Green Purchasing Asia :: February 2012

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Emerson SPV grid-tie inverters The key to better investment performance

New High Yield Photovoltaic Central Inverters from 145kVAp - 1590kVAp (FOFSBUF NPSF FOFSHZ &VSP FG» DJFODZ (FOFSBUF GPS MPOHFS 4XJUDI PO PGG BU POMZ 8 (FOFSBUF NPSF SFMJBCMZ ¯ .PEVMBS TZTUFN JT GBVMU UPMFSBOU (FOFSBUF XJUI DPO» EFODF &NFSTPO CBOLBCJMJUZ

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EMERSON. CONSIDER IT SOLVED.

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Creating Water Solutions Veolia Water Solutions & Technologies is a leading Design & Build company and a specialized provider of technological solutions in water treatment. Established in Asia since 25 years, Veolia provides the complete range of services required to design, build, operate, maintain, upgrade and manage water and wastewater treatment facilities and systems. We address economic and environmental challenges by optimizing water treatment plants performances, developing alternative resources and by taking steps to reduce the environmental footprint of our activities. We are committed to operate our business to the highest environmental standards.

From a wastewater treatment Plant to a bio-refinery

As municipalities and industries strive towards sustainable development development, the wastewater treatment plant is on the verge of being transformed into a “biorefinery». The wastewater treatment plant will become resource, providing a lower environmental footprint, generating value-added byproducts, reducing total life-cycle costs of ownership and operation, and complying with current and anticipated regulatory requirements. Resource efficiency and sustainability are driving changes in worldwide businesses, and Veolia is committed to staying at the leading edge of sustainable offerings. By actively pursuing a strategy to deliver environmentally conscious and d innovative in n water technologies and ssolutions, o we help our clients to turn wastewater w a into a resource by developing tthe e wastewater treatment plant of the 21st 221 1 century.

Contact our experts: sales-sea@veoliawater.com www.veoliawaterst-sea.com


Š - ALSTOM – Being

COMMITTING FOR TOMORROW A global leader in equipment and services for the power generation, power transmission and rail transport markets, Alstom has placed sustainable growth at the centre of its strategy, by developing innovative, environmentally friendly technologies. Each day, Alstom’s employees, spread throughout more than 70 countries, work to make our future better.

www.alstom.com

Ĺš Ś‘‡  Â‡ž Â‚ÂŒ ŸÂ†Â‚ 5th Floor, Chulan Tower, 3 Jalan Conlay, 50450 Kuala Lumpur, Malaysia Tel: +60 3 2055 6000 Fax: +60 3 2161 7788


Contents

cover

Profits in retrofits (see pages 14–30)

From the managing editor’s desk

5

OPPORTUNITIES

6

New-energy vehicles to benefit from new law

6

There are enough pioneering projects – both in the advanced economies as well as in the emerging ones – to show the financial viability of turning an energy-guzzling building into a power-sipper.

Boost for China’s EV with new tax law

Retrofitting the corporate mindset

Post-Fukushima recovery to drive green growth

8

Japan adapts to energy cuts

Disaster waste management essential to rebuilding efforts

10

16

“Energy efficiency has to be viewed as an industry in Malaysia before we can see changes.”

Underdog to shine brightly in emerging countries

20

Optimistic outlook for retrofits

Supermart gets smart with energy efficiency

22

How retrofit enhanced PoMo Building’s value

25

Chiller change makes Thai hospital a winner

26

Zaini Abdul Wahab, Sustainable Energy Development Authority (SEDA) Malaysia

“Retrofits of central air-con systems have to achieve 25% energy reduction over the 2005 level.” Tan Tian Chong, BCA director of technology development

“Tax credits for energy-efficient equipment and materials help building owners make greener decisions.” Dr Atch Sreshthaputra, Thailand Chulalongkorn University

Premier convention centre 27 banks on LED lights Practising what it preaches

29

   •   


-

Fixing China’s solar PV industry (see page 52)

CASE STUDIES

32

PEOPLE

38

Winds of change in the Mekong Delta

32

SEDA pushes RE boundaries

38

Bac Lieu Province is where the wind action is

46

Europe’s loss at Durban: Lessons for Asia

46

Mining the mobile

47

Clean energy options for the home owner

49

Building sustainably in tropical Southeast Asia

50

INFORMATION

52

Chinese solar PV faces drastic change

52

Piped brackish water to 53 alleviate Delhi’s shortage Dual pipelines for different purposes

“The potential of all renewable energy sources will be assessed.” Badriyah Abdul Malek, CEO of Sustainable Energy Development Authority (SEDA) Malaysia

Rural solar plant brings dependable power

EDITORIAL

34

NGO and Norwegian firm initiate community solar plant in Indian village

Solar, India’s only viable long-term solution

Case of the missing fuel mileage

54

Fuel efficiency advances not reflected in fuel mileage

40

Tibet’s resource curse

55

Lithium-rich salt lakes bring environmental woes

“The market needs to provide more support for decentralised solutions.” Tobias Engelmeier, owner of Bridge to India Pvt Ltd

Planning greener routes for the customer

China launches world’s largest biomass power plant Guangdong Yudean sets record with 50 MW biomass plant

    •  

36

43

“We found that 57% of business customers would choose an environment-friendly logistics provider.” David Ng, managing director DHL Express Malaysia

Remote microgrids to grow with solar PV uptake

58

News briefs

60

Homework

64


The team Editorial Editor: Lim Siang Jin Managing editor: David Lee Boon Siew Assistant editors: Siaw Mei Li, Celia Alphonsus Contributing editors: Ann Teoh, Jason Tan Contributing writers: Eleanor Chen, G Danapal, Stephen Ng, Bhavani Prakash, Suvarna Beesetti, Tan Su-Yin, VK Shashikumar, Mallika Naguran, Jennifer Neoh-Tan Columnists: Shel Horowitz, Khoo Hock Aun, Prasad Modak, Andrew McKillop Marketing & sales Manager: Yong Wang Ching +6012 205 7928 Lim Wan Tsau (Singapore) +65 9068 0184 Email: marketing@greenpurchasingasia.com Creative & design Khoo Kay Hong, Gordon Ling Production & advertising traffic Eddy Yap Subscription & circulation Jessica Lee, Yap Eng Jin Finance & operations Kym Chong Corporate Managing director: Lim Siang Jin Publisher Briomedia Green Sdn Bhd (924679-H) 3-3 Jalan Solaris 2, Solaris Mont Kiara 50480 Kuala Lumpur, Malaysia Tel: +603 w6203 7681 (Malaysia) Tel: +65 9068 0184 (Singapore) Fax: +603 6211 2681 Email: editor@greenpurchasingasia.com Printer KHL Printing Co Sdn Bhd (235060-A) Lot 10 & 12, Jalan Modal 23/2 Seksyen 23, Kawasan Miel Phase 8 40000 Shah Alam, Selangor, Malaysia Tel: +603 5541 3695 Fax: +603 5541 3712 © 2012: Briomedia Green Sdn Bhd Letters and articles are welcome, and should be addressed to: The Editor at Green Purchasing Asia 3-3 Jalan Solaris 2, Solaris Mont Kiara 50480 Kuala Lumpur, Malaysia Email: letters@greenpurchasingasia.com Endorsed by • Ministry of Energy, Green Technology and Water, Malaysia • International Green Purchasing Network

Disclaimer Briomedia Green Sdn Bhd (924679-H) believes that the information published at the time of printing is correct. The views expressed in the articles are not necessarily those of the publisher. While the publisher has taken reasonable care in compiling the magazine, it shall not be liable for any omission, error or inaccuracy. Editorial contributions are welcome but unsolicited materials are submitted at the sender’s risk. The publisher cannot accept responsibility for loss or damage. All rights reserved by Briomedia Green Sdn Bhd (924679-H). No part of this publication may be reproduced without the publisher’s written permission.

Paper: Cover 180gsm Ningbo artcard PEFC; Text 80gsm Royal Express Silk PEFC/FSC

From the managing editor’s desk David Lee Boon Siew boonsiew@ greenpurchasingasia.com

New green building projects are extremely sexy, and get a lot of press anywhere in the world. In an urban landscape of conventional structures, they stand out for their low carbon footprint. If their energy efficiency standards are high, their occupants and tenants gain from markedly lower monthly maintenance bills. For these reasons, owners of existing buildings should be making a bee-line to get their properties retrofitted to make them efficient consumers of expensive energy, right? Sounds like a no-brainer, but in reality, many businessmen hesitate to fix something they perceive to be “not broken” even if there are innovative funding mechanisms for retrofits that only require the client to pay with the energy savings realised. I suspect there could be more to this reluctance. As one of the interviewees for our cover story put it, there could be an issue of trust. There are many consultants that offer to do retrofits for building owners, and their brief invariably includes an energy audit. Their report will paint the before and after scenario, and how much the client stands to gain. The problem is that the client sometimes becomes skeptical of the findings and questions the consultant’s credentials. Certification of energy managers and auditors is available but it is the authorities’ job to ensure that training courses meet standards that inspire client confidence. I believe such issues are being sorted out. For this cover package, we have put together case studies of energy retrofits of several building types,

including a Thai hospital, a mixeddevelopment complex in Singapore (that incidentally sold for a significantly higher price after a retrofit job), and a Malaysian university. The latter might give you an idea of the work involved in maintaining a low-energy consumption pattern. An article I found particularly interesting is that on post-disaster waste management, which puts some figures to the massive material recovery efforts after the March 11th 2011 eastern Japan earthquake and tsunami, and the 2004 Indian Ocean tsunami that struck Banda Aceh and Nias in Indonesia, parts of Thailand and Sri Lanka. The Japanese tsunami churned out 25 million tonnes of waste and debris, or the country’s waste for an entire year. It cost between US$4.8 billion and US$12 billion to dispose of the waste. The volume was significantly higher than that generated in the other three countries hit by the 2004 tsunami. The article showed how methodical the Japanese were in handling waste management. That was an eye-opener. Another must-read on my list is that on Tibet’s resource curse, or how the mining of lithium at the dried salt lakes on the Tibetan plains has affected the health of the Tibetans, including the monks at the famous temple of Kumbum. The story makes me think of supply chains every time I switch on a device that uses lithium batteries.

Next issue: Streets of green: Growing cities sustainably Even as “green” becomes the norm for rising new metropolises of Asia, planners in older cities and municipalities are confronting the urgent need for a new kind of urban reform.

   •   


opportunities



New-energy vehicles to benefit from new law Pure electric, fuel cell and plug-in hybrids fully tax exempt Chinese vehicle makers revving up production of new-energy vehicles

China’s Vehicle and Vessel Tax Law, which tax-exempts new-energy vehicles, is expected to churn up demand for, and production of, such vehicles, judging by the five-year plans anounced by automakers. The much-anticipated law took effect on January 1st. The new law offers full tax exemption for pure electric vehicles, fuel cell vehicles and plug-in hybrids. Other types of hybrid vehicles will have their taxes halved. Taxes on vehicles and ships are

now based on engine sizes, and divided into seven classes. Prior to this, vehicles were charged a flat annual levy ranging from 300 to 540 yuan, regardless of engine capacity. Today, the highest tax amount is 90 times the lowest for passenger cars. Cars with large engines bear the heaviest burden. A 2.5 to 3.0 litre vehicle will be taxed between 1,200 and 2,400 yuan (US$190 to US$380), while a 3.0 to 4.0 litre vehicle will be taxed between 2,400 and 3,600 yuan. Cars above 4.0

• The annual tax on mini passenger cars (engines under 1.0 litre) is now 60 yuan to 360 yuan (US$9.50 to US$57); down from the 2011 range of 60 yuan to 480 yuan. This encourages people to go back to small cars. Small-car tax incentives were removed at the end of 2010, leading to rising popularity of mid- to higher-engine capacity cars. • The Chinese luxury car market is not expected to be seriously affected as the moneyed class is unlikely to be put off by annual taxes exceeding 2,000 yuan • A 2011 report says 87% of all vehicles in China are less than 2.0 litres; this means only 13% will be affected by the higher-tax disincentive for higher capacity engines (as cars under 2.0 litres do not face higher tax under the new tax structure)

.

Small is beautiful in the new tax environment

Auto exhibition in Beijing

Schedule of annual tax on passenger cars (by engine capacity) Engine capacity

Annual tax per vehicle

No more than 1 litre (with seating for no more than nine passengers)

60 to 360 yuan

1.0 litre to 1.6 litres (inclusive)

300 to 540 yuan

1.6 litres to 2.0 litres (inclusive)

360 to 660 yuan

2.0 litres to 2.5 litres (inclusive)

660 to 1,200 yuan

2.5 litres to 3.0 litres (inclusive)

1,200 to 2,400 yuan

3.0 litres to 4.0 litres (inclusive)

2,400 to 3,600 yuan

Above 4.0 litres

3,600 to 5,400 yuan

Adapted from www.china-briefing.com     •  

litres will pay between 3,600 and 5,400 yuan. In comparison, the lowest tax for a car under 1.0 litre is only 60 yuan. Few expect the rich to be overly concerned with these hikes, and luxury car sales are not likely to be affected. With tax exemption, a new-energy vehicle owner will save up to 4,320 yuan in taxes over an estimated eightyear service life, using the 2011 annual tax on a passenger car of 300 yuan and 540 yuan as the baseline. Analysts say the tax incentives will boost the new-energy vehicle market. Some automakers have announced their new-energy bus development plans for the next five years. They include: • Zhengzhou Yutong Bus: The world’s largest bus manufacturer will introduce hybrid electric coaches this year. In 2013, it will start mass producing them. • Anhui Ankai Automobile: It will boost its capacity for buses to 3,000 units this year. It now has more than 400 pure electric buses on the road, or an 80% market share. • ZhongTong Bus: It has sold more than 400 new-energy buses. By 2015, new-energy buses will represent one third of its sales. It is building two plants to make up to 30,000 buses annually. • Beijing's Foton Motor Group: By 2015, the company expects to sell 225,000 new-energy vehicles, accounting for 15% of annual sales. • Higer Bus: It plans to produce 3,000 pure electric buses by 2015. • FAW Bus and Coach: It will invest 9.8 billion yuan in its newenergy vehicle operations in the next five years. The company will build eight plants for pure electric, hybrid electric and plugin hybrid electric passenger cars as well as pure electric and hybrid electric commercial vehicles. It will also develop three new-energy commercial vehicle models. • Zongda Bus: It plans to sell at least 1,000 new-energy buses annually over the next five years. • Hengtong Bus: This compressed natural gas (CNG) bus maker aims to realise an annual capacity of 8,000 to 10,000 units over the next five years. – Nanjing Shanglong Communications


GPA’S NEW VOCABULARY

ECOSYSTEM Every industry is a community of synergistic stakeholders. Each of them interacts, creates and derives values within its business ecosystem. If you are involved in green businesses, we want to hear from you. Our stories and reports could promote your interest and in turn profit the overall business ecosystem as well.


 

Post-Fukushima recovery to drive green growth Government incorporates renewable energy infrastructure in rebuild Interest in energy efficiency soars among businesses and consumers alike

Amid the anguish of Japan’s March 11th earthquake and tsunami, there is a silver lining of opportunities to build a greener and more energy-secure future for survivors and generations to come. In Japan, widespread energy cuts that followed the Fukushima Daiichi nuclear power plant crisis have encouraged consumers to adapt their lifestyles for greater energy efficiency. Many are now seeking more powersaving features in the products they buy and the homes they live in.

Wanted: Greener homes Panasonic Electric Works Co carried out an online survey in mid-2011 on housing-related expenses among 2,283 people across Japan who were considering building or actually building, or had completed building a home in 2011. Compared to the 2008 survey, those considering photovoltaics (PV) systems jumped from a mere 1.4% to 25%. When asked to choose a home energy product that they wanted to buy in the future, the largest number of respondents (46%) chose “PV systems”, followed by “storage batteries for residential use” (17%). Consumer expectations are also changing when it comes to long-term investments. In an online survey among 150 men and women who were planning to buy a condominium, Yomiko Advertising Inc found that 85.3% of respondents expected their future homes to have “energy-saving features, such as enhanced heating and efficient air-conditioning”, and 76.0% replied “energy-generation features, such as PV panels.” Japan gets its second wind The public sector is also doing its part by building new energy infrastructure that harnesses renewable resources. In September, Bloomberg reported     •  

that Japan’s Ministry of Economy, Trade and Industry plans to spend up to 20 billion yen (US$260 million) on a pilot project of six 2-MW floating wind power turbines located off the Fukushima coast as part of reconstruction efforts. Among the companies expected to take part in this project are Mitsubishi Heavy Industries Ltd, Fuji Heavy Industries Ltd, IHI Corp and Mitsui Engineering and Shipbuilding Co. The Sankei newspaper reported the same week that Japan hopes to build as many as 80 floating wind turbines off Fukushima by 2020 once the necessary feasibility studies have been done.

Saving energy’s a 24/7 business In the heat of summer, Hitachi Ltd,

which employs the country’s secondbiggest staff force, and Kyocera Corp planted leafy bitter gourd (goya) vines on the facades of their buildings as “green curtains” to block heat from the sun and reduce air-conditioning costs. The companies also distributed goya seeds to encourage their employees to do likewise at home. In October, Seven-Eleven Japan Co, a unit of Japan’s biggest retailer Seven & I, revealed that it would spend 10 billion yen (US$130.5 million) on installing environmentfriendly fixtures at more of its stores, bringing its energy-saving investment in fiscal 2011 to more than 20 billion yen. According to the Nikkei business daily via Reuters, the company also expects to recoup the same amount within five years through savings on its electricity bills. Seven-Eleven estimates that stores outfitted with light-emitting diode (LED) lamps and other fixtures will cut down on power use by 27–28% year-on-year in July. The company has also installed solar panels at some 1,000 stores in 2011, but is waiting for a price drop before investing in more fittings, the Nikkei said.

Changing attitudes post-March 11th A September 2011 phone survey among 1,000 men and women aged 20 to 59 by Palsystem Consumers’ Co-operative Union found: • 70.1% had begun turning off unneeded lights • 56.7% were setting air-conditioners to higher temperatures in summer • 15.3% were switching to LED bulbs Another survey conducted in July 2011 among 716 photovoltaics (PV) owners and 1,037 non-owners by the Housing Environment Research Institute of Sekisui Chemical Co shows: • 62% of respondents in eastern Japan and 34% of those in western Japan said PV had become a more frequent topic of discussion than before • 88% had someone they know show an interest in PV systems because “PV can reduce energy bills” • 44% had someone they know show an interest in PV systems because “PV provides a sense of security in times of disaster”



opportunities

Projector LED is a compact and powerful fixture using the latest High Power LED technology

In a September survey among 600 men and women in their 20s to 70s by Daikin Industries Ltd, • 50.2% said the need to save energy in summer 2011 changed their perception of electricity-consuming lifestyles • 84.3% of respondents said they would like to continue saving electricity.


GPA’S NEW VOCABULARY

LIVING CASES Real life offers authentic stories and case studies for business success: Pitfalls to avoid and opportunities to tap into. We call them Living Cases. These Living Cases have the potential to connect you with markets, products and suppliers to add value to your business. GPA will devote 60% of its pages to case studies – and we support the cases afterwards via regular updates on our website.

   •   


opportunities

 

Disaster waste management essential to rebuilding efforts Proper recycling of waste reduces disposal cost, saves on materials for rebuild

The March 11th 2011 eastern Japan earthquake and tsunami resulted in the generation of approximately 25 million tonnes of waste and debris, equivalent to one-year’s waste generation. The cost to manage the waste during and after the tsunami event incurred approximately 3–5% of Japan’s gross domestic product (GDP) with the waste disposal cost estimated at between US$4.8 billion and US$12 billion. Despite being well prepared, Japan still found the management of post-tsunami waste challenging due to the country’s limited land and landfill space. Proper waste management is especially crucial following natural disasters such as tsunamis, hurricanes, flooding and earthquakes, or manmade disasters such as war and fire. Aside from the all-important impact on human health, key concerns include adequate waste disposal capacity, availability of appropriate treatment, recycling and reuse options, transportation of wastes, accessibility of waste management facilities, environmental hazards, financial implications, and legal and ethical responsibilities. General waste categories

  :  

Right incentives for informal sector can accelerate salvage and reuse efforts

An aerial view of damage to Otsuchi, Iwate, Japan after a 9.0 magnitude earthquake and subsequent tsunami devastated the area in northern Japan

produced during and after a disaster include: • Municipal solid waste generated by the people living in the area • Infectious waste from dead bodies (human and animals) and medical activities • Debris from demolished buildings and civil structures (including roads). Among factors that influence the management of disaster debris and wastes are the varying composition of wastes, type of disaster, geographic location, population density and socioeconomic setting. Meanwhile, waste composition is determined by the sources of waste. While waste from urban areas may

include concrete, asphalt, masonry, brick/cinder blocks, plaster, drywall, various forms of wood/wood composites/laminates, metals and other substances from destroyed buildings and other structures, waste from rural areas are low in synthetic components or composite polymeric and metallurgical materials, but high in natural materials and organic matters (wood, vegetation, etc). The best strategy for effective waste management therefore takes into account the various factors mentioned above. In many cases, the largest portion of the debris and wastes generated during and after a disaster are inert, and has high potential for recycling. Thus the management of disaster waste needs to integrate recycling strategies to allow for maximum retrieval of materials from the waste stream and to improve recycling capabilities so that waste can quickly and sustainably be converted into valueadded material. Opportunities for 3R implementations are essential to effectively reutilise existing material and identify alternatives to minimise waste generation. The experience from these major post-disaster clean-up efforts leaves no doubt that there is a great necessity as well as ample business opportunities in setting up a disaster management unit targeted towards waste management. Main article and case studies adapted from an article by Agamuthu P and Fauziah S H of Universiti Malaya’s Institute of Biological Sciences, Malaysia

Thailand: Existing infrastructure catered for disposal needs

    •  

involved the services of private waste management companies to deal with the wastes. The post-tsunami 3R activities in Thailand saw reusable materials being separated from waste to be utilised in the reconstruction process. Although there was active recycling by the informal sectors, this practice was discouraged by the government due to health risks. 

