ＮＥＤＯ−ＩＣ−０２−ＥＤ−０２

Infrastructure Improvement Project for
Rationalization of International Energy Use(Feasibility Study on Energy Conservation in
Major Industries in ASEAN Countries)

March, 2003

New Energy and Industrial Technology
Development Organization (NEDO)
Entrusted to The Energy Conservation Center, Japan

Infrastructure Improvement Project for Rationalization of International Energy Use(Feasibility Study on Energy Conservation in Major Industries in ASEAN Countries)
The Energy Conservation Center, Japan
March, 2003

Study purpose:
This survey is intended to carry out energy audits for typical factories andbusiness establishments involved in major industries jointly with experts the fromASEAN side and thereby grasp an understanding of the actual state of energy
consumption by the factories concerned, with a view to providing appropriate
advice on their energy conservation measures and at the same time establishingtypical energy auditing methodology in those countries.

Preface
In recent years, proper actions for effective utilization and demand stabilization ofincreasingly limited energy resources and against global warming problems have beenemphasized and necessity of sustainable economic development has been discussed in many
ways.
Japan as an advanced nation in terms of economy and technology is strongly demanded toprovide positive international cooperation for developing countries.
In order to contribute to well-balanced development of economy and environment indeveloping countries, the actual status and issues on the energy use and environmental
protection measures in each of these countries should be fully surveyed. Preparation of an
appropriate and acceptable plan and support matching the conditions in each country would
be necessary.
Under such circumstances, the planned and established energy audits in major industries andtechnical transfer for ASEAN countries seems very timely because these countries arecontinuing remarkable development and will show a steep increase in energy consumption.
This project includes not only transfer of energy conservation technology but also transfer offactory audit technology to allow autonomous energy conservation audit in these countries infuture, so this project will be very useful for these countries in terms of assisting in
independent development.
We hope that this project will contribute to energy conservation and environmental
protection in ASEAN countries and these counties will sustain economic development being
harmonized with environment, and expect that this project will be a bridge for technicalexchange and friendship between Japan and these countries.
March 2003
The Energy Conservation Center, Japan

Summary
The ASEAN economies are continuing to grow at a brisk pace, and accordingly their energy
consumption is also anticipated to increase rapidly from now on. In this context, it will bevital to use energy more efficiently, as well as to give due consideration to global warming.
This project has entered its third year, and the ASEAN Center for Energy (ACE), our
ASEAN counterpart, is engaged in increasingly full-fledged and substantial energy
conservation activities, thereby contributing to the spread of awareness of the need forenergy conservation among the people in ASEAN countries.
Especially, it is notable that the results of the project were summed up and the future action
policy was discussed intensely with Japanese experts.
In details, creation of a database, benchmark, guideline for energy management was started
in order to share the accomplishments of these 3 years within ASEAN countries. This theme
was discussed at the Inception Workshop, which was held just after the start of the project of
this fiscal year and at the Post Workshop after the close of the business on site.
Formation of a working group by a representative from each ASEAN country was resolved
at the workshop of end of February 2003, which means that a practical framework to back up
the database, benchmark and guideline was built.
Specific details of activities through this project for this year are as follows:
Nov. 25-26, 2002;
Participate in “Inception Workshop of The SOME-METI Project on PROMEEC - Buildings
and PROMEEC - Industries” (Singapore).
(1) Policies for energy conservation promotion for building & industry sections, andenergy management & typical energy conservation technologies(2) Explanation and discussion of Action Plan for 2002FY project (building & mainindustry sections)(3) Determination of a rough schedule for the building and main industry survey(4) Exchange of views on benchmarks for energy consumption in buildings(5) Exchange of views of the future project development
Dec. 10-19, 2002;
Energy audit of the garment industry in Cambodia and iron & steel industry in Philippines(first survey)(1) Introduction of energy conservation of garment industry in Japan (Cambodia)(2) Audit of 2 garment factories in Cambodia(3) Preparation of audit of iron & steel industry in Philippines

Feb. 10-21, 2003;
Energy audit of the garment industry in Cambodia and iron & steel industry in Philippines(second survey)(1) Introduction of energy conservation of iron & steel industry in Japan (Philippines)(2) Audit of 2 iron & steel factories in Philippines, explanation of results and discussion(3) Audit of 2 garment factories in Cambodia, explanation of results, discussion andadditional audit
Feb. 28-Mar. 1, 2003;
Participate in “Workshop of The Working Group for Benchmarking and Audit Guideline
Development Projects, SOME-METI Work Program” (Yangon, Myanmar)(1) Report of results and discussion of audit of building (Vietnam & Myanmar)(2) Report of results and discussion of factory audit (garment industry in Cambodia andiron & steel industry in Philippines)(3) Introduction and discussion of development of a database, benchmark, and guideline
for building in Japan(4) Case study of development of a database, benchmark, and guideline for building in
Vietnam & Myanmar(5) Introduction and discussion of implementation and concept of the development ofbench mark in ASEAN(6) Discussion of future policy and plan of PROMEEC Project (building & mainindustries)
Considerable cooperation was provided from Cambodia and Philippines, which were
subjects of survey, this fiscal year.
At Cambodia, audit was carried out twice at M&V International Manufacturing Ltd. andJune Textiles Co., Ltd. (Cambodia) at Phnom Penh.
Cambodia is just at its start point of development, and electrification is limited to urban areas.
We had full support from the related organizations on selecting the 2 companies. Garment
industry is a representative industry of Cambodia, and many administration officials attended
the workshops and the first audit with enthusiasm, to absorb experience and informationfrom Japanese experts.
Philippines is on the way of further development, as for iron & steel industry, because of theimport of cheap slabs and billets and appreciation of scrap (raw material) caused by therobust economy of China, the management of steel manufacturers by electric furnace is in adifficult situation.
A large number of companies are suspending the operation of electric furnace, and thefurnace operating companies are diminished to only 5 companies in these days.
The Target Company could not be determined at the first audit. We visited Philippines Iron
& steel Manufacturers Association and 3 iron & steel manufacturers, and made a request to
make coordination for the second audit.

By the second audit, the slabs and billets price run up. 2 companies, almost at full-operation,
accepted our audit, and audit was carried out at an electric furnace factory of billet
production and factory of rolling only. A large number of engineers, more over the attendants
from the Ministry of Energy, participated the workshop to acquire Japan’s energy
conservation experience and knowledge.
However, we could have fruitful results for both parties thanks to the cooperation ofadministration officials and ACE persons. We believe that the proposed measures for energy
conservation are significant points to improve the current situation concerned.
We would very much like to see these proposals put into practice at the earliest opportunity,
and the reference materials and actual experiences are utilized effectively, disseminated in
ASEAN countries and become the base of future activities, thereby enabling us to contributeto the conservation of energy and presentation of the environment in the ASEAN countries.
Finally, we would like to thank all those at ACE along with the organizations and factories
involved in each country for their cooperation.

Contents

Preface
SummaryI.

