Energy efficiency implementation program for state level in Malaysia
-
Upload
zaini-abdul-wahab -
Category
Services
-
view
293 -
download
7
description
Transcript of Energy efficiency implementation program for state level in Malaysia
![Page 1: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/1.jpg)
ENERGY EFFICIENCY PROGRAM IMPLEMENTATION AT STATE LEVEL IN MALAYSIA
FOR BUILDING FACILITIES
By ZAINI ABDUL WAHAB
Committee Member (Strategic Initiatives)MAESCO
2014
![Page 2: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/2.jpg)
Outline
ENERGY SERVICES INDUSTRY AND EPC SUCCESS STORIES FOR ENERGY COST REDUCTION
EPC IMPLEMENTATION FOR BUILDING FACILITIES
WHERE AND HOW TO SAVE?-Potential energy saving opportunities from detailed energy audit
What’s Next and The Way Forward…
![Page 3: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/3.jpg)
ENERGY SERVICES INDUSTRY AND EPC SUCCESS STORIES FOR ENERGY COST REDUCTION
![Page 4: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/4.jpg)
ESCO industry size estimates by selected country
Source: Lawrence Berkeley National Laboratory , National Association of Energy Service Companies, USA September 2013
![Page 5: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/5.jpg)
ESCO Industry in the US…
Source: Lawrence Berkeley National Laboratory , National Association of Energy Service Companies, USA September 2013
![Page 6: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/6.jpg)
Market Potentials of ESCO industry by sector-USA
Source: Lawrence Berkeley National Laboratory , National Association of Energy Service Companies, USA September 2013
![Page 7: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/7.jpg)
Energy Saving Potentials (in USD) in South East Asia’s Countries
Clearly, the industrial and commercial sector s offers
much higher savings potential Source: www.reexasia.com
![Page 8: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/8.jpg)
Pay Back Period for EE Investments
Source: reexasia.com(Feb 2011)
![Page 9: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/9.jpg)
Australia’s Strategy
Source: Government Property Group ,Integrated Energy Efficiency Retrofits and Energy Performance Contracting ,Australia,2011
![Page 10: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/10.jpg)
AUSTRALIA -Victorian Government
Greener Government Buildings Program in 2009.
Aimed to save $1 billion in energy & maintenance costs in 25 year
To reduce emissions from government buildings by 20% by 2020.
A simple government-wide protocol for the EPC process
Loans for agencies to implement energy efficiency upgrades
Establishing a facilitation unit in the Department of Treasury and Finance
A mandate for all agencies to implement energy efficiency upgrades at sites accounting for 20% of agency energy use by 2012 and 90% by 2018.
Commenced with a trial EPC covering 16 office buildings, and is now being rolled out across agencies
$160 million in 4 years
Decisions on additional funding to complete the program will be made in coming years.
![Page 11: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/11.jpg)
AUSTRALIA -Queensland Government
The Strategic Energy Efficiency Policy for Queensland Government Buildings - to reduce their energy consumption by 5 % below 2005-06 levels by 2010, and 20 % by 2015.
Shares some key features with the Victorian program - the use of EPC and facilitation by a single department, the Department of Public Works.
The Department of Public Works has so far invested over $20 million in improving the energy efficiency of 25 of the sites that it owns, and has reduced its energy use in those buildings by 18 megawatt hours per year.6
![Page 12: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/12.jpg)
United States Federal, State, and local governments in the US invested
over $21 billion in EPC since 1997.
The US Federal Government’s 2009 economic stimulus package included an additional $3.1 billion for efficiency in existing federal government buildings
Federal and State governments have passed specific laws to facilitate EPC and accept up to 15-20 year payback periods.
Research in the US indicated that EPCs have delivered general benefit to cost ratios of 1.6 to 1, with higher 2.1 to 1 ratios for EPCs in health facilities.
![Page 13: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/13.jpg)
European Platform for the Promotion of EPC
Development of manuals on additional models and support-EPC + White Certification› Quality Standards › Comprehensive
Refurbishment & link to Facility Management
› Norms /Certification › Financing
Intensive dialogue with market actors - Building owners - Financial sector - ESCOs
Capacity building & Increased awareness, know-how & exchange › Over 100 events organised
and attended, 2,000 participants with about 60 are new EPC experts.