Thailand had to deal with more than 0.8 million tonnes of disaster waste during and after the 2004 Indian Ocean tsunami. The cost incurred differed from one place to another. For instance, disposal cost US$1.16 million in Phatong (Phuket), US$0.4 million in Kamala (Phuket) and US$28 million in the Phi Phi Islands (Krabi). The management of disaster waste in Thailand was reported to be of higher efficiency than that of Sri Lanka due to the fact that Thailand has existing infrastructure to cater for disposal needs. Additionally, the government had

The 2004 tsunami inflicted heavy damage on Thailand’s tourism infrastructure and other coastal economies


GPA’S NEW VOCABULARY

CONSORTIUM Many businesses position themselves as consortiums of established partners. Together, these partners add relevant credentials and a track record for mutual advantage. Get to know who these consortiums are, what their business models are, what set them apart, and why these teams are thriving.

   •   


Following the 2004 Indian Ocean tsunami, half a million tonnes of waste was cleared in Sri Lanka. The unexpected amount of waste taxed the country’s existing waste management system to the point that it was almost impossible to clear and dispose of the debris and waste, particularly in densely populated areas along the east coast of Sri Lanka. Burning was carried out in existing dumpsites, coral mining areas and even playgrounds. The 3R (Reduce, Reuse and Recycle) approach was taken for construction waste materials, where both high-value and low-value materials were reused for similar purposes (eg, window frames, bricks for paving, crushed concrete, wood for shutters) and metal, plastic, glass, cardboard and paper were recycled.

 

Sri Lanka: Waste management taxed to extreme limits

Volunteers dig out rubble from a drain as part of a clean-up operation in southern Sri Lanka, where 5,000 residents of the town of Hambantota lost their lives to the 2004 tsunami

Waste scavengers played a huge role in material recovery strategies in the aftermath of the 2004 tsunami in Indonesia. The killer waves generated more than 300,000 cu m of waste in Kota Banda Aceh while in Aceh Barat it was 85,000 cu m. The waste disposal in Kota Banda Aceh utilised 21 ha of paddy field, fish ponds or private land, incurring a cost of about US$6.8 million. In Aceh Barat, the waste was dumped into 8 ha of private land costing close to US$2 million. In total, the volume of construction & demolition (C&D) debris generated during the earthquake and tsunami in Banda Aceh is estimated to have been around 853,930 cu m from building super-structures (above ground) and 725,840 cu m from sub-structures/foundations. Material recovery strategies implemented included: • Recovering and processing wood into a suitable condition for recycling (1,527 cu m) or stockpiled for reconstruction and for making furniture (13,185 cu m) • Reusing rubble debris to pave roads and fill up low-lying land was 14,560 cu m • More than 85% of all metals (copper, aluminium, iron, steel and rods) collected by the informal sector from disaster sites or temporary dumpsites/ landfills, namely scrap dealers, were sold on the market • Soil and mud were used to cover municipal solid waste • Plastic waste was turned into plastic chips for sale to recyclers

    •  



Indonesia: Informal sector tapped to implement material recovery strategies

In the aftermath of the 2004 earthquake and tsunami, debris, like this ravaged house in Banda Aceh, was turned into raw material to help rebuild a devastated community

• Provision of restored tsunami wood to furniture manufacturers • Tsunami wood-fired kiln rehabilitation projects to make red bricks and lime • Charcoal manufacture from tsunami timber • Provision of stone crushers to make secondary aggregate for use in brick (breeze block) projects, concrete preparation and/or road base. These approaches were successful because the incentives for waste scavengers to join the United Nations Development Programme (UNDP) programme were attractive. The UNDP programme provided personal protection equipment and vaccinations to the workers. This, on top of the cash wages they received, encouraged them to work in the area.

Early estimates for the number of such labourers employed at the disaster sites were 1,000–1,500 in Kota Banda Aceh, 900 in Aceh Barat and 900 in Aceh Jaya. Materials that were not immediately saleable (wood, stone and concrete) were used to assist small businesses in recovering from the tsunami, to prevent excessive use of fresh natural resources, and to create new businesses needed for reconstruction (brick and concrete manufacture) or rehabilitation of infrastructure. The successful implementation of 3R strategies in Indonesia – particularly in Banda Aceh and Nias – for the management of disaster debris was enhanced by the up-scaling of the project.


GPA’S NEW VOCABULARY

PROSPECTS Going green is increasingly important to business today. We can help you maximise results by improving your market visibility and connecting you with untapped prospects. By providing market communications support to green vendors and purchasers, we assist in building a sustainable future that is also economically viable.


1

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opportunities

Retrofitting the corporate mindset Market boost may come from Malaysia’s Energy Efficiency Act expected in 2014 Singapore has more than 940 green buildings, up from 17 in 2005

The phrase “going retro” usually conjures up images of disco balls, bell-bottoms and afro hair-dos. But in today’s corporate and environmental circles, it refers to green retrofitting; or what is being hailed as the super weapon in the fight against climate change. A green retrofit involves changes and adaptations to a physical structure to enable it to be more energy and water efficient. The retrofit is a weapon indeed, but the “armies” in some countries appear to be sluggish in beefing up their arsenal. While some advanced economies like the US are enjoying the retrofits boom – according to the US Green Building Council, as of December 2011, LEED-certified existing buildings are outpacing their newly-built counterparts by 15 million sq ft on a cumulative basis – others like Malaysia appear to be lagging behind. Zaini Abdul Wahab, director of energy efficiency at the Sustainable Energy Development Authority (SEDA) Malaysia, says a recent study by ReEx Capital Asia shows that although Malaysia has the highest energyefficiency potential amongst Asean countries, it is only ranked fourth in terms of investor attractiveness. Singapore and Thailand lead in this respect. Across the causeway, investor interest appears to be lucrative. For instance, Singapore’s PoMo Building underwent a green retrofit by property developer Lend Lease and was sold last year for a 40% internal rate of return. According to Jones Lang La Salle, the 234,996 sq ft mixed development building was sold for US$200 million to CLSA (see PoMo Building case study on page 25). With compliance to the Building and Construction Authority’s Green     •  

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By Celia Alphonsus

The industry needed to be persuaded to make environmental sustainability a cornerstone in their construction, operation and management of buildings – Tan Tian Chong, BCA director of technology development

Mark made mandatory for new builds, Singapore’s current challenge is to accelerate greening efforts in its existing building stock. BCA director of technology development Tan Tian Chong says BCA’s second green building masterplan was introduced in 2009 for this purpose, and S$100 million (about US$75 million) was set aside for the Green Mark incentive scheme to encourage energy retrofits of existing buildings. He says BCA also announced last year that it will be introducing a new set of regulations to guide owners of existing buildings to improve the minimum environmental sustainability standards of their properties. Tan adds that retrofits of central air-conditioning systems are required to achieve at least 25% energy reduction over the energy efficiency level of 2005. Singapore’s target is to green 80% of its building stock by 2030. When the Green Mark was launched in 2005, there were only 17 green building projects on the island state. Today, the number is more than 940. This translates to more than 28 million sq m of gross floor area (or 12% of the total gross floor area) in Singapore. Over in Malaysia, there is no lack of interest in retrofits. But things are not moving as fast as the authorities want them to be. Why the lack of sizzle? SEDA Malaysia’s Zaini attributes it to a couple of factors: • Cheap electricity Malaysia’s electricity tariffs are too low, and any investment in retrofits

Surge of building retrofits in the US The US Green Building Council (USGBC) recently reported a surge in LEED-certified existing buildings, with numbers now surpassing new green buildings. In the US, the building sector accounts for 40% of greenhouse gas emissions and consumes 70% of electricity generated. These ratios are mirrored across the globe in other industrialised and developing nations. Industrial market research firm SBI Energy predicts significant growth in green retrofits to 13% of the market in 2015, with green

building practices in renovations emerging as the new normal. What appears to be driving the retrofit surge from the public perspective is the threat of climate change, energy security and economic stimulus. LEED or Leadership in Energy and Environmental Design is an internationally recognised mark of excellence providing building owners and operators with a framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.


Funding mechanism One of the main supporting measures is a funding mechanism to stimulate growth in energy-efficiency projects. Although there are opportunities now that do not involve capital expenditure but rather a pay-as-you-save method, many companies are resistant as their internal accounting processes do not accommodate this. “People get confused and wary,” says Zaini. “They are used to getting

 

“Energy efficiency has to be viewed as an industry in Malaysia before we can see changes. Right now energy retrofits are viewed as complementary services rather than as an element of the core business of a company.” – Zaini Abdul Wahab, Sustainable Energy Development Authority Malaysia

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will have a longer payback period. “Our neighbours are paying market prices for energy, so naturally this is the main driver for retrofitting in their countries.” • Perception “Energy efficiency has to be viewed as an industry in Malaysia before we can see changes. Right now energy retrofits are viewed as complementary services rather than as an element of the core business of a company,” says Zaini. “If it ain’t broke, don’t fix it” is apparently a viewpoint shared by many decision-makers. Even though energy performance contracts do not require capital expenditure, the key players are still hesitant. “This is because the level of confidence in the industry is still low and there is no proper funding mechanism as yet.” Zaini says if energy efficiency is viewed as the “sixth fuel”, it will spark rapid growth of the retrofit market in Malaysia. According to him, these barriers have been identified and the process is underway to draw up supporting laws, funding mechanisms and capacity building. The groundwork for the legislative framework is being prepared. Malaysia’s Energy Efficiency Act is expected to come into play in 2014. It will cover both thermal and electrical sources of energy in all sectors, including the use of equipment. “The spirit of this proposed law is not to penalise but rather to assist people to do things in a standardised manner. Take Japan for example, before a company is penalised for noncompliance, they are given all kinds of supporting measures to assist them to comply. This is what we want to emulate in Malaysia.”

“Tax credits for energyefficient building equipment and materials can help building owners make greener decisions.” – Dr Atch Sreshthaputra, Thailand Chulalongkorn University

an invoice and issuing payment. When you tell them ‘pay a percentage of what you save’, they are lost.” Therefore, he says, a funding mechanism that involves the services of professionals and agencies authorised by the government is needed. Zaini also says the ministry is drawing up a plan involving banks to fund energy efficiency projects. “Thailand is already so far ahead of us. They created a revolving fund many years ago that proved to be attractive enough to spur the growth of energy-efficient retrofits,” he says. Currently, energy services companies (ESCOs) approaching decisionmakers have a tough time because they lack the credibility that comes with the authorities‘ stamp of approval. However, the industry via the Malaysia Association of Energy Services Companies (MAESCO) is trying to address this by working with SEDA Malaysia and the Energy Commission to finalise the format for the registration of ESCOs. Work has been ongoing for months but the industry is still unclear which of the two will be the authority in charge.

Thai experience Dr Atch Sreshthaputra from Thailand’s Chulalongkorn University feels that the Thai government can still do more to provide soft loans for energy retrofits.“Tax credits for energyefficient building equipment and materials can help building owners make greener decisions.” He says it is also essential for the Thai government to provide guidelines, technical support, and tools for building owners to investigate their own energy use profiles and how to improve efficiency. As an industry driver, he says “buildings should be required by law to show their energy use to the public.” Thailand’s Energy Efficiency Revolving Fund started operation in January 2003. The fund was established to stimulate financial sector involvement in energy efficiency projects and to simplify project evaluation and financing procedures. It provides capital at no cost to Thai banks to fund energy efficiency projects, and the banks provide lowcost loans to project proponents.    •   


They found that these 11 buildings alone can potentially cut energy use by between 6% and 35% per annum, which translates to RM170,000 to RM2 million saved each per year. They will need to invest between RM400,000 and RM9 million each, with a payback period of two to seven years. For the period between January and July 2011, the Ministry of Finance building as well as the Economic Planning Unit each saved about RM1 million after being retrofitted.

Malaysia: Incentive to replace inefficient chillers Under the SAVE rebate programme introduced in July 2011, Malaysianregistered businesses get a RM200 per refrigerant tonne (RT) rebate to buy energy-efficient chillers for offices to replace working-condition ones that are older than 15 years. SEDA Malaysia’s Zaini Abdul Wahab says as of December 2011, 44% of the allocated 72,000 RT has been taken up. He expects the quota to be fully taken up by July or August this year. As the rebate covers only about 30% of the cost of a new chiller, which is a big ticket item, companies need to allocate a budget for the retrofit.

Government intervention in the financing process is minimised. While waiting for the legal and financial frameworks, the Malaysian government is looking to lead by example, to create awareness, and to educate the market on the possibilities in store and the outcomes they can expect. The Ministry of Energy, Green Technology and Water audited 11 government buildings between 2008 and 2010 using a special fund.

Singapore: S$100 million Green Mark Incentive Scheme for Existing Buildings What it provides: • A cash incentive for upgrading and retrofitting, co-funding up to 35% (capped at S$1.5 million) of the costs of energy-efficient equipment installed to improve the energy-efficiency of existing buildings, and; • A “health check” scheme, which is an energy audit to determine the efficiency of air-conditioning plants. BCA will co-fund 50% of the cost for conducting this health check and the remaining 50% will be borne by the building owner.

Sustaining best practices While energy-efficiency measures are very much the focus, Zaini pointed out that to ensure long-term benefits, the question lies in how to manage best practices sustainably. He says the way forward is to establish energy management systems in buildings that have been retrofitted. “Part of the retrofitting exercise includes the setting up of an energy committee as well as the appointment of an energy manager [in every organisation] to ensure long-term policies, strategies and proper reporting are on-going regardless of the change in leadership.” Sreshthaputra concurs saying that “on-going or continuous commission-

ing will help the building maintain its high performance in the future.” To ensure the growth of energyefficiency as an industry rather than a complementary cost-saving measure, Zaini indicates the need for capacity building to fuel the sustainability of energy management. He notes that 11 Malaysian universities have expressed interest to work with the ministry and SEDA Malaysia to supply trained professionals to this field.

San Francisco’s Transamerica Pyramid

Taipei 101

Recently LEED-certified and undertaking a large renovation project. The retrofit is expected to slash energy consumption by more than 38%, saving US$4.4 million in energy costs annually, recouping the costs of implementation within three years.

Earned LEED Platinum rating 39 years after it was originally built. The landmark’s onsite co-generation plant saves an average of US$700,000 annually in energy costs.

The Taipei Financial Centre received the Platinum-level certification under the LEED for Existing Buildings: O&M rating system in July 2011. It is now designed to use 30% less energy, reducing annual utility costs by US$700,000 a year.

In its “Green Outlook 2011” report, McGraw Hill Construction found that by 2015, the green share of the largest commercial retrofit and renovation activity will more than triple in the US, growing to 25–33% of the activity by value – a US$14 billion to US$18 billion opportunity in major construction projects alone.

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Empire State Building

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Skyscraper makeovers


How building owners decide opportunity to retrofit,” says Saifuddin, adding that as buildings age, they become less attractive to tenants and command lower rental as well. Other retrofit measures that have hit the market:

 

Data manager: Rajpall Singh of RDM Asia, a company that helps supermarkets manage their energy usage using a data manager, says the two main sectors which consume the highest levels of energy come from the refrigeration, and heating, ventilation and airconditioning (HVAC) sectors. “Surveys done on our past projects have shown that refrigeration and HVAC sectors of a typical fullsized supermarket or hypermarket account for about 70% of its overall energy usage. So by managing energy consumption for these two areas, supermarket owners can save around 12–25% of their energy cost. This saving has been achieved by many of our clients.” Despite the plethora of greener options that are available to improve building energy efficiency, the mindset of resistance is still very much prevalent.

“Refrigeration and HVAC sectors of a typical full-sized supermarket account for about 70% of its overall energy usage. By managing energy consumption for these two areas, owners can save around 12–25% of their energy cost.” – Rajpall Singh, RDM Asia

-  

Although retrofitting is for the good of the planet, savvy building owners make greening decisions based on a cost-benefit analysis, often choosing retrofitting options that cost the least but deliver a hefty cut in utility costs. Dr Atch Sreshthaputra from Thailand’s Chulalongkorn University says the choice of retrofit measures depends on the age of the building to determine the most cost-effective and value-enhancing measures. “Re-lamping” or lighting retrofit is the most cost-effective practice for new buildings (1–5 years old), but for older buildings (more than 15 years old), changing cooling system components (like chillers and pumps) for higher-efficiency models are proven to provide good benefits. For buildings more than 25 years old, envelope replacement (like the use of green light-weight concrete blocks) can be done. Sreshthaputra says air-conditioning accounts for 60% of energy use in buildings, while 50% of the cooling load is the result of external factors like building envelopes. “The biggest opportunity in energy cost savings is to improve thermal performance of envelope materials. “Window glass offers a lot of room for improvement. Using low-e glass or window film will help reduce heat gain through the façade of highrise buildings. Adding roof insulation will also cut a large amount of heat for low-rise buildings. “However, due to technical difficulty of an envelope retrofit when buildings are occupied, most buildings have focused only on lighting retrofit, which has a lower investment cost. Replacing T-8 fluorescent lamps with the newer T-5 normally provide a better return on investment.” Malaysian Institute of Architect president Saifuddin Ahmad says the biggest opportunities to save energy cost depends on the building types. For low-rise buildings up to four storeys, most of the heat is through the roof so roof insulation is the first step, he says. For high-rises, most of the heat comes through the glass and windows, so shading works. “The primary challenge for commercial buildings is the cost and existing tenants. However, when buildings reach about 15–20 years, their mechanical and engineering (M&E) systems begin to age and are not only less efficient but break down more often. This then gives the owners the

“Being manufacturers ourselves, we often come across buyers who are sceptical about adapting new building materials in construction.” – Harish J Hariraj, H3-Frio Sdn Bhd

Light weight concrete blocks: Harish J Hariraj, managing director of H3-Frio Sdn Bhd, which markets GLOC Green Light Weight Concrete Blocks, says: “New age green building materials similar to our GLOC blocks are available in the market. They lower construction cost and offer long-term savings in operational cost.” “Being manufacturers ourselves, we often come across buyers who are sceptical about adapting new building materials in construction. I can understand the hesitation of our buyers to adapt to these new lightweight blocks instead of the conventional clay or cement sand bricks as they are concerned about the potential increase in cost per square foot.” Some common retrofitting elements used to improve energy efficiency or to reduce the thermal load on the HVAC system: • Energy-efficient and right-size chillers for air-conditioning • Light-emitting diodes (LED) lighting • Roof insulation • Heat-reflective roofing tiles and innovative roofing systems • Low-e glass on windows and skylights • Sealants for windows, doorways and roofs to plug leakage of cool air.

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Underdog to shine brightly in emerging countries The share for green building retrofit is likely to increase to 30% by 2015 Advanced APAC economies may see medium to high uptake of retrofit activities

Building construction is usually among the first markets to be affected by poor economic conditions in most countries. Being a derived market, a robust construction industry is usually a reflection of a country’s vibrant economic activities, and vice versa. Retrofitting has been regarded as the “underdog” segment in this market for the simple reason that no one fancies fixing things that are not broken. However, retrofitting is an inevitable solution and may turn out to be a long-term investment for building owners as far as the current economic climate and call for sustainable buildings are concerned. In Asia Pacific, the building construction market picked up during the period from 2009 to 2010, but lost momentum in 2011. This trend is likely to continue in 2012. Countries such as Malaysia and Singapore are, however, committed to achieving carbon reduction targets, and one of the key drivers is green retrofitting of existing buildings along with the construction of new ones. Figure 1 depicts the building construction market in Asia Pacific. The market size figures refer to the contractors’ revenue and forecast of actual earnings (not book orders or future fulfilment) for the construction of buildings, both residential and non-residential. Other non-building infrastructures such as roads, bridges,

 

By Melvin Leong

Building materials and LED lighting offer the best prospects where retrofits are concerned

and dams are excluded from the analysis. In most of these markets, the retrofit share is between 20% and 30% of the total market size annually. This percentage is not expected to increase drastically in 2012 but the outlook for building renovations and refurbishments remains optimistic.

