International Collaboration for the Development of Distributed Energy Resources

11

THE APEC 21ST CENTURY RENEWABLE ENERGY DEVELOPMENT INITIATIVE:

DISTRIBUTED ENERGY RESOURCES (DER)

COLLABORATIVE (V)By Dr. Iain Sanders

Design for Innovation LimitedChristchurch, New Zealand

22

APEC DER COLLABORATIVE (V) – BACKGROUND

33

APEC DER COLLABORATIVE

• The APEC 21st Century Renewable Energy Development Initiative (the “Initiative”) was adopted by APEC Energy Ministers at their 4th Ministerial Meeting in San Diego, California USA in May 2000.

• The purpose of the APEC 21st Century Renewable Energy Development Initiative is to develop a series of “collaboratives” within the framework of the Expert Group on New and Renewable Energy Technologies (EGNRET) to advance the use of renewable energy for growth and sustainable development in the APEC region.

• A “collaborative” is designed to address the energy needs and issues of individual APEC member economies through multi-economy cooperation that leads to action and results.

44

EGNRET OBJECTIVES• The mission of the Expert Group on New and Renewable Energy

Technologies (EGNRET) is to facilitate the increase in the use of new and renewable energy technologies in the APEC region. Its objectives are related to the removal of specific barriers to renewable-energy development and associated issues. These objectives include: Fostering a common understanding of regional renewable-

energy issues and options. Facilitating trade, investment and financing relating to

renewable-energy technology applications. Developing the region's renewable-energy technology and

services infrastructure. Promoting an understanding of renewable resource availability. Facilitating technology characterization and technology-

specific applications. Reducing the environmental impact of the energy sector. Implementing the APEC 21st Century Renewable Energy

Development Initiative.

55

EGNRET ACTIVITIES• In addressing these objectives, EGNRET is involved in various

types of activities, such as: Implementing renewable energy resource assessments. Promoting the commercialization of renewable energy

technologies, promoting the development of the renewable-energy technological and services infrastructure.

Identifying and mobilizing industry and government sources of financing.

Technical assistance and education programs. Developing effective policy recommendations for

addressing impediments to the increased use of renewable energy technologies and for including renewable energy in domestic energy plans.

66

EGNRET STRATEGY• EGNRET has adopted a broad ranging strategy in order to achieve

its objectives. This strategy is based on the elements, such as: Improving the level of information exchange between member

economies on existing initiatives. Assessing the potential for replicating successful initiatives in

other member economies. Identifying and pioneering new initiatives, including the APEC

21st Century Renewable Energy Development Initiative. Establishing links with - and use of - existing technology-

information data bases and clearing houses. Encouraging the development and use of energy planning

tools that include the use of renewable energy in both grid-connected and distributed applications.

Identifying options for more effectively including renewable energy in the national development goals of APEC-member economies.

Involving industry, as well as government officials and NGOs, as appropriate.

77

EGNRET COLLABORATIVES (1 OF 2)• A "collaborative" is designed to address the energy needs and

issues of individual APEC member economies through multi-economy cooperation that leads to action and results.

• Application-driven collaboratives include on-grid, hybrid or stand-alone applications. Examples include the use of renewable energy for rural health care, rural education, or rural economicdevelopment; utilization of wind technologies for grid-connected power; or the use of distributed power in rural electrification.

• Program-based collaboratives include renewable-energy financing, regulations, training or standards.

• Discrete projects developed as elements of a collaborative may address a range of issues, including: development of joint ventures, the removal of trade barriers, renewable-energy infrastructure-development needs, training, analytical tools and methodology, policy and financing.

88

EGNRET COLLABORATIVES (2 OF 2)• Collaboratives are to be designed and implemented by multi-

economy and multi-disciplinary "collaborative teams," consisting of representatives from the economies, the private sector, civil society, utilities, financing organizations and other relevant organizations.

• At least three APEC economies are to be represented on each team.

• What distinguishes this Initiative from previous EGNRET activities is that each collaborative is based on a "multi-year work-program," which provides structure and a timetable to achieve results.

• Such work-programs require a strong commitment for successful implementation from developed and developing economies. While collaboratives with APEC-wide benefits may seek funding from APEC funds, collaboratives will primarily rely on funding from the participating member economies, international financing organizations, foundations and the private sector.

99

18TH EGNRET MEETING RESULTS• The 18th meeting of the Expert Group on New and Renewable

Energy Technologies (EGNRET) took place on March 28-29, 2001 in Portland, Oregon USA. Attendance included representatives from Australia, Canada, China, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Philippines, Russia, Chinese Taipei, Thailand, and the United States of America.

• Building on the recommendations and success of the Private Sector Forum, EGNRET adopted and took leadership in nine broad based collaboratives.

• The adopted collaboratives mark a milestone in the implementation of the APEC 21st Century Renewable Energy Development Initiative.

• The Forum results clearly illustrate the commitment of APEC economies to the continued development of renewable energy resources and the window of opportunity that now exists to engage the private sector in moving renewable energy into the mainstream of the APEC region's energy infrastructure.

1010

APEC ENDORSED APEC ENDORSED COLLABORATIVESCOLLABORATIVES

JAPANNew and Alternative Transport Fuels IXMEXICOFinancingVIII

CANADAWeb-based Renewable Energy Information Dissemination Project

VII

CHINESE TAIPEIRenewable Energy Technology Applications VINEW ZEALANDDistributed Resources VCHINARenewable Energy Standards IV

AUSTRALIARenewable Energy Training & Certification Network

IIIUSAMicro Business Development II

USAStakeholders Dialogue, Outreach Forums, Symposium, Activities

ILead EconomyNameNo.

JAPANNew and Alternative Transport Fuels IXMEXICOFinancingVIII

CANADAWeb-based Renewable Energy Information Dissemination Project

VII

CHINESE TAIPEIRenewable Energy Technology Applications VINEW ZEALANDDistributed Resources VCHINARenewable Energy Standards IV

AUSTRALIARenewable Energy Training & Certification Network

IIIUSAMicro Business Development II

USAStakeholders Dialogue, Outreach Forums, Symposium, Activities

ILead EconomyNameNo.

1111

COLLABORATIVE V COLLABORATIVE V –– NZ: NZ: DERDER

• The Distributed Energy Resources (DER) Collaborative represents a DER “Community of Practice”, responsible for finding and sharing DER best practices, stewarding knowledge, and helping members work better.

• The DER Collaborative will provide the means to move local DER know-how within an APEC economy to collective information accessible by all participating APEC economies, and promote standardization of DER practices across commercial, political, environmental and social operations and regions.

• Initially the DER Collaborative members will communicate by email, using an internet-based email group management system. We envision developing the email group into a fully-fledged online community as time, interest and funding permits.

1212

DER COLLABORATIVE TASKS

1. Provide a forum for community members to help each other solve everyday DER-related work problems.

2. Develop and disseminate DER best practices, guidelines, and procedures for their members.

3. Organize, manage, and steward the DER body of knowledge from which community members can draw.

4. Innovate and create DER breakthrough ideas, knowledge, and practices.

1313

DER COLLABORATIVE DEVELOPMENT• The DER Collaborative will work on capacity building,

infrastructure development, and the dissemination of information regarding DER.

• Creating an effective environmental setting for the DER Collaborative to prosper will require the latest interactive, web-based communication technologies so that:1. Dialogue and contact between people is facilitated and help

found.2. Technology, innovation and R&D needs, opportunities and

capabilities together with sources of funding and finance are posted and coordinated.

3. Information can be efficiently disseminated, accessed, gathered and exchanged.

4. Fast tracks to expertise and solutions are facilitated.5. New strategic alliances and smart partnerships are forged.6. An innovative capacity-building framework for facilitating

the transfer and adoption of DER technologies is realized.

1414

DER COLLABORATIVE OBJECTIVES• The DER Collaborative will enable three or more APEC

economies to work regularly and consistently with each other on DER projects and programs originated by any economy.

• Each participating economy is able to contribute independently, yet depends on the other economies for added capabilities, expertise, and competence.

• The DER Collaborative will become large scale and sustainable over time – it will not just focus on technical demonstration projects.

• The DER Collaborative will focus on means and ways to maximize the pooling of Distributed Energy Resources so that the collaborative is able to sustain its own growth in the long-term, through carefully structured work plans that build upon:

1515

DER CAPACITY-BUILDING1. Collaborative R&D on new and emerging energy and

environmentally-friendly DER technologies.2. Demonstration projects and joint ventures for conducting

technology valuations and performance assessments of DER applications in rural, urban and micro-grid settings.

3. Build stakeholder interest, buy-in, participation and agreement to long-term expansion of DER.

4. Develop the electronic medium to facilitate technology transfer and adoption amongst participating economies, project management and e-commerce.

5. Disseminate knowledge, expertise, experience and procedures to: educate, inform and train participating stakeholders at all levels of involvement.

1616

DER COLLABORATIVE OUTCOMES• The DER Collaborative will focus on delivering long-term

energy services and not on short-term equipment sales.• The DER Collaborative will be integrated with, and in

support of, the sustainable development goals (economic, social, environmental) of the participating economies.

• A coordinated DER plan should integrate the diverse requirements covered by different political agendas: e.g. ministry of environment, ministry of energy, Climate change targets, electricity deregulation, economic growth and infrastructure expansion, management and maintenance etc.

• The DER Collaborative will contribute to the improvement of electricity security, quality and reliability in the participating economies.