Pilot projects › Over 360 buildings screened › 30 more concrete projects
received further support › 17 resulted in concrete EPC
projects› About 1 million square
meters › Energy cost baseline of
almost 10 million Euros/year› Estimated energy savings
between 10% and over 25%
![Page 14: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/14.jpg)
ESCO Fund in Thailand
![Page 15: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/15.jpg)
Malaysia’s EPC case study : Warehouse Facilities
Application Areas: - Fluorescent Lamps - High bay Lighting - HID
After Installation:20,000 pcs x 26W/1000
Before Installation:20,000 pcs x 45W/1000 Total annual Saving =
42.2%= 3,283,200 kWh, = RM 920,000
Source: MAESCO member
![Page 16: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/16.jpg)
Malaysia’s EPC case study : Integrated Shopping Complex
Facilities
Areas of Conservation Implementation:1) Transformers (MSB)2) Cooling System – Chillers, C/Tower, AHUs, CHW & CDW
Pumps3) Lighting System – Internal, External & Parking4) Peak Demand Control
Total Actual Saving Achieved = RM 1,495,000/year
Total Proposed Saving = RM 905,000/yearSource: MAESCO member
![Page 17: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/17.jpg)
EPC IMPLEMENTATION FOR BUILDING
FACILITIES
![Page 18: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/18.jpg)
How to make EPC Works for buildings?
Commitment to get faster
results!
![Page 19: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/19.jpg)
Asset Responsibility Period
Energy Supply & Utilization
![Page 20: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/20.jpg)
Building life cycle
Source:The American Institute of Architects,2010
![Page 21: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/21.jpg)
ENERGY EFFICIENCY
IMPROVEMENT PROGRAM
Sustainable Energy Management
Awareness Program
Capacity Building – Training &
Development
HRDF refundable programs
Measurement & Verification (M&V) Internal/3rd Parties
Adoption of Energy Management System
(ISO50001)
Internal/Consultant
Energy Saving Project
Energy Auditing
Internal Budget
EPC Model
Full/matching grant – with commitment
to implement
Energy Saving Projects
Implementation
EPC model
Standard Procurement
SUPPORT MEASURES by the government
TA
RG
ET
GR
IOU
P
S
Options To REDUCE Energy Costs For Businesses
![Page 22: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/22.jpg)
Hypothetical Scenario – energy efficiency costs and savings
Source: Government Property Group ,Integrated Energy Efficiency Retrofits and Energy Performance Contracting ,Australia,2011
![Page 23: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/23.jpg)
Traditional vs. Integrated Energy Services Model
Traditional Integrated Energy Services Model
Source: Government Property Group ,Integrated Energy Efficiency Retrofits and Energy Performance Contracting ,Australia,2011
![Page 24: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/24.jpg)
What is Energy Performance Contracting(EPC)?
“Energy Performance Contracting is when an ESCO is engaged to improve the energy efficiency of a facility, with the guaranteed energy savings paying for the capital investment required to implement improvements”
![Page 25: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/25.jpg)
Scope of Services under EPC Projects
Project Funding & Financing Options
Engineering & Economic Feasibility Studies
Project Design, Engineering & Permitting
Project Construction
Project Commissioning
Operation, spare parts & Maintenance
Performance measurements & monitoring
Energy performance reporting
![Page 26: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/26.jpg)
Benefits of EPC-Facilities OwnerFinance energy saving improvements with no upfront capital
Invest savings achieved into other projects
ESCO to identify Energy Saving projects
ESCO guarantee Energy savings - the remuneration of ESCOs is directly tied to the actual energy savings achieved
Energy saving is shared between ESCO & the building owneras per agreed terms & payment schedule with a single-source responsibility
ESCO supplies, installs, maintains & retain an on-going operational role in measuring & verifying the savings over the contractual terms.
