sharing of ... Overview of Energy in Malaysia and Outlooks on EE industry  potentials ESCOs in EE industry Sustainable implementation of EE initiatives at organizations through management and engineering solutions Barriers and counter measures for holistic EE implementation at the national level to  grow EE industry The way forward based on my experiences, knowledge, readings and beliefs as an industry players

1. By
ZAINI ABDUL WAHAB
MAESCO
Awareness Program For Engineers
17th December 2014
WISMA IEM

2.  Overview of Energy in Malaysia and Outlooks on EE
industry potentials
 ESCOs in EE industry
 Sustainable implementation of EE initiatives at
organizations through management and engineering
solutions
 Barriers and counter measures for holistic EE
implementation at the national level to grow EE
industry
 The way forward

3. CONSULTANT/ PRACTITIONER
REGULATOR/
POLICY MAKER IN GOVERNMENT SERVICES
CONSULTANT/
INDUSTRY PLAYER
1997-2004
2004-2012
2012-present

4.  Certified Competent EnMS Expert,
UNIDO
 Registered Electrical Energy
Manager, Energy Commission
 Certified Trainer, HRDF
 Registered ISO50001 Technical
Auditor with Certification Bodies
 Registered Consultant, Asian
Development Bank
 Member of Board of Judges,
Asean Energy Awards 2011
 Expert Facilitator for EE Policy
Workshop, IEA 2012
 EE Policy Studies & strategic
implementation plan for national
& state levels
 Expert trainer & speaker for
energy management training,
seminars and conferences at
local & international programs
 EE Capacity Development
Program Designs
 EnMS development &
implementation , energy audit &
business case proposal
preparation & presentation
 REEM Coaching for qualified
professionals/EE practitioners

5. AS A PROPFESSIONAL SPEAKER AT LOCAL & INTERNATIONAL EVENTS

6. AS A TRAINER FOR CAPACITY BUILDING PROGRAMS

7. AS A PANELIST FOR LIVE SHOWS AT TV & RADIO STATIONS

8. IN PRINTED & ONLINE MEDIA

11.  There is a need to have a dedicated policy on EE at the
national level &recommended by the study by government
Source: SEDA Malaysia

12. CRUDE OIL : 5.46 billion barrels, NATURAL GAS : 88.00 trillion standard cubic feet
RESERVE LIFE : Oil – 19 years, Gas - 36 years
(source: PETRONAS (as at 1st January 2008)

13.  more on the decreasing trends from the early 90s
Source: PEMANDU

14. Total resources addition has been shrinking despite
increased in exploration activities.
Oil explorations activities today require bigger investments
Source: PEMANDU

15.  moved from oil dependent to gas &coal dependent for
electricity generation.
 The dependency on coal from Indonesia reduced from 84%
in 2008 to 65% in 2011.
Source: Energy Commission

16.  GDP growth is strongly related to the increase of final energy supply &demand.
 Need to get the GDP to grow as are moving towards a developed country
 To change the trend of the energy demand to increase exactly according to the GDP growth
to show that we are not utilizing our energy resources effectively.
Source: National Energy Balance 2012

17.  Malaysia is expected to become net oil importer by 2020 or
earlier if the demand increase in the same period.
 Coal is biggest imported energy source for Malaysia until 2030
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2002 2010 2020 2030
Percentage
Coal Oil Gas Hydro Nuclear NRE Electricity Heat
Source: APERC 2006

18.  Energy demand projected to increase from 2,000 PJ(2009) to 4,013
PJ(2030), average rate of 3.6% /year
 Short term &long term measures that can be taken is through EE
initiatives while working on looking for new energy sources (RE&
alternative energy)
To balance and reduce the supply and
demand gap
Source: EPU

20. Using the same/less
amount of energy
to produce the better Output
Using less energy
to accomplish
the same task/to enjoy
the same comfort level
Process
( Equipment/Operations)
INPUT OUTPUT
• Comfort
level
• Production
volume
• Quality
• Safety
• Electricity
• Fuel

21. ….but how
Malaysia has
been doing it?

