Cabinet de Réalisation des Audits et       Etudes Energétiques                                                            ...
CRA2EETUDE CONTRÔLE & PILOTAGE                            Introduction     In the last twenty years, a potential solution ...
CRA2EETUDE CONTRÔLE & PILOTAGE                            OUTLINES     o What is the ESCO?     o ESCOs history in the worl...
CRA2EETUDE CONTRÔLE & PILOTAGE                            4
CRA2EETUDE CONTRÔLE & PILOTAGE       ESCOs can be defined as company that offer integrated       services (technical and f...
CRA2EETUDE CONTRÔLE & PILOTAGE                            6
CRA2EETUDE CONTRÔLE & PILOTAGE  - The ESCO concept started about twenty (20) years ago in    United States, Canada and Eng...
CRA2EETUDE CONTRÔLE & PILOTAGE   -In developing countries and with the ones with Economies in   transition though, this co...
CRA2EETUDE CONTRÔLE & PILOTAGE  - Countries like Hungary, Czech Republic, Egypt, Hungary,    Poland, Thailand have seen In...
CRA2EETUDE CONTRÔLE & PILOTAGE                            10
CRA2EETUDE CONTRÔLE & PILOTAGE   o The Tunisian government estimates the country’s energy     saving potential at a cumula...
CRA2EETUDE CONTRÔLE & PILOTAGE   o Escalating expenditures for energy are mainly due to a rapid     growth of energy deman...
CRA2EETUDE CONTRÔLE & PILOTAGE   o Energy efficiency improvements have led to a significant     decline of Tunisian energy...
CRA2EETUDE CONTRÔLE & PILOTAGE  o At present, Tunisian energy intensity is at a level of 0.33    toe/$ 1000 compared to 0....
CRA2EETUDE CONTRÔLE & PILOTAGE    o The Tunisian government has taken the following measures      to improve energy effici...
CRA2EETUDE CONTRÔLE & PILOTAGE      n National Agency for Energy Conservation:        In 1985, the government established ...
CRA2EETUDE CONTRÔLE & PILOTAGE      n Task Force on Large Energy Consuming Industries (IGCE):        In 2005, Ministry set...
CRA2EETUDE CONTRÔLE & PILOTAGE     n National Energy Conservation Fund:       In December 2005, the national government se...
CRA2EETUDE CONTRÔLE & PILOTAGE       n Periodic energy audits and performance contracts:         Large energy consumers in...
CRA2EETUDE CONTRÔLE & PILOTAGE      n Energy Performance Standards:        The government is supporting the establishment ...
CRA2EETUDE CONTRÔLE & PILOTAGE      n Cogeneration:            In 2004, the government adopted a law to foster            ...
CRA2EETUDE CONTRÔLE & PILOTAGE          n Promotion of Solar Water Heating (SWH) systems:          Since the early 1980s, ...
CRA2EETUDE CONTRÔLE & PILOTAGE          In 2005, a new programme named PROSOL (partnership          between the UN Environ...
CRA2EETUDE CONTRÔLE & PILOTAGE                            24
CRA2EETUDE CONTRÔLE & PILOTAGE     n Development of Energy Service Companies (ESCO) in Tunisia        This project encoura...
CRA2EETUDE CONTRÔLE & PILOTAGE                                GHG                        Potential contribution of        ...
CRA2EETUDE CONTRÔLE & PILOTAGE o The potential and strategic role of ESCOs has been recognized   in ongoing efforts to res...
CRA2EETUDE CONTRÔLE & PILOTAGE o The Fund is designed to be self-sustaining, meaning that a   portion of the financial sav...
CRA2EETUDE CONTRÔLE & PILOTAGE  o The original idea of an Energy Service Companies or ESCO is    that an entity other than...
CRA2EETUDE CONTRÔLE & PILOTAGE  o The name ESCO is sometimes also given to companies that    just provide consulting servi...
CRA2EETUDE CONTRÔLE & PILOTAGE  o The Law defines energy service companies that engage with    energy users to make feasib...
CRA2EETUDE CONTRÔLE & PILOTAGE  o There is very little activity in the classic ESCO mode whereby    the ESCO supplies fund...
CRA2EETUDE CONTRÔLE & PILOTAGE                            33
CRA2EETUDE CONTRÔLE & PILOTAGE q There are basically two types of contracts ESCO : 1.     Shared Savings Contract: The cli...