Use future energy ,cut operating cost, be more competitive & improved comfort & productivity from upgraded systems
Positive environmental impacts & reduced environmental footprint
![Page 27: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/27.jpg)
Summary of Comparison Between EPC –Shared Saving Model & Cash Purchase
Item EPC-Shared Saving Model
Cash Purchase
Technical Expertise ESCO ESCO
Implementation(design, installation, testing & commissioning) ESCO ESCO
Funding Source ESCO OWNER
Sharing of returns % At agreed % & conditions
100% to OWNER
Technical & Investment Risks ESCO OWNER
Energy Performance Maintenance & monitoring works and risks ESCO OWNER
![Page 28: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/28.jpg)
Key Features & Success Factors Of EPC Projects Implementation
Savings based on actual & measured energy performance data with permanent measuring equipment
Capable ESCO- Technically & Financially
Comprehensive EPC Contract document
Understanding of the how EPC works & it long term benefits by facilities owners
![Page 29: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/29.jpg)
Financing Options for EPC
In all above, ESCO provides a guarantee of the project’s technical performance and satisfaction of contracted specifications with the client
1. GUARANTEED SAVING Model
• The loan goes on the client’s balance sheet
2. SHARED SAVING Model
• The loan goes on ESCO’s balance sheet
![Page 30: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/30.jpg)
Guaranteed Saving Model
FACILITIES
OWNERESCOBANK
Project Design&
Implementation
Agreed Project
FeesLoan
Repayment
![Page 31: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/31.jpg)
Owner’s Share(10-30%)ESCO’s share(70-90%)(Loan & interest, O&M, spare parts, insurance,
profit & etc)
EPC contract periodBEFORE
BaselineDetailed
Energy Audit 100% saving
enjoyed by owner
After EPC contract period
Energy bill saved
Develop EnMS & in-house capacity building
Implement EnMS & sustain saving
YEAR
EN
ER
GY
BIL
L
Implement EPC
Project
Shared Saving Model
![Page 32: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/32.jpg)
How the Model Works?
GUARANTEED SAVING
Facilities owner takes out “normal” loan (will appear on balance sheet)
ESCO guarantees loan can be repaid with savings
ESCO pays difference if minimum savings not met
Main advantage: ESCO can undertake moreprojects
SHARED SAVING
Facilities owner does not take loan (will not appear on balance sheet)
ESCO finances project: takes performance & credit risk
Facilities owner pays higher % to ESCO
Main advantage: Independent of Facilities
owner ’s borrowing capacity
![Page 33: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/33.jpg)
Key Steps in EPC Implementation Process
![Page 34: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/34.jpg)
Selection Criteria of an ESCO
Experiences in EPC Projects /Track
Records in energy services
Financial Strengths
Management capacity in
energy services
Technical Competency &
ExpertiseESCO
To secure financing &
ensure sustainable operations
MAESCO WILL ASSIST IN THE SELECTION OF ITS MEMBERS
![Page 35: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/35.jpg)
WHERE AND HOW TO SAVE?Potential energy saving opportunities from detailed energy audit
![Page 36: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/36.jpg)
SAVING POTENTIALS Pumps (25% - 35%) Chiller (20% - 25%) AHU/FCU (25% - 35%) Cooling Tower(15% - 20% Lighting System (40-60%)
Energy Saving potentials at Building Facilities
Source: MAESCO member
![Page 37: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/37.jpg)
Potential EPC Projects for Energy Efficient Lighting Technologies
Savings at 40-60% from lighting system
Energy Saving Micro Ballast and HP Fluorescent T8-28
watts
LED Fluorescent Tubes LED Down Light
LED Ceiling Light High Performance LED Street Light
LED Spot/Flood Light
![Page 38: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/38.jpg)
EPC Project Implementation Process
EPC Contract Negotiation &
Signing
Install Data Logger/
permanent sub-meters
Collect energy data to
establish energy
baseline values
Improve & optimize energy
consumption with energy
saving measures
Measure & monitor actual
energy savings
achieved against agreed
baseline values
![Page 39: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/39.jpg)
Measurement & Verification of Actual Electricity Consumption Reduction
Achieved
Saving = 40%
(7.8 – 4.7)/7.8
Saving = 42.5%
(8.0 – 4.6)/8.0
Source: MAESCO member
![Page 40: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/40.jpg)
Factors should be considered for M&V in EPC contract to reduce dispute
Commitment from Client Factors Affecting Savings
Performance Evaluating Savings Uncertainty Minimum Operating Conditions Energy Prices Verification by a Third Party Baseline Adjustments (Non-
Routine) Balancing Uncertainty and Cost
![Page 41: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/41.jpg)
Key Elements in EPC Contract Document(1)
What is guaranteed?› The minimum amount of savings expected
to be achieved› The method, report formatting and formula
for calculating shared savings will be paid to the ESCO;
› Conditions to be applied if savings achieved are less than guaranteed by the ESCO.