22. Source: IEA,2012

23.  It’s beyond energy cost saving!
Source: IEA,2012

24. What the energy
consumption &
socioeconomic
situation would
have been
without
improved EE -
baseline
The government
must to prioritise
the needs of the
country-benefits
in economic
growth, job
creation/industri
al productivity
are given equal
weight, or even
favoured over
energy savings.
Reconsidering
the outcomes
from EE
improvements -
welfare gains
rather than
energy savings
alone could
transform the
rebound effect
from negative
impacts to a
quantification of
the wider
socioeconomic
impacts

25.  Economically viable efficiency measures can
halve energy demand growth to 2035
Source: IEA

26.  EE potential used by sector in the New Policies Scenario
 2/3 of the economic potential to improve EE remains
untapped in the period to 2035
Source: IEA

27.  Reducing demand of energy with lesser investments & faster results
Source: McKinsey Global
Institute Analysis 2010

28. Source: McKinsey Global
Institute Analysis 2010

29. Source:Global Insight, IEA McKinsey Global Institute Analysis
Malaysia don’t have EE policy yet & urgently need one!

30. 1,327
1,273
1,192
1,101 1,101
1,059 1,059
1,000
978
951
1,036
1,013
1,013
985
1,049
1,091
1,051
1,0701,077
1,037
1,044
1,021
1,059
1,036
1,038
1,050
1,131
1,142
1,345
1,405
1,467
1,566
1,573
1,438
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
'73
'75
'77
'79
'81
'83
'85
'87
'89
'91
'93
'95
'97
'99
'01
'03
'05
Fiscal Year
Primaryenergyconsumption/GDP
Ton oil eq.
/ Billion yen
2nd Oil Crisis
1st Oil Crisis
Source: METI/General Energy Statistics
10 years
Improvement by 30%
10% improved for 20 years
Main Improvements:
1. Energy Management
2. Energy Efficient
Equipment
3. Efficient Processes
Technologies
4. R&D

31. Through strong regulatory implementation framework, sustainable funding & holistic
approach for focused sectors

32. Source: American Council for an Energy Efficient Economy(ACEEE)

34.  An Energy Service Company(ESCO)
 Develop and implement turnkey, comprehensive EE projects
 ESCOs offer performance-based contracts (i.e., contracts that tie
the compensation of the ESCO to the energy savings generated
by the project) as a significant part of their business
 To ensure credentials, ESCOs must demonstrate the
technical & managerial competencies to design &
implement projects involving multiple technologies :
 Lighting
 Motors & Drives
 Heating & steam systems
 HVAC Systems
 Control Systems
 Maximum Demand Controls
 Building Envelope Improvements
…at building/industrial facilities

35.  Registered in
September 2000 n
conjunction with the
launching of the
Malaysian Industrial EE
Improvement Project
(MIEEIP) by the
Government-UNDP
OBJECTIVES
 To develop recognized ESCO businesses in
collaboration with Government & private
sectors.
 To actively promote the activity of cost
reduction and efficiency standards of the
industrial and commercial sector
 To oversee the well being of it’s members
 To facilitate and do all things necessary
towards developing successful energy
related projects.
 To introduce related products and services
for the industry
 To foster healthy co-existence amongst
members through ethical professional
practices
 Ensure quality of services by members

36.  Energy Management
Training Courses for Energy
Managers
 Producing guidelines &
provide advisory in services
delivery
 Awareness & promotional
programs
 Provide inputs on EE industry
to the Government with
other Stakeholders
 Rental of Equipment for
energy audit and M&V

37. Elected Committee Members(2014 /2016)
President
Ar. Zulkifli b. Zahari
Vice President, Policies & Int. Liaison
Ir. Ong Ching Loon
Honorary Secretary &
Historian
VTR Dharamarajah
Honorary Advisor / Internal
Auditor
Ir. Dr. KS Kannan
Business
Development
Ir. Phang Chen
Faut
Training
Mohd Iskandar
b. Majidi
Green Technology
Kevin Yap
Publicity &
Promotions
Ir. Kumarason S
Kandiah
Government
Liaison
Ahmad Zaky
b. Mohd Amin
Internal Auditor
Khairol Nizam
b. Abd Muen
Treasurer &
Finance/Strategic Initiatives
Zaini b. Abdul Wahab
Asst. Honorary Secretary &
Membership and Practice
Koay Keong Tay
Program Coordinator
Anuar b. Mat Saad
Admin / Secretariat
Afiza bt. Mohd Sa’ad
Accountant
Mohd Izzuddin
b. Salahudin

