This document discusses energy efficiency in the industry and how global business services vendors can contribute. It outlines that energy service companies (ESCOs) can implement high-impact energy efficiency projects through energy performance contracting models. Case studies and key success factors are presented, such as having strong policy and regulatory frameworks, sustainable financing mechanisms, and building competency in energy management. Barriers to developing the energy services industry like lack of awareness and skills are discussed alongside recommendations to provide the necessary supports and infrastructure to help the industry grow in order to create jobs and economic opportunities while enhancing sustainability.

1. By
ZAINI ABDUL WAHAB
Energy Management System Consultant
GROUP
14th DECEMBER 2015
G Tower Hotel,Kuala Lumpur
ENERGY EFFICIENCY INDUSTRY: HOW GLOBAL BUSINESS SERVICES
VENDORS CAN PLAY A PART TO ENHANCE ITS CONTRIBUTION TO
THE ECONOMIC GROWTH

2. A Malaysian Energy Service Company (ESCO)
Performance Driven through investments in EE projects implementation since 2001
Strong domestic &regional presence
With PROVEN TRACK RECORDS, experienced & specialized in-house expertise
CNS Group
Investments through Energy Performance
Contracting(EPC) investment model
Computer-Aided Energy Resource Management
System(CERMS)
Total energy efficient technologies & solutions
Energy audit & energy performance measurement
 Energy Management System Development, Implementation &
Performance Monitoring based on ISO50001 Standard
 Energy management training program identification,
development & delivery for in-house capacity building
 Registered Electrical Energy Manager Services: Expert
guidance & compliance
 Sustainable energy management policy studies &
development of strategic implementation plan for national,
state & organizational levels
ENGINEERING SOLUTIONS
Project Implementation
MANAGEMENT SOLUTIONS
Energy Management System Consultancy &
Advisory

3. OUTLINE
Overview of energy efficiency business potentials
Overview of energy service industry, funding options & business models to
implement high impact energy efficiency projects with big scale
investments
Case studies & key success factors to sustain performance in energy
efficiency projects
Barriers & proposed counter to develop and grow energy service business to
enhance economic growth
Conclusion and the way forward for energy service industry

4. OVERVIEW OF ENERGY EFFICIENCY
BUSINESS POTENTIALS IN MALAYSIA
AND REGIONAL MARKETS

5. • EE programs help manage energy risks - reducing exposure to the
high costs of sourcing, transport & energy-intensive upstream
products
Energy Exposure Beyond Electricity Price

6. GLOBAL EE POTENTIALS
 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

7. SEA: INVESTMENT POTENTIALS (US$MIL.)
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

8. ESCO INDUSTRY SIZE ESTIMATES BY SELECTED
COUNTRY
Source: Lawrence Berkeley National Laboratory , National
Association of Energy Service Companies, USA September 2013

9. Building owners can see reduced operating costs, increased building values, greater
return on investment, and higher occupancy from new and retrofitted green buildings
Source: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
THE CORPORATE TRENDS…
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

10. EE BUSINESS NEWS& POTENTIALS

11. THE PRACTICAL STRATEGY FOR EE
IMPLEMENTATION
ALTERNATIVE ENERGY
SOURCES
High costs
ENERGY EFFICIENT
TECHNOLOGY SOLUTIONS
Medium-high costs
Require financial & investment
risks assessments
SAVE THROUGH BEST PRACTICES &
CULTURAL CHANGE – ENERGY
MANAGEMENT
Low-no costs
CLEARER POLICY &
SUPPPORT
MEASURES
REQUIRED FROM
THE GOVERNMENT
TO ENCOURAGE
MORE
INVESTMENTS IN EE

12. OVERVIEW OF ENERGY SERVICE
INDUSTRY AND BUSINESS
MODELS TO IMPLEMENT HIGH
IMPACT ENERGY EFFICIENCY
PROJECTS WITH BIG SCALE
INVESTMENTS

13. ENERGY EFFICIENCY VALUE CHAIN
WHERE ARE YOU OR WHERE DO YOU WISH TO ENTER?

14. WHAT IS ENERGY
SERVICE?

15. SCOPES OF ENERGY SERVICE IN IMPLEMENTING EE
PROJECTS
Built-in scopes:
Project funding & financing options
Engineering & economic feasibility studies
Project design, engineering & permitting
Project construction
Project commissioning
Operations, spare parts & maintenance
Performance measurements, verification & monitoring
Energy performance reporting
Value
added/additional
scopes
Consultancy &
Advisory
Regulatory
Compliance
Standards &
Ratings

