About Us

     We are a group of IMBA students, Thammasat Business School from Thammasat University, Thailand which believes that our effort can impact many the Thai people who has an effect on lacking of electricity in Northern region of Thailand

     This project is a part of Macro Environments in the Global Economy Course (GI630) as the course description as belowed:

     "This course provides an introduction to a variety of key issues confronting managers in the age of globalization. The ultimate goal of the course is to enable students to broaden their outlooks on the political, economic, technological, and social context of international business. The objectives of the course include: the analysis of the more complex environment of business operations; the use of conceptual and analytical tools related to international business operations; the awareness of major international business issues; the broad understanding of current international business operations; and the analysis of trends in international business, Such the liberalization of trade includes the WTO, Regional Economics Integration, and the role of the International Monetary Fund."

Contact Us

Email: th.microhydropower@gmail.com

Follow us on Twitter: @th_microhydro

Click "Like" in Facebook Fanpage: Micro Hydropower in Thailand

Our Team Members

                       Earth              Einar             Gluay             Mint                Nui

About the project.

     

     We are interesting in micro hydropower as a renewable, eco-friendly source of energy. This project of Micro Hydropower in the North of Thailand is part of our study in "Macro Environment in the Global Economy" course.

     The objectives of this project are to 

  1) be a coordinator between investors who would like to make a contribution to the community, governmental organizations who have expertise and authority, and local people who have no access to electricity, to construct micro hydropower plants in off-grid areas in the north of Thailand; and 

  2) provide information about micro hydropower in the context of Thailand.

In this blog, we share with you information and knowledge about micro hydropower. We have useful and interesting statistics information for you to download. Also, we provide links to a lot of energy and environmental-relate websites as well as video clips and news.

     All contents and materials appear on this website is intended for educational purpose only.

Our business Model

After we get a fund to run the project,

1. we will use the fund to build a micro hydropower plant.
2. Then, the micro hydropower plant will generate electricity, and we as part of the community electricity committee will sell electricity to the local people, and
3. we will get the revenue in return.
4. We will use some of this revenue to pay the maintain cost of the micro hydropower plant,
5. and some to donate to the local school and community to use to improve local public services in order to better the living quality of people in the community.
6. For the investors, they will get carbon credits in return for their contribution to the project.

PESTL(E) Analysis

Environment Factors

      The use of natural energy sources to provide electricity is rapidly increasing in popularity among home owners. The use of more natural and renewable energy sources is needed to take the burden off our current dependency on fossil fuels. The high levels of fossil fuels we burn each and every day are contributing to climate change and the polluting of the air and surrounding environments.

      From our research, We found that  petrochemical and electricity power plant mostly release carbon dioxide.  We can attempt to save the earth from devastation by making the switch to natural and renewable energy sources which is a large step forward in the fight against climate change, and the fight for a cleaner environment. There are many different natural and renewable energy sources such as the sun, wind, tides, and water. Each country chooses the alternatives depended on country’s topography. In North of Thailand, their geographic has waterfall  and mountains. People still use waterfall for daily usage and cannot be accessed to electricity.  Hydro power is the most suitable source for helping the north people. It only takes a small amount of flow (as little as two gallons per minute) or a drop as low as two feet to generate electricity with micro hydro. Electricity can be delivered as far as a mile away to the location where it is being used. Hydro produces a continuous supply of electrical energy in comparison to other small-scale renewable technologies.

      Micro hydropower is considered to function as a ‘run-of-river’ system, meaning that the water passing through the generator is directed back into the stream with relatively little impact on the surrounding ecology.

      The ecological impact of small-scale hydro is minimal; however the low-level environmental effects must be taken into consideration before construction begins. Stream water will be diverted away from a portion of the stream, and proper caution must be exercised to ensure there will be no damaging impact on the local ecology or civil infrastructure.
      Energy output is dependant on two major factors: the stream flow (how much water runs through the system) and drop (or head), which is the vertical distance the water will fall through the water turbine.

