eceee 2009 summer study y C Current state of ESCO activities in - - PowerPoint PPT Presentation

eceee 2009 summer study

C t t t f ESCO ti iti i A i

y

Current state of ESCO activities in Asia: ESCO industry development programs and f t t k i A i t i future tasks in Asian countries

June 2009

Chiharu Murakoshi Ph D Chiharu Murakoshi Ph.D. Hidetoshi Nakagami Ph.D. Jyukankyo Research Institute J A i ti f E S i C i (JAESCO)

1

Japan Association of Energy Service Companies (JAESCO)

JAESCO

Overview of Presentation Overview of Presentation

Definition of ESCO in this paper Market size of ESCO industry in Asia Promotion program of ESCO industry in Asia Conclusion Conclusion

2

Definition of ESCO in this Definition of ESCO in this paper p p

3

Definition of ESCO

The definition of ESCO in this paper is simple The definition of ESCO in this paper is simple. ESCOs provide energy efficient retrofit projects

with performance contracts that guarantee energy savings.

Introduction of ESCOs to Asia took place in the 1990s. Almost all countries learned the ESCO concept from Almost all countries learned the ESCO concept from

USA.

Th

d fi i i f ESCO i A i i i i il

The definition of an ESCO in Asian countries is similar

to the traditional ESCO concept in USA（before utility restructuring)

4

restructuring).

Market size of ESCO industry in Asia

5

Market size of ESCO I ndustry in A i Asia

700 3 700

(M i l l i

• n U S D )

630

500 600 700 3, 500 3, 700 3, 600

3, 630 353 237

300 400

112 87

100 200 Japan S outh K orea C hi na T hai l and U . S . A

(2007) (2006) (2006) (2006) (2008)

• Japan, South Korea, China and Thailand is limited performance

contract based, and 69% is performance contract projects in USA.

• A

l th i d 20% i Chi Th il d d USA i

6

• Annual growth is around 20% in China, Thailand and USA, increase

in Japan and decrease in South Korea recently.

Market size of ESCO industry in Japan

C om m erci al S ector w i th P C C om m erci al S ector ES P

Annual

I ndustri al S ector w i th P C I ndustri al S ector ES P C om m erci al S ector w i th P C & ES P I ndustri al S ector w i th P C & ES P

(M i l l i

• n U SD )

(M i l l i

• n U SD /proj

ect)

investment Ave size of project

350 400 2. 5 3.

321 353 (M i l l i

• n U SD )

(M i l l i

• n U SD /proj

ect)

ct

200 250 300 1 5 2.

253 231

i nvestm ent ze of P roj ec

100 150 200 1. 1. 5

62 117 143

A nnual i A verage si z

50

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0. 0. 5

8 18 32 62

A 7

Data source:JAESCO survey,2008

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

PC:Performance Contract / ESP:Energy Service Provider

Chinese EE I nvestment

70

(100 Million RMB) 2 500 350 Investment amount

2005 Year

50 60

Energy efficiency investment EPC investment

2,216 294 2,000 2,500 250 300 350

Number of projects

(Million RMB)

• jects

20 30 40 668 189 1,000 1,500 100 150 200 vestment amount( Number of pro 10 2003 2004 2005 2006

(year) 19 15 500 Commercial Sector Industrial Sector Transportation 50 Inv

Data：Zhao Ming: EMCA and ESCO development in China, Proceedings of 2nd Asia ESCO Conference, Beijing, September 2007 Data：EMCA survey ,2006

• Investment for EE projects with PC in 2006: 237 Million UDS

Sector

• Energy savings in 2006:overall investment in EE as 4.16 Mtce/year,

investment in EE with PC as 2.69 Mtce/year

• Industrial sector is major (76%)

8

• Industrial sector is major (76%).
• Investment per project: 1.43 Million USD for Industrial sector/ 280

thousand USD for Commercial sector.

Market trends of ESCO industry in Thailand in Thailand

（ M i l l i U S D ） 86. 9 90 100 （ M i l l i

• n U S D ）

56. 9 69. 7 60 70 80 36. 2 30 40 50 6. 5 8. 8 13. 2 10 20 30 2000 2001 2002 2003 2004 2005 2006 （ Y ear） 9

Investment for EE projects with Performance Contract

ESCO market trend in South Korea

( ) ( ) 183 519 548 180 200 500 600 (M i l l i

• n U D S )

(N o,

• f P roj

ects) 140 133 136 112 491 328 120 140 160 400 500 65 86 75 100 83 112 244 328 202 80 100 120 300 30 65 156 139 106 167 40 60 100 200 0. 5 3. 9 2. 8 5. 5 5. 7 3 3 3 24 25 100 20 ' 93 ' 94 ' 95 ' 96 ' 97 ' 98 ' 99 ' 00 ' 01 ' 02 ' 03 ' 04 ' 05 ' 06 ' 07 ' 08

10

Dada: Korean Association for Energy Service Companies (2008)

Promotion program of

• o

p og

• ESCO industry in Asia

11

The step of market development The step of market development

• f ESCO industry in Japan
• f ESCO industry in Japan

2008

EC Law

1996/ 2001 1998 2002/ 2005

Strengthen

• f ESCO industry in Japan
• f ESCO industry in Japan

2005

Kyoto Protocol Market revised

1996/ 2001

Target of EE policy

1998

Subsidy Program EE policy Protocol effected Market development Market New entry Market promotion

1997

Finance

Commendation P

1998

Pilot FS

1999

Program(2005-) Asia ESCO Conference

(2005/2007)

projects

1996

What is ESCO?

