feasibility study project for the jcm (2015fy) energy saving for

Feasibility Study Project for the JCM (2015FY)

Energy Saving for Factories with Introduction of

EMS and Highly Energy Efficient Equipment

March 2016

ASICS Corporation

myclimate Japan Co., Ltd.

2

Table of contents

Chapter 1. Energy-saving project in subcontract factories of Asics .................................. 4

1.1. Project overview ......................................................................................................... 4

1.2. Project background (ASICS CSR strategy) .............................................................. 4

1.3. Technical overview ..................................................................................................... 5

1.3.1. EMS ...................................................................................................................... 5

1.3.2. Efficiency improvement of each equipment ....................................................... 6

1.4. Project site .................................................................................................................. 7

1.4.1. Cambodia: ■■■■■■ company limited (COMPANY A).................................. 7

1.4.2. Vietnam: ■■■■■■ company limited (COMPANY B) .................................... 7

1.4.3. Production process ............................................................................................... 7

Chapter 2. A concrete plan for implementing the project .................................................. 8

2.1. Understanding the energy balance in the subject factories .................................... 8

2.1.1. Overview of Shneider’s Energy-saving diagnosis ............................................. 8

2.1.2. Result of energy-saving diagnosis (Cambodia) ................................................ 10

2.1.3. Result of energy-saving diagnosis (Vietnam) .................................................. 12

2.2. Determination of subject items and finance, and Decision of capital spending plan.

.......................................................................................................................................... 16

2.3. Important study to reduce operational risk ........................................................... 16

2.4. Comparative investigation to competitors’ products for product diffusion in local

.......................................................................................................................................... 16

Chapter 3. Methodology for emission reduction and estimation of expected GHG

emission reduction .............................................................................................................. 18

3.1. Methodology developing approach .......................................................................... 18

3.1.1. Categorization of energy-saving measures in the factories ............................ 18

3.1.2. Analysis of existing methodology ..................................................................... 19

3.2. Overview of the methodology .................................................................................. 21

3.2.1. Eligibility criteria .............................................................................................. 21

3.2.2. Calculation procedure for the amount of reference emissions ....................... 22

3.2.3. Calculation procedure for the amount of project emissions ........................... 24

3.2.4. Monitoring method ............................................................................................ 25

3.2.5. Estimation of the amount of emission reduction ............................................ 29

3.3. In forthcoming issues ............................................................................................... 35

3.3.1. How to secure the maintainability of the amount of emission reduction ...... 35

Chapter 4. Analysis of the economic effect and the impact on the partner countries

trough the project ................................................................................................................ 36

3

4.1. The economic effect through the project ................................................................. 36

4.2. Analysis of the impact on the partner countries .................................................... 37

Chapter 5. Tasks for the project, success factors or issued for JCM in the future......... 38

Chapter 6. Policy recommendation and the reaction of the partner governments ........ 39

6.1. Current issues and the solution proposal ............................................................... 39

6.1.1 Current issues ..................................................................................................... 39

6.1.2. Predicaments in Japan ...................................................................................... 42

6.1.3. Solution Proposal for the partner countries .................................................... 43

6.2. Future issues ............................................................................................................ 44

Chapter 7. Summary .......................................................................................................... 44

Figure / Table List

Figure 1 Energy-saving Approach ............................................................................. 4

Figure 2 Equipment Introduction Flow ..................................................................... 6

Figure 3 Shoes Component ......................................................................................... 7

Figure 4 Manufacturing Process Flow ...................................................................... 8

Figure 5 Monthly Electricity Consumption and Cost in COMPANY A ................. 11

Figure 6 Energy Usage Ratio by Facility in COMPANY A ..................................... 11

Figure 7 Monthly Electricity Consumption and cost in COMPANY B ................. 13

Figure 8 Energy Usage Ratio by Facility in COMPANY B .................................... 13

Figure 9 Comparison with Competitors .................................................................. 17

Figure 10 Conceptual Scheme of Scope 1-3 ............................................................. 18

Table 1 Scopes for energy-saving diagnosis .............................................................. 9

Table 2 The Countermeasure Items Proposed by Energy-saving Diagnosis

(COMPANY A) ....................................................................................................... 11

Table 3 The Countermeasure Items Proposed by Energy-saving Diagnosis

(COMPANY B) ...................................................................................................... 14

Table 4 Category of Energy-saving Measure in Factories ..................................... 18

Table 5 Category of Calulation Methods for GHG emission Reduction in Factories

............................................................................................................................... 19

Table 6 The Result of Calculation: The Economic Effect on COMPANY A in

Cambodia .............................................................................................................. 36

Table 7 The Result of Calculation: The Economic Effect on COMPANY B in

Vietnam ................................................................................................................. 37

Table 8 Expected Policy Actions for Energy Saving Measures .............................. 39

4

Chapter 1. Energy-saving project in subcontract factories of Asics

1.1. Project overview

This project aims to reduce both the energy cost and the GHG emissions by

optimizing energy utilazationin the whole factory by means of the introduction of

Energy Management System

(hereinafter called EMS) and

efficiency improvement of each

equipment in subcontract

factories of ASICS (one factory

each in Cambodia and Vietnam).

EMS has a certain level of effect

for the leveling of used amount

and the lowering of the maximum

used amount with peak-cut or peak-shift of energy utilization.

On the other hand, performance improvement of each equipment shows the

possibility to lower the total amount of energy consumption by raising the efficiency of

each equipment in itself (figure 1.).

This project (a consignment project by the Ministry of Economy, Trade and Industry)

is designated to verify the current situation of existing energy consumption (energy

diagnosis), propose the efficient list of countermeasure items to the each subcontract

factory, and draw up the project by conferring with subcontract factories as the

feasibility study for above mentioned project.

1.2. Project background (ASICS CSR strategy)

Established in 1949, ASICS Corporation is the manufacturing and distribution

company which produces sports equipment. Aside from the head office and ASICS

institute of sport science in Kobe, Hyogo prefecture, ASICS has 11 consolidated

subsidiaries and affiliates in Japan, as well as 40 in the world (the United States of

America, Europe, Asia and Oceania). As it related to the financial information,

consolidated net sales in December 2012 are 345.051 million JPY, which 80.5% in

overseas sales. In the product category basis, sports shoes are the core product with

79.9% of consolidated net sales, secondary sportswear, 15.3% and 4.8% of sport

equipment. Among more than 200 ASICS factories in the world, all of them are

subcontract facilities (contract manufacturing) expect the one which is owned by ASICS.

As the global company, ASICS is actively undertaking CSR activity, and sets a

corporate objective to “10% reduction of CO2 emissions”. Till now, ASICS has been

FIGURE 1 ENERGY-SAVING APPROACH

(kW)

Energyconsumption

(time)

Approach to peak times by EMS

Approach to efficient use of each equipment

5

promoting the electricity consumption reduction as well as the renewable energy

utilization in their business places and shops. However, there is a limit how far they can

do in those business places and shops (see scope 1 and 2).

Therefore, ASICS has just embarked CO2 emission reduction actions in the overseas

subcontract factories in order to expand the reduction target into the manufacturing

processes (see scope 3) which consume huge energy on their activity. At the

energy-saving program in the subcontract factories, not only to implement

energy-saving measures, but also ASICS has an intention to strengthen the price

competitiveness by understanding an appropriate manufacturing cost based on the

“visualization”.

As ASICS has never conducted energy-saving measures in their subcontract factories,

this project was the first trial for them. By referring to this project as a model case, they

have an intention to expand the energy-saving measures into 25 factories in Asia (2 in

Cambodia, 4 in Vietnam, 13 in China and 3 in Indonesia) which have high potential for

reduction, and furthermore beyond the Asia in the future.

1.3. Technical overview

1.3.1. EMS

EMS is the system for implementing energy cost control which the final adopter

should pay, by visualizing and optimizing energy consumption without preventing from

the original purpose.

