ENERGY EFFICIENCY FOR HOTELS AND CARBON CREDIT POTENTIAL

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ENERGY EFFICIENCY FOR HOTELS AND CARBON CREDIT
POTENTIAL

• Yuyun Ismawati

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SUSTAINABLE HOTEL Triple Bottom Line
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HOTEL, ELECTRICITY AND ENERGY

• Hotels are large consumers of electricity and
  energy
• Hotel face increasing costs to provide a high
  quality of service to guests

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HOTEL, ELECTRICITY AND ENERGY......

• Most of Balis electricity is supplied by 27
  diesel power generating plants located all over
  Bali, the remaining 40 comes from coal power
  plants in East Java
• Most of this supply is absorbed by hotels in the
  Badung Regency and Denpasar City
• In addition, the energy efficiency of buildings
  is often poor

Out of that 70 percent, some 35 percent is
utilized to power hotels in the Nusa Dua
area, Wayan Redika, Public Relation of PLN
Distribusi Bali, 2007
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STUDY REVEALED1

• On energy conservation and efficiency, hotel
  operators generally recognize the cost reduction
  potential of energy conservation measures.
• However, many of these potentials have not been
  implemented due to a number of barriers such as
• Lack of information distribution regarding Energy
  Conservation Opportunities (ECOs), energy
  efficient equipment and services, and energy
  management practices and projects that actually
  demonstrate the financial benefit of energy
  efficiency measures
• Chief engineers have limited capability in
  identifying and further communicating the
  financial benefit of energy conservation measures
  to top hotel management
• Limited number of institutions who can provide
  necessary support in financing the investment for
  energy efficiency projects
• No provisions of incentives such as tax credits
  specifically intended for energy efficiency
  measures

1Retno Gumilang Dewi, The Status of Energy
Efficiency Projects in the Indonesian Hotel
Industry, The Center for Research on Material and
Energy, Bandung Institute of Technology, March
2003
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STUDY REVEALED......

• Many businesses are beginning to recognize
  financial incentives to undertake energy
  conservation measures following sharp increases
  in energy prices in the Indonesia
• However, to change this interest to a desire
  for change, staff training to conduct energy
  audits and cost benefit analysis of energy
  efficiency is required
• Application would only be widespread when
  projects can actually demonstrate the cost
  benefit of energy efficiency measures

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ANOTHER STUDY REVEALED2

• The latest study on hotels contribution to
  global warming showed that lighting, eletricity,
  energy accounted for 70 of hotels contribution,
  compared to water 12 and waste 65
• Data from the Bali office of state electricity
  company, PLN, reveals that hotels especially in
  Badung regency and Denpasar city -- consume 70
  of the total electricity supply, which reaches
  439 MW during peak hours
• Nusa Dua resort area, the venue of the UN climate
  conference, alone consumes gt 1/3 of the power
  allocated for the hotels

2Greenpeace Study on Climate Change and Hotels
Contribution, Dec 2007
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MINIMUM STANDARDS TOWARDS A SUSTAINABLE HOTEL3

• Policy and Framework
• Staff Training and Awareness
• Environmental Management
• Purchasing
• People and Communities
• Destination Protection

3 Going Green, Minimum Standards Towards a
Sustainable Hotel, International Tourism
Partnership
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MINIMUM STANDARDS TOWARDS A SUSTAINABLE
HOTEL...............

• Policy and Framework
• Committment from everyone, starts from the top
• Designate responsible persons
• Set up Green Team
• Setup indicators to measure accomplishments
• Draw business policy
• Staff Training and Awareness
• Launch/introduce the program to staff
• Maintain staff awareness
• Encourage staff motivation
• Include the program in every staff introduction
• Communicate the results progress

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MINIMUM STANDARDS TOWARDS A SUSTAINABLE
HOTEL...............