1999

JAESCO established

M&V id li

ESCO introduction

Market database(2001-)

(2005/2007) 12

M&V guide-line(1999-2002) Standard contract(1998)

Potential market scale(1997)

Case study(2000-)

ESCO introduction manual(2004)

Programs which had not adopted i J in Japan

Tax incentive Low interest loan Low interest loan Loan guarantee program Reform of the procurement system in the national

government

13

Brief trends of ESCO industry in China China

• 1992-1994:Survey by WB/GEF：China Issues and Option in
• 1992 1994:Survey by WB/GEF：China Issues and Option in

GHG Emissions Control

• 1998: Enforced Energy Conservation Law

gy

• 1998:WB/ GEF “The China Energy Efficiency Project

(CEEP)” started 1998-2003:First phase

• Established 3 pilot ESCOs(1996) and NECIDC

2003-2008:Second phase

• Loan Guarantee Program, EMCA(ESCO association)
• 2006:11th Five-year Development Guidelines, 20 % reduce

energy consumption per GDP until 2010

14

• 2007: Strengthened Energy Conservation Law

I nternational Financial Support

• n First phase
• n First phase

Funding Organization Type of support Amount Allocation to each EMC g pp WB/IBRD Loan 63 Million UDS 21 Million UDS GEF Subsidy 22 Million USD 5 Million UDS S 1 Milli E EU Subsidy 4 Million Euro 1 Million Euro England Subsidy 1.91 Million Pound － Total 89.4 Million USD 26.8 Millon UDS

Note:Using 1996 exchange rates: 1.269 USD/Euro, 1.578 USD/Pound

15

Support on Second phase uppo

• eco d p ase

Set up ESCO association(EMCA)

• Become independent until 2008

Implemented “loan guarantee program”. Managed by

p g p g g y CNI&G

• let financial organizations avoid 90% credit risk

GEF subsidy (22 Million USD) The rest the fund is used for

• ther energy efficiency projects

EMC loan guarantee special fund (CNI&G) Increase to 5 to 10 times of resource Financing to EMC from banks

16

Increase to 5 to 10 times of resource fund by loan guarantee program

Brief trends of ESCO I ndustry in Th il d Thailand

E di i d 4 i i 1996 d b GEF (6

• Energy audit carried out to 4 site in 1996 supported by GEF (6

Million Thai Bath）

• Only one factory carried out ESCO project(190 Million Thai Bath
• Only one factory carried out ESCO project(190 Million Thai Bath,

SPP= 4.9 year). Subsidized 30% by ENCON Fund.

• EGAT had supported to promote ESCO. And EGAT tried to establish

pp p ESCO company, but it had stopped.

• FTI（The Federation of Thai Industries） support to promote ESCO

as ESCO association, now.

• 56 ESCOs registered to ESCO Fund.

17

Activities of Thai ESCOs Activities of Thai ESCOs

• 56 ESCOs in Thailand
• Active Science Co.,Ltd, B.T.M.Engineering Co.,Ltd, Best Energy

Service Co.,Ltd, Compress Air Management Co.,Ltd, Elyo-H Facilities Management Ltd., Energica Co.,Ltd, Energy Conservation System Co Ltd Energy Design Concept Co Ltd Conservation System Co.,Ltd, Energy Design Concept Co.,Ltd, Energy Solution System Co.,Ltd, Excellent Energy International Co.,Ltd, Goldmark Technical Supply Co.,Ltd, Johnson Controls International Co.,Ltd, Schneider Ltd., Solecell Intertrader , , , Co.,Ltd, Thai Agency Engineering Co.,Ltd, Thai Energy Conservation Co.,Ltd, Vesta PMS Co.,Ltd

• Hitach, Ltd. from Japan

, p

• Market scale of EPC is 3.2 Billion Thai Bath (86.9 Million USD) in

2006

• FTI(Th

F d ti f Th i I d t i )

• FTI(The Federation of Thai Industries)
• FTI support to promote ESCO industry as ESCO association
• ESCO Fund

18

• ESCO Fund
• Low interest loan provided by ENCON Fund

Promotion program of ESCO Promotion program of ESCO industry (1) industry (1)

Market development programs carried out can be

industry (1) industry (1)

Market development programs carried out can be

categorized

(1) baseline surveys/feasibility studies (1) baseline surveys/feasibility studies (2) skill development (3) public awareness campaigns (3) public awareness campaigns (4) founding of core businesses and support for operations (5)

j t d l t

(5) project development (6) financial support (7) strengthening of policies and systemic reforms

In general, through providing such programs, it is possible

19

to initiate an ESCO industry.

Success factors of ESCO in Asian t i (1)

Similar programs had been in effect in Japan China

countries(1)

Similar programs had been in effect in Japan, China,

Thailand and India, but success factors of these four main countries vary. y

Japanese case:most active in Asia

• t i iti ti

l ti f ffi i

government initiative, regulation for energy efficiency

(ECL), and the contributions of JAESCO and leasing companies as private sector participants companies as private sector participants

Chinese case:most active in Asia initiative and intensive investment by WB/GEF to pilot

ESCOs and a loan guarantee program

20

Success factors of ESCO in Asian t i (2)

Indian case:still very small market

countries(2)

Indian case:still very small market initiative by international organizations initiatives of international organizations were concentrated

in China, but dispersed in India

Thai case:middle developed in Asia government initiative regulation for energy efficiency government initiative, regulation for energy efficiency

