HAESCO

HAESCO together with FOE (Friends of the Earth) organised a forum, but unlike other events delegate’s had the opportunity to express their view on the energy business sector in Hong Kong to everyone present.

With over 100 delegates, they where seated around a table forming teams, and each team comprised 8-10 people.

Angus from FOE had a prepared a few questions in advance to entice the teams to answer in their response. After the discussion period the table leader was invited to the stage to deliver the views of their table to the audience, and received a Oneclick technologies energy saving plug.

One issue each table offered was education, educating government, educating business, and educating the general public.  It is a key issue, if we want wider acceptance of alternate business models, including performance contracting, business needs to know these options exist. Not to replace traditional ways of doing business, but to supplement them. Performance Contacts is just one option, it will never suit everyone and that’s fine. In other countries the ESCO companies started with government projects, then moved into the private sector, here the Hong Kong government has been painfully slow to show any interest, hoping that the commercial sector will be enough.

Hong Kong government or LEGCO didn’t offer any opinion.

Another important outcome was the financing for energy efficiency, presently banks and LFI’s (Local Financial Institutions) are stuck, only offering traditional loan services based on upfront collateral, and also fail to recognise the resulting cashflow generated by energy efficiency projects.

Delegates put forward a number of opinions, including loan guarantee by Hong Kong government, the setting up of a fund, and others. As other have any already pointed out, the existing SME loan guarantee scheme is not working as intended, and doesn’t educate the banks about energy project finance.

In addition to the forum session, a number of exhibitions booths allowed delegates to browse the latest services, equipment, and technology available.

Along with FOE’s director Mr Edwin Lau FOE opening presentation, Mr John Herbert HAESCO’s Vice chairman was also invited to provide opening remarks.

I must give special thanks to HAESCO’s own Mr Lawrence Wong Oneclick Technologies. Lawrence a founding director of HAESCO provided a free energy saving device for every table leader.

Several HAESCO directors and HAESCO members attended to support the event forum, I thank them all, including Simon Cheng (Honorary Treasurer), Mr Lawrence Wong,  Mr David Leung, Mr Joe Ng,  Mr Thomas Heinrich, and Mr Eddy Lui.

Both David Leung, and Thomas Heinrich also deserve a special mention, and additional thanks for taking up the challenge and supporting the exhibition. Below are some more pictures from the event, including the exhibition booths area.

Finally, I must thank FOE, Angus and all the FOE volunteers for helping organise a worthwhile event.

What is EPC and ESCO?

An EPC (Energy Performance Contract) is a contract based on agreed performance criteria.

An ESCO is Energy Service Company (ESCO) it is a business that develops, installs, and arranges financing for projects designed to improve the energy efficiency and maintenance costs for facilities.

Typically esco firms offer one or more of these services:

* develop, design, and arrange financing for energy efficiency projects
* install and maintain the energy efficient equipment
* measure, monitor, and verify the project’s energy savings
* assume the risk that the project will save the amount of energy guaranteed

EPC are comprehensive contracts, which means that the ESCO can employ a wide array of cost-effective measures to achieve energy efficiency improvements. These measures often include the following new technology, high efficiency lighting, heating and air conditioning, or use of variable speed drives, and centralized energy management systems are just some of the means used.

When an ESCO undertakes an EPC project, the company’s compensation, and often the project’s financing, are directly linked to the amount of energy that will be saved over the term. Typically, the comprehensive energy efficiency retrofits inherent in ESCO projects require a large initial capital investment and offer a relatively long payback period.

The customer’s debt payments are tied to the energy savings offered under the project so that the customer pays for the capital improvement with the money that comes out of the difference between pre-installation and post-installation energy use. For this reason, ESCOs have led the effort to verify, rather than estimate energy savings. One of the most accurate means of measurement is the relatively new practice of metering, which is direct tracking of energy savings according to sanctioned engineering protocols.

Most performance based energy efficiency projects include the maintenance of all or some portion of the new equipment over the life of the contract. The cost of this ongoing maintenance is covered by the overall cost of the project. Therefore, during the life of the contract, the customer receives the benefit of reduced maintenance costs, in addition to reduced energy costs.

In addition to the economic benefits realized by ESCO customers through energy and maintenance cost savings, this booming industry has had a profound effect on the economy. New jobs are created, not only within the ESCOs, but though the use of contractors and through the many firms involved directly and indirectly in supporting energy efficiency projects.

One major advantage for the customer is that the efficient plant remains in place long after the EPC is completed, and can continue to provide savings year after year.

There are several esco “models” to suit different situations and applications.