Market untapped In retrofitting existing buildings, building owners tend to seek value-add approaches in energy efficiency and savings, and water use minimisation. While initial investments are high, building owners are increasingly aware that intelligent or smart buildings will yield higher lease and resale value. In addition to the physical construction or retrofit work, the business of building retrofits is supported by technology suppliers and service providers in key opportunity areas, namely building materials, lighting, building automation and energy management and integrated facilities management (where energy savings are primarily involved). Compared to advanced economies outside the Asia Pacific, the market potential for these opportunity areas in this region is largely untapped. As going green is becoming mainstream, the retrofit of existing buildings in accordance with local regulatory requirement on sustainable buildings is anticipated to take the spotlight in the building construction market. Additionally, the retrofit scenario for green buildings in advanced Asia Pacific economies seems promising with medium to high uptake of such activities. Currently, 25% of certified green buildings are retrofitted while new buildings take the remaining market share. The share for green building retrofit is likely to increase to 30% by 2015. The opportunities in green buildings are clustered in more advanced economies in this region but it is the emerging countries that will be the new investment areas for retrofits. While the uptake of green retrofits is gaining thrust, lack of technical skills, funds and resources are the main challenges faced by most suppliers and service providers in the

Figure 1: Revenue of building construction market (US$ billion), 2010–2015 Southeast Asia

China

India

South Korea

Australia & New Zealand

Japan

Total

2010

46.37

550.45

165.30

73.60

60.70

92.36

988.78

2015

80.70

955.40

300.45

140.30

87.10

102.22

1,666.17

Source: Frost & Sullivan analysis

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Figure 3: Retrofitted vs new

Japan

> 200

Medium-high

Medium

Australia

> 700

High

High

New Zealand

> 100

Medium-low

Medium-high

South Korea

> 1200

High

Medium-high

Singapore

> 700

High

High

Malaysia

50–100

Low-high

Medium-low

Indonesia

50–100

Low-high

Medium-low

Source: Frost & Sullivan analysis

Regulatory-driven market The push for green and sustainable buildings is largely regulatory- and not voluntary-driven in Asia Pacific. Currently, building codes are reviewed and revised to hinge mainly on energy efficiency and standards of construction. Construction companies should observe the varying standards or guidelines adopted in Asia Pacific countries. Additionally, even within a country, building codes may vary in line with climate zones. For instance, the Building Code of Australia (BCA) has eight climate zones; China has five for non-residential buildings, and three for residential buildings; India’s Energy Conservation Building Code (ECBC) has five climatic zones; Japan’s building codes has three zones for nonresidential buildings, and six zones for residential buildings; and South Korea grouped its buildings into three zones by geography. In terms of regulatory compliance, building codes in China and India cover only large buildings. In advanced economies, enforcement is more stringent and well-regulated. Insulation requirement is mandatory in all large buildings in South Korea, and Japan has recently reduced the threshold

d New

es

Share of certified green buildings (Asia Pacific), 2011 Source: Frost & Sullivan analysis

compliance from 2,000 to 300 sq m for new buildings.

Retrofit locus There are numerous specific opportunities or business areas in the retrofit segment. Building materials and lighting offer the best prospects where retrofits are concerned. • Building materials Specifically, key thermal insulation materials such as cellulose, foil, mineral wool and polyester are widely used in new buildings and retrofits. The combined revenue for thermal insulation materials for buildings in Australia and New Zealand total about US$440 million

in 2011. The market has the potential to reach US$520 million by 2015. In Southeast Asia, suppliers of thermal insulation materials hit US$470 million in revenue for 2011, and the market is expected to grow to US$700 million by 2015. China is the largest market with US$5.5 billion in revenue in 2011 and is likely to reach US$8.4 billion by 2015. The market share of retrofit ranges from 30 to 35% in Australia and New Zealand, and 15 to 20% in Southeast Asia. • Lighting The light-emitting diodes (LED) lamp is strengthening its foothold in both old and new buildings. With greater

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building construction value chain. While these remain as short-term challenges, some market participants involved in new designs and retrofit for buildings are already offering green solutions as part of their product or service propositions.

%* 25

5%*

Regulatory initiatives and promotion on green buildings

n7

Market intensity and participation

ig

Number of green buildings – certified and under evaluation

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Regions

Ret roƩ t

Figure 2: Analysis of green buildings (Asia Pacific), 2009-2010

Construction workers near the Pearl Oriental Tower in Shanghai: Building construction markets in Southeast Asia, China, India and South Korea will almost double between 2011 and 2015    •   


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Retrofits account for 20 to 25% of the market share for LED lights and it varies considerably across countries in Asia Pacific.

  

awareness among building owners, suppliers and building designers are incorporating LED lamps as an investment alternative that promises energy savings. Depending on the scale of the project, the supply of LED lamps to large existing buildings may require the services of specialist electrical contractors. In 2011, the sale of LED lamps in Asia Pacific generated US$280 million in revenue, or 51% of the world’s market size and it is expected to touch US$530 million by 2015. Currently, architectural lighting is the largest end-user segment followed by retail and hospitality sectors. The retail and hospitality segment and commercial and industrial segment will be the top end-users by 2015.

Melvin Leong

“As going green is becoming mainstream, the retrofit of existing buildings in accordance with local regulatory requirement on sustainable buildings is anticipated to take the spotlight in the building construction market.”

opportunities

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Supermart gets smart with energy efficiency Presto Supermarket estimates it is saving RM240,000 a year in electricity Refrigeration managed by RDM’s data manager can be remotely controlled

Every time I visit the supermarket to pick up groceries, I have to whizz past the aisles where they have refrigerated displays, for fear that my three-yearold son who sits in my shopping cart would get a chill. But the shopping experience at the new Presto Supermarket at Citta Mall is somewhat more pleasant. You can take your time to choose your groceries at these refrigerated cabinets without the cold air blasting at you. The secret is in the energy efficient technology used in the Hussman Tempcool semi-height merchandiser, which uses a secondary curtain of hot air to keep the cold air within the cabinet. But the whole system runs deeper than just offering a pleasant shopping experience.     •  

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By Stephen Ng

Daniel Ruppert, managing director, Presto Supermarket: “Being energy-efficient is important, because the electricity bill is a major part of our operating expenses.”

The entire cooling package in the supermarket undertaken by Hussman Tempcool is designed to be energy efficient by replacing the mechanical control system with RDM’s flexible electronic controls system, and by centrally controlling the system, using real-time data, which is collected

Future scene The demand for state-of-art buildings will continue to soar in line with the building regulatory demands in Asia Pacific. While the construction of new buildings may not augur well in challenging times, building retrofits will remain relevant with the continuous call and commitment for carbon emission reductions, and the advocacy of green buildings as part of the green economy. Melvin Leong is programe manager for the Environment & Building Technologies practice, Frost & Sullivan Asia Pacific

and sent to the data manager at the office of the supermarket’s managing director Daniel Ruppert. RDM’s data management package, which includes both its software and hardware, costs RM70,000 (US$17,400), but it allows Ruppert to control his supermarket from anywhere in the world. This was, in fact, what he had in mind when he developed his 18,500 sq ft supermarket at Citta Mall, a new shopping mall in Ara Damansara, on the outskirts of Malaysia’s capital of Kuala Lumpur.

Returns on investment “We have to think long-term as entrepreneurs,” says Ruppert. “Being energy-efficient is important, because the electricity bill is a major part of our operating expenses. It makes good business sense if you put in the right amount of money now as part of your capital expenditure to have a good and proper start-up, because after that, the business will be sustainable and more profitable in the long run.” In total, he says, he may have spent about RM850,000, or about 45% above his original budget of RM600,000 for the total refrigeration system for the supermarket, but compared to his two other mini markets, the Presto Citta Mall is more energy-efficient.


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At his first 1,000 sq laysia, conventional piston ft mini-market established compressors are loud and in 2005 in Damansara noisy, and usually kept Perdana (20 km from Citta outside the building. Longer Mall), which operates from copper pipes also mean 9am–10pm, seven days a more chlorofluorocarbon week, the electricity bill is (CFC) used. “In the case of around RM1,600 a month, or Presto, the compressor is loRM1.60 per sq ft of shopping cated next to the cold room. space. We are using only one-fifth The electricity conthe amount of CFC, comsumption at his second pared to the conventional mini-market in Taman Tun compressor units,” he says. Dr Ismail, with a floor space Fresh dairy products, of 4,500 sq ft, which opens such as milk, are stocked from 8am–10pm, seven days in walk-in cold rooms, a week, is RM9,500 a month, Energy-efficient displays help to improve shopping experience where they are easily fed or RM2.11 per sq ft. In both from behind the chiller outlets, he uses split-unit aircabinets. “Besides ensuring conditioners and standalone the products are fresh, our 3-door refrigerated cabinets. employees do not have to His Citta Mall set-up cart the milk cartons to costs him RM22,000 in stock the cabinets,” explains electricity bills, or RM1.18 Ruppert. “We also reduce per sq ft, with more savings energy loss when the chiller in the pipeline if control doors are opened while is extended to the lighting stocking up.” system. The air-conditioning The chiller cabinets is provided by the building also use low-energy glass management. that has anti-frosting If Ruppert had technology. “This helps to installed the conventional enhance the shopping excooling system as he had in perience of our customers. Damansara Perdana, it would It also reduces energy loss, Hussman Tempcool’s Christopher Chua checking out the controls at the have cost him RM29,600 to compared to the ordinary condensers located behind a cold room operate from 10am–10pm, glass used in conventional seven days a week. Based on his chiller cabinets,” says Ruppert. Taman Tun Dr Ismail mini-market cost What is most important in the as RM2.4 million, for the additional of RM2.11 per sq ft, the bill could be entire package is the data management RM300,000 he had paid for a proper as high as RM39,000 a month. That aspects of RDM. According to Rajpall cooling package. What makes the does not take into consideration the Singh, manager of Resource Data refrigeration system interesting fact that now he has two sets of seven Management Asia Sdn Bhd, the data is that it is managed by a data compressors, one cooling tower of manager located at Ruppert’s office is manager developed by Resource 80 kW cooling capacity, 17 chiller the brain of the entire system. Data Management (RDM Asia), as cabinets of 123-foot run, five freezers “To control the system, we need a modular front end system, with an of 60-foot run, and three cold rooms to measure. Without data, you cannot alarm and control panel that connects for his supermarket. control the refrigeration system,” he to field devices in the store. “The electricity bill could easily says. “The remote diagnostic capability Besides the lower energy bills, shoot up to RM40,000 a month, if not of the RDM case controllers is a key Ruppert believes he also saves on the higher,” he says. “Now, I believe I am benefit, where data is integrated and need to call his contractor each time saving at least RM20,000 a month, centrally processed to enable integratthere is a minor problem with the or RM240,000 a year. Within a year, ed control of the cooling system.” refrigeration. “There is a cost each I can recover the additional capital time a man is sent to troubleshoot,” RDM building controls expenditure incurred. When the he says. “Now, with the data easily Real time data from the hardware electricity tariff goes up, there will be a accessible to my contractor, the greater pinch for supermarkets that are troubleshooting can be done remotely.” (such as the probes, humidistat and meters) is streamed to the data centre not energy-efficient.” Energy-saving ideas in Glasgow to be processed there. The Over the entire ten-year tenancy According to Christopher Chua, sales centre will also carry out a comparison agreement with the mall, Ruppert manager of Hussman Tempcool Mabetween the real data and the predictbelieves, the savings could be as high    •   


RDM system: An overview of how the system works

[5] [1]

Alarm handlers/contract manager: Alarm handlers in the monitoring centre who monitor all alarm triggers at the facility and engages maintenance staƤ or contractors to attend to problems. (Monitoring centre)

Store controllers: Installation of control devices for monitoring, controls and data management.

[2] Server

Data manager: Data manager, the central hub for all communication between the control devices and the web, owners, contractors, facility managers and others. It acts as the central fault manager.

Server

Raj Samuel, the man who designed the RDM package

“The entire cooling system can be controlled remotely via the Internet, with bandwidth as low as 512 kbps.”

Call handlers: They manage and answer customer reports and complaints on issues related to the facility managed. (Monitoring centre)

Receiver(s): Communication and reporting to owners, contractors, vendors, procurement, accounts, engineering, facilities managers and other third parties.

[7] Mailer: This is an automated system which generates reports to contractors/ maintenance staƤs, worJ order, damage or reports breaJdown.

SQL DATABASE

b We rts o rep

Web FM

[4]

[9]

[8]

Contractor(s): Contractors and maintenance people.

Web applications: A web-based system to manage all online reporting and management. This system also acts as an asset management system.

ed data, and look at the deviation and start asking questions. Someone like Ruppert, for example, can check and control the entire operation and monitor the data online, even when he is overseas. “In fact, the entire cooling system can be controlled remotely via the Internet, with bandwidth as low as 512 kbps,” says Raj Samuel, who together with his team in Glasgow, had developed the RDM system. Back in 1982, after graduating from the University of Glasgow, Samuel developed the system with engineers from Hussman Tempcool and Marks & Spencer. Their first project was the latter’s supermarket in Glasgow, which yielded impressive     •  

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energy savings. “Since then, Marks & Spencer started retrofitting its branches in other parts of the world, including in Hong Kong.” If there is a problem in the cooling system, the data manager automatically sends out an SMS and email to the contractor, or any number of persons. “This alarm allows the management to respond and get the system working again,” Samuel says. What’s interesting is that by analysing the data, the RDM system can predict equipment failure four to five weeks before it happens. This helps to minimise breakdowns. The system has the capacity to store and archive data for up to five years. With refrigeration and heat-

Marshall/slaves: The monitoring centre by the facility management company. Either manually operated (human-web) or automated (systems). (Monitoring centre)

ing, ventilation, and air-conditioning (HVAC) being the biggest energy guzzlers for supermarkets, Samuel’s system can be used for retrofitting old supermarkets to make them more energy efficient. In the UK, RDM Ltd in Glasgow controls 80% of the market for industries, in particular, the retail sector. AWC Berhad, a leading provider of engineering services and integrated facilities in Malaysia, has invested in RDM Asia. Its group chief executive and managing director Azmir Merican says the market for RDM products in Malaysia and Asia is estimated at RM100 million. Operating from Kuala Lumpur, RDM Asia hopes to expand to other parts of Asia.

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How retrofit enhanced PoMo Building’s value Retrofit investment of S$2.5 mil yields S$270,000 annual saving in energy costs

It was once called Paradiz Centre; constructed in 1986 and managed and co-owned by the Lend Lease Group, an Australian international property group with varied expertise across the property value chain. The company operates three core businesses: project management and construction, property investment management and property development. Renamed the PoMo Building, the Singapore property is a 234,996 sq ft ten-storey mixed-use development with four levels of retail space, six levels of offices and a car park with 141 bays. It is located near Orchard Road and the Bras Basah-Bugis area. In 2007, Lend Lease started sustainability initiatives on the mall with an investment of S$2.5 million (US$1.9 million). For what can be considered a relatively small investment, the mall enjoyed an annual savings of S$270,000 in energy costs. Three years later, the PoMo Building together with Parkway Parade (another property also owned by Lend Lease) became the first mixeduse developments to be awarded the Singapore Building and Construction Authority’s Green Mark Platinum under the existing building category. In November 2011, Paradiz Investments, a joint venture between Lend Lease and Lehman Brothers’ private real estate fund, sold PoMo to CLSA for US$200 million, enjoying a 40% internal rate of return. The sale has become a landmark example of the potential for increased asset value after a green building retrofit.

Retrofit elements • Chiller for air-conditioning The main improvements to efficiency were focused on the chilled water system. Prior to an energy audit in

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Building sold for US$200 mil in 2011; seller enjoying 40% rate of return

The PoMo Building: A shining example of the potential for increased asset value after a green building retrofit

2009, the system performed at an efficiency level of 1.1 to 1.7 kW per refrigerant tonne (RT) during peak operating hours. After retrofitting, peak hour efficiency was at 0.65 kW/ RT. This 50% improvement equates to a saving of 1.27 million kWh per annum. The aged chillers were replaced after tests conducted by an energy modelling software system. Improvements were also made to the pumping system; the chilled water and condenser water pumps were resized for better efficiency For higher efficiency, the condenser water pumps and cooling towers were fitted with variable speed drives to capture energy savings during part-load conditions.

• Building management system The installation of a building management system to monitor chiller systems and other building services. The system has trending and logging capabilities to allow the facility manager to analyse and implement further energy-saving strategies. • Sensors The placement of light sensors at the mall atriums, toilets and staircases allow lights to be turned off when not needed. • Lighting Replacing 380 T8 light fittings with the more energy-efficient T5, which come with high-frequency electronic ballasts • Waste management The segregation of organic and non-organic waste in designated waste bins by all tenants. The organic waste then undergoes anaerobic digestion for electricity production • Filters The installation of ultraviolet (UV) light filters that kill bacteria by up to 90% and prevent the formation of mould and fungi while removing odour and volatile organic compounds • Air quality The installation of sensors in car parks to monitor carbon monoxide and carbon dioxide levels, to control exhaust fans and modulate the intake of fresh air. A higher rate of return on investment is not dependent solely on cosmetic upgrades. The savvy buyer or tenant looks at the quality of space, improved natural light, thermal comfort, quality of fresh air as well as the flexibility of services. Architects can no longer afford to ignore these elements or consider them in isolation during a retrofit as this will not give the desired return on investment. As the PoMo Building illustrates, energy efficiency and in-built sustainability are crucial drivers for a high rate of return from retrofitting. Sources: www.thefifthestate.com.au and Jones Lang Lasalle’s The Investor, Issue 6 November 2011    •   


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Chiller change makes Thai hospital a winner Hospital’s energy consumption reduced by 60% through retrofit US$229,000 green investment recouped in 2.3 years

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Energy audit showed aging chillers were responsible for high energy bill

Phyathai Hospital facade: Winner of the ASEAN Best Practices for Energy Management in Buildings & Industry under the large building category at the ASEAN Energy Awards 2010

About 120 km east of Bangkok in Sriracha town of Chonburi province is the Phyathai Hospital, which has become as well known for its energy-efficiency as for its work of healing the sick. It was first in the conservation of energy category at the Thai Energy Awards in 2010 and went on to win the ASEAN Best Practices for Energy Management in Building and Industry, under the large building category at the 2010 ASEAN Energy Awards.

The hospital started its sustainability initiatives in 2003, using internal funds, when an energy audit showed its energy consumption that year to be 4,195,000 kWh, costing about 10.9 million baht (US$344,757). The average electricity cost at the time was 2.60 baht/kWh. The hospital was using five aircooled reciprocating chillers, each using 210 tonnes of refrigerant. Of the five chillers, only two were being

used fully as the rest could not operate properly. The two good chillers operated on low efficiency of between 1.66 and 2.17 kW per refrigerant tonne (RT). The maintenance cost for each chiller was also high at 500,000 baht per annum. The energy audit showed that the chillers used about 2.06 million kWh per year operating 24 hours every day. This equates to half the hospital’s energy consumption, costing 5.63 million baht per year. After the audit, the hospital replaced the aging air-cooled chillers with water-cooled screw chillers that had an efficiency rating of 0.65kW/RT. The technology provider was Airco Ltd (Trane Thailand). The new chillers promised energy savings of 3.48 million baht per year at an initial implementation cost of 8 million baht with a payback period of 2.3 years at a healthy 43.62% internal rate of return (IRR). The investment cost for the water-cooled screw chillers included additional equipment such as cooling towers (to cool the refrigerant at the condenser) as well as a water treatment system. Power consumption of the new water-cooled screw chiller is at about 0.65kW/RT (at full load) while energy consumption is expected to be about 840,470 kWh a year; which is a 60% lighter load in overall consumption. The efficiency of the system was determined by measuring chilled water flow rate with an ultrasonic flow meter while power consumption (kW) was measured with a power meter. The results were then calculated to find the kW/RT. (Source: www.setatwork.au)

Comparison of three options for chiller replacement Option

Measure

Quantity

Est. energy consumption (kWh/year)

Investment (baht)

Net cost savings* (baht)

Payback (year)

IRR %

1

New air-cooled reciprocating chillers

2

1,503,072

5,600,000

2,405,700

2.33

43.05

2

New water-cooled screw chillers

2

840,470

8,000,000

3,478,400

2.30

43.62

3

Overhaul the existing chillers

4

1,759,680

4,000,000

1,488,500

2.69

36.77

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Premier convention centre banks on LED lights RM2 million project to install LED in five exhibition halls in stages this year Management to look into other areas to achieve energy efficiency

By Stephen Ng Bhd, the company that manages the convention centre. “Once this project is completed, we plan to look at other areas and identify ways to further improve our energy efficiency,” he adds. Chen hopes to implement the project in stages before end of this year. In Exhibition Halls 1–5 located on the ground floor, there are about 900 high bay lamps. Each metal halide lamp is about 250 W. When replaced with LED bulbs, each bulb will only be in the range of 70 W, ie, using only 28% of the current energy. “Our electricity consumption pattern depends largely on our guests,” Chen says. “It is hard to monitor our consumption on a month-to-month basis. But, generally, depending on the

Longer lifespan Apart from being energy-efficient, these new bulbs have longer lifespan. Compared to incandescent bulbs with an average lifespan of 2,000 hours, LED, for example, can last between 25,000 and 30,000 hours. “There is again savings from having to replace the lamps ever too frequently in between functions,” he says. Based on the wattage of the energy-saving bulbs, Chen estimates a straight reduction of 162 kW of electricity loading for all five exhibition halls. Whereas in the past, it would have consumed 225 kWh of energy, now it would only be 63 kWh. Multiply this by 5,000 hours of usage a year, assuming this is the total operating hours in a year, this is a saving of 810,000 kWh a year. Under the C1 Tariff for Medium Voltage General Commercial Users at 31.2 sen per kWh, the saving is RM253,000 per annum for the five exhibition halls. The payback period is shorter if the operating hours and the electricity tariff increase.

Above: “Our preference is to change the lamps without changing the fixtures. Direct replacement helps to save cost,” says Chen. Right: Since bulb replacement started at the KL Convention Centre, the bill for air-conditioning has also dropped. This is probably because the energy-saving bulbs generate less heat

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The KL Convention Centre (KLCC), Malaysia’s premier exhibition and convention centre, recently finalised a RM2 million (US$636,334) tender to retrofit and improve the lighting efficiency of its five exhibition halls, totaling 10,000 sq m. The convention centre located on the grounds of Kuala Lumpur’s famous Twin Towers, which has been the preferred venue for a number of major green events, has over the last five years invested close to RM2.5 million in retrofitting the entire lighting system (see Table 1 for details). The old bulbs were disposed off as scheduled wastes by an approved contractor. The latest tender is by far the largest, says Chen Soo Yoong, director of facilities for Convex Malaysia Sdn

hours of usage, type and cost of the bulbs, we expect the payback period of between three and five years.”