16. WHAT IS AN ENERGY SERVICE
COMPANY(ESCO)?
 ESCOs must demonstrate the
technical & managerial
competencies to design &
implement projects involving
multiple technologies & energy
efficiency solutions at
building/industrial facilities
 Develop, implement turnkey &
comprehensive EE projects
 ESCOs offer energy performance-
based contracts
 Returns of investments by ESCOs are
from the actual energy savings
achieved by the projects as the
main element their business
 No upfront costs/investments
required by the facilities owner

17. ESCO ORGANIZATION WORKFORCE BY
JOB CATEGORY
Source: Ernest Orlando Lawrence ,Berkeley National Laboratory,2010

18. JOBS CREATED IN EE SERVICES SECTOR:
COMMERCIAL & INSTITUTIONAL
Source: Ernest Orlando Lawrence ,Berkeley National Laboratory,2010

19. JOBS CREATED IN ENERGY SERVICE
INDUSTRY: INDUSTRIAL
Source: Ernest Orlando Lawrence ,Berkeley National Laboratory,2010

20. JOBS CREATED IN EE SERVICES
SECTOR:RESIDENTIAL
Source: Ernest Orlando Lawrence ,Berkeley National Laboratory,2010

21. KEY CHALLENGES IN WORKFORCE FOR ESCO
Shortage of management -level applicants level applicants with experience
in energy efficiency
Shortage of experienced energy efficiency engineers
Building & construction industry
• Limited awareness that the EESS is poised to expand significantly & their skills will
be required be required
• Retirement is a growing concern
• Limited number of skilled trainers for EE

22. WHAT IS ENERGY PERFORMANCE
CONTRACTING(EPC)?
“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”

23. FUNDING OPTIONS FOR IMPLEMENTING BIG
SCALE EE PROJECTS?
LOAN
CONVENTIONAL
PROCUREMENT
ENERGY
PERFORMANCE
CONTRACTING
Performance
Guarantee Model
GRANTS ENERGY PERFORMANCE
CONTRACTING
Shared/Guaranteed Saving
Model
PUBLIC PRIVATE PARTNERSHIP
INTERNAL
EXTERNAL EXTERNAL & BY
THIRD PARTIES
ENERGY PERFORMANCE
CONTRACTING
Special Purpose Vehicle

24. HYPOTHETICAL SCENARIO – ENERGY EFFICIENCY
COSTS & SAVINGS
Source: Government Property Group ,Integrated Energy Efficiency Retrofits and
Energy Performance Contracting ,Australia,2011

25. TRADITIONAL VS. INTEGRATED ENERGY SERVICE MODEL IN
IMPLEMENTING EE PROJECTS
Traditional Integrated Energy Services Model
Source: Government Property Group ,Integrated Energy Efficiency Retrofits
& Energy Performance Contracting ,Australia,2011

26. DRIVERS OF GROWTH
Federal stimulus funding Federal stimulus funding
State, local & (potentially) federal policy
Market demand for EE products/services due to
products/services due to rising energy prices &
influence of policy

27. LOW PRIORITY VS. CORE
BUSINESS
FUNDING THROUGH
LOANS/DEBTS FOR EE
PROJECTS WILL IMPAIR “CREDIT
CAPACITY
BENEFITS ARE TOO SMALL TO
APPEAR ON TOP
MANAGEMENT’S RADAR
SCREEN
NOT CONVINCED ON ACTUAL
COST SAVINGS ACHIEVED
HOWEVER, EXPECT THESE BARRIERS…

28. STRATEGIC PLAN & SUCCESS
STORIES FROM STRATEGIC
ENERGY EFFICIENCY
PROGRAMS IMPLEMENTATION

29. ENERGY SAVINGS BY 2020 IN EU COUNTRIES:
How to triple the impact of energy saving policies in Europe?
Source: A contributing study to Roadmap 2050: a practical guide to a prosperous, low-carbon Europe

30. IMPACTS OF EE POLICIES IN JAPAN
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/GDPTon oil eq.
/ Billion yen
Source: METI/General Energy Statistics
10 years
Improvement by 30%
1st Oil Crisis
2nd Oil Crisis
10% improved for 20 years
Key areas of improvement
 Energy management
 Energy efficient equipment
 Efficient processes
technologies
 R&D

31. ENERGY CONSUMPTION PERFORMANCE WITH NATIONAL EE POLICY
IMPLEMENTATION IN THAILAND
Through strong regulatory implementation framework, sustainable funding &
holistic approach for focused sectors

