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ENERGY EFFICIENCY USING SOLAR AIRCON IN THE
PHILIPPINES
Inter-regional Workshop on Energy Efficiency Investment Project Pipeline
UNCC, Bangkok, Thailand April 23-24, 2014
Presented by : Felix Richard A. Cordova, President & CEOMaria Miranda C. Cordova, EVP & COO
Location of the Philippines
REPUBLIC ACT 9513Renewable Energy Act of 2008
AN ACT PROMOTING THE DEVELOPMENT, UTILIZATION
AND COMMERCIALIZATION OF RENEWABLE ENERGY
RESOURCES AND FOR OTHER PURPOSES
RE TYPE
SOLARWIND BIOMASSRIVER HYDRO
PROPOSEDFIT RATE (Peso)
17.95 10.37
7.00 6.15
APPROVED FIT RATE (Peso)
9.688.536.635.90
TARGET MW IN 3YRS
50 MW200 MW250 MW250 MW
FEED-IN TARIFF IN PHILIPPINES
No Approved rate for Ocean energy, but target installation was set at 50MW
Note : Average power rate in the Philippines is Ps 12.00 or 0.28 USD per kwhr
1.Regulatory delays in the implementation of the law
2.FIT rates are lower than proposed rates3.Limiting target installation vs service contracts
already awarded4.Huge risk on the part of RE developers which is
required to put up the plant first before FIT awarding
5.Uncertainty with regards to FIT payment and unclear collection guidelines
Challenges of RE in Philippines:
ENERGY EFFICIENCY & CONSERVATION POLICIES
ADMINISTRATIVE ORDER NO. 110 - DIRECTING THE INSTITUTIONALIZATION OF A GOVERNMENT ENERGY The Government shall aim to reduce its monthly consumption of electricity (in kilowatt-hours) and petroleum products (in liters) by at least ten percent (10%)
EXECUTIVE ORDER NO. 123 (September 8, 1993) INSTITUTIONALIZING THE COMMITTEE ON POWER CONSERVATION AND DEMAND MANAGEMENT The Committee on Power Conservation and Demand Management, hereinafter referred to as theCommittee, is hereby established as a regular and permanent body with the Chairman of the Council ofAdvisers on Energy Affairs as its Chairman and at least one representative from each of the followingagencies as members: Department of Energy; Department of Education, Culture, and Sports;Department of Trade and Industry; Department of Interior and Local Government; Department of Labourand Employment; Metro Manila Authority; National Power Corporation; Philippine National OilCorporation and the National Electrification Administration.
EXECUTIVE ORDER NO. 472 – Institutionalizing the Committee on Fuel conservation and Efficiency in Road Transport signed on 25 March 1998. It aims to disseminate information on efficiency utilization of fuel through the local chapters created for the purpose. The program targets a 10% reduction in fuel consumption.
DEPARTMENT CIRCULAR – 93-03-05To all Industrial, Commercial and Transport Sectors: Establishments consuming 1 million LOE annually are required to submit Quarterly Energy Consumption Report (QECR) to DOE. In addition, establishments consuming 2 million LOE, apart from the QECR are required to submit an Annual Energy Conservation Program Report (AECPR)
SENATE BILL NO. : 3321 Introduced by: HON. SERGIO R. OSMEÑA ENERGY EFFICIENCY AND CONSERVATION ACT OF 2012 (Filed November 5, 2012)
“AN ACT INSTITUTIONALIZING ENERGY EFFICIENCY AND CONSERVATION, ENHANCING THE EFFICIENT USE OF ENERGY, AND GRANTING INCENTIVES TO ENERGY EFFICIENCY AND CONSERVATION PROJECTS, AND FOR OTHER PURPOSES”.
SENATE BILL NO. :2027 Introduced by: HON. EDGARDO J. ANGARA ENERGY EFFICIENCY AND CONSERVATION ACT OF 2010
AN ACT PROMOTING THE ENHANCEMENT OF ENERGY EFFICIENCY AND CONSERVATION THROUGH THE DEVELOPMENT OF ENERGY EFFICIENT TECHNOLOGIES, STRENGTHENING ORGANIZATIONAL RELATIONSHIPS AND REINFORCEMENT OF RELATED LAWS AND OTHER STATUTORY PROVISIONS ON ENERGY.