![Page 42: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/42.jpg)
Key Elements in EPC Contract Document(2)
The cost savings measurement with significant changes of operations at the facilities.
The responsibilities of building owners and the ESCO throughout the contract period.
Maintenance, use and modification/ removal of the equipment that was installed by the ESCO by the facilities owner.
If the equipment installed by the ESCO is lost or damaged
Guarantee of losses and liabilities by ESCO to the facilities owner.
![Page 43: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/43.jpg)
Challenges of Energy Performance Contracting(1)
•Facility owner participate in establishing the energy baseline,
Energy Baseline Development
• The facility owner agree on the definitions and methodology for making any future adjustments to the energy baseline and should be A part of the contract.
Energy Baseline Adjustment
•The allowance of operational savings is generally discouraged.
Operational Savings
•Should be avoided/used minimally.
Stipulated Savings
•ESCOs inflated the interest rate of funds borrowed for additional profits.
•Facility owners may check/arrange their own financing at lower rates.
Excessive Finance Charges
![Page 44: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/44.jpg)
Challenges of Energy Performance Contracting(2)
•Some ESCOs have required that the preventive maintenance on facilities also be outsourced to that ESCO
Required Maintenance Agreements
•off-site control must be avoided.
Lack of Local Facilities Control
•Savings should be calculated on an annual basis and stand alone on that basis.
Terms of Savings Reconciliation Versus Budget
Cycle
•the use of a project manager or a third party verifier by the client is highly recommended.
Quality Control
•Transparency in the overall costs involved(technologies, )&M, interest rates, IRR, profits and etc.)
Owners request unreasonable
amount of shared saving %
![Page 45: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/45.jpg)
WHAT’S NEXT?
![Page 46: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/46.jpg)
ENERGY EFFICIENT BUILDINGS – PROPOSED PROCESS FLOW
STAGE 1 - PREPARATORY(2-3 weeks)
STAGE 2 - AUDIT(2 -3 Months)
STAGE 3 - RETROFIT(3-6 months)
STAGE 4 – O&M(5-7 years)
Building Owner
Program Manager
ESCO
1.Initial Briefing
2.Obtain Initial Info
3.WorkshopOn EE
4A. Apply forBSEEP Fund
4B.Engage withOther Funders
5. Evaluate, select & appoint ESCO
6.Energy Audit
8.PresentAudit Report
Yes
Yes
7.PrepareEnergy Audit Report
9.Prep areDraft EPC Contract
10.Nego
11.Sign EPC Contract
12.ImplementEPC Works
Performance Monitoring &Verification
MonthlyPayment to ESCO
Yes
• Implementation process• Contract principles• Top mgmt. participation• Form 2 to fill up
• Intro on EE Bldgs• Form 1 to fill up
Funding
Yes
Monitoring, Operation & Maintenance based on contractual conditions
Assistance/Advisory on M&V
![Page 47: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/47.jpg)
How to make EPC Works for government buildings?
Commitment to get faster results!
A Standardize
d Government Guidelines
A Lead Agency
A source of Capital
Mandates & set targets on agencies
![Page 48: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/48.jpg)
Recommended Support Measures for EPC in Malaysia
FINANCING
Sustainable Funding Sources
Revolving Fund /Low
Interest Loans
Assessment Criteria For
Energy Services/Energy
Efficiency Solutions
TECHNICAL ASSESSMENT
Competent & Independent
Parties
Transparency In Assessment
Criteria
ACTUAL ENERGY
PERFORMANCE M&V
Competent & Independent
Parties
Recognition Of M&V Services
FISCAL INCENTIVES
GOVERNMENT AGENCIES,FINANCIAL
INSTITUTIONS, PROFESSIONAL BODIES
![Page 49: Energy efficiency implementation program for state level in Malaysia](https://reader037.fdocuments.net/reader037/viewer/2022110309/55841240d8b42a40018b481a/html5/thumbnails/49.jpg)
THE WAY FORWARD….
The potentials in Malaysia is still relatively “UNTAPPED”.EPC is a proven workable model for faster EE implementation!
Interested parties must have the same understanding & goals on how to make EPC works – WIN-WIN & LONG TERM ENERGY COST SAVINGS!
ESCOs must have/develop competency & capability to ensure successful EPC projects implementation
More successful EPC projects are required to attract more attention of building owners & banks/investors