JUNE

JUNE 2008
2008

ASIA
ASIA CLEAN
CLEAN ENERGY
ENERGY FORUM
FORUM

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Ⅰ

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Ⅰ

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 KOREA’s Financial Support System

y Fund established in 1980

y Loan
: long term, low rate of interest loans for investing in
energy efficiency & conservation facilities

y Tax incentives
: 10% tax deduction (income tax or corporation tax) for
investments of energy efficiency & conservation facilities

y Managed by MKE(government) and operated by KEMCO

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 Projects of Loan

Rational use of energy

Establishment of cogeneration facilities for industry or building,
installation of energy efficiency & conservation facilities and
ESCO projects etc.

Integrated Energy Supply

District Heating, Community Energy System, Industrial Complex
CHP (Combined Heat and Power System)

Dissemination of New & Renewable energy

Installation of equipment using alternative energy such as solar-
heat, solar-light and bio-energy etc.
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 Loan Scale in 2008

Budget
Category
(million USD)

Rational Use of Energy 480

Integrated Energy Supply 100

Dissemination of New & Renewable energy 130

Total 710

(1 USD ≒1,000 won)

※ Rate of interest : 3.25~6% (variable)

Repayment period : 4~15years (according to facilities or project)

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 Loan Procedure

① to apply
Applicant KEMCO
② to recommend

③
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BANK

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Ⅱ

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 ESCO System in KOREA

y System is in operation since 1992

y ESCO should be registered before applying for a loan

y 156 ESCOs have registered as of 2007

y But, Active ESCOs are about 30~40

y Energy Performance Contracting model is almost the

Shared Savings model (about 98%)

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 Two main models for EPC

‹ Shared savings model

(ESCO: Fund raising and profit sharing)

ESCO Energy user

fund raise

‹ Guaranteed savings model

(ESCO: energy performance guarantee / Energy user: Fund raising)

ESCO Energy user

fund raise

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 System of supporting ESCO

Investment in facility
ESCO Energy user
sharing of cost savings

· Financial support · Advertisement

· Policy improvement · Market expansion

MKE & KEMCO

※ MKE : Ministry of Knowledge Economy

KEMCO : Korea Energy Management Corporation

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 Number of registered ESCOs

180
159
160 166
163 163
159 158 156
140
No. of ESCOs

120
103
100

80

60 55

40 28
16
20 6 9
4 5 7
0
'9 2 '9 3 '9 4 '9 5 '9 6 '9 7 '9 8 '9 9 '0 0 '0 1 '0 2 '0 3 '0 4 '0 5 '0 6 '0 7

Class 1(plant) Class 2(building) Class 1 · 2 Total

18 companies 47 companies 91 companies 156 companies

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 Yearly Investment Performance

200 600
183
ESCO Fund(million USD) 548
No. of Projects 519 491 500
150
ESCO Fund (M USD)

140 133 136

No. of Projects
400
328
100
100 86 300
244 83
75
65 202 200
139 167
50 156
106
30 100

0.5 3.9 2.8 5.5245.725

0 3 3 3 0
'93 '94 '95 '96 '97 '98 '99 Year
'00 '01 '02 '03 '04 '05 '06 '07

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 Investment by facility (’93∼’07)
300 2,000
274 276
1,771 ESCO Fund(million USD)
250 No. of Projects 1,600
ESCO Fund (M USD)

No. of Projects
200
1,200
150 122
115 118
800
100 81

35 245 244 400

50 173 21
139 239 6
81 13 53
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 Examples of energy conservation in Industry

y Waste Heat Recovery System

- Heat Recovery Boiler
- Mechanical(Thermal) Vapor Recompressor
- Heat exchanger for heating or cooling

y Co-Generation (Steam + Electricity)

y Process Improvement
- Naphtha Cracking Heater Coil replacement
- Ejector type replacement (Steam ⇒ EG)

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Examples of energy conservation in Building

y Ice thermal storage system

y Lighting System
y Co-generation system (Apartment)
y Heat recovery system (AHU, Steam)
y Building automation control unit
y Variable Voltage Variable Frequency

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 Energy Saving Performance (’93∼’07)
120 350
110
Savings(million USD)
291 300
100 284 thousand toe
78 250
Savings (M USD)

77
80

thousand toe
200
60
148 150
40 36 32 37
113 108 100
20 15
39 9 50
22 19
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 Policies for supporting ESCOs

y Operating Fund (1998)

- Fund for small & medium sized ESCOs

y Credit loan system (1998)

- Getting a credit loan from bank

y Factoring system (1999)

y Guaranteed savings contract model (2004)

y Excellent ESCO (2006)

- accreditation program to superior ESCO

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Ⅲ

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y Rapid economic growth in a short period

y Various policy-oriented Funds to induce faster

economic development
y Last five years EC Fund (unit : million USD)

2003 2004 2005 2006 2007

305 282 458 433 467

y Estimated 700,000toe of energy savings yearly

y Fund for new & renewable energy is increasing

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 y Financial support to 108 groups of energy
saving facilities
Group Major Facilities
Integrated District Heating & Cooling, Community Energy System,
Energy Supply Combined Heat & Power for industrial complex
furnace, kiln, dyeing machine, drying machine, pulper,
Energy efficient MVR, TVR, accumulator, air handling unit, Cogeneration,
facilities building automation control unit , heat recovery boiler,
heat exchanger etc.
Certified high Induction motor, pump, gas boiler, UPS, transformer,
efficient fluorescent lamp & ballast, inverter, vending machine,
products fan, blower, LED traffic light etc.

y Hard to estimate the effect of energy savings

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y Economic structure in Korea

y Result of Korean Government’s strong will to

energy saving
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 Thank you

for more information

e-mail : ksm525@kemco.or.kr or
eslee@kemco.or.kr
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