      Careful design is required to ensure the system has a minimal impact on the local ecology. A small amount of energy compromise may result, but this will ensure that the project does not have an effect on local fish stocks. The Environment Agency requires that stream levels must be maintained at a certain level in order to sustain the life within. Since there is no loss of water in the generation process, these requirements can easily be met.

PEST(L)E Analysis

Legal factors

      For constructing micro hydropower plant in Thailand, compliance with the laws and regulations is the must, but they should not be an obstacle to the project. However, an application for the construction to the local administration can take different length of time depending on each local administration. Also, laws and regulations concerning a construction of a micro hydropower plant are varied from project to project depending on the objective and location of the project.

      Generally, a commercial, renewable energy generator including a micro hydropower plant that is estimated to have a capacity to generate electricity less than 1 mega watt will be subject to the Very Small Power Producer(VSPP) regulations. However, for a non-commercial electricity generating project, it is not required to comply with the regulations.

      Also, for any project located in a national park or preserved area, it is subjected to ask permission from the Department of National Parks, Wildlife and Plant Conservation (www.dnp.go.th) to build a micro hydropower plant prior to the construction as some areas might be more sensitive, stricter and more vital than the other, and the department may not allow the construction of any kind.

      For regulations related to the impact of the micro hydropower plant on the environment around the power plant, according to the regulations of the Department of Alternative Energy Development and Efficiency (www.dede.go.th) , a power plant that generates electricity less than 10 mega watt is not required to do the Environmental Impact Assessment (EIA).

      Public hearing is not required by law, but it is usually considered necessary to see if the need for a power plant exists in the area or not.

PES(T)LE Analysis

Technologial factors

      Micro hydropower is a technical production process where mostly production happens without much human involvement. The technology is well known, and several producers have products like small turbines, pipes, generators etc. The chance of this technology becoming obsolete is also small, since it’s already so developed. That means there is little risk when it comes to the technology for producing micro hydropower. For more information about how this works, press here.

      In Thailand there are already producers that know this technology, and the government also employs several technicians in the hydropower production throughout the country. Local knowledge might be small, and labor might have to be found elsewhere in the country. Training locals is a possibility for getting the manpower to operate the production sites. R&D investments are not too high in renewable energy has not been high in Thailand, but cooperation with a foreign investor might still be well accepted. An technology index can be found here.(Thailand placed as nr 41.)

      The technology is environmentally friendly, and has a very small impact on the surrounding ecology. The biggest risk comes from disturbing the life in the river around the area where the turbine is placed.

PE(S)TLE Analysis

Social Factor

Stakeholders

      There are many stakeholders who will benefit from this project. The stakeholders can involve in many ways such as financing, equipment and technology.

• Central Government – With the support from Department of Alternative Energy Development and Efficiency, Ministry of Energy who encourage and give out many policies for sustainable energy. This project will reduce the nation’s emission and also reduce the imported fuel to generate electricity.
• Local Government – With the authority to develop the local area with government’s budget and also permission of them will help the project to be successful.
• Local People – With the mission to provide electricity to every area especially to the area that electricity polls are not reachable so they can have a chance to have education, news and more productivity on agriculture and handcraft.
• NGOs – Source of fund and keep an eye on impact on environment and social.
• Bank – As an investment or giving a credit part.
• Universities and colleges – with the knowhow of the students and professors in the college that can provide the technology for turbine. This is win-win situation between both sides, the students have a reality project and our project can get the cheap and developed equipment.
• VSPP. SPP. IPP. – in this case is us but we are smaller
• The investors or firm who interest in CSR program – With the new corporate strategy trends, CSR or Corporate Social Responsibility is one tool that firms put the money into the projects which give back to the nature, people and environment. Our project is one kind of Social venture program which these firms can finance and use that amount of money to reduce the tax, according to the government’s policy which encourage producing the alternative energy.

