irem ® fall leadership conference global business practices forum implementing alternative energy...
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IREM® FALL LEADERSHIP CONFERENCE
Global Business Practices Forum
Implementing Alternative Energy Projects at Your Properties
• An Introduction to Alternative Energy• Eric Storey, CPM®
•A Glimpse Into Energy Usage in China• Guoqiang Pan, CPM®
•Implementing Alternative Energy in Japan
• Tiger Yamamoto, CPM®
•Why choose Solar Energy?• Craig Robb
Today’s Agenda
IREM China Shanghai Chapter President
Guoqiang Pan, CPM
Oct 16, 2013
A Glimpse into Alternative Energy in China
IREM® FALL LEADERSHIP CONFERENCE
Scottsdale, Arizona
The major traditional energy widely used is Coal and Oil
1. Traditional Energy Usage in China - Overview
产能
消耗0
10
20
30
40
煤炭石油
产能消耗
In 100 million tons
IREM® China Shanghai Chapter
CapacityConsumption
0
10
20
30
40
Coal Oil
Capacity
Consumption
In recent years, energy consumption has increased by
8.9%
By 2020, energy consumption will reach 7.9 billon
tons of standard coal
That’s almost 50%of total energy consumption in the world!
1. Traditional Energy Usage in China - Statistics
IREM® China Shanghai Chapter
The Chinese government has prioritized production clean-
up of traditional energy
It recognizes that cleaner energy production will:
1) Reduce energy waste by 20% every five years
2) Better control pollution and greenhouse gas
emission
3) By 2020, reduce Chinese consumption to 1/3 of
all global energy
1. Traditional Energy Usage in China – Production Clean-Up
IREM® China Shanghai Chapter
2. Main Substitutes of Traditional Energy in China
Natural Gas: Currently only 3% of
consumption, but expected to
increase
Nuclear Power: Higher than solar
or wind power, and has great
potential
Renewable Energy: Great future
in bio terrestrial (geothermal) heat,
solar, wind, and tidal energy
IREM® China Shanghai Chapter
Natural Gas
Nuclear Power
Renewable Energy
3. Alternative Energy in China –Terrestrial (Geothermal) Heat
Terrestrial Heat - Geothermal heat pumps, utilize energy within
the earth, and boasts a 50-70% energy saving efficiency
Shanghai Shibei Industrial Park
2 office buildings with a GFA of 40,000
square meters
Geothermal pumps supply cold air,
heating, floor heating, year-round hot
water and swimming pool heating
IREM® China Shanghai Chapter
3. Alternative Energy in China –Terrestrial (Geothermal)Heat
GFA: 25,000 square meters
Geothermal heat pumps supply
cold air, heating, floor heating,
all-year-round hot water and
swimming pool heating.
Shanghai Donghu Hotel
IREM® China Shanghai Chapter
3. Alternative Energy in China – Solar Energy
Three categories: low grade heat, medium grade
heat and high grade heat.
In China, 70% of energy consumption comes from
industry; hence, the mid-to-high grade heat has
become the major source of high energy
consumption.
China has initiated the wide application of mid-to-
high grade heat in solar energy, such as solar
power generation, heating, refrigerating, seawater
desalination and beer fermentation
IREM® China Shanghai Chapter
3. Alternative Energy in China – Solar Energy
East Baifan Village, 1st solar energy model village
20 households
Total annual electricity consumption: 70 million kWh
150kW photovoltaic generators with an annual capacity of 10,000 hours of 150,000 kWh clean power
Solar hot water system adopts panel collector with auxiliary heating function, which can supply hot water all year around.
Saving 50 ton standard coal and 131 ton of CO2 emission annual
Shaanxi Solar Energy Modal Village
IREM® China Shanghai Chapter
3. Alternative Energy in China – Wind Energy
Worldwide potential wind energy supply may accumulate up to
2.74×109 MW, among which 2×107 MW is usable, 10 times more than
the total hydro power.
According to the government plan, in the next 15 years, the total
capacity of wind generators may reach 20-30 million kW.
IREM® China Shanghai Chapter
4. Sustainable Energy Practices
Increase inspection and maintenance
Reduce water loss
Optimize building layout and use of space
Use renewable materials
IREM® China Shanghai Chapter
5. Cases
Chengdu Fucheng International Business Center planned and
designed by Shanghai Gaoyi Energy Technology Co., Ltd.
which is affiliated to our group.
Land area: 39,250 square meters
plot ratio: 6.0
Planned height: 100 meters
GFA: 315,050 square meters
Building density: 45%
Green space ratio: 10%; total green space:
3,925 square meters.
A mixed use property incorporating the
functions of grade A office, grade B office,
serviced apartment and retail.