In this project, ASICS plans to introduce “Power quality monitoring unit” from Fuji

Electric FA Components & Systems Co., Ltd. This system can flexibly manage possible

modifications (partial revisions or additional alterations) and well modulized. So that, it

can be easily linked to the other energy information such as water and gas. This system

also makes enable for energy information to be linked to the cooperating site

management systems in the upper system, or their subcontract factories which

introduce EMS, when the companies who have several factories or who are consigned

for manufacturing want to manage all energy information centrally. In addition to that

point, EMS can remain history record of harmonics or noise. So by using those records,

it will be possible to determine the cause and take measures for avoiding harmonics and

noise in the early timing. Since the load of factory equipment becomes reduced, the

service life of factory equipment can be extended.

This EMS consists of a monitoring software and electric meters. Putting electric

meters in several points of the electric circuit in the factory, electricity consumption

information from meters are traceable through monitoring software on time (every

6

15minutes). With this information, it is possible to emit warnings when the excess

usage penalty may occur because of temporary high electricity consumption, or cut the

power off automatically if not in use to avoid paying excess penalty. Furthermore, once

the information is accumulated which let us to understand the trend in the past, we can

prepare programmed beforehand to set control usage in peak time.

Once introduced above mentioned monitoring software into ASICS and their

subcontract factories, ASICS can correctly understand the status of energy consumption

in each subcontract factory, which leads to visualize the manufacturing cost.

Furthermore, ASICS can ask subcontract factories to check the status of energy

consumption if their electricity consumption is more than planned or drastically

increased, and to optimize their electricity consumption.

1.3.2. Efficiency improvement of each equipment

Appropriate improvement of energy efficiency for each factory can aim to decrease the

total amount of energy consumption. To achieve this goal, it is necessary to consider

each circumstance such as the status of use or life expectancy of each equipment and

facility, then implement the efficiency improvement measures which are the most

cost-effective. There are two types of measures for equipment efficiency improvement.

First, the measures for equipment used in the production line, second, for utility

equipment necessary for factory operation such as supply of power, lighting or

air-conditioning.

In this project, ASICS conducts the energy-saving diagnosis for both production

equipment and utility equipment, then confer the measures with subcontract factories.

Therefore, it seems to be possible to plan the project in earlier timing comparing to the

case which requires to start by verifying the possibility of introduction with the

restricted introduced system.

FIGURE 2 EQUIPMENT INTRODUCTION FLOW

Selecting equipment

Confirming suitability

Adjusting specs Implementation

Implementation

Past Projects

This ProjectGrasping current

conditionSelecting

equipment

Energy-savingDiagnosis Verifying the possibility

7

1.4. Project site

1.4.1. Cambodia: ■■■■■■ company limited (COMPANY A)

■■■■■■ company limited (hereinafter called COMPANY A) is located

■■■■■■■■■■■■■■■■■■■■■■■■■■ in the Kingdom of Cambodia,

■■■■■■■■■■■■■■■■■■■■■■■■■■■■ (■■■■ by car). The area of the

factory is 665,555 square meters, and the number of employees is approximately 7,000.

COMPANY A is a local subsidiary of ■■■■■■■■■■■■■. ■■■■■■■■ also

holds 2 factories in Cambodia (manufacturing the products ordered by the other

manufacturer). COMPANY A continues to deal with ASICS since 2012, the most

order-received factory among 4 factories in Cambodia (4,803,982 pairs in 2015).

1.4.2. Vietnam: ■■■■■■■■ company limited (COMPANY B)

■■■■■■■■ company limited (hereinafter called COMPANY B) is located

■■■■■■■■■■■■■■■■■■■■■■■■■■, in the Socialist Republic of Viet Nam,

■■■■■■■■■■■■■■■■■■■■■■■■■■ (■■■■ by car). The area of the

factory is apporoximately 480,000 square meters, and the number of employees is

approximately 6,900.

COMPANY B is a local subsidiary of ■■■■■■■ group ■■■■

■■■■■■■■■■■■■■■■■■■■■. ■■■■■■■ has the CSR division in the

headquarter office, and eagers to perform energy-saving action in their factories. The

trading between ■■■■■■■ and ASICS has long been since 2004. Production quantity

of ASICS shoes is 7,677,903 pairs in 2015.

1.4.3. Production process

Both 2 factories which are subjects for this project produce sports shoes for

running. Sports shoes are composed of 2

different parts. Upper part which uses

fibrous material and artificial leather, and

sole part which uses rubber, rubber sponge

and EVA sponge.

Upper part requires cutting materials,

printing and sewing process. For those

processes, cutting machine, sewing machine

and compressor are needed as the equipment

which consumes electricity.

Sole part requires kneading, pressing, forming, cutting and gluing process. For those

FIGURE 3 SHOES COMPONENT

Upper part

Sole part

8

processes, steam boiler and heater, cooler and compressor are needed as the equipment

which consume electricity.

After each part is manufactured in its own production line, upper and sole parts are

combined in the other line. In this process, set the upper part on last, then glue with the

sole part. Therefore, heater, cooler and compressor are needed as the equipment which

consume electricity.

FIGURE 4 MANUFACTURING PROCESS FLOW

Chapter 2. A concrete plan for implementing the project

2.1. Understanding the energy balance in the subject factories

2.1.1. Overview of Shneider’s Energy-saving diagnosis

It is Shneider Electric company which implemented energy-saving diagnosis for this

project. Schneider Electric Company has a great knowledge of energy-saving measures.

They offer design and production technique and consultation service regarding energy

management or automation, and control solution in the world.

Energy-saving diagnosis in local was implemented from 7th Decemeber 2015 to 15th

December 2015 for COMPANY B, in Vietnam, and from 17th December 2015 to 23rd

December 2015 for COMPANY A, in Cambodia. During above mentioned periods, we

understood the current electricity usage in each factory by section, then checked the

situation of utilization of each facility and equipment. Table 1 shows concrete scope.

Cutting, Printing, SewingUpper part

kneading, pressing, forming, cutting, gluingSole part

Assembly gluing

Products

9

No. Scope Description of verification

1 Motors,

Electricity

distribution system

• Detailed observation of consumption pattern of

existing equipments (including breakdown)

• Measurement and analysis of of energy needs

• Measurement of the condenser performance

• Performance observation of the moters of more than

5.5kW, and specifying of the motors underloaded /

overloaded.

2 Air compressor • Calculation of leakage area by leakage test

• Measurement of energy consumption and

performance for each compressor

• Pressure analysis

• Observation of lead operation / no-load operation

3 Air conditioning • Measurement of the parameters such as the air flow,

DBP and the electricity consumption

• Calculation of TR and energy consumption

• Optimization analysis of the air conditioning for

users Optimization of the temperature

4 Heater • Parameters analysis for avoiding the loss

• Analysis of the optimal temperature and the

possibility of energy reduction

• Analysis of the best operational policy for

energy-saving

• Performance improvement and calculation of

energy-saving potential

5 Fan and pump • Measurements of the air weight flow, pressure and

electricity consumption

• Optimization of the air weight flow for reducing

electricity consumption

• Evaluation of operational optimization according to

the parameters such as the air flow, the pressure

and the electricity consumption.

• Performance improvement and calculation for

energy-saving potential

6 Kneading machine, • Energy consumption measurement by considering

TABLE 1 SCOPES FOR ENERGY-SAVING DIAGNOSIS

10

Press machine operational time and each equipment

• Analysis of the oil pump pressure

• Estimation of the potential about performance

improvement and energy-saving

• Detailed energy-saving analysis with parameters

such as input / output for kneading machine,

electricity and production capacity

• Analysis of energy consumption / usage pattern

7 Lighting • Actual survey for lighting improvement and

optimization.

• Study for introduction of intermittent lighting for

energy consumption saving, improvement of

equipments, and rayout change.

