Section 3 of the Royal Decree provides that the following buildings are regulated buildings:

(1)   a building or group of buildings whose electricity installation is at least 1,000 kW or 1,175 KVA; and

(2)   a building or group of buildings whose electricity, steam heat, or any other non-renewable energy consumption between 1 January and 31 December of each year is at least 20 million MJ of electricity equivalent.

Section 17 of the Act provides a number of energy conservation measures for regulated buildings. However, none of these measures provides for renewable energy use in regulated buildings, in particular, the energy substitution measure as provided for regulated factories under section 7. As a result, the owners of regulated buildings that employ such substitutions of power generated from non-renewable energy by power generated from renewable energy in regulated buildings are not eligible for the promotion or assistance provided in Part 5, from which the owners of regulated factories benefit.

It may be argued that the Act does not provide an energy substitution option for regulated buildings like that for regulated factories because probably owing to lack of appropriate renewable energy technologies it is unlikely that the owners of regulated buildings would put much effort into substituting conventional energy sources with such renewable energy resources.

3        Energy Conservation in Machineries, Equipments and Highly Efficient Materials

Section 23(1) of the Act empowers the Minister,[24] under a recommendation from NEPC, to issue a ministerial regulation prescribing any machinery or equipment by types, sizes, quantities of energy use, energy consumption ratio or energy efficiency, as highly efficient machinery or equipment, or prescribing any material by types, quality and standards, as highly efficient material. By virtue of section 23(2), any producer or distributor of such prescribed machineries, equipments or highly efficient materials is eligible to apply for promotion or assistance under section 40.

Unfortunately, no ministerial regulation prescribing highly efficient machineries, equipments or materials has been issued. As a result, no one has been eligible for promotion and assistance through this measure.

4        Fund for Promotion of Energy Conservation

Section 24 of the Act established the Fund for Promotion of Energy Conservation (FPEC) in the Ministry of Finance. Section 27 established the FPEC Committee to administer and manage FPEC. Section 25 provides that the use of FPEC will be limited mainly to energy conservation and to solving problems resulting from energy conservation, but not resulting from renewable energy use or development. Fortunately, section 25(3)(d) distinctively provides that FPEC can be used for studies, training or conferences related to energy, including renewable energy. As a result, FPEC is able to play a significant role in the promotion of renewable energy. It can be used to provide grants or subsidies for any study, training or conference related to renewable energy promotion.

5        Promotion and Assistance Measures

Part 5 of the Act provides the promotion and assistance benefits as incentives to those who put their efforts into achieving the designated energy conservation measures. Section 40(1) provides that any regulated factory or building that is required to establish an energy conservation programme and is required to acquire machineries, equipments, tools, articles and materials essential for such a programme, or any producer or distributor of highly efficient machineries or equipments or materials used in energy conservation, is eligible to apply for exemption from paying surcharges, grants or subsidies from FPEC under section 25. Section 40(2) further provides that any owner of a factory or building and any state agency that is not required to establish an energy conservation programme, but desires to acquire machineries, equipments, tools, articles or operation control systems of its own for the purpose of energy conservation, is also eligible to apply for promotion and assistance measures under section 40(1).

Sections 35, 36 and 37 require all petroleum producers or petroleum importers for domestic consumption and those who purchase or obtain gas from any concessionaire who produces such gas from the separation of natural gas to send contributions to FPEC at the rates prescribed by NEPC. Under section 58, those who fail to send such contributions are subject to imprisonment for between three months and two years, or a fine of 100,000 to 10,000,000 Thai Baht, or both.

6        Surcharges and Promotion of Renewable Energy

Part 6 of the Act provides for the imposition of surcharges as a disincentive to those who fail to comply with the designated energy conservation measures. Section 42 requires owners of regulated factories or regulated buildings that violate or fail to comply with the ministerial regulation issued under section 9 or 19 to pay surcharges. These surcharges apply to electricity consumption generated either from non-renewable or renewable energy sources.

