DEVELOPING ESCO IN INDONESIA CHALLENGE AHEAD
JUDIANTO HASAN JOGYAKARTA 29 MARET 2012
I NTRODUCTION M ARKETING & L EGAL I SSUES
Energy Law No 30/2007
Gov Regulation no 70/2009
Presidential Instruction no. 13/2011
Climate Change : Indonesia to 26 – 41
GO GREEN
O PPORTUNITIES
3
Current:
Lightings
HVAC Retrofits
Building Control Systems
Motors and Drives
Chiller and Boiler Upgrades
Trend :
Thermal Storage/Load Shaping
Generation Efficiency Improvement
On-site Power Generation (Distributed Generation, CHP, Cogeneration)
Power Quality
Industrial Processes (e.g., compressed air systems)
P HASES OF D EVELOPMENT: O PPORTUNITIES R EALIZATION Time Initial Phase • corporate behavior • Regulatory constraint • Reactive • Results are unimportant and not monitored
Transition Phase • Implementation of policies that transform into business results • Shift from reactive to proactive • Economic benefits begin to emerge
Data → Information → Knowledge → Action
Actualization Phase • EE & EC becomes core value • Economic results are consistent and measurable • Proactive adherence in key business systems
B ARRIERS
Energy Efficiency Market is Not Developed Enough to Motivate Local Banks to Invest in Setting up EEP Lending Infrastructure.
Legal frame work to safeguard contracts or indemnify against a breach in contract need to be developed.
Understanding of banking sector of EEP’s and their payback potential
Difficult to depart from conventional asset based lending (EEP is Project Cashflow-Based Lending for ESCO)
Fund with favourable rates and repayment terms
Low electricity tariff
Lack of knowledge of potential clients
Tendering process
ESCO M UST M ANAGE R ISKS
Development
Construction
Technology
Operations & Maintenance
Performance (Savings)
6
R ISKS
Savings Guarantee to Customer that the “turnkey” costs of implementing and financing the EEPs will be paid-from-savings. The financial model of a classical Performance Contracting Solutions
P OTENTIAL F INANCING M ECHANISM Equity Capital for ESCOs
RDPT (Special Purpose Mutual Fund Type)
Venture capital for corporate and/or project equity
Guarantee Fund Leasing Payment Security Mechanism
Mechanism to secure the cash flows from energy savings for debt service
Streamlined (Program-based) approach for small projects
Development of standardised project approval parameters that mitigate risks on a portfolio basis
A LT – 1 : P UBLIC S ECTOR International Institution Repayment
GOI
Loan
Exec Agency
loan PSM Repayment
EE Projects (large) ESCO
Guarantee Mechanism loan Lenders
PSM Repayment
Small Projects
A LT – 2 : P RIVATE S ECTOR International Institution
GOI
Credit Guarantee loan Exec PSM Agency Repayment
Fees/int
EE Projects (large) ESCO
Guarantee Mechanism (unfunded) loan Lenders
PSM Repayment
Small Project(s) (Borrower)
G UARANTEE
FUNDS
Objective: Encourage EE lending through subsidized credit risk of bank
Advantages:
Alleviate barriers: collateral requirements, high risk of new technologies, risk of long-term lending
Build bank capacity in EE loans
Work best:
Banking sector well developed and liquid
Risk of EE loans is main barrier
Sufficient demand for loan financing
EQUIPMENT SUPPLIER CREDIT & EQUIPMENT LEASING How it works:
Supplier designs and implements project & measures performance
Equipment supplier credit:
Customer owns equipment
Customer pays lump-sum or over time based on energy savings
Equipment leasing:
Supplier owns equipment until full repayment
Customer pays lease payments
ACTION
LINES TO FOSTER
ESCO
MARKET DEVELOPMENT
Standardize contracts for ESCOs.
Standardize measurement and verification for ESCO projects.
Conduct ESCO demonstration projects.
Promote energy performance contracting in SOE’s and government buildings.
Develop a third-party financing network.
Establish an equipment-leasing organization.
Strategy to strengthen the ESCO industry 1. Promotion – Outreach and education to increase awareness of the benefits of performance contracting financial institutions, energy end users (particular – associations) manufacturers and distributors 2. Strengthen the offer of ESCOs by
Establishing a Loan Guarantee Fund
Estblishing Special Fund (RDPT)
Help establish a financing mechanism that will allow ESCOs to bundle several projects and reduce transaction costs
Establish a line of credit to finance projects
S TRATEGY TO STRENGTHEN C ONT....
