1 October 12, 2010 ENERGY EFFICIENCY SERVICES LIMITED ENERGY EFFICIENCY IN ULB’s.

1October 12, 2010October 12, 2010

ENERGY EFFICIENCY SERVICES LIMITED

ENERGY EFFICIENCY IN ULB’s

ENERGY SAVINGS POTENTIAL IN THE STATE

POWER SCENARIO OF UTTAR PRDAESH FOR 2007-08

INSTALLED CAPACITY 9339.3 MW

TOTAL ENERGY SALES

45.41 BU

PEAK DEMAND 11104 MW

PEAK MET 8568 MW

PEAK DEFECIT / SURPLUS

-2536 MW (-22.8 %)

ENERGY DEFICIT / SURPLUS

-11293 MU (-18 %) *Including electrical energy consumption

& savings potential of SME clusters

S. No.

Sector Reference

Annual Electricity

Consumption (MU)

Estimated Annual Savings

Potential (MU)

1. Agriculture 5693 1700

2. Commercial 610 122

3. Municipalities 1057 229

4. Domestic 13704.2 2740

5. Industries* 16472.89 1152

Total 37537.09 5943

ENERGY EFFICIENCY IS THE LEAST COST OPTION TO OVERCOME THE PEAK DEFICIT

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INSTITUTIONAL ARRANGEMENTS FOR EE

Energy Conservation Act enacted in 2001. BEE created at central level in March 2002 to promote

the efficient use of energy and its conservation. State Designated Agencies (SDA) at state level for

implementation of EC Act. BEE and SDAs are to perform the role of a quassi-

regulatory and policy advisory body to the State and Central Govt.

Till date 32 States have notified their SDAs. Energy Efficiency Services Limited formed in December

2009 to implement energy efficiency projects in partnership with the private ESCOs.

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ABOUT EESL

Energy Efficiency Services Limited (EESL), a JV of NTPC Limited, PFC, REC and POWERGRID has been set up to facilitate implementation of EE projects and to be the implementation arm for Central government and state governments.

The authorized share capital of the company is Rs. 190 crores and the paid-up capital is Rs. 100 crores with equal contribution from all PSUs.

It is registered under the companies Act, 1956 on 10th December 2009 and the commencement of business certificate is obtained on 11th February 2010.

It is the first such government company exclusively for implementation of energy efficiency in South Asia and amongst a very few such instances in the world.

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EESL- OBJECTIVES

To facilitate implementation of energy efficiency projects

for Demand Side Measures including municipal

functions, agriculture, public building, lighting etc. To implement schemes, programmes and policies of

central and state governments or its agencies. Implementing agency with private ESCO’s and other

companies to promote energy efficiency. To provide consultancy services in the field of energy

efficiency, CDM projects, and other related areas. To identify and impart training to build the capacity of

stakeholders.

Implementing Govt.

Programs

Consultancy Organization

Resource Centre

ESCO

EESL

EESL- ROLES

•CDM Consultancy•Energy Efficiency Potential•Consultancy to SDAs/ Govt.•International Consultancy

•Capacity building of SDAs•Training of Energy Managers•3L Programmes

•Implementation of EE in buildings, •municipality, •agriculture, •SMEs

•S&L Programme•National Examination•PAT scheme•PRGF/ VCFEE

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Municipal EE Projects

EESL as an advisor/consultantEESL will prepare the Detailed Project ReportEESL will prepare the bidding documents and will facilitate in finalization of the implementing agencyEESL will facilitate implementation of energy efficiency projects by acting as a Project Management Consultant (PMC) and also as an independent third party M&V agency.EESL as an ESCOEESL will prepare the Detailed Project Report.EESL will invest in the EE projects by entering into a performance contract agreement with ULB/State Govt. Dept.Investment will be recovered though reduction in electricity bills.EESL will be responsible for implementation of EEM’s and O&M during the currency of performance contract

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LUDHIANA MUNICIPAL CORPORATION

90,862 street lights in LMC are to replaced with LEDs. A total of 881 switching points exists.

56% are 70W HPSV, 26% are 150W HPSV, 13% are 250W MH, 7% are 250W HPSV and the remaining are FTLs and CFLs.

EESL conducted the Energy Audits and prepared the DPRs.

The existing annual consumption is 45.72 MU, where as with LED and automatic switch control and dimmer the consumption will go down to 10.4 MU for annual avg. operating hours of 4015.

The estimated project cost is Rs. 66.00 crores including the cost for PMC and M&V, which are capitilized.

The project IRR is 14.82% with a SPB of 6 years. Bids are invited from LED manufacturers / ESCOs / FIs for

implementation of the project on performance contracting mode.