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Table 1: Schedule for retrofitting lamps at KLCC Costs (RM)

2008

1,600

40,000

2009

1,080

27,000

2010

600

70,000

2011

770

72,000

2012

900

2,000,000

Total

4,943

Incandescent bulbs

LED

Average lifespan: 2,000 hours Energy consumption: 225 kWh*

Average lifespan: 25,000–30,000 hours Energy consumption: 63 kWh*

Savings of 810,000 kWh per year (RM253,000)

* Energy usage for ƥve eWhiAition halls at KLCC

2,209,000

“What is important is that this helps to reduce the carbon footprint of the building and the overall operating costs, especially at a time when the electricity tariff is going up,” he says. “We have to think long term.” With air-conditioning being serviced by a district cooling system, where the bill is half a million ringgit a month, the next biggest electricity consumer is lighting. “On average, the electricity bill is about RM500,000 a month,” Chen says. “Of this, 30% of the bill is contributed by lighting.”

Retrofit since 2005 As a result of the retrofit job, which began in 2005, the company found that the bill for air-conditioning has also dropped. “This is probably because the energy-saving light bulbs generate less heat,” he says. Where previously high energy lamps such as the tungsten halogen infrared lamps (HIR), neon lights and other incandescent bulbs were used, now Chen’s mission is to replace them in stages with energy-saving bulbs like compact fluorescent lamps (CFLs), cold cathode, PLC lighting and lightemitting diodes (LED). The change is hardly noticeable to end-users. “In fact, with the replacement of the high bay HID lamps at the exhibition halls, we expect better control of the lighting system,” Chen says. “The existing HID lamp is inherently designed to be able to be relighted only after about     •  

“What’s important is that this helps to reduce the carbon footprint of the building and overall operating costs, especially at a time when electricity tariff is going up.” – Chen Soo Yoong, director of facilities, Convex Malaysia Sdn Bhd

a five-minute cooling period. This is usually unacceptable as it disrupts the smooth flow of events or shows. On the contrary, the new LED lamp can be turned on and off instantaneously and we do not need re-striking time.” The current suppliers of the new lamps are Philips, Osram, and Megaman, which is manufactured in China. The last is his favourite because it offers direct replacement for the lamps. “Where we can, we do not wish to change the lamp fixtures, as it involves costs on fittings and labour,” he says. “We follow closely to the specifications in the building design, hence, if it was 100 W, now it is averagely less than 30 W. With CFLs, it could be as low as 15 W and LED at 10 W.” In some non-essential areas or places where there is sufficient natural daylight, de-lamping was carried out.

“This is an effective strategy that we have adopted,” he adds. According to Chen, other initiatives have also proven to save energy. For example, specially-designed Variable Speed Drives (VSD) and inverter systems currently regulate, respectively, the escalators and airconditioners by automatically shutting or slowing down motors when escalators are not in use, or a drop in temperature is detected. The Danfoss VSD has been reliable in modulating the fan speed of air-handling units (AHUs), hence optimising air-conditioning energy usage.

Green, seriously As early as 2005, the KLCC started benchmarking its environmental performance against the criteria set by the UN World Tourism Organisation and Green Globe 21 Company Standard. Its safety, health and environment manager Rasima Abdul Rasid has been submitting benchmarking data annually since 2005 to Green Globe, which is now known as the EC3 Global. The company has received benchmark certificates based on this data. “In February 2010, we obtained from SIRIM our ISO14001,” she says. The company is studying the merits of embarking on ISO50001: 2011 on Energy Management System, launched recently by SIRIM, the national quality and standards body.

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Bulbs changed (units)

Year


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Practising what it preaches UTM’s electricity bill hit new low in July 2011 Varsity to be first university to take part in ASEAN Energy Award this year

By Stephen Ng

July 2011 was a milestone for Universiti Teknologi Malaysia (UTM) — for the first time since 2008, the university’s electricity bill dipped below the RM1 million (US$318,000) markenergy efficient drive . Considering that the university’s monthly power consumption over the past three years was as high as RM1.7 million, the July figure of RM962,345 was a sterling achievement. To Prof Dr Zainuddin Abdul Manan, a key member of a group who implemented the energy efficiency drive at UTM, such an achievement is the result of all-round cooperation from the campus community. Although the electricity bill went up to RM1.1 million in August and RM1.2 million in September, Zainuddin attributes it to the fact that ten more buildings were commissioned at the end of August. “What is encouraging is that the energy consumption is trending downwards,” he adds. “We have noted that the energy

consumption of the ten new buildings is an average of 770,000 kWh or RM260,000 a month in the months of June and July.” The dean of the Faculty of Chemical Engineering, who was among the first batch of Malaysians to participate in the ASEAN Energy Management Accreditation Scheme (AEMAS) workshop in Thailand in 2006, says UTM was one of two organisations recently awarded the Energy Management GOLD Standard

“UTM to be the first university to participate in upcoming ASEAN Energy Award 2012.”

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Prof Dr Zainuddin Abdul Manan, Universiti Teknologi Malaysia

“When it comes to investing in hardware, there is a need to prioritise based on the potential amount of savings.” Dr Sharifah Rafidah Wan Alwi, AEMAS-certified energy manager

(Single Star) (see explanation). The other was a subsidiary of Malaysia’s telecommunications company, TM Research and Development (TMRD). The university will go for the Energy Management GOLD (Two Star) Standard, when it is able to sustain the improvement in its electricity consumption. “We will also be the first Malaysian university to participate in the upcoming ASEAN Energy Award in 2012. At the moment, not even one university in ASEAN has taken up the challenge,” he says.

Working within budget Energy-saving initiatives began in UTM as far back as 2003, when the facilities maintenance team improved power usage at the library with the help of an energy services company (ESCO) which provided the investments, and subsequently shared the savings. Early last year, an in-house energy management committee with representation from all faculties was set up to provide, among other things, training on sustainable energy management (SEM) and to develop energy managers. Head of electrical maintenance unit Ahmad Khairul Nizam says UTM started investing in energy-efficient products in mid-2007. “The main constraint is that energy conservation measures have to be done in phases due to limited budget. We hope that by 2015, all UTM faculties will get more efficient and smarter HVAC systems in their buildings.” These are some initiatives taken by the team: • Retrofitting the air-conditioning system by implementing variable refrigerant volume (VRV) in many faculties and buildings • Lighting retrofits, which included de-lamping and installation of highefficiency T5 and super T8 lights • Maximum demand management, which involves shifting load so as to reduce maximum demand.• Capitalising on off-peak tariff rate (OPTR) discount. Starting July 19th 2011, UTM gets a 20% discount on its power bill if it saves about RM80,000 monthly. A number of electrical appliances are run during off-peak hours

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Push for more energy managers Audits done by Green Technology Corporation Malaysia (GreenTech Malaysia) on 64 energy-intensive industries throughout Malaysia have shown that companies that have energy management systems in place score better energy conservation than those without. This is why GreenTech Malaysia is aggressively promoting the ASEAN Energy Management Accreditation Scheme (AEMAS) to produce energy managers to serve the industry. Energy management courses are conducted by GreenTech with the collaboration of Malaysia Energy Professional Association (MEPA). The courses started in 2009. The target is to have 500 certified energy managers by early 2014. Currently, there are only 169, with another 31 in the process of obtaining their certification. Their role is to help

the country conserve energy, and cut down carbon emissions. Every year since 2006, the ASEAN Energy Award is held to showcase best practices in energy management. This is an initiative under ASEAN to promote energy conservation. The Energy Management GOLD Standard is achievable at three levels – One Star, Two Stars and Three Stars.

• Online Energy Billing and Management System (EBMS) to communicate and provide up-to-date information to all stakeholders on the campus • Power quality improvement. This involves, among others, maintaining a high power factor and monitoring harmonics value for the main electrical feeders.

menting its energy conservation measures. Among them are Zulaz Engineering Sdn Bhd, Stagno Tech Sdn Bhd and Hager Bhd. Hager‘s robust energy-saving European Installation Bus (EIB) system was introduced at UTM’s library, mosque and lecture halls. The company also installed meters that enabled energy managers to monitor energy consumption in labs and classrooms.

Most of these measures are carried out with in-house expertise. However, many outstanding contractors have assisted UTM in imple-

Challenges ahead UTM resident energy manager Masilah Bandi says the biggest challenge is

Electricity billing for UTM (in Ringgit) 2008 – September 2011

2008 2009 2010 2011

Eletric bill in RM (Millions)

2.0 1.8 1.6 1.4 1.2 1.0 0.8

Jan

Feb

Mar

Apr

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One Star is awarded to companies that have implemented the energy management system, upon an audit by AEMAS auditors. Such companies have an energy manager, a company-wide energy management committee, and have implemented the entire energy management system. The Two Stars is awarded to companies that show improvement in their energy efficiency index resulting from implementation of energy conservation measures. The Three Stars goes to companies that have achieved and maintained their energy efficiency improvement for at least three years. For more information about the training programmes for energy managers in ASEAN countries, go to www.aemas.org.

to get the whole campus to embrace change. For example, when delamping and installation of LED lights were done, there was resistance from some people. However, strong commitment from the top management helped overcome such barriers. The training of energy managers is crucial to transforming the university. Responsible for their faculties, they report to one resident energy manager. “It will take some time for UTM to stabilise the energy management system,” says Dr Sharifah Rafidah Wan Alwi, the energy manager for the Faculty of Chemical Engineering. “Our energy managers have a huge task of building a culture of conservation for a campus community of 28,000 people.” Due to the limited technical expertise provided only by the Asset and Building Department, there is a long queue for internal energy audits for each faculty “We need more auditors to be trained within UTM,” she says. To encourage staff and students to strive for energy conservation, recognition is given in the form of awards, certificates and gifts. “With all these things in place, the university-wide energy management team is working hard towards preparing UTM for next year’s audit by AEMAS for the Two Stars Gold award,” says Sharifah.



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case studies

The completion of the Binh Thuan Wind Power Plant in 2011 – Vietnam’s first wind farm project – kick-started private sector investments in wind power across the country

Winds of change in the Mekong Delta Construction of 500 ha Bac Lieu Wind Farm has started after deal with GE US$1 billion loan sealed in October to fund wind farms in Mekong Delta

Vietnam’s Mekong Delta, noted as the nation’s rice basket, is also a huge source of seafood. It offers another resource, too: wind. But this renewable energy was largely untapped until recently when the central government, faced with escalating fossil-fuel costs and environmental issues, decided to harness it to drive and sustain the Mekong Delta’s economic development. Bac Lieu Province, located southeast of the Mekong Delta and some 200 km from bustling Ho Chi Minh City, is where the “wind is blowing”. A coastal region with 56 km of coastline, Bac Lieu, listed by the World Bank as a region with huge potential in wind energy, along with agriculture, seafood farming and cloth manufacturing, is gearing up for the challenge.     •  

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By G Danapal

The Binh Thuan Wind Power Plant funded by Vietnam Renewable Energy Joint Stock Company (REVN)

It is here that the Mekong Delta’s first wind farm project is taking shape at Binh Dong, a hamlet in southern Bac Lieu Province. “This will be the first large-scale industrial/energy project in Bac Lieu Province,” says To Hoai Dan, chairman of Cong Ly Ltd, the company undertaking the project. Construction of the 500-ha Bac Lieu Wind Farm power plant in two phases started on September 9th 2011, two months after the company inked a deal with General Electric Co to procure ten wind turbines and operations and maintenance services for the first phase of the project that will have 16 MW of generation capacity. Phase two will add up to 120 MW of wind power, meaning the wind farm will showcase 66 wind turbines with a capacity to produce 310 million kWh per year. To see the project through, the company’s subsidiary Cong Ly Construction-Trade-Tourism Ltd Co is investing 4.5 trillion dong (about US$214 million). The plant will be completed in the next 36 months. The project is expected to bring clean power generation to Vietnam’s Mekong Delta and also create a number of local jobs during the construction phase. “We expect that the project will help to improve the social and economic conditions of the province by creating new jobs requiring technical and industrial skills, while producing much-needed power,” says To. He is confident this first large-scale wind farm project will help attract more investments into the Bac Lieu province. Country executive for GE Energy in Vietnam Nguyen Xuan Thang describes the project as a significant milestone for the Bac Lieu province. “Wind energy also provides an alternative to Vietnam’s reliance on hydropower as a cleaner source of energy and aligns with the government’s vision (under its Master Electricity Plan VII) to generate 5% of the country’s electricity from renewable sources by 2020, and 9% by 2030,” he adds. A 2009 survey by the World Bank revealed that Vietnam has greater wind energy potential than Thailand, Laos and Cambodia. It says Vietnam is capable of producing 513,360 MW annually, or 200 times the output of the


the central government has been encouraging investment in, and construction of, clean energy projects and also considers special assistance and incentives for such projects. According to the Asian Development Bank (ADB), Vietnam’s

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Son La Hydroelectric Plant in the north – Southeast Asia’s largest power plant – and ten times the entire national capacity forecast for 2020. Over 20 wind power projects across the country in high “wind power density” areas such as Ninh Thuan, Binh Thuan, Tra Vinh and Soc Trang are underway with the ability to generate an expected electricity output of 20,000 MW. Except for the Binh Thuan wind power plant – the country’s first wind farm, and the largest in SE Asia – none of the other projects has been put into operation. Completed and connected to the national grid system in March 2011, the Binh Thuan Wind Farm, which has investment from the Vietnam Renewable Energy Joint Stock Company (REVN), has five German experts operating the farm’s Germanmade machinery and turbines for the first two years. They also trained the locals in wind energy technology. But burdened with rising fossilfuel cost and growing demand for electricity from its industrial sector,

The social and economic conditions of riverine farming communities are expected to change for the better when the Bac Lieu Wind Farm brings clean power generation to Vietnam's Mekong Delta

demand for electricity is growing at a rate of 16% each year. The growth and development of Vietnam is dependent on its ability to keep up with the growing energy demand. Denmark, a leader in green energy, has come forward to help Vietnam build and operate wind farms in provinces and cities across the country. At a wind energy workshop jointly held by the Ministry of Industry and Trade (MoIT) and the Danish Embassy in Hanoi on November 29th 2011, Danish wind energy experts made a commitment to transfer technology and supply necessary equipment for Vietnam’s wind power industry. MoIT officials pledged to offer incentives, creating the best possible conditions for Danish wind farm investors. With the Vietnam Development Bank having inked a crucial financing deal with Export-Import Bank of the US in October 2011 for a US$1 billion loan to fund the development of a wave of wind farms in the Mekong Delta over the next four years, it looks like the sector is set to fly.


case studies

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Rural solar plant brings dependable power Rural Rampura has had stable 24-hour power supply in the past two years

Efforts to secure permissions and support from other departments, like the Revenue Department and Sales Tax Department, were also instrumental for custom clearance and transporting plant components, such as solar panels, batteries and controls to the project site across state borders.

Unlike many children living elsewhere in rural India, ten-year-old Sanjeev enjoys access to computer-aided learning at his primary school in Rampura, a small community situated in the Jhanshi district of Uttar Pradesh, India. Thanks to his village’s own local solar plant, Sanjeev and his friends also enjoy watching television occasionally, and have the option to study or do their homework even after the sun has gone down. Up till three years ago, however, this was not possible. The World Bank reports that 44% of households in India are not even connected to the power grid and Rampura was one of them. Villagers did little after nightfall and indoor illumination by kerosene lamps alone was not only limited, but often a fire hazard as well.

Reliability breeds enterprise Today, the Rampura CSPP has been up and running for three years. It is the pride of its local community, with a track record to rival (and probably outdo) the reliability of power grids in many of India’s larger cities. “This village has had 24-hour electricity supply without even a single power cut in the last two years,” says Manoj Mahata, project manager of the Society for Technology and Action for Rural Advancement (TARA), a Development Alternatives Group enterprise. This assurance of power supply has enabled the people of Rampura to consider new ways of making a living. Gopal, 30, opened a flour mill in the village. In the past, villagers used to go to the nearest market in another village for their milling needs, but now they have access to the facility in their own village. In addition to the

Solar company and local NGO help Indian village to set up its own power plant

(Source: Development Alternatives)

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Nurturing local cooperation DA started off the project by forming a Village Energy Committee (VEC) and training its members to operate and maintain the solar plant that was to be built in their community. The NGO also did important groundwork by facilitating dialogue between local communities and the government and influencing the Panchayat (local government) to support the project so that land could be properly procured for the CSPP.

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Project location: Rampura village, Uttar Pradesh, India Beneficiary households: 70 Plant operational since: January 2009 Power plant design: • Polycrystalline solar plant – three strings x 20 modules (50 cells per module) • Total plant capacity – 8.7 kWp • Mini-grid of 0.75 km supplies single phase 220 V (AC) power for household, community and commercial use • Three-day battery back-up via 24 two-volt batteries of 2,500 Amp • Power station: Two inverters (5 kW capacity each) supplying 42 V (DC) to 220 V (AC), and one 9 kW inverter charge controller Funding agency: Scatec Solar, Norway Implementing agency: Development Alternatives, India

In 2008, however, the outlook brightened for Rampura when Indian non-governmental organisation (NGO) Development Alternatives (DA) and Norwegian company Scatec Solar initiated a Community Solar Power Plant (CSPP) in the village.

Students at Rampura’s primary school now have access to computer education, thanks to the electricity generated by their village’s own solar power plant

Meters are connected to the grid to prevent electricity theft. Street lamps and a security guard also provide more security to villagers


Prospects for future growth The responsibility of load management, revenue recovery and operationmaintenance for sustainability has been placed on Rampura’s VEC, and the local electricity tariff was jointly developed by the committee and DA staff. The cost of the whole CSSP project came up to Rs 2.95 million (US$55,690). Villagers paid a onetime security charge of Rs 500 (just under US$10), as well as one-time payments for applicable electrical appliances of their choice, such as fans and televisions (Rs 80 and Rs 90, respectively). Subsequently, they pay Rs 4.5 (about ten cents) per unit for their electricity usage. According to a DA report, each household is paying an average of Rs 120 per month for electricity services.

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Revenue • Annual revenue from domestic load: Rs 40,843 or US$770 (includes Rs 4,800 from street lights) • Annual revenue from commercial load: Rs 4,819 • Total annual revenue: Rs 45,662 Rampura’s community solar power project was funded by Norwegian photovoltaics (PV) solar energy solutions supplier Scatec Solar

Expenditure • Annual operator salary: Rs 14,400 • Annual salary of security guard: Rs 14,400 • Estimated annual expenses on maintenance: Rs 4,000 • Annual insurance premium: Rs 3,500 • Total annual expense: Rs 36,300 • Annual savings: Rs 9,362 (Source: Development Alternatives)

“I started this flour mill six months back. I am earning as well as serving the villagers.”

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220 V supplied to households, a threehorsepower electricity line is available for businesses like Gopal’s. “Electricity is very necessary for the overall development of any community and now we have our own power plant,” Gopal says. He adds: “I started this flour mill six months back. I am earning as well as serving the villagers.” The availability of household electricity is also making an impact on women’s quality of life in the village. Now that they are able to cook more efficiently with electric cookers, find more time for themselves and enjoy comfortable lighting in the evenings, some of the women in Rampura are supplementing their household income by sewing, making incense sticks, ropes and sweaters. In addition, the 13 street lamps powered by the CSPP also provide a more secure environment for the women and other villagers when they travel on the streets after dark. Before electrification, Rampura used some 2,400 litres of kerosene annually for household lighting, along with other fossil fuels for cooking. Now the villagers use emission-free, energyefficient compact fluorescent lamps (CFLs) and electric stoves instead. The CSPP has therefore also removed health risks from constant inhalation of smoke and fumes from kerosene, coal and wood stoves.