38. Source: Lawrence Berkeley National Laboratory , National Association
of Energy Service Companies, USA September 2013

39. Source: Lawrence Berkeley National Laboratory , National Association
of Energy Service Companies, USA September 2013

40. The total market size = US$6.7 billion;
Industrial = US$2.9 billion(44%)
Commercial = US$3.7 billion(56%)
source: www.reexasia.com
Biggest potentials in the industrial
sector

41. “Energy Performance Contracting is
when an ESCO is engaged to improve
the energy efficiency of a facility, with
the guaranteed energy savings paying
for the capital investment required to
implement improvements”

42. EPC
Project Funding & Financing Options
Engineering & Economic Feasibility
Studies
Project Design, Engineering & Permitting
Project Construction
Project Commissioning
Operation, spare parts & Maintenance
Performance measurements &
monitoring
Energy performance reporting
 Consultancy &
Advisory
 Regulatory
Compliance
 Standards & Ratings

43. Energy Cost savings based on
ACTUAL & MEASURED data-before
& after
CAPABLE
ESCO
UNDERSTANDING of the how
EPC works & it long term
benefits by facilities owners
COMPREHENSIVE EPC Contract
Document
TRUST & TRANPARENCY in
strategic partnership to reduce
business costs
Commitment to get
FASTER results!

44. The owner
confirmed EPC
needs
Prepare EPC basic
info, Objectives &
Targets
Prequalification
Of ESCOs
Issue RFP to
qualified ESCOs
Evaluate Proposals
from ESCOsAppoint ESCO
ESCO conduct
technical audit &
present detailed
EPC investment
proposal
EPC
Contractual
Terms
Negotiation
Sign EPC Contract
Implement EPC
Project
Measurement &
Verification of
Saving
Achieved
Monthly reporting
& payment to
ESCO

45. Experiences in EPC
Projects /Track
Records in energy
services
Financial
Strengths
Management
capacity in
energy services
Technical
Competency &
Expertise
ESCO
To secure
financing &
ensure
sustainable
operations

46.  EPC implementation process must match the ESCOs
business model.
 EPC is a proven EFFECTIVE model for faster EE
implementation!
 Interested parties must have the same understanding
& goals on how to make EPC works – WIN-WIN &
LONG TERM ENERGY COST SAVINGS!
 ESCOs must have/develop competency & capability
to ensure successful EPC projects implementation.
 More successful EPC projects are required to attract
more attention of building owners & banks/investors

48. •Energy supply & utilization
•The most costly period
Source: Institute of Asset
Management, UK

49.  EE programs help manage energy risks - reducing exposure to the
high costs of sourcing, transport & energy-intensive upstream
products

50.  EEPs viewed as
“Infrastructure
Investments” – LOW
PRIORITY VS. CORE
BUSINESS – don’t fix if not
broken
 EEPs funding through
loans/debts WILL IMPAIR
“CREDIT CAPACITY” from
core business – NO WAY
for SMEs/SMIs
 BENEFITS ARE TOO SMALL
TO APPEAR ON CEO’S
RADAR SCREEN & to
justify “perceived’
operating
complexities/risks
 NOT CONVINCED ON
ACTUAL COST SAVINGS
ACHIEVED nor aware of
proven Measurement &
Verification(M&V)
methods to ensure
sustainability of savings.

