Electricity and the cost of doing

business in the Philippines

Philippe Reveilhac
President
Schneider Electric Philippines

2nd European Union-Philippines Meeting on Energy

Energy Efficiency to Boost Economic Growth
29th May 2013
 Well Known Fact About Philippines
• Ideal investment destination

• International credit rating upgrade – “BBB-”

• Resilient economy that can weather a global economic downturn

- GDP in 20124Q grew by 6.8%, full year 6.6%
- GDP value of PH represents 0.36% of the world’s economy

• Strategic logistics hub to Asia (where more then 2B people resides)

- Within proximity are demand centers such as China, Indonesia & India

• Abundant resources that provides endless possibilities to invest

- 5th among mineralized country in the world
- 2nd in gold reserves, 4th in copper, 5th in nickel & 6th in chromites

• What sets apart ? - The Filipinos

References:
•www.boi.gov.ph
•www.manila2012.ph/about_the_philippines
•http://scoopboy.com/philippines-gets-first-ever-investment-grade-credit-rating/
•Bloomberg TV, Worldbank, NSCB, CIA Worldfact Book and PH & WW news releases 2
In the Philippines
Today:
94M million inhabitants
40% lives in cities
Approx 20% have access to a
decent energy infrastructure
By 2030:
125 million inhabitants
60% will live in cities
an additional (approx) 2
million people in the “energy”
middle class
3
Source: UN Population Fund Report 2010
Electrical energy is generally more expensive
for those who have less access to it
Systems to be implemented
Traditional systems Conventional systems
(consumables) (micro elec) (mini elec) (Interconnected network)
€ /kWh

150
Rural : villages Dense and Sub-
Dry batteries
motorized urban,
Scatteredhousing
centers urban
Candles
Petrol/Gas
Cost of the final service

15
Lamps

1,5

Interconnected
0,15 power plants and
paid off grid

Photobatteries Isolated genset

batteries + micro grid
0,015

Source: AFD Watt kWatt MWatt Installed power

4
 Energy Cost
* Philippines is one of the highest rated country in the world!

References:
http://www.interaksyon.com/business/40664/ph-electricity-rates-among-10-highest-in-survey-of-44-countri
http://www.abs-cbnnews.com/business/10/10/11/ph-power-rates-5th-highest-world
International Energy Agency – www.iea.org

5
The Costs of Power Failure

6
 Impact of Energy to Businesses

References:
http://www.minda.gov.ph/site/Mindanao/downloads/Presentations
http://infochat.com.ph/2012/04/protecting-businesses-from-the-energy-crisis/
7
http://opinion.inquirer.net/50283/mindanao-power-woes-and-media-brownout
 Controlling energy
risks should not just
be limited to having
emergency
generators!
- Michael Bruch, AGCS Allianz
8
 The Jurassic Grid
Old-style power distribution

Centralised
Generation

Residential

Industry

Building

Datacenter
Transmission Distribution Commercial & Industrial

• Central production adapting to demand • Production / consumption balance done by

variation integrated utility companies
• Top-down energy flow • Rather passive users
9
Electricity networks are becoming more
complex, less stable!
To continue to efficiently balance supply & demand, the grid needs to become smarter

drivers accelerators
Growing electricity demand Technology availability

Need to reduce CO2 emissions Active government & regulators

Constraints on existing networks Active end-users

making the Smart Grid happen

Schneider Electric 10
The Smart Grid
Communication and software at all levels “Smart Grid”

Utility network Consumers

4
Centralised Generation

Transmission Distribution Consumers

3 Active

Residential

Consumers
Active
Industry

3
Buildings

Electric Vehicles
& Energy Storage
Data Centres

Infrastructure
1 2 1
Renewable Energy Plants Active Energy Efficiency: Distributed Generation
Energy visibility & Means to act

Flexible distribution Renewables integration Electric vehicle charging Demand-response

