key steps and success factors in epc implementation
DESCRIPTION
A revised version on EPC Guideline for implementation for government buildingsTRANSCRIPT
SEMINAR HIJAU
THE PRACTICAL STEPS AND KEY
CRITERIA IN ENERGY PERFORMANCE CONTRACTING
Zaini Abdul Wahab
MAESCO 4th July 2013
Hotel Seri Malaysia, Ayer Keroh
Melaka
Outline
1. EPC Market Potentials
2. The Practical Steps & Key Success Factors For Successful EPC Projects Implementation
3. EPC Success Stories
4. The Way Forward
Shared Saving Mechanism
Adaptation from US Dept. of Energy, Measurement & Verification Guidelines, Version 3.0,
time
(year)
Energy Bills
During contract period
Lower Energy
Bill
After Contract period
Energy bill saved
Before Contract Period
Electricity bill
before energy
saving
measures
implementation
Payment to
ESCO
Savings for the
client
Baseline
Lower Energy
Bill
Savings for
the client
Implement EMS Develop & Plan
EMS
Guaranteed Savings Model
FACILITIE
S OWNER ESCO BANK
Project Design&
Implementation
Project Fees Loan
Repayment
Shared-Savings Model
FACILITI
ES
OWNER ESCO BANK
Project Design&
Implementation
Loan
Repayment
EE
PROJECT Energy saving share
(90%-70%)
Financing
Energy saving share
(10%-30%)
Energy Efficiency Market & Potentials in SEA
Source: www.reexasia.com
Saving Potentials (USD) in SEA
Clearly, the industrial and
commercial sector s offers
much higher savings potential Source: www.reexasia.com
EPC MARKET POTENTIALS IN MALAYSIA
Biggest Electricity Users For Government
Buildings (Sep 2009-Oct 2010)
Hospitals, 20%
Universities, 29%
Ministries, 19%
Others (States,
Agencies), 32%
Building Nos
Total Consumption
(kWh/year)
Total Bill
(RM/year)
Hospitals 22 367,587,657 130,640,653
Universities 25 543,961,738 193,324,002
Ministries 25 360,592,831 128,154,692
Others(States,
Agencies) 56 603,464,085 214,471,136
128 1,875,606,311 666,590,483
Estimated Total TNB
Bill for government
buildings
(Sep 2010-Aug 2011)
Total
Consumption(kWh/year)
Total Bill(RM/year)
7,896,508,329 2,726,767,394
10% saving equals
to about RM270
millions /year
Source:KeTTHA
EPC Market Potentials : Melaka
No. Building
Total Electricity
Bill
(RM/year)
Total
Consumption
(kWh/year)
1 Melaka Mall Complex Ayer Keroh 2,018,339 6,469,034
2 Seri Negeri Chief Minister Department
, Ayer Keroh 1,435,728 4,601,693
3 MITC Complex, Ayer Keroh 980,085 3,141,299
4 Wisma Negeri Building Ayer Keroh 1,095,472 2,547,610
5 Graha Maju Building, Jln Hang Tuah 674,267 2,161,113
6 Wisma PKMM Building, Ayer Keroh 646,924 2,073,473
7 Digital Mall, Jln Hang Tuah 550,110 1,763,174
8 Melaka Sentral Terminal Peringgit 735,193 1,709,750
9 Putra Specialist Hospital 2,858,772 1,905,848
Total 10,994,890 26,372,994
Source: JIMAT
Potential Areas For EPC Projects
EPC Potentials : A Building Facilities in Melaka
NO. Item
MOTOR
RUNNING NORMAL MODE ENERGY SAVING MODE
( Rated
kW )
( Running
kW ) kWh/Year
Rate/Year
(RM)
Amount
(kWh)
Rate/Year
(RM)
SAVING
(%)
SAVING
(RM/Year)
1 CHWP 1
18.5 19.1 165,024 70,960 107,266 46,124 35% 24,836 Old Block Chiller Room
2 CHWP 2
18.5 19.0 164,160 70,589 106,704 45,883 35% 24,706 New Block Chiller Room
3 CDWP 1
15 13.3 114,912 49,412 82,737 35,577 28% 13,835 Old Block Chiller Room
4 CDWP 2
18.5 15.3 132,192 56,843 95,178 40,927 28% 15,916 New Block Chiller Room
Sub-Total 67 576,288 247,804 391,884 168,510 32% 79,294
No Item Rated
(kW)
Actual
kW
Normal
kWh/Year
Saving Mode
kWh/Year Saving % Saving kWh
Saving
(RM/Year)
1 Chiller – Old Blk 210 128 1,105,920 995,328 10% 427,991 47,555
2 Chiller– New Blk 210 115 993,600 914,112 8% 393,068 34,180
Sub-Total 420 243 2,099,520 1,909,440 9.1% 821,059 81,734
TOTAL HVAC SAVING 161,028
Source: ESCO
EPC Potential:
Shopping Complex in Melaka
• Total Lighting Saving = RM 116,253
• Total Maintenance Saving = RM 44,768
• Total Saving for HVAC = RM 270,231
• Total Annual Savings = RM 431,252
18% from total annual
electricity bill
(Nov 2012-Feb 2013)
Source: ESCO
The Practical Steps & Key
Success Factors For Successful EPC Projects Implementation
The Key Steps
Confirm The Need!