(ENCON Act), and financial incentives

21

Asian EE market leached turning point turning point

EE market would be increase under steady economic

growth condition growth condition

Target of EE: increase profitability Bakery with long line: Focus investment to

increase products

B k

ith li F i t t t i

Bakery with no line: Focus investment to increase

profitability and quality

It would be leached turning point in Asia It would be leached turning point in Asia Jump in oil price Strengthen EE policy and regulation Set up production by investment to EE

22

Reinforcement of competitiveness and increase

employment by development of EE innovation

Conclusion(1) ( )

Asian countries introduced ESCO with reference to the US Asian countries introduced ESCO, with reference to the US

• model. In this process, measures to introduce and spread

ESCO have been carried out in each country. y

Market size of ESCO industry exist 353 million USD in

Japan(2007), 237 million USD in China(2006), 112 million Japan(2007), 237 million USD in China(2006), 112 million USD in Korea(2008), 87 million USD in Thailand(2006) and 3.6 billion USD in USA(2006).

This data limited performance contract based in Asian countries and

69% is performance contract projects in USA. Annual growth is around 20% in China Thailand and USA increase in Japan and around 20% in China, Thailand and USA, increase in Japan and decrease in Korea recently.

23

Conclusion(2) ( )

Market development programs can be categorized as (1) Market development programs can be categorized as (1)

baseline surveys/feasibility studies, (2) skill development, (3) public awareness campaigns, (4) founding of core ( ) p p g , ( ) g businesses and support for operations, (5) project development, (6) financial support, and (7) strengthening of li i d t i f policies and systemic reforms.

In general, through providing such programs, it is possible

to initiate an ESCO industry.

It is important to strengthen energy efficiency policy, reform

p g gy y p y, procurement systems of government, develop financial mechanisms, receive intensive investment by government or i t ti l i ti d d l ESCO i ti

24

international organizations and develop an ESCO association.

Conclusion(3) ( )

Asian EE market leached Asian EE market leached

turning point.

Amid the current global

Help! I need

Amid the current global

financial crisis, we wonder if energy efficiency investment

p some ESCO!

energy efficiency investment will be reduced.

But we would like to insist that But, we would like to insist that

now is a good chance to invest in energy efficiency and ensure gy y future profitability.

Thank you for Thank you for Listening !!

Idea source:Thomas Friedman ”Green Revolution”

Thank You for Thank You for Thank You for Thank You for Listening ! Listening !

Help! I need some ESCO!

Listening ! Listening !

http:/ / w w w .jyuri.co.jp http:/ / w w w .jyuri.co.jp

26

Back ground slides Back ground slides

27

Share by type of contract y yp

100%

I ndustri al SSC I ndustri al ESP C om m erci al SSC C om m erci al ESP I ndustri al G SC C om m erci al G SC

12 8% 22. 3% 16. 7% % 9% 7% 2% 2% 48. 3% 36. 6% 12. 6% 8. 4% 26. 8% 9. 4% 8. 1% 3% 1% 23. 2%

80% 100%

12. 8% 22. 5% 35. 9% 37. 5% 6% 16% 4% 99. 4% 93. 0% 48. 3% 1%

60%

68% 68% 47% 71% 16% 28% 25. 7% 33%

20% 40%

12% 22% 18% 16% 4. 8% 6. 6%

0% 20% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

28

Data source:JAESCO survey,2008

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

(Year)

I nvestment per project p p j

Energy-efficiency retrofit projects Energy efficiency retrofit projects

3, 000

C om m erci al P C

($1, 000/proj ect)

2, 341 1 966 2, 420 2 008

2 000 2, 500

I ndustri al P C C om m erci al non P C I ndustri al non P C P C A

1, 793 1, 296 1, 966 1, 474 2, 008 1, 323 1, 396

1, 500 2, 000

P C A verage non P C A verage

1, 047 687 714 , 1, 211 954 1, 123 , 810 644

500 1, 000

483 462 270 277 172 179

500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 （

year）

29

Data source:JAESCO survey,2008

（ y ）

I nvestment per project p p j

Performance contract projects Performance contract projects

7, 000

I ndustri al SSC C i lSSC

($1, 000/proj ect)

6, 119

5, 000 6, 000

C om m erci al SSC I ndustri al G SC C om m erci al G SC SSC

3 033 4, 425 3, 593 3, 425 3, 799 4, 652

4, 000

SSC G SC

3, 033 1, 817 1 359 2, 340 2, 730 2, 738 1 342 2, 670 1, 736

2, 000 3, 000

173 1, 270 1, 109 1, 359 845 868 1, 213 531 676 1, 068 1, 342 343

1, 000 1998 1999 2000 2001 2002 2003 2004 2005 2006 207 （

）

30

Data source:JAESCO survey,2008

1998 1999 2000 2001 2002 2003 2004 2005 2006 207 （

year）

Conclusion( 1 )

• I t has been 13 years since the approach toward the ESCO
• I t has been 13 years since the approach toward the ESCO

business in Japan started in 1996

• The ESCO business is expanding the market with
• The ESCO business is expanding the market with

strengthening of governmental support

• ESCO (EPC) market are extending doubling annually, it

ESCO (EPC) market are extending doubling annually, it grew up into $353 Million in 2007 grew up into $353 Million in 2007

• Shared savings contracts are over 90% in 2003, 70% in

Shared savings contracts are over 90% in 2003, 70% in 2004 90% in 2005 70% in 2006 and 90% in 2007 2004 90% in 2005 70% in 2006 and 90% in 2007 2004, 90% in 2005, 70% in 2006 and 90% in 2007 2004, 90% in 2005, 70% in 2006 and 90% in 2007

