Transcript Montreal PPT291105 GDR

Development of CDM Methodology
for
Municipal services energy
efficiency
By
Dr. G C Datta Roy
DSCL Energy Services Co Ltd
India
Presentation objectives
• Highlighting key issues
– Approved methodologies for EE projects
– Implementation of EE projects in the Municipal
sector in India
– Performance contract projects implementation
under ESCO guaranteed and shared savings
scheme
• Capturing inputs from the meetings and
presentation for further development of
the methodology for ESCO EE projects
Acknowledgement
We acknowledge and thank
• MRI, for
• METI, for
• LBNL, for
• Mr. Shashi Shekar, MD, TNUIFSL –
For the co-operation and support
being extended for the municipal EE
data collection
Structure of the Presentation
• Existing EE methodologies
–
–
–
–
Review
Analysis
Evaluation
Issues
• Municipal sector
– Municipal structure and its technologies
– Issues
• ESCO
– ESCO experiences
– Issues in implementation
• Consolidation
– Issues in methodologies, municipal and ESCO seen together
• Way forward
– Summarizing the Inputs on above issues from participants
– Planning for development of the new methodology
Existing EE Methodologies
Review, Analysis, Evaluation
and Recommendation
Review of Existing EE Methodologies
Approved
Methodology
AM0017
AM0018
AM0020
(Replacing steam traps &
condensate recovery)
(Steam optimization)
(Water pumping EE
improvement)
Lighting
NA
NA
NA
Pumping
NA
NA
NA
Common
Baseline
Yes
Common for similar
technologies
NA
Yes
Yes
Of similar technologies
Of projects
NA
Relevant
methodologies
Yes
Analyzed
Of
projects
further
Bundling and
Type
Relevance to
ESCO EE Muni.
Projects
•Baseline establishment
method
•Control group selection
•Type of barriers
•Benchmarking
•Baseline energy i/p
•Boundary
•1st yr. baseline data
•Individual monitoring
•Barriers
Applicability
Repair and replacement
of steam traps, O&M,
condensate recovery where these are not
BAU
EE by reducing steam
consumption in
industrial processes
Efficiency improvement
of energy and water
usage in pumping
Review of Existing EE Methodologies
Small Scale
Methodology
AMS II C
AMS II E
(Demand side EE for specific
technologies)
(Demand side EE in buildings)
Lighting
Yes
NA
Pumping
Yes
Yes
Common Baseline
Yes
NA
Of similar technologies
Of projects
Bundling and Type
Relevant methodologies
Yes
Analyzed furtherYes
Relevance to ESCO
EE Muni. Projects
•Baseline calculation
•Monitoring methods
•Monitoring methods
•Baseline determined during
the replacement
Applicability
Adoption of energy-efficient
equipment, lamps, ballasts,
refrigerators, motors, fans, air
conditioners, appliances,
pumps etc.
Includes technical energy
efficiency measures (such as
efficient appliances, better
insulation and optimal
arrangement of equipment)
AMS II A, B, D & F not applicable
Review of Existing EE Methodologies
NM 0118
NM 0072
(Efficient energy use in
brewery)
(Room air conditioners
mandatory standards)
Lighting
Industry specific
Yes
Pumping
NA
NA
New Methodology
Common Baseline
NA
Bundling and Type
NA
Relevance to ESCO
EE Muni. Projects
Applicability
Relevant
Yes
methodology
Analyzed
Yes
further
Of similar
technologies
NA
•Statistical sampling for
baseline and monitoring
•Variable baseline
NA
Room Air-conditioners and
other appliances under
mandatory EE
Review of Existing EE Methodologies
Not Approved
Methodology
NM0044
(EE in
Municipal – PF
improvement)
NM0074
NM0099
(EE in district
heating)
(Technical
improvement
in cement
plant)
(EE in
process &
manufacturin
g industries)
NM0058 &
NM0096
NM0120
(DSM in
buildings)
Lighting
NA
NA
NA
NA
Yes
Pumping
NA
NA
NA
NA
NA
Common
Baseline
NA
Yes
NA
NA
Yes
Yes
Yes
Of similar
technologies
Of similar
technologies
Yes
Yes
Yes
Of projects
Of projects
Of projects
Relevance to
ESCO EE Muni.