33. KEY SUCCESS FACTORS
Major elements to
be considered

34. EFFECTIVE EE GOVERNANCE-IEA
ENABLING
FRAMEWORK
INSTITUTIONAL
ARRANGEMENTS
 Regulatory Framework
 National EE Policy
Level & Strategic Plan
 Sustainable funding
 Dedicated, empowered &
accountable agency
 Resource requirements
 Roles of utilities
 Stakeholders engagement
 Private-public sector co-
operation
 International assistance
COORDINATION
MECHANISM
 Governmental
• Targets &
evaluation
mechanisms

35. In March 2015, President Obama signed an Executive
Order calling for federal agencies to reduce energy
use in federal buildings by 2.5 percent per year from a
2015 baseline, through 2025 with Detailed Guidelines
attached
EUROPEAN UNION ISSUED:
Energy Performance of Buildings Directive in 2010
Energy Efficiency Directive in 2012 - EU's main
legislation to reduce energy consumption of buildings
with specified targets & commitment expected from
the government
SINGAPORE
2007 - The Sustainable Construction Masterplan with SGD50 million
Ministry of National Development (MND) Research Fund for the Built
Environment were introduced
2009- the Green Building Masterplan unveiled in 2009 with focused on
greening existing buildings with specified strategies
POLICY EXAMPLES

36. APPLICATIONS OF INFORMATION
TECHNOLOGY FOR EFFECTIVE
ENERGY EFFICIENCY PROGRAM
MANAGEMENT SYSTEM
Intelligent Efficiency

37. 5 KEY WAYS INTELLIGENT EFFICIENCY IS
SHAPING THE MARKET
REDUCE COSTS OF REAL-TIME MONITORING & VERIFICATION
 Helping build trust among customers & creating new opportunities for projects
VIRTUAL ENERGY ASSESSMENTS CAPABILITY
 Offer energy data to the market, leveraging new lead opportunities for energy service professionals
WEB-BASED ENERGY MONITORING TOOLS
 Linking the energy efficiency &energy management markets in more dynamic ways
BIG DATA ANALYTICS
 Allowing companies to be predictive & proactive in efficiency
OPEN ACCESS TO INFORMATION
 Strengthening the relationship between utilities & customers
 Helping improve choices about efficiency and setting the foundation for the smart grid

38. HOW INTELLIGENT EFFICIENCY CREATES
VALUE FOR INTENSIVE ENERGY USERS
Source:www.greentechmedia.com

39. Adoption of effective energy management
system technologies for energy performance
records & monitoring
Basic data collection &
reporting
Computerized management
system with operational controls
of key operating parameters
Key data gathering, energy
performance tracking,
measurement & reporting system

40. BARRIERS & PROPOSED COUNTER MEASURES
TO GROW ENERGY SERVICES INDUSTRY TO
ENHANCE ECONOMIC GROWTH

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

42. No Silver
Bullet!
Public-private
Partnership
Creating A
Market
Strong
Political
Will
The Importance
Of National
Context PROMOTING ENERGY
EFFICIENCY
INVESTMENTS THROUGH
POLICIES
IMPLEMENTATION: CASE
STUDIES FROM IEA

43. CONCLUSION AND THE WAY FORWARD
FOR ENERGY EFFICIENCY SERVICES
INDUSTRY

44. 11TH MALAYSIA PLAN:CHAPTER 6-PURSUING GREEN
GROWTH FOR SUSTAINABILITY & RESILIENCE
CONSERVING NATURAL RESOURCES
FOR PRESENT & FUTURE GENERATIONS
ADOPTING THE SUSTAINABLE CONSUMPTION
& PRODUCTION CONCEPT
Source: RMK11,EPU
STRENGTHENING RESILIENCE AGAINST
CLIMATE CHANGE & NATURAL DISASTERS
STRENGTHENING THE ENABLING ENVIRONMENT
FOR GREEN GROWTH

45. 11TH MALAYSIA PLAN:
ENHANCING DEMAND SIDE MANAGEMENT
FORMULATING
A COMPREHENSIVE DEMAND SIDE MASTER PLAN
EXPANDING
DEMAND SIDE MANAGEMENT MEASURES
Industries Buildings Households
Electrical
Energy
Transport Energy
Thermal Energy

46. FOR ENERGY SERVICE INDUSTRY DEVELOPMENT IN
MALAYSIA
Strong
Governance &
regulatory
framework
Financing &
business
friendly
mechanisms
Accountable
& competent
implementing
agency
Information,
Education
&
Awareness
R&D &
Commercialization
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!
CREATED
•Business & job opportunities
•More experts/workers from energy
efficiency industry
•New source of economic growth
•More Direct Domestic Investments

47. CONNECSYS SDN BHD
www.cnsgroup.com.my
zaini@cnsgroup.com.my
THANK YOU!