Section 9 requires owners of regulated factories to conserve energy, and audit and analyse energy use in their factories so as to comply with standards, rules and procedures prescribed under ministerial regulation, whereas section 19 empowers the Minister, under a recommendation from NEPC, to issue ministerial regulations to prescribe:

(1)   total building thermal transfer values and building energy consumption values;

(2)   rules, procedures and conditions for the estimation of the thermal transfer value of construction materials, building total thermal transfer values and building energy consumption values; and

(3)   standards for air conditioning, hot water and building heating systems for regulated buildings.

At present, the Ministerial Regulation (BE 2538 (1995)) issued under the Promotion of Energy Conservation Act, BE 2535 (1992) is the only ministerial regulation issued under section 19. It prescribes the total thermal transfer values of buildings and building parts, such as roof and external walls, building energy consumption values and also prescribes procedures for the estimation of thermal transfer values of construction materials, total building thermal transfer values and electricity consumption values. No ministerial regulation under section 9 to prescribe similar parameters for regulated factories has yet been issued. As a result, no regulated factory is subject to the surcharges. Only regulated buildings that violate or fail to comply with the 1995 Ministerial Regulation are subject to the surcharges.

Section 43(1) empowers the FPEC Committee, with the approval of NEPC, to prescribe the rates of the surcharges for electricity consumption, whereas section 43(2) sets out criteria for prescribing the surcharge rates, ie the differences between the rates payable to the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority or the Provincial Electricity Authority and the total inclusive costs of the production and distribution of such quantities of electricity to the regulated factories or regulated buildings.

Under section 45, the FPEC Committee has sole discretion as to whether to terminate temporarily or reduce the violators rights to apply for the aforementioned support and assistance.

Section 46 provides that the surcharge payment, termination and reduction of support and assistance will be terminated as of the first day of the following month of compliance with the Ministerial Regulation.

7        Department of Alternative Energy Development and Efficiency

As part of the 2002 public administration reform, the former Department of Energy Development and Promotion was converted to the Department of Alternative Energy Development and Efficiency (DEDE) under section 27 of the 2002 Public Agency Organisation Act. The Ministerial Regulation Organising the Department of Alternative Energy Promotion and Energy Conservation, BE 2545 (2002) outlines the missions, powers and duties of DEDE.

DEDE is the key state agency in charge of the regulation of energy conservation and renewable energy matters in Thailand.[25] Under clause 1 of the Ministerial Regulation, DEDEs missions include the promotion of efficiency of energy use, the regulation of energy conservation, the acquisition of energy sources, the development of the integrated use of energy and the systematic dissemination of energy technologies to suit the needs of all sectors of the society, while being practical for the countrys development and promoting a better quality of living. Clause 1 also specifies the powers and duties of DEDE. These include:

(1)   research, studies and the development of alternative energy;

(2)   the prescription of rules and standards on alternative energy technologies;

(3)   the dissemination of technologies for alternative energy production, transmission and utilisation; and

(4)   the monitoring and evaluation of alternative energy development.[26]

The above missions, powers and duties cover any activity of DEDE related to renewable energy.

The term alternative energy is widely used among concerned Thai State agencies. As Thailand heavily relies on imported gasoline and diesel, the term tends to include any alternative non-renewable energy sources that can substitute imported gasoline and diesel, such as natural gas, clean-coal-technology, gasohol and bio-diesel, which are either fossil-proper or fossil-based energy. The term also includes all forms of renewable energy.[27]

C       Energy Development and Promotion Law

Energy development and promotion in Thailand is administered under the 1992 Energy Development and Promotion Act. This Act replaces the 1953 National Energy Act. It specifically provides powers and duties to DEDE in relation to research, development and the regulation of energy production, transmission and distribution.

