Feasibility Study for Joint GHG Reduction Projects and Joint Crediting Mechanism Applying RENKEI Control Technologies

in Utility Providing Facilities through Software Package

Feb. 2013 Azbil Corporation

2012 Azbil Corporation All rights reserved

Feasibility Study for New Offset Mechanism

CountryIndonesia

Utility Facility Operation Optimization Technology

by Azbil Corp.

The technology can be applied to the existing utility system in the factory of various industries and is high return-on-investment (ROI) technology, since it works on simple computer systems, without high-performance hardware or other expensive equipment. It has great amount of CO2 reduction potential for various industries in Indonesia such as refinery plant, chemical plant, district heating and cooling and so on.
Project Outline Application of Utility Facility Operation Optimization Technology in Indonesia, which were successfully applied to many industries in Japan, will contribute the reduction of CO2 emission in Indonesia. Feasibility study will investigate the MRV of this technology to New offset Mechanism Summary of Methodology
1. Simulation Methodology Reference emission will be calculated by simulator which is using mixed integer liner programming. 2. Regression Methodology Reference emission will be calculated from regression model. CO2 emission = k1 * Steam demand + k2*Power demand

Counter part in Indonesia

Refinery (Pertamina Cilacap) Textile company (South Pacific Viscous)

2012 Azbil Corporation All rights reserved

 Feasibility Study for New Offset Mechanism CountryIndonesia

Outline of Applied Technology

Utility Distribution
Elec. Power

Primary Energy Elec. Power

Utility Facility

Production Area

Substation Selection Equipment

Substation

Load Allocation
Cogeneration

Compressor

Air

Production Equipment

Heat Storage

Cooling Water / Hot Water

Turbine

Chiller

Stable supply for utilities

MP Steam

Turbine

Consideration for trouble in utility plant

HP Steam

Fuel Oil Gas

Boiler

Consideration for demand change Consideration for utility cost

Gas

Minimize CO2 & Energy Cost

2012 Azbil Corporation All rights reserved

 Feasibility Study for New Offset Mechanism CountryIndonesia

Eligibility Criteria
Name of technology RENKEI control for utility facilities Description Using mixed integer programming or an equivalent method of optimization calculation, the system determines the optimum selection and the optimum load allocation for utility equipment such as boilers, steam turbines, and chillers used in utility facilities, in order to minimize CO2 emissions. It outputs the results as operation guidance for operators or as online control output. Criteria Utility equipments are consist from boilers / steam turbines / co-generations. Be able to identify total energy consumption and total steam demand / total electric demand for the past one year. or Be able to identify energy consumption and steam and/or electric generation for each individual equipments for the past one year.
2012 Azbil Corporation All rights reserved

 Feasibility Study for New Offset Mechanism CountryIndonesia

Selection of calculation method

Be able to identify energy consumption and steam or electric generation for each individual equipments for the past one year.

YES

Simulation Method

NO
Be able to identify total energy consumption and total steam demand / total electric demand for the past one year.

YES

Regression Method

2012 Azbil Corporation All rights reserved

 Feasibility Study for New Offset Mechanism CountryIndonesia

Reference Scenario Setting

The energy consumption efficiency of a utility plant will continue to be the same level as that of before implementing Utility Optimization system.

2012 Azbil Corporation All rights reserved

 Feasibility Study for New Offset Mechanism CountryIndonesia

Reference Emission and calculation (Simulation Method)

Boiler total efficiency will be affect by Steam demand Individual boiler efficiency Slected boilers To have more accurate Baseline it is better to consider those affection. This simulation approach is including all these affection to calculate Baseline emission. Key Parameters CO2 Minimum Emission (simulation value) Operation emitting the least CO2 (theoretical maximum efficiency) CO2 Maximum Emission (simulation value) Operation emitting the most CO2 (theoretical minimum efficiency) Deviation ratio (%) Deviation from CO2 Minimum Emission, which demonstrates how far the actual boiler operation allows emitting CO2, compared to theoretical maximum efficiency
2012 Azbil Corporation All rights reserved

 Feasibility Study for New Offset Mechanism CountryIndonesia

Reference Emission and calculation (Regression Method)

CO2 emission = k1 * Steam demand + k2*Power demand

K1 and k2 are calculated from regression analysis by using past one yeas data.
Energy Consumption Steam Demand Electric Demand

2012 Azbil Corporation All rights reserved

 Feasibility Study for New Offset Mechanism CountryIndonesia

Project Emission and calculation and emission reduction

Project Emission will be calculated by following formula Project CO2 emission = (Measured Fuel consumption * Conversion Factor into CO2) + (Measured Electric consumption * Conversion Factor into CO2) Emission Reduction will be calculated by following formula
Emission reduction = Reference CO2 Emission Project CO2 Emission

2012 Azbil Corporation All rights reserved

 Feasibility Study for New Offset Mechanism CountryIndonesia

Data and Monitoring

Simulation Method
Energy consumption and steam or electric generation for each individual equipments for the past one year.

Regression Method
Total energy consumption and total steam demand / total electric demand for the past one year.

2012 Azbil Corporation All rights reserved

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 Feasibility Study for New Offset Mechanism CountryIndonesia

Scale of Investment and Project implementation time frame

Scale of Investment
From USD500K to USD1M
Hardware (Data Server and Optimization Server) Software License (Optimization software and others) Engineering Service

Implementation time frame

From 4 month to 8 month
Survey Design Implementation On site Commissioning

2012 Azbil Corporation All rights reserved

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 Feasibility Study for New Offset Mechanism CountryIndonesia

Expected CO2 reduction

Assumption : (1) Number of companies covered by Energy Saving Low (Regulation No.70 Year 2009) is 650 based on IEEJ Report 2010. (2) 650 companies are categorized 3 groups by CO2 emission and each number of companies, U-OPT applied rate are assumption. Total CO2 emission reduction = Total CO2 Emission * U-OPT applied rate * CO2 emission reduction rate
CO2 Total CO2 CO2 Total CO2 U-OPT Number of emission emission Group Emission Emission applied Compnies reduction reduction (Kt-CO2) (Kt-CO2) rate % rate % (Kt-CO2) 50 50,000 50% 2% 500 A 1,000 B 500 150 75,000 30% 2% 450 C 18 450 8,100 10% 2% 16 Total 650 133,100 966
Expected CO2 Reduction

Note Business Base Need some help Need strong support

CO2 emission 18Kt-CO2 6000toe

Estimated reduction %: around 2 of total emission Target reduction 1,000,000 ton-CO2/ year in Indonesian industrial section
2012 Azbil Corporation All rights reserved

12

 2012 Azbil Corporation All rights reserved