Garment Industry ............................................................................................................ I-1

1. Project Summary............................................................................................................. I-1
1.1 Subjects of Study and Organizations Involved ....................................................... I-1
1.2 Political and Economic Conditions in Cambodia ................................................... I-2
1.3 Energy Status in Cambodia..................................................................................... I-5
1.4 Overview of Garment Industry in Cambodia.......................................................... I-7
2. Overview of Garment Factories Audited ........................................................................ I-9
2.1 Overview of Garment Factory 1 – M&V International Manufacturing Ltd. .......... I-9
2.2 Facilities and Capacities of M&V – MV3 Factory ................................................I-11
2.3 Overview of Garment Factory 2 – June Textiles Co., Ltd. ................................... I-13
2.4 Facilities and Capacities of June Textiles Co., Ltd. .............................................. I-14
3. Audit Plan ..................................................................................................................... I-16
3.1 Audit Proceeding .................................................................................................. I-16
3.2 Selection of Equipment to be Audited and Checking Response to
Questionnaire ........................................................................................................ I-17
3.3 Audit Schedule...................................................................................................... I-17
4. Equipment Audited ....................................................................................................... I-19
4.1 Audit Survey of M&V International Manufacturing Ltd...................................... I-19
4.2 Audit Survey of June Textiles Co., Ltd................................................................. I-20
5. Energy Conservation Survey and Measurement Results .............................................. I-23
5.1 Survey and Measurement Results of M&V International Manufacturing Ltd. .... I-23
5.2 Survey and Measurement Results of June Textiles Co., Ltd. ............................... I-25
6. Recommendation for Energy Conservation and Expected Effects ............................... I-27
6.1 Recommendation and Expected Effects for M&V International
Manufacturing Ltd. ............................................................................................... I-27
6.2 Recommendation and Expected Effects for June Textiles Co., Ltd...................... I-30
6.3 Summary of Energy Conservation Effects............................................................ I-36
7. Guideline for Promotion of Energy Conservation ........................................................ I-37
7.1 Overview of Processes in the Garment Industry................................................... I-37i7.2 Grasping the Actual Status of Energy Consumption ............................................ I-37
7.3 Extraction of Problems with Energy Conservation Check List ............................ I-38
7.4 Energy Conservation Approaches......................................................................... I-40
List of Attachments
Attachment I-1: COUNTRY REPORT ON ECONOMIC AND ENERGYSITUATION IN CAMBODIA
Attachment I-2: Department of Garment Industry energy presentation slide list
Attachment I-3: Department of Garment Industry energy presentation slide[The Energy Conservation Technology Realized in Japanese Garment
Industry]
Attachment I-4: Request for selection of factory to be surveyed to ACE
Attachment I-5: Questionnaire to M&V International Manufacturing Ltd. andResponse
Attachment I-6: Questionnaire to June Textiles Co., Ltd. and Response
Attachment I-7: COUNTRY REPORT ON ECONOMIC AND ENERGYSITUATION IN CAMBODIA by ACE

II.

Iron and Steel Industry ................................................................................................. II-1

1. Project Summary............................................................................................................ II-1
1.1 Subjects of Study and Organizations Involved ...................................................... II-1
1.2 Political and Economic Conditions of Philippines ................................................ II-3
1.3 Energy Status in Philippines .................................................................................. II-7
1.4 Iron and Steel Industry in Philippines.................................................................. II-12
2. Overview of Factories with Electrical Arc Furnace and Rolling Mill Audited ........... II-16
2.1 Overview of Company A (Factory with EAF) .................................................... II-16
2.2 Equipment and Capacity of Company A ............................................................. II-17
2.3 Overview of Company B (Factory with Rolling Mill) ........................................ II-20
2.4 Equipment and Capacity of Company B ............................................................. II-20
3. Audit Plan .................................................................................................................... II-23
3.1 Audit Proceeding ................................................................................................. II-23
3.2 Selection of Equipment to be Audited and Checking the Response to
the Questionnaire ................................................................................................. II-24
3.3 Audit Schedule..................................................................................................... II-24
4. Equipment Audited ...................................................................................................... II-26
4.1 Audit and Survey in Company A......................................................................... II-26

ii

4.2 Audit and Survey in Company B ......................................................................... II-30
5. Results of Survey and Measurement on Energy Conservation .................................... II-33
5.1 Results of Survey and Measurement in Company A ........................................... II-33
5.2 Results of Survey and Measurement in Company B ........................................... II-35
6. Recommendation for Energy Conservation and Expected Effects .............................. II-37
6.1 Recommendation and Expected Effects in Company A ...................................... II-37
6.2 Recommendation and Expected Effects in Company B ...................................... II-46
6.3 Summary of Energy Savings ............................................................................... II-53
7. Guideline for Promotion of Energy Conservation and Audit Manual ......................... II-54
7.1 Manufacturing Process Overview........................................................................ II-54
7.2 Grasping the Actual Status of Energy Consumption ........................................... II-73
7.3 Extraction of Problems by Energy Conservation Check List .............................. II-74
7.4 Energy Conservation Approaches........................................................................ II-76
List of Attachments
Attachment I-1: Philippines (COUNTRY REPORT ON ECONOMIC AND ENERGYSITUATION)
Attachment I-2: Department of Iron and Steel Industry energy presentation slide list
Attachment I-3: Department of Iron and Steel Industry energy presentation slide[The Energy Conservation Technology Realized in Japanese Steel
Industry]
Attachment I-4: Request for selection of factory to be surveyed to ACE
Attachment I-5: Questionnaire to Steel Industry(Response not entered because of the confidentiality protection
agreement)
Attachment I-6: Data and Information on Philippines prepared by ACE

iii

I.

Garment Industry

Participants for the workshop, audit and survey of energy conservation in majorindustries of ASEAN countries(Staffs from MIME, ACE and ECCJ)At the entrance of MIME, Phnom Penh, Cambodia, (Dec. 9, 2002)

I.

Garment Industry

1.

Project Summary
Aiming at contributing to energy conservation, environmental protection, and persistenteconomic development in ASEAN countries showing remarkable economic growths,
this project was established as a part of the Infrastructure Improvement for
Rationalization of International Energy Use.
With ACE (ASEAN Center for Energy) as a core organization, this project attempts topromote energy conservation relating to major industries under cooperation of ASEAN
countries. As the country and industry to be surveyed in this fiscal year, Cambodia andits garment industry were selected. Thereafter, an audit plan was created based on
discussions with persons in charge in this country. In four days of December 9 through13, 2002 and February 17 through 21, 2003, audits attended by persons in charge fromMIME (the Ministry of Industry, Mines and Energy) were implemented at the sites of
two companies in the garment industry.
Reported below is the survey result including the political and economic status of thiscountry.

1.1

Subjects of Study and Organizations Involved(1)Country and companies surveyedCountry : The Kingdom of Cambodia
Companies : M&V International Manufacturing Ltd. and June Textiles Co. Ltd.

