get together and networking session between newly established Clean Technology and Environment Division at Malaysia Investment Development Authority(MIDA) and green related NGOs

1. Networking Session
INVESTMENTS POTENTIALS IN
ENERGY EFFICIENCY INDUSTRY
& THE WAY FORWARD FOR
SUSTAINABLE IMPLEMENTATION
IN MALAYSIA
By
MAESCO
21st February 2013
MIDA Sentral, Kuala Lumpur

2. Outline
Introduction to ESCO & energy services
EE Potentials in Malaysia
Key barriers for EE implementation &
proposed counter measures
The way forward

3. What is ESCO?
 An Energy Service Company(ESCO)
 Develop and implement turn key, comprehensive energy
efficiency projects.
 ESCOs offer performance-based contracts (i.e., contracts that tie
the compensation of the ESCO to the energy savings generated
by the project) as a significant part of their business
 To gain accreditation, ESCOs must demonstrate the technical
and managerial competence to design and implement
projects involving multiple technologies such as:
 Lighting
 Motors & Drives
 Heating & steam systems
 HVAC Systems
 Control Systems
 Building Envelope Improvements
…at building/industrial facilities

4. Scope of Energy Services
Full range of services required for a
comprehensive EE project implementation:
Energy Audit
Consultancy
Design of energy efficient systems
Implementation Project Financing
Implementation and Project Management
Construction management
Energy performance monitoring and verification
performance
Testing and commissioning
Operation and maintenance

5. Background of MAESCO
 The Malaysian Industrial Energy
Efficiency Improvement Project (MIEEIP)
components includes ESCO Development
Programs and ESCO participation in EE
Technology Demonstration Projects
 Industrial was chosen as the sector in which
the greatest commercial and environmental
impact could be achieved
 MAESCO was registered with the
Malaysian Registrar of Society in
September 2000
 Incorporated in conjunction with the
launching of the MIEEIP by a Government’s
implementation agency, PTM (Energy
Centre of Malaysia) which is now known as
Malaysia Green Technology
Corporation(Green Tech Malaysia)

6. MAESCO’s Constitutional Objectives
1. To develop recognized ESCO Business models in
collaboration with Government and Private Sector
2. To actively promote the activity of energy cost
reduction and efficiency standards in the industrial,
commercial and public sector
3. To oversee the well being of its members
4. To facilitate and do all things necessary towards
developing successful energy related projects
5. To introduce related products and services for the
industry
6. To foster healthy co-existence amongst members
through ethical professional practices
7. Ensure quality & reliable of services by members

7. Key Activities & Involvement
In EE Industry Development
 Energy Management Training
Courses for Energy Managers
 Preparatory Workshop for
Registered Electrical Energy
Manager (REEM) Application
 Rental of Equipment for energy
audit and M&V
 Awareness and promotional
programs
 Visits And Dialogues With
Government and Key
Stakeholders
 Industrial Energy Efficiency For
Malaysian Manufacturing Sector
(IEEMMS) :UNIDO-SMECORP

8. Membership
60 Registered Members
Categories Consist of
 Energy Performance
 Energy Performance Contractors (EPC)
Contracting (EPC)  Energy Auditors
 Energy Management
 Non Energy Trainers
Performance  Energy Efficient Equipment
Contracting (EPC) Manufacturers/Suppliers
 Energy Consultants
 Energy Management
 Affiliate Systems/Technologies
 Associate  Total Facilities Management
 International

9. EPC: Shared-Savings Model
No upfront costs for clients
Returns to ESCO from actual cost
savings achieved at agreed % & EE
conditions
PROJECT
Energy saving share
Energy saving share (10%-30%)
(90%-70%)
Financing
Loan
FACILITIES
BANK ESCO OWNER
Project Design&
Implementation
Repayment

10. Possible areas for strategic collaborations/
co-operations/business ventures with MAESCO
members
 EE Training& awareness programs in energy management system ,
system optimizations & technology applications for management &
technical groups in government & private organizations
 EE Competency/certification programs development and implementation
 Consultancy/advisory in Sustainable Energy Management System
Development & Implementation based on ISO50001:2011 standard
 Sustainable energy policy studies & strategic implementation plan
preparation
 EE projects implementation with suitable financing mechanisms under
EPC and PFI models.