• Average rate of energy savings is at 12

Average rate of energy savings is at 12-

• 13% for both

13% for both commercial and industrial facilities commercial and industrial facilities commercial and industrial facilities commercial and industrial facilities

• Average simple payback period for PC projects is at 9 years

Average simple payback period for PC projects is at 9 years for both commercial and industrial facilities for both commercial and industrial facilities

31

Conclusion( 2 )

P i b ildi h ld h j k h P i b ildi h ld h j k h

• Private sector building hold the major market share

Private sector building hold the major market share

• ESCO business have mainly been “blue chip” companies in

good standing good standing

• I n the meantime, the number of entities who enter into

ESCO business are increasing primarily with the g p y participation from the large companies

• Financial environment for ESCO business is delay

Financial environment for ESCO business is delay

• Japan is pressed to promote energy saving measures

toward the ratification of the Kyoto Protocol

• The ESCO business is expected to play one of the important

roles with government’s countermeasures against the global warming

32

global warming

The step of market d l t f ESCO development of ESCO industry in Japan industry in Japan

33

Roughly categorized of ESCO ti (1) promotion programs(1)

Improving policy infrastructure Improving policy infrastructure Elaboration of the warming countermeasures and

i li i ( i l d energy-saving policies (various laws and systems and action plan)

Positioning ESCO in energy-saving policies, and

taking measures to support ESCO (the energy consumption curtailment target for ESCOs subsidies consumption curtailment target for ESCOs, subsidies, etc.)

S

ti ESCO i t ti t (I t d t t d

Supporting ESCO in starting stage (Introductory study,

feasibility Investigation, experimental project, market research)

34

research)

Roughly categorized of ESCO ti (2) promotion programs(2)

Capacity building (measurement & verification guideline Capacity building (measurement & verification guideline,

standard contract, introduction guideline for local authorities) authorities)

Engaged in spread and enlightenment activity

(explanatory meeting conference exhibition (explanatory meeting, conference, exhibition, commendation system)

Promoting of public facility Introduction Promoting of public facility Introduction Establishing and fostering of propulsive organization

35

Adopted programs to promote ESCO i d t i J (1)

Initiation of ESCO introductory study (1996)

ESCO industry in Japan(1)

Initiation of ESCO introductory study (1996) Implementation of feasibility study (1997) Implementation of demonstration projects and

preparation of a standard contract form (1998)

Development of Measurement & Verification Protocol

guideline (1999 - 2002) g ( )

Establishment of the Japan Association of Energy

Service Companies(JAESCO) (1999) Service Companies(JAESCO) (1999)

ESCO explanatory meeting and distribution of case

study (2000 - Present)

36

study (2000 Present)

Adopted programs to promote ESCO i d t i J (2)

Introduction of full scale ESCO projects to local

ESCO industry in Japan(2)

Introduction of full-scale ESCO projects to local

authorities (2001)

ESCO

i li (2001)

ESCO promotion as a policy target (2001) ESCO market size survey start (2001 - Present) The General Principle to Promote Counter Measures for

Global Warming (2002) g ( )

Toughening of regulations by revising the Energy

Conservation Law (2002 / 2005) Conservation Law (2002 / 2005)

Preparation of guideline to introduce ESCO projects to

local authorities (2004)

37

local authorities (2004)

Adopted programs to promote ESCO i d t i J (3)

ESCO project introduction start to local authorities

ESCO industry in Japan(3)

ESCO project introduction start to local authorities

under the PFI Law (2003)

ESCO

j I d i i l f ili i (2004)

ESCO project Introduction to national facilities (2004) The Kyoto Protocol effectuation (2005) The First Asia ESCO Conference (2005) Start of Superior ESCO Project Commendation (2005) Start of Superior ESCO Project Commendation (2005) The Second Asia ESCO Conference (2007) The Law Concerning Environmental Consideration

Contracting (2007)

38

The Energy Conservation Law was revised(2008)

World Bank/ GEF China Energy Efficiency Project organization chart Efficiency Project organization chart

NDRC PMO WB, GEF Financial department in China EMCA

Loan guarantee Implementing agency

Financial institutions Beijing EMC Liaoning EMC Shangdong EMC NECIDC New EMC New EMC New EMC

・・・・

The first phase The second phase

Note）NDRC: National Development and Reform Commission PMO：Project Management Office NECIDC：NDRC Energy Conservation Information Dissemination Center

39

Measures to promote and expand ESCO i Chi ESCO in China

Systematization of financial system by Government Systematization of financial system by Government Systematization of recovery after bankruptcy R f f b i t f i t t f Reform of business customs for acquire trust from market Develop and promote standard contract/ Regulation Develop and promote standard contract/ Regulation

• f non-fulfillment of a contract

Promote original ESCO concept to ESCOs, customers and financial organizations customers and financial organizations Implement a system to recognize superior ESCOs Capacity Building of ESCOs Capacity Building of ESCOs Develop guideline of M&V/ Training of energy audit, EE skills, Technology information, M&V and contract

40

, gy , Develop data base

Promotion program of

• o

p og

• ESCO industry in Asia

41

Promotion program of ESCO Promotion program of ESCO industry (1) industry (1) industry (1) industry (1)

< Preliminary review> < Preliminary review> Basic research for ESCO introduction: Description of

ESCO business issues to address for introduction review ESCO business, issues to address for introduction, review

• f introduction program

China with the support of WB/GEF China with the support of WB/GEF India with the support of USAID

42

Promotion program of ESCO Promotion program of ESCO industry (2) industry (2) industry (2) industry (2)

< Capacity building> p y g

• Preparation of technical guidelines: guidelines on M&V

, standard contract, etc.