• Investigation of operational possibility about the

parameters such as voltage for the lighting circuit

8 Possibility of using

renewable energy

• Feasibility analysis of the renewable energy such as

solar power

• Analysis of cost effectiveness by introduction

2.1.2. Result of energy-saving diagnosis (Cambodia)

The annual energy cost in COMPANY A (from December 2014 to November 2015) was

1,059,622USD. Grid electricity utility expense was the biggest factor for this expense,

which is 94.5% of the total (1,004,714USD, 5,648.51MWh). The rest of 5.2% were for the

diesel fuel expense which is used during a power cut (54,907.4USD, 228.78MWh).

11

FIGURE 5 MONTHLY ELECTRICITY CONSUMPTION AND COST IN COMPANY A

FIGURE 6 ENERGY USAGE RATIO BY FACILITY IN COMPANY A

No. Measure items Reduced

electricity

（kWh）

Steam

reduction

(t)

Cost

reduction

(USD)

Measures

cost

(USD)

1 Measures against air leaking

from the compressor machine

308,207 55,917 24,000 0.4

2 Temperature optimization for

the heater

101,220 17,612 14,400 0.8

0

10

20

30

40

50

60

70

80

90

100

0

100

200

300

400

500

600

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Electiricist cost

(k USD)

Electricity

consumption

(MWh)

from December 2014 to November 2015

consumption cost

TABLE 2 THE COUNTERMEASURE ITEMS PROPOSED BY ENERGY-SAVING

DIAGNOSIS (COMPANY A)

12

3 Pressure adjustment of

air-pressure pipe

97,030 17,456 36,000 2.1

4 Substitution LED for

fluorescent lighting

81,487 14,179 22,410 1.6

5 Introduction of temperature

control device to the heater

51,840 9,020 14,400 1.6

6 Installation of internal

connection duct and control

device in the polishing room

39,100 6,803 16,800 2.5

7 Temperature adjustment of the

washer(heat pump)

29,383 5,113 10,800 2.1

8 Introduction of insulator to the

heater

23,588 4,104 8,400 2.0

9 Introduction of energy-saving

blow gun

22,745 3,958 4,680 1.2

10 Compressor shuts down during

lunch time

12,300 2,718 0 0

11 Installation of motion sensor

lighting

11,880 2,067 4,430 2.1

12 Optimization of temperature in

the cooling room

8,352 1,453 0 0

13 Installation of automatic drain

valve for water receiver in the

compressor

6,799 1,231 960 0.8

14 Substitution exhaust duct for

ventilation fan

6,300 1,096 600 0.5

15 Shuts down the lighting during

lunch time

1,056 233 0 0

16 Introduction of EMS －－ 36,000 －

Total 801,287 142,960 193,880 1.4

Sup. Installation of solar power

system (260kw)

360,000 62,640 750,000 12.0

2.1.3. Result of energy-saving diagnosis (Vietnam)

The annual energy cost in COMPANY B (from January 2015 to November 2015) was

2,593,040USD. Steam fee was the biggest factor for this expense, which is 59% of the

13

total (1,735,777USD, 64,209t). The rest of 41% were electricity for the utility expense

(1,217,263USD, 15,446.1MWh)

FIGURE 8 ENERGY USAGE RATIO BY FACILITY IN COMPANY B

FIGURE 7 MONTHLY ELECTRICITY CONSUMPTION AND COST IN COMPANY B

0

20

40

60

80

100

120

140

0

200

400

600

800

1000

1200

1400

1600

1800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Electricity cost

(k USD)

Electiricity

consumption

(MWh)

from January 2015 to November 2015

consumption cost

14

No. Measure items Reduced

electricity

（kWh）

Steam

reduction

(t)

Cost

reduction

(USD)

Measures

cost

(USD)

Investment

Return

(year)

1 Substitution LED for

fluorescent light

891,218 － 70,406 330,986 4.7

2 Improvement of the

cooling pump and

installation of the

control device

554,400 － 43,800 72,000 1.6

3 Introduction of

energy-saving blow

gun

303,402 － 23,969 21,840 0.9

4 Prevention of heat loss

in the boiler

－ 775 20,954 12,000 0.6

5 Introduction of

insulator to pipes and

tanks

－ 660 18,000 24,000 1.3

6 Improvement of

volumetric efficiency

in the compressor

193,827 － 15,312 10,800 0.7

7 Improvement of the

press

machine oil pump

129,024 － 10,193 19,200 1.9

8 Saving energy from

the ceiling lights

150,696 － 11,905 0 0

9 Introduction of control

device to the heater

134,865 － 10,654 11,880 1.1

10 Introduction of auto

temperature control

device to the fan in the

cooling room

128,993 － 10,190 12,000 1.2

11 Introduction of 93,595 － 7,394 12,000 1.6

TABLE 3 THE COUNTERMEASURE ITEMS PROPOSED BY ENERGY-SAVING

DIAGNOSIS (COMPANY B)

15

insulator to the

heater and the

vulcanizer

12 Substitution the

steam type water

heater for the electric

water heater

－－ 5,662 12,000 2.1

13 100% opening door of

the boiler intake

dumper, and

optimization of

existing control

devices

62,537 － 4,940 2,400 0.5

14 Installation of motion

sensor lighting

40,343 － 3,187 11,520 3.6

15 Measures against air

leaking from the

compressor

39,564 － 3,126 3,600 1.2

16 Temporary shut down

of waterway in the

cooler, according to

improvement of No.2

pump

23,040 － 1,820 0 0

17 Optimization of water

temperature in the

cooling room

8,640 － 683 0 0

18 Optimization of

pressure in the

compressor

8,415 － 665 0 0

19 Compressor shuts

down during lunch

time

7,410 － 585 0 0

20 Introduction of EMS －－－ 54,000 －

Total 2,769,969 1,435 263,445 610,226 2.3

16

2.2. Determination of subject items and finance, and Decision of capital spending plan.

This investigation demonstrated that EMS is a high cost-effective measure for both

factories, as well as the early investment-return can be expected after the initial

investment. In addition to it, measure cost is calculated as approximately 1-3 million

JPY, it is affordable for both COMPANY B and COMPANY A to introduce EMS

according to their needs with their own finance.

2.3. Important study to reduce operational risk

In regards to the implementation of energy-saving measures, no risk is presumed.

Since this project aims to realize energy-saving in the factories either improving the

equipments already used in the factories or adding new equipment (control equipment).

Therefore, it is not subject to EIA, because purchasing new land is not required.

Furthermore, equipment improvement which may cause any problem around the

factories such as drainage or noise is not anticipated. Regarding regulations, neither

official permission / authorization nor regulations about energy-saving improvement

exist. Moreover, there is no operational risk for financing since considering the amount

and the recovery speed, both COMPANY A and COMPANY B are able to secure

financing by themselves.

2.4. Comparative investigation to competitors’ products for product diffusion in local

Comparing to competitors’ products, EMS of Fuji Electric FA Components & Systems

Co., Ltd. has an advantage of being well generalized. Other manufacturers’s EMS needs

to be established from scratch in order to be linked to an existing system in the factories.

So that, it is necessary to reestablish EMS in case of enlargement or expansion of

factories, or systems linkage to consignor companies or sub-subcontractors. In the mean

time, Fuji Electric EMS easily corresponds to partial modifications (add or delete

subject items) or system link with upper / lower groups. Since Fuji Electric FA

Components & Systems Co., Ltd. was established as a joint venture between Schneide

Electric which has a wide range of customer in the world, and Fuji Electric, EMS has

been developed after considering various systems in all of the world with the knowledge

Schneide Electric. So that, Fuji Electric FA Components & Systems Co., Ltd.’s EMS has

the advantage as mentioned above. Therefore, for the companies who manage factories,

EMS can be useful for expanding factories due to production volume up or linking to

other factories, subcontractor or sub-subcontractor without establishing a system from

scratch, it apparently means with low cost.

