Key Steps and Success Factors in EPC Implementation
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The document outlines the key steps and criteria for successful energy performance contracting (EPC) projects. It discusses establishing the need for EPC, selecting an energy service company (ESCO), conducting an energy audit, developing an EPC contract, implementing savings measures, and measuring/verifying savings. Successful EPC requires proper evaluation of proposals, agreed upon baselines for energy use, and monitoring/verification of actual savings achieved against the baselines. Case studies show EPC can reduce energy bills by 10-35% through optimizing equipment and systems.
Key Steps and Success Factors in EPC Implementation
- 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
- 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
- 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