1717

APEC DER COLLABORATIVE (V) – OPPORTUNITIES

1818

STRATEGIC FOCUSSTRATEGIC FOCUS

DERDRIVERSMARKETS

FOCUSISSUES

CRITERIA

DERDERDRIVERSMARKETS

FOCUSISSUES

CRITERIA

DRIVERSMARKETS

FOCUSISSUES

CRITERIA

1919

STRATEGIC OPPORTUNITIESSTRATEGIC OPPORTUNITIES

DERSD&DSD&D IS&S

RM&M

P-OF-S

C-OF-SVV--OFOF--SS

GOV

GOVGOVGOV

U&IU&I

U&I

U&I

MILMIL

MIL

MIL

AERAER

AER

AER

TELTEL

TEL

TEL

H&S

H&SH&SH&SB&IB&I

B&I

B&I

RESCOM

COMCOM

COM

RESRES

RES

INDIND

IND

IND

AGRAGR

AGR

AGR

E&RE&R

E&RE&R

CONS

CONS

CONSCONS

ESYS

ESYS

ESYSESYS

CPAC

CPAC

CPACCPAC

CBIL

CBILCBIL

CBIL

SUST

SUSTSUST

SUST

TECH

TECH

TECHTECH

EG&D

EG&D

EG&DEG&D

NEWA

NEWA

NEWANEWA

G-CON

G-CON

GG--CONCON

BAR-A

BAR-A

BARBAR--AA

R&RS

R&RS

R&RSR&RS

R&D

R&D

R&DR&D

R&Q

R&QP&C

R&QR&Q

P&C

P&CP&C

RISK

RISK

RISKRISK

ASET

ASETASET

ASET

E&T

E&TE&T

E&T

S-APL

S-APL

SS--APLAPL

B-DEV

B-DEV

BB--DEVDEV

ENV-IENV-I

ENVENV--II

DERSD&DSD&D IS&S

RM&M

P-OF-S

C-OF-SVV--OFOF--SS

GOV

GOVGOVGOV

U&IU&I

U&I

U&I

MILMIL

MIL

MIL

AERAER

AER

AER

TELTEL

TEL

TEL

H&S

H&SH&SH&SB&IB&I

B&I

B&I

RESCOM

COMCOM

COM

RESRES

RES

INDIND

IND

IND

AGRAGR

AGR

AGR

E&RE&R

E&RE&R

CONS

CONS

CONSCONS

ESYS

ESYS

ESYSESYS

CPAC

CPAC

CPACCPAC

CBIL

CBILCBIL

CBIL

SUST

SUSTSUST

SUST

TECH

TECH

TECHTECH

EG&D

EG&D

EG&DEG&D

NEWA

NEWA

NEWANEWA

G-CON

G-CON

GG--CONCON

BAR-A

BAR-A

BARBAR--AA

R&RS

R&RS

R&RSR&RS

R&D

R&D

R&DR&D

R&Q

R&QP&C

R&QR&Q

P&C

P&CP&C

RISK

RISK

RISKRISK

ASET

ASETASET

ASET

E&T

E&TE&T

E&T

S-APL

S-APL

SS--APLAPL

B-DEV

B-DEV

BB--DEVDEV

ENV-IENV-I

ENVENV--II

2020

DER MARKET DRIVERS

IS&S = INFRASTRUCTURE SUPPORT AND SUBSTITUTION.

RM&M = RISK MANAGEMENT & MITIGATION.

SD&D = SUSTAINABLE DESIGN & DEVELOPMENT.

2121

IS&S = C-OF-S: COST OF SOLUTION.

RM&M = P-OF-S: PROVISION OF SOLUTION.

SD&D = V-OF-S: VALUE OF SOLUTION.

DER DRIVERS DER DRIVERS MARKET CRITERIA MARKET CRITERIA

2222

GOVGOV == GOVERNMENT BUILDINGS & OTHER GOVERNMENT BUILDINGS & OTHER FACILITIES.FACILITIES.U&IU&I == UTILITIES & INDEPENDENT POWER (ENERGY) UTILITIES & INDEPENDENT POWER (ENERGY)

PRODUCERS.PRODUCERS.MILMIL == MILITARY APPLICATIONS.MILITARY APPLICATIONS.AERAER == AEROSPACE INDUSTRY.AEROSPACE INDUSTRY.TELTEL == TELECOMMUNICATIONS.TELECOMMUNICATIONS.H&SH&S == HEALTH AND SAFETY, INCLUDING HOSPITALS.HEALTH AND SAFETY, INCLUDING HOSPITALS.B&IB&I == BANKING & INSURANCE.BANKING & INSURANCE.RESRES == RESIDENTIAL BUILDINGS & APPLICATIONS.RESIDENTIAL BUILDINGS & APPLICATIONS.COMCOM == COMMERCIAL BUILDINGS & APPLICATIONS.COMMERCIAL BUILDINGS & APPLICATIONS.INDIND == INDUSTRIAL FACILITIES & APPLICATIONS.INDUSTRIAL FACILITIES & APPLICATIONS.AGRAGR == AGRICULTURE & FISHERIES.AGRICULTURE & FISHERIES.E&RE&R == EDUCATION & RESEARCH.EDUCATION & RESEARCH.

MAJOR DER MARKET SECTORSMAJOR DER MARKET SECTORS

2323

CONSCONS == CONSUMER SOLUTIONS FOCUS.CONSUMER SOLUTIONS FOCUS.ESYSESYS == ENERGY SYSTEMS FOCUS.ENERGY SYSTEMS FOCUS.CPACCPAC == CAPACITY BUILDING FOCUS.CAPACITY BUILDING FOCUS.CBILCBIL == CAPABILITY BUILDING FOCUS.CAPABILITY BUILDING FOCUS.SUSTSUST == SUSTAINABLE DEVELOPMENT FOCUS.SUSTAINABLE DEVELOPMENT FOCUS.TECHTECH == TECHNOLOGY DEVELOPMENT FOCUS.TECHNOLOGY DEVELOPMENT FOCUS.EG&DEG&D == ECONOMIC GROWTH & DEVELOPMENT FOCUS.ECONOMIC GROWTH & DEVELOPMENT FOCUS.NEWA =NEWA = NEW APPLICATIONS FOCUS.NEW APPLICATIONS FOCUS.

DER MARKET DEVELOPMENT FOCUS

2424

CONSUMER SOLUTIONS FOCUS

EXAMPLES: Solutions for single and multiple consumer tariff

structures in residential housing subdivisions. Commercial business parks energy solutions. Eco-industrial park energy and materials flow

management solutions. Build-Operate-Transfer private investment

solutions in public infrastructure at a local, city, or regional development level.

Mandatory government renewable energy targets solutions.

Green energy marketing solutions. Insurance risk management solutions.

2525

ENERGY SYSTEMS FOCUSEXAMPLES:

Integrating passive solar building design, with solar hot water,with demand side management and photovoltaics in different parts of the country.

Hydrogen storage systems for electrical power and heat. Managing stranded transmission and distribution network

assets. Hydrogen storage systems for developing alternative transport

infrastructures. Maximising the value derived from under-utilised transmission

and distribution network assets. Strategic demand side management strategies for cutting costs

and handling emergencies at a local, regional and national level. Natural and man-made disasters emergency relief infrastructures

and support systems. Cogeneration and thermal storage systems for domestic,

commercial and industrial applications. Infrastructure asset management strategies for

local governments. Renewable energy weather risk management solutions.

2626

CAPACITY BUILDING FOCUS

EXAMPLES: Wind energy IPP development scenarios. PV, solar thermal IPP development scenarios. Biomass / biofuels IPP development scenarios. Integrated distributed energy IPP development

scenarios. Alternative transport infrastructure development

scenarios. Economies of scale thresholds for capacity building and

market penetration. Mass production of modular distributed generation

units for viable investments. Increased utility resource-leveraging derived from

energy and material waste and complementary processes.

2727

CAPABILITY BUILDING FOCUSEXAMPLES:

Benchmarking energy efficiency strategies for buildings.

Benchmarking grid-interconnection strategies. Benchmarking micro-grid configuration strategies. Benchmarking systems integration strategies. Benchmarking PV, solar thermal, wind, micro-hydro,

fuel cells and biomass cogeneration systems. Benchmarking energy conversion and storage

capacity solutions. Benchmarking “sustainability” solutions. Benchmarking “reliability” solutions. Benchmarking “cost-effectiveness” solutions. Benchmarking “market integration” solutions.

2828

SUSTAINABLE DEVELOPMENT FOCUSEXAMPLES:

100% clean energy solutions. Sustainable community development strategies for

local and regional governments. Economic viability with / without mandatory

government renewable energy targets. Economic viability with / without carbon taxes, tax

subsidies, financial incentives etc. Minimising negative environmental impacts – e.g. risk

mitigation strategies. Economic viability of utilising international GHG Clean

Development Mechanisms. Asset management of sustainable energy production,

delivery and storage infrastructures.

2929

TECHNOLOGY DEVELOPMENT FOCUSRENEWABLE ENERGY EXAMPLES:

Gasification-based biomass. Direct-fired biomass. Biomass co-firing. Residential PV. Utility-scale flat-plate thin film PV. Utility-scale PV concentrators. Solar parabolic troughs, power towers, dish engines. Advanced horizontal axis wind turbines in wind farms. Electrical, thermal, mechanical, chemical energy storage technologies. Power quality and delivery control and monitoring technologies. DER / micro-grid / grid-interconnection energy metering technologies. Fuel conversion and storage technologies. Cogeneration heat recovery technologies. Power conditioner / inverter technologies. Micro-grid / grid-interconnected technologies. Micro-hydro turbine technologies: e.g. Kaplan, Pelton, Crossflow,

Turgo etc.

3030

TECHNOLOGY DEVELOPMENT FOCUSFOSSIL FUEL EXAMPLES:

Stirling engines. Diesel engines / petrol engines. Dual fuel engines. Micro-turbines and Steam turbines. Fuel cells. Hydrogen and miscellaneous engine technologies. Optimum fuel delivery and conversion systems.

3131

TECHNOLOGY DEVELOPMENT FOCUS

HYBRID RENEWABLE ENERGY / FOSSIL FUEL EXAMPLES: Solar thermal / Stirling engine hybrid systems. Wind / hydrogen / fuel cell hybrid systems. Cogeneration / thermal storage / energy efficient

building design systems. Biomass conversion / micro-turbine cogeneration

systems. Hydrogen fuel for electricity and transport systems. Viable cost-effective alternatives to standalone diesel

engines etc.

3232

EXAMPLES: Develop industrial infrastructure. Develop export growth markets. Support secondary industries. Develop new industrial products and services. Stimulate micro-enterprise. Utilise industrial waste and industrial byproducts. Develop new services to exploit deregulated utility

markets. Develop new indicators to more effectively measure the

growth and productivity of the relevant industries and markets.

Enhance / add-value to other assets such as tourism and industrial / technical know-how.

Develop mechanisms to efficiently and effectively deregulate utility markets.