IREM® China Shanghai Chapter
5. Cases
IREM® China Shanghai Chapter
Energy saving building technology system
Energy-saving System
High performance envelope structure
Exterior Wall
Exterior Window
Roof
Energy-saving HAVC System
Heat Reservoir & Refrigerator
Heat Inlet
Fresh Air Treatment
Supply Air Terminal
New Energy Technology
Energy Efficiency Equipment
Water-saving System
Water Source
Anti-leakage Pipes
End Water-saving
Material-savingSystem
Green Materials
Design of Energy-saving Materials
5. Cases
IREM® China Shanghai Chapter
1.Land Saving and Outdoor Eco-friendly Technical System
rational planning of building land
Underground space development technology Roof space utilization and cubic technology
Outdoor Environment Technology
2. Building Energy Saving and New Energy Use Technical System
Envelope structure
Air conditioning energy saving techniques
New energy use
Energy saving mechanical and electrical equipment
Light system energy saving techniques 3.Water-saving Technical System
Water supply system
Water saving at the end of distribution system
Rainfall used in the construction
Rain water use
4. Energy Saving Building Materials Technical System
Energy saving structural materials
Energy saving decoration materials
5. Interior Environment Quality
Interior Ecological Environment
Natural lighting and its control techniques
Natural air and its control techniques
Sound environment control techniques
Accessible facilities design
6. Operation and Management Technical System Property management system aiming at energy saving and resource preservation
Application of intelligent system
High efficient system operation and maintenance
5. Cases
IREM® China Shanghai Chapter
27.10%
33.87%
9.64%
15.40%1.07%
1.93%10.21% 0.03%
0.21%
0.53%
Pro Forma Budget: Our Project "Fuxing Commercial Building"
Personnel Costs
Energy Costs
Repair and Maintenance Costs
Cleaning
Green plant rental
Waste cleanup
Security Outsourcing
The public security alarm system
Fire Alarm system
Entertainment expenses
Pro Forma Budget: Our Project “Fixing Commercial Buildings”
Guoqiang Pan, CPM®
IREM® China Shanghai Chapter (No. 118), President.
Guoqiang PanGeneral Manager
Shanghai Golte Asset Management Co., Ltd.Add: 1717 Hutai Road, ShanghaiTel: 86.21.36526200Email: [email protected]
Yasunori “Tiger” Yamamoto, CPM
Oct 16, 2013
Alternative Energy Projects in Japan
IREM® FALL LEADERSHIP CONFERENCE
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Energy Usage Patterns in Japan
Hot water: gas Stove: gas Heating: electric, gas Cooling: electric Gas in metropolitan areas: natural gas,
other areas: LP (liquid petroleum/propane) gas
In colder region, hot water and heating are done by kerosene oil
Energy Cost
Types of energy
Kerosene oil 1
Electricity (night time) 0.88
Electricity (day time) 3.33
Natural gas 1.21
LP gas 2
(in comparison to kerosene cost as 1 ）
Main Alternative Energy in Japan-Photovoltaic (Solar) Panels
1996
year
1997
year
1998
year
1999
year
2000
year
2001
year
2002
year
2003
year
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year
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year
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year
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year
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year
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year
2012
year
0
200000
400000
600000
800000
1000000
1200000
Number of installations
Exceeded one million properties by April of 2012
（ up to April ）
Preferential Treatment
Buyback the entire volume for 20 years at 37.8 yen/KW ｈ
Property tax: 2/3 for the first three years Tax credit of 7% of the baseline acquisition cost Depreciation: Can choose one of the three below 100% instantaneous depreciation 9 year depreciation ＋ 30% special depreciation at
acquisition 9 year depreciation
Fixed buyback program
Tax break
How Much Roof Space Do You Need?
Rule-of-thumb space needed relative to the capacity of photovoltaic system
Configuration
Power output （ kW ）
Space （㎡） Anticipated annual power output （ kW ｈ）
Roof
１０ｋＷ １００㎡ １０，０００ｋＷｈ
２０ｋＷ ２００㎡ ２０，０００ｋＷｈ
３０ｋＷ ３００㎡ ３０，０００ｋＷｈ
４０ｋＷ ４００㎡ ４０，０００ｋＷｈ
５０ｋＷ ５００㎡ ５０，０００ｋＷｈ
Panasonic ＨＩＴ １０． ９ｋＷ system （２３３Ｗ × ４７ panels ） Power generation started in March of 2013 Installation cost: 5 million yen ($50,000) Total annual power generation ：１１，０００ｋＷｈ Annual income from sales of electricity ：４２ yen× １１，０００ｋＷ＝４６２，００
０ yen Payback period of the initial investment ：１０．８ years
Example of installations①
Solar Frontier ２２ｋＷ system （１５０Ｗ × １４７ panels ） Power generation started in December of 2012 Installation cost: 10 million yen ($100,000) Total annual power generation ：２２，０００ｋＷｈ Annual income from sales of electricity ：４２ yen× ２２，０００ｋＷ＝９２４，
０００ yen Payback period of the initial investment ：１０．８ years
Example of installations②
Example of installations③Energy independent disaster proof apartment
Energy System
ＬＰ gasco-generation
Micro grid
Photovoltaic generation
Fuel battery（ Enefarm ）
Storage battery（ lithium-ion battery ）
3 battery types
8.3Kw installed
Used for 1st floor lighting (LED ）Used for foot bath
12Kw × 2 units installed
10Kw × 2 units installed
※No hot water heater
■Electric car （ EV ） sharing■Energy made visible in １ st ・ & ２ nd floor showrooms■Foot bath in front of the lobby (uses hot water from Enefarm)
Controlled by central monitoring center
Energy Self-Sufficiency Rate
By making efficient use of energy through heat and electric supply equipments,
it is possible to reach 80% overall energy efficiency ！
９７％ of heat and ６５％ of electricity can be supplied by the apartment.