1        DEDE

As mentioned earlier, DEDE was converted from the Department of Energy Development and Promotion as part of the 2002 public administration reform. Section 7 of the 1992 Energy Development and Promotion Act appoints the Director-General to be the superior official and responsible for the performance of the official affairs of DEDE. In addition, the Ministerial Regulation Organising the Department of Alternative Energy Promotion and Energy Conservation, BE 2545 (2002) provides the missions, powers and duties of DEDE.[28]

Besides the Ministerial Regulation, section 6 of the Act provides that DEDE should:

(1)   explore, collect information, analyse, experiment and examine activities concerning energy sources, production, process, transmission and utilisation;

(2)   study, plan and formulate projects concerning energy and related activities;

(3)   research, develop, demonstrate and initiate pilot projects concerning energy production, process, transmission, utilisation and conservation;

(4)   design, construct and maintain sources of energy production and process, and energy transmission and utilisation systems;

(5)   prescribe rules and standards concerning energy production, process, transmission, utilisation and conservation, as well as regulate the implementation of such rules and standards;

(6)   prescribe remuneration for energy use operated by DEDE;

(7)   provide, regulate, construct, purchase, sell, rent, lease out, transfer or accept transferral sources of energy production or process, transmission or distribution systems, and issue licences for energy production or the expansion of production capacity;

(8)   transfer technologies, promote, train, and disseminate matters concerning energy production, process, transmission, utilisation and conservation, as well as act as a centre for cooperation on related activities.

By virtue of section 5 of the Act, which defines the term energy to include renewable energy, these powers and duties also apply to renewable energy.

There are a number of bureaus under DEDE that are in charge of renewable energy matters, ie the Bureau of Energy Technology Transfer (BETT), the Bureau of Energy Development (BERD), the Bureau of Solar Energy (BOSE) and the Bureau of Energy Research and Study (BERS). These bureaus individually and jointly perform their powers and duties.[29]

BETT has the powers and duties to disseminate and transfer energy technologies, and to campaign and demonstrate energy technologies, including those related to renewable energy.

BERD has the powers and duties to prescribe rules, standards of energy production, process, transmission and utilisation, to prescribe guidelines for energy acquisition and development and to explore, design, construct and maintain energy production, process, transmission, distribution and utilisation, including those related to renewable energy.

BOSE is the most renewable-energy-oriented bureau in DEDE and in Thailand. It has the powers and duties to study, research, demonstrate and develop solar energy production, process and utilisation technologies, to study the application of solar energy innovations that suit domestic potential and resources, and to disseminate, transfer and promote knowledge on solar energy.

BERS has the powers and duties to study, research, demonstrate and develop energy production, process and utilisation technologies, and to study the application of energy innovation that suits domestic potential and resources, including those related to renewable energy.

DEDE may seek assistance from any state agency, local administration or state enterprise. Sections 8 of the Act empowers DEDE to assign any of these bodies to perform any particular task on its behalf. To ensure the achievement of the assigned task, section 9 requires the relevant bodies to perform the assigned tasks accordingly. Section 9(1) appoints officers of such bodies as competent officers who enjoy the same powers and duties as competent officers of DEDE to ensure the proper authority of the assigned bodies and their workforce. In addition, section 10 provides that DEDE may request any state agency, local government, state enterprise or any individual to furnish technical, financial, and statistical or any other information as required. This provision allows DEDE to acquire any specific information required, including those related to renewable energy, from experts to help it in achieving its work.

2        Competent Officer

Section 5 of the Act defines the term competent officer as an officer of DEDE and an officer of any state agency, local administration or state enterprise who is designated under this Act. Section 11(1) empowers the competent officer to enter any place during the period between sunrise and sunset, or during the working hours of such place, for the purpose of enquiring after facts or inspecting documents or other articles related to energy activities from any individual who is at such place as it is deemed necessary. Accordingly, the occupant must comply with the requests of the competent officer. To ensure individual privacy and property rights, section 11(2) provides that, except in emergencies, a competent official who wishes to enter a private place must notify the occupant of that place in writing at least three days in advance. Section 33 provides that any person who fails to comply with the requests of the competent officer will be subject to imprisonment for up to one month, or a fine of up to 1,000 Thai Baht, or both.

Section 14 empowers a competent officer to use or occupy any real property that is not a place of residence on a temporary basis if it is necessary for exploration of energy production sources, energy transmission or distribution systems, safety precaution against any danger or damage that may be caused to energy production or transmission or distribution, provided that the owner or occupant of such property is notified at least 15 days in advance. Any person who obstructs or fails to facilitate the competent officer will be subject to imprisonment or a fine under section 33. However, if any damage occurs to the owner or occupant of, or any person who holds any other right over, such property as a result of the execution of work by the said competent officer, the affected person may claim compensation from DEDE. The Liabilities of Officials on Wrongful Acts, BE 2539 (1996) then applies to the proceeding of such claim.