CRA2EETUDE CONTRÔLE & PILOTAGE                               PHASES of EPC Shared Savings Contract                        ...
CRA2EETUDE CONTRÔLE & PILOTAGE                            36
CRA2EETUDE CONTRÔLE & PILOTAGE                       Fonds de garantie (FGEE)                                             ...
CRA2EETUDE CONTRÔLE & PILOTAGE                            38
CRA2EETUDE CONTRÔLE & PILOTAGE                               Benefits granted to ESCOs   q Guarantee of loans granted by c...
CRA2EETUDE CONTRÔLE & PILOTAGE                            Guarantee Fund (FGEE)     o The FGEE guaranteed loans granted to...
CRA2EETUDE CONTRÔLE & PILOTAGE                            41
CRA2EETUDE CONTRÔLE & PILOTAGE                            CRA2E MISSIONq Identification of projects eligible for an Energy...
CRA2EETUDE CONTRÔLE & PILOTAGE   q Development of EPC with guaranteed results   q Co-financing of projects with commercial...
CRA2EETUDE CONTRÔLE & PILOTAGE                            CRA2E’s ACHIEVEMENTS CRA2E has signed 15 EPC with:           1. ...
CRA2EETUDE CONTRÔLE & PILOTAGE                   8. SOCIETE BJ - Industrial sector                   9. SOCIETE BJ - Indus...
CRA2EETUDE CONTRÔLE & PILOTAGE                   SAVINGS GUARANTEED BY CRA2E « ESCO»                             Consommat...
CRA2EETUDE CONTRÔLE & PILOTAGE      SAVINGS GUARANTEED BY CRA2E :   8 198 TOE/AN (7,8%)      TOTAL ENERGY SUBSTITUTED :   ...
CRA2EETUDE CONTRÔLE & PILOTAGE                            FUNDING OF PROJECTS    EPC                                      ...
CRA2E     ETUDE CONTRÔLE & PILOTAGE                                             ACHIEVEMENT OF ECMs                       ...
CRA2EETUDE CONTRÔLE & PILOTAGE            ECMs REALIZED           : 12            ECMs ON GOING           :5            GL...
CRA2E ETUDE CONTRÔLE & PILOTAGE   Examples of ECMs realized by CRA2E:   1 - Recovery of hot air from the kiln to the dryer...
CRA2EETUDE CONTRÔLE & PILOTAGE2- Automatic Regulation of Kilin                      Saving           : 200 TOE/year       ...
CRA2EETUDE CONTRÔLE & PILOTAGE                            Benefits and constraints                            from CRA2E E...
CRA2EETUDE CONTRÔLE & PILOTAGE                                  ADVANTAGES An EPC has many advantages for the client: o   ...
CRA2EETUDE CONTRÔLE & PILOTAGE EPC offers many benefits to contractors “ESCO”: o Enhancing their image by demonstrating th...
CRA2EETUDE CONTRÔLE & PILOTAGE                               DISADVANTAGES    Unfortunately, there are also disadvantages:...
CRA2EETUDE CONTRÔLE & PILOTAGE                            57
CRA2EETUDE CONTRÔLE & PILOTAGE  o A great quantity of barriers related to the development of    ESCO activities though are...
CRA2EETUDE CONTRÔLE & PILOTAGE  o There is still a lot of barriers that will have to be addressed    in most countries to ...
CRA2EETUDE CONTRÔLE & PILOTAGE  o The following table summarize the various barrier faced by    ESCO wanting to prospect a...
CRA2E    ETUDE CONTRÔLE & PILOTAGE    Category                                 Barrier description                      Ty...
CRA2E   ETUDE CONTRÔLE & PILOTAGE    Category                               Barrier description                      Type ...
CRA2EETUDE CONTRÔLE & PILOTAGE            How the government is supporting ESCOs, and this is an            essential issu...
CRA2EETUDE CONTRÔLE & PILOTAGE    o When analyzing the strategies used in countries that are      either in the process of...
CRA2EETUDE CONTRÔLE & PILOTAGE  o Programs that facilitates the access to the market    (information dissemination, demons...
CRA2EETUDE CONTRÔLE & PILOTAGE  o Most financial support mechanism put in place gradually    reduced their incentives to l...
CRA2EETUDE CONTRÔLE & PILOTAGE   o ESCO development in Tunisia was the main objective of a     substantial grant from the ...