(2)

Organization
1) Cambodia
Ministry of Industry, Mines and Energy: MIME
Mr. Khlaut Randy
Under Secretary of State MIME
Dr. Sat Samy
Director of Energy Technique Dept.
Mr. Chan Socheat
Manager of Electric of Energy Technique
Mr. Lieng Vuthy
Deputy Head of Energy Efficiency andStandard Office
Mr. Toch Sovanna
Deputy Head of Renewable Energy Office
Mr. Khlainia Amradararith
Technical Energy Dept
Mr. Ouk Theary
Technical Energy Dept
Mr. Nong Chhavyvann
Technical Energy Dept
Mr. Yem Chandararith
Dept. of Energy Development
Mr. Ly Chamroeurn
Technical Energy Dept
Mr. Heang Bora
Staff of Energy Efficiency and Standard
OfficeI-1

Mr. Choun Thea

2)

3)

4)
5)

1.2

Staff of Energy Efficiency and Standard
OfficeMr. Hing Kunthap
Consultant, Energy & Environment
Advisor of Dr. SAT SAMY
Mr. Soeung Vandoeun
Technical Energy Dept
Mr. So Veasna
Technical Energy Dept
Mr. Chhay Khan
Technical Energy Dept
Mr. Chhim Thearith
Electrical Engineer, Technical Energy Dept.
Mr. Thach Sovannreasey
Dept. of Energy Development
Mr. Chum Sopha
Technical Energy Dept
Mr. Anderson WILLIAMSON (From Australia: Sustainable Energy
Development Authority (SEDA))
M&V International Manufacturing Ltd.
Mr. WENY Wei
Administration Dept. Officer for all M&V
Mr. SU Chin Pha
Manager of Energy Sect.
June Textiles Co., Ltd.
Mr. William ONG
General Manager
Mr. YI Sokhom
Shipping Manager
ACE (ASEAN Center for Energy):
Mr. Christopher ZAMORA
The Energy Conservation Center, Japan
Hiroshi Shibuya
Department Manager of the International
Engineering Department
Ichiro Matsuura
Technical expert of the International
Engineering Department
Hideyuki Tanaka
Technical expert of the International
Engineering Department

Political and Economic Conditions in Cambodia(1)

Political and economic conditions in Cambodia
1) National indicators
Country name : The Kingdom of Cambodia
Area: 181,000 km2 (less than about the half area of Japan)
Population: 12.2 million (as of 2000)
Capital: Phnom Penh
Language: Cambodian (Official language)
Religions: Buddhism (Hinayana)

I-22) Basic economic indicators
Gross domestic production (GDP): Approx. 3.09 billion US$ (source:
Ministry of Economy and Finance; 2000)
Trade values (source: data for 2000 from National Bank)(1) Exports: 1,050 million US$ (of which 110 million
US$ represents re-export)(2) Imports: 1,430 million US$(3) Trade balance : 280 million US$
Major items in trade(1) Exports : Garment products, timber, rubber, fish and shell,
agricultural products (soybean, corn)(2) Imports : Petroleum products, tobacco, gold, construction materials,
automobiles, electrical products
Currency and exchange rate: Riels (1 US$ = 3,880 riels as of 2000)
3) Political system
Form of government : Constitutional monarchy
Head of state: His Majesty King Norodom Sihanouk (Enthroned
on Sep. 24, 1993)
National assembly : Bicameral system (National Assembly and Upper
House)
Major ministries: Ministry of Foreign Affairs and International
Cooperation, Ministry of National Defense,
Ministry of Interior and National Security, Ministryof Economy and Finance, Ministry of Information,
Ministry of Public Works and Transport, Ministryof Justice4) Political situation
In November 1998 the People’s Party and the FU Party formed a coalition
government, and at the end of November a new administration was set up
with former Second Prime Minister Hun Sen, deputy leader of the People’s
Party, as the Prime Minister.
The coalition was heavily dominated by the People’s Part: members of theparty were awarded the most influential cabinet posts, including those of
Prime Minister, Chief Cabinet secretary, and all the main ministerial posts
relating to economic matters. As in the previous administration, the posts ofMinister of Defense and Minister of Interior are co-lateral ministers system(2 ministers/ministry).
Meanwhile, each of the two governing parties provided chief secretaries
under the ministers at each government department.

I-3

The new administration from the start announced that its priority would be
the rehabilitation of the economy, thus naming itself “Economy
Administration”. Recognizing that the healthy economic development of thecountry required an efficient administrative and fiscal system, thegovernment put forward and energetically promoted five main reform
policies, covering financial reform, the management of forest resources, thereduction of the number of military personnel, administrative reform, andsocial reform.
Subsequently, the government succeeded in raising its revenue through theintroduction of a value added tax of 10%. In addition, a decrease wasobserved in the incidence of illegal logging. Thus, some of the initial targetsof the reform policy are being gradually realized. At the 6th meeting ofdonor countries and organizations, held in Phnom Penh in June 2002, all thedonor nation governments and donor organizations recorded their favorable
impressions of the reforms undertaken by the Cambodian government andprompted further efforts.
5) Economic trend
As a result of the political change in July 1997 as well as the economiccrisis that affected most of Asia, Cambodia suffered a severe deteriorationin its economy in 1998 (GDP growth slowed from 3.5% in 1996 to 1.5% in1998) owing to declines in aid and investment from overseas, plus a fall off
in revenue from tourism. The newly established administration, in line with
its professed top priority on economic recovery, set to work seriously to
implement reform in the field of finance, the management of forest
resources, the reduction of the number of military personnel, administrativereform, and social reform. At the same time, the Cambodian government
held regular monitoring sessions with representatives of donor countries tokeep them informed on the progress being made in the various reform plans.
In 1999, political stability returned to the country, and the economy also
followed a favorable trend, with GDP growth reaching 6.7%. The trend
remained strong with Cambodia recording GDP growth of 7.7% in 2000 and
6.3% in 2001 in spite of heavy damage from flooding.
6) Economic conditions
Table I-1-1 shows the major economic indicators in Cambodia.

I-4

Table I-1-1

Basic Economic Data

1997

1998

1999

2000

Population (million)

10.7

11.4

11.7

12.2

Real economic growth rate (%)

4.3

2.1

6.9

7.7

6.3

GDP (million US$)

3269

3011

3300

3351

3404

GDP per capita (US$)

281

247

264

261

259

National budget (million US$)

424.6

412.9

480.3

546.7

GDP share bysector (%)

Agriculture, forestry
and fisheries

46

45.8

42.8

38.2

36.9

Industries

15.2

16.1

17.1

20.8

21.9

Service industry

34.6

34

34.5

35.5

35.3

Consumer price inflation rate (%)

5.5

13.8

3.7

-4.6

-2.8

3845

3922

Exchange rate (Riel/US$)

2001

2946

3744

3808

862 (327)

900 (296)884 (172)

Imports (million US$)

1092

1073

1159

1524

1600

Trade balance (million US$)

-230

-173

-275

-263

-226

Exports (re-export) (million US$)(2)1261 (170) 1375 (176)

Major export/import items to/from Japan
1) Trade with Japan(a) Exports to Japan (for 2000; unit: 1 million Japanese yen)
Imports from Japan : 4,146
Exports to Japan: 5,573(b) Major items in trade
Imports from Japan : Motorcycles, machines, etc.
Exports to Japan: Footwear, fish (frozen), etc.
2) Direct investment from Japan
Lumber factories, galvanized steel sheet factories, automobile service
factories, etc.