Understanding on EPC concept by the building owner
The needs to adopt EPC model
Self assessment
Comparing energy benchmark
Estimation of project costs & saving potentials
Private investment & Risks transfer to ESCO - viable sharing ratio/%
Opened or Closed Tender?
Scope of Services under EPC
Project Funding & Financing Options
Engineering & Economic Feasibility Studies
Project Design, Engineering & Permitting
Project Construction
Project Commissioning
Operation, spare parts & Maintenance
Performance measurements & monitoring
Preparation
Facility Profile Basic building information
Floors & areas
M&E equipment & system data
Building materials information & data
Energy consumption
Define project & preliminary scope
Evaluation criteria ESCOs
EPC Project Proposals
Prequalification of ESCOs
Qualifying criteria
Own criteria – must consider the nature of
ESCO business for EPC
MAESCO’ s /International guidelines
Current criteria by ST is insufficient to
determine the financial & technical capabilities
of registered ESCOs
Identify Potential ESCOs
Selection of ESCOs
Experiences in EPC/Track Records in energy services
Financial Strengths
Management capacity in
energy services
Technical Competency &
Expertise
ESCO
To secure
financing & ensure
sustainable
operations
Issue Request for Proposal
Evaluation of Proposals
Example: Evaluation Score Sheet
Detailed Energy Audit
Investment Grade
Energy Audit
Owner’s roles
Scope & schedule
Findings
Energy saving
potentials analysis
Projected annual cash
flow
Measurement,
Monitoring &
Verification of actual
savings
EPC Contract Document
Drafted by JKR for government buildings as reference To be customized based on requirements of each building owner
Factors should be considered to reduce dispute in EPC Contract Obligations of owners & ESCOs
Factors affecting savings performance
Valuating savings uncertainty
Minimum operating conditions
Energy prices/tariff rates
Verification by A third party
Baseline modification/review(non-routine)
Balancing uncertainty and costs
Protection from risks by both parties
Project Implementation
EPC Contract Negotiation &
Signing
Install permanent sub-meters
Collect energy data to
establish energy
baseline values
Improve & optimize energy
consumption with proposed
saving measures
Measure & monitor actual
energy savings achieved
against agreed baseline values
Measurement, Monitoring &
Verification
For actual savings achieved
Methodology/Protocol
Baselines agreed
Permanent metering (highly recommended)
Options For
Energy Baseline & Saving Calculation
Method Advantages Disadvantages
Utility billing history Low cost •Effects of weather ,
occupancy, other
changes may mask
savings
•May be unreliable
unless savings are
significant compared to
normal bill variation
Data already available
Independent data
Represent all effects of
ESMs
Account for interactive
effects
System/Equipment
sub-metering
Isolate effects of ESMs
•Higher cost
•Misses interactive
effects
Very accurate for
lighting measures
Results are more
predictable(low risk)
Baseline:
Baseline year from electricity bill data (kWh)
(kW
h)
Example:
Energy saving calculated by the difference between a
baseline year and a subsequent year from electricity bill
(kW
h)
Baseline : Building Monthly Load Profile (kW) from sub-metering
31
Baseline :
Building monthly electricity consumption profile(kWh) from sub-metering
32
Baseline :
Building monthly load profile(kW) for AHU from sub-metering
33
Baseline :
Monthly electricity consumption profile(kWh) for AHU from sub-metering
34
Example: Savings calculated based on actual
measurement from sub-meters
Modifying/Reviewing Baseline
To establish standards for “Materials” changes which may reasonable expected to change energy consumption trend in the facility Occupied square footage, operating hours
Facility’s energy equipment/operating parameters other than the ESCO equipment
Energy equipment, other than ESCO equipment, that malfunctions, or is repaired, or replaced in a manner that increases or decreases energy consumption;
Other actions taken by the facility owner that may reduce or increase energy use; and,
Discovery of an error in the original baseline, in which case the change would be retroactive
Trust , good
relationship &
effective
communication
between ESCO &
building owner is
crucial to identify the
needs to
modify/review
baseline!
Example: Monitoring & Measurements for Air
Conditioning System
Your Energy Management
Specialist &
Total Energy Conservation
37
(Before) Conventional FL 36W (After) HP T8-28W
Example : Before & After Implementation
EPC Success Stories:USA
ESCO Fund:Thailand
EPC Success Stories: Malaysia
Source: ESCO
THE WAY FORWARD
Capacity building for ESCOs and building operators to enhance competencies in energy saving projects implementation
Incentives/rewards/recognition for buildings which produced significant energy savings To create motivation
Supports from banks with independent technical assessment from a competent agency for EPC project proposals for funding To increase numbers & sizes of participation by ESCO & building
owners
One-stop & competent agency for EPC project proposals evaluation & performance measurement & verification
Fiscal incentives for ESCOs & Business friendly procedures