ECONOMIC GROWTH & DEVELOPMENT FOCUS

3333

NEW APPLICATIONS FOCUSEXAMPLES:

Mobile modular energy storage systems. Mobile modular energy conversion and delivery

systems. Uninterruptible power supplies (UPS). Transport systems. Grid-support systems. Building-integrated materials for energy

conversion and delivery, e.g. PV roofing tiles.

3434

GG--CONCON == GRID INTERCONNECTION.GRID INTERCONNECTION.BARBAR--AA == BARRIERS TO ADOPTION.BARRIERS TO ADOPTION.R&RSR&RS == RULES AND REGULATIONS.RULES AND REGULATIONS.R&DR&D == RESEARCH & DEVELOPMENT.RESEARCH & DEVELOPMENT.R&QR&Q == RELIABILITY AND QUALITY.RELIABILITY AND QUALITY.P&CP&C == PRICING AND COSTING.PRICING AND COSTING.RISKRISK == RISK MANAGEMENT.RISK MANAGEMENT.ASETASET == ASSET MANAGEMENT.ASSET MANAGEMENT.E&TE&T == EDUCATION AND TRAINING.EDUCATION AND TRAINING.SS--APLAPL == SPECIALISED APPLICATIONS.SPECIALISED APPLICATIONS.BB--DEVDEV == BUSINESS DEVELOPMENT.BUSINESS DEVELOPMENT.ENVENV--II == ENVIRONMENTAL IMPACT.ENVIRONMENTAL IMPACT.

DER MARKET DEVELOPMENT ISSUES

3535

DER interconnection issues – standards, finance, guidelines, legal and technical issues, permitting, regulations and experience including the integration and application of DER in local energy systems by:

(1) Using current interface, control and communication technologies; and,

(2) Developing advanced operational concepts and plug-and-play interface and control technologies.

For integration of distributed energy resources into next-generation intelligent grid-connected and grid-independent local energy systems.

DER INTERCONNECTION ISSUES

3636

OVERCOMING BARRIERS TO DER ADOPTION

Overcoming impediments and barriers to the adoption of DER in APEC economies, including: (1) Better understanding of regional renewable-energy

related issues and options, (2) Less trade restrictions, more investment and better

financing, (3) More extensive renewable-energy technology and

services infrastructure, (4) Better understanding of renewable-resource

availability, (5) More in-country production of renewable-energy

systems and system components, (6) Systems development for specific applications, (7) Better understanding and more extensive

articulation of country-specific environmental impacts of the energy sector.

3737

BENCHMARKING BEST-PRACTICE DER RULES AND REGULATIONS

Benchmark national and local government mechanisms, policies, targets and frameworks,

For accelerating the development, adoption, and implementation of regulatory policies, building codes and standards, and environmental siting and permitting processes etc.

That will allow DER to compete fairly in the market without compromising consumer protection, environmental values, health, and safety considerations…

… And promote the adoption of best practices.

3838

DER TECHNOLOGY R&D DER technology R&D – e.g. development of adaptable,

modular ‘plug-and-play’ interfaces, intelligent adaptive control technologies, manufacturing growth capability, new DER generation technology developments and refinements, and accelerating DER system deployment in the field with appropriate support.

Technology development might include: Advanced industrial turbines and microturbines;

concentrating solar power and solar buildings systems; cooling, heating and power (CHP); fuel cells; hydrogen energy systems; batteries and other storage systems; geothermal systems; biomass-derived fuels and combustion systems; hybrid systems; natural gas engines; photovoltaic systems; wind energy systems; power electronics, sensors and controls; fuel flexibility, delivery mechanisms, and processing…

3939

DER POWER RELIABILITY AND QUALITY ISSUES

DER power reliability – i.e. power interruptions, back-up / storage options, switching and control for various types of consumer requiring a range of power options from highly flexible availability (e.g. topping up battery storage) to continuous uninterrupted power supplies (UPS).

DER support of weak and / or rural distribution systems, by improving voltage stability and reducing system losses.

DER power quality issues – i.e. voltage regulation and conditioning, e.g. grid ancillary services such as voltage support or stability, VARS, contingency reserves, and black start capability.

DER scheduling dynamics, fuel costs and maintenance; DER capacity-sizing and capacity-building, capability and load-following.

4040

DER PRICING MECHANISMS AND OTHER COSTING ISSUES

DER network capacity charges and DER interruptible rates;

Pricing mechanisms and methodologies for DER; Network losses impacting DER and their costs; DER net-metering issues; Least-cost expansion of networks for meeting peak loads

using DER; Financing and managing DER projects, including

subsidies, tariffs, incentives, tax levies, mandatory cost-adjusted targets and total cost accounting measures;

DER techno-economic planning and evaluation models and methodologies;

Energy conservation, load management, innovative energy services, and optimum utility and IPP structuring for DER project financing;

DER pricing and market research.

4141

DER RISK MANAGEMENT Renewable resource availability and risk management

for DER, including the optimum integration and coordination of multi-source DER systems and hybrids to compensate for the intermittency of renewables and fluctuating fuel prices.

Commercial development of multi-source and renewable/fossil-fuel hybrid DER technologies to:

(1) Soften the impacts of high first costs for renewables,

(2) Provide more robust market distribution channels for renewables,

(3) Mitigate investment risks and improve asset utilization for (for example) natural gas delivery infrastructure investments,

(4) Bring a more ‘green’ and ‘sustainable’image/reality to natural gas generation, and

(5) Provide price risk mitigation against natural gas market volatility.

4242

DER ASSET AND INFRASTRUCTURE MANAGEMENT

Infrastructure asset management and valuation issues influencing DER investments, through creation, acquisition, maintenance, operation, rehabilitation and disposal of assets to meet a required level of service.

These issues include: adopting lifecycle costing, developing cost-effective management strategies for the long-term, providing a defined level of service and monitoring performance, managing risks associated with asset failures, sustainable use of physical resources, and continuous improvement in asset management practices.

Managing standalone DER assets and micro-grid DER infrastructure development, energy storage and provision of district heat / energy etc…

4343

DER EDUCATION, TRAINING & SUPPORT DER education, training and promotions facilitating

economic development, poverty alleviation, energy security, health and environmental protection.

This includes: project management, costing and procurement,

Technical development and training, employment and industrial development,

Energy supply security and deregulation, information dissemination,

Knowledge of rules and regulations, sources of government and private-sector funding – and how to qualify,

Facilitating market awareness and interest in DER, Setting up new DER initiatives, running & managing

workshops, Technology transfer, market research, industrial news,

exchange visits, conference information and seminars, Funding and financing business development or individual

projects etc…

4444

DEVELOPING SPECIFIC DER SOLUTIONS

Developing standardized, customized DER solutions for particular applications, such as:

Buildings, industrial facilities, power parks, micro-grids,

Weak-grid support, emergency and back-up supplies, Rapid deployment options, rural micro-enterprise,

health clinics and education centers, Communication, energy storage, combined heat and

power, Agricultural development, clean power supplies,

uninterrupted power supplies, Micro/mini/small/medium/large-scale DER applications, Portable versus permanent energy supply fixtures,

utility power systems etc…

4545

COMMERCIAL DER DEVELOPMENT INITIATIVES

Establish an incubation program supporting the rapid growth and development of commercial and government DER initiatives, by:

(1) Creating new businesses, i.e. start-ups; (2) Attracting new businesses from other

communities (even APEC economies); (3) Retaining existing businesses; and, (4) Expansion of existing businesses.

The purpose of the program is to facilitate greater interaction among the private-sector, NGOs, academic institutions and government laboratories in participating economies,

Resulting in leveraging of expertise across organizations and the founding of strategic and technology partnerships among them.

4646

Assess the environmental impacts of various DER technologies and identify the best strategies for reducing emissions from greenhouse gases and other pollutants.

Identify best-practice planning and design methods and procedures for addressing local opposition to construction and installation of unsightly and / or noisy DER systems, including electricity and pipeline infrastructures etc…

Identify DER solutions that support sustainable development and greenhouse gas emissions abatement.

DER ENVIRONMENTAL IMPACT ASSESSMENT AND MITIGATION

4747

STRATEGIC OPPORTUNITIESSTRATEGIC OPPORTUNITIES

DERSD&DSD&D IS&S

RM&M

P-OF-S

C-OF-SVV--OFOF--SS

GOV

GOVGOVGOV

U&IU&I

U&I

U&I

MILMIL

MIL

MIL

AERAER

AER

AER

TELTEL

TEL

TEL

H&S

H&SH&SH&SB&IB&I

B&I

B&I

RESCOM

COMCOM

COM

RESRES

RES

INDIND

IND

IND

AGRAGR

AGR

AGR

E&RE&R

E&RE&R

CONS

CONS

CONSCONS

ESYS

ESYS

ESYSESYS

CPAC

CPAC

CPACCPAC

CBIL

CBILCBIL

CBIL

SUST

SUSTSUST

SUST

TECH

TECH

TECHTECH

EG&D

EG&D

EG&DEG&D

NEWA

NEWA

NEWANEWA

G-CON

G-CON

GG--CONCON

BAR-A

BAR-A

BARBAR--AA

R&RS

R&RS

R&RSR&RS

R&D

R&D

R&DR&D

R&Q

R&QP&C

R&QR&Q

P&C

P&CP&C

RISK

RISK

RISKRISK

ASET

ASETASET

ASET

E&T

E&TE&T

E&T

S-APL

S-APL

SS--APLAPL

B-DEV

B-DEV

BB--DEVDEV

ENV-IENV-I

ENVENV--II

DERSD&DSD&D IS&S

RM&M

P-OF-S

C-OF-SVV--OFOF--SS

GOV

GOVGOVGOV

U&IU&I

U&I

U&I

MILMIL

MIL

MIL

AERAER

AER

AER

TELTEL

TEL

TEL

H&S

H&SH&SH&SB&IB&I

B&I

B&I

RESCOM

COMCOM

COM

RESRES

RES

INDIND

IND

IND

AGRAGR

AGR

AGR

E&RE&R

E&RE&R

CONS

CONS

CONSCONS

ESYS

ESYS

ESYSESYS

CPAC

CPAC

CPACCPAC

CBIL

CBILCBIL

CBIL

SUST

SUSTSUST

SUST

TECH

TECH

TECHTECH

EG&D

EG&D

EG&DEG&D

NEWA

NEWA

NEWANEWA

G-CON

G-CON

GG--CONCON

BAR-A

BAR-A

BARBAR--AA

R&RS

R&RS

R&RSR&RS

R&D

R&D

R&DR&D

R&Q

R&QP&C

R&QR&Q

P&C

P&CP&C

RISK

RISK

RISKRISK

ASET

ASETASET

ASET

E&T

E&TE&T

E&T

S-APL

S-APL

SS--APLAPL

B-DEV

B-DEV

BB--DEVDEV

ENV-IENV-I

ENVENV--II

4848

APEC DER COLLABORATIVE (V) – SEVEN STAKEHOLDER

INTEREST GROUPS

4949

1. DER PROJECT FINANCE1. DER PROJECT FINANCE

The DER Project Finance Stakeholder Interest Group represents private investment institutions, venture capitalists and government funding sources. Some of the services provided, include for example: (a) investor-linked project finance, (b) project tenders-linked project finance, (c) project procurement-linked project finance, and (d) project finance services in general. This Group will identify and promote best-practice DER financing methods and procedures.