51. EE IMPROVEMENT
PROGRAM
Sustainable Energy
Management
Awareness Program
Capacity Building –
Training & Development
HRDF refundable
programs
Measurement &
Verification (M&V) Internal/3rd Parties
Adoption of Energy
Management System
(ISO50001)
Internal/Consultant
Energy Saving Project
Energy Auditing
Internal Budget
EPC Model
Full/matching grant –
with commitment to
implement
Energy Saving Projects
Implementation
EPC model
Standard
Procurement
SUPPORT
MEASURES
NEEDED
Options To Save Energy Costs in Organizations

52. • Management
Directives
• Implementation of
EnMS - to ensure
sustainability of
energy cost
reduction initiatives
MEASURES
With LOW/NO
COST
Minimal Cost
Savings
•Priorities of budget
- core
business/operations
•Investment risks
•Limited human
resources & expertise
MEASURES
WITH HIGH
COST
Significant Cost
Savings
May require
expert
assistance &
external
financing such
as EPC model
In-house
initiatives

53. TOP MANAGEMENT
•Smooth operation
•Budget Compliance
•Profit & loss account
PRODUCTION
MANAGER
•Product quality and delivery dates
•Optimization of production costs
•Reliability of production facilitiesPROCUREMENT
MANAGER
•Improvement of purchasing
conditions/procedures
•Best/optimal prices
ENGINEERING
MANAGER
•Reliability of supplying facilities
•Optimization of energy cost
FACILITIES
OPERATORS
•Reliability of operation and
maintenance
•Low defect/damage potentials
EXTERNAL SERVICE
PROVIDER/CONSULTANT
•Maintain the contract
•Identification of potential
improvements
•Client’s satisfaction

54. Profitability
Sustainability
Competiveness
Competency
Working environment
quality
Corporate Image
Operating Costs -
Energy
Risks – price fluctuation
& supply shortages
Pollution
Carbon emission
Depletion of fossil fuel
INCREASE USERS’ COMFORT
SALES/LEASE & ENERGY COST
SAVINGS
BOOST IMAGE & VALUES

56.  Typical manufacturing companies* can improve their profit margins
by 2% within 3 years

57.  Require holistic & inclusive approach for sustainable results

58.  Management commitment is needed!

59.  Organizational cultural changes needed!

60. •CEO shows strong &
ongoing enthusiasm
for EE
•To achieve significant
results
ENSURE TOP
MANAGEMENT
SUPPORT
•Giving the program
its own budget
responsibility
ALIGN
RESPONSIBILITIES&
BUDGETS
•set up new metrics &
tools to measure
energy consumption
•quantify the success
& benefits
CREATE DATA
TRANSPARENCY &
INSTALL TARGET
TRACKING

61. MANAGEMENT
COMMITMENT
ENERGY
POLICY
PLANNING
IMPLEMENTATION &
OPERATION
SYSTEM &
PERFORMANCE
CHECKING
MANAGEMENT
REVIEW
Energy saving
measures – to bring
results in improving
energy performance &
cost reduction!
No management commitment =
less impacts = forget it!

62. ENERGYSAVING
MEASURES/PROJECTS
TECHNICAL
VIABILITY
FINANCIAL VIABILITY
SUSTAINABILITY PLAN
Expertise/
Competency
EnMS
(ISO 50001)
Performance M&V
Financial criteria &
sources

63. Source: Energy Conservation Centre of Japan, 2011

64. Pumps (25% - 35%)
 Chiller (20% - 25%)
 AHU/FCU (25% - 35%)
 Cooling Tower(15% - 20%

65.  Savings at 40-60% from lighting systems
Energy Saving Micro Ballast
and HP Fluorescent T8-28
watts
LED Fluorescent Tubes LED Down Light
LED Ceiling Light High Performance
LED Street Light
LED Spot/Flood Light

67. Stage 2: Retrofitting for
Improving Chiller
Performance
Stage 3 : Maximum
Demand Monitoring &
Control
Stage 1: Electricity Incoming
Supply Optimization

69. Building owners can see reduced operating costs, increased building
values, greater return on investment, and higher occupancy from new and
retrofitted green buildings
UNEP - GEO-5 for Business
Impacts of a Changing Environment on the Corporate Sector
Companies may receive reputational benefits from achieving green building
certifications . A 2011 survey of U.S. adults- 64% would prefer to patronize a
business whose facility is certified as green, while 48% indicated that green
certification of a facility improves their image of a company.
University of Missouri researchers - consumers would be more
willing to pay between 15 & 20% more for retail products from
companies that support sustainable practices
UN Global Compact of 766 CEOs worldwide-93 % of
CEOs said sustainability issues will be a critical factor
to the future success of their business
2012 Ernst & Young Survey – 66% of executives saw an increased amount
of sustainability-related inquiries from investors in the past year. 70%
inquiries focused on energy management and greenhouse gas emissions
& more than ½ questions about sustainability reporting
Survey on 250 CFOs in 14 countries by Deloitte - CFOs are increasingly aware the
benefits sustainability can bring to the business. 2/3 respondents said they are
involved in driving sustainability strategies .More than 50 % said their
involvement in pushing sustainable practices has increased in the past year.
TOWARDS GREENER
BUSINESS PRACTICES &
MARKET DEMANDS