1.3

Energy Status in Cambodia
The Ministry of Industry, Mines and Energy (MIME) is responsible for energy policies
in Cambodia. The results of its activities seem to appear gradually but the steps are
slow because of fund shortage, etc.
Most of energy resources in Cambodia is still firewood. Although deposits ofpetroleum, natural gas, and coal have been expected, they are not confirmed yet. Thiscountry has a lot of water but the expected waterpower is approximately 10,000 MW
because flat fields cover the most areas of the country and mountains are limited very
much.

I-5

For the energy demand, petroleum products occupy nearly 95%, which is all imported.
They are mainly used for traffic organizations and power generation plants (public andprivate power generation plants). Gasoline, Kerosene, diesel oil, and fuel oil are usedapproximately evenly.
The main constituent of industrial energy in Cambodia is of course electricity.
Presently, the rate of electrification is still lower than 20%. Electrification is limited toPhnom Penh, major local cities, and surrounding areas. In most areas, people areforced to live on without electricity. Therefore, the top priority for Cambodia is topropagate electrification throughout the country.
According to the MIME’s plan and policy, EDC (Electricite du Cambodge, Electricity
of Combodia) under MIME is mainly promoting the nationwide electrification project.
Supported by new development and imports from adjacent countries, a project ofincreasing electricity supply from approximately 150 MW at present to 750 MW in2016 is being carried forward. Figure I-1-1 shows the master plan of power
generation/distribution by 2012 presented by MIME, Cambodia.

Figure I-1-1

Master Plan of Power Generation/Distribution in Cambodia

I-6

1.4

Overview of Garment Industry in Cambodia
To allow recognition of the Cambodia’s current status, information from documents
disclosed is given below.
1) Foreign relations of Cambodia
Regarding the relations with adjacent countries, the issue of the border thatshould be determined remains. Skirmishes often occur near the border. These
incidents were caused by the fact that the border is not clear. Diplomaticnegotiations for settlement are being continued.
For China, Cambodia has declared that it would support the policy of “OneChina” and the relationship between these two countries is closely tight.
However, it can be mentioned that the influence of the United States toCambodia is very large presently.
First, the United States exists as a country of supplying aid. Although Japansupplies the largest and prominent aid to Cambodia, the amount of
implementation by the United States was 230 million dollars in 1999 alone, as
the runner-up. For the cumulative amount in 1992 to 1999, the United States was
also the runner-up slightly above France. Since the “political change in July1997”, however, the United States has adopted a policy that aid for Cambodia islimited to humane aid only and the United States does not use the central
government as a counterpart.
2) Economy in Cambodia and garment industry
In recent years, almost no price increase has been seen. The rate of Riel to US
dollar was 3800 to 3900 riel per dollar in 2000 and 3900 to 3950 riel in 2002. In
Cambodia, US dollars as well as the domestic currency are generally in use.
Direct investments from foreign countries were decreasing around 2000.
However, investments for tourism (including hotel construction) have drasticallyincreased. Investments to the garment sector do not show a significant drop andthe number of investments increases. Among investments by manufacturingsector in 2000, the garment sector occupied approximately 60% and the energy
sector occupied approximately 16%. Presently, it is said the number of garment
companies is more than 200.
The influence of the United States to the garment industry is considerably great.
In 1999, exports of garment products occupied more than 80% of domestic
product exports from Cambodia and most of them were bound for the UnitedStates. Although the garment industry in Cambodia is being led and developed
by investments from Chinese capitals in China and Hong Kong, it is consideredthat import volume assignment authorized by the United States for Cambodia is
working fairly strongly as the motive for such investments. Further, the generalpreferential trade system is applied to the garment products exported except forI-7

very few items. On the other hand, the United States seems to be not so positivefor increase in volume assignment to Cambodia. Rather, the United States has
been reluctant to assigning an incremental bonus for the reason that the labor
conditions in Cambodia are poor. In other words, the trade policy of the UnitedStates for Cambodia dominates development of the only one and largest exportindustry in Cambodia and therefore it is related to deepening and growth ofindustrialization for the entire national economy of Cambodia.

I-8

2.

Overview of Garment Factories Audited
To implement energy conservation audit and survey for the garment industry in
Cambodia, ECCJ asked ACE to select two garment factories in Phnom Penh and its
surrounding area. The responsible department in the Cambodian government selected
the two garment factories listed above according to the request from ACE.
The overview of two selected garment factories is as follows:

2.1

Overview of Garment Factory 1 – M&V International Manufacturing Ltd.
Company nameFactory nameLocation:::

Products:
Production volume :Employees:
Working system :Organization:

M&V International Manufacturing Ltd.
M&V No. 3 factory (MV3 factory)
No. 1623 Chac Angre Kraum, Phnom Penh, Cambodia
TEL: (855) 23-425 041
Knit wear (sweaters)
5,102,531 pieces (2001)
Approximately 3,000 (staff: 80 to 90)
8-hour work (7:00 to 11:00 and 12:30 to 16:30), 1-shift system
Figure I-2-1 shows the organization of the MV3 factory.
The headquarters is located in Macao (China). One factory is
located in Macao, and four factories in Cambodia.

General Manager

Washing& Dyeing

Finishing& packing

Linking

Energy Sect.
(Mr. Su Chin Pha)

Generator

Other
Departments.

Production Manager

Officer for all MV3(Mr. Weny Wei)

Shop A, B, C, A&C

BoilerFigure I-2-1

Maintenance

Organization of MV3 FactoryI-9

Operation overview :This factory manufactures sweaters only under control of theheadquarters located in Macao. Our impression was that theheadquarters in Macao totally grasped production
organization/management and the role of MV3 was toachieve the production duty according to instructions fromthe headquarters.
This company was established in 1994 and operation in MV3
was started in 1997. The annual production volume is morethan 5 million pieces, all of which are exported to the UnitedStates, EU, etc.
Since sweaters are produced before the season, theproduction peak time is July and August and the time withthe smallest production is February every year. This pattern isrepeated. Upon the audit and survey in February, the factory
was almost deserted, the number of employees was smaller,
and the production volume was approximately 1/3 of that in
the peak time.
Energy sources are electricity and petroleum. The electricity
mainly relies on private power generation by a diesel power
generation but electricity for nighttime lighting, etc. ispurchased from EDC.
For boilers, river water and heavy oil are in use.

I-10

2.2

Facilities and Capacities of M&V – MV3 Factory(1)

Facilities
Boilers : No. 1 boiler --- horizontal fire-tube boiler
4,200 kg/h
No. 2 boiler --- vertical through flow boiler
1,560 kg/h
No. 3 boiler --- vertical through flow boiler
783 kg/h
No. 4 boiler --- horizontal fire-tube boiler
6,000 kg/h
Electricity receiving equipment : 380 V (without transformer)
As the equipment in the garment factory, the dyeing unit, washing machine,
drying machine, sewing machine, knitting machine, flat-iron, lighting, airconditioner, etc. are available.

(2)

Factory layout
Figure I-2-2 shows the layout of the M&V – MV3 factory.