SENATE BILL NO.: 1602 Introduced by: HON. MIRIAM DEFENSOR SANTIAGO
AN ACT TO SUPPORT THE RESEARCH AND DEVELOPMENT OF NEW INDUSTRIAL PROCESSES AND TECHNOLOGIES THAT OPTIMIZE ENERGY EFFICIENCY AND ENVIRONMENTAL PERFORMANCE, UTILIZE DIVERSE SOURCES OF ENERGY , AND INCREASE ECONOMIC COMPETITIVENESS.
ENERGY EFFICIENCY BILLS PENDING IN SENATE
ANOTHER INNOVATION IN SOLAR THERMAL AND AIR CONDITIONING TECHNOLOGY…..
SOLAR-ASSISTED AIRCONSAVE 30 –50% ON POWER
SPLIT TYPE AC SYSTEMS
PARTIAL LIST OF CLIENTS
CEBU IWAKAMI CORPORATION
GTZ – DENR OFFICE
POWER CONSUMPTION COMPARATIVE STUDY
( CONDUCTED BY A TELECOM COMPANY)
SCOPE OF STUDY
• Temp Setting at 22degrees C
• Conducted in 15 days
ACTUAL DATA (15 DAYS OBSERVATION)
AC TYPEAVE.LOAD CURRENT
AVE. VOLTAGE READING
OPERATION STARTED OPERATION ENDED
DATE TIMEINITIAL
READINGDATE TIME
INITIAL READING
BRANDX(3TR, CS)
17.72 2334-
AUG-11
2:30PM 211119-
AUG-11
2:30PM 3367.5
SEDNA AIRE
(3TR, CS)11.57 233
20-AUG-
113:10PM 3396.9
4-SEPT
-113:10PM 4122.2
1256.5
725.3
0
200
400
600
800
1000
1200
1400
BRAND XX (Conv. AC) SEDNA AIRE
KW
HActual KWH Consumption
$AVE:531.2 KWH/15days
or 1,062KWH/month Or 42%
ENERGY COST
1,062KWH/month x PHP12/KWH
PHP12,744
COST ofSedna Aire 3TR PHP 185,000
185,000÷12,744
14.5months
RETURN ON INVESTMENT
THE BUSINESS POTENTIAL FOR SOLAR AIRCON:REPLACEMENT OF OLD 3 TONNER UNITS IN THE
PHILIPPINES
MILLION
APPROXIMATE COST TO REPLACE
Ps 185,000 x 3M = Ps 555,000,000,000.00 or
OLD UNITS WHICH ARE CONVENTIONAL AIRCON INSTALLED IN THE PHILIPPINES
3
(Project cost)
USD 12.6B
POTENTIAL ENERGY SAVINGS
1,062KWHRS X 3M
With 3M Units
3.18B KWHRS/MO
POTENTIAL MARKET:
ONLY 40,0003Million
TARGET:
99%
1%
Potential
Target
TARGET in Years540,000 units 3TR x $4,204.54/unit
USD 168.1M
$168M
Leasing? We get leasing lines from banks for 3yrs. And offer subleasing to clients for 5-6 yrs with O & M contract
FINANCING AVAILABLE
SUSTAINABLE ENERGY
FINANCE
Solar Aircon - Success Factors
1. The Philippines is a tropical country enjoying the sun in most parts of the year
2. The electricity tariff is among the highest in the region (at Php12 or .28USD for residential and small commercial)
3. As much as 50% of energy cost is used for cooling purposes, not only in households but across industries in commercial and industrial nature
4. The public awareness on climate change is high especially with the series of unprecedented natural disasters in recent months
5. Solar aircon is energy efficient at the same time renewable energy
6. Increasing acceptance among users since its introduction in 2009
7. Promotes demand side management by reducing large portion of energy used for cooling
8. Reduces CO2 production
Solar Aircon – Barriers
1. Solar Thermal technology was not considered in RE law, hence not covered by incentive
2. New technology means “wait-and-see” attitude among prospective clients although installations are working since 2009
3. Mainstream market acceptability4. Everything is imported, we don’t own the technology.5. High Upfront Cost 6. No available 3rd party testing facility for Solar Aircon7. Promotion of the technology lacks government
support8. High Cost of Financing9. 100% of risks is borne by the project developer since
we get leasing from the bank
WAY FORWARD ….
• Establish ESCO Company• Establish local assembly • Strengthen technical capability• Source low cost financing
www,edwardmarcsphil.com
Manila : +632 9112371; +632 9221658Cebu : +6332 2381972; +63325120684Davao : +6382 2962907; +6382 2862162Web : www.edwardmarcsphilinc.comEmail : rickycordova@edwardmarcsphilinc.com
THANK YOU FOR YOUR ATTENTION
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