• Preparation of ESCO introduction manuals: manuals for customers

to explain method of introducing ESCO

• Capacity building for financial institutes: proved information,

guideline for method of evaluating energy efficiency, support for development of finance products p p

• Capacity building for ESCOs: lecture, trainings, technical instruction
• 3-CEE project (countries in scope are China, India and Brazil)
• 3 CEE project (countries in scope are China, India and Brazil)

supported by the WB group.

• Capacity building for ESCOs.

43

Also, in several countries including India, technical trainings are provided by USAID, etc.

Promotion program of ESCO Promotion program of ESCO industry (3) industry (3)

< Promotion program>

industry (3) industry (3)

< Promotion program>

• Publish successful case studies.
• Seminar conference exhibition
• Seminar, conference, exhibition
• Provide information such as news letters, websites etc.
• C

d ti f ll t ESCO j t

• Commendation program for excellent ESCO projects
• In India was supported by USAID and 3-CEE.
• In China, EMCA was supported by GEF

. On the other hand, like in Malaysia or Thailand, government or governmental organization play a main role in these activities governmental organization play a main role in these activities, because there is not ESCO association.

44

Promotion program of ESCO Promotion program of ESCO industry (4) industry (4)

< Establishment of project body/ operation support>

industry (4) industry (4)

p j y p pp

• Set up of ESCO association/operation support
• Support to set up ESCOs
• Support to set up ESCOs
• Accreditation program for ESCOs: BEE in India. Preliminary

accreditation system to simplify government expedition procedure (Super ESPC in USA, Australia, etc.) and accreditation system (NAESCO etc.) for nurturing excellent ESCOs are available.

• The typical program for it is the supports to establishment of ESCO
• The typical program for it is the supports to establishment of ESCO

providers in China by GEF .

• In India, USAID supports operators by supplying supports to ESCOs
• In India, USAID supports operators by supplying supports to ESCOs

in information business. In addition, supports to establish ESCO association is being provided by 3-CEE project（ICPEEB:Indian Council for Promotion of Energy Efficiency Business）

45

Council for Promotion of Energy Efficiency Business）.

Promotion program of ESCO Promotion program of ESCO industry (5) industry (5)

< Development of business>

industry (5) industry (5)

< Development of business>

• Implementation of energy audit (corresponding to FS research)
• Implementation of pilot project
• Implementation of pilot project
• Implementation of IRP/DSM programs
• I t

d ti f ESCO j t i t t l f iliti

• Introduction of ESCO projects into governmental facilities
• Energy audit is conducted by GEF in Malaysia
• The pilot project is implemented aided by low interest financing by

GEF fund.

• In Thailand the energy audit is conducted by GEF and the subsidy
• In Thailand, the energy audit is conducted by GEF and the subsidy

from ENCON Fund is allocated for pilot projects. While no pilot project is conducted in China, GEF supports to

46

While no pilot project is conducted in China, GEF supports to establishment of ESCOs and the low interest financing by the WB have sufficiently covered the demands.

Promotion program of ESCO Promotion program of ESCO industry (6) industry (6)

< Finance support>

industry (6) industry (6)

< Finance support>

• Implementation of low interest finance
• Offer of subsidies
• Offer of subsidies
• Implementation of loan guarantee programs
• T

b t

• Tax rebate
• The low interest loan and loan guarantee are the main part of it.
• Low interest finance: by WB in China/ by WB, ADB, JBIC, USAID,
• etc. in India/ and by GEF in Malaysia.
• Loan guarantee: by GEF In China 3 CEE in India
• Loan guarantee: by GEF In China, 3-CEE in India
• Governmental subsidy program: by the national fund based on

ENCON fund in Thailand

47

ENCON fund in Thailand

• Tax rebate: in Thailand and China

Promotion program of ESCO Promotion program of ESCO industry (7) industry (7)

< Reinforcement of policy/ reformation of acquisition

industry (7) industry (7)

< Reinforcement of policy/ reformation of acquisition regulation> Reinforcement of regulations for energy conservation Reinforcement of regulations for energy conservation Reformation of acquisition regulations to introduce ESCO in

governmental facilities

48

Promotion program of ESCO Promotion program of ESCO industry (2) industry (2)

program China Thailand India Malaysia

Philippines

Japan

Primary review Basic research for ESCO introduction GEF USAID METI

industry (2) industry (2)

Primary review Basic research for ESCO introduction GEF USAID METI Capacity building Technical guideline 3-CEE EGAT 3-CEE ECCJ ESCO introduction manuals EGAT ECCJ Capacity building for financial institutes 3-CEE 3-CEE Capacity building for ESCOs 3-CEE EGAT USAID/3-CEE PTM JAESCO p y g Promotion program Publish successful case studies ECCJ Seminar, conference, exhibition EMCA/JAESCO DEDE/JAESCO PRCA/FICC PTM ECCJ/JAESCO News letters, website etc EMCA/3-CEE DEDE 3-CEE PTM ECCJ/JAESCO Commendation program for ESCO projects ECCJ DEDE Establishment