CRA2EETUDE CONTRÔLE & PILOTAGE   68
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Day 5 :Tunisian Experience in Promoting the Role of Energy Service Companies (ESCOs): Experience and achievements of CRA2E

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Energy Audit in Building A Regional Training Workshop a
1 - 5 June, 2010

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Day 5 :Tunisian Experience in Promoting the Role of Energy Service Companies (ESCOs): Experience and achievements of CRA2E

  1. 1. Cabinet de Réalisation des Audits et Etudes Energétiques CRA2E Tunisian experience in promoting the role of Energy Service Companies (ESCOs) Experience and achievements of CRA2E Presented by : Hamadi Sayah International Energy Expert MAY 2010 Centre Molka Escalier N°15 El Manar II – 2092 TUNIS Tél: 00 216 71 886 177 – Fax: 00 216 71 885 010 1 Site Web: www.cra2e.com– E-mail: cra2e@yahoo.fr
  2. 2. CRA2EETUDE CONTRÔLE & PILOTAGE Introduction In the last twenty years, a potential solution to help get over a good numbers of barriers to energy efficiency projects implementation have come from a approach that is promoted by companies that call themselves Energy Services Companies, or ESCOs. 2
  3. 3. CRA2EETUDE CONTRÔLE & PILOTAGE OUTLINES o What is the ESCO? o ESCOs history in the world? o Tunisian experience in energy efficiency? o Developing of ESCO activity in the country and role in promoting energy efficiency ? o Financing resources of Tunisian ESCOs? 3
  4. 4. CRA2EETUDE CONTRÔLE & PILOTAGE 4
  5. 5. CRA2EETUDE CONTRÔLE & PILOTAGE ESCOs can be defined as company that offer integrated services (technical and financial) for the implementation of energy efficiency project and that provide a guarantee that the energy savings generated by the project will be sufficient to reimburse all the implementation cost over a certain period of time defined by contracts. 5
  6. 6. CRA2EETUDE CONTRÔLE & PILOTAGE 6
  7. 7. CRA2EETUDE CONTRÔLE & PILOTAGE - The ESCO concept started about twenty (20) years ago in United States, Canada and England, and expanded rapidly in other part of the world, like Western European countries in the mid 1980s and in some Asian countries during the early 1990s. 7
  8. 8. CRA2EETUDE CONTRÔLE & PILOTAGE -In developing countries and with the ones with Economies in transition though, this concept has only been introduced in recent years, mainly du to the pressure that the environmental community is putting worldwide to have all countries participate in a cleaning up effort to limit the climate change process that is currently underway and that started to show its effect pretty strongly recently. 8
  9. 9. CRA2EETUDE CONTRÔLE & PILOTAGE - Countries like Hungary, Czech Republic, Egypt, Hungary, Poland, Thailand have seen International Financial Institutions financed all type of projects to support the development of ESCO and ESCO. - Furthermore, governments of countries like Brazil are implementing more global strategies dedicated to the development of ESCO on their territories. - Some other countries benefited for an introduction on the ESCO concept directly from the private sector supported by International ESCO operators, like United Arab Emirates, Jordan, South Korea and Tunisia. 9
  10. 10. CRA2EETUDE CONTRÔLE & PILOTAGE 10
  11. 11. CRA2EETUDE CONTRÔLE & PILOTAGE o The Tunisian government estimates the country’s energy saving potential at a cumulated 80 Mtoe until 2030. In recent years, the Tunisian government has made considerable efforts to reap this potential. o These efforts were stimulated by a growing energy bill which currently covers 14% of the GDP compared to 10% in 2004 and less than 7% in 2000. 11
  12. 12. CRA2EETUDE CONTRÔLE & PILOTAGE o Escalating expenditures for energy are mainly due to a rapid growth of energy demand. o In 2007 industry (36%) and transportation (31%) were the largest national energy consumers whereas the tertiary (10%) and the residential sector (16%) as well as agriculture (7%) accounted for smaller shares. 12
  13. 13. CRA2EETUDE CONTRÔLE & PILOTAGE o Energy efficiency improvements have led to a significant decline of Tunisian energy intensity since the early nineties. o On average, energy intensity was reduced by 2% per year until 2007 with energy demand successively being decoupled from economic growth. 13
