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The Brazilian Energy Efficiency Market october 2002. Eduardo Moreno ABESCO President - Associação Brasileira das Empresas de Serviço em Conservação de Energia www.abesco.com.br abesco@abesco.com.br VITALUX – Performance Contract Director emoreno@vitalux.com.br. Agenda. Historical
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The Brazilian Energy Efficiency Marketoctober 2002 • Eduardo Moreno • ABESCO President - Associação Brasileira • das Empresas de Serviço em Conservação de Energia • www.abesco.com.brabesco@abesco.com.br • VITALUX – Performance Contract Director • emoreno@vitalux.com.br NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Agenda • Historical • EE Market Transformation • Abesco – Main Activities • Performance Contracts Implemented NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Historical • 1.994 – Real Plan – inflation fell dramatically • Entrepreneur learn to know cost composition of their products in a stable economy • Increase interest for some Companies to work as a Esco NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Historical • First 4-5 years few projects, barriers – customer / financing / difficulties to spread win-win concept • 1.997 – Abesco was founded • 1.998 - Utilities Privatization – 1% - from revenue goes for energy efficiency projects • 2.001 - Energy Crise - changed the customer behavior NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Market’s Transformation • Energy Efficiency has became a good business, new agents selling energy solutions: • ESCO: core business is energy solutions – electrical energy, water, gas, fuel, generation, cogeneration and support in a regulatory aspects • SERVICE’s:companies that sell energy solutions in order to agregate value to be faithfull with the clients . Ex.: Fuels Distributors ( Petrobras, Shell) / Utilities Energy Distribution NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Market’s Transformation • ESCOs Profile : • Abesco members • Last year increased from 28 to 74 companies • More than 50 % – small Companies • Few of them Know how to work in a performance contract NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Market’s Transformation • EE Utilities Profile: • 10% - Has its own ESCO • 15% - Intend to start its own ESCO • 90% - Contract ESCOS • 5% - Work with Performance Contract • 10% - Abesco’s members • Fonte: ABESCO - 08/02 - universo pesquisado: 30% NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Abesco • Convenium with FIESP – the biggest industry Federation in Brazil - Join ESCOs and Industrial End Users • Provide FIESP with technical support • ABESCO enlarge ESCO concept, join important partners as the main Federations and Association • Discuss and spread Performance Contract Concept NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Abesco • Review the Rule to expand the profile members, accepting international members • Join the Financial Market (FEBRABAN). • Propose the quality Model for the Sector. • Join all of the agents ot network Segment instituting the Brazilian Energy Efficiency Industry NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Energy Efficiency Industry ABESCO Process Certification Customer ESCOS ABILUX SINDINST. ABINEE ABDIB ABRAVA ABRADEE Outros `Financial Market $ Energy Efficiency (Performance Contract) Ar Condicionado Infra-estrutura Construção Outros Agentes Instalação Motores Iluminação NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Partners from the Sector • ( 94) ABILUX - Associação Brasileira da Ind. de Iluminação • (123) SINDINSTALAÇÃO - Sind. da Ind. de Instalação de S.P. • (554) ABINEE - Ass. Bras. da Ind. Elétrica e Eletrônica • (134) ABDIB - Ass. Bras. da Infra-Estrutura de Base • (32) ABEGAS - Ass. Bras. das Empresas de Gás • ( 45) SINDICEL - Sind. da Ind. de Condutores Elétricos, Trefilação e Laminação de Metais não Ferrosos do Est. SP; • ( 77) ABCE - Ass. Bras. de Concessionárias de Energia Elétrica; • (52/Energia) ABCE - Ass. Bras. de Consultores de Engenharia; • (400) ABRAVA - Ass. Bras. de Refrig., Ar Condic., Ventilação e Aquecimento; • (1400) ABIMAQ - Ass. Bras. da Ind. De Máquinas e Equipamentos; • (59) ABRACE - Ass. Bras. dos Grandes Cons. Industriais de Energia; • (44) ABRADEE - Ass. Bras. Distribuidores de Energia Elétrica NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Partners from the Sector • Financial Market: • - FEBRABAN - Cx. Ec. Federal - BMC • - ANB-AMRO - Banco Mundial - Nossa Caixa • - Banco do Brasil - Unibanco - Itaú • - Banco Safra - Sudameris - BNDES • - IFC - International Finance Corporation • Venture Capital andSpecial Funds • - A2R - ABB - FondElec - NVST Brasil - Petrobrás - Veritel • Assurance • - Geraseg - Cibrasec NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Integration for Energy Efficiency Industry • Integration Seminars • 1o. 29/Nov/01: Abesco / Abilux / Sindinstalação / Fiesp / Febraban and Procel. • 2o. 10/Set/02: Abesco / Abinee / Abdib / Abilux / Abradee / Sindinstalação / Fiesp / Febraban e Procel. • Implement the same Fiesp Convenium for other States • By Abesco’s regionais NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
“TOOLS” • Certification (Quality) • Convenium ELETROBRÁS / PROCEL / ABESCO model will be ready until 2.003 / march • Involves ABNT / INMETRO / Certification Companies / Procel / Cepel / ABESCO • ABESCO will facilitate capacitation and training for Escos NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
“TOOLS” • Financial Facilities • Guarantee Fund – WORLD BANK / PROCEL / FEBRABAN / IBMEC / INEE / ABESCO • Investiment Fund - Holding to support ESCOS with financial side - (MME / PROCEL / BNDES). • Concepting Data Bank - Business in the EE Industry - site dedicated for the sector. NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Energy Efficiency Law • Law nº 10.295, october/ 17 / 2001: Establish maximuns “specifical energy consumption index” for products, equipments and others goods manufactered and commercialized in the country. NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Current Profile of Electricity Consumption 15% 15% 28% 43% NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Performance Contract • Sectors: Industrial, Commercial and Public • Contract - 3 - 5 years • Savings – 15 % - 30 % • Shared with the customer - 0 a 30 % • Medium project – US$ 200.000 • Amount per year – US$ 30.000.000 NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
Potential Market • Demand reduction 1.400 MW (2%) • InvestimentsUS$700 million • Energy Conservation 500 US$ / Kw • Expand Power Supply 900 US$ / Kw NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002
The Brazilian Energy Efficiency Marketoctober 2002 • Eduardo Moreno • ABESCO President - Associação Brasileira • das Empresas de Serviço em Conservação de Energia • www.abesco.com.brabesco@abesco.com.br • VITALUX – Performance Contract Director • emoreno@vitalux.com.br NAESCO - INTERNATIONAL FINANCING ROUNDTABLE OCTOBER/2002