“The whole project was initially funded by Scatec Solar Company, but now the project is generating annual revenue of Rs 9,600, which will be useful for changing the battery after ten years,” says Manoj. The population of Rampura is growing, and with it the power needs of the villagers as well. Soon, DA may have to work with the community to further develop their solar plant. Meanwhile, the village of Rampura continues to serve as a successful living case for local renewable energy initiatives. Adapted from interviews and a Development Alternatives case study compendium designed and written by Anand Kumar

– Gopal, local flour mill owner CSPP electricity tariff structure Slab-I Types

Slab-II

0-5 kWh 5-10 kWh

Slab-III 10 kWh

Domestic Fixed cost (Rs)

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90

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Variable cost (Rs)

4.5 per kWh

5.5 per kWh

6.5 per kWh

Enterprise Fixed cost (Rs)

200

Variable cost (Rs)

6.5 per kWh

Source: Development Alternatives    •   


case studies

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China launches world’s largest biomass power plant Guangdong Yudean Group’s two 50 MW uses locally-abundant biomass

The second 50 MW unit of the Zhanjiang Biomass Power Generation Project in Guangdong Province, China, passed the “72+24” hours trial operating at full load. This means that the world’s largest biomass power plant has officially begun commercial operation. The first unit of the facility was put into operation last August. This is a new record for China’s biomass power generation sector. The plant, developed by Guangdong Yudean Group, comprises two 50 MW biomass power generation units and is the world’s largest biomass power facility both in terms of unit capacity and total installed capacity. Using locally-abundant biomass resources including bark, branches, trunk residuals and roots from eucalyptus trees for power generation, the project is being supported by the Chinese government. The plant enjoys several inherent advantages, the key one being its location on Leizhou Peninsula on the southwestern end of Guangdong, where sunshine is ample and climate well-suited for crops that are a key resource for biomass energy. In addition, the strong transportation network across the province makes it easier to collect and deliver the biomass resources. Lastly, the Yudean Group has good relationships with major power generating equipment manufacturers and research institutes. These organisations would be the channels through which renewable energy technologies would get popularised and adopted. The construction and now operation of the plant produced many positive environmental and socioeconomic benefits and contribute to local sustainable development by promoting the integrated use of local resources while avoiding environmental pollution from fossil     •  

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US$750 mil to convert 200 counties into green energy zones, 108 converted

13 GW China’s biomass energy target by 2015

• 500–700 new biomass plants • Double 2010’s capacity of 5.5 GW

fuel-fired ones. Local economic development is expected to get a boost from the extra electricity to meet rising local energy demands while greenhouse gas emissions are reduced. Many short-term employment opportunities were created during the construction phase followed

by permanent ones for the facility operations. The plant will also stimulate the local economy as services are needed to transport, purchase and store biomass residues. The harmful substances, mainly sulphur and ash, released in the process of generating biomass energy accounts only for one-tenth of that generated by metabituminous coal. In addition, the use of biomass energy achieves near-zero CO2 emissions. As a result, Chinese authorities including the National Development and Reform Commission (NDRC), the Ministry of Finance and the National Energy Bureau, have reached a consensus to provide guidance and support policies for the sector. China increased the on-grid price for biomass power to 0.75 yuan (about US$0.12) per kW hour in July 2011, a rate at which most biomass power stations can turn a profit. The Chinese central government has also agreed to provide 4.75 billion yuan or US$750 million in subsidies to convert 200 counties across the country into green energy demonstration zones during the five-year period. To date, just over half or 108 of the counties have already been “converted”. Biomass is a good potential alternative to coal, and plays an important role in meeting China’s energy conservation and emission reduction targets of 2015, according to Li Yuanpu, an executive member of China’s renewable energy institute. Industry observers expect the government to come up with more policies that support the development of biomass as China moves towards a greener model of economic development. – Nanjing Shanglong Communications

Background on Yudean Group • Established by Guangdong Province government in August 2001 based on the power generation business of the former Guangdong Electric Power Holding Company whose history goes back more than a century • Owned by Guangdong Provincial Government and China Huaneng Group, it is the biggest power generation enterprise in Guangdong Province • Total assets valued at 116.6 billion yuan

• Installed capacity of power plants has reached 21,186.7 MW • The group uses multiple energy sources including thermal power, hydropower, wind power, nuclear power, LNG power, biomass power and solar energy • The first power generation enterprise in China to have desulfurisation operation in all power units, thus reducing the discharge of sulphur dioxide by 290,000 tonnes every year for Guangdong


Briomedia Green Sdn Bhd (924679-H) 3-3 Jalan Solaris 2, Solaris Mont Kiara, 50480 Kuala Lumpur, Malaysia • Tel: +603 6203 7681 (Malaysia) • Tel: +65 9068 0184 (Singapore) • Fax: +603 6211 2681 • Email: editor@greenpurchasingasia.com • Marketing & sales Yong Wang Ching (Malaysia) +6012 205 7928, Lim Wan Tsau (Singapore) +65 9068 0184 • Subscription & circulation Jessica Lee, Yap Eng Jin

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people

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SEDA pushes RE boundaries In this second part of our interview, Sustainable Energy Development Authority (SEDA) Malaysia CEO Badriyah Abdul Malek shares with Celia Alphonsus some of what the newly set-up institution will be doing going forward.

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On geothermal energy “We need a geothermal map and we are working with (national utility company) Tenaga Nasional Berhad (TNB) on this before we can really move ahead,” she says. “According to a study conducted by the Minerals and Geoscience Department, there appears to be a good source of geothermal energy in Sabah.” Surveys carried out at Apas Kiri near Tawau, covering an area of about 50 sq km, found a potential for 67 MW (see box story). SEDA Malaysia is now looking into calculating the possible allocation and tariffs needed to include geothermal energy into the FiT. Sabah is in an awkward situation. For now, only renewable energy pioneers under the Small Renewable Energy Power Programme (SREP), which started in 2006 can tap into the FiT. It is believed the authorities are working towards the inclusion of Sabah, which for now is not obliged to pay the 1% levy towards the Renewable Energy Fund, and thus not eligible to enjoy the FiT although exception has been announced for those under the SREP.

On wind power “Many people have approached me to say we also have a lot of wind north of Borneo. But I can’t do anything if I don’t have a wind map.” Badriyah says it is important for Malaysia to have a wind map and for this, she intends to call for tenders soon. “Once I know where the winds are and how strong they are, then we can explore the commercial viability of wind power as well.”

“I am now working on business development, capacity building, research and development as well as spreading awareness.”

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For players in the renewable energy industry, there’s much more to look forward to as far as Malaysia’s feed-in tariff (FiT) mechanism is concerned. The FiT, launched last December, currently covers four renewable sources of energy – solar, biomass, biogas and mini hydro. But they are not exclusive, as other renewable energy sources will be added to the list once they are commercially viable. Badriyah Abdul Malek, who disclosed this to Green Purchasing Asia, says there is still much to be done in this area, as well as in awarenessbuilding and ensuring the growth of the renewable energy industry. These are her thoughts:

Mud volcanoes at Apas Kiri indicate geothermal activities: SEDA Malaysia is considering FiT for geothermal

On tidal power Although the results of an initial study by the Ministry of Science, Technology and Innovation shows that tidal power is not good enough to go commercial, she says the Maritime Institute of Malaysia (MIMA) is keen to explore options and conduct studies on ocean thermal temperature differences. “Apparently they found some potential off the coast of Labuan. However, Malaysia still has a long way to go. We are still in the infancy stage in this area but we are keeping our options open.” She says there are “so many things being researched now, including fuel cells and algae” and all their potentials will be assessed. Capacity building, investment growth Even though she already has her plate full with the Key Performance Indicators (KPIs) for the FiT, Badriyah sees her duty as above and beyond that. “Although FiT is our bread and butter, we play a pivotal role to promote sustainable energy. Part of our plans is to focus on capacity building and intensifying research and development,” she says. Badriyah is keen to see investments in renewable energy grow. She also needs to monitor the progress of businesses and to increase the number of jobs in the renewable energy industry while ensuring there is sufficient competency training.


Awareness among the people “For now, renewable energy players are very well aware of the potential and opportunities, but after appearing on Astro Awani [a cable TV station] and RTM [a free-to-air television station], the feedback I have received is that the man on the street is not as aware.” She acknowledges the fact that more awareness initiatives and activities must be carried out to address this issue.

emissions reduction, there are now extensive business and employment opportunities in new fields. “Through the FiT targets, we are able to reduce 42.2 million tonnes of CO2, which equates to almost 42% of the target set in Copenhagen.” SEDA Malaysia’s role, she says, is to communicate the holistic view of renewable energy that goes beyond complementing electricity supply from fossil fuel sources.

On CO reduction The potential of the renewable energy industry is one that is far-reaching from all perspectives. As a result of the government’s commitment to

Five-pronged thrust “I have completed the first thrust of the pillars of renewable energy, which is the (enabling) law. I am now working on the rest which are business

development, capacity building, research and development as well as spreading awareness.” She says she is committed to ensuring Malaysian renewable energy players are able to grow. “Bank Negara Malaysia [the central bank] has announced that renewable energy players can now apply for the Green Technology Financing Scheme using the Renewable Energy Power Purchase Agreement (REPPA) as collateral. This is good news because they now have an advantage. I now need to work with Bank Negara to allocate a bigger chunk of the money available to renewable energy players,” she says.

Geothermal steaming up in Sabah

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Project details

Signing for SESB were managing director Datuk Baharin Din (seated, second from left) and company secretary Zunaidah Othman. On TGE’s end were managing director Ramzi Raad (seated, second from right) and project director Andrew Amaladoss. The ceremony was witnessed by (L to R) chairman of TNB and SESB Tan Sri Leo Moggie, Minister of Culture, Tourism & Environment Sabah Datuk Masidi Manjun, CEO of TNB & director of SESB Datuk Seri Che Khalib Mohamad Noh

Malaysia’s first geothermal power plant using indigenous geothermal resources is being developed at Apas Kiri near Tawau, Sabah. Tawau Green Energy (TGE) signed a 21-year agreement with Sabah Electricity Sdn Bhd (SESB) on November 29th 2011 to supply 30 MW to Sabah’s grid. The RM400 million (US$127 million) project will be commissioned in late 2014. The project will be financed by

local banks using the conventional debt-equity method. The site’s geothermal potential was discovered by the Minerals and GeoScience Department Malaysia, via a magnetelluric survey done by Usains Holding Sdn Bhd and Laboratory of Geothermal Energy, Universiti of Indonesia, from December 2008 to January 2009. The survey, covering 50 sq km around geothermal manifestations,

• G : G   P-P P U, P M D,             ,              • C : E   C D M, K P   U N F C  C C UNFCCC • C: PT P E, I G,     A FA, S C    S K, S I  G (Source: www.tgepower.com)

led to the discovery of subsurface heat water field of 12 sq km. There is potential for a 67 MW geothermal power plant if drilling is done to a depth of 2.5 km. Twelve wells will be built to draw out steam and hot water to produce energy. TGE project director Andrew Amaladoss says: “The first exploratory well is expected to be drilled in April 2012 to an anticipated depth not exceeding 2,000 metres.”

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KLIA taps solar power

The Kuala Lumpur International Airport, Malaysia: Total installed capacity of 30 MW in Sepang

Malaysia’s green airport, the Kuala Lumpur International Airport (KLIA), is tapping the sun for part of its energy needs. According to allocations for feed-in tariff (FiT) in the Sustainable Energy Development Authority (SEDA) Malaysia’s website, nine applications have been approved for a total installed capacity of 30 MW in Sepang where the airport is located. Silverstar Pavilion Sdn Bhd leads the pack with two solar photovoltaic

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(PV) projects with an installed capacity of 5 MW each while Fortune 11 Sdn Bhd and Diversified Harvest Sdn Bhd have a 5 MW allocation each. The others are: Corporate Season Sdn Bhd (4 MW), Uptown System Sdn Bhd (2.47 MW), Phoenix 11 Sdn Bhd (2 MW), Benchmark 11 Sdn Bhd (1.1 MW), and Synergy Must Sdn Bhd (1.01 MW). The FiT for all renewable energy sources started on December 1st 2011,

and players in the 1–5 MW solar PV category have gobbled up all quotas until the first half of 2014. The KLIA projects are among 20 solar PV approved applications in the 1–5 MW category. A Malaysia Airports Holdings Berhad (MAHB) official confirmed that they are building solar plants with a total of 30 MW installed capacity but did not elaborate. MAHB, which runs airports in the country, adopted a sustainable agenda six years ago, and achieved Green Globe Gold status in 2009. The Green Globe is a certification and performance improvement system based on Agenda 21 of the United Nations’ Rio de Janeiro Summit. Other companies with 5 MW solar FiT allocations include Gading Kenchana Sdn Bhd and Bumi Masyhur Industri Sdn Bhd, both in Malacca and Cypark Suria (Pajam) in Negeri Sembilan. For an overview of the RE Capacity map, see SEDA Malaysia’s portal at www.seda. gov.my

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Solar, India’s only viable long-term solution

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India’s growing economy is facing a severe electricity deficit that runs between 10% and 13% of daily needs. As the nation is increasingly eyeing solar in its energy mix, Nishtha Arora engages solar expert Dr Tobias Engelmeier on the way ahead for India. He is owner of a renewable energy and resource management company based in New Delhi.

For more on India’s greenomics, read our July 2011 issue at www.greenpurchasingasia.com

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India relies on coal for about 40% of its total energy consumption, oil for about 24%, and natural gas for 6%. The country is now looking beyond fossil-fuels to turn around its energy deficit. How do you think this can be achieved? India will continue to rely on fossil-fuel for the next 20 years or so. The energy market is very strategic. Any decision you take now will be relevant for a long time. For example, India is now investing in nuclear power. It’s a long-term decision. Ten years or so to build a plant and it runs for the next 15 years. There is something called path

dependency; once you are on that path, you stay on that path. The question is when India is going to make a strategic shift from fossil-based power to nonfossil based power; and you can see that happening already. It first happens in the mind and then it happens in the investments. In the mind, this shift is starting to take place and India is actually quite advanced compared to the US, for example, which is a developed economy with a slower growth rate and demand. You see significant investments coming in but it will take time for it to have a fair share of energy mix.


What are the motivations for the common man to invest in solar photovoltaics? From an economic perspective, what are the options for a villager without power supply? For now, he mostly uses kerosene, cow dung or twigs; biomass in various forms. If he is wealthier, he may buy diesel for water pumps. Cow dung and kerosene are extremely unhealthy. Kerosene and diesel are heavily subsidised. I am not sure how much longer they will be because it is not economically, environmentally and socially sustainable. Electricity is extremely expensive and you pay upwards of 15 rupees per kWh. You can have solar power at 11 to 12 rupees. In that context, it is much cheaper, even if you look at the cost of solar installation, which is falling rapidly. The problem is in the liquidity. If you buy diesel power, there is a small fixed cost, which is the

generator, and the high variable (and recurring) cost, which is the fuel. With solar power, you have to pay for the system upfront but people don’t have that much cash in their pockets. So you have to look at some sort of financing models, like micro financing or some sort of Grameen Surya Bijlee. While solar policy is robust, developers are facing a number of challenges that threaten forecast growth. Chief among these threats are project bankability and financing. Why are the banks still hesitant to invest in this area? Capital expenditure, as in equipment cost, is an issue and that relates to the global market. However, costs have

different islands in which solar power is commercially competitive. That is what we are looking at in projects that we are developing. On the bankability side, it is a question of risks. The banks would normally ask, if I finance 70% of the project how secure are my returns? How bankable are the power purchase agreements with the state utility? Does the technology work in India? Is it well built? Initially, banks were hesitant as they did not know the technology and the international banks did not know the market but it has started moving now. Indians are very enterprising and creative in finding ways to make things work.

Tobias Engelmeier • Ranked among top 50 solar experts in the world • PhD in political science from South Asia Institute in Heidelberg, Germany • Owner of Bridge to India Pvt Ltd, a renewable energy and resource management company based in New Delhi • Had worked for three years in the energy sector with a strategy consultancy • Has written a book on Indian political culture

“I do not think India as a country, or Indian companies, are interested in green on a global level, on a carbon emission level. They are interested in green when it comes to local pollution to some extent.” come down significantly globally, and that is a big macro trend. India has an uneven price topography, very different customers and very different process, not just for grid power but for any power. In that uneven topography, you have many

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You have said solar is set to grow significantly in India over the next ten years and that the market’s gigawatt-scale emergence will be spurred by the maturing National Solar Mission (NSM). What does this mean to the people? Solar power has one big disadvantage: it is costly compared to other sources. But the key advantage is that it can be installed off-grid, of any size it does not matter. We cannot do that with a coal-based plant. India has not built up a centralised power infrastructure, a big grid involving mega power plants. The problem for the population is they do not have access to power. For the government, it will be more expensive to provide them with a grid than to provide them with a decentralised energy solution. It is quite likely businesses that are suffering from power cuts, and villages that are cut off from the grid will look at solar power for a solution. The question is who pays for that extra cost. There are ways of mitigating that. The government could subsidise it directly; it depends on the customer group. So if you look at village electrification, you have 90% capital subsidies for that. The commercial, industrial markets would be able to pay for themselves.

What do you think are the prospects of meeting India’s energy needs through a mix of renewable energy (RE) technologies in the next five to ten years? It is not clear if there is a power strategy but as I see it, India wants to get as much power as possible from all sources because it has an energy deficit that is growing. Demand rises so fast that the supply cannot keep up. Therefore, there are these big coalbased plants, nuclear power, gas and hydropower projects, etc. On the renewables side, there is a problem because you work with limited resources. Therefore, you want to find out which renewable energy is cheapest, is most readily available where you need it because then you save on the transmission    •   


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“It is wrong to think the government should or could create a market that is a ready-made bed so that you can lie down on it. That is not going to happen.”

and distribution infrastructure. Then there is the question of supply security, which is the issue with biomass. You also want to develop a technology that is scalable because you would need to fill a huge gap. The four renewable energy sources in India – biomass, hydropower, wind and solar – have different pros and cons. Wind is extremely competitive price wise and is reliable as there is a lot of data available. But there is limited potential because the best sites are already in use. Biomass can be very good but you have the problem of supply, which fluctuates according to the monsoons and the harvests. A number of biomass companies are having trouble securing a stable supply of feedstock. And you always have the question of whether you are in a conflict with the food chain. Now, there is small hydropower, which is very profitable, very old technology, very bankable. It is good technology. I am talking about those below 25 MW, which is run-of-theriver, so it is not damming. More of these should be done. Solar power is more expensive but it is easily available on a small scale. So you can have a solar powered torch or solar application like street light or a solar home system. In my view, solar power is the only long-term viable strategy that this country has to satisfy its power demand. It is often said companies that manage their carbon emissions responsibly can enhance their brand value. Also, investors are choosing to invest in and buy from companies that are environmentally    •  

conscious. How well do you think Indian companies are taking this route? I do not think India as a country, or Indian companies, are interested in going green on a global level. They are interested in green when it comes to local pollution to some extent. Even the government invests in these technologies not because they are green but because of power security. There some notable exceptions. Nevertheless, by and large, the willingness of an Indian company to pay even a penny more for power that is green is almost non-existent. In order to really scale the industry, it has to be a commerciallyviable option. It cannot be a CSR option. Longer cost-recovery period, higher development costs and economic viability are the major restraints with building and operating renewable energy systems. How do you think the Ministry of New & Renewable Energy (MNRE) can address this issue? The MNRE follows a number of programmes. Jawaharlal Nehru National Solar Mission is a very good one and very well executed. Why, because, it is a trial and error programme. The MNRE says this is India, we have a lot of energy requirements, we have a lot of sunshine but we do not have unlimited resources. We cannot build plants, and fields and fields of solar power just because we think it is cool. So we need to see how to do it and we do it with trial and error. We support a little here and a little there and see what transpires.

Can we afford these trial-and-error ways when there so many other burning issues? Energy is one of the most fundamental issues in India. Providing energy to people and to industry is crucial for this country. It is like a philosophical question; which is more important: education or health? It is wrong to think the government should or could create a market that is a ready-made bed so that you can lie down on it. That is not going to happen. There are a number of issues in the marketplace, like solar irradiation and what the cost and returns on investment will be. Banks are also reluctant to give money. Technological competencies in the country are low, not only at senior levels but also on the installation side. The market and the government have to work together to address these issues. The government does certain things like set up funds to guarantee payments of PPAs under the National Solar Mission to make projects more bankable. The government is investing in R&D centres, Indian Institute of Technology (IIT) in Jodhpur and IIT in Mumbai. The overall strategy for the government has been to create an industry, to have at least a hundred companies that are into solar and would be able to compete with each other, and they have achieved this. And they have achieved improvements in the domestic manufacturing industry, although I have my doubts whether that is the right way to go. What they have not achieved yet and where I think the market needs to go is to provide more support for decentralised solutions. – Canary Trap


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Planning greener routes for the customer

It has been four years since DHL embarked on its GoGreen programme. Tell us about this programme and why it is important to your operations globally. Deutsche Post DHL was the first global logistics provider to set itself a quantified carbon dioxide (CO2) efficiency target, ie, to improve the company’s overall carbon efficiency by 30% by 2020 against our 2007 baseline. We also made sure all our targets in the GoGreen programme are well cascaded from the global to the division, regional, country and even site levels. This is to ensure we align our actions and take the necessary measures to achieve our group-wide target. GoGreen is one of the three core programmes of the group’s corporate responsibility strategy and it provides a framework for minimising the impact of our business on the environment and the offering of sustainable logistics to our customers. We will continue to engage our employees in our change process and work with our customers who wish to ship using a greener solution. What are its achievements in terms of carbon reduction? Give us details on the carbon offset projects that DHL has invested in. Globally, DHL Express achieved 31% carbon efficiency improvement on our direct emission compared to 2007 levels, surpassing our mediumterm target of 10% carbon efficiency improvement by 2012. In Asia Pacific, we achieved 14.1% carbon efficiency improvement on the ground operations. In Malaysia, we have done well in managing our carbon footprint, attaining a remarkable 11.1% reduction in its total CO2 emissions while CO2 efficiency improved by 9.7% in 2010, compared to 2009. We have invested in environmentfriendly projects such as a biomass

David Ng Managing director, DHL Express Malaysia • Born on Wall Street in Kuantan, Malaysia (not New York); the road has since been renamed Jalan Besar • Grew up in Kuala Terengganu, where the previous Yang di-Pertuan Agong (King of Malaysia) was his classmate • Has two children, aged 9 and 7, born in Jakarta. Ng’s wife is an Indonesian • Hobbies: Golf and playing football with his kids (“We are MU supporters”) • Currently reading Good to Great by Jim Collins • An alumnus of Surrey University and Warwick University • A Fellow of the Institute of Chartered Accountants

and a hydro power plant in India and Brazil, respectively, and a wind farm in China. All of these have certified emission reduction (CER) credits in accordance with the Clean Development Mechanism of the United Nations

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The Malaysia Express division of global logistics leader DHL recently reported achieving double-digit year-on-year carbon emissions reductions in 2010 over 2009 levels. Managing director of DHL Express Malaysia David Ng talks to Green Purchasing Asia about how this was done and how the company plans to maintain its green momentum.

