TurSEFF: A great financing opportunity for Cogeneration, Tri-generation and Energy Efficiency projects in Turkey

Transcription

1 TÜRKOTED Sempozyum Izmir, 28 May 2015 Dario Dilucia La Perna TurSEFF: A great financing opportunity for Cogeneration, Tri-generation and Energy Efficiency projects in Turkey DESIGNED BY SUPPORTED BY IMPLEMENTED BY

2 Content of the presentation 1. The TurSEFF programme 2. Energy Surveys and Simplified Energy Audits to identify Energy Efficiency opportunities under TurSEFF 3. Co-generation and Trigeneration market 4. Co-generation and trigeneration financing under TurSEFF 5. Conclusions 2

3 The TurSEFF programme DESIGNED BY SUPPORTED BY IMPLEMENTED BY

4 Turkey Private Sector Sustainable Energy Financing Facility (TurSEFF) The EBRD has developed the Turkey Private Sector Sustainable Energy Financing Facility (TurSEFF). The programme is supported by EU and CTF 4

5 Which are the overall goals of the programme? Enhancing energy security through improving energy efficiency in key sectors of the economy (private sector) Supporting a clean energy transition by reducing reliance on fossil fuels and focusing on meeting energy needs in an environmentally sustainable manner, thereby reducing GHG emissions Promoting and increasing the awareness of energy efficiency across economic sectors together with climate change 5

6 Which are the TurSEFF stakeholders? 6

7 Which type of loans is available? Energy Efficiency and Renewable Energy Projects (1) (2) (3) (4) (5) Large Scale loan in Industry (SMEs) (up to EUR 5 million) Large scale loan in commercial buildings(smes) (up to EUR 5 million) Small Scale loan (LEME-LESI) (SMEs) (up to EUR 250,000) Supplier loan (SMEs) (up to EUR 1 million) Vendor loan (End-users must be SMEs) (up to EUR 5 million) 7

8 Which are our core activities? Management PB relationship Ensure that the technical criteria of the Facility are clearly defined, consistently applied and updated Provide overall Facility coordination Establish an efficient tracking, monitoring, management and reporting system Monitor the portfolio of Sub-projects of the Facility Provide all the assistance and help needed to the VC and to the PBs during the verification phase Periodically report to EBRD the progress of the Facility (monthly and quarterly) Training of Loan Officers of Participating Banks Focus on working with regional branches of the PBs to increase the outreach to investors Development of new loan products and financing schemes Design of incentive Scheme for Loan Officers 8

9 ..Marketing and Engineering Marketing Engineering Promote the TurSEFF through targeted public awareness and marketing campaigns in cooperation with Participating Banks and other stakeholders in the energy market Arrange information dissemination activities related to the project to inform a wide range of stakeholders about the Facility and the benefits of rational energy utilisation Support the development of an adequate project pipeline Work with local ministries and other governmental agencies related to energy Preparation and distribution of marketing material Provide free-technical assistance to beneficiaries such as Energy Audit, help in developing energy efficiency and renewable energy sub-projects in both industry and buildings Prepare Project Assessment Reports (PAR) for large scale projects Design, establish, and regularly update the List of Eligible Measures and Equipment (LEME) and a List of Equipment Suppliers and Installers (LESI) Energy management training for Turkish enterprises and for local engineers/energy auditors/architects and designers 9

10 Phases of sub-project development Project origination Project screning Project preparation Project appraisal Project financing Project implementation Project Verification Project Consultant PB Beneficiary Verification Consultant 10

11 How can TurSEFF help mitigating the risks and barriers of the market? Competitive pricing; LEME-LESI List to boost the process for small scale projects (loan amount lower than 250,000 EUR) Fast evaluation process against the TurSEFF criteria (if data are available) The technical assistance provided by us is free-of charge for both the banks and the end-users Wide spectrum of technical assistance activities provided, including: Tailored energy surveys to the most energy intensive clients (both industrial and commercial); Energy Management trainings to: Beneficiaries PBs Engineers and architects (via training) Regional Development Agencies (via training) Technical support to the client to promote their projects to the bank for financing 11

12 TurSEFF website 12

13 Small-Scale projects (up to EUR 250,000): visit our LEME-LESI on TurSEFF website! 13

14 TurSEFF website express request form The express request form is widely adopted by potential benefiaciaries 14

15 TurSEFF website sector leaflets Leaflets for many industrial sector (almost 20) can be easily downloaded from the website! 15

16 TurSEFF website Frequently Asked Questions Frequently Asked Questions tab to easily and quickly provide answers to the key questions! 16

