1. UNIDO-GEF Industrial Energy Efficiency Project in Macedonia

2. UNIDO-GEF Industrial Energy Efficiency Project in Macedonia
Marco Matteini
Industrial Development Officer
UNIDO Energy Branch
Holiday Inn, 28 May 2015
Skopje, Macedonia 2

3. UNIDO & Executing Partners
Project at a Glance
Title:
Catalyzing market transformation for industrial energy efficiency and accelerate investments in best available practices and technologies in the FYR of Macedonia
Objective: Reduce greenhouse gases emissions of Macedonian industry through improved energy efficiency
Implementing Agency: UNIDO
Executing Partners: Min. of Environment & PP, Min. of Economy, Energy Agency, Macedonia Bank for Development and Promotion, REC Country Office Macedonia, Macedonian industries, Faculty of Technology and Metallurgy, USAID/Timel Proekt
Budget: USD 1,400, plus USD 5,900,000 co-financing
Duration:
UNDP will work together with EIE to serve the large industries and UNIDO wilt KOSGED to serve the SMEs.
UNIDO & Executing Partners 3 3

4. Project Context
Industry is the single largest source of GHG emissions, accounting for about 32% of global emissions
Industry accounts for ~ 1/3 of global energy use
Industrial energy use is projected to increase by 37% by 2035 (2013 base) in the New Policies Scenario
Growth arises especially in non- energy intensive sectors and in non- OECD countries
Greenhouse Gas Emissions by Economic Sectors
Industrial energy use over expanded by almost 55%, and it is projected to increase a further 37% by 2035 in the New Policies Scenario. (IEA WEO 2013, page 287)
Over the projection period ( ), industrial energy consumption grows to some 3,530 Mtoe from today’s level of 2,550 Mtoe (Table7.3). Most of this growth arises in non-energy intensive sectors, such as food, textiles, machinery and transport equipment, whose energy consumption increases by 60%, while energy consumption in iron and steel grows by only 16% and is almost flat in cement.
Source: IPPC Working Group III – Mitigation of Climate Change, 2014
Estimated economic EE potential in industry is 25-30%, with existing best-available practices and technologies 4 4

5. Project Context – 2 (National)
UNDP will work together with EIE to serve the large industries and UNIDO wilt KOSGED to serve the SMEs. 5 5

6. Policies & Institutions Market Services & Skills
Project Intervention Logic
IEE Barriers at various levels
Project response
Technical Assistance for IEE Policies and Programs development and institutional strengthening
IEE market development support through skills and services upgrade, pilot implementation and demand creation
Partnerships for scaling-up IEE investments through enhancement of existing financing mechanisms
Policies & Institutions
Implement. and
Invest.
Market Services & Skills
Strengthen policy and regulatory frameworks for better and sustainable energy efficient performance in industry
Accelerate adoption and wide dissemination of IEE best-available practices and technologies
Save energy and reduce GHG emission of the industrial sector
Integrate EE in industry daily business practices 6 6

7. Market Services, Skills & Implem.
Project Structure
Component 1
Policy & Institutions
Energy Management Policy Programme
Certification of personnel
Incentives for EnMS/ISO implementation
IEE best-practice information dissemination programme
Industrial energy data management tool
Assessment of climate technologies for industry
Strengthening of IEE institutional expertise
Component 2
Market Services, Skills & Implem.
Training for local IEE consultants
Energy Management Systems (EnMS) in line with ISO50001
Steam System Optimization (SSO)
Compressed-air System Optimization (CASO)
Training for enterprises
Implementation of EnMS, SSO and CASO
Integration of ISO and ISO14001
Component 3
Investments
Technical assistance facility for IEE investment proposals preparation and appraisal
Performance-based cash-premium for IEE investments
Training of local IEE consultants
Training of lending officers of Macedonian banks 7 7

