The presentation provided an overview of energy efficiency potentials and options for cost savings through sustainable energy management for Malaysian hotel facilities. It discussed energy service companies (ESCOs) and energy performance contracting models, where an ESCO implements energy efficiency projects at no upfront cost to the building owner by guaranteeing energy savings. Potential savings of 40-60% were cited from lighting system upgrades. Next steps proposed confirming interests from Malaysian Association of Hotels members to pursue projects with MAESCO and support from the Malaysian government.

1. The presentation to
members of Malaysian Association of Hotels Melaka
By
ZAINI ABDUL WAHAB
Committee Member (Strategic Initiatives)
MAESCO
Hatten Hotel, Melaka
20th August 2014

2.  EE Potentials in Malaysia & Building Facilities
 Introduction to energy services & MAESCO
 Options for energy cost savings through
sustainable energy management
implementation at building facilities
 Overview of EPC Projects Implementation
 What’s next?

4. Building owners can see reduced operating costs, increased building
values, greater return on investment, and higher occupancy from new and
retrofitted green buildings
UNEP - GEO-5 for Business
Impacts of a Changing Environment on the Corporate Sector
Companies may receive reputational benefits from achieving green building
certifications . A 2011 survey of U.S. adults- 64% would prefer to patronize a
business whose facility is certified as green, while 48% indicated that green
certification of a facility improves their image of a company.
University of Missouri researchers - consumers would be more
willing to pay between 15 & 20% more for retail products from
companies that support sustainable practices
UN Global Compact of 766 CEOs worldwide-93 % of
CEOs said sustainability issues will be a critical factor
to the future success of their business
2012 Ernst & Young Survey – 66% of executives saw an increased amount
of sustainability-related inquiries from investors in the past year. 70%
inquiries focused on energy management and greenhouse gas emissions
& more than ½ questions about sustainability reporting
Survey on 250 CFOs in 14 countries by Deloitte - CFOs are increasingly aware the
benefits sustainability can bring to the business. 2/3 respondents said they are
involved in driving sustainability strategies .More than 50 % said their
involvement in pushing sustainable practices has increased in the past year.
IS ENERGY EFFICIENCY AN
OPTION OR A MUST DO NOW?

5. Clearly, the industrial and
commercial sector s offers
much higher savings potential
Source: www.reexasia.com

6. Source: reexasia.com(Feb 2011)

7. Source: ESCO
TREASURY BUILDING, MINISTRY OF FINANCE OF MALAYSIA
17% reduction of electricity bill in 2011
based on 2010 baseline consumption – SEDA Malaysia

8. SAVING POTENTIALS
 Pumps (25% - 35%)
 Chiller (20% - 25%)
 AHU/FCU (25% - 35%)
 Cooling Tower(15% - 20%
 Lighting System (40-60%)

9.  EEPs viewed as
“Infrastructure
Investments” – LOW
PRIORITY VS. CORE
BUSINESS – don’t fix if not
broken
 EEPs funding through
loans/debts WILL IMPAIR
“CREDIT CAPACITY” from
core business – NO WAY
for SMEs/SMIs
 BENEFITS ARE TOO SMALL
TO APPEAR ON CEO’S
RADAR SCREEN & to
justify “perceived’
operating
complexities/risks
 NOT CONVINCED ON
ACTUAL COST SAVINGS
ACHIEVED nor aware of
proven Measurement &
Verification(M&V)
methods to ensure
sustainability of savings.

10. Profitability
Sustainability
Competiveness
Competency
Working environment
quality
Corporate Image
Operating Costs -
Energy
Risks – price fluctuation
& supply shortages
Pollution
Carbon emission
Depletion of fossil fuel
INCREASE USERS’ COMFORT
SALES & ENERGY COST SAVINGS
BOOST IMAGE & VALUES

12.  An Energy Service Company(ESCO)
 Develop and implement turnkey, 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 ensure credentials, ESCOs must demonstrate the technical &
managerial competencies to design & implement projects
involving multiple technologies :
 Lighting
 Motors & Drives
 Heating & steam systems
 HVAC Systems
 Control Systems
 Maximum Demand Controls
 Building Envelope Improvements
…at building/industrial facilities

13.  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)

14.  Energy Management Training
Courses for Energy Managers
 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

15.  Full range of services required for
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 & commissioning
 Operation & maintenance
 M&V

16.  Energy Performance Contracting
 Energy Auditors
 Energy Management Consultants
 Energy Management/Energy Efficiency
Expert Trainers
 Energy Efficient Equipment
Manufacturers/Suppliers
 Energy Management
Services/Technologies Providers
 Total Facilities Management Services
Providers
60 Registered Members