(3)

Organization for operation
1-shift operation system with 3,000 to 4,000 workers (approximately 1,000
temporary workers assumed)
The working time is 7:00 to 11:00 and 12:30 to 16:30 (8 hours).
An organization of 16 members is responsible for energy equipment.

(4)

Energy consumption
Table I-2-1 lists energy consumption by energy source type in 2002. The data
was obtained from M&V.
Table I-2-1

Energy Consumption (2002)(1US$ = 3,950 Riels)
Consumption
Energy source type Consumption
Unit priceamount (US$)
Heavy oil (kL/y)
927.6
US$0.25/L
231,900
Diesel oil (kL/y)
480
US$0.35/L
168,000
Electricity (MWh/y)214
600 Riel/kWh = US$0.152/kWh
32,545
Total
432,455

I-11

Generators&
Boilers

Steam

3F: Knitting & Linking
2F: Knitting & Check
1F: Warehouse
Water

Dyeing &Washing

Repair(Shop A)
Packing&
Shipping(Shop B)QA &Packing

Ironing,
Wash
&
Dry

(Shop C)
Ironing& Check

Warehouse

OfficeGate

Figure I-2-2

M&V International Manufacturing Ltd. – MV3 Factory Layout

I-12

2.3

Overview of Garment Factory 2 – June Textiles Co., Ltd.
Company name

: GIMMILL Industrial (Pte) Ltd. (RAMATEX/GIMMILL
Group)
June Textiles Co., Ltd. (Cambodia)
Factory name: June Textiles Co., Ltd. (Cambodia)
Location: Russian Blvd., Borei 100 Khnong, Sangkat Tek Thla, Khan
Russei Keo, Phnom Penh
Tel: 023-883-338
Products: Casual wear (main product: T-shirts)
Production volume : 1.17 million dozens (2001)
Employees: 4,393 (as of November 30, 2002) (30 skilled workers included)
Working system: 7.5-hour system with 2 shifts(6:15 to 14:15 (7.5 hours), 14:15 to 22:15 (7.5 hours))
Organization: Figure I-2-3 shows the organization of June Textiles Co., Ltd.
(Cambodia). The headquarters is located in Singapore.

Managing Director
General Manager(Mr. William Ong)

Shipping Manager(Mr. Yi Sockom)

Production
Planning

Main StoreNew Factory
Sewing Dept.

Others:(Administration
IT
Security
ClinicBook keeping & Secretarial
assistance)

Cutting Dept.

Old Factory
Sewing Dept.

Figure I-2-3

Mechanic &Maintenance
Dept.
(Energy Group)

SampleDept.

Followup Dept.

Factory Organization of June Textiles Co., Ltd.

I-13

QC Dept.

Operation overview : This factory manufactures casual products including T-shirts
mainly under control of the headquarters located in Singapore.
This company was established in 1992 and operation wasstarted in 1994. In 1997, a new building was constructedbeside the existing building. Presently, the annual production
volume is 1.17 million dozens (in 2001). All of the products
are exported to the United States and EU.
Energy sources are electricity and petroleum products.
Electricity from the diesel power generator in IPP(Independent Power Producer) installed in its own factory has
been purchased but electricity has also been purchased since2011 from EDC (Electricite du Cambodge). In the time zoneof 14:15 to 22:15, electricity from IPP is used. In other timezones, electricity from EDC is used.
For boilers, service water and diesel oil are in use.
2.4

Facilities and Capacities of June Textiles Co., Ltd.
(1)

Facilities
Boilers : No. 1 boiler --- vertical through flow boiler
783 kg/h
No. 2 boiler --- vertical through flow boiler
500 kg/h
No. 3 boiler --- vertical through flow boiler
300 kg/h
No. 4 boiler --- vertical through flow boiler (second-hand equipment
being installed)
Electricity receiving equipment : 22 kV (a transformer (22 kV/400 to 230 V,
1500 kVA) provided)
Air compressors:
No. 1 air compressor --- 12.95m3/min×85.9 kW + Reservoir tank 1 m3
No. 2 air compressor --- 37 kW + Reservoir tank 1 m3 (also used forNo. 3 air compressor)
No. 3 air compressor --- 37 kW
As equipment in the garment factory, the cutting machine, sewing machine, flatiron, air conditioners, etc. are available.

(2)

Factory layout
Figure I-2-4 shows the factory layout of June Textiles Co., Ltd.

(3)

Organization for operation
4,393 workers with 2 shifts
The operating time is 7.5 hours in 6:15 to 14:15 and 7.5 hours in 14:15 to 22:15(totally 15 hours).

I-14

(4)

Energy consumption
Table I-2-2 lists energy consumption by energy source type in 2002. The data
was obtained from June Textiles.

Table I-2-2

Energy Consumption (December 2001 to November 2002)(1US$ = 3,950 Riels)
Consumption
Energy source type Consumption
Unit priceamountElectricity from IPP
1,676
480 Riel/kWh = US$0.122/kWh
205,168(MWh/y)Electricity from EDC
2,170
480 Riel/kWh = US$0.122/kWh265,165(MWh/y)Diesel oil (kL/y)

198

US$0.35/L

67,747538,080

Total

Restaurant

2F contact bridge
New factory (4-story building)
4F: Cutting and warehouse
3F: Sewing and air compressor
2F: Flat-iron and warehouse
1F: Warehouse and shipping

Boilers

Old factory (3-story
building)
3F: Sewing
2F: Sewing
1F: Warehouse andmaintenanceshop

Wellhole
IPP power
generator

4F: Office

Maintenance
shop

Gate

Figure I-2-4

Factory Organization of June Textiles Co., Ltd.

I-15

3.

Audit Plan
The purpose of audit and survey by visiting Cambodia was to grasp the production
processes, energy consumption, and actual status of utilizing exhaust heat in two
selected garment factories, propose an improvement plan for promotion of energy
conservation, and attempt to improve and propagate energy conservation consciousness
for enlightenment through convening a workshop on the site to introduce the energy
conservation technologies and activities in Japan. Further, it was intended to support thepersons responsible for promotion of energy conservation on the ASEAN side so thatthey would be able to establish the standard energy conservation audit method, by
taking into account the actual status of similar industries, energy conservation audit
technical level, etc. in ASEAN countries after energy conservation audit was
implemented.
Upon implementation, survey was carried out two times.
In the first field survey, the first workshop was convened. Efforts were made so thatpoints of energy audit in the garment industry and energy conservation technologies
realized in the Japanese garment industry would be introduced and understood.
For audit, it had been planned that the local audit group arranged by ACE would
perform measurement and implement audit under supervision of the delegated experts
with regard to check with the questionnaire sent in advance and survey in the actual
factories. However, factory selection was delayed as described above, we were obliged
to conduct check with the questionnaire and audit survey concurrently.
In the second field survey, based on the energy conservation improvement plan revealed
as a result of the first audit, explanation was given to the person in charge in the
Ministry of Industry, Mines and Energy (MIME) of the Cambodian government and the
manager from these two companies. Further, field audit survey was performed again toconfirm the contents of the improvement plan.

