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    Challenges of Financing Challenges of Financing Small EE Projects in China

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    Asia Clean Energy Forum
    The document discusses challenges financing small energy efficiency projects in China and proposes potential solutions. It notes that while government and large companies fund large EE projects, small projects, end users, and ESCOs face difficulties due to limited capital, experience, and high transaction costs. It suggests adopting a project aggregation model used in solar installations to lower costs through standardization, pre-screening, and joint procurement. This could help industrial facilities and ESCOs jointly implement smaller EE projects in a more efficient manner.

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    Challenges of Financing Challenges of Financing Small EE Projects in China

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    Asia Clean Energy Forum
    82 views11 pages
    The document discusses challenges financing small energy efficiency projects in China and proposes potential solutions. It notes that while government and large companies fund large EE projects, small projects, end users, and ESCOs face difficulties due to limited capital, experience, and high transaction costs. It suggests adopting a project aggregation model used in solar installations to lower costs through standardization, pre-screening, and joint procurement. This could help industrial facilities and ESCOs jointly implement smaller EE projects in a more efficient manner.

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    Shi_EEWorkshop_21June2011

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    The document discusses challenges financing small energy efficiency projects in China and proposes potential solutions. It notes that while government and large companies fund large EE projects, small projects, end users, and ESCOs face difficulties due to limited capital, experience, and high transaction costs. It suggests adopting a project aggregation model used in solar installations to lower costs through standardization, pre-screening, and joint procurement. This could help industrial facilities and ESCOs jointly implement smaller EE projects in a more efficient manner.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    82 views11 pages

    Challenges of Financing Challenges of Financing Small EE Projects in China

    Uploaded by

    Asia Clean Energy Forum
    The document discusses challenges financing small energy efficiency projects in China and proposes potential solutions. It notes that while government and large companies fund large EE projects, small projects, end users, and ESCOs face difficulties due to limited capital, experience, and high transaction costs. It suggests adopting a project aggregation model used in solar installations to lower costs through standardization, pre-screening, and joint procurement. This could help industrial facilities and ESCOs jointly implement smaller EE projects in a more efficient manner.

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    of 11

    Challenges of Financing Small EE Projects in China

    Xiaoyu Shi June 2011, Manila

    EE Investment in China
    Government - earmarked funds for energy saving and pollution reduction
    50 billion RMB yuan (2010 MOF) (2010, Chinas 10 Key Energy Savings Technology Categories High efficient products/buildings (AC, CFL, cars, motors/drive, etc.)

    Big and financially strong companies - funds for energy savings and pollution reduction
    12.6 billion RMB yuan

    Financial institutions - EE loans or other products

    ESCOs Growing Role g

    New Era of ESCOs - 12th 5 YP?


    To save energy to Vigorously promote energy
    conservation 7+ strategic emerging industries Attention shifted to ESCOs and EPCs EPCs.
    New ESCO taxation policy and accounting rules
    Cash rewards re ards Development of ESCO industry EE improvement in SMEs and Buildings Greater leverage with private funding and wider options

    Cash Rewards Eligibility Criteria for ESCOs


    S Shared-saving EMC C ESCO registered with both central and local authorities Project annual energy-saving, 100 to10,000 tce (500 tce for industrial projects) ESCO registered capital, > 5M ( 1M in Shanghai) ESCOs i t d it l i Sh h i) Percentage of ESCO investment , >= 70% How many of the small EE projects individually can benefit?

    Who finance small EE projects?


    Failure in competing for internal funds Limited ability to raise funds Lack of experience in EPC Lack of internal human resources for EE and EPC

    End Users

    Financial Institutions
    Favor large projects Unfamiliarity with EE and limited EE/ESCO products Lack of suitable appraisal methodologies th d l i Collateral- fixed assets Short term loan

    ESCOs
    y Nascent industry Limited capital Difficulty in getting loans and other capital Limited technology scopes

    How to get small EE projects financed and implemented? fi d di l t d? Transaction cost is the key
    Learning costs due to limited familiarity with EPC and ESCOs Search costs of both industrial facilities and ESCOs Procurement costs of industrial facilities Project d P j t development costs: pre-screening customers and l t t i t d projects

    Can it be lowered? How?

    Success Story: Collaborative Solar Procurement


    New model for reducing the installation e ode o educ g e s a a o cost and overall cost of solar PV: (2009) Multiple companies working together on a single solar purchase across multiple facilities Achieve scale to bring down the cost Saving time Solar Aggregation in California

    http://pdf.wri.org/purchasing_power.pdf

    China Energy Efficiency Aggregation Project Aggregation lowers transaction costs Can EE transactions be standardized? Move towards a standardized business?
    Pre-screening checklist to identify financeable energy Pre screening efficiency projects EE Financing/Investment Decision-Making Supporting Tool to calculate key financing indicators and performance Request for information to pre-select ESCOs Request for proposal to solicit bids in a joint effort

    China Energy Efficiency Aggregation Project


    Project aggregation is a new approach for helping individual entities, such as Chinese, American, and other industrial plants i Sh l t in Shanghai i d t i l parks, t come t h i industrial k to together t th to efficiently move forward with the implementation of longer term and relatively small efficiency projects projects.

    ACKOWLEDGEMENT

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