Sustainability

      Micro hydro appears to exhibit characteristics that indicate: ‘it is easier to make the profitable social, than to make the social profitable’!  In planning micro hydro investments it appears important to consider means of using the plant to secure livelihoods at an early stage, and to then see how the impact can be spread to marginalized people and to social activities such as lighting in health centres, schools, etc.

      According to The United Nations Decade of Education for Sustainable Development (2005-2014), for which UNESCO is the lead agency, seeks to integrate the principles, values, and practices of sustainable development into all aspects of education and learning, in order to address the social, economic, cultural and environmental problems we face in the 21st century.

      Our Micro Hydro Power Project is a small tool but sustainably impact the people’s life and environment.

Just Distribution

      With the purpose of Distance Learning Foundation for the distance learning via Satellite that want to provide the free education to every Thai students to have the good quality of education fairly. But without the electricity, no TV or communication that can support the distance learning. Moreover the equally education gives a chance to people uphill to have more skills, more knowledge to develop the living to have a better life.

      Though there are many stakeholders involved in this project but nevertheless, the people who finally can access to the electricity is the one who get the benefit, not the money benefit but it’s a better living.

Efficient Allocation

• Negative externalities

              There might be a environmental cost of the project which are not taken into account. For example, some nature will be destroyed, some trees have to been cut down. Also, the life in the river might be suffered from small damn (fish, scallops etc). Also, the flow of the river will be changed, and this could affect people living close to it. The access to electricity might mean that the village people start producing more waste, which is bad for the environment.

• Positive externalities

              Access to electricity might help improving the standard of health care, public education in a village, which will increase the standard of living. The benefits gained from the project might be higher than the cost of running a power plant for the government. And also the electricity can let the villagers to work with their handcraft in the evening. The productivity for the agricultural product which is the main product of the villagers will be increased.

(P)ESTLE Analysis

Political factors:

     In considering constructing micro hydropower plants in Northern Thailand, the political factors are very important. As one of the major stakeholders, the Thai government owns the land and rivers where these projects can be started. They also own the electrical grid, and own most of the electricity production in Thailand that already exist. One can say that government is strongly involved in energy-related business in the country, and to start business in this area one will have to cooperate with the government one way or the other. 

     The Thai government wants to increase the amount of renewable energy in Thailand. In their action plan for the coming years they promise tax benefits potential investors. Policy in this field in general is very supporting when it comes to using the hydro resources in the country for electricity production. Information from the Ministry of Energy when it comes to target levels and support schemes can be found here.

     Infrastructure in the area is not the best, but there is a wide-spread electricity grid across the country. This means that connection to the national grid can be done without the biggest investments from neither the government nor a potential investor.

      Foreign investment is welcomed by the government. This leaves the door open for any energy company that is willing to invest here. Corruption has been a problem for many years, and is something that will have to be dealt with. This might especially be a problem for a foreign company that needs permits, licences etc to start production on government owned land, using a government controlled resource like water. A comparison to other countries from Transparency International can be done here.

     There has also been a problem with political unstable conditions in Thailand. Several parties struggle for power, and violence and coups has been the norm rather than a rarity. This brings uncertainty about long-term conditions and government plans for foreign investors. More information about politics and the thai government can be found here.

     The political risk is definitively present, and the biggest uncertainty comes from the instability of government and the corruption level in the country. Except from this, the government seems very interested in both promoting electricity production in the country, and should be very willing to support investment in micro hydropower in Thailand.

P(E)STLE Analysis

Economics Factor


     Before we get deeper into our topic, I would first like to show the big picture of Thailand’s economic status as this will affect the purchasing power of our target customers and our project’s cost. The following are factors in the macro economy:

      GDP (In 2010)    :               Expands at 7.8%

      Interest rates    :               Thai policy rate is currently 2.5%

      Exchange rates :               US/TB 30.32 (3.34 p.m. Mar 9, 2011)

      Inflation rate (February 2011):

          Core Inflation                    =             1.45 %

          Headline Inflation            =             2.87 %

   

    From data above, we can conclude that Thai Economy in 2010 has improved considerably (expanding at 7.8%) from last year’s contraction of 2.3 percent.