Framework Convention on Climate Change. Your carbon accounting process covers some 1,000 facilities in Asia Pacific. How exacting is this process? And is it independently verified? At DHL Express, a custom designed web-based Carbon Footprint Assessment (CFA) tool has been rolled out to over 2,000 facilities in 66 countries to collect our fuel and energy consumption data on a monthly basis. The data from each facility is then aggregated at a country level, verified for accuracy, then uploaded into CREST, our corporate accounting system. CREST converts all the litres of fuel and kWh of electricity consumed into CO2 emissions based on unique emission factors associated with each type of fuel and source of electricity.    •   


DHL’s efforts in ensuring sustainability are recognised by the community, setting the bar high for green logistics: • British Chambers of Commerce Business Award 2010 for quantifiable “Extraordinary CSR” practices with a global impact • DHL came 1st in Carbon Disclosure Project ranking, with 99 out of 100 points in the recent Carbon Performance Leadership Index • DHL is listed on both the Dow Jones Sustainability Index as well as the FTSE4Good Index Our carbon accounting process has been endorsed by Ernst & Young for its auditable, reliable and standardised process. Our group carbon data disclosed in our annual Responsibility Reporting are audited by our external auditors, PriceWaterhouse Coopers.

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DHL has mentioned Barclays, DVNPS and Sandvik AB as corporations that have opted for its GoGreen Carbon Neutral product. Who are the other companies that are signing up? Is there a cost issue with the carbon neutral product? DHL Express was the first global logistics company to offer carbonneutral shipping service via DHL GoGreen Carbon Neutral. This service comprises the calculation of CO2 from every shipment, the offsetting of CO2 emissions through DHL’s carbon management function, and the annual verification of CO2 offsets by an external third party. Carbon emissions generated by each shipment are offset by purchasing carbon credits from recognised climate protection projects such as hydropower, biomass or wind energy. Globally, DHL successfully shipped more than 1.7 billion GoGreen shipments in 2010, offsetting 82,000 tonnes of CO2 for customers. The growing market acceptance of GoGreen services is in line with our global findings on sustainability, where DP DHL found that 57% of business customers and 51% of consumers indicated they would choose an environment-friendly logistics provider over a cheaper one. Regionally, an increasing number of customers are enquiring about our

Deutsche Post DHL finds that 57% of business consumers and 51% of consumers would choose an environment-friendly logistics provider over a cheaper one

“Most of our staff members had heard about being environment-friendly but knew little about energy conservation and how to help protect the environment.” GoGreen services. Standard Chartered Bank is the first bank to adopt the service globally, signing a worldwide contract to make 95% of the bank’s international courier services carbon neutral. Malaysia is among the countries where this service will be implemented. The charging mechanism we adopted for our GoGreen service is based purely on cost, ie, the cost of equivalent carbon credit needed to offset the carbon emission of the shipment, plus other administrative costs. Your Malaysia Express division cut total CO2 emissions by 11.1% and CO2 efficiency by 9.7% in 2010 compared to 2009. Please explain the difference in the two values. Carbon efficiency is CO2/kg = CO2

per kilogram – a standard unit used to measure the amount of greenhouse gases emitted as a result of energy use for each kilogram of shipment that DHL moves. Carbon emission is the amount of carbon dioxide emitted as a result of our day-to-day operations. Tell us how you achieved those reductions. Give some examples of how your facilities have innovatively reduced energy consumption. In Malaysia, we focus on two key areas to effectively manage our carbon footprint: employee engagement and optimisation of network and facilities. Route optimisation Information such as traffic data, distance travelled and time spent on the roads by each courier is continuously measured and monitored to provide couriers with insights on the most efficient and effective route to pick up and deliver customer shipments, thus helping to reduce fuel consumption. Refleeting DHL Express Malaysia refleets its vehicles every year to ensure that the vehicles are fuel-efficient. In 2011, we refleeted 40 vehicles and will look into renewing more of our fleet in 2012.


Facilities optimisation We reviewed our space utilisation of DHL Express’s facilities in Malaysia and relocated some functions within these facilities, resulting in lower total energy consumption and a smaller overall carbon footprint. Employee engagement We launched a “lowest electricity usage” competition amongst facilities as one way of spurring employees to work together as a team and propose creative ideas for CO2 reduction. Through this exercise, employees acquire knowhow on managing their own energy consumption and such good practices can be applied beyond the workplace. What’s the target for 2011? The group as a whole will work

Senior management has to walk the talk and employees have to make it their way of life to ensure long-term sustainability 

We will also explore the possibility of working with Proton to produce e-vehicles that are more environmentfriendly.

towards reaching our target of improving our carbon efficiency by 30% in 2020. When DHL Malaysia first started tracking and disclosing its carbon footprint, what were the initial challenges and how did you overcome them? Some advice for companies that are thinking of going this route to sustainability. The initial challenge that DHL Express Malaysia faced was the need to change the mindset of our employees. Most of our staff members had heard about being environment-

friendly but knew little about energy conservation and how to help protect the environment. With time, proper explanation and sharing of experiences, as well as showing them the data and highlighting the improvements, the staff are encouraged to do more to help save the environment. Clear messages are cascaded from the top management to the divisions and incorporated as part of the overall strategy for the company. Senior management has to walk the talk and employees have to make it their way of life to ensure long-term sustainability.

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editorial

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Europe’s loss at Durban: Lessons for Asia Forced emissions trading has given rise to fraud, eroded investor confidence

The United Nations-brokered Conferences of the Parties (COP) 17 climate talks in Durban, which ended December 9th, were in some ways a trial of strength and battle of wills between Europe on one side, and the rest of the world on the other. The Asian role was possibly the biggest and most important, as the US kept a low profile and Canada announced this was the end of the line for Canadian participation in any format for how the Kyoto Protocol will or might operate from the end of 2012. Japan also made it clear that it thinks the present formats for battling climate change are not working and its own commitment will be tapered down, while the European model of forced and mandatory greenhouse gas emissions permits trading – Europe’s Emission Trading Scheme (ETS), which has soldiered along since 2005 – is now the only one of its kind in the world. Europe’s position was both defensive and aggressive, so much so that a climate blog during the talks revealed a strictly off-the-record comment by a high-ranking member of the Indian delegation, who called the European stance “naive, hypocritical and aggressive”. Europe wanted everything, including European-type mandatory carbon trading worldwide, but got nothing. Lessons for Asia start there.

Does carbon trading help green energy? The European argument is yes, and this was also the US stance until the end of 2010 when the Chicago CCX voluntary market for emissions trading shut down, with final trades valuing the right to emit one tonne of CO2 at around 5 cents. In fact the answer to the question is not certain,     •  

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Asian green energy sector to consolidate and witness value-added integration

Sector value-add searches by investors may spark renewed interest in the biofuels sector due to the links between biofuels and food production, bio-resource and water supply development, and possible knowledge-based enterprise activities downstream

and Asian attempts at creating either voluntary or mandatory trading, especially in Australia, have met with little uptake and support from players in the green energy market. One clear reason is that “the only model in town” – the one in Europe – is not working as intended. Tracing a downtrending curve like the shrinking market price for a one-tonne CO2 emissions permit in Europe (eg, EU-Allowances [EUAs] and Certified Emissions Reductions [CERs]) from as high as 20 euros or US$30 a tonne in 2009 to about eight euros today, investor support for green energy has also shrunk. Still growing as late as the end of 2010 in both the US and Europe, but already flat in Asia, the trend is now downwards in all three regions. Europe’s mandatory

Andrew McKillop writes and consults on the interface of oil, renewable energy and the sustainable economy. Was an energy policy expert at the European Commission, Brussels.

carbon trading has done nothing to slow the decline. Some observers claim the low credibility of forced emissions trading, and say the many abuses and frauds within the system have spilled over to green energy finance and further eroded investor support. Asian investment in green energy has in any case been almost too successful, with no need at all for emissions trading. State-aided – even state-planned – and targeted investment in solar photovoltaics cell production and the wind energy sector in China, India and elsewhere in emerging and developing Asia, has fallen victim to its own success. Global overcapacity in both products is high and now creating adverse market conditions for companies operating in these sectors, as shown by the rapid decline of investor support, loss of jobs and rising company insolvencies in the German and Spanish solar PV and wind energy sectors. Many analysts suggest it will take three to five years for business to start growing again, and forecast continuing consolidation.

No quick recovery Another basic lesson coming out of the Durban climate talks was that scientific doubt about the real link between fossil fuels and global warming has grown. The United Nations Intergovernmental Panel on Climate Change (IPCC) has itself issued a major report on likely forward trends, saying that natural climate variations can be as important as any human-induced changes. Likewise, the fast-growing world resources of shale gas and coalseam gas, slow growth in world oil demand, and few problems in world coal supply – even if coal mining and transport infrastructures are stretched – make for an energy supply picture that is not


as stark as previously thought. In this context, investor support – and at least as important, government subsidies and grants – for green energy is very unlikely to grow like it did from 2006 to 2010. Asian moves in green energy will therefore certainly include sector consolidation with a probable trend to downstream value-added integration. Simply producing and selling small quantities of energy from high-cost sources and systems puts green energy firms in a weak competitive position against large and established fossil-fuel energy producers. Finding new and

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better ways of using energy, however, can generate stakeholder value. Sector value-add searches by investors may spark renewed interest in one of the current losers in green energy – the biofuels sector – due to the links between biofuels and food production, bio-resource and water supply development, and a mix of possible knowledge-based enterprise activities downstream from producing biofuels. In the optimistic boom years in Asia concerning biodiesel and, to a lesser extent, bioethanol fuels, the potential for knowledge-based valueadd was mostly ignored, but today this

sector may show a major uptake. To be sure, some green energy sectors with special promise in Asia, such as plug-in electric scooters, if not electric cars, will continue growing in pollution-conscious city environments. These will be joined by natural gaspowered city transport vehicle fleets in a shift that places Asia well ahead of Europe and the US in substituting and replacing high-priced oil. The bottom line is therefore on sector consolidation, a search for value-adds across the green energy sector, and a special Asian focus on oil-saving transport.

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Mining the mobile Incorrectly discarded mobile phones may leach toxic substances Harvesting rare metals from used mobile phones saves cost and the environment

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Mobile phones were once a rare commodity and a luxury. Their use was confined to business people, government officials and the elite in society. Today, however, widespread use of mobile phones has led to vast quantities of discarded phones as people upgrade and replace their phones with sometimes alarming frequency. In mid-2005, the number of mobile service subscribers saw a dramatic leap to nearly 4 billion worldwide. The result of this was an estimated 650 million retired or discarded mobile phones. What is to be done with these discarded mobile phones? Without planned disposal and intervention, they will simply choke our landfills, pollute the environment and poison our ecosystems.

What do mobile phones typically contain? Typically, a mobile phone comprises a handset (this includes a printed circuit board [PCB], liquid crystal display [LCD] panel, keypad, antennae, microphone and casing), a battery and

A mobile phone has significant impacts across its life cycle – right from extraction (especially metals), making, packaging and distribution, use and disposal

a charger. The PCB is made mostly of copper soldered to an epoxy resin or fibreglass board with coatings and adhesives. Generally, it is also coated with gold plating. Other metals and toxic substances you may find on a PCB are arsenic (in chips made from gallium arsenide), antimony, beryllium, brominated flame retardants (BFRs), cadmium, lead from the solder joining the parts together, nickel, palladium,

Dr Prasad Modak is chairman of the Green Purchasing Network of India. His email is prasad. modak@emcentre.com

silver, tantalum and zinc. Among these, the lead and BFRs have the highest environmental impact because they are highly toxic and remain for a relatively long period of time in the environment. Meanwhile, the liquid crystals in the LCD display panel can contain toxic substances such as mercury. Rechargeable batteries are less wasteful than single-use batteries. They can, however, contain toxic metals such as cadmium, nickel, zinc and copper. As for the battery charger, it often weighs more than the handset and battery combined. Because mobile phone battery chargers are also often make- and model-specific, their usefulness goes out with the phone they are designed for. Chargers consist mainly of copper wires and plastic, but may contain gold, cadmium and BFRs as well. Because many of the metals and substances used in a mobile phone kit are not only valuable but environmentally harmful when carelessly disposed, we need to figure out how to get used phones back, and how to extract and reuse these metals.    •   


Discarded mobile phones are like mobile mines of precious metals. Nearly 300 grams of gold can be recovered from approximately one tonne of recycled mobile phones. If all of this is reused, we save on mining 110 tonnes of gold ore. Batteries, too, contain various metals that can be reused as secondary raw materials. Well-established methods are in place for recycling most batteries containing lead, nickel-cadmium and mercury, while processes for the newer nickelhydride and lithium systems are being developed.

Collecting and recycling used mobile sets Many large mobile set makers have come together under the leadership of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (commonly known as the Basel Convention) to be part of the Mobile Phone Partnership Initiative (MPPI). Such partnerships, however, must be translated

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down to local levels and effect change in consumer behaviour. According to a global consumer survey released by Nokia, only 3% of people recycle their mobile phones. The survey, which was based on interviews with 6,500 people in 13 countries, found that globally, half of those surveyed didn’t know that metals could be reused. It was once estimated that if each of the world’s three billion mobile users (this is based on an older computation) brought back just one unused device, it would mean saving up to 240,000 tonnes of raw materials and a GHG emissions reduction equivalent to taking 4 million cars off the road. Between 65 to 80% of any Nokia device can be recycled, and the Finnish mobile brand has set up 5,000 collection points for unwanted mobile devices in 85 countries around the world. When Nokia tried to promote its mobile recycling campaign in Bangladesh, however, response was weak because of low awareness levels,

unfamiliarity with the concept of recycling, and people’s expectations that they would get paid for returning their used mobile phones. That’s why some believe that buy-back programmes may just work. Sprint in the US has a long list of approved phones for buyback. The company pays US$195 for a 64GB WiFi iPad, whereas a Samsung Restore is worth US$26, and an LG EnV Touch delivers US$12 in account credit. We often use the term Extended Producer Responsibility (EPR), but in order to successfully mine the metals in our discarded mobiles phone, we must cultivate Extended Customer Responsibility (ECR). Everyone needs to consciously and actively recycle used mobile phones. The next time you upgrade to a new mobile phone, consider sending the old one for recycling instead of just tossing it in the dustbin. Let’s help conserve earth’s precious metal resources and do our bit to save the planet.


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Clean energy options for the home owner Conserve – the less you use, the less you need to source Source or generate locally where possible to minimise transmission losses

So, you’ve made the decision to switch all or part of your energy use to clean, renewable sources? Congratulations on a great decision – but now, how do you decide among these alternatives: various forms of solar, wind, hydro, geothermal, as well as more exotic forms like magnetic and tidal? The choices can be bewildering, but these two principles may help you figure it out: First, do conservation, and second, pick the best alternative based on conditions on-site.

close to the point of use as you can. Enormous quantities of energy get wasted in transmission and transportation, so it will almost always be better to produce on-site. Thus, a rooftop solar array or ground-level wind turbine makes more sense in most cases than piping in electricity from a photovoltaics (PV) farm hundreds of kilometers away. Each energy system is going to be better suited to some installations than others. Factoring in any grants and tax incentives, how many years can you expect for payback, and thus what is your ROI? Without in any way trying to substitute for a professional evaluation, here are some quick guidelines:

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Conservation first Energy you save outright is energy you don’t need to generate or harvest. One very prominent example, New York City’s iconic Empire State Building, enlisted the Rocky Mountain Institute and other groups to design and implement a “deep energy retrofit” that’s now saving over US$4 million every year. While the US$20 million investment was not cheap, the 20% annual return on investment (ROI) far outpaces any conventional investment vehicle and will continue to pay multimillion dollar dividends for decades. Not every business has the capital for that kind of programme. But the good news is every business can find ways to save at least a few percentage points, on up to as much as 80% of energy consumption. Whether the investment is small or large, the payback can be quick (and the savings reinvested in more energy conservation). If you only need half as much power as you did before, you can put in a smaller and cheaper alternative energy system. Conservation can be as simple as turning off unneeded lights and computers, or as complex as completely redesigning and rebuilding an industrial process. Do an energy audit with a consultant who can

Shel Horowitz is the primary author of Guerilla Marketing Goes Green. He can be reached at shel@ greenandprofitable.com

The on-site remanufacturing of the Empire State Building’s 6,514 windows into superwindows in 2010 cut winter heat loss by at least two-thirds and summer heat gain by half. The advanced glazing along with improved lighting and office equipment cut cooling load by one-third (Source: Rocky Mountain Institute)

see not just the usual incremental measures but also the potential for sweeping, big-picture changes. For the Empire State Building, that actually meant temporarily converting a floor of the building into a window factory to make highly efficient windows on-site (among other improvements).

Find the right alternative Once you’ve reduced your energy footprint through conservation, it’s time to research your alternative energy options. When possible, generate the power you need as

Solar Is it sunny more often than cloudy? Do you have adequate exposure: an area that gets good sun and is not in the shadow of a tall building, a mountain, or a tree canopy? If looking at rooftops, will your roof support the added weight of solar infrastructure? If looking at ground installation, can you install the system so as to permit other uses (for example, an employee community garden) underneath? Do you have a vehicle fleet that could be converted to solar and used to recharge the grid? Do you have room and budget for both solar thermal (eg, hot water) and PV (electricity generation), and if not, which should you do first? Wind Does your location have steady but relatively modest wind – fast enough to spin the blades, but not so fast that it tears the system apart in a year or two? Will your neighbours put up a big fight that makes the project too expensive and uncomfortable? Have you looked into less intrusive systems such as lowto-the-ground vertical-axis turbines?    •   


Hydro Are you sited near a river or stream? Can you use technology that captures energy from the moving water directly, or will you need to build a dam? If you’re damming a body of water, have you fully analysed the environmental impact? Can you use the water to directly run a mill, or will you be using it to generate electricity?

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Geothermal Do you have enough land to put in a system? Can you harness that energy for enough uses (space heating and cooling, water heating) to justify the substantial capital cost? Do you live in a country like the Philippines or Iceland, where your energy source may already be geothermal?

Contributing to the solution Whichever technology turns out to be right for your location, turning toward clean renewables is a great move. Installing a system that’s right for your site will lower your energy costs and carbon footprint, while contributing at least a little toward preventing catastrophic climate change. So do your part – but “do it smart.”

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Building sustainably in tropical Southeast Asia Regional building design should offer more quantifiable eco benefits

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Malaysia’s high carbon footprint makes it ideal to showcase green homes

Developed by the research & development innovation division of Sime Darby Property Bhd (SDPB) in Shah Alam, Malaysia, the Idea House is a showcase project designed by author Jason Pomeroy and the first zero-carbon residence in Southeast Asia

The global drive towards creating sustainable built products out of sustainable collaborative processes has given rise to a broad range of exemplar green built projects and an even broader extent of literature that graces the bookshelves on sustainable development pre-Brundtland [ie, before the World Commission on Environment and Development, also known as the Brundtland Commission, published its report in 1987]. The maturity of the environmental agenda in particular parts of the world often owes as much to private sector     •  

advocacy as it does to governmental legislation and enforcement. By 2050, it is predicted that almost half of the world’s carbon emissions will be from developing countries. Modernisation may come at the expense of society and the environment, as the mistakes of an industrialised West pre-Brundtland fail to deter the developing nation’s quest for economic prosperity. However, a combination of public and private sector commitment to combating climate change has found expression in green building legislation and the establishment of

Jason Pomeroy is an award-winning architect, academic and director of Broadway Malyan, based in Singapore

green assessment methods tailored to the tropical climate and regional social economics. This is further testimony to a fundamental step change in the way buildings are being procured, designed and built in Southeast Asia. The McGraw Hill 2008 smart market report “Global Green Building Trends” showed that the fastest growing green building movement is currently in Asia, where the population of firms largely dedicated to establishing a greener built environment is expected to nearly triple between 2008 and 2013 from 26% to 73%. With its geographical position between the two growth economies of India and China, Malaysia has seen continued economic growth and, according to the 10th Malaysian economic plan, a shift from a predominantly manufacturing economy to one increasingly focused on technology. Economic prosperity, coupled with population growth, urban migration and decreasing land availability has spawned an abundance of single or double storey terraced house typologies to address such pressures. However, high thermal mass materials and energy-intensive construction processes; lower energy tariffs in comparison to neighbouring


Southeast Asian countries, and a hot and humid climate that is predominantly outside of recognised thermal comfort zones has seen an increasing use of mechanicallyassisted ventilation methods and the consumption of natural resources to try and keep the built environment habitable (Woods 2008). Of the developing countries in Southeast Asia, Malaysia has one of the largest carbon footprints at 1,624 tonnes of carbon dioxide per person between 1950 and 2000, and a total carbon dioxide emission of 116 million tonnes in 2002 from the burning of fossil fuels (Dow and Downing 2006). Such statistics have unsurprisingly led to governmental plans that seek to create a more sustainable environment by reducing carbon emissions by up to 40% through the promotion of energy efficiency, tax incentives for the use of renewable energies and the support of green building design through the application of green assessment methods. However, whilst examples of environmentally-responsive, sustainable built environments in

Southeast Asia exist, the issue of measuring embodied and operating carbon quantity within a building is an area that appears to have been explored to a lesser extent, let alone the carbon neutrality within a particular building typology. It is with the need for more quantifiable “green” assertions in the Southeast Asian building design, fostered through an interdisciplinary design process, that the Idea House project was conceived. Such intent acknowledges the increasing popularity of the green agenda in Southeast Asia that is driven not just by governments and the green consumer, but also by an awakened civil society who in turn spurred developers to engage in more conscientious development programmes. Idea House records the collaborative journey of one such developer and a design team that embraced the green agenda to create a prototype dwelling for tropical living, and in so doing set a benchmark for environmental residential design in Southeast Asia. It is an exploration into the residential

typology that ostensibly required the reconsideration of lessons learnt from the past in light of societal, economic, technological and environmental change in the 21st century. In addition, it seeks to establish a sustainable process of design – drawing upon the collaboration of a knowledge-sharing interdisciplinary team that sought to minimise design, production, and construction waste. This article is an adapted excerpt from Jason Pomeroy’s new book, Idea House: Future Tropical Living Today, published by ORO Editions in late 2011.