In cases of emergency, section 21 empowers a competent officer to enter any place of any person to inspect, repair or correct energy lines or pipelines or equipments at all times, provided that the owner or occupant has been notified. Section 33 also provides for imprisonment or a fine against any person who obstructs or fails to facilitate the competent officer in performing his or her duties.

Section 13 provides that a competent officer is also an officer designated under the Penal Code. This provision grants considerable protection to a competent officer in performing his or her powers or duties, while providing a severe penalty to a competent officer who abuses his or her duties.

3        Rights of Way

On many occasions, DEDE may need a right of way for the execution of its works, for example, in mobilising machineries or equipments for power lines or equipment installation. As a result, section 16(1) of the Act empowers DEDE to establish an energy station, install energy lines or pipelines under, above, along or across the land of any person, or to install poles or equipments into or on undeveloped land of any person, provided that this is necessary for the benefit of the community. Section 33 provides for imprisonment and a fine against any person who obstructs or fails to facilitate the competent officer. On the other hand, to ensure the protection of property rights, section 16(2) requires DEDE to pay a fair amount of compensation to the landowner or occupant for such use, unless the owner or occupant gains worthwhile benefits from such action.

In certain cases, DEDE may only need to fix certain lines or pipelines onto buildings adjacent to a public road without occupying any land. In such a case, section 17 empowers DEDE to fix energy lines or pipelines, for the benefit of the community, onto the building of any person that is above or next to a public thoroughfare. However, section 18 provides that, in exercising its power under section 16 or 17, DEDE should notify the relevant owner or occupant of such land or building. In this case, the relevant landowner or occupant may file a petition to the Minister within 15 days.

Section 19 empowers DEDE to cut down any trunk, branch or root of trees that are close to energy lines or pipelines or equipments, for the sake of safety in energy transmission, provided that the owner or person who holds the right over such property is notified in advance and within a reasonable amount of time. Any person who obstructs or fails to facilitate the competent officer is subject to imprisonment or a fine under section 33.

Section 20 provides that the owner or occupant of property involved who wishes to construct or conduct any activity on the land where energy lines or pipelines or equipments may obstruct such action may request DEDE to move, remove, modify or correct such obstruction. It is in DEDEs sole discretion as to whether to comply with such a request, provided that all expenses incurred are borne by the owner or occupant.

4        Regulated Energy

Section 5 defines the term regulated energy as energy that is subject to regulation under the Act, except for petroleum that is administered under the law on petroleum.

Section 24 provides that regulated energy shall be prescribed by a royal decree. The Royal Decree Prescribing Regulated Energy, BE 2497 (1954) was enacted under the repealed 1953 National Energy Act, but still continues in force by virtue of a transitional provision, i.e. section 39. This Royal Decree prescribes only electricity as regulated energy. No renewable energy resource has ever been prescribed as regulated energy. Electricity technically is not energy, but power. However, section 5 follows its predecessor, the 1953 National Energy Act, to define the term energy to include electricity. The electricity under the said Royal Decree is: (1) electricity with a total production capacity of 25 kW and above, in the case of the production for distribution to the general public; and (2) electricity with a total production capacity of 50 kW and above, in the case of production not for distribution to the general public.

Section 25(1) prohibits any person from producing or expanding the production capacity of regulated energy, unless a licence is granted by DEDE. Any person who violates this section is subject to imprisonment for up to two years, or a fine of up to 20,000 Thai Baht, or both, under section 34. Section 25(2) provides that any application for a licence must comply with the rules and procedures prescribed in the ministerial regulation. In addition, section 26 provides matters that will be taken into account in prescribing such rules and procedures. They are:

(1)   impacts on the environment, economy and national security;

(2)   potential dangers that might be caused by energy production or expansion of such production; and

(3)   experience in the use of raw materials or natural materials.

Ministerial Regulation No 2 (BE 2539 (1996)), issued under the Energy Development and Promotion Act, BE 2535 (1992), prescribes such rules and procedures.

In granting a licence, section 27 of the Act provides that DEDE may prescribe the following conditions:

(1)   the highest possible rates of compensation that the licensee may demand from users of the regulated energy;

(2)   the specific area for energy distribution and size of machineries to be installed for production process;

(3)   scientifically-acknowledged and accepted performance on works such as the installation of energy lines, fire protection, safety precaution for damage to machineries, other safety precaution measures, or classification of or procedures for the use of raw materials or natural materials in the production of regulated energy.

In the event of a periodic shortage of regulated energy or of any other necessity of benefit to the countrys economy, section 28 provides a number of measures that the Director-General may order in writing to any regulated energy producer. They are:

(1)   to decrease or increase any production, distribution or utilisation of regulated energy;

(2)   to change the kinds of raw materials or natural materials used in producing regulated energy; and

(3)   to change the highest possible rates of compensation that the licensee may demand from users of regulated energy.

In addition, in order to eliminate or prevent possible hazards to any person, property, public health or national security, section 29 provides a number of measures that the Director-General may order in writing to any regulated energy producer. They are:

(1)   to change, repair or renovate any building, machinery, equipment, tool or article;

(2)   to acquire or construct any structure that will eliminate or prevent hazards; and

(3)   to terminate temporarily the production, transmission, utilisation or distribution of regulated energy until proper action under (1) or (2) has been taken.

Section 35 provides that any person who fails to comply with an order issued under section 28 or 29 is subject to imprisonment for up to one year, or a fine of up to 10,000 Thai Baht, or both.

Section 30 ensures the practicality of the order given under sections 28 and 29 by requiring DEDE to take into account the additional expenses that a regulated energy producer may incur or the ability of the producer to raise funds.

Section 31 provides a right of appeal to any person who is aggrieved with a decision on a licence application or order made under section 28, 29 or 30. This person may file an appeal to the Minister. If the appellant does not agree with the decision made on the appeal, he or she may file a case to the court. This kind of disputes are administrative cases and fall within the jurisdiction of the Administrative Court under the Establishment of the Administrative Court and Procedures of the Administrative Court Act, BE 2542 (1999).

Section 32 provides protection to regulated energy production in that any action by any person that may obstruct or diminish regulated energy production is prohibited. Section 36 provides that anyone who violates this section is subject to imprisonment for up to one year, or a fine of up to 10,000 Thai Baht, or both.

III     The Recent Developments

A       The National Energy Policy Council and the Ministry of Energy

The incomplete public administration reform in October 2002 has left the composition of NEPC and the transfer of powers and duties among the Prime Minister, Deputies Prime Minister, Minister Attached to the Office of Prime Minister and the Minister of Energy in an awkward situation. The Prime Minister, Deputies Prime Minister and Minister Attached to the Office of Prime Minister, who were attempted to be removed from NEPC, and replaced by the Minister of Energy, are still lawful members of NEPC and hold most powers and duties under the 1992 National Energy Policy Council Act whereas the Minister of Energy, who was attempted to exercise such powers and duties, play no significant role.[30] Despite the absence of clear consequences of this confusion, a proper amendment to section 5 of the Act by way of legislation is still needed before its difficulties cause any damage.

B       RPS

RPS has been introduced among independent power producers (IPPs). However, at present, no legislation requiring RPS has been enacted to ensure the countrys sustainable and mandatory goal for renewable energy use as suggested by OEPPs report.[31] IPPs are required to adhere to RPS under bidding contracts. That is, in bidding to supply their power to Electricity Generating Authority of Thailand, all IPPs must produce 5% of their installed energy generating capacity from renewable sources.[32]

C       Power Substitution in Regulated Factories

The substitution of power generated from non-renewable energy by another power generated from renewable energy provided under section 7(4) of the 1992 Promotion of Energy Conservation Act can be a renewable energy conservation measure. This measure allows the owners of regulated factories to benefit from the promotion or assistance provided in Part 5 of the Act, ie an exemption from paying surcharges, grants or subsidies from the Fund for Promotion of Energy Conservation under section 25.[33] However, this measure has never been used or even considered.