17 Energy efficiency financing under TurSEFF: results achieved so far! Out of EUR 300 million financed under TurSEFF, EUR 210 million was financed for EE projects Manufacturing, Textile, Construction and Service are the leading sectors! The CO2eq emissions savings are equivalent to the emissions of 80,000 cars! The primary energy savings are equivalent to the electricity consumption of around 1.2 million people living in Turkey! 17

18 Which EE technologies are financed under TurSEFF? Wide spectrum of technologies have been financed so far under TurSEFF! Process machine replacement, Insulation and cogeneration are leading the primary energy savings achieved 18

19 Regional coverage of TurSEFF financing for EE projects Marmara, Aegean and Central Anatolia have been the most active Regions in terms of disbursement! Marmara: 43% Aegean: 28% Central Anatolia: 15% Mediterranean: 8% South and Eastern Anatolia: 6% Black-sea: 1% 19

20 Energy Surveys and Simplified Energy Audits to identify Energy Efficiency opportunities under TurSEFF DESIGNED BY SUPPORTED BY IMPLEMENTED BY

21 Energy Surveys and Simplified Energy Audit under TurSEFF TurSEFF Team Bank Industrial Clients Free-of charge Energy Surveys (ES) approved by EBRD Commercial Building Clients Free-of charge Simplified Energy Audit (SEA) approved by EBRD SME Pre-screening of the Clients: a)energy intensive facilities b)interested to invest in EE projects in shorttime c)committment of the Management d)high-operating time e)medium to high energy costs 21

22 Industry - Break-down of primary energy savings by technology TOE/year Cogeneration Compressed air FMCS Fuel switch Heat Pump Heat recovery Heating system HVAC Insulation Lighting Process Machine Replacement Pumps/motors PV Solar System The total potential loan amount with ESs activities equals EUR 4.8 million and the total primary energy savings identified so far with ESs activities amount to 5,100 toe per year Sector Sum of Annual primary energy equivalent savings [toe/year] Since June ,800 1,677 1,600 1,400 1,200 1, Project type 22

23 Industry - Break-down of cumulative energy savings by sector TOE/year The ferrous sector is leading with 34% of the potential savings Sector identified followed by food&beverage and non-ferrous sectors. Sum of Annual primary energy equivalent savings [toe/year] 2,000 1,800 1,600 1,400 1,200 1, , Since June Economic Activity 23

24 Commercial buildings- Break-down of primary energy savings by technology TOE/year Cogeneration Compressed air FMCS Fuel switch Heat Pump Heat recovery HVAC Insulation Lighting Pumps/motors PV Solar System Solar Water Heaters Trigeneration Wind Power Plant Windows The total potential loan amount with SEAs activities amounts to EUR 6.6 million and the total primary energy savings identified so far with SEAs activities amounts to 4,472 toe per year. Since June 2013 Sector Sum of Annual primary energy equivalent savings [toe/year] 1,600 1,440 1,400 1,200 1, Project type 24

25 Commercial buildings - Break-down of cumulative energy savings by sector TOE/year The tourism sector is leading with 55% of the potential savings identified, followed by the retail and hospital sectors Sector Sum of Annual primary energy equivalent savings [toe/year] 3,000 Since June ,500 2,515 2,000 1,500 1, , Hospital Retail Tourism Economic Activity 25

26 Co-generation and Tri-generation market DESIGNED BY SUPPORTED BY IMPLEMENTED BY

27 Cogeneration and tri-generation applications The heat to power ratio demand of the facility should match with the heat to power ratio of the selected cogeneration system Low temperature heat demand improves the profitability of the project (for reciprocating engines applications) High requirements for heating and / or cooling (at least 5,000 hours); The ability to connect to the grid at a reasonable price with the availability of back-up; Availability of space for the equipment and short distances for heat transport. Reliable, long-term supply of fuel

28 Benefits of cogeneration for end-users and the Country At end-user level Increased efficiency of energy conversion and use (49% 75%) Improved local security of supply Additional competitiveness At country level Lower emissions to the environment, in particular of CO2. An opportunity to move towards more decentralised forms of electricity generation Improved general security of supply Enhanced electricity network stability through reduction in congestion and peakshaving Reduced investment in energy system infrastructure 28

29 The role of cogeneration in total electricity generation in Europe and Turkey The EU currently generates 11.2% of its electricity using cogeneration on average 29

30 Barriers in Turkish market.. a) Lack of technical awareness (especially amongst SMEs) b) Creditworthiness of Clients (especially amongst SMEs located in the least development Regions) c) Electricity tariff very low in OIZ d) Lack of budget resources on EE projects e) Natural gas market not fully liberalized (uncertainty for CHP and tri-generation projects) f) Lack of awareness of business models such as ESCO, PPA agreement g) Poor quality Feasibility Study h) ESCO modeling is difficult for the unlicensed segment of the market (< 1 MW) i) Lack of incentives for micro-cogeneration (<30kW) 30

