Seminar On Energy Efficiency For Sustainable Business

For TNB Prime Consumers

28th January 2014

Puteri Pacific Hotel

Johor Bahru

Corporate trends & potentials for energy savings to increase profitability

Barriers and counter measures for organizations to implement EE

Key success factors & steps to reduce energy costs

Support measures required from the government

What’s next?

Building owners can see reduced operating costs, increased building values, greater return on investment, and higher occupancy from new and retrofitted green buildings

UNEP - GEO-5 for Business

Impacts of a Changing Environment on the Corporate Sector

Companies may receive reputational benefits from achieving green building certifications . A 2011 survey of U.S. adults- 64% would prefer to patronize a business whose facility is certified as green, while 48% indicated that green certification of a facility improves their image of a company.

University of Missouri researchers - consumers would be more willing to pay between 15 & 20% more for retail products from companies that support sustainable practices

UN Global Compact of 766 CEOs worldwide-93 % of

CEOs said sustainability issues will be a critical factor to the future success of their business

2012 Ernst & Young Survey – 66% of executives saw an increased amount of sustainability-related inquiries from investors in the past year. 70% inquiries focused on energy management and greenhouse gas emissions & more than ½ questions about sustainability reporting

Survey on 250 CFOs in 14 countries by Deloitte - CFOs are increasingly aware the benefits sustainability can bring to the business. 2/3 respondents said they

are involved in driving sustainability strategies .More than 50 % said their involvement in pushing sustainable practices has increased in the past year.

IS ENERGY EFFICIENCY AN

OPTION OR A MUST DO NOW?

Energy efficiency potential used by sector in the New Policies Scenario 2/3 of the economic potential to improve energy efficiency remains

untapped in the period to 2035

Source: ESCO

TREASURY BUILDING, MINISTRY OF FINANCE OF MALAYSIA

17% reduction of electricity bill in 2011 based on 2010 baseline consumption – SEDA Malaysia

160 companies - 60% of Ireland’s industrial energy use

2% improvement in energy performance per year

Long-term members - have improved energy

performance by 33% (1995 and 2010)

Energy Management Standard helps up to €150m in

avoided energy costs (2005-10)

SOLID FOUNDATION WILL

ENSURE SUSTAINABLE RESULTS

SAVING POTENTIALS

Pumps (25% - 35%)

Chiller (20% - 25%)

AHU/FCU (25% - 35%)

Cooling Tower(15% - 20%

Lighting System (40-60%)

(Source: Energy Conservation Centre of Japan, 2011)

Profitability

Sustainability

Competiveness

Competency

Working environment quality

Corporate Image

Operating Costs - Energy

Risks – price fluctuation & supply shortages

Pollution

Carbon emission

Depletion of fossil fuel

INCREASE USERS’ COMFORT

SALES & ENERGY COST SAVINGS

BOOST IMAGE & VALUES

•Uncertainty in economic & regulatory framework

•Vague expectations

•No/Short term policy

GENERAL ISSUES

• Lack of tangible assets as collateral/guarantee

• Pressure &demand for short payback period

FINANCIAL SUPPORTS

• Time &human resources

• Inadequate technical know-how Resources

• Poor/inaccurate estimation of energy saving potentials

• Lack of reference data (baseline/benchmarking) INFORMATION

• Lack of competent & reliable service providers TECHNICAL SUPPORTS

& ADVISORY

EEPs viewed as “Infrastructure Investments” – LOW PRIORITY VS. CORE BUSINESS – don’t fix if not broken

EEPs funding through loans/debts WILL IMPAIR “CREDIT CAPACITY” from core business – NO WAY for SMEs/SMIs

BENEFITS ARE TOO SMALL TO APPEAR ON CEO’S RADAR SCREEN & to justify “perceived’ operating complexities/risks

NOT CONVINCED ON ACTUAL COST SAVINGS ACHIEVED nor aware of proven Measurement & Verification(M&V) methods to ensure sustainability of savings.