  14. 14. CRA2EETUDE CONTRÔLE & PILOTAGE o At present, Tunisian energy intensity is at a level of 0.33 toe/$ 1000 compared to 0.84 toe/$1000 in Africa and a global average of 0.29 toe/$ 1000. Trend of Tunisian Primary Energy Demand. ANME (2009) 14
  15. 15. CRA2EETUDE CONTRÔLE & PILOTAGE o The Tunisian government has taken the following measures to improve energy efficiency: n National Agency for Energy Conservation n Task Force on Large Energy Consuming Industries (IGCE) n National Energy Conservation Fund n Periodic energy audits and performance contracts n Energy Performance Standards n Cogeneration n Promotion of solar water heating (SWH) systems 15
  16. 16. CRA2EETUDE CONTRÔLE & PILOTAGE n National Agency for Energy Conservation: In 1985, the government established the National Agency for Energy Conservation (ANME). ANME is a public entity under the auspices of the Ministry of Industry and technology with a staff of about 130 employees. It is involved in the development and implementation of national policies for energy conservation as well as studies and research and development projects in the fields of energy efficiency, renewable energy and energy substitution. 16
  17. 17. CRA2EETUDE CONTRÔLE & PILOTAGE n Task Force on Large Energy Consuming Industries (IGCE): In 2005, Ministry set up a task force to identify energy saving potentials of energy intensive industries and to deploy measures for a rapid realisation of these potentials. The task force comprises representatives of the National Electricity and Gas Distribution Utility (STEG), ANME and national and international experts. 17
  18. 18. CRA2EETUDE CONTRÔLE & PILOTAGE n National Energy Conservation Fund: In December 2005, the national government set up a “National Fund for Energy Conservation” (FNME) for financing energy efficiency measures. FNME shall contribute to a 20% reduction of energy demand by 2011; however, the baseline used for this reduction goal is not clear. In order to meet this objective, the fund subsidises 20% of all energy efficiency investments undertaken by corporations, 70% of energy audit costs, 20% of all solar energy investments and 50% of investments in renewable and efficient energy demonstration initiatives. 18
  19. 19. CRA2EETUDE CONTRÔLE & PILOTAGE n Periodic energy audits and performance contracts: Large energy consumers in the transportation and tertiary/residential sectors consuming more than 500 toe per year and industrial companies consuming more than 800 toe per year are mandated to conduct periodic energy audits. The government provides financial support for this purpose and, furthermore, induces performance contracts to reap energy efficiency potentials. For the period from 2007-2011, the government’s objective is to realise 200 energy audits and 300 performance contracts in order to achieve energy savings of 943 ktoe. 19
  20. 20. CRA2EETUDE CONTRÔLE & PILOTAGE n Energy Performance Standards: The government is supporting the establishment of energy performance standards both for buildings and household appliances. Several projects were completed or are ongoing. 20
  21. 21. CRA2EETUDE CONTRÔLE & PILOTAGE n Cogeneration: In 2004, the government adopted a law to foster cogeneration in Tunisia including a subsidized selling price of electricity from cogeneration operations. ANME is conducting a programme, which aims at removing barriers for cogeneration by evaluating the national cogeneration potential, conducting feasibility studies in the tertiary and residential sector and improving the legal framework conditions. From 2007 to 2011, the government plans to install 110 MW of cogeneration capacity, achieving energy savings of 85,000 toe. 21
  22. 22. CRA2EETUDE CONTRÔLE & PILOTAGE n Promotion of Solar Water Heating (SWH) systems: Since the early 1980s, the national government and international donors have made several attempts to promote the deployment of solar water heating systems in Tunisia. However, these programmes did not result in a sustainable market deployment due to uncertain qualities of Tunisian SWH systems and sudden breakups of subsidies. 22