31 ..and opportunities a) Good penetration rate of top-equipment suppliers b) Good penetration rate of high-efficiency equipment c) Different financing schemes are available d) High Efficiency Cogeneration requirement has been recently defined in the energy legislation e) There are many energy intensive industries f) Very good profitability for many industrial clients g) Natural Gas is available in many Regions of the country h) ESCO model can reduce the technical and financial risk from Client side (especially for commercial building applications) 31

32 Cogeneration and tri-generation financing under TurSEFF DESIGNED BY SUPPORTED BY IMPLEMENTED BY

33 Co-generation and tri-generation financing under TurSEFF! EUR 27.8 Million was disbursed under TurSEFF for both cogeneration and tri-generation projects leading to 335 GWh/year electricity generation. The electricity generation would offset the electricity consumption of around 660,000 people living in Turkey. The tco 2eq savings are equivalent to the tco 2eq emitted by nearly 30,000 cars. 33

34 Type of Clients which have used TurSEFF funds for co/trigeneration since 2010! (1) Industrial Clients, up to EUR 5 million (2) Commercial Clients, up to EUR 5 million (3) Energy Service Companies (ESCOs), up to EUR 5 million (4) Cogeration manufacturers, up to EUR 1 million (5) Cogeneration dealers, installers and vendors, up to EUR 5 million 34

35 TurSEFF case study: tri-generation project at Florence Nightingale Hospital, Istanbul Esko (the Seller) has signed a long-term PPA with Florence Nightingale Hospital (the Buyer). It is one of the few PPAs in place in Turkey so far; Win-win solution: Esko benefits from the revenues from the customers, and the customer benefits from lower energy tariffs applied to its energy bill. The PPA solution overcomes the barrier of lack of technical expertise from customer side (a hospital) which takes neither financial nor technical risks. The tri-generation application in hospitals can provide both reliable electricity and satisfy the contemporaneous demand of electricity, thermal energy and cooling.

36 Structure of the Power Purchase Agreement 36

37 Results Key Performance Data Implementation date June 2014 Category of investment Energy Efficiency Power installed 800 kw Primary energy saving 4,912 MWh/year CO2 emission reduction 425 Tons CO2/year Investment 592,105 EUR TurSEFF loan amount 592,105 EUR Internal Rate of Return 32.2 % Simple Pay Back Time 3.1 years The capacity of the new trigeneration unit is 800 kw el increasing the overall installed capacity up to 2,800 kw el.

38 Conclusions DESIGNED BY SUPPORTED BY IMPLEMENTED BY

39 Country energy overview Turkey relied on energy supply from other countries to an extent of 75.5% of the country primary energy needs in 2013 the electricity demand will increase annually at a rate of 5-6 % Industrial, residential and services account for more than 70% of the final energy consumption 39

40 National 2023 energy efficiency targets General Turkish energy efficiency targets, articulated in Energy Efficiency Strategy Paper , are established for The final objective is decreasing at least 20% of amount of energy consumed per unit of GDP of Turkey in the year

41 Why does Energy efficiency play a key role to achieve the National Targets? Pay-back time can be very short Negawatt means the energy that is never used Energy Efficiency can be «partially» done even for free, just changing the behavior of people and managing energy Energy Efficiency improves the competitiveness of Clients Energy Efficiency is the «cheapest fuel» available in the market At final user level, energy efficiency MUST come before renewable energy for self-consumption Energy Efficiency is the «quickest way» to save energy Nothing else can allow to achieve the below sustainable energy targets all at once as the energy efficiency can do: i. Reduction of energy consumption at final users; ii. iii. iv. Reduction of primary energy consumption at country level; Reduction of GHG emissions at country level, and; Improvement of Power Supply security. 41

42 Why can TurSEFF help contributing to the achievement of the National targets? Excellent results achieved since 2010 Very flexible financing mechanism Very strong free of charge Technical Assistance Great network with key stakeholders of the market LEME-LESI as a tool to promote high efficiency equipment in the market Very short and easy process Competitive pricing 42

43 A final quote from Rockey Mountain Institute Energy Efficiency is one of the highest-return and lowestrisk investments in the whole economy By Amory Lovins, Rockey Mountain Institute 43

44 Contact details Asmadalı Sokak No:27 Koşuyolu / Kadıköy Istanbul / TURKEY Tel: Fax: