ENERGY EFFICIENCY USING SOLAR AIRCON IN THE … · ENERGY EFFICIENCY USING SOLAR AIRCON IN THE PHILIPPINES Inter-regional Workshop on Energy Efficiency Investment Project Pipeline

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 & CEO

Maria Miranda C. Cordova, EVP & COO

Location of the Philippines

REPUBLIC ACT 9513 Renewable Energy Act of 2008

AN ACT PROMOTING THE DEVELOPMENT, UTILIZATION

AND COMMERCIALIZATION OF RENEWABLE ENERGY

RESOURCES AND FOR OTHER PURPOSES

RE TYPE SOLAR WIND BIOMASS RIVER HYDRO

PROPOSED FIT RATE (Peso) 17.95 10.37 7.00 6.15

APPROVED FIT RATE (Peso) 9.68 8.53 6.63 5.90

TARGET MW IN 3YRS 50 MW 200 MW 250 MW 250 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 rates

3.Limiting target installation vs service contracts

already awarded

4.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 the

Committee, is hereby established as a regular and permanent body with the Chairman of the Council of

Advisers on Energy Affairs as its Chairman and at least one representative from each of the following

agencies as members: Department of Energy; Department of Education, Culture, and Sports;

Department of Trade and Industry; Department of Interior and Local Government; Department of Labour

and Employment; Metro Manila Authority; National Power Corporation; Philippine National Oil

Corporation 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 – 93-03-05

To 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 AIRCON SAVE 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 TYPE AVE.LOAD CURRENT

AVE. VOLTAGE READING

OPERATION STARTED OPERATION ENDED

DATE TIME INITIAL

READING DATE TIME

INITIAL READING

BRANDX (3TR, CS)

17.72 233 4-

AUG-11

2:30PM 2111 19-

AUG-11

2:30PM 3367.5

SEDNA AIRE

(3TR, CS) 11.57 233

20-AUG-

11 3:10PM 3396.9

4-SEPT

-11 3:10PM 4122.2

1256.5

725.3

0

200

400

600

800

1000

1200

1400

BRAND XX (Conv. AC) SEDNA AIRE

KW

H

Actual KWH Consumption

$AVE: 531.2 KWH/15days

or 1,062KWH/month Or 42%

ENERGY COST

1,062KWH/month x PHP12/KWH

PHP12,744

COST of Sedna 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 40,000 3Million

TARGET:

99%

1%

Potential

Target

TARGET in Years 5 40,000 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 Php

12 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 acceptability

4. Everything is imported, we don’t own the technology.

5. High Upfront Cost

6. No available 3rd party testing facility for Solar Aircon

7. Promotion of the technology lacks government

support

8. High Cost of Financing

9. 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 9221658

Cebu : +6332 2381972; +63325120684

Davao : +6382 2962907; +6382 2862162

Web : www.edwardmarcsphilinc.com

Email : [email protected]

THANK YOU FOR YOUR ATTENTION