• f project body

and

• peration

support Setup ESCO association/ operation support GEF FTI 3-CEE PTM DOE ECCJ/JAESCO Support to set up ESCOs GEF USAID Accreditation program for ESCOs Development of business Energy audit NDRC GEF/ENCON Fund USAID GEF DOE ECCJ/NEDO BEE Pilot projects ENCON Fund USAID GEF NEDO IRP/DSM program USAID Introduction ESCO projects into government METI Finance support Low interest finance WB ESCO Fund WB/ADB /JBIC/ USAID GEF/MIDF Subsidies program NDRC ENCON Fund NEDO loan guarantee program GEF/3-CEE 3-CEE (IFC/GEF) Tax rebate NDRC DEDE Reinforcement

• f policy

Reinforcement of regulations for EE NDRC DEDE BEE DOE METI

49

Note: The blank cells represent unavailability of the corresponding program. PTM: Pusat Tenaga Malaysia, MIDF: Malaysian Industrial Development Finance Bhd, IFC: International Finance Corporation 3-CEE is supported by UNDP and funded by UNF, ESMAP, ASTAE and DFID

• f policy

Reformation of acquisition regulations

EE Business is net-work business business

Develop maintenance net-work system which keep up Develop maintenance net work system which keep up

with on time

Design services is first step

Design services is first step

Energy audit M

t f t ti i t ll ti

Management of construction or installation Provide maintenance services M&V Financial arrangement

Financial arrangement

Provide comprehensive services to keep EE performance

long term

50

long term

Establish brand image

Detail survey for ESCO activities from 2 0 0 1 to 2 0 0 7 year from 2 0 0 1 to 2 0 0 7 year

PC:Performance Contract

C om m erci al P C 5% C om m erci al non P C 11% I ndustri al non P C 20% P ubl i c sector 19% O thers 0% 11%

(n=310)

% I ndustri al P C 13% C om m erci al P C

2001～2007

n=1, 315

(n 310)

P ri vate sector 81% 13% P C 21%

(n=1, 357)

C om m erci al non P C 30%

51

Data source:JAESCO survey,2008

Ratio of energy savings

13. 4 O ffi ce

( sam pl e)

( 60)

18. 1 12. 8 8. 2 11 0 H ospi tal H otel S hoppi ng S h l

( 57) ( 22) ( 65)

( Sam pl e)

11. 15. 2 19. 4 13 5 S chool W el fare center O thers A verage

( 26) ( 14) ( 32) ( 276)

Performance Contract Projects

14. 9 13 5 11. 5

G S C S S C P C A ve m m erci al

( 276) ( 110) ( 163)

13. 5 5 10 15 20 25 A verage

(％)

( 276)

Contract Projects

13. 5 9. 9 8. 9

P C A ve non P C G S C C om l

( 276) ( 180) ( 10) ( )

12. 7 13. 8 12. 4

S S C P C A ve non P C I ndustri a

( 90) ( 34) ( 78)

52

Data source:JAESCO survey,2008

2 4 6 8 10 12 14 16

（ ％）

Sim ple pay-back period

( Sam pl e)

Pe fo mance Cont act

10. 6 8. 6 6. 1 G S C S S C P C A ve m m erci al

( 248) ( 112) ( 136)

Performance Contract Project of commercial buildings

10. 8 6. 9 10 1 non P C G S C S S C C om ri al

( 133) ( 26) (68)

8. 7 10. 1 6. 9 S S C P C A ve non P C I ndustr

( 100) ( 53) ( 68)

U nder 1 year 3. 9% 2-3 years 10. 6%

5 10 15 （

year）

unknow n 42. 6% 4-5 years 12. 7% A ve: 8. 6years t 10 8-9 6-7 years 8. 8% n=432

53

Data source:JAESCO survey,2008

up to 10 years 11. 6% years 9. 7%

Energy efficiency measures for i l t PCP commercial sector PCPs

n=432

【 C om m erci al S ector】 12 4 9 20 60

P um p/F an I N V V A V , V W V A i r to ai r heat exchangers O pen ai r-A C C ontrol of open ai r l

• ad

C ondi ti

• ner

20 2 15 15 23 15

C ontrol

• f open ai

r l

• ad

C O 2 C ontrol l er by C O 2 censor I nterm i ttent control C ogenerati

• n

R enew al

• f a boi

l er A i r C l er & ezer

23 10 20 12 4

R enew al

• f a freezer

O n/O ff control H F I nv C om pact Li ghti ng H I D l am p B oi l F re g

8 5 29 13 2

p O ccupancy censor I l l um i nati

• n censor

I nv l i ghti ng H i gh effi ci ency l ead l am p O th l i hti L i ghti ng

2 29 4 21 5

O ther l i ghti ng H i gh effi ci ency transform er H i gh effi ci ency m otor B E M S D em and control E l ectri c pow er

• ntrol

54

Data source:JAESCO survey,2008

11 20 40 60 80

W ater conservati

• n

C o

（ ％）

Energy efficiency measures for i d t i l t PCP industrial sector PCPs

r

n=215 【 I ndustri al S ector】 1 1 22

P um p/F an I N V V A V , V W V A i r to ai r heat exchangers i r C ondi ti

• ner

10 2 31

C O 2 C ontrol l er by C O 2 censor C ogenerati

• n

R enew al

• f a boi

l er A i & F reezer

16 7 3

R enew al

• f a freezer

O n/O ff control H F I nv B oi l er & g

7 13

C om pact Li ghti ng H I D l am p I nv l i ghti ng L i ghti n c

2 2

H i gh effi ci ency transform er H i gh effi ci ency m otor B E M S E l ectri c pow er