      The positive factors are attributed to:

    Higher exports in terms of US dollars that followed the economic recovery of major trading partners, combined with a revival in private domestic consumption and investment. Thailand is also still strong with a current account surplus of 4.4 percent of GDP in 2010.               

    Interest rates have gone up from 1.25% (since crisis in 2008) to 2.5% as of the 9^th of March, 2011 but when compared to the regional (ASEAN), Thailand’s interest rates are still low.

    Thai Baht exchange rates have also appreciated since 2001 to 2010 by more than 30% (From US/TB 45 to US/TB 30). This has been a great advantage for importers in Thailand.

Thailand inflation rate (consumer price) is now around 3% and trend to increase due to the increase in oil prices. And the core inflation is around 1.45 %. This is a factor for Bank of Thailand to evaluate the Thai policy rate.

     The factors mentioned above have had major impacts on how businesses have operated and decisions made. For example, interest rates affect our total project's cost and therefore affect the breakeven point. Another example is changes in exchange rates which affect the costs of exporting materials and the supply and price of imported materials in economy country.

    After we look in Macro Economics of Thailand, we then move to the Economy of Northern in Thailand as that is where our project is based. These figures will give a clearer picture of the micro environment of the northern states of Thailand.

      The size of northern economic accounted for over 8.5 percent of the country and the production structure also has a good distribution.

Private Investment Indicators of the Northern Region

                   Source: Department of Industrial Works, Ministry of Industry

                               Northern Region Investment and Economic Center, Office of the Board of Investment (BOI)

    From the table above, you can see that the investment value of newly registered factories is decreasing every year. On the other hand, the investment value of BOI’s approved projects is increasing especially in year 2010.

     Then we look at the import/export of energy in Thailand in the table below.

Value of energy import in Thailand (UNIT: MILLION BAHT)

                COMPILED BY: ENERGY POLICY AND PLANNING OFFICE (EPPO)

     From the table above, we can conclude that the total value of energy import in Thailand is fluctuate but not much. We therefore say that it is almost constant every year.

Value of energy export in Thailand (UNIT: MILLION BAHT) 

                COMPILED BY: ENERGY POLICY AND PLANNING OFFICE (EPPO)

      From the table above, we can conclude that the total value of enery export in Thailand is almost constant every year except in year 2008 which jumps to 319,212 million Baht.

EXPENDITURE ON FINAL ENERGY CONSUMPTION 

(UNIT: MILLION BAHT)

                      Source: PTT, EGAT, DODE, DEDE

      From the table above, we can conclude that the consumption of final energy is increasing every year including renewable energy.   

Electricity utilization 

(Peak Demand by Month 1996 to 2010)

                         Source: PTT, EGAT, DODE, DEDE

      From the picture above, you will see that the utilization of electricity is increasing every year and peak at April. Hence if we can use renewable energy to generate electricity, it will help us save the environment.       

                     

                Source: FSS Research

      Based on the graphs above we can assume that government has been persistently and consistently pursuing the development and growth of renewable energy in order to reduce reliance on oil and other imported fossil fuels. Even though the country still has to invest in conventional energy, its growth will be lesser than that of renewable energy due to higher importance being place on the environment by local and foreign governments. The costs of renewable energy has also be considerable lower when compared to the past which makes it a more attractive business venture as it is a viable source of profit for companies.