5050

2. DER PROJECT 2. DER PROJECT DEVELOPMENTDEVELOPMENT

The DER Project Development Stakeholder Interest Group represents all aspects of project design and development, including for example: (a) project evaluation, feasibility and profitability, (b) project management and budgeting, (c) equipment purchase, delivery and installation; (d) systems design, assembly, integration and manufacturing, (e) systems operation and maintenance, and (f) backup specialist technical and commercial support services. This Group will identify and promote best-practice DER project development methods and procedures.

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3. DER PROJECT TOOLS & 3. DER PROJECT TOOLS & TRAININGTRAINING

The DER Project Tools and Training Stakeholder Interest Group represents all the necessary tools, methodologies, templates, information sources, training and education resources etc. necessary for facilitating supply-led and demand-led technology-transfer and project development initiatives for successful DER project implementation. This Group will identify and promote best-practice DER project tools and training methods and procedures.

5252

4. DER TECHNOLOGY R&D4. DER TECHNOLOGY R&D

The DER Technology R&D Stakeholder Interest Group represents government research and development (R&D) facilities, private / corporate R&D programs or departments, consortia and other R&D facilities, and, private inventors. A catalog of R&D programs, projects, technologies, expertise, ideas and innovations can be developed to capture and characterize sustainable energy R&D amongst the stakeholder interest group participants. This Group will identify and promote best-practice DER technology R&D.

5353

5. DER APPLICATIONS5. DER APPLICATIONS The DER Applications Stakeholder Interest Group

represents the main uses for DER technologies, products and services. For example, DER applications include: combined heat and power (CHP) – cogeneration, standby power, peak shaving, demand side management (DSM), grid-supported power, grid-isolated power, grid-enhanced power, green / renewable energy markets, integrated resource planning (IRP) / energy performance contracting, competitive independent power producer (IPP) alternatives, infrastructure asset management, and disaster and recovery planning. This Group will identify and promote best-practice DER applications, methods and procedures.

5454

6. DER ISSUES / TOPICS6. DER ISSUES / TOPICS The DER Issues / Topics Stakeholder Interest Group

represents the various problems and challenges affecting the adoption of DER technologies, products and services. For example, DER issues and topics of interest include: providing grid-interconnection services and solutions, overcoming barriers to DER/DG adoption, designing and developing appropriate rules and regulations, all aspects of DER/DG research and development, DER/DG reliability and quality control, designing and developing appropriate pricing and costing methodologies, developing appropriate risk mitigation and management strategies, developing appropriate asset management strategies, all aspects of DER/DG training and education, developing specialisedDER/DG applications, planning DER/DG business development strategies, developing appropriate environmental impact minimization strategies. This Group will identify and promote best-practice resolution of problems and challenges affecting DER adoption.

5555

7. DER TECHNOLOGIES / 7. DER TECHNOLOGIES / PRODUCTS / SERVICES PRODUCTS / SERVICES

The DER Technologies / Products / Services Stakeholder Interest Group represents technologies, products and services associated with different DER systems and solutions. For example, DER systems may include: solar thermal electric / solar hot water, photovoltaics, wind turbines, micro-hydro, gensets –e.g. microturbines or diesel/petrol or Stirling engines, fuel cells – e.g. alkaline fuel cells, cogeneration (combined heat and power), biomass heating, energy storage – e.g. batteries or hydro or capacitors or hydrogen or thermal etc., demand side management (DSM), energy conservation (including passive solar design), and integrated DG/DER systems – e.g. hybrid system design. This Group will identify and promote best-practice DER technologies, products and services.

5656

MAPPING DER SYSTEMS USES

XXcc½½½½½½DISASTER & RECOVERYASSET MANAGEMENT½½½½ddaaIPP COMPETITIONIRP ENERGY PERFORMANCE½½½½½½GREEN, CLEAN ENERGYXXXXXXaaGRID-ENHANCED POWERXXcc½½½½½½aaGRID-ISOLATED POWERXXGRID-SUPPORTED POWER DEMAND SIDE MANAGEMENTcc½½½½½½PEAK SHAVINGXXXXXXXXXXbbSTANDBY ENERGYXXXXXXXXaaCOGEN (CHP)

INTE

GR

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TED

DE

EN

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GY

S

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S

DS

M

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SO

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DER SYSTEMS

DER USES

a = yes for solar electric, no for solar hot water; b = no for solar electric, yes for solar hot water;

c = no for run-of-river micro-hydro, yes for storage micro-hydro; d = district heating applications

(DE = Distributed Energy)


INTE

GR

-A

TED

DE

EN

ER

GY

S

AV

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S

DS

M

EN

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GY

S

TOR

EB

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AS

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HE

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GC

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(C

HP

)FU

EL

CE

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WIN

D

PV

SO

LAR

TH

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DER SYSTEMS

DER USES




5757

TWELVE PRIMARY DER USESTWELVE PRIMARY DER USES• COMBINED HEAT AND POWER (CHP) COMBINED HEAT AND POWER (CHP) –– COGENCOGEN

•• STANDBY ENERGYSTANDBY ENERGY

•• PEAK SHAVINGPEAK SHAVING

•• DEMAND SIDE MANAGEMENT (DSM)DEMAND SIDE MANAGEMENT (DSM)

•• GRIDGRID--SUPPORTED POWERSUPPORTED POWER

•• GRIDGRID--ISOLATED POWERISOLATED POWER

•• GRIDGRID--ENHANCED POWERENHANCED POWER

•• GREEN / RENEWABLE ENERGY MARKETSGREEN / RENEWABLE ENERGY MARKETS

•• IRP / ENERGY PERFORMANCE CONTRACTINGIRP / ENERGY PERFORMANCE CONTRACTING

•• COMPETITIVE IPP ALTERNATIVESCOMPETITIVE IPP ALTERNATIVES

•• INFRASTRUCTURE ASSET MANAGEMENTINFRASTRUCTURE ASSET MANAGEMENT

•• DISASTER AND RECOVERY PLANNINGDISASTER AND RECOVERY PLANNING

5858

• For the average power plant, two thirds of the energy content of the input fuel is converted to heat. If the power generation is located on or near the customer’s site, the excess heat can be used.

• CHP systems at industrial plants or commercial buildings can be three times more efficient than central generating plants.

• CHP, also called cogeneration, can significantly increase the efficiency of energy utilisation, reduce global emissions, and lower costs.

• CHP is best for mid to high thermal use customers: process industries, hospitals, health clubs, laundries, etc.

• The approach has been successful in large industrial markets using significant quantities of steam and may in the future be successful in residential and small commercial markets with high heating loads.

COMBINED HEAT & POWER (CHP)

5959

STANDBY ENERGY

• Some customers are extremely sensitive to outages. Certain customers have onsite, standby units to supply power until utility service is restored.

• Some standby generators are required by law to maintain public health and safety, such as hospitals, elevators, and water pumping stations.

• For other customers like telecommunications, retail, and process industries, the installation of standby units is an economic choice based on high outage costs.

• In addition, power quality for certain customers is extremely important. With new technological advances in the computer (chipmakers) and telecommunications industries, power quality can have lasting consequences.

• Even the slightest electric sag or fluctuation can adversely affect the products’ quality.

6060

PEAK SHAVING

• Both time-of-use (TOU) customers and those participating in competitive power markets could select DER options during high-cost peak periods.

• Using DER for peak-shaving could reduce the customer’s overall cost of power.

• In turn, this customer capability could reduce the need for energy service providers (ESP) to generate or contract to receive and redistribute high-cost power.

• TOU customers may find their DER systems are cheaper than peak TOU rates for part of the year.

• Greater economic benefit may be obtained for both the customer and the ESP in developing a peak-shaving strategy.

6161

DEMAND SIDE MANAGEMENT (DSM)

• DER location is critical. DER installed on the utility side of the meter does not jeopardize utility profitability.

• Unless the utility owns or installs the DER unit, DER located on the customer side of the meter does jeopardize utility profits.

• This is true for both demand-side and supply-side assets.

• From a utility standpoint, demand or supply-side assets installed on the customer side produce the same effect: reduced sales and subsequent revenue loss.

• Situating DER in high-cost areas provides distribution cost relief. The distribution cost savings can offset financial losses from DER, or even add to profits if DER is deployed strategically in the right areas.

6262

GRID-SUPPORTED POWER• The cost for power varies hour-by-hour depending on

demand and availability of generating assets.• Utilities see these variations, but customers typically do

not.• Switching large amounts of load from the grid can provide

system benefits and reduce the need for investment in other parts of the system.

• Potential DER benefits include: Voltage and frequency support to enhance reliability. Avoidance or deferral of high cost. High lead time. T&D system upgrades. Reduction of line losses. Reactive power control. Transmission capacity release. Reduced central generating station reserve requirements. Fuel use reductions when solar, renewable, or high efficiency

DER is applied in place of central station power. Emission reduction from photovoltaics, wind,

fuel cells and clean cogeneration.

6363

GRID-ISOLATED POWER

• In selected situations, grid isolated DER may be more economic than integration with the power grid.

• This would be true in isolated or remote locations.• In some cases, customers with CHP systems have

separated from the grid due to an inability to negotiate economical back-up power from their ESP.

6464

GRID-ENHANCED POWER

• Customer net-metered DER schemes or Independent Power Producers (IPPs) can provide additional sources of revenue or reduced costs in some situations.