Projects
Not applicable
– common
baseline
inadequate
Category “A”
monitoring
Category “A”
monitoring
Category “A”
monitoring
involving ESCO
Applicability
Replacement
of distributed
boilers with
central
heating
system
NA
Change in
motors, drives,
better controls,
insulation, leak
reduction etc
Lighting, air
conditioning,
ventilation and
food refrigeration.
Directly related to
sales area.
Bundling and
Type
PF
improvement
Analysis of Relevant EE Methodologies
AMS IIE Demand side
EE in
Buildings
AM0020 Municipal water
pumping EE
AMS IIC - Demand
side EE for specific
technologies
Applicability
To projects reducing
specific energy
consumption of water
pumping for existing
pumping systems
Adoption of energy-efficient
equipment, lamps, ballasts,
refrigerators, motors, fans,
air conditioners, appliances,
etc. at many sites.Both for
existing and new
installations
Adoption of EE
equipment/methods
like insulation etc in
an existing or new
building or group of
buildings
Not considered - since
project is still in scrutiny
(To common projects in a
country)
System
boundary
Physical boundary of each
system involving
individual M&E of inflow
and outflow from each
system
Physical boundary of each
equipment
Physical boundary of
the buildings
Appliances and sub-set of
appliances under
mandatory EE in a country
Electricity
boundary
Regional grid
Grid or other energy source
Grid or other energy
source
Grid
Baseline
approach
Existing actual or
historical - project specific
- Fixed baseline
Existing actual or historic or
expected - baseline common
for boundary - Fixed
baseline
Existing actual or
historic or expected
- baseline common
for boundary - Fixed
baseline
Existing actual or historic
and expected - common
baseline for the country constantly variable
baseline
Baseline
Scenario
Lower efficiency system
Lower efficiency equipment
Lower efficiency
equipment
A lower EE standard with
fixed annual BAU EE
improvement rate
included
Particular
NM0072 Mandatory EE
standards
Analysis of Relevant EE Methodologies
Particular
AM0020 Municipal
water
pumping EE
AMS IIC Demand side
EE for specific
technologies
AMS IIE Demand side
EE in
Buildings
Baseline Energy
Function of energy
and water efficiency
- kWh/m3 water
For retrofits Weighted average of
actual power
consumption of a
group of similar
equipment, For new
installations- weighted
avg of devices in the
market. Also, the
baseline no. of devices
replaced may be
counted during actual
replacement
For retrofits Existing
consumption, For
new installations consumption of what
would have been
used in absence of
CDM
Existing EE is calculated. Historical
annual BAU EE improvements rate in
last 3 yrs calculated or data from other
countries collected. Annual baseline EE
is calculated from base year EE
adjusted to BAU EE improvement rate .
Annual baseline quantity and baseline
hours is based on actual new
appliances and actual operating hours
in a year. All of above is arrived by
internationally accepted sampling and
statistical procedures. EE of new
appliances is calculated for base year
only by sampling - but EE degradation
of new appliances not addressed?
CEF
Grid CEF calculated
every year by
combined margin
method
IPCC values or
weighted avg. of grid
with T&D losses
IPCC values or
weighted avg. of grid
with T&D losses
Weighted average of the grid
Leakage
Only leakage from
changes in the
system are
addressed
Only if equipment
transferred from other
activity
Only if equipment
transferred from
other activity
Only if more energy is used in
manufacturing of EE equipment
Baseline
monitoring
Not monitored
Not monitored
Not monitored
Yes, to an extent
NM0072 - Mandatory EE
standards
Analysis of Relevant EE Methodologies
Particular
AM0020 Municipal
water
pumping EE
AMS IIC Demand side EE
for specific
technologies
Energy
monitoring
Monitoring of inflow
and outflow from
each system
CEF
monitoring
AMS IIE Demand side EE
in Buildings
NM0072 Mandatory EE
standards
Select sample - small
sample for fixed leads and
large sample for variable
loads. Either monitor
energy or power and
operating hrs (using runtime meters) of the
sample.A sample of the
non-metered items are to
be annually checked to
ensure they are still
operating - provide proof.