MANAGEMENT

COMMITMENT

ENERGY

POLICY

PLANNING

IMPLEMENTATION &

OPERATION

SYSTEM &

PERFORMANCE

CHECKING

MANAGEMENT

REVIEW

Energy saving

measures – to bring

results in improving

energy performance & cost reduction!

• Management Directives

• Implementation of EnMS - to ensure sustainability of energy cost reduction initiatives

MEASURES

With LOW/NO

COST

Minimal Cost

Savings

•Priorities of budget - core business/operations

•Investment risks

•Limited human resources & expertise

MEASURES WITH HIGH

COST

Significant Cost Savings

May require

expert

assistance &

external

financing

In-house

initiatives

EN

ER

GY

SA

VIN

G

MEA

SU

RES/P

RO

JEC

TS

TECHNICAL

VIABILITY

FINANCIAL VIABILITY

SUSTAINABILITY PLAN

Expertise/

Competency

EnMS

(ISO 50001)

Performance

M&V

Financial

criteria &

sources

Clearly state the

VALUE

PROPOSITION

upfront

Briefly describe

THE WAY THE

BUSINESS CASE

PROPOSAL WAS

DEVELOPED

Describe

TECHNICAL

CHANGES

REQUIRED &

relevant

planning issues

List & describe

all key COSTS &

BENEFITS

State key

project risks &

how to manage

them

Describe the

FUNDING/SUPPO

RTS that being

sought

EE projects aimed to reduce energy costs TO INCREASE PROFITABIITY!

Must be strategically prepared to get the approval from the top management to IMPLEMENT!

The presentation to precisely address: what they like to hear, see & talk

about

what is the return from the investment & how soon they can get back the return

what are the risks & measures to mitigate the risks

how to get the savings(may be the only technical element in the presentation)

decisions/total fund required to

kick-off the project

Decisions will be based on what

THEY WANT TO HEAR rather than

what YOU WANT TO PRESENT!

PRESENT LIKE A GREAT SALES MAN!

ISO 55000

An overview of the subject of

asset management and

the standard terms &

definitions to be used

ISO 55001

The requirements

specification for an integrated,

effective management system

for assets- defines

requirements for

a management system

IS0 55002 provides

Guidance for the

implementation the system

ISO50001:2011 Energy

Management Systems - Requirements With Guidance For Use

En

erg

y

pe

rfo

rma

nc

e

imp

rov

em

en

t

for

en

erg

y

usi

ng

se

rvic

es

To be launched in Jan/Feb 2014

WHAT’S NEXT?

Solution or technology based approaches?; or

Project based ; or

With corporate

sustainable energy management program

with action plans, clear

targets & strategies?

To view energy efficiency as an

industry with its own economic

potentials

Clear policy goals & targets

Strong governance &

comprehensive framework

Consistency, accountability &

competency with One-Stop

Centre Agency

Inclusiveness in policies

development & reviews

Technical Assistance

& Advisory Incentives & Financial

Assistance

SMEs & SMIs - energy audit & guidance

Technical assessment by the competent agency on EE projects for financing purposes

Measurement & verification of performance

deployment of experts for technical assistance & advisory

Continue & enhance fiscal incentives

Business friendly & transparent procedures & evaluation criteria

Low interest loans with

dedicated revolving fund for EE projects.

Grants based on annual government budget for specified initiatives 7 awareness programs

INTRODUCTION

&

AWARENESS

IMPLEMENTATION & SUPPORT MEASURES

PERFORMANCE

MONITORING&

MEASUREMENT

IMPROVED

•Energy

Performance

•Competitiveness

•Profits

•Environmental

quality

REDUCED

•Energy

consumption &

costs

•Pollution

•CO2 emissions CREATED •Business & job opportunities

•More experts/workers from energy efficiency industry •New source of economic growth •More Direct Domestic Investments

THANK YOU!