News of Micro hydropower projects in Thailand

Huay-poo-ling children in the school

source: www.thaimtb.com

The hydro power plant for village size “Huay Poo Ling Project” locate at Jomthong, Chiang-mai. The size of production is 22kW. It is operated by co-operation from Sub-district Administration Organization (SAO) of Bann-luang sub-district, Department of Alternative Energy Development and Efficiency (DEDE), Department of National park Wild life and Plant Conservation (DNP)and Energy for Environment foundation (E for E) under the financial supported from United Nations Development Programme. This plant has capacity to provide the electricity to local more than 100 houses including village’s school, temple, church and the forest control. However with the limited of finance for construction so in the beginning, E for E had constructed the electricity transfer system and household devices for 51 houses. And now it does still under financing for expand the system in second phrase to 66 houses. This “Huay Poo Ling Project” shows the co-operation of central and local government sectors, International organization, village people and E for E in the development to the area that far from normal electricity system. Moreover, the local people have seen the importance of reserving  Hill evergreen forest which is the source for power plant and support the distance learning via satellite which school has money to install but no electricity for other electric appliances.

Ta-po-poo school

source: www.weekendhobby.com

The micro hydro power plant, “Ta-po-poo Project” located at Tha-song-yang district, Tak. The size of production is at 12 Kw. It’s operated by the Border Green Energy Team (BGET) which got the money supported by E for E and the embassy of Australia in Thailand. The power plant can provide the electricity for local people in total for 60 houses which is enough for the household’s usage and generate the productivity of local handcraft in the evening. With the character of area which is hard to transport the device and electricity polls but with the united in action and spirit of local people, the construction went well.  The local community has set up the village committee to collect the electricity’s charge and keep the power plant to be sustained. This power plant has been in service since January 2009.

Government Energy Policy

Energy Policy stated in Policy Statement of the Government of Mr. Abhisit Vejjajiva, Prime Minister, to the National Assembly, Monday 30th December, 2008 (B.E. 2551)

Energy Policy (4.4, page 26-27)

(1) To develop the energy sources in Thailand for greater self-reliance through providing adequate energy and increasing stability by expediting the exploration and development of energy sources at both domestic and international levels as well as encouraging in the negotiation with neighboring countries at the government level for joint development; plan to develop energy mix in order to reduce sourcing risk, price volatility, and production cost; encourage electricity production from renewable energy, particularly from small and very small scale electricity generating projects, including study the suitability of other alternative energy for electricity generation.

(2) To set the alternative energy usage as national agenda by encouraging the production and usage of alternative energy, especially bio-fuel and bio-mass such as gasohol (E10, E20 and E85), bio-diesel, waste, dung, etc. to enhance energy security, decrease pollution, and for the benefit of the farmers by encouraging the production and usage of renewable energy at community or village level under appropriate incentives together with support the usage of natural gas in the transportation sector by expanding natural gas distribution system nationwide along with intensive and continued research promotion and development of  all types of alternative energy.

(3) To supervise and control the energy price at appropriate, stable and affordable level for Thai people by setting the proper fuel price structure which supports the development of energy crops and reflects the most realistic rate of production cost; to manage through the market mechanism and oil funds for effective and economical use of energy as well as encourage the competition and investment in energy industry, while improving the quality of both service and safety.

(4) To encourage the energy conservation in household sector, industrial sector, service sector and transportation sector through energy conscience and discipline building campaign and to  promote the effective energy usage with incentives to attract private sector in adopting of energy conserving appliances; to set the motivating measures in order to reduce the level of electricity usage during the peak period; to research, develop and set the standard for electrical appliances and energy conserving building; to encourage the development of mass public transportation and railway system so as to boost effective energy usage and be able to reduce the country’s investment in obtaining energy.

(5) To encourage the energy exploration and usage which emphasize the importance of environment through public participation by setting various standards together with support clean energy development mechanisms project to reduce social and environmental impact and to diminish the greenhouse gas emission.

********************************************************************* 

Energy Policy stated in Policy Statement of the Government of Mr. Samak Sundaravej, Prime Minister, to the National Assembly, 18th -20th February, 2008 (B.E. 2551)

Energy Policy (3.4, page 16-17)

(1) To establish the energy security through acquisition of sufficient energy for the country's development and the people's well-being by expediting more investment in the exploration and development of energy within the country, in joint development areas and from neighboring countries; as well as promoting energy cooperation with foreign countries.