3.1

Audit Proceeding
For 2 companies that accepted energy conservation audit survey, one-day visit wasmade to each company for both the first and second field surveys.
In the first audit survey, MIME and ECCJ explained how this audit survey wasplanned and its significance to the plant managers of both companies. Since theresponse to the questionnaire had not been given, all members took a plant tour first.
Then, the members were divided into two teams. One team was to check the responseto the questionnaire and the other was to implement audit by visiting the field again.
The measuring instruments used by the auditing team were the radiation thermometer,
illuminometer, clamp type ammeter, and clamp type watt-meter.
In addition, the photo shoots were forbidden strictly by two companies, therefore there
are no pictures showing the factory situations.

I-16

3.2

Selection of Equipment to be Audited and Checking Response to
Questionnaire
Energy used in the garment factories is limited to:Electricity (private power generation and purchased electricity):
Sewing machine, washing machine, drying machine, dyeing machine,
pump, fan/air conditioner operation, lighting, etc.
Steam : Flat-iron, water temperature control of the washing machine and dyeing
machine, etc.
Therefore, if a power generator was provided, it was determined that audit would
focus on the power generator’s operation and exhaust heat recovery status; boiler
operation, piping equipment, and steam utilization status; and the air compressor andlighting equipment that would use more energy.
Although two companies already received the questionnaire from ECCJ when audit
was started, nothing was prepared as the response. Therefore, we decided to get eachanswer by checking one by one.
The attached table shows the questionnaire and responses.
Both companies had not performed field measurement and daily data collection but
they had simply checked the monthly payment bills.
Actions against failures could not be taken and countermeasures would be late unlessmeters are attached to the equipment and management with these meters is enabled.
Further, someone may notice a failure several months after it occurred.

3.3

Audit Schedule
Two factories where we conducted audit survey were located in Phnom Penh. We wereable to move around very easily because of MIME’s help.
We visited two factories twice each. For individual reasons of each factory, one-day
audit survey was performed for both first and second field surveys. In the M&V –MV3 factory, it took time because two interpreters were necessary among English,
Cambodian, and Chinese.
The audit schedule is shown below.
First survey: Implemented in December 2002
December 9 (Mon.) Convention of a workshop on energy efficiency
and energy conservation (participated by MME,
ACE, and ECCJ)
December 10 (Tue.) Preparation and discussion on audit survey at
MIME

I-17

December 11 (Wed.) M&V MV3 factory visit
Introduction of participants, explanation of the
purpose for audit survey, plant tour, audit
implementation, and acquisition of the response to
the questionnaire
December 12 (Thu.) June Textiles Co., Ltd. Factory visit
Introduction of participants, explanation of the
purpose for audit survey, plant tour, audit
implementation, and acquisition of the response to
the questionnaire
December 13 (Fri)
Summary of audit survey and implementation of
the wrap-up meeting at MIME
Second survey: Implemented in February 2003
February 17 (Mon.) Explanation and discussion on the result of thefirst audit survey (energy conservation
improvement plan) at MIME
February 18 (Tue.) June Textiles Co., Ltd. Factory visit
Explanation of the result of the first audit survey(energy conservation improvement plan) and reimplementation of audit and informationacquisition
February 19 (Wed.) M&V MV3 factory visit
Explanation of the result of the first audit survey(energy conservation improvement plan) and reimplementation of audit and informationacquisition
February 20 (Thu.) Summary of audit survey and correction of the
improvement plan at MIME and reporting to theenergy department manager of MIME
February 21 (Fri.)
Summary of audit survey at MIME and reporting
the energy conservation improvement plant to thevice minister of MIME

I-18

4.

Equipment Audited

4.1

Audit Survey of M&V International Manufacturing Ltd.
(1)

Diesel power generator equipment specifications and operating method
1) Equipment capacities
No. 1 power generator : 500 kVA, 400 kW
No. 2 power generator : 720 kVA, 576 kW
No. 3 power generator : 720 kVA, 576 kW–
JUBILEE GENERATING
SET, UKJUBILEE GENERATING
SET, UK

2) Operating method
From AM7:30 to 11:30 and PM1:00 to 5:00, the No. 2 and 3 power
generators are run to support the factory load.
In the nighttime, electricity is purchased from EDC to support the factoryload.
On the day of audit. No. 1 generated 250 kW and No. 2 generated 230 kW.
Total electricity output (factory load) was approximately 480 kW.
(2)Electricity receiving/transforming equipment
1) Equipment capacity
The 3-phase 400 V power is purchased from EDC.
2) Operating method
Mainly in the nighttime, electricity is purchased from EDC.
The time zone and the frame of purchased electricity are determinedaccording to the discussion with EDC. Electric energy purchased isapproximately 13,000 kWh/m.

(3)

Boiler equipment specifications and operating method
1) Equipment capacities
Boiler A: Evaporation volume 4,200 kg/h × 10 kg/cm2: horizontal
fire tube boiler
LAI CHEN WORKS CO., LTD., TAIWAN

I-19

Boiler B

Boiler C

Boiler D: Evaporation volume 3,450 LBS/h × 10 kg/cm2: verticalthrough flow boiler
FULTON BOILER WORKS, INC., NY: Evaporation volume 1,725 LBS/h × 10 kg/cm2: verticalthrough flow boiler
FULTON BOILER WORKS, INC., NY: Evaporation volume 6,000 kg/h × 10 kg/cm2: horizontal
fire tube boiler
FULTON BOILER WORKS, INC., NY

2) Operating method
Boiler D mainly supplies steam of 7 kg/cm2 to the dyeing, dryer, and ironing
processes.
(4)

Lighting equipment
1) Equipment capacities
Shop A: Uses many local lights and ceiling (general)
lighting with 36 lamps.
Shop B: Uses many local lights and ceiling (general)
lighting with 18 lamps. However, ceiling (general)
lighting is turned off.
Shop C: Uses many local lights and ceiling (general)
lighting with 266 lamps.
Washing and dyeing : Ceiling (general) lighting
Shop A & B: Uses many local lights and ceiling (general)
lighting.
2) Operating method
Ceiling (general) lighting and local lights are turned off for the equipmentthat has been shut down.
For the equipment in service, many local lights and ceiling (general)
lighting are used.

4.2

Audit Survey of June Textiles Co., Ltd.
(1)

Diesel power generator equipment specifications and operating method
1) Equipment capacities
No. 1 power generator : 350 kVA/280 kW
PERKINGS ENGINES LTD, UK
No. 2 power generator : 500 kVA/400 kW
PERKINGS ENGINES LTD, UK

I-20

2) Operating method
The power generators are operated by IPP, from which this company
purchases electricity.
From PM 2:00 to 10:00, electricity is purchased from these two power
generators for the factory load of approximately 700 kW.
(2)Electricity receiving/transforming equipment specifications and operating
method1) Equipment capacity
Electricity of 22 kV is received from EDC. The capacity of the maintransformer is 22 kV/400-230 V, 1500 kVA.
2) Operating method
Presently, electricity is purchased from EDC in a time zone of AM6:00 toPM2:00. The time zone and the frame of electricity purchased aredetermined according to the discussion with EDC.

