Thailand ‘Example’ for Efficiency Finance

by | Apr 5, 2013

A government initiative in Thailand aimed at increasing the familiarity of local banks with energy efficiency projects financed projects worth a total investment of $453 million from 2002 to 2010, according to a case study released by the World Resources Institute.

These investments – made through the country’s Energy Efficiency Revolving Fund – have resulted in cost savings in the ballpark of $154 million a year, according to Mobilizing Climate Investment Annex 1 – Energy Efficiency in Thailand.

When it was established in 2002, the fund offered a credit line to local banks, initially at no interest, as a way of overcoming the knowledge barrier that the government thought was acting as a hurdle to local banks investing in efficiency projects, according to the WRI.

The Revolving Fund followed on from earlier moves by the Thailand government that kick-started investments in energy efficiency. In the early 199os the country’s economy was growing exponentially and its energy use was growing even faster. In a bid to conserve energy to meet the demands of the growing economy Thailand passed a number of efficiency standards  or industry and established an Energy Conservation Promotion Fund, which raised money for efficiency investments through taxing petroleum products, the WRI says.

In 1992, the government introduced what WRI calls a “demand-side  management plan” that aimed to build public awareness of energy efficiency, set efficiency standards for buildings and appliances and better manage the timing of consumer energy demand. This plan was financed using $40 million from international climate fund the Global Environment Facility, the Australian government and the Japanese government, the WRI says.

The demand-side plan resulted in 15,700 GWh of energy savings by 2012, exceeding its own energy-savings targets.

The Energy Conservation Promotion Fund is now being used to fund a 20-year energy efficiency development plan that aims to cut the country’s overall energy consumption by 20 percent by 2030.

According to the WRI, Thailand’s example shows how strong government leadership combined with international climate finance can move a country towards an energy efficiency economy.

A recent report by the American Council for an Energy-Efficient Economy expects 2013 to be a banner year for energy efficient investment in the US. In 2013, ACEEE forecasts utility-sector spending on energy efficiency will increase, and says congress will likely look at bipartisan energy efficiency legislation.

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