11. EE Potentials In Malaysia

12. Investment & Saving Potentials
Source: reexasia.com(Feb 2011)

13. Pay Back Period for EE Investments
Source: reexasia.com(Feb 2011)

14. Overall Rankings in Asean EE Market
14
Source: reexasia.com(Feb 2011)

15. Key Barriers for EE Industry
•No clear coordination & clear long-term and medium term objective
No Overall National •No systematic and holistic approach in EE implementation at national level
Plan, Legal & •No overall laws and limited elements in the existing laws - the electricity
sector only
Regulatory Framework •No legal framework to place the responsibility for EE within the government
• No clear authority in charge for EE in the nation’s energy planning-
No Champion To Drive more based on demand forecast and supply planning, without taking into
account EE
EE Implementation • Critical to have a focused agency to drive EE efforts in the country - to
enforce the laws and regulations relating to EE & oversee all issues and
activities related to EE
Low energy prices • Our energy prices are very low compared to
developed countries - prevents efforts on EE
Lack of Sustainable • Currently, the Government does not provide any
Funding dedicated funding to kick-off significant &
sustainable EE initiatives
Lack of consistency • Most of the efforts on promoting EE have been on
projects basis with limited time frame and
EE Implementation commitment

16. Proposed Counter Measures To Overcome
Barriers
• Introduce National Energy Efficiency Master Plan(NEEMP) with national EE
policy and targets for each energy using sectors
• Develop & enforce Regulatory tools for EE with dedicated EE law
• Establish a Centralized Agency as one-stop centre for EE Implementation
•
• Create Sustainable Funding & Financial Mechanism for EE Implementation
at all sectors
• Capacity Building & Training to
• Enhance Research & Development for EE applications & technologies
• EE Education & Awareness

17. Current EE development that affecting EE
Industry
NO KEY INITIATIVES STATUS
Proposed key criteria to ensure qualified ESCOs for EPC
1 Registration of ESCO projects at government project ignored by the agency in-charge
and lack of competency in EPC implementation in the agency
National Energy Efficiency Unknown after almost 4 years spent to develop with all
2 Master Plan stakeholders
Stopped by the ministry in Dec 2012 for unclear reasons
Drafting of EE Act (Thermal
3 & Electrical)
despite participation and supports from all stakeholders from
March 2011 in drafting working groups.
Entry Point Project 9:
Government Lead by No champion for the implementation due to handing over of
4 Example, Oil, Gas&Energy the functions to implementation to a different agency
Sector, ETP
Budget only approved for one year from 3 year as planned.
Entry Point Project 9: SAVE Achieved targets to increase the market share for 5-Star
5 Rebate Program for EE rated products
products Targeted t be sustained with the proposed introduction of
mandatory MEPS & EE label by 2014 in ETP Document
Mandatory Standard & Delayed for unknown reasons
6 Labeling for EE products Will result in the market to be flooded with inefficient products

18. The Way Forward…

19. The Strategic Approach
Establishment of Sustainable Framework - Introduction of
National EE Policy and Implementation of key initiatives
under the EE master plan

20. Overall Sustainable Framework
Introduce National EE With national and sub sectors
Master Plan energy saving targets
– National EE&C Policy
Electricity savings
– EE&C Targets
(TWh)
• National level
• Industrial sector Power Plant Capacity savings
• Commercial Building and (GW)
residential sectors
Electricity bills savings
• Equipment & appliances
(RM Mill)
GHG avoidance
(ktCO2-eq)
Electricity consumption reduction
(%)

21. Proposed Key Supporting Measures To
Implement National EE Master Plan
Technical Assistance Incentives & Financial
& Advisory Assistance
• SMEs & SMIs - energy audit • Fiscal incentives
and guidance • Low interest loans with
• Measurement and government guarantee
verification of performance • Grant based on annual
• Technical assessment from government budget for
other ministries/agencies on specified initiatives and
EE projects for financing awareness programs
/further approval
• Registration and
deployment of experts

22. Expected Impacts Sustainable EE
Implementation
IMPROVED
•Energy Efficiency
•Competitiveness/
profits
•Environmental
IMPLEMENTATION quality
& PERFORMANCE,
POLICY
SUPPORT MEASUREMENT &
INTRODUCTION REVIEW
MEASURES
REDUCED
•Energy
consumption &
costs
•CO2 emissions
CREATED
•Business & job opportunities
•More experts/workers from EE industry
•New source of economic growth & Direct Domestic Investments

23. THANK YOU FOR YOUR ATTENTION!
zaini@cnsgroup.com.my
019 2152700
www.maesco.org.my
www.goingee.blogspot.com