  23. 23. CRA2EETUDE CONTRÔLE & PILOTAGE In 2005, a new programme named PROSOL (partnership between the UN Environment Programme, STEG and Ademe) was initiated to boost SWH capacity in Tunisia. The programme includes two financial mechanisms: A direct subsidy of 20% of the investment costs with a maximum of € 70; loans over five years with a reimbursement of the loan through the electricity bill. PROSOL has led to a major recovery of the national SWH market and attracted new industrial operators and installer networks. 23
  24. 24. CRA2EETUDE CONTRÔLE & PILOTAGE 24
  25. 25. CRA2EETUDE CONTRÔLE & PILOTAGE n Development of Energy Service Companies (ESCO) in Tunisia This project encourages the development of energy service companies (ESCOs) through the creation of a Revolving Fund. ESCOs have the potential to enhance the use of energy efficient equipment across the industrial, commercial, and transport sectors by facilitating access to information, prospective investors, and favorable financing arrangements. 25
  26. 26. CRA2EETUDE CONTRÔLE & PILOTAGE GHG Potential contribution of emiss. Total invest. CDMProject areas (Mdt) reduce (kTe-CO2) (Mdt) %Energy saving and contractprogramme in tertiary sector 1 984 55 9.5 17%Water solar heating 4 651 678 22.3 3%Public street lighting 1 080 95 5.2 5%Energy saving and contract 9 820 275 47.1 17%programme in industryWind energy development 29 028 738 139.3 19%Biogas development 2 294 74 11.0 15%Cogeneration development 18 943 548 90.9 17%ESCO promotion 7 749 226 37.2 16%Natural Gas substitution 6 045 590 29.0 5%Flaring gas reduction in gasand petroleum production 1 394 18 6.7 38%sitesTotal 82 989 3 297 380 12% 26
  27. 27. CRA2EETUDE CONTRÔLE & PILOTAGE o The potential and strategic role of ESCOs has been recognized in ongoing efforts to restructure the energy sector in Tunisia, and has been given prominent consideration. o The Tunisian government is seeking investment partners for the creation of a US$ 24 million Revolving Fund. o Only a portion of this investment is being sought from potential CDM investors, relative to the value of the carbon reductions generated. 27
  28. 28. CRA2EETUDE CONTRÔLE & PILOTAGE o The Fund is designed to be self-sustaining, meaning that a portion of the financial savings achieved through energy into the Fund. The start-up for this project is envisioned for mid- 2002 and will be operational until 2020. o Once the creation of the Revolving Fund has been secured, it is expected that a number of new private sector ESCOs will emerge – entirely independent of the new Fund - incentivized by the realization that energy efficiency projects represent new business opportunities in Tunisia. 28
  29. 29. CRA2EETUDE CONTRÔLE & PILOTAGE o The original idea of an Energy Service Companies or ESCO is that an entity other than the energy supplier should identify, design, finance, supervise and commission projects for a client, to be compensated by a share of the energy savings achieved over a defined period. o The partition of savings is determined by a special contract known as an energy performance contract (EPC). o Actual practice varies widely; some ESCOs will finance the project, others will organise finance. o Implementation is not easy and there are relatively few successful examples. 29
  30. 30. CRA2EETUDE CONTRÔLE & PILOTAGE o The name ESCO is sometimes also given to companies that just provide consulting services, but do not enter into an EPC. o It is important to be clear what is meant, as the latter is a much easier exercise than the former. o Article 6 of the Law 2004-72 permits energy consuming companies to sign contractual agreements with energy service companies to achieve savings in energy use. 30
  31. 31. CRA2EETUDE CONTRÔLE & PILOTAGE o The Law defines energy service companies that engage with energy users to make feasibility studies, manage, monitor and finance projects within the facilities of the user and to guarantee performance. o The service companies must be approved by the Ministry of Industry and technology. o Many companies have since developed skills in energy auditing and in feasibility studies for investment in energy efficiency. 31