8. ENERGY SAVINGS & INVESTMENTS!
Focus on Energy Management Systems (EnMS)
in line with ISO 50001
Enact CHANGE!
ENACT CHANGE!
Top management engage in EE
Challenge operations and
established practices
Build internal technical skills
Data and analysis discipline
Focus on no-/low-cost measures
Continual improvement
EE INTEGRATED
Commit
Check
kWh
Plan
The logic and line of thinking is the following:
The way things work with respect to EE do not work, therefore
WE NEED TO CHANGE
Change is not about technologies but it is first about people and management practices
top management involvement
energy performance and impact knowledge and skills building
staff and middle management behaviour change
change in management and operation practices
show results at basically no cost, especially capital cost
The results of these changes is the integration of EE in daily business and production practices
At that point EE investments that make economic sense will come „automatically“ Do
ENERGY SAVINGS & INVESTMENTS! 8 8

9. Combined with Energy Systems Optimization (ESO)
Industrial energy systems
Energy systems (steam, pumps, etc.) account for over 50% of industrial energy consumption
Average efficiency gains from system optimization range between 15-30% against 4-5 % of individual components
Macedonia IEE Project focus
Steam systems
Compressed-air systems
Industrial operations more variable than commercial or residential
Production schedules change
Utilities need to follow production and still remain optimized
Steam systems and motor driven systems (pumps, fans, etc.) account for 50 to 60% of final manufacturing energy use
The energy savings opportunities from systems are far greater than from individual components
15-30% average efficiency gains through system optimization against 4-5 % efficiency gains for individual components
Capital requirement and implementation costs are often limited and with fast payback, often measured in months 9

10. Market Services, Skills & Implem.
Project Approach
Work together with counterparts, partners & stakeholders
Component 2
Market Services, Skills & Implem.
Awareness
Seminars
UNIDO International EnMS/ ESO Trainers
National
EE-EnMS/ESO Consultants
USER
Trainings
EXPERT
Trainings
Partner Enterprise
Partner Enterprise
Partner Enterprise 10 10

11. Project Key Performance Indicators
KPI
Target
Project Objective
1. GHG emission reductions
133,000 ton CO2eq
2. Involvement of women in trainings
≥ 20%
Component 1
Policy & Institutions
3. Certification program for EnMS Practitioner
Established
4. Incentive for EnMS/ISO implementation
Pilot operational
5. IEE Best-Practice Dissemination Programme
Web-platform
6. Industrial Climate Technologies assessment
Report
Component 2
Services, Skills & Implem.
7. Number of EnMS implemented in enterprises 15
8. Number of EnMS Experts Qualified 20
9. Number of ESO Experts Qualified 30
10. Number of enterprises trained in EnMS & ESO 50
Component 3
Investments
11. IEE investments mobilized
4,000, 000 USD 11 11

12. Services, Skills & Implem.
Project Timelines
Component 1
Policy & Institutions
Component 2
Services, Skills & Implem.
Component 3
Investments
Jun
Sep
Dec
Apr
Jul
Sep
Dec
Apr
Jul
Sep
Dec
Time
2015
2016
2017
2018 12 12

13. Thank you for your attention
For more information:
Marco Matteini
Industrial Energy Efficiency Unit
Energy Branch
UNIDO
Vienna International Centre
P.O. Box 300
A-1400 Vienna, Austria

14. Content Context for Industrial Energy Efficiency (IEE) Problem outline
Available solutions
Best available technologies
Policies best practices
Energy management systems and energy system optimization
Energy Efficiency Obligation Schemes
Target Setting Voluntary Agreements
IEE Project Concept for Belarus 14

15. Energy Management Systems – Iron and Steel
COREX
DR-Plant
Steel shop
Mills
RHF
Arcelormittal Saldanha Works
Electricity demand : 160 MW
Manpower: 548 permanent employees
Sales output: 1,2 million ton HRC/annum
Energy Efficiency Achievements 2011
Energy Management System Implemented
No. of Projects/Measures 11
Total Capital Investment (USD)
2011 Gross Financial Savings (USD)
9,076,000
Overall Payback Period (in years)
2011 Energy Savings (GWh)
79.95
2011 GHG Reductions (tons CO2)
77,000
Adjustments/optimization of production operation, energy systems optimization, fuels switching, etc..... driven by EnMS!
UNIDO IEE-EnMS-ESO PROJECT in SOUTH AFRICA
Saldanha Works is 1 of 4 Steel plants in ArcelroMittal South Africa. The plant is a flat rolling facility producing 1.2m tons of Hot Rolled coil pa and is primarily focussed on the export market.
The Process :
Integrated Steel Mill producing HRC from Iron Ore
3 Main Production Sections : Iron, Steel and Rolling
Plant was bound to be shut down in 2011 because of financial losses
Plant “survived” thanks to EnMS program
2012 Energy Savings > 100 GWh 15