Document specifications
of replaced equipment,
metering consumption of
new equipment,
calculation of energy
savings in an appropriate
manner
Annual monitoring of
operating hours and no. of
replacements by following
internationally accepted
sampling and statistical
procedures. Monitoring of
average retirement age of
equipments to discount
equipments that would have
been anyway replaced
Yearly monitoring
Yearly T&D loss monitoring
Yearly T&D loss
monitoring
Additionality
Using UNFCCC tool system specific.
Barriers for EE –
investment,
political, institutional
and others
Using UNFCCC tool project specific. Financial
additionality or Barrier
Using UNFCCC tool project specific Financial
additionality or Barrier
Using UNFCCC tool - common
additionality for the country.
Mainly barriers – institutional,
market and human barriers
Bundling
Yes, of pumps in a
system, yet
monitoring is
individual
Yes, of similar equipments
Yes, of similar buildings
Yes, of similar technologies –
Inherent in the methodology
Evaluation of EE Methodologies for use in
New Methodology
Applicability
Some of the inputs from AM0020, AMS II C&E and NM0072 are relevant.
The methodologies are project centric and have imposed limitations which
need to be reviewed to widen its applicability eg. Credits only of retrofit and
not for new efficient system.
System
boundary
The system boundaries as in AM0020 are too narrow and may not be valid
especially when we have hundreds of municipalities and cost of transaction
would be very high. Other inputs like a State/National boundary ( NM0072)
may be appropriate for wider applicability. However sub-boundaries may
have to be established for Monitoring with elements from AMS II C,E
Electricity
boundary
State/ Regional or national grid. This needs to be established what
conditions should determine the choice. E.g. Is it a small scale retrofit job or
a large scale job in state of across the state.
Baseline
approach
Existing actual or historical - project specific - Fixed baseline as in AM0020
may not be appropriate. Also variable baseline approach like in NM0072
may not be fully relevant. The situations needs to be clarified depending on
several factors. We may include UNFCCC approach 3 also.
Baseline
Scenario
AM0020 and other approved meths adopt a fixed baseline for the entire
crediting period – doesn’t consider the dynamic nature of EE market. The
variable baseline dependent on a fixed annual BAU EE improvement rate
adopted by NM0072 is relevant. May upgrade to adopt a variable annual
BAU EE improvement rate that is calculated on an annual/bi-annual basis
and is dependent on several factors
Evaluation of EE Methodologies for use in
New Methodology
Baseline Energy
Existing approved meths consider the base year or historical average as the
baseline energy for entire crediting period. BAU EE improvement is neglected.
We may adopt a variable baseline energy dependent on an annual BAU EE
improvement rate. For calculating baseline EE, operating hours, and annual
BAU EE improvement rate, a sampling method may be built on what is
prescribed by NM0072.But baseline quantity may be established by actual
records instead of the sampling. EE of new devices may be calculated by the
sampling of already installed high EE devices as in NM0072. However, their EE
degradation over time may have to be accounted.
CEF
CEF of regional grid is mostly used in all existing projects. The method of
calculation has to be established. An appropriate method to account for
captive DG usage and the effect of captive RE devices like gasifiers, solar has
to be established
Leakage
Changes in system mentioned in AM0020 and higher energy use in
manufacture of EE equipment as in NM0072 are somewhat relevant. However,
to eliminate the tedious leakage analysis of hundreds of systems, we may
propose a IF-THEN function to analyze only those where leakage possibility is
identified.
Baseline
monitoring
None of the existing meths include monitoring and adjustment of changes in
original baseline scenario.