D       FPEC

Despite the powers under section 25(3)(d), FPEC has never played its role in the promotion of renewable energy by providing grants or subsidies for any study, training or conference related to renewable energy promotion. FPEC tends to limit its powers to the promotion of energy conservation and related problems.[34]

E        DEDE

As the key state agency in charge of the regulation of renewable energy matters, DEDE has played significant roles in the promotion of renewable energy, mostly in renewable energy technology research and development.

1        Investment Incentives

A number of investment incentives have been introduced. An initiative promoting industries and businesses related to energy conservation and renewable energy use has been implemented under the cooperation project between the Ministry of Energy through DEDE and the Board of Investment of Thailand. That is, by virtue of sections 16 and 31 of the Board of Investment Act, BE 2520 (1977), the Board of Investment of Thailand has issued a series of announcements to introduce and improve incentives to producers of energy conservation machineries or equipments or producers of equipments utilising alternative energy, in particular producers of solar cells, producers of alcohol or fuels from agricultural produce, agricultural wastes or residues, producers of fuel cell and energy service companies. These incentives include exemptions from machinery import duties and income taxes to the producers.[35] As at August 2005, four energy service companies have been benefited from these incentives. It has been estimated that these four companies could conserve up to 2.4 MJ of energy each year and could save up to 99.3 million Thai Baht each year.[36] However, the effectiveness and efficiency of this initiative should be evaluated for the sake of future expansion.

2        Regulated Energy

The 1992 Energy Development and Promotion Act provides measures regulating the production, distribution and utilisation of energy sources once they are prescribed as regulated energy. Over the last five decades, the Royal Decree Prescribing Regulated Energy, BE 2497 (1954) prescribes only electricity as regulated energy.[37] As a result, renewable energy production is not fully regulated and protected under the above measures. The Royal Decree should be amended to include certain renewable energy sources as regulated energy so that the production, distribution, utilisation and protection measures can be fully applied to renewable energy sources. This will allow a better promotion of renewable energy production in Thailand.

3        Research and Development

A number of research and development projects of high potential renewable energy sources in Thailand have been conducted, eg potential and possibilities of solar cell production industries in Thailand is now being jointly studied by DEDE and Chulalongkorn University.[38] In addition, a conceptual design of solar-heat dryer for agricultural buildings has been released by DEDE.[39]

A number of international cooperation projects have been implemented, eg the Promotion of Renewable Energy Technologies: Action Plan for the Development of the Market in Thailand is a project under cooperation between the Thai and Danish governments to be inline with the Energy Strategy for Competitiveness[40] and to focus on developing renewable energy sub-strategies and measures able to reach the targets set in the aforesaid strategy.[41]

IV    Conclusion

Thai energy laws can be used to promote renewable energy in three aspects. First, the 1992 National Energy Policy Act empowers NEPC and OEPP to be responsible for the making and regulating of Thailands energy policies and plans, including those of renewable energy. However, the incomplete modification of the NEPC component under the 2002 public administration reform is of concern. Despite the absence of clear consequences, an appropriate amendment to the relevant provision of the Act is still needed before the difficulties cause any damages.

In addition, enactment of legislation requiring RPS is needed to ensure Thailands mandatory and sustainable goal for renewable energy use.

Secondly, the 1992 Promotion of Energy Conservation Act, which aims at the efficient and economical production and use of energy by providing incentives to those who put efforts into energy conservation measures and providing disincentives to those who fail to comply with such measures, can be used to promote renewable energy, especially by substituting non-renewable energy with renewable energy. However, such substitution measures have never been used or considered. Hence, they should be prioritised to encourage wider use of renewable energy in regulated factories.

Thirdly, DEDE, which is the key state agency in relation to technical aspects and regulation of energy production, transmission and distribution under the 1992 Energy Development and Promotion Act, can play a significant role in renewable energy promotion. In addition, the measures related to regulated energy, if wisely used, can be useful in renewable energy promotion. However, over the last five decades, only electricity has been prescribed as regulated energy. Certain renewable energy sources should be prescribed as regulated energy so that the production, distribution, utilisation and protection measures can be fully applied to renewable energy sources. This will allow a better promotion of renewable energy production in Thailand.