• Marginally cost-effective / unprofitable rural network assets can be revitalised by injecting additional power from a node of spur located on the periphery, back into the heart of the network.

• Additional revenues earned from net-metered and IPP rental charges, can enhance the profitability and hence the long-term sustainable operation of rural networks etc. – providing much needed funds for costly network maintenance or urgent system upgrades.

6565

• The essence of green power marketing is to provide market-based choices for electricity consumers to purchase power from environmentally preferred sources.

• The term "green power" is used to define power generated from renewable energy sources, such as wind and solar power, geothermal, hydropower and various forms of biomass.

• Green power marketing has the potential to expand domestic markets for renewable energy technologies by fostering greater availability of renewable electric service options in retail markets.

• Although renewable energy development has traditionally been limited by cost considerations, customer choice allows consumer preferences for cleaner energy sources to be reflected in market transactions.

• Green pricing is an optional utility service that allows customers an opportunity to support a greater level of utility company investment in renewable energy technologies.

GREEN / RENEWABLE ENERGY MARKETS

6666

• IRP (Integrated Resource Planning) is the combined development of energy supplies and energy-efficiency improvements, including Demand-Side Management (DSM) options, to provide energy services at minimum costs, including environmental and social costs.

• IRP explicitly addresses the full range of options for investments to expand the provision of energy services. Some of the principal actions that are commonly considered in an IRP process are, for example: Integrating DSM programs and system loss reduction

with supply expansion. Integrating private producers and cogeneration with

utility generation. Integrating environmental impacts and risks with cost

analysis. Integrating the public ‘total resource’

perspective with the utility perspective.

IRP / ENERGY PERFORMANCE CONTRACTING

6767

• The current model of Independent Power Producers (IPPs), which has proven successful in the region, may be fully adapted to exploit renewable energy resources.

• The commercial new renewable energy technologies have been sufficiently proven that they will attract international capital finance at competitive rates.

• That such low risk finance is available is evidence that the new renewable projects have a consistent proven track record of providing dependable power, meeting contractual obligations and most importantly providing the returns that make them a sound financial investment.

• In order to offset the natural tendency of the electricity retailers to maximize sales, it is possible to set up independent energy efficiency provider companies to operate in a de-regulated market.

• The transition to a liberalized energy market can provide an excellent platform for a growth in least-cost capacity with significant contribution from new renewables.

COMPETITIVE IPP ALTERNATIVES

6868

• Asset creation / acquisition is the provision of, or improvementto, an asset where the outlay can reasonably be expected to provide benefits beyond the year of outlay. A value management approach may be adopted to produce the economic and creative solutions

• A formal approach to the management of infrastructure assets is essential in order to provide services in the most cost-effective manner, and to demonstrate this to customers, investors and other stakeholders

• Key elements of infrastructure asset management include:

Taking a life-cycle approach Developing cost-effective management strategies

for the long-term Providing a defined level of service and monitoring

performance Managing risks associated with asset failures Sustainable use of physical resources Continuous improvement in asset management

practices

INFRASTRUCTURE ASSET MANAGEMENT

6969

• Experience has shown again and again that lives can be saved, damage to property can be reduced significantly, and economic recovery can be accelerated by consistently building safer and stronger buildings, strengthening existing infrastructures, enforcing building codes, and making the proper preparations before a disaster occurs.

• More important, mitigation investments by the businesses and citizens of a community will enhance and strengthen the economic structure, stability and future of the community regardless of when a disaster may strike.

• Societies worldwide have long practiced risk management in dealing with environmental hazards.

• Risk management methods are increasingly being used in dealing with natural and technological hazards in order to reduce the effects of emergencies and disasters.

DISASTER AND RECOVERY PLANNING

7070

ESCOS: INSTRUMENTS FOR WEALTH-CREATION

DER INVESTMENT RISK DER INVESTMENT RISK MANAGEMENT: MANAGEMENT:

MECHANISMS FOR FACILTATING DER UPTAKE

7171

WHAT IS PERFORMANCE CONTRACTING?WHAT IS PERFORMANCE CONTRACTING?

Performance contracting involves the turnkey installation Performance contracting involves the turnkey installation and financing of equipment with extended payment for these and financing of equipment with extended payment for these services based on services based on ““performance.performance.””

The equipment, often installed to reduce net energy costs or The equipment, often installed to reduce net energy costs or improve productivity, will have some previously agreeimprove productivity, will have some previously agree--upon upon mechanism to document results.mechanism to document results.

The performance results, whether estimated or metered The performance results, whether estimated or metered regularly, will form the basis for calculating periodic regularly, will form the basis for calculating periodic payments to the contractor by the customer.payments to the contractor by the customer.

Utilities can apply these service, as a package or Utilities can apply these service, as a package or individually, to support their individually, to support their reactivereactive customer retention customer retention activities as well as the activities as well as the proactiveproactive sales growth opportunities.sales growth opportunities.

7272

PERFORMANCE CONTRACTING PERFORMANCE CONTRACTING INCLUDESINCLUDES……

Preliminary and detailed facility assessments.Preliminary and detailed facility assessments. Cash flow analysis.Cash flow analysis. Meter installation.Meter installation. Performance specification.Performance specification. Detailed engineering design.Detailed engineering design. Bidding.Bidding. Equipment installation.Equipment installation. Commissioning.Commissioning. Financing.Financing. Maintenance.Maintenance. Ongoing metering and billing.Ongoing metering and billing.

7373

HISTORICALLYHISTORICALLY……

Hundreds of megawatts of energy efficiency have been Hundreds of megawatts of energy efficiency have been installed as a result of the installed as a result of the ““block bidblock bid”” DSM programs of DSM programs of the 1980s and 1990s.the 1980s and 1990s.

In these relationships, the performance contractor or In these relationships, the performance contractor or ESCO (Energy Service Company) contracts with the ESCO (Energy Service Company) contracts with the utility to install a block of energy efficiency projects and utility to install a block of energy efficiency projects and agrees to be paid based on documented kWh or kW agrees to be paid based on documented kWh or kW savings.savings.

These contracts, typically lasting 5 to 10 years, are These contracts, typically lasting 5 to 10 years, are structured around meeting annual minimum construction structured around meeting annual minimum construction milestones and annual savings levels.milestones and annual savings levels.

7474

TYPICAL ESCO SERVICESTYPICAL ESCO SERVICES An investmentAn investment--grade energy audit to identify energy and grade energy audit to identify energy and

operational savings opportunities, assess risks and calculate operational savings opportunities, assess risks and calculate costcost--effectiveness of proposed measures over time;effectiveness of proposed measures over time;

Financing from its own resources or through arrangements with Financing from its own resources or through arrangements with banks or other financing sources;banks or other financing sources;

The purchase, installation and maintenance of the installed The purchase, installation and maintenance of the installed energyenergy--efficient equipment; possibly maintenance on all efficient equipment; possibly maintenance on all energyenergy--consuming equipment;consuming equipment;

New equipment training of operations and maintenance (O&M) New equipment training of operations and maintenance (O&M) personnel;personnel;

Training of O&M personnel in energyTraining of O&M personnel in energy--efficient practices;efficient practices; Monitoring of the operations and energy savings, so reduced Monitoring of the operations and energy savings, so reduced

energy consumption and operating costs persist;energy consumption and operating costs persist; Measurement and savings verification; and,Measurement and savings verification; and, A guarantee of the energy savings to be achieved.A guarantee of the energy savings to be achieved.

7575

TYPICAL CUSTOMER ADVANTAGES An immediate upgrade of facilities and reduced operating

costs – without any initial owner investment; Access to the ESCO’s energy-efficiency expertise. Through

savings guarantees, ESCOs have learned from experience just how effective specific energy-efficiency measures are under specific conditions and how soon they can pay for themselves;

Positive cash flow – most projects generate savings that exceed the guarantee;

The opportunity to use the money that would have been used for required upgrades to meet other needs;

Improved and more energy-efficient operations and maintenance;

Several normal business risks are assumed by the ESCO, including the guaranteed performance of the new equipment for the life of the contract (not just through a warranty period);

A more comfortable, productive environment; and; Services paid for with money the customer would have paid

the utilities for wasted energy.

7676

WORKING WITH AN ESCO…

PAYING FORTHE PROJECTWITH FUTURESAVINGS…

http://energyroadmaps.org/road/rm3-step6.shtml















7777

An Energy Service Company (ESCO) takes the lead in this process. The roles of owner, Energy Service Company (ESCO), and financier can be fairly complex. A key feature of ESCOs is the performance contracting process, which ties compensation to actual savings.

1. BECOME AWARE OF BENEFITS

7878

2. PRELIMINARY AUDIT

The ESCO may volunteer to perform a rough audit of the building. The results form the basis of a preliminary technical and financial proposal.

7979

3. ESCO PROPOSES PERFORMANCE CONTRACT BASED ON IPMVP

STANDARD

ESCOs distinguish themselves from traditional A&E firms by assuming performance risk. The building owner sees no out-of-pocket cost but instead "pays" for the capital improvement and ESCO fees with the savings in energy costs. The National Association of Energy Service Companies (NAESCO), together with industry, professional, governmental, and academic entities, has developed an International Performance Measurement and Verification Protocol (IPMVP) to provide consistent documentation of energy and cost savings.

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4. INVESTMENT-GRADE AUDIT An Investment-Grade Audit underpins the upgrade's

financial structure. The audit estimates energy savings, implementation, and maintenance costs and should examine the interactive impacts of various strategies. It also addresses benefits such as savings in maintenance, materials, labor, and cost of downtime, as well as the potential for increased productivity and decreased absenteeism.

The financial analysis should clearly delineate the costs and benefits of the project including first cost, simple payback period, net present value, and internal rate of return. The cost benefit analysis may be based only on direct costs and savings or may include an analysis that capitalizes the increase in net operating income to raise the property's appraised value.

It is also critical that the analysis incorporates information on the type, duration, and expense-sharing provisions of existing leases and correctly allocates benefits between the building owner and tenants.

8181

5. TENANT/LANDLORD INVESTMENT CONSIDERATIONS

Because the building owner contracts directly with the ESCO, tenants are often not included in the process. The owner should make certain that the ESCO considers key information related to lease structures and profit-sharing agreements. For gross leased space, the landlord pays the energy costs and captures all savings. With a net lease, the tenant pays all the energy costs and derives all savings from an upgrade to its space. With a fixed-base lease, the landlord pays for expenses up to a certain limit or "expense stop."