  32. 32. CRA2EETUDE CONTRÔLE & PILOTAGE o There is very little activity in the classic ESCO mode whereby the ESCO supplies funds and the profits are shared through an energy performance contract. o The main limiting factor is the capital base of the companies involved. o They are mainly small companies and cannot raise the capital to make large investments. o Credit lines, whether concessional or not, do help much because collateral is bound up in existing credits. 32
  33. 33. CRA2EETUDE CONTRÔLE & PILOTAGE 33
  34. 34. CRA2EETUDE CONTRÔLE & PILOTAGE q There are basically two types of contracts ESCO : 1. Shared Savings Contract: The client and the ESCO share the investment of ECM recorded in the EPC. 2. Contract savings guarantees: The client finance all ECMs and ESCO Ensures the achievement of expected results. 34
  35. 35. CRA2EETUDE CONTRÔLE & PILOTAGE PHASES of EPC Shared Savings Contract Fin du contrat ESE Mise en place des projets avec l’assistance de l’ESE Bénéfices ESE Investissement engagé par l’ESE Honoraires ESE 35
  36. 36. CRA2EETUDE CONTRÔLE & PILOTAGE 36
  37. 37. CRA2EETUDE CONTRÔLE & PILOTAGE Fonds de garantie (FGEE) Avis favorable de SOTUGAR la SOTUGAR Avis technique UGP/PEEI Dossier de demande de garantie CONTRAT Client ESCO Demande de prêt Prêt Prêt Banque Garantie 37
  38. 38. CRA2EETUDE CONTRÔLE & PILOTAGE 38
  39. 39. CRA2EETUDE CONTRÔLE & PILOTAGE Benefits granted to ESCOs q Guarantee of loans granted by credit institutions to finance energy efficiency projects in industry with the use of ESCO. (75% of credit with a ceiling of U.S. $ 200,000); q Aid for investments made with the use of ESCO (10% with a ceiling of U.S. $ 100,000 ); 39
  40. 40. CRA2EETUDE CONTRÔLE & PILOTAGE Guarantee Fund (FGEE) o The FGEE guaranteed loans granted to the ESCO or Institution o The FGEE involves essentially a dialogue between: n ESCO n SOTUGAR n Institution n ANME 40
  41. 41. CRA2EETUDE CONTRÔLE & PILOTAGE 41
  42. 42. CRA2EETUDE CONTRÔLE & PILOTAGE CRA2E MISSIONq Identification of projects eligible for an Energy Performance Contracting “EPC” on the basis of energy audits realized by CRA2E or other auditorsq Achievement of any additional studies and proposal a program of Energy Conservation Measures “ECMs” for improving the level of energy efficiency of the establishmentq Technical and economic Studies of ECMs and definition of the return time of Investment 42
  43. 43. CRA2EETUDE CONTRÔLE & PILOTAGE q Development of EPC with guaranteed results q Co-financing of projects with commercial or industrial customers q Assistance and monitoring of the implementation of ECMs recorded in EPC q Evaluation of results 43
  44. 44. CRA2EETUDE CONTRÔLE & PILOTAGE CRA2E’s ACHIEVEMENTS CRA2E has signed 15 EPC with: 1. SOCIETE MAWASSIR – Industrial sector 2. SOCETE TUNISIENNE DE L’ACCUMULATEUR « Batterie NOUR » – Industrial sector 3. PATES ALIMENTAIRES WARDA – Industrial sector 4. BRIQUETERIE MODERNE DE BENI KHIAR – Industrial sector 5. BRIQUETERIE FARJALLAH – Industrial sector 6. BRIQUETERIE SIBHON – Industrial sector 7. BRIQUETERIE BKS – Industrial sector 44
  45. 45. CRA2EETUDE CONTRÔLE & PILOTAGE 8. SOCIETE BJ - Industrial sector 9. SOCIETE BJ - Industrial sector 10. SOCIETE CRJ - Industrial sector 11. SOCIETE ADWYA - Industrial sector 12. SOCIETE BKZ - Industrial sector 13. SOCIETE BLC - Industrial sector 14. SOCIETE BB&MP - Industrial sector 15. OACA - Commercial sector 45
  46. 46. CRA2EETUDE CONTRÔLE & PILOTAGE SAVINGS GUARANTEED BY CRA2E « ESCO» Consommation Potentiel of EnergyN° ETS % TOE/year Conservation TOE/AN 1 BMB 6 168 2 123 34,42 SIBHON 862 252 29,23 ELMAWASSIR 2 099 289 13,84 WARDA 4 496 770 17,15 NOUR 1 587 280 17,66 FARJALLAH 3 192 - -7 BKS 28 379 - -8 BJ 6683 143 2,19 BJ 6683 785 11,710 CRJ 907 123 13,611 ADWYA 1671 353 21,112 BKZ 8275 843 10,213 BLC 23457 403 1,714 BB&MP 1133 263 23,215 OACA 9275 1571 16,9 46
  47. 47. CRA2EETUDE CONTRÔLE & PILOTAGE SAVINGS GUARANTEED BY CRA2E : 8 198 TOE/AN (7,8%) TOTAL ENERGY SUBSTITUTED : 60 000 TEP/AN 47
  48. 48. CRA2EETUDE CONTRÔLE & PILOTAGE FUNDING OF PROJECTS EPC Part N° ETS FUNDING in TND Industriel ESE 1 BMB 300 000 220 000 80 000 2 SIBHON 184 000 129 000 55 000 3 ELMAWASSIR 320 500 305 500 15 000 4 WARDA 556 000 488 000 68 000 5 NOUR 238 000 228 000 10 000 6 FARJALLAH 374 000 342 000 32 000 7 BKS 1 041 000 869 000 172 000 8 BJ 585 000 0 585 000 9 BJ 396 000 246 000 150 000 10 CRJ 148 000 129 000 19 000 11 ADWYA 304 700 297 700 7 000 12 BKZ 862 000 590 000 272 000 13 BLC 1 590 000 1 208 000 382 000 14 BB&MP 359 000 314 000 45 000 15 OACA 1 025 000 980 000 45 000 48