55

Data source:JAESCO survey,2008

6 10 20 30 40

I ndustri al P rocess

（ ％）

Distribution of floor area in i l f iliti commercial facilities

Performance contract

～1, 000㎡ 0%

1, 000-4, 999㎡ 6. 8%

5, 000～ 9, 999㎡

Performance contract projects

unknow n 26% 9, 999㎡ 7% 100, 000㎡ 10, 000～

A ve: 40, 077m 2 n=432

50 000～ , ～ 7% 10, 000 49, 999㎡ 40%

5, 000～ 9, 999㎡ 10%

1, 000-4, 999㎡ 6. 8%

～1, 000㎡ 1%

50, 000～ 99, 999㎡ 14%

10% unknow n 38%

A ve: 30 966m 2

Non-Performance contract projects

10, 000～ 49, 999㎡ 33%

A ve: 30, 966m 2 n=695

56

Data source:JAESCO survey,2008

100, 000㎡～ 3. 4%

50, 000～ 99, 999㎡ 7%

Floor area of com m ercial building’s PC projects building s PC projects

k

～1, 000㎡ 0%

1, 000-4, 999㎡ 6. 8%

5, 000～ 9, 999㎡ 7% unknow n 26% 7%

A 40 077 2

100, 000㎡ ～ 7% 10, 000～ 49, 999㎡ 40%

A ve: 40, 077m 2 n=432

50, 000～ 99, 999㎡ 14%

40, 302 41, 560

O ffi ce H ospi tal

( sam pl e) ( 75) ( 60) 39, 090 49, 075 43, 019

H otel S hoppi ng S chool

( 30) ( 74) ( 31) ( ) 22, 912 20, 893 39, 957

W el fare center O thers A verage

( 15) ( 32) ( 317)

57

Data source:JAESCO survey,2008

20, 000 40, 000 60, 000

(1, 000m 2)

Project scale

2, 196

O ffi ce

( sam pl e) ( 83) 2, 762 864 668 4, 360

H ospi tal H otel Shoppi ng School

( 66) ( 32) ( 111) ( 29) 4, 360 2, 821 1, 043 1, 701

School W el fare center O thers A verage

( 29) ( 13) ( 39) ( 373) ( Sam pl e)

1, 000 2, 000 3, 000 4, 000 5, 000

($1, 000)

Performance Contract Projects

1, 941 1 693 1, 229 G S C S S C P C A ve m erci al

( Sam pl e) ( 432) ( 169) ( 255)

Contract Projects

1, 693 1, 292 297 3, 182 P C A ve non P C G S C S S C C om ri al

( 432) ( 471) ( 46) (156)

Note: GSC:Guaranteed Savings Contract 2, 867 543 S S C P C A ve non P C I ndustr

( 215) ( 337) ( 156)

58

Data source:JAESCO survey,2008

SSC:Shared Savings Contract

500 1, 000 1, 500 2, 000 2, 500 3, 000 3, 500 （ $1, 000）

Ratio of energy savings of PC p ojects projects

Commercial buildings

30％- 6. 9%

Commercial buildings

• 5％

24 6% 20-30％ 16. 7% 24. 6%

A ve: 13. 5％ n=276 30％-

5-10％ 21% 10-15％ 14 1% 15-20％ 16. 3%

7. 8% 20-30％ 6. 7%

• 5％

20. 0%

14. 1%

15-20％ 13. 3% 20. 0%

A ve: 12. 7％ n=90

10-15％ 25 6% 5-10％ 26%

n=90

59

Industrial facilities

Data source:JAESCO survey,2008

25. 6%

Sim ple pay-back period of PC p ojects projects

Commercial buildings

U nder 1 year 2-3

Commercial buildings

year 3. 9% 2 3 years 10. 6% unknow n 42. 6% 4-5 years 12. 7% A ve: 8. 6years n=432

2-3 years 5. 6% 4-5 years U nder 1 year 0 9%

8-9 6-7 years 8. 8% n=432

4 5 years 13. 5% 6 7 years 0. 9%

up to 10 years 11. 6% 8 9 years 9. 7%

6-7 years 8. 8% unknow n 53. 5%

A ve: 8. 7years n=215

I d i l f ili i

8-9 years 7. 0% up to 10 years 60

Industrial facilities

Data source:JAESCO survey,2008

years 10. 7%

Contract period

7. 7 O ffi ce ( sam pl e)

( 89)

8. 7 7. 7 6. 6 9 5 H ospi tal H otel S hoppi ng S h l

( 61) ( 32) ( 113

4. 5 G S C al

( Sam pl e) ( 159)

9. 5 9. 7 7. 1 7. 7 S chool W el fare center O thers A verage

( 31) ( 15) ( 42) ( 283)

Performance

9. 9 7. 7 1 8 S S C P C A ve P C C om m erci a

( 383) ( 222)

2 4 6 8 10 12 g (Y ear)

( 283)

Contract Projects

1. 8 3. 5 9. 5 non P C G S C S S C C stri al

( 235) ( 44) ( 132)

8. 1 4. 6 5 10 15 P C A ve non P C I ndus

( 179) ( 55)

61

Data source:JAESCO survey,2008

5 10 15 （ years）

Contract period of PC projects

Commercial buildings

U nder 1 year 2. 8%

Commercial buildings

% unknow n 11. 3% 2-3 years 18. 8% up to 10 years 29 4% 4-5 years 10. 4% A ve: 7. 8years n=432

