Bangkok--14 May--McKinnon & Clarke
Thailand could help businesses improve their energy efficiency by slashing red tape and introducing tax incentives, such as those offered in Singapore, says the global energy consultancy McKinnon & Clarke.
‘‘It does not require a big budget to cover a broad range of energy efficiency projects,’’ says Mr Northrop.
The government should focus on helping businesses implement simple low-cost energy saving activities, instead of promoting complicated Clean Development Mechanism (CDM) projects or renewable energies, said Simon Northrop, the CEO of McKinnon & Clarke.
The Singaporean government funds 50% of new investments in energy efficiency projects, while countries such as Thailand, Malaysia and Vietnam only offer soft loans.
“Thailand should do the same as Singapore,” Mr Northrop said. “It does not require a big budget to cover a broad range of energy efficiency projects.”
Government subsidies could reduce the break-even point for investments in energy saving projects to six months or one year, he said.
“This is a good time to implement efficient energy management because the cost of the equipment is going down,” he said. “More clients are now willing to embark on energy efficiency projects despite the ongoing economic recession.”
While the cost of oil has fallen by more than 50% in the past 12 months, the current low prices will not be sustained. As a result, businesses should invest in energy-efficiency management now to prepare for higher energy prices that will follow the global economic recovery, he said.
Thailand should broaden the scope of the energy efficiency projects that qualify for grants under the Energy Ministry’s Demand Side Management (DSM) programme, he said.
The DSM provides financial support for energy users, including factories, buildings, hotels and resorts, to encourage them to invest in better energy efficiency. However, businesses have to bid for the grants, while some activities, such as changing the type of energy used, are not eligible under the scheme.
The DSM’s existing grant criteria relate only to sizeable energy-saving projects, and are restricted to certain types of new technology, Mr Northrop said. Consequently, small to medium-sized businesses do not qualify for such incentives.
“The scheme has a lengthy, complicated and has a less-than-certain qualification process. The terms of the scheme undoubtedly puts users off from applying,” he said.
“Some companies invested and stopped halfway because the process is too difficult. You should go back to basics and create a favourable environment for SMEs to invest. For instance, covering their expenses for training on energy saving.”
McKinnon & Clarke participated in the DSM scheme by helping some of its clients, such as Thai Mitsuwa and UMC Metal, obtain grants, said Mr Northrop.
Bangkok is the Scottish company’s regional hub. McKinnon & Clarke serves 4,500 clients worldwide, in the manufacturing, commercial and services sectors, including 200 Thai companies. It employs 70 local staff.
“The business is growing by about 10% every year, and it will probably have a total 5,000 clients by this time next year,” he said.
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