  49. 49. CRA2E ETUDE CONTRÔLE & PILOTAGE ACHIEVEMENT OF ECMs Rate ofN° ETS Signature of EPC Project Type ECM ECMs Realized Realization %1 BMB 2006 Energy Efficiency 3 1 332 SIBHON 2006 Energy Efficiency 2 2 1003 ELMAWASSIR 2006 Energy Efficiency 3 2 804 WARDA 2007 Energy Efficiency 6 2 335 NOUR 2007 Energy Efficiency 4 1 256 FARJALLAH 2007 Conversion 1 1 1007 BKS 2007 Conversion 1 1 1008 BJ 2008 Conversion 1 1 309 BLC 2008 Conversion 1 1 3010 BJ 2008 Energy Efficiency 5 On Going11 CRJ 2008 Energy Efficiency 6 On Going12 ADWYA 2008 Energy Efficiency 2 On Going13 BKZ 2008 Energy Efficiency 4 On Going14 BB&MP 2008 Energy Efficiency 6 On Going15 OACA 2008 Energy Efficiency 4 On Going 49
  50. 50. CRA2EETUDE CONTRÔLE & PILOTAGE ECMs REALIZED : 12 ECMs ON GOING :5 GLOBAL RATE : 67% PAYBACK OF INVESTMENT : 28 mois 50
  51. 51. CRA2E ETUDE CONTRÔLE & PILOTAGE Examples of ECMs realized by CRA2E: 1 - Recovery of hot air from the kiln to the dryer and installation of rapid cooling M RecupérationVentilateur air chaud vers Ventilateur sechoir M Fumée Recyclage Ventilateur Ventilateur à haute Refroidissement 1 2 3 4 5 6 recuperation pression rapide M M 3 M M 3 3 3 t° M 3 Saving : 60 TOE/year Financial Gain : 12 000 TND/year Investment : 20 000 TND 51
  52. 52. CRA2EETUDE CONTRÔLE & PILOTAGE2- Automatic Regulation of Kilin Saving : 200 TOE/year Financial Gain : 40 000 TND/year Investment : 120 000 TND 52
  53. 53. CRA2EETUDE CONTRÔLE & PILOTAGE Benefits and constraints from CRA2E Experience 53
  54. 54. CRA2EETUDE CONTRÔLE & PILOTAGE ADVANTAGES An EPC has many advantages for the client: o A global solution, one provider offering a full range of services o This ensures an economical and efficient energy solution, tailored to the needs o It can reduce, even eliminate, capital spending, o The risks associated with construction are transferred to the contractor “ESCO”, o Ensuring a stable price throughout the contract period, o No problems or maintenance work o A major advantage is that the energy service company is solely responsible, at both technical and financial, in case of unpredictable events. 54
  55. 55. CRA2EETUDE CONTRÔLE & PILOTAGE EPC offers many benefits to contractors “ESCO”: o Enhancing their image by demonstrating their skills in the following areas: n Taking into account the interests of the client n Rational use of energy o Customer loyalty in the long term o Enrichment activities of the company: the EPC is not an end in itself but a means to promote energy conservation, o Taking market share. 55
  56. 56. CRA2EETUDE CONTRÔLE & PILOTAGE DISADVANTAGES Unfortunately, there are also disadvantages: q EPC is not very common, both parties to the contract must demonstrate a better organization qThe projects require a significant investment and / or low energy savings is not attractive either for the company which provides third funding or for the client. qIn most cases, the duration of the energy-performance contract exceeds five years. This means that a long term commitment towards the ESCO. But this point can be in the eyes of some, regarded as an advantage. 56
  57. 57. CRA2EETUDE CONTRÔLE & PILOTAGE 57
  58. 58. CRA2EETUDE CONTRÔLE & PILOTAGE o A great quantity of barriers related to the development of ESCO activities though are still present in most countries. The lack of knowledge of clients (clients education) about the numerous and important benefits that it carries to put in practical projects of energy efficiency and the difficulty to achieve the financing of the same ones, constitutes the two bigger obstacles to that development. 58
  59. 59. CRA2EETUDE CONTRÔLE & PILOTAGE o There is still a lot of barriers that will have to be addressed in most countries to be able to benefit from all the potential these organizations bring to the market in these countries but we can hope that first the governments of these countries will realize the great potential they bring with there activities, both on the environment and economical side, and that they will support through there actions the creation and the expansion of this market. 59