(3)

Boiler equipment specifications and operating method
1) Equipment capacities
No. 1 boiler : Evaporation volume 1,725 LBS/h × 10 kg/cm2
FULTON BOILER WORKS INC, NY
No. 2 boiler : Evaporation volume 500 kg/h × 10 kg/cm2
MIURA BOILER CO. LTD, JAPANNo. 3 boiler : Evaporation volume 300 kg/h × 10 kg/cm2
No. 4 boiler : Under installation
2) Operating method
Presently the No. 1 boiler mainly supplies steam to the ironing process at aboiler outlet steam pressure of approximately 3.3 kg/cm2.

(4)

Air compressor equipment specifications and operating method
1) Equipment capacities
No. 1 air compressor: 12.95 m3/min × 85.9 kW (INPUT)
BKOOM WADE, UK
No. 2 air compressor: 37 kW OSP-37S5AR
HITACHI, JAPANNo. 3 air compressor: 37 kW OSP-37S5AR
HITACHI, JAPANNo. 1 air compressor reservoir tank : 1 m3
No. 2 & 3 air compressor reservoir tank: 0.3 m3

I-21

2) Operating method
Since compressed air is required for sewing machine in new and old
factories, air compressors are started at AM6:00 every day and stopped at
PM10:00 when the work ends. Three air compressors are connected via
piping. Presently, the No. 1 air compressor supplies compressed air to thefactories.
(5)

Lighting equipment specifications and operating method
1) New factory
The product warehouse is located on the first floor, the ironing, inspection,and packing workshop on the second floor, the sewing workshop on thethird floor, and the material and cutting room on the fourth floor. Generally,
the positions of lighting apparatuses are high.
2) Old factory
The knit product warehouse is located on the first floor, and the sewing
workshops on the second and third floors. Generally, the positions oflighting apparatuses are high.

I-22

5.

Energy Conservation Survey and Measurement Results

5.1

Survey and Measurement Results of M&V International Manufacturing Ltd.
(1)

Diesel power generators
Although the No. 2 and 3 power generators are in service, exhaust gas from thediesel engine is not efficiently used.
Heat of exhaust gas from the No. 2 and 3 power generators should be recovered
to generate steam of 3 kg/cm2.

(2)

Boiler equipment
Some parts of the steam piping and valves in the dryer and ironing processes
were not covered with the heat insulator.
1) Dryer process : 25 A steam valve : 10 positions
25 A steam piping : 3 m/position × 10 positions = 30 m
2) Ironing process : 25 A steam valve : 8 positions
25 A steam piping : 2 m/position × 8 positions = 16 m

(3)

Lighting equipment
In Shop A, Shop C, and Shop A & B, ceiling (general) lighting does notefficiently work. These lights should be turned off for energy conservation.
1) Result of illumination measurement through ceiling lighting ON/OFF in
Shop A (Figure I-5-1)

I-23

Boarding
Room

Checking &Packing
810/750

Pressing
840/805

6m
2m

1m

1m

15 m

25 m
30 m

8m

15 m
Office1m
Checking &Packing735/690

Pressing
850/8306m

50 m

Figure I-5-1{: Point of measuring illumination

Illumination through Ceiling Lighting ON/OFF in Shop A(Example) 840/805

840: Illumination (Lx) provided when both ceilinglighting and local lights are turned on
805: Illumination (Lx) provided when ceilinglighting is turned off

2) Result of illumination measurement through ceiling lighting ON/OFF in
Shop C (Figure I-5-2)
846

880

1120

3m

First
Checking
SectionLight
SectionOverlock Section
Buttoning Section
Labeling Section

19 m

6m

16 m
280

Ironing
Section

11 m

11 m

Measuring
Section1180/1100

SecondChecking
Section131/125

2m

30 m

4m

Packing
Section830/820

5m

3m
50 m

{: Point of measuring illumination
Figure I-5-2

Illumination through Ceiling Lighting ON/OFF in Shop C

I-24

3) Result of illumination measurement through ceiling lighting ON/OFF in
Shop A & B (Figure I-5-3)

630

601/570
Lighting
Section(Inspection)

Sew
Label

6m

430/420

Mending
16 m

8m

17 m

17 m

228

490

Sort Size

Sew Label

648/64050 m

Figure I-5-3
5.2

8m

Mending

6m{: Point of measuring illumination

Illumination through Ceiling Lighting ON/OFF in Shop A & B

Survey and Measurement Results of June Textiles Co., Ltd.
(1)

Boiler equipment
1) Most of drain from the ironing process is emitted to the air.
Heat of the drain should be recovered and used as water supplied to theboiler.
2) The steam piping between the boiler, steam header, and factory is not
insulated (surface temperature: 135°C). Figure I-5-4 shows the boiler piping
schematic diagram.
Heat insulation should be applied to the bare piping for energy conservation.

I-25

30 m

Steam to Factories

No. 1
BoilerNo. 2
BoilerNo. 3
Boiler1725
LBS/h

500 kg/h

300 kg/h
Steam Header

Figure I-5-4(2)

Bare Pipe,
Surface temperature= 135°C

Boiler Piping Schematic Diagram

Air compressor equipment
On the day of audit, the No. 1 air compressor was running and repeating
loading/unloading.
A 2 m3 reservoir tank should be installed and controlling the number of aircompressors in service should be applied to three air compressors for energy
conservation.

(3)

Lighting equipment
The mounting position of the fluorescent lamp apparatus for the cutting machineon the fourth floor in the new factory is high. By lowering the apparatus position
by approximately 50 cm, illumination on the working surface can be greatly
improved. Finally, the number of lighting apparatuses can be reduced andsignificant energy conservation effects can be expected.
Similarly, the position of the fluorescent lamp apparatus for the sewing machineon the second floor in the old factory should be lowered.

I-26

6.

Recommendation of Energy Conservation and Expected Effects

6.1

Recommendation and Expected Effects for M&V International Manufacturing
Ltd.
(1)

Heat recovery of exhaust gas from diesel engine
1) Exhaust gas heat recovery method
Heat exchangers should be newly installed on the exhaust gas ducts fromthe No. 2 and 3 diesel engines for exhaust gas heat recovery. With energy
resulting from exhaust gas heat recovery, steam of 3 kg/cm2 is generated andused along with existing boilers. Consequently, reduction of fuel used byboilers is attempted.
Figure I-6-1 shows heat recovery method of the exhaust gas from diesel
engines.