If tenant costs do not exceed the expense stop, all benefits of the upgrade go to the owner. If the tenant costs exceed the expense stop, a portion of the energy savings will benefit the tenant, which may justify a lease amendment. To address these critical issues, the ESCO should utilize analytical tools, such as EPA's QuikScope to facilitate an interactive "who pays/who benefits" examination.

This analysis allocates costs and benefits and helps to determine if any leases should be amended as part of the overall project financing.

8282

6. SET PROJECT FINANCING Two financial structures are commonly used by ESCOs:

Guaranteed Savings and Shared Savings. In a Guaranteed Savings project, the building owner makes periodic debt service payments to amortize the "implementation price" — the ESCO'scost of developing, designing, installing, and monitoring the efficiency measures. The ESCO guarantees that the project's savings will equal or exceed the payments, which are typically made to a third party financier. If the realized savings fall short of the required payments, the ESCO pays the difference. If actual savings exceed the payments, the customer typically agrees to share the savings with the ESCO.

Under the less common Shared Savings structure, the customer has no obligation to repay the Implementation Price though a debt payment, but instead commits to paying a percentage of the realized savings to the ESCO over a specified period of time. The ESCO finances the implementation price and collateralizes the loan with the anticipated savings. The customer assumes no financial obligation other than to pay the ESCO. Thus, the ESCO assumes both performance and credit risk.

8383

7. PROJECT AGREEMENT SIGNED

The basic project agreements between the owner and the ESCO are signed after completion of the investment-grade audit. The agreements may be directly with the ESCO or may include financing agreements with a third party.

8484

8. ESCO SECURES FINANCING

The type of financing arranged by the ESCO is decided by the owner and the ESCO.

8585

9. IMPLEMENT PROJECT

The ESCO will prepare construction documentation and technical specifications and solicit bids for the upgrade. Most ESCOssupervise installation of the efficiency measures and require performance warranties from their subcontractors. Because correct project installation can dramatically affect actual energy savings, ESCOs manage this phase carefully.

8686

10. STAFF TRAINING

Staff training is key to ensuring that the systems are operated and maintained in optimal form. The costs of such training are usually included in the Implementation Price.

8787

11. RE-COMMISSION BUILDING

Building Commissioning ensures that the building mechanical and energy management control systems are functioning in conformity with the design intent. Full-building commissioning, conducted in accordance with the International Performance Measurement and Verification Protocol (IPMVP), is an integral part of the ESCO contract. Along with maintenance and monitoring, it reflects the ESCO'sdrive to maximize systems performance, thus allowing maximum compensation.

8888

12. MAINTENANCE AND MONITORING

The IPMVP establishes every aspect of performance, including maintenance protocols. After the upgrades have been implemented, the reduction in energy consumption and costs will be measured, recorded, and verified according to the protocols and compared with the investment grade audit.

8989

13. PROJECT TURN-OVER TO OWNER

The length of the ESCO's financing agreement and responsibility for the project may range from seven to as many as twenty years. After the agreement is complete, ownership and responsibility for maintaining all components of the upgrade revert to the building owner.

9090

THE NEW OPPORTUNITYTHE NEW OPPORTUNITY

Utilities can repackage the beneficial parts of the ESCO Utilities can repackage the beneficial parts of the ESCO ““bundle of servicesbundle of services”” and offer these components to and offer these components to customers directly and eliminate the ESCO as a customers directly and eliminate the ESCO as a ““middleman.middleman.””

Utilities Utilities cancan offer assessment, design, financing and offer assessment, design, financing and construction services construction services themselvesthemselves to promote load growth, to promote load growth, retention, energy efficiency and ultimately, profitability.retention, energy efficiency and ultimately, profitability.

The experience gained in building just such services will The experience gained in building just such services will also prepare a utilityalso prepare a utility’’s sales and service staff members to s sales and service staff members to compete for customers in other utility service territories compete for customers in other utility service territories –– in in a deregulated, competitive market.a deregulated, competitive market.

9191

THE EMERGING OPPORTUNITY:THE EMERGING OPPORTUNITY: Market research conducted by A&C Market research conducted by A&C EnercomEnercom’’ss TRITECH, coupled with a TRITECH, coupled with a

heavy dose of common sense and experience, reveal a number of laheavy dose of common sense and experience, reveal a number of large rge customer needs that could be fulfilled by a utility performance customer needs that could be fulfilled by a utility performance contractingcontracting--type service.type service.

Customer needs include:Customer needs include: Identifying, designing and installing electric and gas technologIdentifying, designing and installing electric and gas technologies.ies. Load management services, such as standby generation and direct Load management services, such as standby generation and direct

load control.load control. Manufacturing and environmental assessments.Manufacturing and environmental assessments. EndEnd--use pricing.use pricing. Power services, such as power conditioning and power factor Power services, such as power conditioning and power factor

correction.correction. Multiple metering services.Multiple metering services. Energy brokering (in the future).Energy brokering (in the future). Financing.Financing. District heating and cooling systems.District heating and cooling systems.

These services could be provided by a team of technologists, proThese services could be provided by a team of technologists, project ject managers, financiers and developers.managers, financiers and developers.

This team can take a customer need, preThis team can take a customer need, pre--qualify the opportunity and qualify the opportunity and develop a fulldevelop a full--service package.service package.

9292

THE UTILITIESTHE UTILITIES’’ COMPETITIVE EDGE:COMPETITIVE EDGE: Utilities enjoy a unique position Utilities enjoy a unique position

in the marketplace.in the marketplace. Competitive advantages include:Competitive advantages include:

Customer name recognition.Customer name recognition. Utilities are (and some portion Utilities are (and some portion

will continue to be) regulated.will continue to be) regulated. Many utilities already own their Many utilities already own their

power generators; other players power generators; other players do not.do not.

Access to capital.Access to capital. Existing support services Existing support services

infrastructure infrastructure –– they are ready they are ready to go.to go.

Lead generation (customers Lead generation (customers already asking for services).already asking for services).

““OneOne--stop shoppingstop shopping”” –– utilities utilities are able to offer diverse but are able to offer diverse but related services from one related services from one company.company.

ESCOSERVICES

OTHERSERVICES

UTILITYSALES REPS

LARGECUSTOMERS

9393

ENERGY SAVINGS PERFORMANCE ENERGY SAVINGS PERFORMANCE CONTRACTING (ESPC):CONTRACTING (ESPC):

Bankers and Bankers and specialisedspecialised investment companies are investment companies are increasingly becoming involved in ESPC.increasingly becoming involved in ESPC.

They are offering an innovative loan program known as They are offering an innovative loan program known as FullFull--Recourse Project FinancingRecourse Project Financing..

They will review the They will review the ESCOESCO’’ss financial statements, but they financial statements, but they will also review the customerwill also review the customer’’s financial statements and the s financial statements and the project specifics prior to making a lending decision.project specifics prior to making a lending decision.

The term The term ““FullFull--RecourseRecourse”” is derived from the right which the is derived from the right which the lender will have to take back any asset of the borrower lender will have to take back any asset of the borrower should the loan not be paid on schedule.should the loan not be paid on schedule.

9494

LENDER

ESCO

CUSTOMEREnergy Services

Share of Savings Over Time

LoanLoan Payments Over Time

FULL-RECOURSE PROJECT FINANCING

9595

““NONNON--RECOURSE PROJECT FINANCINGRECOURSE PROJECT FINANCING””

As some lenders become more comfortable with energy As some lenders become more comfortable with energy projects, they may be willing to structure what is called projects, they may be willing to structure what is called ““NonNon--Recourse Project FinancingRecourse Project Financing””..

In this case, the loan is made to a In this case, the loan is made to a SingleSingle--Purpose EntityPurpose Entity(SPE) which then owns the equipment of the project and (SPE) which then owns the equipment of the project and contracts with the ESCO to perform the energy services.contracts with the ESCO to perform the energy services.

If the project fails to perform as expected, the lender only If the project fails to perform as expected, the lender only has recourse to the project equipment in the SPE.has recourse to the project equipment in the SPE.

The lender cannot reach the assets of either the customer The lender cannot reach the assets of either the customer or the ESCO.or the ESCO.

9696

NON-RECOURSE PROJECT FINANCING

LENDER CUSTOMER

LoanLoan Payments Over Time

ESCO

Funds for Building Project

Share of Savings Minus Loan Payment Over Time

Energy Services

Share of Savings Over Time

SINGLE-PURPOSE ENTITY (SPE)

9797

HELPING THE LENDERHELPING THE LENDER’’S BUSINESS: S BUSINESS: DEVELOPING A REVOLVING FUNDDEVELOPING A REVOLVING FUND

•• The basis of a revolving fund is that an The basis of a revolving fund is that an organisationorganisation (or an (or an individual in the case of the money lender) has access to a individual in the case of the money lender) has access to a reserve of money (funds) which is used to lend to one or more reserve of money (funds) which is used to lend to one or more borrowers.borrowers.

•• Over a given period of time the borrower is expected to repay Over a given period of time the borrower is expected to repay the original sum which replenishes the fund.the original sum which replenishes the fund.

•• This money can then be loaned to a new borrower and so the This money can then be loaned to a new borrower and so the cycle starts afresh.cycle starts afresh.

•• Usually an additional sum (interest) is charged to the borrower Usually an additional sum (interest) is charged to the borrower by the lender, which effectively serves as a fee for providing tby the lender, which effectively serves as a fee for providing the he service and helps safeguard the fund from factors which could service and helps safeguard the fund from factors which could deplete it (e.g. inflation, nondeplete it (e.g. inflation, non--payments and the cost for the payments and the cost for the lender to obtain external finance).lender to obtain external finance).

•• Revolving funds can serve to Revolving funds can serve to mobilisemobilise domestic savings by domestic savings by encouraging users to invest in goods or services which they encouraging users to invest in goods or services which they pay for over an extended period.pay for over an extended period.

9898

SERVICE COST COMPONENTS• Credit interest charges should at the very least be

sufficient to cover the costs of providing the service. Service costs consist of three discrete components:

1. Costs of obtaining and maintaining the resources which are on-lent to borrowers;

2. Program operating costs; and,3. Lending risk costs.

• If repayments are not geared to covered minimum costs of providing the service, then the fund will be reliant on continued external support and will, in the longer term, be unsustainable.