(2) To encourage the supervision of energy sector in order that the energy prices will be appropriate, fair and able to stimulate the competition for investment  in energy industry, while maintaining high standards of quality, service and safety.

(3) To develop and promote research in all forms of alternative energy as an option for Thai people, in line with the principles of the sufficiency economy philosophy and sustainable development, as well as undertake studies to prepare readiness for making decision on the development of other alternative energy which utilizes high technology and locally compatible energy.

(4) To strongly and continuously promote energy conservation and saving plans to conserve, as well as to promote efficient use of energy in the manufacturing sector, service sector, and public sector with appropriate incentives.

(5) To promote the energy development, production, and usage simultaneously with the environmental conservation; to encourage the development of clean energy, including giving importance to the management of greenhouse gas emission in order to help alleviate global warming.

Source: http://www.energy.go.th/index.php?q=en/energy_policy

Clean Development Mechanism

     

     The Clean Development Mechanism (CDM) is one of the "flexibility" mechanisms defined in the Kyoto Protocol (IPCC, 2007). It is defined in Article 12 of the Protocol, and is intended to meet two objectives: (1) to assist parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC), which is to prevent dangerous climate change; and (2) to assist parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments (greenhouse gas (GHG) emission caps). "Annex I" parties are those countries that are listed in Annex I of the treaty, and are the industrialized countries. Non-Annex I parties are developing countries.

     Objective (2) is achieved by allowing the Annex I countries to meet part of their caps using "Certified Emission Reductions" from CDM emission reduction projects in developing countries (Carbon Trust, 2009, p. 14). This is subject to oversight to ensure that these emission reductions are real and "additional." The CDM is supervised by the CDM Executive Board (CDM EB) and is under the guidance of the Conference of the Parties (COP/MOP) of the United Nations Framework Convention on Climate Change (UNFCCC).

     The CDM allows industrialized countries to invest in emission reductions wherever it is cheapest globally (Grubb, 2003, p. 159). Between 2001, which was the first year CDM projects could be registered and by 2012, the end of the Kyoto commitment period, the CDM is expected to produce some 1.5 billion tons of carbon dioxide equivalent (CO2e) in emission reductions.[4] Most of these reductions are through renewable energy, energy efficiency, and fuel switching (World Bank, 2010, p. 262). However, a number of weaknesses of the CDM have been identified (World Bank, 2010, p. 265-267). Several of these issues are addressed by a new modality, the Program of Activities (PoA) that moves away from accrediting single projects but bundles all projects of one type of activity and accredits them together.

Source: http://en.wikipedia.org/wiki/Clean_Development_Mechanism

What is a Carbon Credit?

     A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one ton of carbon or carbon dioxide equivalent (CO2-e).

Carbon credits and carbon markets are a component of national and international attempts to mitigate the growth in concentrations of greenhouse gases (GHGs). One carbon credit is equal to one ton of carbon dioxide, or in some markets, carbon dioxide equivalent gases. Carbon trading is an application of an emissions trading approach. Greenhouse gas emissions are capped and then markets are used to allocate the emissions among the group of regulated sources. The goal is to allow market mechanisms to drive industrial and commercial processes in the direction of low emissions or less carbon intensive approaches than those used when there is no cost to emitting carbon dioxide and other GHGs into the atmosphere. Since GHG mitigation projects generate credits, this approach can be used to finance carbon reduction schemes between trading partners and around the world.

     There are also many companies that sell carbon credits to commercial and individual customers who are interested in lowering their carbon footprint on a voluntary basis. These carbon offsetters purchase the credits from an investment fund or a carbon development company that has aggregated the credits from individual projects. The quality of the credits is based in part on the validation process and sophistication of the fund or development company that acted as the sponsor to the carbon project. This is reflected in their price; voluntary units typically have less value than the units sold through the rigorously validated Clean Development Mechanism. 

Source: http://en.wikipedia.org/wiki/Carbon_credit