NM0072 includes a fixed annual BAU EE improvement rate that may represent
the changing baseline scenario - but only to an extent. We may look at actual
monitoring of the baseline scenario - monitoring share of EE products, policy
etc
Evaluation of EE Methodologies for use in
New Methodology
Energy
monitoring
For mass bundling systems AMSIIC suggests monitoring by sampling– a
small sample for fixed loads and large sample for variable loads. Sample
monitoring of energy and hours like NM0072 is relevant but may be
inadequate for variable loads like pumping. May adopt EE monitoring on
Municipality (whole facility) level for each technology
CEF monitoring
Existing AMS meths adopt yearly T&D loss monitoring, monitoring of
capacity additions to grid etc, we may include monitoring of changes in
captive RE devices and DG sets
Additionality
All existing meths use UNFCCC additionality tool. We may look at
"default additionality" for all projects following the new meth – by
considering financial and other additonality factors in the variable
baseline itself
Bundling
AM0020 doesn’t include technology bundling. Technology bundling is
inherent in AMS IIC, E and NM0072. We may take inputs from these to
adopt inherent technology bundling in the meth.
Applicability
• Can be with respect to technology, boundary or
aggregator
• Conditions under which it will be applicable
– Whole municipality / any one of lighting, pumping,
building, heating, etc.
• Total input basis - which has number of sources of inputs
(metered/ un-metered)
• Local area metering or system metering or equipment
metering eg will it be mandatory to have meters and up
till what level
• Accounting system decentralized / centralized/ different
agencies involved like New Delhi has distribution + certain
lighting under .. While street lighting is under NDMC, water
pumping under Delhi Jal board
• Retrofit of old inefficient system or / and with new efficient
system-when retrofit; when new e.g during the capacity
expansion phase.
• Diverse usage within municipal area and also across
municipalities
Applicability
• Conditions of Applicability
– Small equipment like pump set replaced
– Local ward under a municipality. It has diverse
usage –lighting/ pumping etc. If EE is in one
category, how do we establish savings on
overall basis.
– Total municipality or municipalities
– State which has number of municipalities
– Some states can also be clubbed-regional;
national
– State grid or a regional grid or combination of
two grids or national grid
Applicability
• Conditions of applicability
– Who can be the aggregator or owner of CEReither one or more of following
•
•
•
•
Project owner
Outside agency like Japan Carbon Fund
The local financing agency like banks, TNUIFSL
The ESCO who is implementing the project
– Aggregation at multiple level-role of ESCOs
– Should we then redefine the scope of the
assignment itself-instead of ESCO EE projects,
can rename as ‘EE Performance Contract
Projects’.
Aggregation mechanism
Owner
ESCO
Extl Agn
Local Agn
100%
80%
60%
40%
20%
0%
Cost
Risk
CERs
Baseline approach
• Existing actual emissions
– what happens when we have thousands of pumps – cost of
transaction?
– can we take sampling approach – what %
– can we make baseline efficiency of system based on audit
reports in some municipalities like all pumps in state of TN
have baseline efficiency of 40-45%
– Can we account for change in baseline EE due to BAU EE
improvements – how and what factors to consider
• Emissions from economically attractive course of action
– What are the likely course of actions to consider – MCs
themselves implementing EE projects?, ?
– Although it is know fact that these projects are economically
viable, still practically nothing has happened
• Emissions from similar project activities? – like ECO
projects, BEE govt. building EE projects etc?
–
–
–
–
Many initiatives – no results
One or two undertaken by vendors
Difficult to take them as baseline
Incentive to implement if the EE projects are baseline
Additionality
• Technical additionality
– What are current technologies used,
how shall it be established, statistical
model and sampling technique
– How do we qualify project as technical
additional given the fact that such EE
projects are not happening despite
financial attractiveness
– Should we also consider baseline
‘Tender Methodology-L1’ for
determination of technical additonality?