Despite the absence of the use of the measures related to regulated energy, a number of initiatives have been implemented by DEDE. These include the cooperation between DEDE and the Board of Investment of Thailand to introduce a series of investment incentives, ie exemptions from machinery import duties and income taxes to producers of energy conservation machineries or equipments or producers of equipments utilising alternative energy and energy service companies.

In addition, a number of research and development projects of high potential renewable energy sources and use in Thailand have been conducted both at national level through joint project between DEDE and universities, and at international level through international cooperation.

 



*       Paper presented at the TC Beirne School of Law Postgraduate Law Research Colloquium, Brisbane, 2-4 December 2005.

      Chacrit Sitdhiwej is Lecturer, Former Chair, Natural Resources and Environmental Law Programme, Thammasat University Faculty of Law, Thailand; Minerals and Energy Laws Course Coordinator and Lecturer, PhD candidate in energy law, The University of Adelaide Law School, South Australia. He can be contacted by e-mail at chacrit.sitdhiwej@adelaide.edu.au.

[1]       Chacrit Sitdhiwej, Laws in Thailand Promoting Renewable Energy (2005) 23 Journal of Energy & Natural Resources Law 205-222.

[2]       Ibid, 222.

[3]       Ibid.

[4]       Ibid.

[5]       National Energy Policy Office and Danish Cooperation for Environment and Development, Investigation of Pricing Incentives in a Renewable Energy Strategy (1998) 7-17.

[6]       Department of Alternative Energy Development and Efficiency, The Studies and Development of Alternative Energy <http://203.150.24.8/dede/renew/renew_index.html> at 12 January 2004.

[7]       Ibid.

[8]       Ibid.

[9]       Ibid.

[10]     Office of Energy Policy and Planning, Thailand Energy Policy and Measures, 2546 (2003) <http://www.eppo.go.th/doc/report-2546/4-strategies.html> at 19 November 2005.

[11]     See Office of Energy Policy and Planning, Energy Strategy: Energy for Thailands Competitiveness <http://www.eppo.go.th/doc/strategy2546/strategy.html> at 20 November 2005.

[12]     The Minister of Energy is converted from the Minister of Science, Technology and Environment under the 2002 public administration reform.

[13]     Under the 2002 public administration reform, the Permanent Secretary of the Ministry of Industry was to be replaced by the Permanent Secretary of the Ministry of Energy. However, due to a concern over constitutionality of the delegation of powers, the attempt was suspended. See below, 4; n 18. See also below n 19.

[14]     The Director-General of the Department of Alternative Energy Development and Efficiency is converted under the 2002 public administration reform from the Director-General of the Department of Energy Development and Promotion under the former Ministry of Science, Technology and Environment.

[15]     Office of Energy Policy and Planning, Council of Ministers Resolutions related to Energy Collection: 18 May 2004 <http://www.eppo.go.th/admin/cab/cab18may47.html> at 19 November 2005.

[16]     Under the Thai legal system and Constitution, a royal decree is subordinate to and must not contradict or amend any Act of Parliament.

[17]     The Ministry of Energy is established and empowered under ss 5 and 26 of the State Agency Organisation Act, BE 2545 (2002).

[18]     The author has formed this view in his capacity as rapporteur to the Working Group for the Establishment of the Ministry of Energy at the Office of the Council of State of Thailand, September 2002.

[19]     Despite the existence of the position of Minister Attached to the Office of Prime Minister in s 10(2) of the Public Administration Act, BE 2534 (1991), created under the public administration reform in October 2002, no Minister Attached to the Office of the Prime Minister  was appointed during the Prime Minister Thaksin Shinnawatras first term of office (from February 2001 to March 2005) but two Ministers Attached to the Office of the Prime Minister have been appointed in his second term of office (since March 2005 until present). However, none of these two Ministers has been delegated to oversee energy related business. See also Royal Thai Government, The Cabinet Line-up <http://www.thaigov.go.th/> at 19 November 2005; Royal Thai Government, Office of Prime Minister Order No 440/2548 (2005) Re Delegating and Empowering the Deputies Prime Minister and Ministers Attached to the Office of Prime Minister to Act for the Prime Minister <http://www.thaigov.go.th/news/press/48/nov48/pr01nov48-440.pdf>  at 19 November 2005.