17

FIGURE 9 COMPARISON WITH COMPETITORS

This point differentiates itself from competitors’ products at the policy proposal as

stated below. At the policy proposal, first of all, we state that introducing EMS and

promoting the performance improvement for each equipment in targeted foreign capital

groups is the priority. Foreign capital groups, especially the global companies which

have overseas bases in various countries are now requested to take action for the

environment or CSR. GHG emission reduction is not exceptional. In recent years, not

only direct emissions by company’s business activity (Scope 1) and indirect emissions by

energy consumption (Scope 2), but also every company should take responsibility for the

indirect emissions discharged by whole supply chain including itself (Scope 3).

EMS of competitors

extension

System re-development

EMS of Fuji Electric FA Components & Systems Easily adding to system

Linking with other factories

Subcontractor

extension

System re-development

Linking with other factories

Subcontractor

Easily adding to system

18

FIGURE 10 CONCEPTUAL SCHEME OF SCOPE 1-31

For ASICS, scope 3 was a trigger to start working on this project. It shows that the

global companies like ASICS have a more and more tendency to work on scope3. With

EMS in subcontract factories, which can be easily linked to the corporate site

management systems in the headquarter, the global companies are able to understand

the data from subcontract factories.

Chapter 3. Methodology for emission reduction and estimation of expected GHG

emission reduction

3.1. Methodology developing approach

3.1.1. Categorization of energy-saving measures in the factories

Energy-saving measure items mentioned in the previous chapter as the result of

energy diagnosis for COMPANY A in Cambodia and COMPANY B in Vietnam are

divided into 3 categories.

No. Category Examples of energy-saving measures

1 Introduction of high

performance

equipment

· Substitution LED for fluorescent light

· Introduction of high performance pump

1 Mizuho Research and Information Insutitute

http://www.meti.go.jp/committee/kenkyukai/sangi/supplychain_gas_global/001_05_01s.pdf

TABLE 4 CATEGORY OF ENERGY-SAVING MEASURE IN FACTORIES

19

(substitution for

existing equipment)

2 Introduction of

control device

· Introduction of intermittent control device to the

pumps

· Introduction of temperature control device to the

heater

· Introduction of temperature control device to the

condenser room

· Introduction of internal connection duct and control

device to the fan in the polishing room

· Introduction of motion sensor lighting

3 Operational

improvement,

maintenance and

repairing of existing

equipment

· Countermeasures against air leaking from the

compressor

· Installation of heat insulator in the boiler

· Optimization of temperature in the dryer

· Temperature adjustment of washer machine

· Compressor shuts down during lunch time

etc.

Among those 3 categories, No.3 is not eligible for this credit system, because

operational improvement, maintenance and repairing for existing equipments should be

regarded as the measures which do not require any new investment, or just mean the

recovery into the original condition. Therefore, “No.1: introduction of the high

performance equipment” and “No.2: introduction of the control equipment” are set to be

the subjects for this project, and methodology for those 2 categories is developed.

3.1.2. Analysis of existing methodology

In this project, we developed the methodology by referring to existing CDM

methodologies and J-credit methodologies. There are two types of ways to calculate

GHG emission reduction amount by striving for energy efficiency improvement.

No. Category Examples of methodologies

1 A method of

calculating the

CDM methodologies

· AM0091 “Energy efficiency technologies and fuel

TABLE 5 CATEGORY OF CALULATION METHODS FOR GH EMISSION REDUCTION

IN FACTORIES

20

amount of emission

reduction in whole

building or based on

the certain unit of

land area

switching in new and existing buildings”

· AMS-Ⅲ .AE “Energy efficiency and renewable

energy measures in new residential buildings”

· AMS- Ⅱ .Q “Energy efficiency and/or energy

supply projects in commercial buildings”

Etc.

J-credit methodology

N/A

2 A method of

calculating the

amount of emission

reduction by each

equipment introduced

to this project.

CDM methodologies

· AMS- Ⅱ .C “Demand-side energy efficiency

activities for specific technologies”

· AMS-Ⅱ .J “Demand-side activities for efficient

lighting technologies”

· AMS- Ⅱ .N “Demand-side energy efficiency

activities for installation of energy efficient

lighting and/or controls in buildings”

· AMS-Ⅱ.S “Energy efficiency in motor systems”

Etc.

J-credit methodology

· EN-S-001 “Introduction of high efficiency boiler”

· EN-S-002 “Introduction of high efficiency heat

pumps”

· EN-S-005 “Renewal of fan and pump or

installation of inverter and controlling

equipment”

· EN-S-006 “Introduction of high efficiency lighting

facilities”

Etc.

To calculate the amount of emission reduction based on whole building or certain

surface per unit, it is common to set the baseline by simulating on energy cnsumption

per unit, on the assumption of accumulated data in the past. This way may lighten the

burden of the credit application process, but in many JCM signer countries, it is

uncertain If the data which can be used for setting the original unit of energy

consumption in the building has accumulated enough. Then, developing a

methodology with this way seems not to be feasible. Normally, the way to calculate the

21

amount of emission reduction for each equipment tend to increase a burden because it is

necessary to carry out a data monitoring and emission reduction calculation particularly.

However, with EMS, which has a particular monitoring function, a burden to the

companies which handle the application process can be lightened. In addition to it,

EMS can avoid the effect of energy-saving or emission reduction to be overestimated

since EMS is able to quantify only the effect occurred by the project. Normally, the case

that many various projects are simultaneously handled, such as temperature setting or

repairing is not eligible for the project. However, EMS can resolve this point.

Therefore, in this project, we concluded that calculating the amount of emission

reduction based on each equipment is the best way to develop a methodology.

3.2. Overview of the methodology

The target of this methodology is the project which optimizes energy consumption,

introduces energy-saving equipment (high performance equipment and control

equipment), and reduces energy consumption and CO2 emissions.

3.2.1. Eligibility criteria

The criteria for this methodology are as follows;

No. Contents

Criterion 1 To implement energy-saving diagnosis before introducing

energy-saving equipment (high performance equipment, control

device).

Criterion 2 To introduce equipment which has higher energy efficiency than

existing equipment, or can control energy consumption in existing

equipment in factories subjected to the project.

Criterion 3 To introduce EMS to the factories subjected to the project, and

implement measurement and management of energy consumption

in the factories.

Criterion 4 Introduction of energy-saving equipment shall be implemented

either by the replacement of existing equipment or the new

installation on the existing equipment.

Criterion 5 Among the existing equipment which are subject to, the ones

which have already started working before the project are not

subject to this project.

This methodology sets the factories the object, and aims at;

22

(1) Promoting understanding energy-saving measures based on energy-saving

diagnosis, and confirming if there is potential of reduction.

(2) Implementing energy-saving measures based on the diagnostic result.

(3) Quantifying the reduction effect of energy-saving measures, and promoting the

diffusion of EMS which can visualize the amount of energy consumption

optimizing energy utilization.

Hence, based on these aims, we ordain the above mentioned eligibility criteria 1., 2., and

3.

Since criterion 4 determines the object of this methodology as existing equipments in

order to recommend energy-saving process in the factories as well as criteria 1,2, and 3,

the case of establishing a new factory is excluded.

Furthermore, this methodology aims to control energy consumption, which may lead

to discharge GHG emissions such as co-operative energy from non-renewable energy or

fossil fuel, so that criterion 5 excludes the equipment who had started its operation with

renewable energy before the beginning of this project.

3.2.2. Calculation procedure for the amount of reference emissions

As mentioned above, energy-saving measures in factories can be divided into two

types. One is to control energy consumption by introducing a high performance device.

The other is to control energy consumption by putting XXX on existing equipment.

Therefore, the amount of reference emissions in the whole factory is the sum total of

every reference emissions calculated based on the above mentioned categories.