• The Revolving Fund should be sustainable in the long term, and able to expand.

9999

FINANCING PROGRAM COSTS (1 OF 2)Start-up costs:

(one-off charges at financing program initialisation):• Purchase of land / buildings.• Purchase of office equipment.• Purchase of vehicles.

Recurring fixed costs:(independent of number of sales / rentals):• Salaries at HQ (e.g. management, marketing and

administrative staff).• Marketing activities.• Building / equipment rentals.• Utility bills.• Office supplies.• Interest on outstanding debts.• Depreciation of fixed assets.

100100

FINANCING PROGRAM COSTS (2 OF 2)Recurring variable costs:

(dependent on number of sales / rentals):• Materials (e.g. system bulk purchases, including

import duty / sales tax where applicable).• Component replacements.• Vehicles (fuel requirements thereof plus any new

purchases).• Salaries of field staff.• Cost of delayed or non-payments (usually a

percentage of total sales).• Corporation tax payable on profits.• Inflation.

Balance of payments• The ‘balance’ of these numerous program costs is

mainly the repayments from customers.• Repayment annuities are dependent on:

1. the initial amount borrowed, 2. the loanperiod, and 3. the interest charged.

101101

SUCCESSFUL FUND CONSIDERATIONS• Harnessing low cost capital – either grants or low-

interest loans – to ‘seed’ a revolving fund mechanism will help to limit the overall program costs.

• Charging interest on loans to customers is the fund manager’s key method for balancing the program income with the program costs.

• As more customers are serviced, the cost per customer is theoretically reduced as many of the program costs are independent of the number of clients. This effectively enables the finance provider to offer a cheaper credit service.

• Care should be taken to assess, and if necessary correct at the earliest opportunity, any potential bad debtors as these can be a drain on program funds.

• Excellent staff and training are invaluable in limiting non- or late repayments.

• Contingency funds may be helpful to balance unexpected project costs.

102102

LENDING LENDING PROGRAMPROGRAM

70 70 –– 85% TOTAL COST85% TOTAL COST

FUND COSTSFUND COSTS

FUNDFUNDMANAGEMENTMANAGEMENT

15 15 –– 30% TOTAL COST30% TOTAL COST

DIRECT COSTS

Staff timeStaff time

TransportationTransportation

EquipmentEquipment

Documentation and processingDocumentation and processing

INDIRECT COSTS

Staff salaries and benefitsStaff salaries and benefits

TrainingTraining

RentRent

UtilitiesUtilities

Office suppliesOffice supplies

Printing/copyingPrinting/copying

DepreciationDepreciation

Equipment maintenance & insuranceEquipment maintenance & insurance

Marketing and promotionMarketing and promotion

Legal, accounting and auditing feesLegal, accounting and auditing fees

DIRECT COSTS

Cost of fundsCost of funds

Provision for lossesProvision for losses

103103

FUND INCOME



RENT OF OFFICE SPACE (IF OWN BUILDING)

SALE OF SERVICES (MANAGEMENT SERVICES, CONSULTING)

BUSINESS CENTRE INCOME (USE OF FAX, COPIER ETC. – INCUBATOR PROGRAM?)

GRANTS / DONATIONS

FEES

Membership

Loan application

Processing

Closing

Late payment

OTHER INTEREST EARNED

GRANTS / DONATIONS

INTEREST RATES ON LOANS

CERTAIN INCOME

POSSIBLE INCOME

104104

DESIRABLE OUTCOME


COSTS + INCOMECOSTS + INCOME


COSTS + INCOMECOSTS + INCOME

OVERALL COSTS AND INCOME MUST BALANCE IF THE SCHEME IS TO BE SUSTAINABLE

(INCOME MUST EXCEED COSTS IF THERE IS TO BE GROWTH)

105105

REVOLVING FUNDS FOR LENDERSREVOLVING FUNDS FOR LENDERS……REVOLVING LOANS FOR BORROWERS!REVOLVING LOANS FOR BORROWERS!

106106

REVOLVING LOANS

IRP SOLUTIONSFOR A SESCO

DEMAND-SIDEENERGY

PERFORMANCE

SUPPLY-SIDERENEWABLE

ENERGY

SINGLE-PURPOSE ENTITY (SPE)

BRINGING IT ALL TOGETHERBRINGING IT ALL TOGETHER……

REVOLVINGFUNDS

107107

APEC DER COLLABORATIVE (V) – THE COLLABORATIVES

PROJECT INTEGRATOR

108108

• APEC-CPI is an online environment.• For the APEC members to collaborate, trade,

facilitate and accelerate the commercialisation of projects, services and technologies etc.

• Inventors and entrepreneurs enlist expertise and tools in order to incubate and accelerate the IP value contained within their projects, services and technologies etc.

INTRODUCING APEC-CPI

109109

APECAPEC--CPI OBJECTIVECPI OBJECTIVE To build and develop an APEC Sustainable

Energy Collaboratives Projects Integrator (APEC-CPI) that will: Create an on-line marketplace to remove the

barriers and impediments to financing, developing, commercialising and implementing:

Distributed and renewable energy technology projects and,

Facilitate trade and investment in distributed and renewable energy in the APEC region.

110110

APECAPEC--CPI CORE COMPONENTSCPI CORE COMPONENTS APECAPEC--CPI will consist of five distributed and CPI will consist of five distributed and

renewable energy onrenewable energy on--line market portals for (1) line market portals for (1) Project Collaboration, (2) Project Finance, (3) Project Project Collaboration, (2) Project Finance, (3) Project Development, (4) Project Research, and (5) Tools and Development, (4) Project Research, and (5) Tools and Resources.Resources.

In each of these portals, onIn each of these portals, on--line activities will take line activities will take place, and information will be developed and stored.place, and information will be developed and stored.

This will give APECThis will give APEC--member economies the member economies the opportunity to be involved in, and have access to:opportunity to be involved in, and have access to: Distributed and renewable energy project Distributed and renewable energy project

collaboration,collaboration, Financiers and investors (and their requirements for Financiers and investors (and their requirements for

financing, application forms, etc.), financing, application forms, etc.), Project developers, Project developers, Project researchers and expertise, Project researchers and expertise, Tools (e.g., computer models), Tools (e.g., computer models), Analytic techniques (e.g., methodologies for doing Analytic techniques (e.g., methodologies for doing

project feasibility studies), and project feasibility studies), and Training and education resources to implement Training and education resources to implement

distributed and renewable energy projects. distributed and renewable energy projects.

111111

SCHEMATIC OVERVIEW OF APECSCHEMATIC OVERVIEW OF APEC--CPICPI BUSINESS DEVELOPMENT SUPPORT

(4) PROJECT

RESEARCH (5)

PROJECT TOOLS & TRAINING

(2) PROJECT FINANCE

(3) PROJECT

DEVELOPMENT

S = SUPPLY-LED PROJECT COLLABORATION

D = DEMAND-LED PROJECT COLLABORATION

S

D

S

D

TECHNOLOGY TRANSFER

FACILITATION PROJECT

MANAGEMENT FACILITATION

PRODUCT DELIVERY

FACILITATION SPECIALIST TECHNICAL SUPPORT

(1) PROJECT COLLABORATION

APPLY-SPECIFIC

TOPIC-SPECIFIC TECH-SPECIFIC

S

D

S

D

112112

EXPLANATION OF APECEXPLANATION OF APEC--CPI PORTALS & CPI PORTALS & SERVICESSERVICES

Five on-line portals:1. Project Collaboration Portal.2. Project Finance Portal.3. Project Development Portal.4. Project Research Portal.5. Project Tools & Resources Portal.

Five inter-linked services:I. Technology Transfer Services.II. Project Management Services.III. Product Delivery Services.IV. Specialist Technical Support Services.V. General Business Development Services.

113113

1. PROJECT COLLABORTION PORTAL

This portal will host supply-led and demand-led collaborative initiatives submitted by any APEC-CPI stakeholder for support and development. Projects may focus on: technology-specific, topic-specific or application-specific collaboration.

114114

EXAMPLES OF DER TECHNOLOGYEXAMPLES OF DER TECHNOLOGY--SPECIFIC COLLABORATIONSPECIFIC COLLABORATION

SOLAR THERMAL ELECTRIC / HOT WATER. PHOTOVOLTAICS. WIND TURBINES. MICRO-HYDRO. GENSETS – E.G. MICROTURBINES, DIESEL/PETROL &

STIRLING. FUEL CELLS – E.G. ALKALINE FUEL CELLS. COGEN (CHP). BIOMASS HEATING. ENERGY STORAGE – E.G. BATTERIES, HYDRO PUMPED

STORAGE, CAPACITORS, H2, THERMAL STORAGE.

DEMAND SIDE MANAGEMENT (DSM). ENERGY CONSERVATION (INC. PASSIVE SOLAR). INTEGRATED DG/DER SYSTEMS – E.G. HYBRID.

115115

EXAMPLES OF DER TOPICEXAMPLES OF DER TOPIC--SPECIFIC SPECIFIC COLLABORATIONCOLLABORATION

G-CON = GRID INTERCONNECTION.BAR-A = BARRIERS TO ADOPTION.R&RS = RULES AND REGULATIONS.R&D = RESEARCH AND DEVELOPMENT.R&Q = RELIABILITY AND QUALITY.P&C = PRICING AND COSTING.RISK = RISK MANAGEMENT.ASET = ASSET MANAGEMENT.E&T = EDUCATION AND TRAINING.S-APL = SPECIALISED APPLICATIONS.B-DEV = BUSINESS DEVELOPMENT.ENV-I = ENVIRONMENTAL IMPACT.

116116

APPLICATIONAPPLICATION--SPECIFICSPECIFIC EXAMPLESEXAMPLES……


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117117

2. PROJECT FINANCE PORTAL

This portal will host private investment institutions, commercial financiers and banks, venture capitalists and government funding sources. Some of the services to be provided, include for example: (a) investor-linked project finance, (b) project tenders-linked project finance, (c) project procurement-linked project finance, and (d) project finance services in general.