Additionality
• Financial additionality
– CDM benefit can enhance ESCOs
capacity to borrow-key requirement for
project execution by ESCOs-overcoming
financing barrier
– Present fiscal conditions of
Municipalities-no money for project
implementation-support from external
agencies like TNUIFSL/WB-leveraging
CDM
Additionality
• Barriers in implementing EE projects
– Institutional
• Municipalities desire but the process is
lengthy and Bureaucratic
• Only L 1 criteria
– Logistical barriers
• Wide geographical area
• Large number of municipalities with diverse
characteristics-very small distributed
projects
• Individual project PMV
Additionality
• Barriers in implementing EE projects
– Institutional
• Implementing through ESCO-bidding methodologies.
• Status of present O&M employees post
implementation of ESCO projects
– Policy
• There are generalized statement of intends for
implementing EE in various Government facilities.
– Announcement by the then Prime Minister in August
2002 to reduce power by 30% in Government buildings
by 2007 (Though nothing much has happened till now).
– GOI policy stipulates to have 10% RE by 2012
– Are these to be factored?
Additionality
• Common practice issues
– Energy efficiency has happened in one
or two isolated places and mostly by
equipment vendor – this can not be
treated as common practice.
– Since it has not happened, can all EE
projects in Municipalities be treated as
not common practice and hence
additional.
Monitoring
• Monitoring of EE emission reduction
– Equipment wise or system wise or whole
facility monitoring?
– MC will have wide geographical area and
thousands of equipment.how to control cost of
transaction
– Can the sampling method be used for certain
percentage, which all the time should be
traceable.
– In any case, the EE reduction shall be
measured by ESCO and the project developer.
Should that document suffice for estimation of
emission reductions
Monitoring – Service delivered as a Parameter
Application
Measuring “service delivered”
Street
lighting
Interviews of people in the sample area for
level of service
Record of number of complaints received
may indicate the service level
Water
pumping
Per capita water delivered Vs energy
consumption may be a good indicator
Monitoring
• Impact of increased
urbanization/population/availability
of amenities within the selected
project boundary.
• Increased use of RE technologies
e.g. solar street lights.
Validation
• Role of validators
– Dependence on ESCO PMV reports
– Scrutiny only at CEF level
Summarising
• None of the existing approved methodologies provide
adequate tool for ESCO EE and EE bundled projects
involving multiple technologies and dispersed project
location
• It is possible to develop a complex baseline and
additonality tools-on the other hand a simplified barrier and
common practice sets of tools can be adequate-this would
considerably reduce the transaction requirement and at the
same time meet the CDM criteria
• Through ESCO system of project implementation, it should
be possible to develop a statistical tool for emission
reduction estimation at macro level thereby simplifying the
monitoring methodology.
• Validation methodology can also be factoring the Baseline
and PMV reports of the ESCO performance contract.
Municipal Energy Efficiency
Projects
Rationale for selection of Municipal EE
Projects
• Ideal candidates for ESCO performance contract projects
• Project diversity
– Technology
– Size
– Dispersion
•
•
•
•
Replicability
Reasonable market size and attractiveness
Existence of implementation barriers
Large efforts by donor agencies to remove the market
barriers
• CDM can make significant contribution in removal of
financing, institutional and implementation barriers
• Methodology developed for such bundled projects can be
used for similar projects in other sectors too.