17.  Investments for energy saving projects implementation using
EPC model
 Energy auditing services to identify energy saving measures
 Capacity building programs – training in energy management
system , system optimizations for management & technical
groups
 Consultancy/advisory services in Sustainable Energy
Management System Development & Implementation based on
ISO50001:2011 standard
 Energy performance measurement & verification services
 Awareness & promotional programs

19. ENERGY
EFFICIENCY
IMPROVEMENT
PROGRAM
Sustainable Energy
Management
Awareness Program
Capacity Building –
Training & Development
HRDF refundable
programs
Measurement &
Verification (M&V) Internal/3rd Parties
Adoption of Energy
Management System
(ISO50001)
Internal/Consultant
Energy Saving Project
Energy Auditing
Internal Budget
EPC Model
Full/matching grant –
with commitment to
implement
Energy Saving Projects
Implementation
EPC model
Standard
Procurement
SUPPORT
MEASURES
by the
government
Options To Save Energy Costs For Businesses

20. • Management
Directives
• Implementation of
EnMS - to ensure
sustainability of
energy cost
reduction initiatives
MEASURES
With LOW/NO
COST
Minimal Cost
Savings
•Priorities of budget
- core
business/operations
•Investment risks
•Limited human
resources & expertise
MEASURES
WITH HIGH
COST
Significant Cost
Savings
May require expert
assistance & external
financing
In-house
initiatives

21. ENERGYSAVING
PROJECTS
TECHNICAL
VIABILITY
FINANCIAL VIABILITY
SUSTAINABILITY PLAN
Expertise/
Competency
EnMS
(ISO 50001)
Performance M&V
Financial criteria &
sources

22. MANAGEMENT
COMMITMENT
ENERGY
POLICY
PLANNING
IMPLEMENTATION &
OPERATION
SYSTEM &
PERFORMANCE
CHECKING
MANAGEMENT
REVIEW
Energy saving
measures – to bring
results in improving
energy performance
& cost reduction!

24.  Energy saving projects implementation
through direct investments by ESCO with
“Zero Up front Cost” concept to the owner
of building facilities
 The returns from the investments will be
used to pay back the ESCO only from the
actual energy savings achieved from the
implementation of energy conservation
measures by ESCO based on shared-
saving contract with conditions agreed by
both parties.

25. Owner’s Share(10-30%)
ESCO’s share(70-90%)
(Loan & interest, O&M, spare
parts, insurance, profit & etc)
EPC contract periodBEFORE
Baseline
Detailed
Energy Audit 100% saving
enjoyed
by owner
After EPC contract
period
Energy
bill
saved
Develop EnMS & in-house
capacity building
Implement EnMS & sustain
saving
YEAR
ENERGYBILL
Implement
EPC Project

26. Project Funding & Financing Options
Engineering & Economic Feasibility Studies
Project Design, Engineering & Permitting
Project Construction
Project Commissioning
Operation, spare parts & Maintenance
Performance measurements & monitoring
Energy performance reporting

27. EPC Contract
Negotiation &
Signing
Install Data
Logger/
permanent sub-
meters
Collect energy
data to
establish
energy
baseline values
Improve &
optimize
energy
consumption
with energy
saving
measures
Measure &
monitor actual
energy savings
achieved
against agreed
baseline values

28.  Finance energy saving
improvements with no upfront
capital
 Invest savings achieved into
other projects
 ESCO to identify Energy
Saving projects
 ESCO guarantee Energy
savings - the remuneration of
ESCOs is directly tied to the
actual energy savings achieved
 Energy saving is shared between
ESCO & the building owneras per
agreed terms & payment
schedule with a single-source
responsibility
 ESCO supplies, installs, maintains
& retain an on-going operational
role in measuring & verifying the
savings over the contractual
terms.
 Use future energy ,cut operating
cost, be more competitive &
improved comfort & productivity
from upgraded systems
 Positive environmental impacts &
reduced environmental footprint

30. Experiences in EPC
Projects /Track
Records in energy
services
Financial
Strengths
Management
capacity in
energy services
Technical
Competency &
Expertise
ESCO
To secure
financing &
ensure
sustainable
operations

31. Item
EPC-Shared
Saving Model
Cash
Purchase
Technical Expertise ESCO ESCO
Implementation(design, installation,
testing & commissioning)
ESCO ESCO
Funding Source ESCO OWNER
Sharing of returns %
At agreed % &
conditions
100% to
OWNER
Technical & Investment Risks ESCO OWNER
Energy Performance Maintenance &
monitoring works and risks
ESCO OWNER

32.  Savings at 40-60% from lighting system
Energy Saving Micro Ballast
and HP Fluorescent T8-28
watts
LED Fluorescent Tubes LED Down Light
LED Ceiling Light High Performance
LED Street Light
LED Spot/Flood
Light

33.  To confirm areas of interests by MAH
members for further actions with
MAESCO-MIGHT-Melaka GTC for the
next step
 Commitment on support measures by
the government