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ISSUES Payment Security Mechanism

For successful implementation of energy efficiency projects through ESCO mode, payment security to the investor is very important.

It can be done through the creation of an escrow account by the State Govt.

As a PSM in case of default by the ULB, funds disbursed to ULB by the state government can be paid directly to the ESCO/investor

Revolving Fund State Energy Conservation Fund can do part

investment and will get repaid from energy savings without any profit

This will improve the Project IRR for the ESCO/investor M&V

Third party M&V whose report is acceptable to ULB and the investor

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  A. AS AN ESCO

(i) BUILDINGS AND MUNICIPALITIES There is a vast scope for energy efficiency

improvement in buildings and municipalities. Energy efficiency measures bring about energy savings due to reduced energy consumption.

Investments will be recovered though reduction in electricity bills during the performance contract as per the third party M&V recommendation.

EESL plans to implement 50 Government Building efficiency projects and 5 Municipalities energy efficiency projects during this financial year.

ACTIVITIES OF EESL

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ACTIVITIES OF EESL

Commercial Buildings – 33 billion units

Residential Buildings – 116 billion units

IMPLEMENTING EE IN BUILDINGS / ULBs

SDA

State Government

Policy Guidelines and Notifications

Capital investment to be paid back in equal installments to EESL

Savings, over and above the capital investment, shared with EESL and building owner

Building Owner/ULB

Reduction in Electricity bill to be passed on to SDA

In case of baseline changes additional funds may be required

To be paid as per third party M&V

EESL

Invest in Energy Efficiency Operation & Maintenance till the

performance contract period Shared savings after the capital

investment is paid

Investment in the project

Facilitate State Governments to issue guidelines

Reduction in Electricity bill

Third Party Monitoring

Agency

Sharing of savings

Sharing of savings

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(ii)AGRICULTURE The overall energy efficiency investment market size of

agricultural sector under performance contract system has been estimated at Rs 5,25,00 crores (total number of pumps 15 million and average cost of pump Rs 35,000).

EESL will invest in energy efficiency measures on a rural pump set feeder on which supply quality enhancements [such as feeder separation and High Voltage Direct Supply (HVDS)] have been carried out.

The investments will be for procurement and Operation & Maintenance of pumpsets during the performance contract.

The reduction in electricity demand due to implementation of the project will be shared between DISCOM and EESL as per contract agreement.

EESL plans to take up least two such project this year.

ACTIVITIES OF EESL

IMPLEMENTING Ag DSM PROJECT

Consumers

Farmer

Government / Regulatory Commission

•Reduction in Subsidy payments•Policy Guidelines and Approvals•Inclusion in Annual Revenue Requirement

•Sale of saved energy to other consumers

•Free Energy Efficient Pump sets•Reduced Energy Bills•Free Maintenance •Quality Power Supply

Third Party Testing

Agreement

Utility / DISCOM

•Annual payment from Special DSM fund to support capital expenditure•Sharing of savings to support operating expenses•Improved Collection efficiency•Reduced Losses and Peak Load

EESL

•Capital investment for Installation of new pumps•Design / Installation / Commissioning & R&M•Demonstrate the energy savings•Repair and Maintenance

Payment Security Package

Policy guidelines & Approvals

Electricity sales

Monitoring Agency

Regulator

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(iii) BACHAT LAMP YOJANA

BLY seeks to provide CFLs to households at the price similar to that of incandescent bulbs and plans to utilize the Clean Development Mechanism (CDM) of the Kyoto Protocol to recover the cost differential between the market price of the CFLs and the price at which they are sold to households.

EESL will invest for implementing Bachat Lamp Yojana (BLY)

Distribution of CFLs in the project area at Rs. 15/- per CFL and collection of one incandescent bulb

ACTIVITIES OF EESL

Empanelment of investor / BLY Developer with

BEE

Investor / BLY Developer and

DISCOM identify SSC-

CPA area

Signing of Tri-Partite

Agreement

CPA validation by DoE

Investor develops CPA-DD and

submits to BEE

Investor secures finance and

sources CFLs

CFL distribution by Investor /

DISCOM / BLY Developer

Project area monitoring as per CPA-DD

CPA Verification and allocation

of CERs by BEE

IMPLEMENTING BLY SCHEMES

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B. CONSULTANCY

EESL will provide consultancy / Advisory services for the various activities in a CDM programme of activities namely

Developing the CDM programme of activity documents Promotion of the Programme of activities Conducting market surveys as per UNFCCC guidelines Conducting monitoring surveys as per UNFCCC

guidelines Forward and Spot Trading of CERs Developing Database management systems

ACTIVITIES OF EESL

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C. IMPLEMENTING GOVT. SCHEMES

Standards & LabellingRight from receiving the applications to the processing of applications from manufacturers and check testing of samples drawn from the market will be handled by EESL. EESL has taken up processing of applications of 3 products viz. Ceiling Fans, Colour Television and Pumpsets.  Perform Achieve and Trade (PAT)One of the initiatives of the NMEEE is Perform Achieve and Trade (PAT). EESL has taken up the study for conducting “Baseline Energy Audit” of Designated Consumers.