[20]     State Agency Organisation Act, BE 2545 (2002) ss 26, 27; and Royal Decree Amending Provisions to be Consistent with the State Agency Organisation Act, BE 2545, BE 2545 (2002) s 41.

[21]     See above n 11.

[22]     In practice, the Ministry of Energy and its agencies tend to use the broader term alternative energy to include renewable energy rather than the term renewable energy proper.

[23]     Office of Energy Policy and Planning, above n 10, Part 4, Energy Strategies: Energy for Thailands Competitiveness.

[24]     Section 3 defines the term Minister as Minister of Science, Technology and Environment. At present, by virtue of ss 26 and 27 of the State Agency Organisation Act, BE 2545 (2002) and s 33 of the Royal Decree Amending Provisions to be Consistent with the State Agency Organisation Act, BE 2545, BE 2545 (2002), the term Minister means Minister of Energy.

[25]     Converted from the Department of Energy Development and Promotion under the Ministry of Science, Technology and Environment under the 2002 public administration reform.

[26]     Ministerial Regulation Organising the Department of Alternative Energy Promotion and Energy Conservation, BE 2545 (2002) cl 1(2), (3), (4).

[27]     See above n 22.

[28]     See above IIB7, 10.

[29]     Above n 26, cl 2(5), (6), (7), (8).

[30]     See above IIA2, 3. See also above n 13.

[31]     See above IIA3, 5.

[32]     Board of Investment of Thailand, Strengthening Thailands energy security and sustainability 16 Thailand Investment Review 6.

[33]     See above IIB1, 6.

[34]     See above IIB4, 8. See also Department of Alternative Energy Development and Efficiency, Fund for Promotion of Energy Conservation <http://www2.dede.go.th/RFProgram/detail/activity2.php> at 20 November 2005.

[35]     Announcement of the Board of Investment No Sor 9/2547 (2004) Re Promotions Given to Businesses related to Energy Conservation; Announcement of the Board of Investment No Sor 10/2547 (2004) Re Additional Rights and Benefits Given to Businesses related to Energy Conservation; Announcement of the Board of Investment No Sor 4/2548 (2005) Re Promotion for Businesses related to Alternative Energy Production; Announcement of the Board of Investment No Sor 5/2548 (2005) Re Import Duty Exemption for Machineries used for Energy Conservation. See also Department of Alternative Energy Development and Efficiency, Energy Service Company Project <http://www.dede.go.th/dede/index.php?id=66> at 20 November 2005; Department of Alternative Energy Development and Efficiency, Pilot Project on Tax Benefits for Energy Conservation <http://www.dede.go.th/dede/index.php?id=66> at 20 November 2005; Department of Alternative Energy Development and Efficiency, Taxation Measures Promoting Energy Efficiency <http://www.dede.go.th/dede/index.php?id=66> at 20 November 2005; Department of Alternative Energy Development and Efficiency, Case Studies on Tax Benefits <http://www.dede.
go.th/dede/index.php?id=66> at 20 November 2005.

[36]     Department of Alternative Energy Development and Efficiency, Project Results <http://www.
dede.go.th/dede/index.php?id=66> at 20 November 2005.

[37]     See above IIC4, 14.

[38]     Department of Alternative Energy Development and Efficiency and Chulalongkorn University, Guidelines` for Solar Cell Industry Investment in Thailand <http://www.dede.go.th/dede/> at 20 November 2005.

[39]     Department of Alternative Energy Development and Efficiency, Solar-heat Dryer for Agricultural Buildings <http://www.dede.go.th/dede/> at 20 November 2005.

[40]     See above IIA2, 3.

[41]     See Department of Alternative Energy Development and Efficiency and Danish International Development Agency, Promotion of Renewable Energy Technologies: Action Plan for the Development of the Market in Thailand (Conclusion Report on the Renewable Energy Development (RED) Model Seminar and Workshop for Thailand, Bangkok, 8-9 September 2005) Annex 3.

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