  60. 60. CRA2EETUDE CONTRÔLE & PILOTAGE o The following table summarize the various barrier faced by ESCO wanting to prospect a given market. o An indication is given when the barrier is mainly applicable to foreign investor wanting to invest in a country. o If the barrier is manageable by the ESCOs by putting in place appropriate internal procedure for client selection, technology to use and risk control mechanism within the contract. o Finally, if the barrier is not manageable by the ESCO itself, it is indicated by the world « external » in the table below. 60
  61. 61. CRA2E ETUDE CONTRÔLE & PILOTAGE Category Barrier description Type of barrier Availability of high efficiency equipment ManageableTechnological Cost of equipment in the market Manageable Skills for design, installation, operation and maintenance Manageable Local support for technical guarantee Manageable Low energy rates External Customer education Partially Market access barrier Manageable - Institutional market regulation ExternalCommercial - Institutional market budgeting procedures External - Commercial market lenders Manageable - Industrial process expertise Manageable No reliable historic consumption data for client Manageable Internal trouble ExternalPolitical Risk of nationalization of foreign assets Foreign Foreign investment regulation Foreign 61
  62. 62. CRA2E ETUDE CONTRÔLE & PILOTAGE Category Barrier description Type of barrierEconomic Exchange rate stability Foreign and External Contract enforcement delays Foreign andLegal External Complexity of performance contract Partially Manageable Income tax (in comparison to other countries) ForeignFiscal Capital repatriation rules Fiscal treatment of dividend Foreign Foreign Unavailability of funding for long termFinancial Unfavorable conditions (high down payment, high interest, collateral’s) 62
  63. 63. CRA2EETUDE CONTRÔLE & PILOTAGE How the government is supporting ESCOs, and this is an essential issue for the success of ESCOs? 63
  64. 64. CRA2EETUDE CONTRÔLE & PILOTAGE o When analyzing the strategies used in countries that are either in the process of developing or have successfully developed the market of ESCO, it can be concluded that, in most of the cases, the action of the governments was fundamental and indispensable to accelerate the development of this type of industry by creating a favorable environment for their growth and by removing or reducing some market entry barriers. 64
  65. 65. CRA2EETUDE CONTRÔLE & PILOTAGE o Programs that facilitates the access to the market (information dissemination, demonstration programs) were the most used form of support programs and their intend was to accelerate the acceptance of the ESCO business model by the clients. o In countries were financing is very difficult to obtain, like most developing countries and with countries with Economies in transition, the development of a strong ESCO industry necessitated a financing support structure to permit the development of the first projects. 65
  66. 66. CRA2EETUDE CONTRÔLE & PILOTAGE o Most financial support mechanism put in place gradually reduced their incentives to let the private sector develop their own financing mechanism adapted for the performance contracting industry. o In conclusion, we can say that ESCO can certainly be considered as one of the most interesting tools to help implement energy efficiency projects, in all type of countries, including the developing one s and the ones with economies in transition. 66
  67. 67. CRA2EETUDE CONTRÔLE & PILOTAGE o ESCO development in Tunisia was the main objective of a substantial grant from the World Bank for an activity called the Energy Efficiency Program and Industrial Sector Project “PEEI”. o The intention was to overcome institutional and capacity- related barriers to the development of a sustainable market for energy efficiency products and to establish energy services companies (ESCOs) as the main vehicle to guarantee a sustainable energy efficiency market. 67
  68. 68. CRA2EETUDE CONTRÔLE & PILOTAGE 68

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