U nder 1

29. 4% 8 9 6-7 years 11. 1%

2-3 years 16. 7% unknow n 16. 7% year 1. 9%

8-9 years 16. 2%

4-5 years 9. 8% A ve: 8. 1years

Industrial facilities

6-7 years 8. 8% 8 9 up to 10 years 37 2% n=215

62

Industrial facilities

Data source:JAESCO survey,2008

8-9 years 8. 8% 37. 2%

Thai ESCO market leached turning point turning point

There are many big Japanese companies There are many big Japanese companies We thought Japanese ESCOs would on advantage Japanese ESCO started in 2003 and left in 2007 Many Thai ESCOs started to provide ESCO services to Many Thai ESCOs started to provide ESCO services to

Japanese companies

Based on close connection with Japanese companies Based on close connection with Japanese companies

and Thai companies

M i

l t d l EE k t i l l i

Main players to develop EE market is local companies It is better that Japanese Government support local

63

players direct

JAESCO

Japan Association of Energy Service Companies: JAESCO

Brief introduction of Brief introduction of JAESCO JAESCO JAESCO JAESCO

h / / j j h / / j j http:/ / w w w .jaesco.gr.jp http:/ / w w w .jaesco.gr.jp

64

Objectives of JAESCO Object es o J SCO

JAESCO was established to support development of JAESCO was established to support development of

ESCO market

• ll

d l i f ESCO i d

as well as ensure sound evolution of ESCO industry to provide customers energy efficiency with

comprehensive services of high cost-performance

thereby, resulting in progress of energy conservation

y, g p g gy and global environment protection.

65

Japan Association of Energy Service Companies: JAESCO

JAESCO

Ｏｒｇａｎｉｚ ｇ ａｔｉｏｎ

Committee on examination of membership qualification Committee members for Eastern region Committee members for Western region

Executive board Committee on market transformation Project committee

General assembly President Vice president

Project committee Committee on public information

assembly meeting Directors Auditor

Financial Forum JAESCO office JAESCO office

Jyukankyo Research Institute Energy Conservation Center Japan

66

Japan Association of Energy Service Companies: JAESCO

JAESCO

Activities of committees

• Committee on market transformation

Committee on market transformation

• Aiming at the most effective evolution of ESCO industry and its

contribution to society by exploring and advising measures to co t but o to soc ety by e p o g a d ad s g easu es to improve business environment surrounding ESCOs

• Exploring measures to encourage adoption of ESCO projects by

governments as well as seeking solution to difficulties confronted for introduction of ESCO projects

• Fulfilling data based on a in depth market survey and collecting
• Fulfilling data based on a in-depth market survey and collecting

actual performance data of member’s ESCO projects

• Examine how to manage the association

Examine how to manage the association

67

Japan Association of Energy Service Companies: JAESCO

JAESCO

Activities of committees:continue Activities of committees:continue

Project committee

Seminar WG

Holding seminars for members on the latest activity close about ESCO th f ti ll t k t b 100 200 b ESCOs three or four times annually, taken part by 100-200 members

Training WG

Planning two or three days training for members

ENEX WG

Running booths at ENEX (Energy & Environment Exhibition) held by the Energy Conservation Center Japan in Tokyo and Osaka

E hibi i WG Exhibition WG

Holding ESCO exhibition and provide members with opportunities to exchange information among members and with parties concerned

68

Japan Association of Energy Service Companies: JAESCO

JAESCO

exchange information among members and with parties concerned

Activities of committees:continue

Committee on public information Committee on public information

Carrying out plans to popularize ESCO industry such as advertising via mass media, cooperating to news reporters and taking part in various ass ed a, coope at g to e s epo te s a d ta g pa t a ous related projects

Conference WG

Holding annual conference & vendors showcase on the latest activity surrounding ESCO industry. Lectures and panel discussion are held with leader of each business world and professionals. Wide-ranging discussion is extended together with more than 300 participants on topics directly linked to business including governmental policies & programs, technology, finance and

69

Japan Association of Energy Service Companies: JAESCO

JAESCO

go e e ta po c es & p og a s, tec

• ogy,

a ce a d contracts.

Activities of committees:continue Activities of committees:continue

Financial Forum Financial Forum

Making discussion about new financial scheme for ESCO projects projects

News letter WG

Publish news latter for members

70

Japan Association of Energy Service Companies: JAESCO

JAESCO

Feature of JAESCO Mem bers

JAESCO established with 16 members in 1999 JAESCO established with 16 members in 1999 137 members have joined in 2008 Large companies most members and all most utilities have joined JAESCO Over 50 ESCOs which is experienced in PC

71

Japan Association of Energy Service Companies: JAESCO

JAESCO

Asia ESCO Associations Net- work: AEA Net work: AEA-Net

Objectives of AEA Net Objectives of AEA-Net Shear information about activities of ESCO industries in

h ld the world

Support upbringing ESCO industry of each countries Built international relationship of ESCO associations to

cope with countermeasure against global warming, p g g g, especially Asia

72

Japan Association of Energy Service Companies: JAESCO

JAESCO

Asia ESCO Associations Net- work: AEA Net

ti

work: AEA-Net:continue

Role of AEA-Net Role of AEA-Net 1st meeting on Feb 2007 in Tokyo. 2nd

ti S 2007 i B iji

2nd meeting on Sep 2007 in Beijing. Each association's directors or representative attend

the meeting the meeting.

Each members give a presentation for activities of ESCO

industry. dust y

Discuss how to develop ESCO market in Asia and

possibility of relationship of ESCO associations.

JAESCO host the meeting.

73

Japan Association of Energy Service Companies: JAESCO

JAESCO