Schneider Electric 11
Energy challenges & opportunities
are everywhere

Supply Side Demand Supply Demand Side

Management
More Efficient and + More Efficient Use
Cleaner Supply Metering & Conservation & Management
Analysis

Cleaner supplies will take Current technologies allow us

time to implement to target 30% savings

We must develop technologies We must focus on Energy

and business models to increase Efficiency to solve our energy
renewable energies penetration dilemma

Mid term approach Short term action

Schneider Electric 12
We must enable high performance green
buildings & smart cities for our future
Future Carbon Neutral buildings,
micro grids, eco-cities
Net Zero Energy & Positive
Energy buildings
Connect to Electrical Vehicles
Use renewable energy

smart and green come together to deliver

“bright green” buildings

Focus on efficiency and operational

performance over time (LEED EB:O&M)

Focus on environmental impact of construction

Today
(green design)

Time
Schneider Electric 13
 100 units of Fossil Fuel

38.5 units 35 units 22 units

Fossil Fuel Power Plant Power Transmission Building Facilities

61.5 3.5 13

Lost through inefficient Lost through transmission Wasted through

generation and heat loss and distribution inefficient end use

Schneider Electric 14
 Understanding Building Lifecycle Costs

Building life cycle costs = capital investment + operation costs

Development CAPEX Ongoing OPEX

Construction Financing Operation and Upgrades

11% 14% 75%

Source : www.CABA.org

3 to 5 years 30 to 35 years

Real Estate Developers Architects Owners

Investors Engineers Facility Managers
Construction Companies Contractors Occupants

Energy Management minimizes ongoing costs,

which is 75% of the life cycle cost of the building.

Schneider Electric 15
Active Energy Management:
The fastest way to save on energy, curb CO2 emissions
and reduce operation cost
Energy audit
1 Find out what the challenge is… & metering

Passive Energy Efficiency Active Energy Management

2 3 Optimise through 4 Monitor,

Fix the basics automation & maintain,
regulation improve

Low consumption devices, Solutions in : Metering, monitoring and

insulation material, power building management, consulting services, EM analysis
factor correction power management, software
motor control, lighting control
Schneider Electric 16
A few examples
of
REAL
$aving$
17
Case Study 1: Building in France
ISO 50001: first certified building in the world!

÷4
Final energy
consumption vs. previous
sites in the area

80 kwh/m²/ yr
Final energy consumption
ROI in 5 to 7 years

A Green building
● Equipped with SE solutions Certified
● Electric Vehicles charging station with PV solar panel roof ISO14001
● Smart grid-ready HQE Exploitation
NF EN16001
● Full monitoring

18
20
21
22
23
24
Case Study 2: A Manufacturing Plant in Philippines

25
 Energy Savings in the Plant
Key Success Factors

• Use Lifecycle Solution for

Energy Efficiency
Initiatives in the Plant.

• Fast implementation to
measure energy using
Powerlogic ION Meters

• Regularly recording,
monitoring and analysis
with Powerlogic ION
Enterprise System

• Commitment from each

contributors

Schneider Electric 26
Step 1 Measure
Energy Consumption Monitoring
• The basis of a successful energy efficiency program is
to implement an Energy Management System

MDB1
MDB1
• PowerLogic® Power Metering System
• cover all 6 sites with 84 power meters to survey
the electricity consumption
• Regularly monitoring and analysis PowerLogic data Savings: ~10%

• Real time data logging and reporting was made

through StruXureware power monitoring

Schneider Electric 27
Step 2 Awareness! Fix the basics

Optimized the workload of air Before

compressor and reduce the 15% Savings
energy usage Immediately!
After
 to setup new
air Approx P8M
pressure level. savings
The charts show; Air compressors after
-8.14% of Kw reduced air pressure, real power
significant drop ( 69Kw. to 64Kw.)