• The methodology so developed can be soon used in a real
life situation for projects undertaken in the State of Tamil
Nadu, India
Energy Accounting
Energy accounting for Municipality
Category
Street Lighting
Areas of
application
Street lighting
Signal
Park lighting
Technology
bank and
Methods
Lamps: Incandescent
lamps FTLs – T12, T8, T5
HPMV, HPSV, Halogen,
metal halides, CFLs, LEDs
Ballasts: Electro-magnetic,
VPIT, Electronic
Luminaires: Conventional,
Reflective
Operation: Manual, timer,
photo switch
Control: Voltage
regulation, orientation,
capacitor banks,
distribution study
Water Pumping
River water pumping
Bore well pumping
Pumping from reservoir,
booster stations, pumping
to overhead tanks,
pumping to consumption
points
Type: Submersible,
centrifugal, turbine
Control: VFDs, throttling,
on/off, change of impeller,
change of pumps, coatings,
high eff motors, auto
operation based on
demand, tank level control,
hydraulic study, NPSH
study, efficient pump
selection, valves, piping
Buildings owned
by municipalities
Lighting
HVAC
Pumps
Lifts
Hot water system
Effluent system
Apart from I & II,
Occupancy sensors,
day-light dimming,
Fans, heaters, chillers,
package ACs, VAMs,
solar,
window/split AC,
insulation,
electrical/gas/solar
heating system
Introduction to Tamilnadu
Municipalities
(Projects initiated in 44 municipalities)
Diversities
Parameter
Population
Area (Sq. Kms)
Power/Bill ($ 000)
Minimum
Maximum
2,842
5,421,985
0.94
600
8
200
Municipal water pumping system (Typical)
System I
System
approach?
Approach
to handle?
Equipment
approach?
System II
Tanker
distribution
Sub-system
approach? System III
Booster
pumping
station
WTP
Overhead
tank
OHT
Consumer
Leaks & Theft
Bore
wells/wells
in river
Collecti
on well
Head
pumping
station
Water
treatment
plant
Intermediate
pumping
station
Type
System I
System II
System III
A
Bore wells/river
wells to
collection well
Collection well to OHT
B
Local pumps
Collection well to Supply
Booster station to OHT
What Approach?
C
Collection well to booster
station
D
Collection well to WTP
Overall
E
approach?
WTP to Booster station
Booster station to supply
output/input
Municipal water pumping system
IA
IB
II
II
II
II
II
II
Distribution of pump population
MC1 MC2 MC3 MC4 MC5 MC6
5
5
8
5
164
30
17
14
13
A
B
C
D
E
F
III A
III B
* Data from 7 municipalities
2
2
2
6
4
5
2
2
4
2
4
4
2
6
4
MC7
41
Municipal water pumping system
Approach
Baseline
Monitoring
Other issues
Equipment –
Inlet to outlet
of pump
A simple fixed baseline. But
difficult to establish dealing with large numbers.
Heterogeneity makes
sampling difficult
Simple but tedious,
since large numbers
are involved and
monitoring cost will be
high.
Makes sense if a
successful sampling
method is established.
Limited to equipment
specific EE measures.
Sub-system –
A pumping
station
Limited to sub-system
specific measures
A fixed baseline isn’t
System –
Source to next possible – system changes
discharge point with time.
Less numbers are an
advantage
Most EE measures can
be covered.
Overall –
River/bore well
to
OHT/consumer
Simple and easy
Errors likely due to
theft, leaks, and
other unmetered
outlets like tanker
distribution etc
Dealing with small
numbers – sampling
not required.
A method to account
for effect of system
changes on baseline
and monitoring is the
challenge.
A complex baseline and
initial baseline
establishment may be
difficult. Changes in the
system makes it a dynamic
baseline.
Eg: new pumps, higher
output etc
Municipal street lighting system (Typical)
Mains
SS1
SS2
M
M
To others
To others
M
M
M
M
M
M
F.P
F.P
F.P
F.P
F.P
F.P
S
S
S
S
S
S
What Approach?
S Switch
Sub-system
approach?
M Meter
System
approach?
FP
Feeder pillar
SS Sub station
Overall
approach?
Municipal Street Lighting System
Share of Technologies
Lamps - Share by wattage
Lamps - Share by quantity
FTL-T12
50%
Others
1%
MVL
7%
FTL-T12
79%
Others
0%
MVL
3%
SVL
42%
SVL
18%
Municipal street lighting system (Typical)
Approach
Baseline
Monitoring
Sub-system –
Group of
fittings from a
single feeder
pillar
Though simple, large numbers
make it tedious. Sampling
approach will be ideal if
variations are taken care-of
A sampling approach
may be used provided
variables like voltage
are taken care-of
System – All
feeders from a
sub-station
Same as above since no separate
metering of lighting services are
done. However, historical voltage
variations may be useful
Metering can’t be from
sub-station since other
loads are also
connected
Voltage variations may
be captured easily.