Technical hnical Workshops: 27 April 2012

Efficient Design, Engineering and Material Technologies for High Performance Building Envelopes 2012’s ALL-STAR SPEAKER LINE-UP INCLUDES: Adam Frampton Associate OFFICE OF METROPOLITAN ARCHITECTURE Agnes Ng Chairman BEAM SOCIETY, Hong Kong

Jason Pomeroy Director BROADWAY MALYAN

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Chinese solar PV faces drastic change Number of players expected to drop to ten after consolidation

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Rebound depends on global economy, European regulations on carbon trading for 2013

The sun is still shining but is dusk falling on China’s solar PV industry?

Industry analysts from China’s solar photovoltaics (PV) industry say the country’s solar PV market is entering a period of deeper and wider adjustments and upgrades. Small and medium-sized players cut their output of solar wafers from a million a month to some 400,000 last year in response to ongoing deteriorating market conditions, although they still showed a profit margin of 20% the year before. The county of Kaihua, Zhejiang province’s key silicon manufacturing area, is seeing a consolidation of its solar PV firms, with Zhejiang Yuhui Solar Energy Source Co Ltd, a whollyowned subsidiary of ReneSola and the country’s third largest solar wafer manufacturer, taking the lead. Shen Fuxin, general secretary of the Zhejiang Solar Energy Industry Association, recently told reporters that the development of the solar PV industry lies in high quality products, advanced technology and sufficient funding, all of which require an overall consolidation, with the market eventually dominated by a handful of large players.     •  

Zhejiang Yuhui is in the process of bringing production capacity up to 1.9 GW for solar wafers, 600 MW for solar cells and modules, and 3,500 tonnes of polysilicon. Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission, however, does not see the value in consolidation. The solar PV industry is characterised by high tech, high efficiency and low cost. For him, it does not make sense to simply have large firms gobble up the smaller ones as the challenge the sector is facing is not having enough room for development, rather than a lack of production capacity. Small producers are bearing the environmental burden as a result of a low standard of production technology and high resource consumption. Li Shengmao, a senior researcher from CIConsulting, notes that for large solar PV manufacturers, absorbing small ones involves a fair amount of expenditure on post-acquisition upgrades, making construction of scalable production lines based on

high quality standards or expanding existing capacity more attractive alternatives. Solar PV firms across China are expected to number about ten after industry reshuffle, predicts Meng Xiangan, deputy director with the China Renewable Energy Society (CRES). He adds that the country’s solar PV industry is mainly driven by favourable policies and government subsidies, so industry players should keep their eyes on political and economic conditions when considering a production expansion. About half the solar PV firms in the country stopped production in 2011 despite the industry being chosen as one of the new national strategic sectors. Prices for PV panels plunged 20% over 2011 due to overcapacity of polysilicon and finished panels, combined with the increasingly fierce competition. Lux Research expects that by end-2016, the annual sales growth rate of solar PV panels will have fallen to some 15% from the 65% it enjoyed over the past five years. Chinese authorities are worried as production expansion of solar PV panels had been growing too fast. In addition, the ongoing European debt crisis and a slow recovery of the US economy triggered a worldwide double-dip recession, significantly impacting demand, with half of Chinese-made products failing to find buyers, says Jiang Weiwu, head of solar power business at CSG Holding. Jiang adds that the rebound of the sector lies in a combination of an improved global economy and the roll-out of Europe’s new regulations on carbon emissions trading for 2013. By that time, the use of traditional fossil-fuels will come at a price, putting a spotlight on the benefits of energysaving products, which in turn, will generate a new surge in interest. CITIC Securities forecasts that China is likely to put a policy stimulus package in place in the first half of 2012, in a move to boost domestic demand for solar PV products. The firm is bullish on the investment opportunities that will be brought about by a potential growth in demand as a result of the stimulus. – Nanjing Shanglong Communications


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Piped brackish water to alleviate Delhi’s shortage Dual pipelines system offers business potential CGWB report proposes tapping brackish water to control spread of such water

By Ramzauva Chhakchhuak

other household purposes like cleaning and washing. Brackish water can also be used for drinking when mixed with fresh water to reduce its salinity to permissible limits. Shekhar says the business potential of the dual system of supplying water is big and water companies should exploit it. Nonetheless, some from the water industry are skeptical. “Such a system could be put in place in case of two or three houses, or in a residential areas with 60 houses, but for an entire township or city like Delhi, it looks very difficult,” says R Balasankar, managing director of Elite Water Solutions based in Chennai. “The cost of such a project may also be huge.”

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Delhi, the second largest Indian city after Mumbai, with its 17.6 million inhabitants (based on 2009 projections), needs 3,500 million litres of water a day for drinking and domestic use but the municipality supplies only 3,000 million litres daily. This shortage has yielded a creative solution from the Central Ground Water Board (CGWB): dual pipelines, one for brackish water, and another for fresh water. Delhi University hydrogeologist Dr Shashank Shekhar, a member of a three-man team who prepared the CGWB report, believes the dual pipelines system is viable, more so for new housing developments. In the dual system, there will be

Slum dwellers fill their cans with water from a tanker in Kusumpur Pahari. The slum, built more than thirty years ago has no running water or sewage facilities. The only water supply comes from the Delhi Jal Board water trucks that visit several times a day

two sources of water coming from existing pipelines – one from saline and brackish aquifers flowing at fixed hours that can be used for flushing toilets and other domestic purposes, and the other from fresh water aquifers that can be used for drinking and for

However, Shekhar thinks otherwise and is upbeat about the plan. “I, myself, stay in Indirapuram, Ghaziabad (East Delhi) in an area where the dual system has been put in place. I am already reaping its benefits.”

Shekhar says there are other areas and communities, although not many, where this system is already functioning. His team proposed the dual system to the Delhi Jal Board – the municipal body in charge of water supply – nearly a year ago but the proposal has yet to be taken up in a big way. Shekhar feels the dual system is best implemented at the planning stage of an infrastructural or housing development, adding that it would be more difficult to ask users of the current system to pay extra for a new system. The amount of water that Delhi gets and consumes is the highest of any city in India. Groundwater in the capital has been over-exploited and increasingly depleted as a result of indiscriminate and unplanned drilling, says the CGWB report. Out of nine districts of the Northern Capital Territory (NCT), seven districts are over-exploited. In fact, fresh water aquifers are being increasingly invaded by brackish water because of the intensive use of groundwater. The report proposes the exploration of brackish water areas located within shallow/water logged areas, to promote the scientific management and proper planning for the exploitation of brackish water, for “the effective control” of the spread of brackish water. It says some 670 sq km of Delhi (or 45% Delhi’s land area) has brackish water at shallow depths that can be developed for domestic uses other than for drinking. The CGWB report identified many aquifers – fresh and saline – for development including an area of 97 sq km that stretches about 35 km along Yamuna River, with a potential of 322 million litres. The report also suggested limited development of aquifers in the Dwarka Township (West Delhi) for fresh water. The report also proposed rainwater harvesting and artificial recharge to groundwater. The National Capital Territory of Delhi masterplan for rainwater harvesting and artificial recharge estimates that 1,666 million litres of rainwater can be harvested annually in Delhi. – Canary Trap    •   


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Case of the missing fuel mileage Car makers improved efficiency but fuel mileage of individual cars barely increased From 1980–2006, average curb weight of cars increased 26% and horsepower 107%

By Peter Dizikes

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portation sector produces more than 30% of US greenhouse gas emissions, turning that innovation into increased overall mileage would produce notable environmental benefits. Knittel thinks it is understandable consumers would opt for large, powerful vehicles, and that the most logical way to reduce emissions is through higher fuel tax that leads consumers to value fuel efficiency more highly.

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Contrary to common perception, major automakers have produced large increases in fuel efficiency through better technology in recent decades. There’s just one catch: All those advances have barely increased the fuel mileage that vehicles actually achieve on the road. Sounds perplexing? This situation is the result of a trend newly quantified by Massachusetts Institute of Technology (MIT) economist Christopher Knittel: Because automobiles are bigger and more powerful than they were three decades ago, major innovations in fuel efficiency have only produced minor gains in fuel mileage. Specifically, between 1980 and 2006, the average fuel mileage of vehicles sold in the United States increased by slightly more than 15% – a relatively modest improvement. But during that time, the average curb weight of those vehicles increased 26%, while their horsepower rose 107%. All factors being equal, fuel economy actually increased by 60% between 1980 and 2006, as Knittel shows in a new research paper, “Automobiles on Steroids,” just published in the American Economic Review. Thus, if Americans today were driving cars of the same size and power that were typical in 1980, the country’s fleet of autos would have jumped from an average of about 23 miles per gallon (mpg) or 9.8 km per litre (km/l) to roughly 37 mpg or 15.7 km/l, well above the current average of around 27 mpg. Instead, Knittel says: “Most of that technological progress has gone into [compensating for] weight and horsepower.” And considering that the trans-

Most of the progress in fuel efficiency has been neutralised by the increase in weight and horsepower of cars today

Giving the people what they want While auto-industry critics have long called for new types of vehicles, such as fuel-electric hybrids, Knittel’s research underscores the many ways that conventional internal-combustion engines have improved. Among other innovations, as Knittel notes, efficient fuel-injection

systems have replaced carburetors; most vehicles now have multiple camshafts (which control the valves in an engine) rather than just one, allowing for a smoother flow of fuel, air and exhaust in and out of engines; and variable-speed transmissions have let engines better regulate their revolutions per minute, saving fuel. To be sure, the recent introduction of hybrids is also helping fleet-wide fuel efficiency. Of the thousands of vehicle makes that Knittel scrutinised, the most fuel-efficient was the 2000 Honda Insight, the first hybrid model to enter mass production, at more than 70 mpg. The least fuel-efficient car sold in the US that Knittel found was the 1990 Lamborghini Countach, a high-end sports car that averaged fewer than 9 mpg. To conduct his study, Knittel drew on data from the National Highway Transportation Safety Administration, auto manufacturers and trade journals. As those numbers showed, a major reason fleet-wide mileage has only slowly increased is that so many Americans have chosen to buy bigger, less fuel-efficient vehicles. In 1980, light trucks represented about 20% of passenger vehicles sold in the US. By 2004, light trucks – including SUVs – accounted for 51% of passengervehicle sales. “I find little fault with the auto manufacturers, because there has been no incentive to put technologies into overall fuel economy,” Knittel says. “Firms are going to give consumers what they want, and if fuel prices are low, consumers are going to want big, fast cars.” And between 1980 and 2004, fuel prices dropped by 30% when adjusted for inflation.

The road ahead Knittel asserts that given consumer preferences in cars, larger changes in fleet-wide fuel mileage will occur only when policies change. “It’s the policymakers’ responsibility to create a structure that leads to these technologies being put toward fuel economy,” he says. Among environmental policy analysts, the notion of a surcharge on fuel is widely supported. “I think 98% of economists would say we need higher fuel taxes,” Knittel says.


Instead, the major policy advance in this area occurring under the current administration has been a mandated rise in the Corporate Average Fuel Economy (CAFE) standards of cars and trucks. In July, President Barack Obama announced new standards calling for a fleet-wide average of 35.5 mpg by 2016, and 54.5 mpg by 2025. According to Knittel’s calculations, the automakers could meet the new CAFE standards by simply maintaining the rate of technological innovation experienced

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since 1980 while reducing the weight and horsepower of the average vehicle sold by 25%. Alternately, a shift back to the average weight and power seen in 1980, along with a continuation of the trend toward greater fuel efficiency, would lead to a fleet-wide average of 52 mpg by 2020. That said, Knittel is skeptical that CAFE standards by themselves will have the impact a new fuel tax would. Such mileage regulations, he says, “end up reducing the cost of driving. If you force people to buy more fuel-efficient cars through CAFE

standards, you actually get what’s called ‘rebound,’ and they drive more than they would have.” A fuel tax, he believes, would create demand for more fuel-efficient cars without as much rebound, the phenomenon through which greater efficiency leads to potentially greater consumption. Fuel efficiency, Knittel says, has come a long way in recent decades. But when it comes to getting those advances to have an impact out on the road, there is still a long way to go. – Massachusetts Institute of Technology

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Tibet’s resource curse China scaling up lithium extraction for electric cars and smart phones Environmental damage to the fragile Tibetan plateau will be irreversible

Chinese geologists exploring Tibet in the 1960s criss-crossed the plateau, searching for the mineral wealth they assumed must be abundant, but had not yet discovered. In remote alpine deserts, the geological expeditions came upon lakes which were slowly drying up due to long-term climate shifts. High on the empty Chan Tang plain in western Tibet, they found lakes already dry, their beds a shimmering salt pan. Testing the various salts, the geologists discovered a scientific curiosity. One lake in particular, Drangyer Tsaka (Zabuye), held an extraordinary concentration of lithium salts; measurements of 660 parts per million (ppm) of lithium were recorded. Only in the Atacama Desert of the Andes had such levels of lithium been discovered. For decades, these findings were known only to a handful of geologists. Lithium was a metal in moderate demand, for unglamorous uses in the manufacture of ceramics and industrial greases and, in tiny amounts, as a psychiatric anti-depressant. China satisfied its modest need for lithium by mining a lithium-rich mineral ore

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By Gabriel Lafitte

Monks of this magnificent Gyantse Kumbum in Tibet and the local people had become ill from drinking water that had been polluted by lithium mining

at Yichun, in eastern China’s Jiangxi province. Should that prove insufficient, there were other salt lakes on the Tibetan Plateau, far from lonely Drangyer Tsaka. In the Tsaidam Basin of northern Tibet, geologists found not only salt

lakes, but also oil, asbestos, lead, zinc; and in Tso Ngonpo (Qinghai Lake) they found minerals that could be used for developing submarine-based nuclear missiles.

Abundance of minerals So valuable were the lakes in the Tsaidam Basin that a railway was built more than three decades ago, enabling tanker wagons to haul millions of tonnes of oil to Lanzhou, the capital of Gansu province. The availability of so many minerals in one basin, as well as gas fields discovered and exploited later, provided the raw materials for a major industrial base. Golmud, formerly a camel-train stop on the long haul between Lanzhou and Lhasa, became an industrial city, with petrochemical plants that produced plastics, fuel, fertilisers and explosives. The salts of the many salt lakes were essential inputs. One such lake, Charhan, in the arid Tsaidam Basin stood out for its high level of lithium salts, mixed in as usual with common sodium salt, potassium and magnesium salts. It had concentrations of lithium recorded at 330 ppm, half the level of Drangyer Tsaka, but extraordinary by any other comparison. Five-year plans In the 1980s, the salts of Tibet started appearing in the central government’s five-year plans, but actual use was limited to scooping huge quantities of salt from briny lake beds to use in the    •   


Pollution disaster But the process of extraction has paid little attention to the impact of mining. In mid-2011, people from Kumbum protested and petitioned local authorities to stop the polluting extractive business practices. Local villagers obstructed the mining on many occasions, demanding that the sacred mountain not be mined and requesting Kumbum Monastery to act as an official protector. Previous appeals had been ignored. “As of this year, the situation has become more serious, especially during the months of May to July, when eight villages had serious contamination in their water pipes with     •  

the water becoming muddy and foul smelling,” the petition stated. “Monks and local people became nauseous, their bodies became listless and they felt dazed and some even had to be hospitalised from drinking the water.” The pollution in Kumbum is far from a unique case. Many recent protests in western China have been in response to the impacts of uncontrolled mining, including lithium extraction.

liquor tomorrow’s hot investment stock, is the electric car. The amount of lithium in the li-ion batteries driving electric cars is measured in kilograms, rather than grams. And this growing demand will be satisfied by extracting lithium from the accessible Tsaidam Basin and even the inaccessible Drangyer Tsaka. China’s battery manufacturers saw the possibility of making the leap, from

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manufacture of polyvinyl chloride and urea fertiliser. These processes ignored not only lithium, but also the potentially valuable potassium and magnesium salts. By the 1990s, as the productivity of Chinese farm soils depleted, attention shifted to potassium salts – used to make potash – essential to the mix of chemical fertilisers that is used to restore balance and fertility to overworked farmland soils. At first, China had to import potash from Canada to meet this demand; yet the salt lakes of the Tsaidam Basin, rich in potash, were industrially undeveloped. Finally, China invested in domestic potash production, which is now one of the major industries of Qinghai province, along with petrochemicals. Around the turn of this century, China began to separate the mixed salts of Tsaidam Basin lake beds on a large-scale. Separating naturally crystallised sodium, potassium, magnesium and lithium salts requires heavy-duty toxic solvents (such as isobutanol and chloroform), known to cause cancer. Since the Qinghai authorities were keen to industrialise their province – known for its poverty, remoteness and cold climate – landuse controls and environmental regulations were not a priority. From the provincial capital Xining, spreading out to the famous Kumbum Monastery, industrial plants took up land, pouring effluents into nearby streams. Potash and magnesium plants were built and expanded in Gormo, Xining and along the connecting railway line.

Warren Buffett and Bill Gates at the launch of BYD M6 electric car in 2010. Buffett bought nearly 10% of Chinese car and battery maker BYD Co Ltd in September 2008

Li-ion batteries Lithium enters rivers and drinking water from many industrial sources. Its toxicity has been scientifically studied in fish, other aquatic creatures and mammals. A team of Canadian and Finnish scientists have found that lithium is “potentially detrimental to the juvenile rainbow trout.” Lithium fed experimentally to rats caused developmental deformities, according to a 2004 scientific report. Until very recently, lithium remained an industrial by-product, a waste in the liquor remaining after everything valuable had been extracted. But now, demand for lithium is growing, as mobile phones and laptop computers, all powered by lithium-ion (li-ion) batteries, sweep the world. And China has become the li-ion battery factory of the world, an industry growing at 33% a year. Electric cars to inflict most damage But the real game changer that has made yesterday’s industrial waste

makers of no-name brands hidden inside your iPad or smartphone, to big-brand car manufacturers. The quickest to capitalise and upscale was a Shenzhen battery-maker called BYD – which has transformed itself into a car manufacturer. BYD’s coup, as announced in 2010, is that it had not only taken an equity stake in the Drangyer Tsaka lithium salt deposit, but had exclusive contractual rights to its lithium salts for the next 20 years. This captured the attention of two of the world’s richest men, Warren Buffett and Bill Gates, who flew to Shenzhen for the launch of BYD’s M6 electric car prototype. Back in 2008, Buffett bought a 10% equity stake in BYD signaling to the global market that the company was the next big thing.

Not so green cars Obtaining lithium, magnesium and potassium from salt lakes remains a dirty business. Environmental regulations are often ignored, particularly in west-


and Australia, and nearly 90% of its output comes from salt lakes in Qinghai province. Qinghai produced 6,000 tonnes of lithium last year and plans to raise this to 30,000 tonnes over the next five years, the director of Qinghai’s Land and Resources Department, Liu Shanqing, was quoted as saying in China Daily. “The original plan was to have a capacity of 60,000 tonnes by 2015

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ern China, where mineral extraction pollutes the air, soil and water. The sexy green electric car of the future may not be as green as people hope. Not only does li-ion battery manufacture use a lot of energy, but given the solvent extraction methods used, there is a risk that lithium will leak into water supplies. BYD has missed its own promised deadlines for putting an actual electric

Ponds to obtain lithium from the salt of Salar de Atacama, in the North of Chile. Atacama alone has 27% of the world’s reserve of lithium. China is now the third largest miner of lithium after Chile and Australia

car on the market, and Beijing shows signs of scaling back its hopes and subsidies. In 2011, BYD’s share price plummeted. The company’s net profits fell by 85.5% in the first nine months of 2011 because of fewer car sales and lower margins in its battery business. According to Chinese media organisation Caixin, the company “invested too much in its expansion” and cannot earn enough “to sustain the investment projects”. China’s state-sponsored push to turn BYD into a national champion of electric car manufacturing may be faltering, but plans to increase lithium extraction are powering ahead. The central government has ambitious targets to increase lithium production, first from the Tsaidam Basin lakes in Qinghai province, and then from Drangyer Tsaka in the far west of Tibet Autonomous Region.

Five-fold increase in production China is now the world’s third largest miner of lithium, after Chile

but since extraction technologies are not that mature, we have scaled it down to 30,000 tonnes,” he said. This still represents a five-fold increase in the production of lithium in Qinghai province. Qinghai Salt Lake Industry Group’s 10,000 tonnes per year brinebased lithium carbonate and chloride project in Qinghai is scheduled to be in full production in 2012, and to triple its output by 2015.

Toxic solvents The speed of lithium extraction has been slowed down by technical problems with the use of volatile toxic solvents, including isobutanol, pentanol, tetrahydrofuran, cresol and chloroform. Unless the solvents work perfectly, the purity of the lithium is contaminated and fails to reach battery-grade suited for use in computers and electric cars. These solvents, which give off fumes even at ordinary temperatures, require careful storage in stainless steel pressure vessels, operated by a trained workforce.

But the environmental impacts of mineral extraction will intensify in the Tibetan Plateau, in arid areas where pollutants accumulate in basins with no external drainage. Both the Tsaidam Basin and Drangyer Tsaka lithium salt lakes cannot naturally dispose of toxins generated by solvent extraction, and so waste products stay where they are dumped, or evaporate into the thin air and intense heat of Tibetan summers. No longer will lithium extraction be confined to Gansu, as in the past.

