Sharing in energy saving benefits

on April 9th, 2013


In Vietnam, the power market with inefficient electricity- using behaviors contained great chances for energy efficiency services. This is an attractive opportunities for financial institutions, banks, investment funds, international consultants and business.

Rex is a typical energy saving success gained the title of "green hotel". At the launch ceremony of partnership program on energy saving model polite by ESCO last week, Mr. Tao Van Nghe - Director of Rex said that there was more than 70% power cost reduced in last three years.

 

 

Image via internet

A particular success

“In addition to the environmental protection criteria, there are brand elements and increase company profits," Mr. Nghe said. According to the business report of Rex Hotel, revenues in 2009 is 258 billion, in which, the cost of electricity is 12.8 billion. In the two years later, Rex has new areas, install two solar water heaters in 2010 and 2011. Total revenue in 2010 was 298 billion, in which, the cost of electricity is 12.6 billion. Revenues in 2011 soared to 410 billion, the spending power of 16.4 billion. In nine months of 2012, revenue is 273 billion, energy cost is 12.3 billion. Although electricity prices continuously increase, own electricity for hot water systems in 2009 was 1.1 billion, Rex has to pay only 300 million for energy cost, while electricity prices increase by 30% comparing to 2009.

The success of Rex is considered as a precious experience for energy service company (ESCO) in the future. Every year, electricity industry requires twice growth comparing to the GDP growth, while the world average is 1% GDP growth equally with 1.2 to 1.5% increasing power prices. The biggest reason is inefficient in using energy while the power-saving model has not been interested. Other barriers are lack of experience, fear of risk capital and technology ... ESCO model is available in many years but it was not applied successfully because of lack of policies and the difficulties in business practices.

New things

ESCO is a business model designed to improve energy efficiency, reduce operations and maintenance costs for customers and two parties will share benefits together. ESCO will invest all parts of project including funds, operations, management, etc.). After that, the two parties will share the benefits based on energy savings agreement. Alternatively, if enterprises invest themself, the ESCO will guarantee energy efficiency, energy audits and ensure energy saving level.

After capital recovery, the enterprise will own all system invested by ESCO. In theory, ESCO model could save up to 70% energy, and more effective, safer, less emissions and less dependency than traditional energy using model.

Ultimately, ESCO model is outsourcing energy services. And this is a chance for business to improve the system to meet the requirements of Law in long term. But this model is still relatively new; the benefits of solutions are being proven in practice to form a true energy market, not only individual projects. And because this is new market, therefore, it should require clear mechanism from the investor relations, allocation, authentication method, ability to supply projects and capacity in attracting projects.

Some enterprises begin to join into this market such as Solar-BK, KASATI Esco, RCEE NIRAS and Viet Esoco – HCM Energy conservation center ... In addition, Many international organizations such as financial International IFC - World Bank (WB), Euro-Aid Fund of European Committee and Japanese companies took part in this market.

Translated by Hoang Phuc


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The International Exposition on Technologies and Products for Energy saving and Environment protection in Hai Phong city in 2017(E&E Expo Hai Phong 2017) taking place from November 29th to December 2nd 2017 at Viet-Tiep Friendship Labor Cultural Palace, Lach Tray Ward, Ngo Quyen District, Hai Phong City.
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Energy Conservation and Cleaner Production Center of Hai Phong City
Add: No. 104 Nguyen Duc Canh - Hai Phong
Tel: (84) 313 7340488 * Fax: (84) 313 630 626
Email: ecc-hpc@haiphong.gov.vn
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