REp = REefficiency,p + REcontrol,p

REp : Total reference emissions during the period p [tCO2/p]

REefficiency,p : Reference emissions by introduction of the high performance

equipment during the period p [tCO2/p]

REcontrol,p : Reference emissions by introduction of the control device during the

period p [tCO2/p]

(1) Introduction of high performance devices

The result of energy-saving diagnosis in this project implies the energy-saving

measure items such as to substitute LED for fluorescent light or to improve the

performance of pumps in the factories.

The reference emissions in substituting high performance equipments for existing ones

23

are calculated as follows;

The reference emissions = the amount of energy consumption of the introduced

equipments x the efficiency differences of equipment before and after replacement

x the emission factors of used energy

The equipment efficiency means the index-value of working performance of the

equipment, differ from the index-value of energy efficiency of each introduced

equipment. The power dissipation for lightings, COP /APF for air conditioning, and the

boiler efficiency for boiler are subjects to the calculation.

REp = REefficiency,p + REcontrol,p

REp : Total reference emissions during the period p [tCO2/p]

REefficiency,p : Reference emissions by introduction of the high performance


REcontrol,p : Reference emissions by introduction of the control device during the

period p [tCO2/p]

(2) Control of existing equipments

The result of energy-saving diagnosis demonstrates some measures for factories in

Vietnam and Cambodia, such as temperature control of the heater and the cooler, a

motion sensor control for lightings and intermittent control for pumps. Here is the

calculation procedure for the amount of reference emissions in case of controlling energy

consumption by putting control devices on existing equipments.

𝑹𝑬𝒄𝒐𝒏𝒕𝒓𝒐𝒍,𝒑 =∑𝑹𝑬𝒄𝒐𝒏𝒕𝒓𝒐𝒍,𝒊,𝒑𝐢

REcontrol,i,p = ECcontrol,RE,i,p × EFi

ECcontrol,RE,i,p = BURE,i × Tbefore

REcontrol,p : Reference emissions by introduction of the control device during

the period p [tCO2/p]

REcontrol,i,p : Reference emissions by introduction of the control device i during

the period p [tCO2/p]

ECcontrol,RE,i,p : Total power consumption of the equipment before introducing the

control device i, during the same period with the period p [e.g.

24

kWh,l,ton/p]

EFi : CO2 emission factor of the equipment with control device i [e.g.

tCO2/kWh,l,ton]

BURE : Base unit of reference energy usage of the equipment with the

control device i [e.g. kWh,l,ton/p]

Tbefore : Time of operation expected without capacity variability by control

device i [hour]

3.2.3. Calculation procedure for the amount of project emissions

Either the case of introducing high performance equipments or control device, the

amount of project emissions needs to be calculated by measuring the actual energy

consumption after the introduction. Calculation procedure is as follows;

PEp = PEefficiency,p + PEcontrol,p

PEp : Project emissions during the period p

PEefficiency,p : Project emissions by introduction of the high performance


PEcontrol,p : Project emissions by introduction of the control device during the

period p [tCO2/p]

The amount of project emissions by introducing high performance equipments

𝑷𝑬𝒆𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒄𝒚,𝒑 =∑𝑷𝑬𝒆𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒄𝒚,𝒊,𝒑𝐢

PEefficiency,i,p = ECefficiency,PJ,i,p ×EFi

PEefficiency,p : Project emissions by introduction of the high performance


PEefficiency,i,p : Project emission by introduction of the high performance

equipment i , during the period p[tCO2/p]

EC efficiency,PJ,i,p : Total power consumption of the device i, during the period p [e.g.

kWh,l,ton/p]


tCO2/kWh,l,ton]

The amount of project emissiosn by introducing control devices

25

𝑷𝑬𝒄𝒐𝒏𝒕𝒓𝒐𝒍,𝒑 =∑𝑷𝑬𝒄𝒐𝒏𝒕𝒓𝒐𝒍,𝒊,𝒑𝐢

PEcontrol,i,p = ECcontrol,PJ,i,p ×EFi

PEcontrol,p : Project emissions of all control devices introduced during the period

p [tCO2/p]

PEcontrol,i,p : Project emissions by introduction of the high performance

equipment i, during the period p [tCO2/p]

ECcontrol,PJ,i,p : Total power consumption of the equipment with the control device i,

during the period p [e.g. kWh,l,ton/p]


tCO2/kWh,l,ton]

3.2.4. Monitoring method

(1) Monitoring method for each parameter

For parameters which require monitoring on each high performance equipment or

device control among parameters showed in above mentioned calculation procedure, we

set monitoring method and its frequency.

Introduction of high performance equipments

Parameter Description of Data Monitoring Frequency

EC efficiency,PJ,i,p Total power

consumption of the

device i, during the

period p [e.g.

kWh,l,ton/p]

Actual measurement with

a measuring instrument

Monthly

ηPJ,i Efficiency of the device

i, introduced by the

project

Refer to the figures in the

specification sheet or the

catalogs

At the project

application.

ηRE,i Efficiency of the

reference device,

before introducing the

device i

Refer to the figure preset

at the energy diagnosis

At the project

application.

EFi CO2 emission factor of

the equipment with

control device i [e.g.

Electricity

In case of using

co-operative energy only;

At the project

application.

26

tCO2/kWh,l,ton] Refer to co-operative

energy emissions factor

published by government

In case of using reserve

power as well;

Refer to the lowest figure

among the ones published

by government and captive

emission factors adopted

by CDM

Fossil fuel

Refer to the IPCC figures

Existing device control

Parameter Description of Data Monitoring Frequency

ECcontrol,PJ,i,p Total power

consumption of the

equipment with the

control device i, during

the period p [e.g.

kWh,l,ton/p]

Actual measurement with

a measuring instrument

Monthly

EFi CO2 emission factor of

the equipment with

control device i [e.g.

tCO2/kWh,l,ton]

Electricity

In case of using

co-operative energy only;

Refer to co-operative

energy emission factors

published by government

In case of using reserve

power as well;

Refer to the lowest figure

among the ones published

by government and captive

emission factors adopted

At the project

application.

27

by CDM

Fossil fuel

Refer to the IPCC figures

BURE Base unit of reference

energy consumptio of

the equipment with

the control device i

[e.g. kWh,l,ton/p]

Refer to the figure preset

at the energy diagnosis

At the project

application.

Tbefore Time of operation

expected without

capacity variability by

control device i [hour]

Refer to the operation

history of equipment

before the project starts.

Or, estimate the operating

days if operational time is

fixed.

At the

monitoring

(3) Pre-setting

Based on the result of energy-saving implemented in this project, we preset the figures

in each factory as follows;

COMPANY A/Cambodia

Among the energy-saving measure items proposed to the factory in Cambodia, we

picked up 2 points which the factory has intention to implement and may be feasible

for JCM credit to preset the figures.

1. Temperature control for the dryer

Parameter Description of Data Figure (source)

BURE Base unit of the reference

energy consumption of the

heater with the control

device (SSR)

115.2 (KW)

The total amount of rated power

from 12 existing dryers which are

determined by energy-saving

diagnosis.

28

2. Motor control for the aspirator in the polishing room




aspirator with the control

device (VFD).

40 (KW)


from an existing aspirator which is


diagnosis

COMPANY B/Vietnam

Among the energy-saving measure items proposed to the factory in Vietnam, we picked

up 4 points which the factory has intention to implement and may be possible for JCM

credit to preset the figures.

1. Introduction of high performance pump and intermittent control




pump with the control

device (VFD).

151(KW)


from 13 existing pumps which are


diagnosis.

2. Temperature control for the heater




dryer with the control

device (SSR).