Foster establishment of strategic alliances to To assist Indonesian ESCOs to access international financing more easily and increase their equity after sharing the debt with the international counterpart Help
build local capacity by transfer of know how
WASTE WATER FLOW CHARTS - PULP AND PAPER EE PROJECT *) WASTE WATER INFLUENT
Flocculation
Primary Clarifier
Biogas Flare
Cooling Tower
Equalization Tank
REACTOR
Conditioning Tank
Anaerobic Effluent to Aerobic
BOILER ENGINE ELECTRICITY TO PROCESS
KEY POINT INFORMATIONS : •Waste Water Quantity = 40,000 m3 per Day • Est. Biogas generated at 30,000 Nm3/day (max), (corresponding approx 810 GJ/day of Heat , eqv. to 240~360 ton LP steam/day.) •Est. Electricity Saving Gains = 20 MwH per Day •Est. New Electricity supply from Engine = 2000-2500 Kw •Est Electricity Cost = US$ 80 / MwH •Est. Steam Cost = 8~9 USD/GJ •Est CO2 Saving 100,000 Ton per Year – CDM , Est. price at 10~15 Euro per ton •Est. Project Cost = US$ 15 – 20 Million *)
Aerobic Treatment RIVER ESCO Conservation Benefit s : Case WWT-Plant No. 2 – IKS a. New Electricity Supply b. Saving electricity of Aerobic Treatment c. Saving CO2 emission – CDM d. Etc
*) Subject to further Detail Study
ESCO FLOW CHARTS - PULP AND PAPER ESCO PROJECT
ENERGY SAVING FACILITIES During The Contract Period
Client Self Fin 30% as down payment, by progress claims, majoring drawn after commissioning *) Installment based on Shared Saving Model, secured by CAMA (Cash Management Agreement)
Measure ment and Verificati ons
Incentive / Subsidies possible obtained from GOI (subject to Regulations) *) Client Option for Earlier ESCO Period and Purchase ESCO Asset , such as with Bank Refinancing *)
Facilities Operator (Esco Team , Joint Team w Client or Outsource)
Service Contract Facilities Installation Operator
Payment of Service Fee
FINANCIAL INSTITUTIONS OFFSHORE ESCO PARTNER
ESCO (ESPC) Ownership of EE Main Facilities Attractive IRR under International Agreement
Constructions Work Company Equipment Manufacturer
*) To Be Discussed, prior to shorter ESCO Period
RESUME FEASIBILITY STUDY REKOMENDASI PENGHEMATAN ENERGI FEASIBILITY STUDY
NO.
PARAMETER KEEKONOMIAN
PABRIK GULA JENIS
1
KREMBOONG
JUICE HEATER
2
PESANTREN BARU
BOILER
3
LESTARI
VACUUM PAN
4
GEMPOLKREP
SISTEM METERING
5
NGADIREJO
ELMO
6
KEDAWOENG
VSD PUTERAN
7
ASEMBAGOES
8
KAPASITAS
INVESTASI
IRR
PI
KETERANGAN
POT (tahun)
80 ton/jam NE
300 juta
14%
1,9
7,9
Layak; Direct contact juice heater
66 ton/jam uap
39 milyar
26
4,0
3,8
Layak.
40 ton/jam NK
9 milyar
21%
4,2
6,9
Layak; Penggantian VP no.1 dan 2
2 milyar
45%
9,9
2,0
Layak; Diseluruh stasiun
12%
1,3
9,0
Simulasi.
6 unit @ 100 kW
12,5 milyar
14%
1,9
7,9
Layak; Puteran high grade
BOILER
80 ton/jam uap
50 milyar
24%
4,3
0,2
Layak; Ganti boiler TR ke boiler TM
PRADJEKAN
BOILER
70 ton/jam uap
40 milyar
13,3
1,7
8,4
Layak; Boiler eksisting efisiensi rendah
9
PAGOTTAN
BAGASSE DRYER
40 ton/jam bagasse
3,2 milyar
19%
2,6
5,8
Layak; Exclude pneumatic system
10
SOEDHONO
BOILER
28 ton/jam uap
20 milyar
25%
3,7
4,1
Layak; Ganti boiler TR ke boiler TM
11
REDJOAGUNG
BAGASSE DRYER
40 ton/jam bagasse
3,1 milyar
10%
1,3
10
Layak; Exclude pneumatic system
12
KREBET BARU
BAGASSE DRYER
24 ton/jam bagasse
2,5 milyar
49%
14
1,7
Layak; Exclude pneumatic system
13
KARANGSUWUNG
BOILER
40 ton/jam uap
12,3 milyar
17%
2,2
6,8
Layak; Ganti boiler TR ke boiler TM
14
JATITUJUH
BAGASSE DRYER
20 ton/jam bagasse
2 milyar
29%
4,7
3,3
Layak; Exclude pneumatic system
EVAPORATOR
100 ton/jam NE
10 milyar
10%
1,4
12,8
MESIN UAP KE TURBIN UAP
450 kW (BHP)
$791.826
13
1,4
8,7
15
TERSANA BARU
Simulasi. Layak.
MODEL PEMBIAYAAN CONTRACT : Consortium + CLIENT EXECUTION PT. INDRA KARYA
SCHNEIDER INDONESIA
Project Consultant
Project Management and Implementation
SCENARIO 1 : Shared Shavings 1. Client 20 - 25 % 2. Consortium 75 - 80 %
BUSINESS MODEL
SCENARIO 2 : 1. DP : 30% 2. Leasing 70 % Duration 3 - 5 Years
CLIENT Targeted Segment Targeted Saving Saving Contract Duration
: : : :
Textile Company Motor for Fan and Pump 25 - 30 % Rp.28.500,000 / Months Client 30 % : Rp. 8.450,000 / Months , ESCO 70 % : Rp. 20.050.000 : 36 Months
C ONCLUSION
Many ESCO opportunities around, and becoming bigger and complex in the near future
Need to establish financial mechanism
Overcome barriers through sinergy
THANK YOU
www.apkenindo.com