First large-scale lithium factory The first large-scale lithium extraction plant in the Tsaidam basin is due to begin operation soon, according to Metal Bulletin, and even Drangyer Tsaka is now scheduled to produce thousands of tonnes of lithium annually. It may not be long before your latest handheld passport to mobile connectivity is powered by Tibetan lithium. In April 2011, Tibet Mineral Development Corporation raised 1.21 billion yuan (US$187.22 million) through a non-public offering of shares to eight investors to recapitalise its subsidiaries. One of those subsidiaries, Tibet Zabuye Lithium Technologies Company, will receive US$15.5 million to intensify lithium extraction in Drangyer Tsaka, Interfax’s China Mining and Metals Weekly reported in July 2011. How will such industrialisation work at Drangyer Tsaka, in the alpine desert of upper Tibet? Drangyer Tsaka is close to 2,000 km from the nearest Chinese industrial city, and almost entirely lacking in roads, towns, power supply and communications. If the world is to watch for environmental impacts, it will have to be from afar. The far north, far west and now far east of the Tibetan Plateau are all designated lithium-extraction zones, far from the gaze of regulatory authorities. Lives have been lost in protests against mining. Can we assume that the “green” technology of the future will be powered by ethically obtained lithium? Gabriel Lafitte is an environmental policy consultant who has worked with Tibetans for over 30 years. This article first appeared in www.chinadialogue.net    •   


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Remote microgrids to grow with solar PV uptake Projected revenue for remote microgrid sector to exceed US$10.2 billion by 2017 Developing countries represent top prospective markets

Remote power systems numbering in the thousands can be found in all corners of the world. For the most part, these are powered by diesel, hardly the fuel or the technology of the smart grid. Nevertheless, once renewable energy is added to the fuel mix, these remote microgrids begin to look like classic microgrids. In fact, the primary driver for remote microgrids over the next six years will be the integration of solar photovoltaics. A new report from Pike Research forecasts that the global remote microgrid market will expand from 349 MW of generation capacity in 2011 to over 1.1 GW by 2017, an amount that

equals, or perhaps even surpasses, all other microgrid segments combined, whether in the planning stages or already deployed. The report analyses market opportunities for remote microgrids in several segments such as village power systems, weak grid island systems, industrial remote mine systems and mobile military microgrids. That growth in capacity will translate into total projected revenue for the remote microgrid sector of more than US$10.2 billion by 2017. A more conservative base scenario – if the global economy continues to stumble – would still result in a healthy US$4.5 billion market in 2017.

“The global remote microgrid segment is the most attractive of all microgrid segments from the revenue perspective. The sector is far more robust than reported, and with solar PV prices continuing to decline, is poised for substantial growth, even without government incentives,” says senior analyst Peter Asmus. Developing countries, which comprise 80% of the world’s population but use only 30% of global commercially-traded energy supplies, are the top prospective market for remote microgrids. As energy consumption rises with increases in population and living standards, awareness is growing about the environmental costs of energy and the need to expand access to energy – especially cleaner electricity – in new ways. Remote microgrids is also a smart way to deliver electricity to the poor. Financial support for remote microgrids is being provided by the United Nations and other agencies. – Pike Research

Asia’s most important and biggest meeting point for the emerging discipline of Smart Electricity 16 - 19 April 2012 Marina Bay Sands, Singapore Smart Electricity World Asia is the largest, most influential electric utility conference that brings together C-level & function decision makers to discuss strategies in smart grid adoption to achieve energy efficiency, integrate off grid energy sources, enhance customer engagement and to profit from new revenue sources.

Remember to quote voucher code DCQV when booking to get the exclusive discount. Register now and get the offer price – on your phone Scan this QR pattern with the camera on your smartphone to register at the special offer price. Don’t have a smartphone? You can also register and get the offer on our website: www.terrapinn.com/smartasia - quote your voucher code for exclusive price

Bringing together multiple stakeholders from across various functions of the entire electric utility, Smart Electricity World Asia is the ONLY conference in the region which addresses Asian utility challenges at various stages of smart grid migration while evaluating ROI on smart grid solutions.

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Nippon Yusen Kabushiki Kaisha (NYK Line), a major Japanese shipping company, has developed the NYK Group CO2 e-calculator, a tool for estimating the amount of carbon dioxide (CO2) emitted during the transportation of goods by container vessels or international airfreight. The tool is the first of its kind to be developed by a Japanese shipping company (See www. nykgroup-e-calculator.com). The e-calculator features the following functions: it can deal with cargo transport by international airfreight as well as container vessels, and estimate the amount of

Electricity for US prison from chicken droppings A prison in the US is looking at generating 1 MW of electricity a year from 5,500 tonnes of chicken litter and crop residue. Maryland’s Eastern Shore Correctional Institute will install a thermophilic anaerobic digester covering 4 ha that will generate electricity to power the site and feed onto the grid. The facility that will be built by EcoCorp, an energy company based in northern Virginia, is scheduled to come online in 2013. Feedstock used will be sourced locally as Delaware and Maryland produce about 13 million cu m of chicken waste a year. The site, which houses about 3,000 prisoners, is working towards a target of having 20% of its energy derived from renewable sources by 2020, as part of a state initiative. The state government says it will also purchase the electricity generated by the anaerobic digester under a 20-year agreement. (Source: http://bioenergy-news.com and www. biomassmagazine.com)     •  

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Bridgestone unveiled its air-free tyres at the recent Tokyo Motor Show. The wheel is supported by a mesh of spokes made from thermoplastic resin that is flexible and durable. Each wheel is close to 23 cm in diameter and can support about 150 kg. The air-free tyre is safer than a pneumatic tyre as there is no risk of puncture and is less wasteful, as it eliminates the need for a spare and can be 100% recycled into a new tyre. Further research is being done to improve the design of the spoke, which needs to be protected to keep objects from getting lodged in it. The air-free concept is being tested on a oneseater electric vehicle while plans are underway for wider commercial use. (Source: www.inhabit.com)

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NYK Lines releases online CO e-calculator

Bridgestone 100% recyclable air-free tyres

CO2 emitted during transport from loading to unloading; it can also be used for inland transportation by truck or train from cargo acceptance to the destination (only in China and North America); and users can download the names of acceptance and destination sites, as well as the estimated CO2 emissions. (Source: Japan for Sustainability)

Guidelines for wind-power operators to prevent bird kills

Toyota develops Ku:Rin, the air-powered car

This month, the US Fish and Wildlife Service is set to publish new guidelines for wind-power operators, providing them with specific information on how to avoid and minimise danger to wildlife at new wind power sites. This comes in the wake of the death of an endangered bat at a Pennsylvania wind farm last September and the deaths of thousands of birds at other sites, including California’s Altamont Pass. Operators of that facility have agreed to take steps to reduce bird kills. The wind turbine’s giant whirling blades and associated power lines often kill songbirds, bats, eagles, condors and other species of wildlife, some of which are endangered. Environmental groups and scientists are concerned that because the new fish and wildlife guidelines will be voluntary, wind-power developers may have little reason to comply. Some one million birds are expected to be killed a year from the 100,000 wind turbines expected to built by 2030. (Source: www.celsias.com)

Toyota Industries Corp, a company under the Toyota Group, announced last September, that members of “Yume no Kuruma Kobo” or “Dream Car Factory” have developed a compressed air-powered car, “Ku:Rin”. The three-wheeled eco-car does not require fossil-fuels or electricity to run. The air engine is small and light, and is superior in terms of output power and instantaneous force. The Ku:Rin reached 129.2 km/h on September 9th 2011, on the Shirosato Test Course at the Japan Automobile Research Institute in Ibaraki Prefecture in Japan. Toyota Industries Corp is the world’s leading supplier of compressors for car air-conditioners. Compressors are used to compress refrigerant in air-conditioning systems. However, the Ku:Rin uses these parts for inflation instead of compression, and the motor is driven only by the inflation power of the compressed air. (Source: Japan for Sustainability)

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Freedom Tower to be giant fuel cell installation

Limited FiT for East Malaysian RE producers

When ready in 2013, New York’s One World Trade Centre, also known as the Freedom Tower, will be the tallest building in the US. Once fully operational, it is expected to draw as much as 70% of its power from green energy. Twelve UTC Power PureCell Model 400 fuel cell stacks have been installed, and will ultimately provide 4,800 kWh of clean energy. The combined systems will be one of the largest fuel cell installations in the world. Waste heat output from fuel cells will be recycled and used for hot water and heating in the podium of the building’s structure and the entrances, amounting to 70,000 BTUs of high-grade heat and 500,000 BTUs of low-grade heat. Together with an absorption chiller, the system is capable of using the waste heat to produce about 50 tonnes of cooling. The building will use green concrete and 75% post-industrial recycled content. (Source: Thomasnet.com)

China’s LDK Solar to take over Sunways of Germany LDK Solar Co will boost its presence in Europe’s solar photovoltaics sector with the takeover of German group Sunways. China’s second largest solar maker’s purchase of newly-

a 70%-subsidiary of Tenaga Nasional Berhad (TNB). For now, TNB is only collecting the RE levy from consumers in Peninsular Malaysia because there is no gazette to this effect yet in Sabah. Sarawak does not benefit from the FiT as it has a separate set of regulations. (Adapted from www. dailyexpress.com.my and www. seda.gov.my)

issued shares in Sunways will give it a 33% stake in the Konstanz-based company. It then plans to offer €1.90 (about US$2.45) per share for the remaining Sunways stock, Sunways tells its investors. The news jacked up Sunways’ shares by almost 29% to €1.90 at the Frankfurt Stock Exchange on the morning it was announced.  

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Renewable energy (RE) producers in the East Malaysian state of Sabah, who are mostly biomass and biogas plant operators at palm oil mills, will only enjoy the new feedin tariff (FiT) if they are already under the Small Renewable Energy Power Programme (SREP) as at December 1st 2011. Sustainable Energy Development Authority (SEDA) Malaysia says RE producers in Sabah will only be eligible for FiT when the 1% RE levy is collected from heavy power users (defined as those using more than 350 kWh per month) in Sabah by Sabah Electricity Sdn Bhd,

Sunways produces a range of solar equipment including modules, cells and inverters. It reported a threemonth loss of €8.7m (US$11.3 million) in the third quarter of 2011, with a similar account for its troubles as fellow PV manufacturers: a continuing “massive pressure on selling prices for PV components”, high global inventories and “hesitant” demand. LDK and Sunways have an agreement over sharing production capacity since end-2010. (Source: Rechargenews. com, Bloomberg)

Tendril unveils website for smart grid apps developers Colorado-based energy platform company Tendril has launched a website (http://dev.tendrilinc.com/) for

developers to build apps for energy management systems that can work with smart meters, home appliances and smart phones as they connect with back-office utility systems. The website emulates Amazon’s EC2 web service, which makes webscale computing easier for developers, says Eric Shiflet, segment manager of products and services at Tendril. It also enables developers to easily build connections between a web app and smart devices. The developer website includes specifications for application programming interfaces (APIs) and open source data sets, as well as a sandbox for developers to test their applications with the cloud-based Tendril Connect platform. Tendril also plans to provide a smart device developer kit to help in creating new apps. (Source: Greenbiz.com)    •   


As Gulf airlines, including Emirates and Etihad, weigh the prospects of raising airfares to Europe to offset the costs of carbon tax, China and Russia joined forces to oppose the levy imposed by the European Union (EU) under its Emissions Trading Scheme (ETS) that came into effect on January 1st. China Air Transport Association, which represents the country’s four major airlines, say that they would not pay any carbon costs, while other AsiaPacific carriers say they would likely pass on the extra cost to passengers. China, allying itself with Russia, is also considering retaliatory measures, including cancelling orders of European aircrafts as well as a massive fuel tax on EU airlines. Although Emirates has complied with the EU ETS, it continued to oppose the “unilateral nature” of the tax. It estimates that in 2012 alone, it will have to spend over €40 million (about US$51.4 million) to comply with the scheme. (Source: Khaleejtimes. com)

Li Ka-shing buys into Sinopoly Battery Hong Kong business tycoon, Li Ka-shing, one of the world’s wealthiest people, entered the green energy industry with a major investment in Hong Kong’s Sinopoly Battery. He is now its second-largest shareholder having acquired an 11% stake (1.2 billion

Taiwan Battery Association executive secretary Hseuh-Lung Lu says Taiwan’s EV battery sector revenue is expected to hit £2.35 billion (US$3.64 billion) by end-2013. In comparison, Taiwan’s consumer electronic product battery market grossed some £781 million in 2010. Meanwhile, China is pushing EV manufacturing and infrastructure, targeting for one in ten new cars being new-energy vehicles in 2012. However, Chinese carmakers have preferred lead-acid batteries to the lithium-ion alternative. (Source: EV Update)

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Taiwan a rising star in EV battery

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China, Russia and Gulf states oppose EU aviation carbon tax

Tata Capital to lend US$1.51b in green finance

Taiwan is growing as a major electric vehicle (EV) battery manufacturer, competing with China, Japan and South Korea for a slice of this rapidly expanding sector. It began investing in battery technology more than a decade ago. Taking the lead is EV battery manufacturer E-one Moli Energy, which specialises in power cells and high-energy cells. Its customers include Ford. BMW’s Mini E is also using its technology.

Tata Capital, a financial services provider under the Tata Group, is aiming to disburse Rs 7,000–8,000 crore (US$1.32– $1.51 billion; 1 crore is 10 million) into energy efficiency financing over the next five years. It signed a memorandum of understanding with the Bureau of Energy Efficiency (BEE)

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shares) worth HK$720 million (US$92.7 million) in the maker of energy-storage batteries for electric vehicles, according to the Guangzhou-based 21st Century Business Herald. Chinese scientist Ma Zifeng predicted that energy-storage batteries will become a larger market than that for batteries used to power electric vehicles. Ma cited China Mobile as an example, saying the telecom plans to use lithium batteries to replace the backup power system at its base stations, a business opportunity worth over 8 billion yuan (US$1.27 billion). Sinopoly was named as the battery supplier for China Mobile’s 200 base stations in Henan province. With a production capacity of 120 million amperes a year, Sinopoly is the biggest lithium battery producer in China. (Source: www.wantchinatimes.com)

to provide financing for a range of segments including energy services companies that work on energy efficiency/saving projects. The conventional banking channel sees high risk in lending to such projects but this is the gap that Tata Capital wants to bridge. The payback period for such loans is four to five years while the interest rates have yet to be finalised. This agreement follows on Tata Cleantech’s focus on offering financing and advice to companies involved in clean technology, says Praveen Kadle, managing director and CEO, Tata Capital. (Source: mydigitalfc. com)

IKEA sets up EV charging stations Swedish Home furnishings retailer IKEA is working with charging specialist ECOtality to install Blink Level 2 EV charging stations at nine IKEA stores along the west coast of the US. Seven locations have been set up, with all but one having four charging stations each. In total, it plans to have 33 stations installed and operational by mid-January 2012.


Knowledge & networking

MAR

World Biofuels Markets Congress & Exhibition 13th-15th March 2012 Rotterdam, Netherlands www.worldbiofuelsmarkets.com 2nd Annnual EduBuild Asia 2012 27th-30th March 2011 Singapore www.edubuildasia.com

APR

10% discount for GPA subscribers

6th China Qingdao International Building Energy Saving & Renewable Energy Utilisation Fair 6th-8th April 2012 Qingdao International Convention Centre, Qingdao, China www.qdcese.com/index1.asp

10% exhibitor discount for GPA subscribers

Smart Electricity World Asia 2012 16th-19th April 2012 Marina Bay Sands, Singapore www.terrapinn.com/2012/smart-electricity-world-asia-conference

Wind company leads China Cleantech Top 20 in 2011 Goldwind Science & Technology Co Ltd, which designs and manufactures wind power generation facilities, was ranked top in the first China Cleantech Top 20 Programme, organised by Deloitte China with venture capital management company Tsing Capital. Top 20 companies are selected based on their accumulated revenue growth and direct environmental efficiency for the three years from 2008–2010. The second and the third place went to Guodian United Power Technology Co Ltd, which engages in the design, manufacturing and sales of large-scale wind power equipment and Beijing Sound Puhua Technology Co Ltd, which produces and sells flexible AC transmission systems. Deloitte also conducted a survey among the CEOs of the participating companies: only 39% of the companies believed they could still maintain relatively fast growth; 36% of the companies believed there would be stable growth while 18% believed that the industry would experience fluctuations or bottlenecks. (Source: Deloitte.com)

10% discount for GPA subscribers

4th China Solar Energy Technology and Investment Congress 8th-9th March 2012 Changzhou, China www.noppen.com.cn/upcoming/L1205/index.asp

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IKEA director of public affairs Joseph Roth told Electric Vehicle Update: “To use the charging stations, you’ll need to have a Blink InCard, which is basically an identity card that you swipe. Then you take a cord, plug it into your car, and then go and shop or grab a drink at IKEA. It’s surprisingly simple. That’s one of the things that really intrigued us because if you’re not familiar with EV charging technology, then it could seem rather daunting or complicated. But, in actual fact, the whole process is very straightforward and user-friendly.” (Source: EV Update)

Procurement & Vendor Management Excellence 1st-2nd March 2012 Singapore http://bit.ly/snR0v6

Asia Green Shipping Summit 2012 24th-25th April 2012 Resorts World Sentosa, Singapore www.greenshippingasia.com Cloud Computing World Asia 2012 25th April 2012 Suntec Exhibition & Convention Centre, Singapore www.terrapinn.com/conference/cloud-computing-world-asia 10% discount for 3rd Annual Building Envelopes Asia 2012 GPA subscribers 25th-26th April, 2012 Marina Bay Sands, Singapore www.buildingenvelopesasia.com/Event.aspx?id=657098

JUN

Cleantech Investment World Asia 2012 26th-29th June 2012 Marina Bay Sands, Singapore www.terrapinn.com/conference/clean-technology-world-asia

JUL

Singapore International Water Week 1st-5th July 2012 Marina Bay Sands Expo and Convention Centre, Singapore www.siww.com.sg World Cities Summit 2012 1st-4th July 2012 Marina Bay Sands Expo and Convention Centre, Singapore www.worldcities.com.sg

Visit www.greenpurchasingasia.com for the latest event listings Green Purchasing Asia is a media partner

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Greening your Business Profitably Harvard Business Press Books, 2011

This book is a collection of articles relevant to its subject that have been published over the last few years in the Harvard Business Review. It is one of many such books from Harvard Business Press Books, which uses this approach extensively. There are ten article reprints in this little volume – little because it is published in paperback size – A5 – and contains around only 200 pages. All of the ten articles reprinted here have been published since 2006 and most since 2009, so it is an up-to-date resource. One article dates back to 1999, but is a seminal article and deserves to be reprinted. Two articles seem to be of particular significance. The first is Strategy and Society: The Link between Competitive Advantage and Corporate Social Responsibility, co-authored by Michael Porter, the doyen of marketing strategy, and Mark Kramer. This article should be required reading for all those who are responsible for corporate social responsibility (CSR) – and that must include the CEO. The authors make the important point that CSR is     •  

not an add-on. It should be an integral part of corporate strategy. The article – the longest in the collection at 40-plus pages – notes that when a company makes CSR a central part of corporate strategy it will reap many benefits. This is a thoughtprovoking article – as one would expect from Michael Porter – and is liberally laced with sidebars and diagrams. Porter consults to some of the world’s largest companies, so the examples are pertinent. The other is A Roadmap for Natural Capitalism by Lovins, Lovins and Hawken, names well-known in the field of green strategy. This is also a Greening 101 document that needs to be read by all CEOs. It provides one of the best overviews of the importance of thinking green in corporate strategy. Two of the articles are personal stories, both from CEOs and both, interestingly, with a link to Brazil. One is by the CEO of Petrobras, the Brazilian oil company, outlining how Petrobras moved from being an outcast in the early years of the century, due to a series of polluting oil spills, to being a paragon of sustainable environmental protection. The other is from the CEO of Timberland, the US outdoor shoe and leather goods company, explaining how he overcame a barrage of 65,000 emails from Greenpeace supporters about the impact on Brazil’s rainforests of clearing them to pasture the cows whose hides Timberland used for its leather. A significant element in this latter story is that Timberland had no idea of where its leather actually originated, stressing the importance of a company understanding the full

implications of its whole supply chain. A classic case for life-cycle analysis, indeed. Each article has an executive summary, which provides the crux of the article in something less than half a page.

Billion Dollar Green: Profit from the Eco Revolution Tobin Smith John Wiley and Sons, 2009

Tobin Smith is an American investment advisor, and this book is written for the potential investor to show how one can make good money from what he terms the “green revolution”. He does note early, though, that “going green is more than just a matter of making the world a cleaner, more liveable and better place. It is about ensuring the very survival of our species.” Because of this, he suggests, going green could be the greatest wealth-building opportunity of the twentyfirst century. He likens it to having the opportunity to invest in Henry Ford’s horseless carriage. The opportunity arises from the rising costs for existing fossil-based energy assets and the need to find renewable sources of energy, coupled with the development of the technologies required to

exploit these, as well as to maximise the use of the dwindling supplies of existing energy sources. The situation is complicated by the fact that the demand for energy is growing at a blistering pace, especially from China and India – he talks of “Chindia” – as well as other rapidly developing countries. The book has two goals. The first is to help the reader understand why the green wave has grown so strong over recent years, and the second is why it is likely to continue growing for a number of years to come. To achieve these goals, he gives a full introduction to each of the major areas of green energy, as well as the sectors in which the green energy will be used, thus almost providing a course in Green 101. He covers the broad spectrum of energy sources and technologies from solar, wind and biofuels to power grid infrastructure to solid state lighting and energy storage, and devotes a chapter to each. In each chapter, he first provides an overview of the area to orient the investor, then explores his picks of the companies in that area which provide the best investment opportunities, complete with their stock exchange codes. He also provides a full list of the companies in an appendix. The book is written in a folksy style, with 14 chapters – some less than ten pages long – in only 160plus pages, so it is an easy read. While geared to the American investor, he notes that international investors are equally welcome. A book geared for the Asian market and investor could be an interesting proposition.


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