Clean Energy Finance and Investment Roadmap of Thailand

Annex A. Process of developing the Roadmap and key stakeholders

The process for preparing the Roadmap included two in-person workshops held in Bangkok on 28 April and 24 November 2023, to consult local stakeholders and discuss barriers possible solutions.1 Thanks to the fruitful discussions in these workshops, key financing solutions were identified, roadmap findings were discussed, and consensus was reached on the roadmap actions and areas of recommendation. These have also been supported with desktop research and analysis, case studies and interviews with Thai, regional and international experts. The Roadmap will be supplemented with support activities intended to create an impactful collaboration across relevant domestic and international stakeholders.

The local and international organisations that have been involved and consulted throughout the development of the Roadmap, either through stakeholder consultation workshops or interviews, include (but are not limited to) the following:

• Department of Alternative Energy Development and Efficiency (DEDE), Ministry of Energy, Government of Thailand

• Energy Policy and Planning Office (EPPO), Ministry of Energy, Government of Thailand

• Provincial Energy Promotion and Development Division, Office of the Permanent Secretary, Ministry of Energy, Government of Thailand

• Office of the Permanent Secretary, Ministry of Energy, Government of Thailand

• Fiscal Policy Office, Ministry of Finance, Government of Thailand

• Office of Natural Resources and Environmental Policy and Planning (ONEP), Ministry of Natural Resources and Environment (MNRE), Government of Thailand

• Office of the National Economic and Social Development Council (NESDC), Government of Thailand

• Department of Industrial Promotion, Ministry of Industry, Government of Thailand

• National Science and Technology Development Agency (NSTDA)

• National Energy Technology Center (ENTEC)

• Office of SME Promotion

• Thailand Board of Investment (BOI)

• The Securities and Exchange Commission (SEC), Thailand

• Electricity Generating Authority of Thailand (EGAT)

• Metropolitan Electricity Authority (MEA)

• Provincial Electricity Authority (PEA)

• Embassy of Denmark in Thailand

• GIZ

• UNDP

• USAID SEA Smart Power Program

• Asian Development Bank (ADB)

• World Bank

• International Finance Corporation (IFC)

• Bangkok Bank

• Kasikornbank

• Export-Import Bank of Thailand

• Thai ESCO Association

• The Thai Bankers' Association (TBA)

• The Thai Bond Market Association

• International Institute for Energy Conservation (IIEC)

• Thailand Development Research Institute

• Asia Clean Energy Partners

• Greenergy Thailand

• B.Grimm Power Public Company Limited

• SCG Power Public Company Limited

• Sena Solar Energy Company Limited

• EGS-plan (Bangkok) Company Limited

• Enapter

• Siam Commercial Bank Public Company Limited

• Asia Pacific Urban Energy Association (APUEA)

• The Joint Graduate School of Energy and Environment, King Mongkut’s University of Technology Thonburi

• Energy Research Institute, Chulalongkorn University

• Agora Energiewende.

The process of developing the Clean Energy Finance and Investment Roadmap for Thailand was divided into two main parts, as illustrated in Figure A A.1 below. Part 1, covering steps 1 to 3, focuses on analysing the investments necessary for Thailand to meet its renewable energy (RE) and energy efficiency (EE) targets. Part 2, covering steps 4 to 6, concentrates on devising a strategy to efficiently access, mobilise and expand financing to support the achievement of the national renewable energy and energy efficiency objectives.

Figure A A.1. Development process of the Clean Energy Finance and Investment Roadmap of Thailand

Source: Authors

A detailed description of each step is provided below:

Step 1: Understand the national targets for renewable energy and EE.

The first step involves thoroughly examining Thailand's existing national plans and policies related to renewable energy and EE. The Ministry of Energy intended to integrate all energy plans into a national energy plan starting in 2021, but an official version has not yet been launched. However, two recent plans related to renewable energy and energy efficiency have been released: the Alternative Energy Development Plan 2018 (AEDP 2018) and the draft version for a public hearing of the Energy Efficiency Plan 2022 (EEP 2022). These two plans served as the basis for analysing the investments required to achieve Thailand's renewable energy and energy efficiency targets.

Step 2: Analyse the total investment needed to fund these technologies.

In this step, a comprehensive analysis was conducted to calculate the total investment needed to facilitate the implementation of renewable energy and energy efficiency technologies in Thailand. This analysis encompassed the assessment of both capital expenses (CAPEX) and operational expenses (OPEX) associated with various clean energy projects. Information regarding CAPEX and OPEX for these technologies was sourced from multiple references, including IRENA’s Renewable Power Generation Costs in 2022 (August, 2023), Ambition to Action’s Domestic Expenditure and Employment Impacts of Power Sector Development in Thailand (November, 2019), A2A (2019), and Clean, Affordable and Secure Energy for Southeast Asia (CASE)’s study on Towards a collective vision of Thai energy transition: National long-term scenarios and socioeconomic implications (November, 2022).

Step 3: Determine the level or degree of public finance involvement in renewable energy and energy efficiency investments.

This step involves assessing the role of government funding, subsidies, incentives and grants in supporting clean energy initiatives. It helps in understanding the government's commitment to driving clean energy adoption and identifying areas where public financing can be optimised. In order to determine the level of public finance involvement in renewable energy and energy efficiency investments, the readiness level of each technology was assessed. At different levels of technology readiness, the degree of public finance involvement was adjusted.

Technology readiness is categorised into six levels, including pre-feasibility study, research and development, demonstration/pilot, deployment, diffusion, and commercial maturity. Financial instruments from public and private sources are applied at different stages of technology development, as shown in Figure A A.2 below.

Figure A A.2. Financial instrument for renewable energy and energy efficiency technologies at each level of readiness

Source: Authors (The Creagy)

To identify the employment opportunities and the value added generated from the implementation of AEDP and EEP, an economic impact analysis of the AEDP and EEP was conducted. In addition, a supply chain analysis of potential technologies for clean energy deployment, including solar PV rooftop and high-efficiency cooling systems for buildings was conducted.

Step 4: Identify strategic opportunities and key actions, including potential initiatives/pilots as actionable items.

In the fourth step, the focus is on identifying strategic opportunities and key actions to accelerate progress towards clean energy objectives. As a result of the consultation with the Department of Alternative Energy Development and Efficiency (DEDE), two potential technologies for clean energy deployment were selected: solar PV rooftops and high-efficiency cooling systems for buildings. To kickstart progress, actionable initiatives and pilot projects were recommended.

Step 5: Identify finance mechanisms and investor types that can help achieve the pathways, considering their needs (e.g. risk/return profiles) and investment expectations.

This step involves identifying the different finance mechanisms and investor categories that can contribute to achieving Thailand's clean energy goals. It includes assessing the risk and return profiles of various investors, such as private sector entities, financial institutions and international organisations. Understanding these factors helps tailor financing strategies to attract diverse sources of funding.

Step 6: Lay out the strategy for how financing could be scaled up and by whom and define which financing mechanisms are to be developed and used where for which technology.

The final step involves formulating a comprehensive strategy for scaling up clean energy financing. This includes defining how financing could be expanded and by whom. It also outlined which financing mechanisms could be developed and applied for two specific technologies. The strategy will provide a clear roadmap for mobilising and allocating resources effectively to meet Thailand's renewable energy and energy efficiency targets.

Note

← 1.  Further details about the stakeholder consultation workshops can be found at Clean energy finance and investment roadmap - OECD