A revised version on EPC Guideline for implementation for government buildings

1. 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

2. 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

3. 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 EMSDevelop & Plan
EMS

4. Guaranteed Savings Model
FACILITIE
S OWNER
ESCOBANK
Project Design&
Implementation
Project FeesLoan
Repayment

5. Shared-Savings Model
FACILITI
ES
OWNER
ESCOBANK
Project Design&
Implementation
Loan
Repayment
EE
PROJECT
Energy saving share
(90%-70%)
Financing
Energy saving share
(10%-30%)

6. Energy Efficiency Market & Potentials in SEA
Source: www.reexasia.com

7. Saving Potentials (USD) in SEA
Clearly, the industrial and
commercial sector s offers
much higher savings potential
Source: www.reexasia.com

8. EPC MARKET POTENTIALS IN MALAYSIA

9. 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

10. 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

11. Potential Areas For EPC Projects

12. 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

13. 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

14. The Practical Steps & Key
Success Factors For Successful
EPC Projects Implementation

15. The Key Steps

16. 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?

17. 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

18. 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

19. 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

20. 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

21. Issue Request for Proposal

22. Evaluation of Proposals

23. Example: Evaluation Score Sheet

24. 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

25. 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

26. 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

27. Measurement, Monitoring &
Verification
For actual savings achieved
Methodology/Protocol
Baselines agreed
Permanent metering (highly recommended)

28. 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)

29. Baseline:
Baseline year from electricity bill data (kWh)
(kWh)

30. Example:
Energy saving calculated by the difference between a
baseline year and a subsequent year from electricity bill
(kWh)

31. Baseline : Building Monthly Load Profile (kW) from sub-metering
31

32. Baseline :
Building monthly electricity consumption profile(kWh) from sub-metering
32

33. Baseline :
Building monthly load profile(kW) for AHU from sub-metering
33

34. Baseline :
Monthly electricity consumption profile(kWh) for AHU from sub-metering
34

35. Example: Savings calculated based on actual
measurement from sub-meters

36. 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!

37. Example: Monitoring & Measurements for Air
Conditioning System
Your Energy Management
Specialist &
37

38. (Before) Conventional FL 36W (After) HP T8-28W
Example : Before & After Implementation

39. EPC Success Stories:USA

40. ESCO Fund:Thailand

41. EPC Success Stories: Malaysia
Source: ESCO

42. 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

43. Thank you for your time & attention!
• secretary@maesco.org.my
• 019 2152700
• www.maesco.org.my