• Environmental Management
• Assess your current environmental impact
• List possible mitigation and management
  alternatives
• Install necessary control measures such as water
  meters and monitor your program
• Set improvement target
• Work with others
• Inform guest, vendors and local stakeholders
• Purchasing
• Work with suppliers, vendors to green your chain
• Inform them about your program

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MINIMUM STANDARDS TOWARDS A SUSTAINABLE
HOTEL...............

• People and Communities
• Look at the world outside your hotel and how you
  can take a more responsible, leadership role
• Destination Protection
• Maintain a sense of place that supports the
  geographical character of a placeits
  environment, culture, heritage, aesthetics, and
  the well-being of its citizens

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GETTING THE MOST OF YOUR ENERGY EFFICIENCY
PROGRAM4

• In a typical hotel, lighting, air conditioning,
  and water heating represent up to 70 percent of
  total energy use, making those systems the best
  targets for energy efficiency programs
• Many full-service hotels can benefit from quick
  no- and low-cost solutions for energy efficiency.

• Air Conditioner
• Lighting
• Boiler

4 Guidebook on Energy Efficiency for Hotels,
Pelangi, 2005
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GETTING THE MOST OF YOUR ENERGY EFFICIENCY
PROGRAM........

• In general, prior to 1997, energy would
  constitute 10 of a hotels total expenditure.
  This figure has now risen to approximately 25
• Energy efficiency is a valuable resource that
  creates a win-win solution on multiple fronts
• It saves energy consumers, money, increases
  comfort, protects the environment, and enhances
  the economy
• When energy efficiency is combined with smart
  energy practices like turning off lights, air
  conditioners, and televisions that are not in use
  all of the benefits above are compounded

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THE LIGHTING SYSTEM
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THE LIGHTING SYSTEM....
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THE LIGHTING SYSTEM....
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COMPARISON BETWEEN ILBs and CFLs
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IMPORTANT NOTE ABOUT CFLs

• The amount of mercury in a CFL or other
  fluorescent light bulb typically ranges between
  3.5 milligrams to 15 milligrams
• The amount of mercury varies depending on the
  type of fluorescent light bulb, the company that
  makes the light bulb, and when the fluorescent
  light bulb was made
• An average CFL contains 5 milligrams or about
  1/100th of the amount of mercury found in a
  mercury fever thermometer
• Careful attention need to be taken when CFLs
  broken

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BOILER

• A boiler is a vessel that functions as a water
  heater
• The fuel used to heat boilers can be either gas,
  oil, or coal
• In Indonesia, most of fuel used for boiler is
  diesel fuel

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SOME TIPS TO MAINTAIN THE EFFICIENCY OF A BOILER

• Perform regular maintenance.
• Use automatic controls to appropriately operate
  the boiler.
• Ensure that control systems are maintenance
  properly. Improper operation of the control
  system can result in an inefficiency of up to
  20.
• Properly insulate the system. Use insulated
  expansion tanks and heat exchangers.
• Prevent scale accumulation in boiler tubes, which
  impedes flow and heat transfer, through effective
  water treatment. This also minimizes boiler
  blowdown and results in potential efficiency
  gains of 10-12.
• Inspect steam distribution systems. Leaks, faulty
  valves, faulty steam traps, etc. can be costly.
  This could result in potential energy savings of
  up to 5.

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SOME TIPS TO MAINTAIN THE EFFICIENCY OF A
BOILER.........

• Regularly cleaning strainers upstream of steam
  traps to prevent particle accumulation can yield
  efficiency gains of 10-15
• Insulating your pipes, valves, fittings, etc. can
  yield energy savings of 2-5
• Minimize surplus combustion air by adjusting
  fans, dampers, seals and optimizing over- fire
  draft controls. Reducing air and oxygen by 15
  percent and 1.5, respectively, can provide a 1
  gain in efficiency
• Lower the water temperature of boilers to reduce
  short-cycle convective and radiant heat losses. A
  potential increase in efficiency of 1 is gained
  by reducing stack temperatures by 4.5oC
• Consider replacing your boiler if it is already
  more than 25 years old. Newer boilers are usually
  designed with highly efficient and cleaner
  technology, which can reduce fuel consumption by
  up to 30 or even more

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INVESTMENT IN CDM PROJECT
CDM project(Hybrid SupplyDiesel- Wind power
station)
Buyer of CER is reliable and pays in hard
currency increase the bankable of the project
(IRR increase)
To adjust the main project, or to build something
new, or to turn the main project into a CDM
project
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PROJECT CASH FLOW

Year
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CARBON PRICES
Real Certified ER (from EB)
Future Project
Self Claiming Project
Claim Verified by others
Future Project
Source World Bank, 2006
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WHAT IS CARBON PRICE OR CER?