16. Energy Management Systems – Brewery
Source: Leonid Kolchin 16

17. Экономия в млн руб - сентябрь 2014 – февраль 2015
Energy Management Systems – Brewery
Экономия в млн руб - сентябрь 2014 – февраль 2015
Завод_1
Завод_2
Завод_3
Завод_4
Завод_5
Завод_6
Завод_7
Завод_8
Итого
Вода
-1,7
-0,8
-0,4
-1,1
-1,2
-0,1
-6,2
Элект.
-2,2
-4,7
-3,2
0,4
0,7
-13,6
Тепло
0,0
-0,2
-2,0
3,0
-5,3
-1,4
1,7
-4,3
-2,6
-3,1
-5,2
-6,3
2,3
-7,2
-4,4
-24,1
Данные экономии достигнуты без привлечения инвестиций
Source: Leonid Kolchin 17

18. Johnson Matthey South Africa
Energy Management Systems – Automotive
Johnson Matthey South Africa
Manufacturing plant in the automotive sector (part of multinational)
Started implementation of EnMS in 2012
Target ISO certification
Completed implementation in 9 months
4 large projects implemented
Compressors optimisation; optimising chillers; production related projects
Johnson Matthey
Annual Electricity Savings (GWh)
9.4
Annual money savings (USD)
- Cost savings from projects
- Cost savings from behavior changes & operational efficiency
725,000
425,000
300,000
Total annual investments (USD)
580,000
Payback Period (years)
0.8
Completed Stage 1 of ISO Certification 18

19. Johnson Matthey South Africa
Energy Management Systems – Automotive
Johnson Matthey South Africa
Specific Energy Consumption against Production
Specific energy per month
(MJ/ units of production)
Production per month (units of production) 19

20. Scope of energy management
Energy Management Systems
Shifts the energy efficiency focus to a systematic, data-driven approach.
Requires top management to be engaged on an ongoing basis.
Provides a context for informed decisions concerning proposed energy efficiency projects, including new technologies.
Involves energy users and decision makers, not just facility personnel and physical systems, to sustain the change.
systems
processes
facilities
equipment
personnel
Scope of energy management
Energy management requires an organization to shift from a project-by-project approach to one of continual improvement in energy performance 20

21. Operational in 17 countries
UNIDO Global EnMS-ESO Programme
As of December 2014
Operational in 17 countries
Planned activities in 10 countries
Operational
South Africa
Moldova
Russia
Turkey
Ecuador
Malaysia
Thailand
Viet Nam
India
Iran
Egypt
Indonesia
Philippines
Ukraine
Colombia
Macedonia
Myanmar
Energy Management Systems, together with energy system optimization, is the current main thematic area on UNIDO‘s interventions.
Planned activities
Other donors
Swiss State Secretariat for Economic Affairs
UK Department for International Development
Government of South Africa
Government of Italy 21

22. International and National Experts support
EnMS Capacity Building & Implementation
Training Overview of EnMS/ ISO 50001
Training
ESO1
Training
ESO2
Training EnMS Planning and EnPIs
Training EnMS Implem. & Operat.
Training EnMS Checking & Review
EnMS
Internal Audits
Energy Assess.ESO1
Energy Assess.ESO2
FINAL EXAM
Implementation 1 2 3 4 5 6 7 8 9 10 11 12 13 14
month
International and National Experts support
Periodic webinars
Plant visits by Experts 22

23. IEA Policy Recommendations for EE in Industry
Available Solutions for IEE and GHG reduction
IEA Policy Recommendations for EE in Industry
IEA Energy Efficiency Policy Recommendations
Source: IEA 2011 23