After Before

Educating employees to 90Kw New office

switch off lights 70Kw New office

& air condition 50Kw

55Kw

when leaving the 50Kw

19Kw Existing office 35Kw
rooms/offices Existing office
21Kw

Schneider Electric 28
 Lighting Optimization &
Step 3 Control
Automate

• Automatic control for switching off

unnecessary lights lead to good
energy savings.

• Replacement of Metal Halide with

High Bay LED Lighting to the
warehouse

Savings: 5-7%

Schneider Electric 29
Step 3 Motor Control Automate

• Variable Speed Drive (VSD) installation at the

vacuum pump for the chiller system 10HP
• Variable Speed Drive (VSD) installation at main
Air compressor 75HP

Schneider Electric 30
Step 4 Energy Monitoring Monitoring

Monitoring system Improvement

(StruXureware)

• Access to the energy readings

and logs through the internet
• Issuance of monthly energy
reports
• Preparation data for
improvement actions

Schneider Electric 31
Results: Significant Energy Savings!

Initial Savings:
P43M worth
energy savings

3,953,576 kWh
savings

Schneider Electric 32
 Case Study 3: A Factory in the Philippines
Energy Target Setting

Scope of Work:
• Analysis of electricity consumption
• Contract Tariff Analysis
• Transformer load & distribution
• Assessment of Industrial Services
• Compressed Air Generation
• Refrigeration Plant
• Cooling Tower
• Water Pumping
• Boiler house & Air heaters
• HVAC
• Lighting
• Assessment of Process
• Detailed Project Description with savings calculation and required CAPEX for the EE initiatives.

Schneider Electric 33
Energy Efficiency Initiatives: A Factory in Philippines

What was done?

More than P45M
• Replaced Air Handling Unit (AHU) chilled worth of savings
water distribution pumps with VFD and high
efficiency pumps Above 6000 MWh
• Replace Valve Absorption Motor (VAM) with energy saved
electrical chillers
equivalent of 0.0471
• New Cooling water pumps with VFD and tons of CO2/t
new rerouted headers
28,980 trees to offset
• Install new cooling water pumps
with VFD and new headers per year!

• Improvement of Power Factor in electrical

distribution

As project is still ongoing, more savings are expected!

Schneider Electric 34
Case Study 4: A Tunnel in the Philippines

Schneider Electric 35
Solar Structure

Schneider Electric 36
Projected Savings
● The solar power is rated at 6.4 kWp. It generates 6,648 kWh per year.

● Total power demand reduction is 28,392 kWh (LED + solar power) or 51%
energy savings.

● Only the right inverter, PVs, batteries, and lighting systems can provide
maximum savings:

Tubular Fluorescent Lights (T12) LED

RESULT
+ High Pressure Sodium (HPS) + SOLAR POWER
Consumption, in
6.58 kW 4 kW
kW
Cost,
Php 570,000 per annum Php 230,056 per annum
@ Php 10 / kW
Power demand
28,392 kWh (51%)
reduction
In Conclusion

We cannot stop energy demand growth

But we can change the way we

use energy and reduce GHG
emissions & eventually realize
the savings from energy reduction
30% savings are available today…

… thanks to a combination of

100%
• Up to 8% per year is lost without
monitoring and maintenance program
• Up to 12% per year is lost without
installation (10 to 15%)
Efficient devices and

regulation and control systems

automation (5 to 15%)
Optimized usage via

70%
Consumption
Energy

Monitoring & Maintenance

(2 to 8 %)

Time

Schneider Electric 39
 … but savings can be lost quickly…
● Unplanned, unmanaged shutdowns of equipment and processes

● Lack of automation and regulation (motors, heating)

● No continuity of behaviours

100%
Up to 8% per year is
lost without
monitoring and
Efficient devices
and installation

maintenance
Optimized usage
via automation

70% program
Consumption

Up to 12% per year

is lost without
Energy

Monitoring & Maintenance regulation and

control systems

Time
Schneider Electric 40
We make the most of your energy!

Thank you