65
97
0% 50% 100%
電気（照明・冷房・厨房）
熱（給湯・暖房）
3,100Kg/year
1,400Kg/year
4,500Kg/year
380Kg/year
2,650Kg/year
3,030Kg/year
67.5ton
Traditional apartment（ emission per
household ）
Self-sufficient apartment（ emission per household ）
Annual emission（ total amount for 15 units ）
33.5 ％ reduction
CO2 Reduction Comparison (estimate ）
Tiger Yamamoto, CPM®
IREM® Japan Chapter (No. 110), President.
Craig Robb
Oct 16, 2013
WHY SOLAR?
IREM® FALL LEADERSHIP CONFERENCE
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IT’S THE ECONOMICS
Average Cost of U.S. Power 12c/kWh 40,000 Electric Rate Structures in the US;
Nearly 4,000 Utility Providers Module Price Drop 2008-2012 $2.60/w
States With the Highest Electric Cost
Rank Residential Commercial Industrial
1 Hawaii Hawaii Hawaii2 California California California3 New York New York Massachusetts4 Connecticut Connecticut Connecticut5 Nevada Massachusetts New Hampshire6 Vermont Arizona Rhode Island7 New Mexico Vermont New Jersey8 Arizona New Mexico Arizona9 New Hampshire New Hampshire Nevada10 New Jersey Nevada New Mexico
Type of Electricity
Solar Overview
Solar Installations by State in 2012
Solar Overview
Utility Scale Change to Residential/Commercial
50 GW = 9,523,809 Homes @5.25kw System 2% Electricity Production by 2016
Growing Sector 1998-34 installations; 2012-208,529
installations
Five Reasons For Improved Growth
1. Grid Parity 10 States at Grid Parity w/o State Incentives
11-15 ₵/kWh vs. 11-37 ₵/kWh Estimated 6 GW installed in Grid Parity States
2. Further Cost Reductions Cost to $2.50/w 12 Additional States Grid Parity by 2015
3. Leading Model is Mainstream Potential Key to Real Estate Industry
4. Lower Financing Costs Every 100 bps Reduced Costs 1₵/kWh Improved Financing Structures
Securitizations Bonds Increased Number of Financing Parties
5. ITC Impact Impact 10%-30% = 10-16₵/kWh 36 States at Grid Parity 2017 Beyond
Five Reasons For Improved Growth
Economic Make-Up
Declining Cost of Solar $8.40/w 2007; approach $2.50/w in 2014
Federal Investment Tax Credit (Previously 1603 Treasury Cash Grant) 30% of Qualified Cost Through 2016 10% of Qualified Cost 2017 Beyond
Economic Make-Up State Rebates, PBI, REC, SREC, FIT’s
30 States and DC with RPS Requirements Standards Vary Amongst States
AZ 15% Renewables by 2025 CA 33% Renewables by 2020
Incentive Declining 2011-2012 Median Pre-Tax Decline Substantial 50%-150% of Corresponding Drop in Installed
Cost
Real Estate and Solar Integration of Solar into Real Estate
Shift of Perspective From Energy Consumer To Energy Provider
Solar Viewed as Part of the Business Franchise- Value, Freedom and Choice Adaptive to User Value to Investor Long Term Improvement NOI
Solar Goes Hand-in-Hand with Efficiency Intelligent Buildings Managed Systems Improved Maintenance and Control of Cost
Acquisition Options Purchase
Accrete Tax Benefits Vary on Return of
Capital and IRR System 7 Years; >10%
IRR Purchase and Finance
(Debt or Capital Lease) Same Attributes Above Possible Improvement
in IRR Difficult Financing
Option
Tax Equity Provider (Direct) Provide Tax Equity
Provider with Tax Benefits (Ownership > 5 Years)
Operating Lease; FMV Buy-Out
Possible PPA Structure Commercial Fund
Several Variables of Tax Equity
Greater Economic Efficiency
Example of Commercial Application
Large Retailer Focus on Economics Looks to Energy Sustainability
Composition of Deal Size: 15.277 MW Number of Location: 34 Average Size: 450 kW Production to Date: 110%
Results Avoided Costs Long-Term Lease Option to Buy-Out Satisfy Corporate Initiatives
What Has NBAZ Done? Installed .9 MW in Solar
Projected 1st year production of 1.4 MWh Efficiency Upgrades
Relamping Occupancy Sensors Energy Efficient Chillers
Estimated Repayment in 4.9 years Reduced electrical consumption by 40%
from 2008-2012
Craig Robb Zions Energy Link
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Thank youありがとうObrigadoСпасибо
谢谢Merci
감사합니다Gracias