70. EE
Energy
Management
Energy
Management
System
Consultancy/Advisory
Standard &Certification
Performance Measurement
& Verification
EnMS Tools
Hardware
(meters , sensors & etc)
Software
(Computerized EnMS)
Energy Engineering
Energy Efficient
technologies Testing, Rating & Labeling
R&D, TQM
Manufacturing
Energy Auditing
Capacity
Building
Education &
Awareness
Training &
Development
Policy
Policy research &
development
Regulatory
Fiscal & Financial
Investments &
Funding
Analysis & Evaluation

71. Energy
Auditors
Energy Efficient
Technology
Application Experts
Measurement
&Verification
Specialists
Energy Efficient
Equipment
Inventors
Energy Efficient
Facilities Designers
Energy Economists
& Data Analysts
Policy & Regulatory
Experts
Demand Side
Management
Specialists
Energy
Managers
Energy
Management
Consultants
Documentation &
Certification Specialists
ISO50001
EnMS(System/
Technical
Auditors)
Expert Trainers
…and many more with
the growth of EE industry

73. The foregone benefits
represent the
‘opportunity cost’ of
failing to adequately
evaluate & prioritize EE
investments
Larger opportunities &
increasing global
demand, stress on
resources & climate
concerns-costs that we
cannot afford to bear
The failure to properly
evaluate the benefits of
EE likely results in under
investment in EE

74. •Clear policy & targets
•Comprehensive regulatory &
implementation framework
•Competencies in institutional set up
Strong governance in policies
implementation
•Competency programs
•Career opportunities
Technical competencies &
human resource capacity
•Sources of funds
•Understanding risks & mitigating
factors in EE investments
Sustainable financing &
business friendly mechanisms
•On green practices
•Business opportunities
•Impacts to climate change
mitigation
Information ,education
&awareness
•Funding
•Academic vs. Commercial valuesR&D & commercialization

75.  SMEs & SMIs - energy audit and
guidance
 Measurement & verification of
performance
 Technical assessment from other
ministries/agencies on EE
projects for financing /further
approval
 Registration & deployment of
experts
 Fiscal incentives
 Low interest loans with
government guarantee
 Grant based on annual
government budget for
specified initiatives and
awareness programs
Technical Assistance
& Advisory
 Incentives & Financial
Assistance

76.  Look and act on EE
urgently!
 Clear policy goals & targets
 Strong governance &
comprehensive framework
 Consistency, accountability
& competency
 Inclusiveness in policies
development & reviews

77. Strong
Governance
Financing &
business
friendly
mechanisms
Accountable &
competent
implementing
agency
Information,
Education
& Awareness
R&D &
Commercialization
EE Industry Growth
Policy Targets
Policy Introduction
Focused Sectors +Industry Players
+ Consumers
Industry players just need the basic & right “infrastructure” & supports .
We can take it from there!

78. THE WAY FORWARD

79.  Project/solution/
technology based
approaches?
or
 Project based or
sustainable
implementation plans &
strategies at national
level?

80. INTRODUCTION
&
AWARENESS
IMPLEMENTATION
& SUPPORT
MEASURES
PERFORMANCE
MONITORING&
MEASUREMENT
IMPROVED
•Energy
Performance
•Competitiveness/
•profits
•Environmental
quality
REDUCED
•Energy
consumption &
costs
•Pollution
•CO2 emissions
CREATED
•Business & job opportunities
•More experts/workers from EE industry
•New source of economic growth
•More Direct Domestic Investments

82. THANK YOU
zainiabdulwahab@yahoo.com