299.7 (KW)


from 3 existing dryers which are


diagnosis

3. Temperature control for the fan in the cooling room




cooling fan with the control

device (temperature control

device)

27.3 (KW)


from 5 cooling fans

29

4. Lighting control by the motion sensor




lighting with the control

device (motion sensor)

24.45 (KW)


from 489 existing lightings which are


diagnosis

3.2.5. Estimation of the amount of emission reduction

(1) The estimation of the amount of emission reduction in COMPANY A/Cambodia

We made the estimation of the amount of emission reduction for each 2 energy-saving

measure item, which may be possible to be JCM credit. The result is as follows;


(the amount of reference emissions)

ECcontrol,RE,i,p

= BURE,i × Tbefore

=115.2 (KW) × 3,000 (hour)

=345,600 (kWh/year)


= 345,600 (kWh/year) × 0.0006413 (tCO2/kWh)

= 221 (tCO2/year)

(the amount of project emissions)


= 293,760 (kWh/year) × 0.0006413 (tCO2/kWh)

= 188 (tCO2/year)

(the amount of emission reduction)

ERcontrol,i,p = REcontrol,i,p －PEcontrol,i,p

= 221 (tCO2/year) － 188 (tCO2/year)

30

= 33 (tCO2/year)

2. Motor control for the aspirator in the polishing room

(the reference emissions)

ECcontrol,RE,i,p

= BURE,i × Tbefore

= 40 (KW) × 3,000 (hour)

= 120,000 (kWh/year)


= 120,000 (kWh/year) × 0.0006413 (tCO2/kWh)

= 76 (tCO2/year)

(the project emissions)


= 80,900 (kWh/year) ×0.0006413 (tCO2/kWh)

= 51 (tCO2/year)



= 76 (tCO2/year) －51 (tCO2/year)

= 25 (tCO2/year)

3. Amount of emission reduction in whole factory

The amount of emission reduced by implementing 2 energy-saving measure items in

whole factory is as follows;


REp

= REefficiency,p + REcontrol,p

= 221 (tCO2/year) + 76 (tCO2/year)

31

= 297 (tCO2/year)


PEp

= PEefficiency,p + PEcontrol,p

= 188 (tCO2/year) + 51 (tCO2/year)

= 239 (tCO2/year)


ERp = REp －PEp


= 58 (tCO2/year)

It concludes that 58 (tCO2/year) will be reduced by implementing the project in the

whole factory.

(2) The estimation of the amount of emissions reduction in COMPANY B/Vietnam

We made the estimation of the amount of emissions reduction for each 4 energy-saving

measure item, which may be possible to be JCM credit. The result is as follows;

1. Introduction of high performance pump and intermittent control


ECcontrol,RE,i,p

= BURE,i × Tbefore

= 151 (KW) × 7,200 (hour)

= 1,087,200 (kWh/year)


= 1,087,200 (kWh/year) × 0.0005408 (tCO2/kWh)

= 587 (tCO2/year)

32



= 536,256 (kWh/year) × 0.0005408 (tCO2/kWh)

= 290 (tCO2/year)



=587 (tCO2/year) － 290 (tCO2/year)

=297 (tCO2/year)



ECcontrol,RE,i,p

= BURE,i × Tbefore

= 299.7 (KW) × 3,000 (hour)

= 899,100 (kWh/year)


= 899,100 (kWh/year) ×0.0005408 (tCO2/kWh)

= 486 (tCO2/year)



= 764,235 (kWh/year) ×0.0005408 (tCO2/kWh)

= 413 (tCO2/year)




33

= 73 (tCO2/year)

3. Temperature control for the fan in the cooling room


ECcontrol,RE,i,p

= BURE,i × Tbefore

= 27.3 (KW) × 6,300 (hour)

= 171,990 (kWh/year)


= 171,990 (kWh/year) ×0.0005408 (tCO2/kWh)

= 93 (tCO2/year)



= 146,160 (kWh/year) ×0.0005408 (tCO2/kWh)

= 79 (tCO2/year)




= 14 (tCO2/year)

4. Lighting control by the motion sensor


ECcontrol,RE,i,p

= BURE,i × Tbefore

= 24.45 (KW) × 3,300 (hour)

= 80,685 (kWh/year)


34

= 80,685 (kWh/year) × 0.0005408 (tCO2/kWh)

= 43 (tCO2/year)



= 40,343 (kWh/year) × 0.0005408 (tCO2/kWh)

= 21 (tCO2/year)




= 22 (tCO2/year)

5. The amount of emission reduction in whole factory

The amount of emission reduced by implementing 4 energy-saving measure item in

whole factory is as follows;


REp

= REefficiency,p + REcontrol,p

= 587 (tCO2/year) + 486 (tCO2/year) + 93 (tCO2/year) + 43 (tCO2/year)

= 1,209 (tCO2/year)


PEp

= PEefficiency,p + PEcontrol,p

= 290 (tCO2/year) + 413 (tCO2/year) + 79 (tCO2/year) + 21 (tCO2/year)

= 803 (tCO2/year)


ERp = REp －PEp

35

= 1,209 (tCO2/year) － 803 (tCO2/year)

= 406 (tCO2/year)

It concludes that 406 (tCO2/year) will be reduced by implementing the project in the

whole factory.

3.3. In forthcoming issues

The methodology in this project was set to aim to lighten burdens for business

operators who have intention to issue the JCM credit in calculation for the amount of

emission reduction. The implementation of energy-saving diagnosis, and energy-saving

measures, and the actual measurement of the amount of energy used for each

equipment by introducing EMS are the presuppositions. However, the guarantee

method of maintaining the amount of emission reduction is still open to argument in the

future..

3.3.1. How to secure the maintainability of the amount of emission reduction

The amount of emission reduction in JCM credit system needs to be calculated

conservatively in order to maintain certainly the reduction amount by implementing

the project. When referring to the past methodologies, the way to secure the

maintainability is various according to each methodology. However, this methodology

aims to secure the maintainability by pre-setting the figures. In either case, the

introduction of high performance equipment or control device, pre-setting the figures

based on the power dissipation or the performance of equipment before the project is the

appropriate approach for determining the amount of reference emissions. To set

conservatively the figures in advance for each calculation, such as “Efficiency of the

reference device, before introducing the device i (ηRE,i)”,” Base unit of reference energy

consumption of the equipment with the control device i [e.g. kWh,l,ton/p](BURE)”, ,

following approaches are supposed;

1) Adopt the figures in the catalogs

In general, the equipment is deteriorating accordingly to daily use, then its capacity

and performance are degraded by comparison with catalogs or specification sheets.

Therefore, to calculate more conservatively the amount of reference emissions than the

actual figures, it is better to adopt the figures in the catalogs for pre-setting the base

unit of reference energy consumption of the equipment with the control device i(BURE)”,

36

as well as the efficiency of the reference device, before introducing the device i (ηRE,i)。

2) Consider the capacity degradation due to the aging degradation

In case where neither catalog, nor specification sheet exists, there is no approach

other than to measure at the energy-saving diagnosis. In this approach, it is possible to

secure the maintainability as well as the approach of adopting catalog figures, by

estimating performance degradation of each equipment, from its introduction to now,

and setting the performance at the introduction timing as the preset figures.

Regarding the validity and the feasibility of the above mentioned approaches, to

secure the maintainability of the calculation, verification through the registration

process of this methodology is still necessary.

Chapter 4. Analysis of the economic effect and the impact on the partner

countries trough the project

4.1. The economic effect through the project

This project aims to implement each measure and the introduction of EMS after the

energy-saving diagnosis. So that, we concluded to include the expense of energy-saving

diagnosis for calculating the economic effect. In the mean time, the introduction of the

equipment of solar power which is under consideration of COMPANY A in Cambodia, is

excluded from this calculation.

(USD)

investment

year1 year 2 years 3 years 4 years 5 years

Energy-saving diagnosis 33,000 0 0 0 0 0 0 0

EMS 36,000 0 0 0 0 0 0 0

Other mesures (excl. EMS) 157,880 142,960 0 142,960 406,405 669,850 933,295 1,196,740

total 226,880 142,960 0 142,960 406,405 669,850 933,295 1,196,740

0.0% 63.0% 179.1% 295.2% 411.4% 527.5%ROI

COMPANY AInvestment

cost

Annual

saving effect

Accomulation saving effect

TABLE 6 THE RESULT OF CALCULATION: THE ECONOMIC EFFECT ON

COMPANY A IN CAMBODIA

37

As mentioned above, it shows that the early investment-return can be expected even

including the expense of the energy-saving diagnosis. In addition to it, although

presupposing that the electricity cost is the same, high ROI (cost effectiveness) can be

expected, 527% in COMPANY A in Cambodia and 203% in COMPANY B in Vietnam.

Therefore, it could be said that this project is feasible for both local factories and, at the

same time, significant for the society because it contributes to the environment as well.

4.2. Analysis of the impact on the partner countries

Reducing the energy cost such as electric charge or diesel fuel by energy saving can be

the factor to reduce the operation cost. It may lead the factories to decrease the product

cost, and furthermore, strengthen the competitiveness.

Especially in Cambodia, that could maintain the competitiveness supported by the

low labor cost even with a high electric charge, the labor cost tends now to increase. In

this country, it is necessary to decrease other manufacturing costs, such the energy cost

which is higher compared to other countries. Nor, it would be difficult to strengthen the

competitiveness. The government of Cambodia also states that an energy cost reduction

in the sewing industry, which is the main industry of this country, is the most

important.

Moreover, it could be said that in Cambodia, where the stable electricity supply is not

secured, the energy saving measures contribute to make it stable.From the results of

the energy saving diagnosis, it demonstrates that COMPANY A can reduce 801,287kWh

per year if COMPANY A implement all measures. On the other hand, the gross domestic

electric power generation in Cambodia is 1,778GWh in 2013. So, apparently, COMPANY

A’s reduction effect is equivalent to 0.05%. If more than 100 factories of the same size

with COMPANY A in Cambodia take the similar measures, the total reduction effect

would be approximately 89GWh, equivalent to 5% of the gross domestic electric power

generation.

(USD)

investment

year1 year 2 years 3 years 4 years 5 years

Energy-saving diagnosis 37,000 0 0 0 0 0 0 0

EMS 54,000 0 0 0 0 0 0 0

Other mesures (excl. EMS) 556,226 263,445 0 263,445 526,890 790,335 1,053,780 1,317,225

total 647,226 263,445 0 263,445 526,890 790,335 1,053,780 1,317,225

0.0% 40.7% 81.4% 122.1% 162.8% 203.5%

COMPANY BInvestment

cost

Annual

saving effect

Accomulation saving effect

ROI

TABLE 7 THE RESULT OF CALCULATION: THE ECONOMIC EFFECT ON

COMPANY B IN VIETNAM

38

Chapter 5. Tasks for the project, success factors or issued for JCM in the future

First of all, a high initial cost for the equipment introduction in case of implementing

the energy saving diagnosis and EMS introduction / equipment efficiency improvement

at the same timing is the issue. To resolve this issue, it is preferable to start

disseminating the energy saving measures into the factories which have relatively high

financial power, but it may possibly lead to the partner countries to burden the risks, in

terms of technique or cost. If in the case of counting on the future diffusion into the

factories which have low financial power, it is better to utilize the government-led

system such as JCM, and give the incentives regarding the implementation of

energy-saving diagnosis or the equipment introduction to the partner countries.

As the possibility for JCM project, there are 2 options as follows;

1) Energy saving by combining EMS and the efficiency improvement of each

equipment

2) Energy saving only by EMS (visualization and the electricity demand control by

EMS)

Regarding 1), the demonstration time of those technologies is needed, as any

example of combination of EMS and the efficiency improvement of each equipment

has not been demonstrated in the partner countries. Therefore, it is preferable to utilize

“JCM feasibility studies and demonstration project” of New Energy and Industrial

Technology Development Organization (hereinafter called NEDO). Meanwhile, about 2),

it is assumed to aim to the JCM project registration by utilizing “MRV feasibility

studies and demonstration project” of NEDO as well.

Success factor is that, by implementing energy saving diagnosis, we could clearly

show the necessary measures, its introduction expenses and the cost effectiveness. It

indicates that the early investment return can be expected even though EMS and

energy saving diagnosis are used together. In the case of promoting the similar energy

saving measures in the future, it is preferable to propose the combination of EMS and

energy saving diagnosis.

Issue to be resolved is that, in the energy saving project, GHG reduction effect

obtained from the one single factory is small. In both Cambodia and Vietnam, most of

private factories are in the light industry, then the quantity of discharged emissions

from them are smaller than from the ones in the heavy industry. In this regard, the

possible approach is to disseminate the energy saving project in the factories as the

CDM project type. In this case, it is required to build the methodology to integrate

many projects into the one, then create credits by accumulating all reduced emissions. If

this method is not practical, the approach to increase the gross amount of GHG

39

reduction by combining with particular measures which have a higher reduction effect

should be adopted.

Chapter 6. Policy recommendation and the reaction of the partner governments

6.1. Current issues and the solution proposal

6.1.1 Current issues

Referring to the predicaments of saving energy in Japan, there may exist five

policy actions to promote the energy saving in the factories (Figure 17). Since the

governments of the partner countries do not have ample financial power, Figure 17 is

summarized from the point of view of taking the effective approaches, by considering

the period and scope needed for financial burden and policy support.

Policy actions Financia l

burden

Period for

policy

support

Scope Evaluation by our

company Predicaments in Japan

1. Formulaitio

n of energy

saving

related law

(mandatory)

Medium Long

term

Wide

area

Difficult to ensure

comprehensiveness

and equality, adjust

between the parties

concerned

Energy saving related low

(Obligation of

implementing the energy

saving measures)

2. Subsidy for

energy

saving

measures

Large Mid

term

Limite

d area

Difficult to implement

permanently due to

the limited target

range

Subsidy for rationalizing

energy use, reduce taxes

for green investment

3. Human

resource

development

for saving

energy

Small Long

term

Limite

d area

Low cost but takes a

long time, and limited

target range

Examination for qualified

energy manager’s license,

Courses in the Energy

conservation Center

(ECC)

4. Introduction

of energy

saving

Small Short

term

Wide

area

Difficult to train

consultants for the

certifying organization

ISO50001(Energy

management standard),

Eco action 21

TABLE 8 EXPECTED POLICY ACTIONS FOR ENERGY SAVING

MEASURES

40

certificate

system

before setting the

system

5. Expansion of

awareness of

energy

saving

measures

Small Short

term

Wide

area

Possible to promote

energy saving once the

benefit of cost

effectiveness is known

to companies

Top runner standards, PR

tool (Ministry of economy,

trade and industry),

energy saving award

1. Formulation of energy saving related law (mandatory) varies by country as can be

seen the difference between Vietnam, which has already engaged and Cambodia,

which needs to design a legal system from now on. Since the process for

formulationg of lows requires comprehensiveness and equality, it takes long time to

confirm business conditions for all industry types and adjusting between the parties

concerned. Additionally, confirmation of implementation status by the witnessed

inspection is required to keep compliance system after the formulation.

2. Subsidy for energy saving measures is the standard countermeasures implemented

in the developing countries. Actually, most of proposals on projects promoting global

warming prevention technology until last year, related to financial support are

grants and providing tax benefits for facility introduction, or tax benefits for

financing. However, it is difficult for Cambodia and Vietnam, the countries suffered

from a chronic budget deficit, to subsidize large amount. And it is also difficult for

the developed countries including Japan to provide financial support permanently.

In addition, the scope of subsidizing at one time is limited and takes time to provide

it to all recipients.

3. Although cultivation of human resource is easy to introduce with low cost, there is

limitation of number to educate at one time and takes long time to complete.

4. Energy saving certification system costs only a little after establishing the system

because the acquisition expenses from companies can be the financial source. On the

other hand, ISO50001, an international rule for energy management, makes it

needless to reestablish the system for energy management by the partner countries

itself. To implement the certification system and the consultants training is also

needed to make the system effective.