ACTIVITIES OF EESL

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IMPLEMENTATION OF CSR OF OTHER COMPANIES

As part of Corporate Social Responsibility, some of the

companies have approached EESL to facilitate energy

efficiency initiatives. EESL prepares DPR’s and

implements low carbon and energy efficient projects like

existing lamps in the villages with LEDs, LED street

lights, Efficient lighting and water pumping in townships

etc. First such DPR for M/s Shapoorji Pallonji Infrastructure

Capital Ltd. (SPINFRA) has been prepared for villages

Chhara, Sarakhadi, Nanawadi, Kaaj in Junagad District of

Gujarat state and is to be implemented by EESL.

ACTIVITIES OF EESL

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SCOPE OF WORK FOR DPR ON STREET LIGHTS

No. and rating of Switching Point for Street lighting in the ULB.

Total length and width of street illuminated Total No. and height of street Light Poles Total No. and type of fixtures Control Mechanisms employed, and no. of working hours

at different seasons in the year General study of HT & LT electrical power distribution

system and to carry out actual measurement of the electrical parameters like voltage, current, active / reactive power, power factor/ Lux level etc. using calibrated instruments and find out energy conservation possibilities therein.

To review actual loading and load distribution on transformer and to assess possibilities of energy saving.

To review the voltage levels in street lighting systems, and suggest mechanisms for voltage optimization.

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To review rating and location of capacitor and suggest power factor improvement scheme and to carry out the harmonics analysis study and suggesting measures to mitigate it, if required.

Monitoring & Measurement of Electrical Energy Consumption (KWH & KVAH).

Measurement of lux level at different positions of the road. The measurement of existing lux levels will be carried out as per the standard 9-point approved methodology for street lighting. The minimum and the average lux will be calculated as per the prescribed formulae of the 9-point method.

Analysis of the reduction in Electrical Energy Consumption (KWH & KVAH) due to energy efficient lighting without compromising the present lux level based on technical parameters like power factor, lumen / watt, CIE Color Rendering Index etc.

SCOPE OF WORK FOR DPR ON STREET LIGHTS

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A study to be carried out by placing LED in at least three fixtures to obtain real data.

Providing a list of energy efficient LED street light manufacturers / suppliers.

Providing a list of ESCOs / FIs who may be interested in bidding for the implementation of this project in joint collaboration with LED street light manufacturers / suppliers.

Cost-benefit analysis showing the simple pay-back period, Return on Investment (RoI), Net Present Value (NPV) and Internal Rate of Return (IRR).

The apporx. cost for preparing DPR on street light will be around Rs. 9.00 lakhs for a MC having 1,00,000 street lights.

SCOPE OF WORK FOR DPR ON STREET LIGHTS

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Discussion with all relevant stakeholders viz. ULB/ PHE Dept., consumers, distribution utility etc.

Name plate details of existing pump sets, delivery valve position, foot valve status / condition and other details.

To provide an overview of existing facilities and current operating system like electrical distribution system, metering system, power tariffs and subsidy, if any, electricity availability, seasonal as well as historical water level variation pattern.

Detailed energy audit (performance evaluation) for all pump sets in each of the water supply schemes in urban and water supply schemes in rural areas will be carried out by measuring the suction & discharge head, power input and water flow to evaluate operating efficiency of the pump sets. Based on audit study an efficiency index for the existing pumping system will be prepared.

SCOPE OF WORK FOR DPR ON WATER PUMPING

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Other parameters and site conditions like delivery valve position, working of foot valve and type of piping etc., will also be studied.

The capacity and type of new energy efficient pump sets that can replace the existing pumps for the same discharge will be decided based on field studies after evaluating the existing pump set performance and operating efficiency.

Interaction with various pump manufacturers / suppliers will be made to understand the selection criteria, impact of changing water levels on the pump set efficiencies, input power and to study the pump curves. During the interaction the efficiency range of different types of star labelled pumps along with technical details, budgetary quotes, suppliers of spare parts etc. will also be discussed.

