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JUDIANTO HASAN JOGYAKARTA 29 MARET 2012 DEVELOPING ESCO IN INDONESIA CHALLENGE AHEAD
JUDIANTO HASAN
JOGYAKARTA 29 MARET 2012
DEVELOPING ESCO
IN INDONESIA
CHALLENGE AHEAD
INTRODUCTION
MARKETING & LEGAL ISSUES
Energy Law No 30/2007
Gov Regulation no 70/2009
Presidential Instruction no. 13/2011
Climate Change : Indonesia to 26 – 41
GO GREEN
3
OPPORTUNITIES
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)
PHASES OF DEVELOPMENT:
OPPORTUNITIES REALIZATION
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
Actualization Phase
• EE & EC becomes core value
• Economic results are consistent and measurable
• Proactive adherence in key business systems
Data → Information → Knowledge → Action
Time
BARRIERS
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
6
ESCO MUST MANAGE RISKS
Development
Construction
Technology
Operations & Maintenance
Performance (Savings)
RISKS
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
POTENTIAL FINANCING
MECHANISM
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
ALT – 1 : PUBLIC SECTOR
International
InstitutionGOI
Exec
Agency
EE
Projects
(large) -
ESCO
Guarantee
Mechanism
Small
ProjectsLenders
PSM
PSM
loan
Repayment
loan
Repayment
LoanRepayment
ALT – 2 : PRIVATE SECTOR
International
InstitutionGOI
Exec
Agency
EE
Projects
(large) -
ESCO
Guarantee Mechanism
(unfunded)
Small
Project(s)
(Borrower)
Lenders
PSM
PSM
loan
Repayment
loan
Repayment
Credit GuaranteeFees/int
GUARANTEE 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
STRATEGY TO STRENGTHENCONT....
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 *)
*) Subject to further Detail Study
Flocculation Primary Clarifier Cooling Tower Equalization Tank
Biogas Flare Conditioning Tank REACTOR
Anaerobic Effluent
to Aerobic
WASTE WATER
INFLUENT
RIVER
BOILER
ENGINE
ELECTRICITY
TO PROCESS
Aerobic Treatment
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 *)
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
Facilities Operator(Esco Team , Joint Team w Client or
Outsource)
Service Contract
Payment of Service Fee
Facilities Installation Operator
ESCO (ESPC)
ENERGY SAVING
FACILITIES
Client Self Fin 30% as down payment, by progress claims, majoring drawn after commissioning *)
FINANCIAL INSTITUTIONS
Constructions Work Company
Equipment Manufacturer
Ownership of EE Main
Facilities
ESCO FLOW CHARTS - PULP AND PAPER ESCO PROJECT
During The Contract Period
*) To Be Discussed, prior to shorter ESCO Period
OFFSHORE ESCO PARTNER
Incentive / Subsidies possible obtained from GOI (subject to Regulations) *)
Attractive IRR under International Agreement
Client Option for Earlier ESCO Period and Purchase ESCO Asset , such as with Bank Refinancing *)
Installment based on
Shared Saving
Model, secured by CAMA
(Cash Management
Agreement)
Measurement and Verifications
RESUME FEASIBILITY STUDY REKOMENDASI PENGHEMATAN
ENERGI
NO. PABRIK GULA
FEASIBILITY STUDY PARAMETER KEEKONOMIAN
KETERANGANJENIS KAPASITAS INVESTASI IRR PI
POT (tahun)
1 KREMBOONG JUICE HEATER 80 ton/jam NE 300 juta 14% 1,9 7,9 Layak; Direct contact juice heater
2 PESANTREN BARU BOILER 66 ton/jam uap 39 milyar 26 4,0 3,8 Layak.
3 LESTARI VACUUM PAN 40 ton/jam NK 9 milyar 21% 4,2 6,9 Layak; Penggantian VP no.1 dan 2
4 GEMPOLKREP SISTEM METERING 2 milyar 45% 9,9 2,0 Layak; Diseluruh stasiun
5 NGADIREJO ELMO 12% 1,3 9,0 Simulasi.
6 KEDAWOENG VSD PUTERAN 6 unit @ 100 kW 12,5 milyar 14% 1,9 7,9 Layak; Puteran high grade
7 ASEMBAGOES BOILER 80 ton/jam uap 50 milyar 24% 4,3 0,2 Layak; Ganti boiler TR ke boiler TM
8 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
15 TERSANA BARU
EVAPORATOR 100 ton/jam NE 10 milyar 10% 1,4 12,8 Simulasi.
MESIN UAP KE TURBIN UAP
450 kW (BHP) $791.826 13 1,4 8,7 Layak.
MODEL PEMBIAYAAN
CONTRACT : Consortium + CLIENT
EXECUTION
SCENARIO 2 :1. DP : 30%2. Leasing 70 %Duration 3 - 5 Years
BUSINESS MODELPT. INDRA KARYA SCHNEIDER INDONESIA
Project Consultant Project Management andImplementation
SCENARIO 1 :Shared Shavings1. Client 20 - 25 %2. Consortium 75 - 80 %
CLIENT : Textile Company
Targeted Segment : Motor for Fan and Pump
Targeted Saving : 25 - 30 %
Saving : Rp.28.500,000 / Months
Client 30 % : Rp. 8.450,000 / Months , ESCO 70 % : Rp. 20.050.000
Contract Duration : 36 Months
CONCLUSION
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
