external financing an energy efficiency project is easier

Strategic Energy Management For Resilience

External financing an Energy Efficiency Project is easier than ever!

A case study: Panasonic and SDCL

Prepared for National Energy Efficiency Conference 2015

By: Peter Lau and Mohamed Shahril Bin Hj Jaffar

6 October 2015

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Part 1:

• Sustainable Development Capital (Asia) Limited (“SDCL”) by Peter Lau,Director of SDCL

• Introduction of the Programme

• Investment Criteria

• Investment Process

• SDCL’s Value Added to the Project

Part 2:

• Panasonic Appliances Refrigeration Devices Singapore (“PAPRDSG”) byMohamed Shahril Bin Hj Jaffar, Manager of PAPRDSG

• Introduction of PAPRDSG and the ECO ideas factory

• Current Challenges

• Solutions

• Project Timeline

• Benefits of SDCL’s External Financing Programme

Agenda

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Part 1

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“Given Singapore’s limited access torenewable energy, energy efficiency isour core strategy to reduce emissions.”

https://www.nccs.gov.sg/nccs-2012/singapores-approach-to-reducing-emissions.html

https://www.nccs.gov.sg/nccs-2012/singapores-approach-to-reducing-emissions.html

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Introduction of Sustainable Development Capital Limited (“SDCL”)

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SDCL’s Energy Efficiency Programme Worldwide

Singapore Energy Efficiency Investments Group Limited

Up to SGD $200 millioncollaboration with

Economic Development Board

Manager

First close March 2014

UK Ireland Singapore

Investment Focus

Public Sector BuildingsFood and AgricultureHotels and Data-centresStreet Lighting

Investment Focus

Buildings RetrofitCombined Heat & PowerRenewable HeatUrban Infrastructure

Investment Focus

Manufacturing SectorHeat RecoveryLightingIndustrial Efficiency

UK Energy Efficiency Investments Fund

GBP £104 million£50 million committed from UK Green Investment Bank

Manager

Closed 2014

Ireland Energy Efficiency Investments PLC

Euro €70 million€35 million committed from

Irish Government

Manager

First close May 2014

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SDCL’s Energy Efficiency Programme in Singaporewww.e2singapore.gov.sg/Incentives/Finance_Programme_for_Energy_Efficiency_Projects.aspx

• Selected by EDB to establish a finance led pilot programme;

• The program (up to S$200 million) is to finance the transformation ofIndustrial/Manufacturing facilities;

• Provide for up to 100% of upfront capital investment to finance theproject;

• Establish a professional team in Singapore to work with EDB toimplement, manage and finance projects;

• Aim to structure financing to achieve off balance sheet treatment underinternational accounting standards;

• Generate significant positive environmental and social impact.

http://www.e2singapore.gov.sg/Incentives/Finance_Programme_for_Energy_Efficiency_Projects.aspx

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Investment Criteria of the Programme

Guideline Note

StructureFinance up to 100% of

project costs

• Equipment• Labour and Installation• Annual operating cost (if required)• Regular measurement and verification

costs (if required)• All three levels of Energy Assessment

cost (if required)

Project Investment Size SGD 1 – 40 million Project with lower project size is considered on a case by case basis

Payback period Up to 5 years This can be a blended average of the proposed interventions

Typical contract term Up to 10 years This can be customised to the extent supported by the project economics

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Investment Process

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Value Added from SDCL’s Involvement in the Project*

• Best lifecycle costs rather than the lowest project cost (i.e. shortestpayback);

• SDCL’s network in the Industry (ESCOs, Technology Partners, Developersetc.);

• Project management assistance;

• A clear measurement and verification process;

• Economic life left in the equipment (i.e. client enjoys the free use of theequipment after contract expires);

• Risk Transfer.

*Based on a typical project or requested by the Host

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Selected Projects in Singapore

Country Client Project Size (up to, local currency)

Interventions Status

Singapore Manufacturing SGD 3.3m Chiller System Closed

Singapore Manufacturing SGD 1m Air Compressors Closed

Singapore Manufacturing SGD 0.1m Air Compressors Closed

Singapore Semi-Conductor SGD 1.0m Heat Pumps Documentation

Singapore Manufacturing SGD 0.2m LED Lighting Documentation

Singapore Waste Management SGD 1.3m Heat Recovery MOU signed

Singapore Manufacturing SGD 2.2m Heat Recovery MOU signed

*As at 30 Sep 2015

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Part 2

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Part 1:

• Sustainable Development Capital (Asia) Limited (“SDCL”) by Peter Lau,Director of SDCL

• Introduction of the Programme

• Investment Criteria

• Investment Process

• SDCL’s Value Added to the Project

Part 2:

• Panasonic Appliances Refrigeration Devices Singapore (“PAPRDSG”) byMohamed Shahril Bin Hj Jaffar, Manager of PAPRDSG

