Cost-Benefit Analysis of EnMS Implementation at Enterprise level and Programme level Giorgia Pasqualetto Project Associate Department of Energy UNIDO Ana Petrovska National Project Manager REC Country Office Macedonia Marco Matteini Industrial Development Officer Department of Energy UNIDO 14 December 2017 Skopje, Macedonia

UNIDO EnMS-ISO 50001 CBI Program in Macedonia

UNIDO EnMS-ISO 50001 CBI Program in Macedonia

Integration of skills development and results time 1-2 months 2 days 1.5-2 months 4 days 4-6 months 3 days 4-6 months 3 days 2-3 months EXAM ½ day Preparation USER Training PE team work to implement EnMS PLANNING Training PE team work to implement EnMS IMPLEM. Training PE team work to implement EnMS CHECKING Training PE team work to implement EnMS Results: Draft Energy Policy Draft Roles & Responsibility matrix Initial data collection Results: Energy Policy Roles & Responsibility matrix Significant Energy Uses Baseline Energy Performance Indicators Opportunities list & action plans Energy & cost savings Performance improvements Results: Staff trained on selected SEUs Operations & controls improved Procurement plan EE measures implemented Energy & cost savings Performance improvements Results: Energy performance checked, verified and reported Energy performance reviewed by top management Decisions for next period based on internal audit Energy & cost savings Performance improvements Results: Trainee qualified as Energy Management System Expert EnMS implemented in PE Energy & cost savings Performance improvements Legend PE team A Partner Enterprise (PE) team is formed by the PE’s staff participating in the EXPERT program plus 1-2 national consultants trainees. Ongoing and periodic communication through webinars, emails and phone calls between international trainers and PE teams to review progress, discuss issues and provide guidance. Plant visits by national EE consultants trainees 4

Improvement of Energy Management Practices Ex. 1 - Refractory Material, Medium-size Company Vardar Dolomit Improvement of Energy Management Practices Production of fire restistant materials based on sintered dolomite 85 employees 29.3 GWh 2015 consumption of oil & mazut 3.3 GWh 2015 consumption of electricity Vardar Dolomit improvements 2016 Energy Management System Implemented No. of Measures/Projects 21 Total Capital Investment (EUR) 5,600 Gross Monetary Savings (EUR) 89,655 Overall Payback Period (in years) 0.06 2016 Electricity Savings Nor. (MWh) 248 2016 GHG Reductions (tons CO2) 320.7 Payback time of EnMS considering all experts and staff costs: 3 months 19,655 € from electricity savings (7.5%), normalized 70,000 € from power purchase contract savings, due to better electricity demand control and forecasting Money savings in 2015-2016 = 19,655 EUR 335.07 kg of CO2/MWh primary energy (coal) 35% power generation efficiency 248 MWh final electricity savings Primary energy savings 248/0.35 = 957 MWh CO2 emission (ton) 957*335/1000 = 320.709 Payback time of EnMS considering all experts and staff costs: 3 months In 2017, added oil & mazut to EnMS scope 174 MWh of normalized energy savings in first 4 months of 2017 with NO investments

REK BITOLA improvements in 2016 Energy Management System Implemented Ex. 2 - Power Generation, Large Company REK BITOLA Mining and Energy Combine (REK) Bitola meets over 70% of country’s demand for electricity Coal-lignite thermal power plant, total installed generating capacity of 700 MW and annual generation of 4,000 GWh Production in 2016 was 2,685 GWh; own consumption was 286.2 GWh REK BITOLA improvements in 2016 Energy Management System Implemented No. of Measures/Projects 4 Total Capital Investment (EUR) Gross Monetary Savings (EUR) 322,000 Overall Payback Period (in years) 0.00 2016 Energy Savings Norm. (MWh) 8,502 2016 GHG Reductions (tons CO2) 10,528 In 2016, EnMS limited to power generation facilities In 2017, EnMS extended to incl. mining operations 8,700 MWh normalized savings as of 7 Oct 2017 EnMS implementation being replicated in all branches of ELEM, the national largest power utility Mining and Energy Combine (REK) Bitola is located in the southern part of Macedonia, in Pelagonia plain. It has been built on the basis of the finds of coal-lignite, at around 12 km eastern from the city of Bitola. The Combine operates as a Plant of the Public Enterprise Electric Company of Macedonia. It consists of the following infrastructural structures: the Mines Suvodol and Brod and Thermal Power Plant (TPP) Bitola, and three departments - for legal affairs, for economic affairs and for investments and research, with a total number of 3000 employees. The conception of development and exploitation of the thermal power plant Bitola Unit 1 was initiated in 1982. In 1984, Unit 2 was put into operation, and Unit 3 in 1988, constructed in the manner that can be adapted for joint operation with another Unit 4 that remained undeveloped. REK Bitola is a facility of strategic importance and primary installation for electricity generation in the Republic of Macedonia. It covers over 70% of the demand for electricity in the country, as well as major part of the industrial boiler plants’ coal (lignite) necessity and consumption. With its three completed units of individual capacity of 233.3 MW or total installed capacity of 700 MW REK Bitola provides an average annual generation of 4000GWh electricity. It has 3000 workers and existing management systems ISO 9001, ISO 14001, and OHSAS 18001. is Energy Policy in place is company has an energy actions plan is annual EE training for staff 12) is company use LCC analysis for EE investments 2.97% of total consumption Payback time: 22-24 days

Costs and Benefits Analysis with In-Kind - Pilot phase EnMS Capacity Building and Implementation Program Costs and Benefits Analysis with In-Kind - Pilot phase 12 Partner enterprises (65% success rate) 23 Nat. Consultants/Expert Trainees In-kind contribution from Nat. Consultants Programme implementation No inclusion of UNIDO staff & support costs Energy Savings 1 Yr: 14.362 GWh (63% no cost) Energy Savings 5 Yr: 165 GWh Money savings 1 Yr: 862,700 USD (52% no cost) Money savings 5 Yr: 10,792,000 USD Without considering non-energy benefits! 7

Costs and Benefits Analysis – Replication Scenario EnMS Capacity Building and Implementation Program Costs and Benefits Analysis – Replication Scenario 10 Partner enterprises 12 UNIDO National EnMS Expert Include Progr. preparation and implementation No inclusion of UNIDO staff & project support costs Target Final Energy Savings 1 Yr: 10 GWh Target Money Savings 1 Yr: 650,000 USD (50% no cost) Without considering non-energy benefits! 8

Ongoing EnMS Replication EnMS Capacity Building and Implementation Program Ongoing EnMS Replication Partnership between UNIDO-GEF IEE Project and EVN Macedonia 6+1 new companies implementing EnMS, including EVN Macedonia 6 UNIDO Qualified National EnMS Experts 7 new EnMS Expert Trainees, 2 from EVN Macedonia Cost-sharing of Qualified National EnMS Experts 1/3 UNIDO project; 1/3 EVN Macedonia; 1/3 Beneficiary company 75% National Trainers – 25% International Trainers EVN Macedonia’s Goals  Start providing EnMS-EE Services to Clients Estimated Replication Cost to IEE project is ̴ 15% of Pilot Program (i.e. about 30,000 USD) 9

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