Overall –
Whole
municipality
Baseline may be difficult to
establish considering variations
May be simple, provided
variations are taken
care-of
Municipal technologies –
CDM issues
Baseline
• Dynamic baseline scenario
– Baseline scenario prone to changes in
crediting period – mandatory EE
standards may be introduced e.g:
mandatory replacement of T12 with T8.
– Inefficient technologies may be phased
out from market(BEE standards &
labeling program) – Especially lamps –
short life of 1 to 3 yrs
– Energy performance of similar devices
from different supply sources
Baseline
• Energy baseline – Unit of measurement
– Lighting: watts/fixture?, kWh/year?, watts
– Pumping: kWh/M3?, kW/M3flow/M head?
• Method of calculation
– Equipments, systems spread over large area
– Heterogeneity poses difficulty for sampling – lamp power
varies with supply voltage, pump power varies with head, flow,
age, condition etc
– Supply voltage varies from place to place and year to year
– Data availability for historical and present years? and then the
quality of data eg data may be available for historical kWh
input, but not for outputs: flow, head, lumens etc
– Water table depletion impact
• CDM Eligibility of EE measures
– CDM EB describes EE as “measures that reduce energy input
for the same output”. Will measures that increase/decrease
the output qualify. eg: Dimming/Timer control of lamps
reduces the output, Voltage control may improve incoming
under-voltage to maintain lumen level
Municipal sector ESCO-EE
projects – The Indian
experience
Municipal Sector ESCO EE Projects in India
Name
Parties
Areas
Jamnagar,
Gujarat
USAID ECO I
One
municipality
NDMC
DSCL Energy
services
HubliDharwad
municipality,
Karnataka
ASE
USAID
Brief
Status
Remarks
1st such ESCO
project in India,
shared savings,
independent
verification
MOU signed
Financial
mechanism ready,
Didn’t take-off
MC reluctance to
provide cash flow
security, ESCO capacity,
administrative barriers
and M&V problems
Street lighting
Water pumping
Municipal
buildings
One NDMC building
project under
shared saving
ESCO contract
Implemented and
PMV for last three
years
All risks borne by ESCO
to demonstrate-not
commercially
sustainable
Street lighting
and water
pumping
Mainly water
pumping
DPR prepared
Project tender
documents under
preparation
Despite two years of
efforts, projects have
not reached
implementation status.
TipturArsikere
Water pumping
Mainly water
pumping
DPR prepared
Project tender
documents under
preparation
Despite two years of
efforts, projects have
not reached
implementation status.
Mysore
Water pumping
Mainly water
pumping
DPR prepared
Project tender
documents under
preparation
Despite two years of
efforts, projects have
not reached
implementation status.
Bangalore,
Karnataka
Street lighting
New lamp and
control technology
Implemented
under ESCO
performance
contract
Made attempt for CDM
but did not succeed-too
small
Municipal sector ESCO-EE projects in
India - Summary
• All projects initiated with TA supports from
donors but practically no implementation
• Several ESCOs have been making effortsfew successes mostly in street light
projects
• Significant barriers exist against
implementation-primarily institutional and
financial
• CDM can help in partly off setting financial
barrier.
• Project implementation by ESCOs are also
likely to better meet additonality criteria.