• Introduction of PAPRDSG and the ECO ideas factory

• Current Challenges

• Solutions

• Project Timeline

• Benefits of SDCL’s External Financing Programme

Agenda

Introduction of Panasonic Appliances Refrigeration Devices Singapore (“PAPRDSG”)

• Manufacturing of Refrigeration Compressor

Application of our product

• Casting Parts • Metal Stamping

Panasonic’s 1st ECO Ideas Factory Outside Japan

Implement high efficient lighting

LED High Bay LED Tubes

Implement high efficiency air compressor

Centrifugal type Inverter type

Change to high efficiency air dryers

Convert to High Efficiency Dryer Use VSD to regulate Cooling Tower & Water Pumps

Implement VSD for pumps & cooling towers

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Meter Gauges for Air Compressors Operation Monitoring

SE-Navi Data

750 kwh/day

1400 kwh/day

Reduce unloading loss > 650 kwh/day

reduction is achieved

Mar-Apr 14

Implement BioOil for Boiler

Diesel supply

during change

over

BioOil supply to

Boiler for steam

generation

Elimination of Water pump & Cooling tower

Convert water

cool package

air con to air

cool condenser.

Water pump

and cooling

tower removed.

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Current Challenges of ECO Programme

Other Investment Priorities

Run Out of Ideas

Project Justification

High Investment

No Plan Budget

Return of Investment Too Long

Source for Collaboration Partners

Identification of the Project

Energy Mapping

Finding Conclusion:

1) Under capacity

2) Aged compressor

3) Efficiency unknown

28% of the total electricity usage

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Overview of the Compressed Air System

1

2

3

5

4

Base line setting:

1) 16 Units of Air Compressor

2) Size range from 55kW to

330kW

3) Age between 1 to 24 years

4) All compressors are

connected to same main

pipelines linked in a closed

loop system

5) M&V were done to measure all

air compressor :-

a) Power (kW)

b) Air flow (m3/h)

c) Pressure ( bar )

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Measurement and Verification (M&V)

Power Meter

Air Flow Meter

Pressure Meter

Data logger

Existing efficiency : 0.119 kW / (m3/hr)

(Base line )

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Proposed Replacement Project

Power Air Flow

(kW) (m3/h)

3 F 1 Compressor 1 58 562





14 F 5 Compressor 6 158 1300


16 F 5 Compressor 8

769 6459

Efficiency of Selected Air Compressors0.119

COP (Existing System)

Total Capacity of Selected Air Compressors

Breakdown

Existing Air Compressors Selected for Replacement

Comp

No.Location Make

Operation Data

Power Air Flow

(kW) (m3/h)

F3 New Compressor 3 180.4 2010




1078.3 11695

Efficiency of Proposed Air Compressors0.092

COP (Proposed System)


Total Capacity of Proposed Air Compressors

Design Operating Data


Proposal of High Efficeincy Air Compressor at Selected Location

Location Make

Achieved 22.6% improvement in COP

8 Units of Air Compressor with COP of 0.119 kW/(m3/h)

Replace with 6 Units of New Air Compressor with COP of

0.092 kW/(m3/h)

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Pictures of Air Compressor Scrapped

Air Compressor : No 16 Scrapped

Air Compressor : No 7 Scrapped

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Pictures of Selected New Air Compressor

New Air Compressor : No 2 Installed on 28 July 15

New Air Compressor : No 4 Installed on 20 Aug 15

Waiting for the next 4 units

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Key Milestones of the Project

2014• May - Signed term sheet 1 with SDCL• May - Energy audit started

• Aug / Sep - Drafted audit report available• Oct to Nov - Due diligence on suppliers• Nov to Dec - Finalised commercial terms with SDCL• Dec – Signed term sheet 2 with SDCL

2015• Jan to Mar – Contract discussion and negotiation• Mar – Contract signed• Apr to Dec – Procurement and construction

2016• Jan - Expected commission date

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Benefits of SDCL’s Programme to PAPRDSG

• SDCL provided 100% capital including the audit costs and M&Vcosts;

• SDCL assisted PAPRDSG throughout the project including:• Introduced and assisted in selection of technology partners

for energy audit• Undertook due diligence for each equipment supplier• Assisted in selection of equipment supplier• Provided a number of funding options• Facilitated and arranged to meet with EDB officers

• Contractual documentation was executed efficiently;

• Ownership of the compressors after contract expires;

• The process was transparent to PAPRDSG.

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Peter Lau,

Director of SDCL

[email protected]

Tel: +65 8232 2753

Mohamed Shahril Bin Hj Jaffar

Manager of PAPRDSG

[email protected]

Tel: +65 6577 0763

Key

Contacts:


mailto:[email protected]

mailto:[email protected]


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THANK YOU

external financing an energy efficiency project is easier

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