• Carbon price in the contract (ERPA) is not CER
  final price that should be consider as price
  without risk
• Price without risk the price of fruit at its
  tree even where the tree is no planted yet
• CER final price the fruit price in nice
  packaging, placed at the supermarket, ready to be
  consumed

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CDM FINANCIAL REQUIREMENT
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CDM FACILITIES
NL Netherland, DK Denmark, JP Japan, WB
World Bank, ADB Asian Development Bank, S
CDM private investors/developers, I Investment
Banks, P Private Company
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CDM PROJECT CYCLE
Tonnes of CO2 per year
Baseline scenario (emissions without the CDM
project)
Emission reductions
Project scenario (emissions with the CDM project)
2006-2007
2008
2010
2012
2014
2016
Validation of baseline
Verification of emission reductions
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LEGAL ISSUES OF CDM PROJECT ACTIVITIES IN ENERGY
SECTOR
Classification of sub-categories of CDM project
activities
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SIMPLE CALCULATION OF EMISSION REDUCTION FROM
ENERGY EFFICIENCY
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PROJECTS ELIGIBLE FOR CDM SCHEME IN INDONESIA
Main issues electricity generation and selling,
renewable energy, energy efficiency, recovery and
utilization of gas from oil wells
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OVERVIEW ON 14 MULTILATERAL FUNDS
World Bank
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FUNDS WITH GOVERNMENT INVESTORS

• World Bank
• Prototype Carbon Fund (veteran)
• Community Development Carbon Fund (community
  benefits, SSP, regional portfolio)
• Bio Carbon Fund (forest, agricultural,
  co-benefits)
• Umbrella Carbon Facility (gt 10 mio tons CERs (HFC
  23))
• (also Bilaterals Italian Carbon Fund,
  Netherlands CDM Facility, Netherlands European
  Carbon Facility, Danish Carbon Fund, Spanish
  Carbon Fund)
• Others
• KfW Carbon Fund
• Multilateral Carbon Credit Fund (EBRD, EIB)
  under development

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PRIVATE FUNDS
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THE FUTURE OF BALI AND US

• Foreign tourist arrivals to Indonesia between
  2005 and 2009 are projected to reach 10 million
  per year with spending amounting to 10billion
• Green Globe Certification, Energy Efficient
  award, Tri-Hite Karana, Natural Guide
  recommendation, Eco-hotel rating and
  opportunities to get carbon credits on Voluntary
  Emission Reductions from the energy sector is
  possible
• Retrofitting and installing energy efficient
  measures, or increasing the use of renewable
  energy sources replacing fossil fuel generators
  are now needed

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THE FUTURE OF BALI AND US.....

• Considering the islands resources and carrying
  capacity, the industry needs to set benchmarks,
  especially for the provision and more efficient
  public services such as public transport, water,
  electricity, solid waste management and waste
  water treatment to mitigate the potential impact
  and anticipate future scenarios
• For a sustainable future of the island and its
  tourism industry, there is a need to shift the
  tourism strategy and orientation in Bali to
  responsible tourism

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Thank you For your kind attention
YUYUN ISMAWATI Mandalawangi No.5 Jalan Tegal
Wangi - Sesetan DENPASAR 80223 Bali,
Indonesia Tlp/Fax [phone] 743
5796 Email yuyun_at_lead.or.id, balifokus_at_balifokus.
or.id URLhttp//www.balifokus.org