118118

3. PROJECT DEVELOPMENT PORTAL

This portal will host all aspects of project design and development, including for example: (a) project evaluation, feasibility and profitability, (b) project management and budgeting, (c) equipment purchase, delivery and installation; (d) systems design, assembly, integration and manufacturing, (e) systems operation and maintenance, and (f) backup specialist technical and commercial support services.

119119

4. PROJECT RESEARCH PORTAL

This portal will host government research and development (R&D) facilities, private / corporate R&D programs or departments, consortia and other R&D facilities, and, private inventors. A catalog of R&D programs, projects, technologies, expertise, ideas and innovations will be developed to capture and characterize sustainable energy R&D.

120120

5. PROJECT TOOLS & RESOURCES PORTAL

This portal will host all the necessary tools, methodologies, templates, information sources, training and education resources etc. necessary for facilitating supply-led and demand-led technology-transfer and project development initiatives amongst the EGNRET collaboratives.

121121

EXAMPLES OF THE FIVE INTEREXAMPLES OF THE FIVE INTER--LINKED LINKED SERVICESSERVICES

I. Technology Transfer Services – e.g. developing a new electrical energy storage technology licensing agreement.

II. Project Development / Management Services – e.g. developing a wind farm feasibility study.

III. Product Delivery Services – e.g. importing, delivering and assembling a photovoltaic system.

IV. Specialist Technical Support Services – e.g. evaluating the geo-technical properties of a prospective micro-hydro site

V. General Business Development Services – e.g. preparing legally-binding contractual arrangements for a fuel cell business start-up.

122122

SERVICES DEFINED (EXAMPLES)SERVICES DEFINED (EXAMPLES)• Technology Transfer:

• Consultancy• Contract Research• Technology Licensing• Transfer of Personnel• Group Initiatives• Sales Promotion• Interdisciplinary Contacts• Training Programs• Direct Marketing• Formation of Spin-Outs

• Project Development:• Design & Development• Evaluation, Feasibility & Profitability• Project Management• Finance• Procurement• Consortia / Partnership Development• Sales & Marketing• Logistics, Distribution & Support

• Product Delivery:• Product / System / Component

Integration, Design & Development• Evaluation, benchmarking,

Accreditation, Standards• Supply-Demand Chain Management• Finance• Procurement• Consortia / Partnership Development• Sales & Marketing• Logistics, Distribution & Support

• Specialist Technical Support:• Design, develop & integrate services• Evaluation, Benchmarking,

Accreditation, Standards• Value-Chain Management• Finance• Procurement• Consortia / Partnership Development• Sales & Marketing• Logistics, Distribution & Support

123123

TECHNOLOGY TRANSFER

FACILITATION

PROJECT MANAGEMENT FACILITATION

PRODUCT DELIVERY

FACILITATION

SPECIALIST TECHNICAL SUPPORT

COLLABORATIONZONE

TOPIC-SPECIFICTECH-SPECIFIC

APPLY-SPECIFIC

TECHNOLOGY TRANSFER

FACILITATION


TECHNOLOGY TRANSFER

FACILITATION


PRODUCT DELIVERY

FACILITATION


PRODUCT DELIVERY

FACILITATION


COLLABORATIONZONE


APPLY-SPECIFIC

COLLABORATIONZONE


APPLY-SPECIFIC

SERVICES DEFINED (CONT.)SERVICES DEFINED (CONT.)

• Business Development:• Services Integration, Design &

Development• Evaluation, benchmarking,

Accreditation, Standards• Value-Chain Management• Finance• Procurement• Consortia / Partnership

Development• Sales & Marketing• Logistics, Distribution & Support

124124

MEASURING APECMEASURING APEC--CPI IMPACTCPI IMPACT

The volume of business generated and sustained.The time required to process and commercialize technologies.

The number of new technologies commercialized.The value-added through project-processed technology innovation.The removal of financial and other barriers to trade and investment.

The number of projects implemented…

(To name but a few examples)

125125

APEC-CPI Project Development

Prepared for APEC EGNRET-20November 4-6, 2002, Seoul, Korea(By Dr. Iain Sanders, New Zealand)

126126

APEC-CPI Facilitates Sustainable Energy Investment

• Sustainable Energy Investment is driven by – the Delivery of Renewable Energy Solutions supported by:– Distributed Generation: e.g. micro-turbines, diesel, fuel cells– Energy Storage: e.g. batteries, hot water, flywheels– Electricity T&D: e.g. grid-support, net-metering– Energy Efficiency: e.g. motors, drives, pumps– Energy Conservation: e.g. passive solar building design– Demand Response measures: e.g. ripple control, peak

shaving– Power Electronics with associated Ancillary Services: e.g.

power conditioning, powerflowswitching & control

127127

APEC-CPI will deliver three key services for three key applications

• Three key services:– Stakeholder Collaboration– Stakeholder Business Development– Stakeholder Project Management

• Three key applications:– R&D (of Technologies, Products & Services)– Utilization (of Technologies, Products & Services)– Support (of Technologies, Products & Services)

128128

Examples of Key Services• Stakeholder

Collaboration– Networking– Mutual referrals– Cross-promoting– Independent

alliances– Joint ventures– Satellite

subcontracting– Consortiums– Cross-team

collaboration– Partnerships– Virtual corporations

• Business Development

– Gestation stage– Start-up stage– Pilot stage– Roll-out stage– Growth stage– Expansion stage– Maturity stage

• Project Management

– Justification, approval & review

– Planning– Tracking– Reporting– Change control– Post-implement-

ation review– Benefits realization

plan– System support

• Stakeholder Collaboration

– Networking– Mutual referrals– Cross-promoting– Independent

alliances– Joint ventures– Satellite

subcontracting– Consortiums– Cross-team

collaboration– Partnerships– Virtual corporations

• Business Development

– Gestation stage– Start-up stage– Pilot stage– Roll-out stage– Growth stage– Expansion stage– Maturity stage

• Project Management

– Justification, approval & review

– Planning– Tracking– Reporting– Change control– Post-implement-

ation review– Benefits realization

plan– System support

129129

Examples of Key Applications

Value-added Financial Services & Product Chain Management

Business Plans for Sustainable Energy Project Developers

Decision Gate / Process Stage Innovation Funnel Management

Project Management

Strategies for Delivering Effective value-added Training

Benchmarking Customer-based Best Practice Business Solution

Managing Intellectual Property in Universities

Business Development

Support the Global Energy Charter for Sustainable Development

Government Tax Incentives for Energy Project Development

Removing Barriers to Technology Transfer & Adoption

Stakeholder Collaboration

SupportUtilizationR&DApplication

Service

Value-added Financial Services & Product Chain Management

Business Plans for Sustainable Energy Project Developers

Decision Gate / Process Stage Innovation Funnel Management

Project Management

Strategies for Delivering Effective value-added Training

Benchmarking Customer-based Best Practice Business Solution

Managing Intellectual Property in Universities

Business Development

Support the Global Energy Charter for Sustainable Development

Government Tax Incentives for Energy Project Development

Removing Barriers to Technology Transfer & Adoption

Stakeholder Collaboration

SupportUtilizationR&DApplication

Service

130130

Participating Stakeholders• APEC• National Governments• Local Governments• Investment / banking organisations• Sustainable energy technology providers• Sustainable energy product providers• Sustainable energy service providers• Electricity T&D companies• Electricity generation & retail companies• Oil & gas & other energy utilities• Multinationals• Small & Medium sized Enterprises (SMEs)

including farms• Domestic / residential communities & individuals• Legal, financial & technical business enablers• Educational institutions

131131

Drivers Motivating Stakeholders Collaboration

• Add value• Reduce costs• Improve communication• Develop trust• Resolve conflicts• Remove hidden agendas

• Provide Leadership• Empower people• Gain commitment• Develop ownership• Break down barriers• Remove fear

132132

Potential Business Models for Facilitating Collaboration

• Brokerage Model – i.e. bring buyers & sellers together & facilitate transactions

• Advertising Model – i.e. an extension of the traditional media broadcast model

• Infomediary Model – i.e. assisting buyers and / or sellers understand a given market

• Merchant Model – i.e. wholesalers & retailers of goods & services

• Manufacturer Model – i.e. allows a product / service provider to reach buyers directly, compressing the distribution channel

• Affiliate Model – i.e. provides purchase opportunities wherever people may be surfing

• Community Model – i.e. users have a high investment in both time & commitment

• Subscription Model – i.e. users are charged a periodic fee to subscribe to a service

• Utility Model – i.e. based on metered usage, or a “pay as you go” approach

133133

APEC-CPI Provides Collaborative Sustainable Energy Investment

9. 8. 7. 6. 5. 4. 3. 2. 2. 3. 4. 5. 6. 7. 8. 9.1.STAKEHOLDER INITIATIONCOLLABORATION

FACILITATION

BUSINESS

DEVELOPMENT

PROJECT

MANAGEMENT

BUY-IN

FOR RESOURCING

BUSINESS

AND

MOBILISING

MULTIPLY

PRODUCT,

SATELLITESSATELLITES

134134

APEC-CPI Portal Framework for Sustainable Energy Investment

APEC-CPISYSTEMPORTAL

APPLICATIONS

COLLAB-ORATION

INTEGRATION BUSINESSINTELLIGENCE

KNOWLEDGEMANAGEMENT

SEARCHPUBLISHING

PERSONALI-ZATION

COLLAB-ORATION

INTEGRATION BUSINESSINTELLIGENCE

KNOWLEDGEMANAGEMENT

SEARCHPUBLISHING

PERSONALI-ZATION

INTERNALWEB SITES

EXTERNALWEB SITES

ORGANISATIONALKNOWLEDGE

BASES

EXTERNALSERVICES

COLLABORATIONPRODUCTS DOCUMENTS

EXTERNALCONTENT

NEWS ANDNEWS FEEDS

DATAWAREHOUSES

EXTERNAL

INFORMATION

RESOURCES

INTERNAL

INFORMATION

RESOURCES

135135

Information APEC-CPI Requires to Build Stakeholder Interest

• What aspects of sustainable energy are stakeholders involved with?

• How does sustainable energy impact stakeholder business / operation?

• What is preventing sustainable energy having a bigger impact on stakeholder business / operation?

A Survey has been produced to collect this information

136136

WINDHYDRO

SOLARBIOMASS

DER

WINDHYDRO

SOLARBIOMASS

DER THANK

YOU

FOR

LISTENING