Why ESCO Projects are Additional
Example – actual audit report work carried out by
reputed organisation and its recommendation
Standard audit
approach
ESCO approach
e
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Stor
age
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Water Pumping System
Present system
Pump is delivering 60% flow at 40%
system efficiency with valve full open
Normal audit
recommendations
Recommends to change
impeller
Eg :Existing river water pumping
system with 72% rated efficiency is
operating at 40% efficiency
ESCO
Comparison of rated Vs actual pump parameters
including in-depth study of NPSH available Eg: In
number of actual cases, For river pumping, water
levels in last 5 yrs are studied, For bore-well
pumps, historic and present ground water levels Vs
rainfall data is studied
A new pump of optimum specification was selected.
is chosen for replacement
The NPSH and system parameters were studied indepth and a suitable new pump with “coating” was
suggested. The system efficiency improved to 78%
Pump delivering low flow due to
more than rated head – low
efficiency
A pump rated for the
existing head is suggested
to increase flow and pump
efficiency
Hydraulic analysis done to determine cause of high
head – excess friction losses in pipe/fittings
identified. Suitable changes implemented to reduce
friction loss – pump comes back to best efficiency
range operation
Eg: In cone of the cases, where
system efficiency was 46% and two
pumps were being used, hydraulic
study improved system efficiency to
70% and shutting of one pump
Replace pump with efficient
pump
Suction and discharge piping were properly sized
and rerouted to reduce pipeline losses and this
increased discharge to meet process flow. The
pump was shifted one floor up by 4.0 m as suction
was positive.
Impact
Most recommendations may
result in marginal energy
reduction.
Recommendations are not
implemented due to various
barriers
Practical EE measure identified and implemented.
These are backed by close interaction with
manufacturers, who are now not only selling
equipment but understand the need/ requirements.
Lighting System
Present system
Normal audit recommendations
ESCO
Street light with T12
fittings, magnetic
ballast, fixed operating
hours controlled
manually
Replace with efficient 36 W lamps
Replace with T8, T5, metal halides
based on area of usage, lamps,
Orientation analysis - study the
reflectors/ direction of scattering of light
to improve quality of output.
Fittings with magnetic
ballast
Replace with electronic ballast
Replace with electronic ballast-measure
the ballast specific energy consumption;
measure the harmonic distortion
Fittings with fixed
operating hours, manual
control and fluctuating
voltage
Install timer control and voltage
regulator
In addition, Install automatic photo
sensor based dimming for most
optimum operation
System analysis
Nil
ESCO would study the system and
identify the losses in system like
number of loose joints, areas of minor /
major sparking, cable sizing and system
analysis using simulations software.
Eg NDMC the savings were more than
predicated because of system analysis –
cable sizing, conditions etc, losses
under varying load conditions etc using
DSCL ES simulation software's.
Why ESCO Projects are Additional
Barriers to ESCO projects
How CDM can facilitate ESCO projects
High project development cost –
developing financial mechanisms and
contract, documentation costs, creating
awareness, attracting funds etc
May be offset by the reduced CDM transaction
cost as a result of bundling – can ESCO collect
this reduction in transaction cost from Annex I
party or the project host?
ESCO’s cost of baseline establishment and
monitoring may be reduced/shared by CDM
Reluctance/fear of failure over EE
technologies
CDM registration will help allay these fears
Newness of ESCO concept in India –
sceptical approach by project hosts
CDM improves credibility of the concept
Lack of successful ESCO projects and
publicity about ESCO projects
Publicity of CDM and making available energy
savings cases through PDD will help overcome
this barrier
Lack of sufficient payment security from
the host. Eg: Municipal utility bill arrears
run into crores
CERs may be routed through the ESCO as a
guarantee mechanism
Difficulty in arranging funds, lack of
willingness of FIs to invest in EE projects
CDM improves credibility and facilitates funding,
Eg: SRF Ltd, Sri Renuga Sugars etc share values
have tripled after registration
Way Forward
• Gathering of all comments from the meeting and development
of approach
• Collection of more data from the audit reports for rest of the
municipalities
• Development of statistical methods for reducing the standard
deviation
• Finalisation of:
–
–
–
–
Baseline methodology
Additonality test tools
Monitoring mechanism
Bundling principle
• Preparation of detailed project report, financial, economic and
other analyses, risk evaluation and mitigation methodologies.
• Development of NME and NMB
• Application to a project
• Development of methodology and submission for peer review
• Finalization of methodology
Timeline
Correlation