Therefore, “5. Expansion of awareness of energy saving measures”seems to be the

most effective and easiest action to start. One of the reasons for the low level of

awareness is the lack of knowledge for effective measures to save energy. Without

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concrete and cost-effective ideas, many companies may give up to implement

countermeasures considering an expensive initial investment. The countermeasures we

propose in this project has a large benefit of the early investment return period. It takes

only a few years and much shorter than installed equipment life, normally eight to

fifteen years. About Vietnam, taking into account calculating with actual low electric

expense, it is assumed to be shorter. Raising awareness of these benefits in owners who

own factories may enhance incentives to save energy and accelerate the penetration

even in the private sector.

Concrete approaches proposed by us are introducing examples and awards system.

When the global companies without its own factories in the local area as Asics, require

to save energy to its subcontract companies, it is understandable what kind of

measurements to take if predicaments are well known. From the point of view of CSR,

award system can easily appeal the company to the public.

In Cambodia, although concrete measures and targets are settled for saving energy in

EUEI PDF, the government priors electric and infrastructure equipment to raise

awareness. However, it is clear that unstable power supply and expensive electric

expense compared to neighboring countries disturb foreign investments to come.

Considering falling international competitiveness due to continuity of labor cost

escalation and increasing power demand, saving energy is definitely required.

According to Cambodia MME, lack of predicaments with obvious cost benefits is the one

of the biggest reasons to disturb penetration of concrete saving energy measures.

In Vietnam, the Japanese Government has already contributed to accelerate saving

energy. The saving energy related laws have already come into effect and the

government provides diagnosis for industries which use much energy as cement,

thermal power plants, coal, steel and iron. However, it is not provided to

small-to-medium-sized companies. According to Vietnam MOIT, the biggest problem is

lacking funds for implementing the measures even the energy saving diagnosis showed

its necessity clearly. Especially in Vietnam, saving energy cannot be regarded as a

management problem because of its low electricity cost. For these reasons, the

government expects the penetration of cost-effective measures. Realistically, FDI has

financial allowance and is regarded the suitable candidate to implement energy-saving

strategy at first. After confirming the effectiveness, it should be done in domestic

companies as well.

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6.1.2. Predicaments in Japan

Raising awareness campaign conducted by the government in Japan is providing

information actively. There are a few examples below.

Portal-site for saving energy: shindan-net.jp

• Offer the diagnosis about possibility for saving energy technology importation

to small and medium-sized companies that have fewer human resources,

technology or financial power to save energy

• Aggressively offer the information through the website, by opening the dedicated

homepage to introduce predicaments of energy saving, or using panels and movies

in the events.

As a result of opening a dedicated website to show the effects of measures for every

industry/equipment including cost information, each company can adopt the

appropriate idea by itself.

Potal-site about energy saving by the government：setsuden.go.jp

• Provide the information about energy saving from ministries and agencies

• Publish the governmental announce about the period, time and goal for energy

saving, especially in the high power demand period.

• Obviously show how much electricity will be saved by taking each action2

2 METI, http://setsuden.go.jp/pdf/setsuden_menu_jigyo_other2015w.pdf

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The government provides information not only through those websites, but also

accelerates saving energy through events, then requests companies, organizations and

municipalities to disseminate energy-saving information. Furthermore, the government

promotes enhancement of energy saving by transmitting information through the media

as newspaper and internet.3

Saving energy award

To promote products, activities, and consciousness regarding energy saving, the

government recognizes companies’ contribution to the energy saving by awards.

Evaluating companies for its excellent works and technologies also helps to improve the

corporate image

6.1.3. Solution Proposal for the partner countries

Since energy saving policy has not penetrated into private sector yet, approaches to

expand or promote the awareness of energy saving measures are effective. Energy

saving measures combined with EMS is cost-effective and have the possibility to lead

the companied to autonomously take action, by notifying these technologies to the

public. If the government can propose high ROI measures and show concretely the

investment effect while refering to predicaments of other countries, such as

expanding/promoting awareness, companies may be able to take energy saving actions

without much difficulty.

The followings are the proposed measures to expand awareness;

1. Opening the website

3 MEXT, http://www.mext.go.jp/a_menu/shisetu/cost/__icsFiles/afieldfile/2015/11/09/1340892_01.pdf

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2. Preparation and distribution of pamphlets

3. Awards to the companies which take actions

4. Providing free or cheap diagnostic system for energy saving

Even though these above mentioned measures have already implemented partially in

both Vietnam and Cambodia, equipment installation has not yet progressed. The high

initial investment cost which is not affordable for the companies and the low awareness

of energy saving measures may be the road blocks. Especially for the former, we picked

up foreign companies which have enough financial power, but less awareness of the

energy saving measures as the target for promotion actions.

Moreover, it is also preferable to further study energy saving measure items or

manage a peak shift by the system control by visualizing the energy consumption on

each production line, with the combination of EMS and energy saving measures.

6.2. Future issues

Even though enough information is provided, the domestic companies tend not

actively to introduce energy saving equipment due to the initial investment cost.

Therefore, the approach of implementing promotion for the domestic factories of foreign

companies first, showing the concrete effects to the domestic companies, then

disseminating seems to be the effective method. The proposed measures for energy

saving in this project estimate 1-3 years of the investment return, calculated on the

energy saving effect per year to the initial investment cost (the effect of electricity

expense reduction). It implies the great benefit compared to the life expectancy of

introduced equipment, and it may be a strong incentive for the foreign companies to

introduce energy saving measures, and to follow for the domestic companies. Therefore,

it is the most important how to make the high ROI measures such as this project well

know by the foreign campanies first.

Chapter 7. Summary

This project aims to implement energy saving in ASICS’ subcontract factories with

the introduction of EMS and the efficiency improvement of each equipment. Through

this project, it is revealed that Governments recognize not only the supply approach, as

to increase supply sources, but also e demand approach, as to optimize energy

consumption, as problems. Governments recognize as well that it is necessary to adopt

enough policies for the peak control, such as peak cut / peak shift. Therefore, the

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scenario to promote the peak control into local companied with the introduction of EMS

is one of the possible options. However, as it may be difficult to introduce only EMS,

visualizing the effect by combining with the energy saving diagnosis is the practical

way.

In the meantime, this project showed that there is an immense room for improving

the efficiency of each equipment in local. Especially in the light industry, which has less

large equipment, the equipment improvement can be implemented at a lower cost.

Furthermore, there are measures that its energy saving can be done only by the

operational improvement. So, these measures are able to be promoted in local, even

though excluded from JCM project.

The background to explain the reason why the energy saving measures of the

introduction of EMS and the efficiency improvement of each equipment is, that the

factories are not capable to judge which measures they should take or recognize what

the benefit (the economic effect) of the energy saving is. Hence forward, the approach to

promote the energy saving measures into the other factories by utilizing the JCM

system and implementing the model project is effective. The energy cost reduction by

the energy saving may lead the local industries to strengthen the competitiveness.

Therefore, this point will attract the foreign companies as well.

To implement this project as the JCM project, there are two approached as follows;

1) The energy saving by the combination of EMS and the efficiency improvement of

each equipment

2) The energy saving by single EMS (the visualization and the energy demand control

by EMS)

As the demonstration period is needed for the above mentioned 1), the approach to

utilize “JCM feasibility studies and demonstration project” of NEDO is potential. For

above mentioned 2), which does not require the demonstration period, aiming to be

registered as the JCM project by utilizing “MRV feasibility studies and demonstration

project” of NEDO is the possible approach.

Issue on implementing JCM project is that the effect of GHG emission reduction per

factory in the light industry is low, because the light industry discharge less emissions

compared to the heavy industry.Therefore, the methodology of issuing credits by

accumulating reduced emissions by combining many projects into one, ought to be

developed in the future.

feasibility study project for the jcm (2015fy) energy saving for

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