SCOPE OF WORK FOR DPR ON WATER PUMPING

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The energy saving potential that can be achieved by replacing existing pumps with that of best efficiency pump set will be quantified based on the analysis of the measurements. In addition to this various technically sound and economically viable measures to improve the end-use energy efficiency like optimum sizing of pump sets for the same discharge, change of foot valve and change of piping system etc will also be provided in the energy audit report.

The cost estimate for preparing DPR in one water supply scheme in Urban having around 100 pumps ranging from 2HP to 50HP will be around Rs. 5.50 lakhs.

The cost estimate for preparing DPR in one water supply scheme in Rural having around 10 pumps ranging from 2HP to 50HP will be around Rs. 35,000/-

SCOPE OF WORK FOR DPR ON WATER PUMPING

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SCOPE OF WORK FOR PREPARING BIDDING DOCUMENT & FINALIZATION OF AGENCY

Finalization of the Detailed Project Report in consultation with Municipal Corporation.

Preparation of bidding documents including technical specifications for energy efficiency projects and drawings etc.

Preparation of Notice Inviting Tenders (NIT). Replying to queries from bidders. Assist in evaluation of bids received and selection of

implementing agency by ESCO mode. Preparation of performance contract agreement

document. Advisory services for acceptance and finalization of

contract with implementing agency. Cost for preparing bidding document and finalizing

implementing agency for one MC for street lighting & water pumping will be around Rs. 2.50 lakhs.

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SCOPE OF WORK FOR PMC

Deputing an official on as and when required basis at location to oversee the progress of the implementation of the project as required by the Municipal Corporation.

Quarterly progress reports to be submitted to MC intimating the progress of implementation.

To assist scrutiny of running payments and final bill of the implementing agency.

To verify the data/ details submitted by the implementing agency.

Clearance of payments due with the implementing agency.

Advisory service at Physical Completion. Advisory services on M&V evaluations and plus/minus

payments due with implementing agency. The cost of PMC & M&V will be capitalized as the

project cost.

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Visit us at www.eesl.co.in

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COST ESTIMATE FOR PREPARING DPR

ItemCharged Rate(Per Month)

Days Value

Professional Expenses (On-Site)Certified Energy Auditor / Manager (1 no.) INR 1,50,000 45 INR 2,25,000Energy Analyst (1 no.) INR 1,00,000 45 INR 1,50,000Sub-Total INR 3,75,000Assumption: On site manpower cost includes professional fees, data collection and measurement, consultation with stakeholders etc. of the expert man powers to be deputed by EESL. Professional Expenses (Off-site) Certified Energy Auditor / Manager (1 no.) INR 1,20,000 45 INR 1,80,000Energy Analyst (1 no.) INR 80,000 45 INR 1,20,000Sub-Total INR 3,00,000Assumption: Off site manpower will be involved in analyzing the data collected and preparing the DPR and other administrative expenses. Logistical ExpensesTravel and stay of the experts deputed and also for officials from EESL

- - INR 1,85,000

Assumption: Deputed Experts will make to & fro travel from headquarter to the site, will to have stay for the duration of surveys, data collection etc. EESL officials will also make to and fro travels.Professional Charges of EESL Officials10% of total (approx) INR 86,000GRAND TOTAL (Indian Rupees Nine Lakhs and Forty Six Thousand only) – exclusive of all taxes

INR 9,46,000

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COST ESTIMATE FOR PREPARING BIDDING DOCUMENT & FINALIZATION OF AGENCY

ItemCharged Rate(Per Month)

Days Value

Professional Expenses (On-Site)Certified Energy Auditor / Manager (1 no.) INR 1,50,000 7.5 INR 37,500Energy Analyst (1 no. ) INR 1,00,000 7.5 INR 25,000Sub-Total INR 62,500Assumption: On site manpower cost includes professional fees, data collection and measurement, consultation with stakeholders etc. of the expert man powers to be deputed by EESL. Professional Expenses (Off-site) Certified Energy Auditor / Manager (1 no.) INR 1,20,000 22.5 INR 75,000Energy Analyst (1 no. ) INR 80,000 22.5 INR 60,000Sub-Total INR 1,35,000Assumption: Off site manpower will be involved in analyzing the data collected and preparing the DPR and other administrative expenses. Logistical ExpensesTravel and stay of the experts deputed and also for officials from EESL

- - INR 31,500

Assumption: Deputed Experts will make to & fro travel from headquarter to the site, will to have stay for the duration of surveys, data collection etc. EESL officials will also make to and fro travels.Professional Charges of EESL Officials10% of total (approx) INR 22,900GRAND TOTAL (Indian Rupees Two Lakhs Fifty One Thousand and Nine Hundred only) – exclusive of all taxes

INR 2,51,900