Kim Session21 Acef2008

JUNE JUNE 2008 2008

ASIA ASIA CLEAN CLEAN ENERGY ENERGY FORUM FORUM

1

Ⅰ Ⅱ Ⅲ

2

Ⅰ

3

KOREA’s Financial Support System y Fund established in 1980 y Loan : long term, low rate of interest loans for investing in energy efficiency & conservation facilities

y Tax incentives : 10% tax deduction (income tax or corporation tax) for investments of energy efficiency & conservation facilities

y Managed by MKE(government) and operated by KEMCO 4

Projects of Loan Rational use of energy Establishment of cogeneration facilities for industry or building, installation of energy efficiency & conservation facilities and ESCO projects etc.

Integrated Energy Supply District Heating, Community Energy System, Industrial Complex CHP (Combined Heat and Power System)

Dissemination of New & Renewable energy Installation of equipment using alternative energy such as solarheat, solar-light and bio-energy etc. 5

Loan Scale in 2008 Budget (million USD)

Category Rational Use of Energy

480

Integrated Energy Supply

100

Dissemination of New & Renewable energy

130

Total

710 (1 USD ≒1,000 won)

※ Rate of interest : 3.25~6% (variable) Repayment period : 4~15years (according to facilities or project)

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Loan Procedure ① to apply

Applicant

KEMCO

② to recommend ③ ply ap

et

to ②

g iv he

n loa the for

to

no le n t if y da gr ee me nt

to

④

l oa

n

BANK 7

Ⅱ

8

ESCO System in KOREA y System is in operation since 1992 y ESCO should be registered before applying for a loan y 156 y But,

ESCOs have registered as of 2007 Active ESCOs are about 30~40

y Energy Performance Contracting model is almost the Shared Savings model (about 98%)

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Two main models for EPC ‹ Shared savings model (ESCO: Fund raising and profit sharing)

Energy user

ESCO fund raise

‹ Guaranteed savings model (ESCO: energy performance guarantee / Energy user: Fund raising)

Energy user

ESCO

fund raise

10

System of supporting ESCO Investment in facility

ESCO

Energy user sharing of cost savings

· Advertisement · Market expansion

· Financial support · Policy improvement

MKE & KEMCO ※ MKE : Ministry of Knowledge Economy KEMCO : Korea Energy Management Corporation 11

Number of registered ESCOs 180

159

160

163 163

No. of ESCOs

140

159

166

158 156

120 103

100 80 55

60 40 20

4

5

7

6

9

'9 2

'9 3

'9 4

'9 5

'9 6

16

28

0

Class 1(plant) 18 companies

'9 7

'9 8

Class 2(building) 47 companies 12

'9 9

'0 0

'0 1

'0 2

'0 3

'0 4

'0 5

'0 6

'0 7

Class 1 · 2 Total 91 companies 156 companies

Yearly Investment Performance 200 ESCO Fund(million USD)

548

150

500

491 140

133 136 400 328

100

100

86

244

75

300

83

65 50

202

139

167

156 106 100

30 0

200

0.5 3.9 2.8 5.5245.725 3 3 3

0

'93 '94 '95 '96 '97 '98 '99 Year '00 '01 '02 '03 '04 '05 '06 '07

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No. of Projects

519

No. of Projects

ESCO Fund (M USD)

600

183

Investment by facility (’93∼’07) ESCO Fund(million USD)

1,771

No. of Projects

1,600

200 1,200 122

118

115

800

100

81

14

er Po w

oo l in g

y

ea t in g/ C

ec ov er H

H

ea tR

ve m

Pr

oc es s

Im pr o

Bo i le r

en t

81

0

400 239 6

21 53

13

s

139

173

th er

244

O

245

un ni ng

35

50

R

150

Li gh ti n C g og en er at io n

ESCO Fund (M USD)

250

2,000

276

274

-

No. of Projects

300

Examples of energy conservation in Industry y Waste Heat Recovery System - Heat Recovery Boiler - Mechanical(Thermal) Vapor Recompressor - Heat exchanger for heating or cooling

y Co-Generation (Steam + Electricity) y Process Improvement - Naphtha Cracking Heater Coil replacement - Ejector type replacement (Steam ⇒ EG)

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Examples of energy conservation in Building

y Ice thermal storage system y Lighting System y Co-generation system (Apartment) y Heat recovery system (AHU, Steam) y Building automation control unit y Variable Voltage Variable Frequency

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Energy Saving Performance (’93∼’07) Savings(million USD) thousand toe

291

100

284 78

77

80

300 250 200

60 150

148 36

40

37

32

108

113

100

15

20

50

9

39

22

19

0

17

s er th O

Po we r

Co

ol in

g

y He

at ing /

co ve r Re

at He

Pr

oc es s

Co

Im pr o

ve m

en t

i le r Bo

ge n

er

at

gh ti n

io n

g

0

Li

Savings (M USD)

350

110

thousand toe

120

Policies for supporting ESCOs y Operating Fund (1998) - Fund for small & medium sized ESCOs

y Credit loan system (1998) - Getting a credit loan from bank

y Factoring system (1999) y Guaranteed savings contract model (2004) y Excellent ESCO (2006) - accreditation program to superior ESCO

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Ⅲ

19

y Rapid economic growth in a short period y Various policy-oriented Funds to induce faster economic development y Last five years EC Fund

(unit : million USD)

2003

2004

2005

2006

2007

305

282

458

433

467

y Estimated 700,000toe of energy savings yearly y Fund for new & renewable energy is increasing 20

y Financial support to 108 groups of energy saving facilities Group

Major Facilities

Integrated Energy Supply

District Heating & Cooling, Community Energy System, Combined Heat & Power for industrial complex

furnace, kiln, dyeing machine, drying machine, pulper, Energy efficient MVR, TVR, accumulator, air handling unit, Cogeneration, facilities building automation control unit , heat recovery boiler, heat exchanger etc. Certified high efficient products

Induction motor, pump, gas boiler, UPS, transformer, fluorescent lamp & ballast, inverter, vending machine, fan, blower, LED traffic light etc.

y Hard to estimate the effect of energy savings 21

y Economic structure in Korea

y Result of Korean Government’s strong will to energy saving 22

Thank you for more information e-mail : [email protected] or [email protected] 23