Development, Creating, and Enabling Environment for ESCO: Thailand s Experiences

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1 Development, Creating, and Enabling Environment for ESCO: Thailand s Experiences 1

2 GDP: $ billion Per capita GDP: $ 4,500 Key Industries: tourism, agricultural products, automotive, electronics, textile s 2

3 Some ESCO Basics 3

4 Current Situation The economic recession have direct impact to organizations/companies. Reduce operation cost with any energy-saving projects since the energy saving measures investment tend to be low-risk and have short-term payback. However. It takes a long time to decide on energy-saving project because CEO are not so convinced.!!! a matter of Trust 4

5 The beginning of ESCO The starting of ESCO business can be attributed to the energy crisis of the late 1970s in Texas USA. ESCO : Energy Service Company (Energy Saving Specialist) Today ESCO across regions of the world including North America, South America, Europe, Asia ESCO is important role in promoting energy efficiency. 5

6 Energy Consultant Company & ESCO Monitoring and Analyze Energy Consumption (Energy Auditor) Task Energy Consultant ESCO Engineering Design Supply and Installation of equipment Source of funds Guarantee the savings 6

7 ESCO Roles & Responsibilities: Tracking and monitoring of energy consumption, Energy conservation plan and engineering design Present the project Convince the boss! Supply installation and maintenance equipment Project management Audit and evaluation of saving Guarantee the savings Train and provide services on energy conservation techniques 7

8 Method of Energy project by choosing ESCO To ESCO directly Initiate Contact for the project Analyze the data Preliminary survey survey of energy consumption Analysis of the project Proposal Present the project By mutual agreement, ESCO will identify and evaluate energy-saving potential Energy Performance Contract : EPC Project Operation Project Operating Result tracking 8

9 Energy Performance Contract :EPC 1 Guarantee Saving Contract Company make most of the investment. ESCO will guarantee that anticipated savings If savings don't materialize, ESCO will pay the difference 2 Share Saving Contract ESCO is the investor Share benefits with the company 9

10 Thailand s ESCO Industry 10

11 Common Types of ESCO in Thailand Equipment of Technology - Large Companies with Technology and equipment Equipment Agent & Supplier - Supply and installation energy equipment, Maintenance services Energy Consultant - Consultant with the knowledge 11

12 Size doesn t matter 36 ESCO in Thaialnd: Registered capital ESCO size S Registered capital 1-5 millions baht : 17 Companies ESCO site m Registered capital 5-20 millions baht : 7 Companies ESCO site L Registered capital millions baht : 5 Companies ESCO site XL Registered capital 50 millions baht : 7 Companies 12

13 Source of Fund for ESCO : Thai Gov. plays a big role 13

14 ESCO Fund: Jointly invest with private operators in EE/RE projects through various channels such as: ESCO Venture Capital - Not more that 30% of registered capital, Max 50 mill. Baht - Investment period 5-7 years - Exit by selling stocks back to shareholders Equity Investment % equity holding, Max. 50 mill. Baht/project - Investment period 5-7 years - Exit by selling stocks back to shareholders Equipment Leasing - 100% of total cost with max. 10 mill. Baht - interest rate 4-6 % (negotiable) - Max. leasing period 5 years - Apply for ESCO with share saving contract 14

15 EE Revolving Fund: As a source fund for energy conservation and renewable energy With low interest rates (<4%) through financial Institutions 15

16 ESCO Business development in Thailand Thailand ESCO Fair Annual conference and exhibition on energy management and energy conservation. ESCO Bank Networking signed MOU with 5 Banks for supporting ESCO business 16

17 In 2007, ESCO Business began History of ESCO in Thailand Today, estimated about 60 active ESCO-companies, But only 36 are registered with ESCO Information Center ( Thai 26 Companies, and 10 foreign companies (USA, UK, Japan, Fr, Aus, Korea) ESCO Information Center was set up with support from DEDE By 2011 ESCO has invested more than 2,300 million Baht, saving ktoe in 2011 Guaranteed-saving contracts are more popular 17

18 ESCO in Thailand from signed 302 contracts Worth of investment 4, million Bath Energy savings 51.2 ktoe Investment 50 Saving (ktoe) 49,2 6% % ,01 18

19 Successful cases Thai Yamaha Motor Co,Ltd. Type of Business The technology used Type of EPC Worth the investment Saving result and payback period average electrical savings Cost savings Payback Period Factory Air Compressor demand management system (ADMS) Guarantee Saving 4.46 Millions Baht 1.32 GWh/year 4.01 Millions Baht/year 1.16 year 19

20 Successful cases Royal Princess Hotel : Chiang Mai Type of Business The technology used Type of EPC Worth the investment Saving result and payback period average electrical savings Cost savings Payback Period Hotel Chiller Replacement Guarantee Saving 4.07 Millions Baht 0.9 GWh/year 2.58 Millions Baht/year 1.58 year 20

21 Key Success Factors: Experiences Equipment & technology support Source of funds 21

22 Future Development: The Thai ESCO Club Central body for knowledge-sharing on energy conservation & energy saving technology & finances Information center and activities to promote ESCO business in Thailand 22

23 Contact Thai ESCO ESCO Information Center Website 23

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