Exhaust3 kg/cm2 SteamPower to FactoryNo. 2 Generator

No. 2 Diesel Engine
720 kVA/576 kW

No. 3 Generator

No. 3 Diesel Engine
720 kVA/576 kW

Exhaust
Fuel

Water

Figure I-6-1

FuelHeat Recovery Method of the Exhaust Gas from Diesel Engines

2) Effects expected as a result of exhaust gas heat recovery
Operating : Power generation output : 250 kW × 2 sets (equipment
conditions
capacity = 576 kW/set)
Recovered steam pressure : 3 kg/cm2
Exhaust gas recovery heat : 45 Mcal/h at 250 kW (Data of thevaluesame equivalent size in Japan)
Fuel heat generation: 10,200 kcal/kg
Fuel specific gravity: 0.85 kg/L
Fuel price (heavy oil)
: US$ 0.25/L in 2002
Boiler efficiency: 85%
Steam enthalpy: 664 kcal/kg

I-27

Supplied watertemperature
Running time
Steam recovery
Merit of heat recovery: 60°C: 2,296 h/y: 45000 × 2/(664-60) = 149 kg/h
: (45000 × 2 × 2296 × 0.25)/(10200 × 0.85 × 0.85)=US$7010/y (= ∆28 kL/y /saved
fuel volume)3) Equipment investment amount US$98600 (Japan-based investment amount)a. Exhaust gas boiler
2 sets US$33000 × 2 =66000
b. Pump, piping material 2 sets US$3300 × 2 = 6600
c. Electrical components 1 set
US$ 10000
d. Installation cost
1 set
US$ 16000
Total
(2)

US$

98600

Heat insulation for steam piping in the dryer and ironing processes
1) Parts to which heat insulation is to be applied
a. Parts in the dryer process to which heat insulation has not been applied
25A steam valve : 10 parts
25A steam pipe : 3 m/part × 10 parts = 30 m
b. Parts in the ironing process to which heat insulation has not been applied
25A steam valve : 8 parts
25A steam pipe : 2 m/part × 8 parts = 16 m
Table I-6-1 shows the heat loss by radiation in the non-heat insulation
points.
Table I-6-1

Process(Location)
Dryer

Ironing

Radiation in the Non-heat Insulation Points

Operation Present Situation
Period(None-heat(h/d)
insulation points)
10 h/d25A Steam Valve
10 valves
25A Steam Pipe
30 m
10 h/d25A Steam Valve
８ valves
25A Steam Pipe
16 m
Total

Heat Loss by Radiation
155 kcal/mh × 1 m × 10 × 10h = 15500 kcal/d
155 kcal/mh × 30 m × 10h = 46500 kcal/d
155 kcal/mh × 1 m × 8 × 10h = 12400 kcal/d
155 kcal/mh × 16 m × 10h = 24800 kcal/d
99200 kcal/d

I-28

2) Expected effect
The energy conservation effect is:
Radiation heat value × Heat insulation efficiency × Annual running days× Fuel unit price/(Fuel calorific value × Boiler efficiency)= 99200 kcal/d × 0.8 × 287d × US$0.25/(10200 kcal/kg × 0.85 kg/L × 0.85)= US$772/y (= ∆3.1 kL/y saved fuel volume)3) Equipment investment amount US$2,850 (Japan-based investment amount)a. Heat insulation material
1 set
US$ 1600
b. Heat insulation application cost 1 set
US$ 1250
Total(3)

US$ 2850

Turning off the ceiling (general) lighting in Shops A, C, and A & B
1) Effects expected from turning off the lighting in Shop A
Illumination provided after turning off the ceiling lighting is almost thesame as that provided when the ceiling lighting is turned on. In other words,
the ceiling (general) lighting does not work efficiently. Therefore, thelighting should be OFF during the daytime for energy conservation.
Since the energy conservation effect is the total capacity of the ceilinglighting apparatuses (4.3 kW (40 W × 3 pieces × 36 sets)):
Total capacity of lighting apparatuses × Annual running time ×Operation rate × Electricity charge unit price= 4.3 kW × 287d ×8 h/d × 0.8 × US$0.152/kWh= US$1200/y2) Effects expected from turning off the lighting in Shop C
Since the energy conservation effect is the total capacity of the ceilinglighting apparatuses (9.6 kW (40 W × 3 pieces × 80 sets)):
Total capacity of lighting apparatuses × Annual running time ×Operation rate × Electricity charge unit price= 9.6 kW × 287d × 8 h/d × 0.8 × US$0.152/kWh= US$2680/y
3) Effects expected from turning off the lighting in Shop A & B
Since the energy conservation effect is the total capacity of the ceilinglighting apparatuses (3.6 kW (40 W × 3 pieces × 30 sets)):
Total capacity of lighting apparatuses × Annual running time ×Operation rate x Electricity charge unit price= 3.6 kW × 287d × 8 h/d × 0.8 × US$0.152/kWh= US$1005/y

I-29

4) Equipment investment amount: 0 (not required)
6.2

Recommendation and Expected Effects for June Textiles Co., Ltd.
(1)

Drain recovery from the ironing process
1) Drain recovery method
Figure I-6-2 shows drain recovery method from the ironing process. Drain
should be utilized for boiler feed water and the heating.

Present Situation

Drain Recovery
Boiler feed water
To Water supply
Tank for Boiler

Inlet

Steam Pipe

Outlet

Drain

Drain
Tank

(Atmospheric Discharge)
P

Ironing
Figure I-6-2

Drain Recovery Pump
Drain Recovery Method from the Ironing Process

2) Effects expected from drain recovery
Drain from indirect heating (heat exchange type) in the ironing process isused as water supplied to the boiler.
A drain recovery pump should be installed to recover the saturated water ofapproximately 1.2 kg/cm2 at 120°C into the boiler water supply tank.
a. Operating
conditions:

Boiler capacity: 500 kg/h
Boiler load rate
: 60%
Steam consumption rate in the ironing process :Drain recovery rate
: 50%
Boiler efficiency: 85%
Boiler water supply temperature : 30°C
Fuel unit price (diesel oil)
: US$0.35/L

I-30

20%

b. The fuel unit consumption (i.e. fuel volume required to generate steamof 1 kg) is obtained.
If the water supply temperature is 30°C (at present),(664-30) kcal/kg/10200 × 0.85 = 0.073 kg/kg
If the water supply temperature is 120°C (drain recovery),(664-120) kcal/kg/10200 × 0.85 = 0.0627 kg/kg
c. The energy conservation effect is:Drain recovery volume kg/y × Fuel unit consumption difference × Fuelunit price/Fuel specific gravity= 500 kg/h × 0.6 × 0.8 × 0.5 × 4800 h/y × (0.073-0.0627) kg/kg
× US$0.35/L/0.85kg/L= US$2443/y (= ∆7 kL/y saved fuel volume)3) Equipment investment amount US$27,000 (Japan-based investment
amount)1 set
US$ 15000
a. Drain tank 5 m3
b. Pump and piping 1 set
US$ 5000c. Installation cost
1 set
US$ 7000
Total(2)

US$ 27000

Heat insulation for bare piping between the boiler, steam header, andfactory
1) Parts to which heat insulator is to be applied
All piping is bare (i.e. heat keeping not applied), as shown in Figure I-6-3,
Boiler piping schematic diagram.
As a measure, heat insulation (heat insulator thickness of 30 mm) should beapplied to the full length (60 m) of the bare piping.
2) Effects expected from heat insulation(Heat insulation conditions) 40A piping × 60 m
Running condition: 16 h/d × 300 d/yHeat insulation effect : 80%(Expected effect)= 230 kcal/mh × 60 m × 16 h/d × 300 d/y × 0.8/(10200 kcal/L × 0.85 × 0.85)
× US$0.35/L = US$2516/y (= ∆7.2 kL/y saved fuel volume)

I-31

3) Equipment investment amount US$3,800 (Japan-based investment amount)a. Heat insulation material
1 set US$ 1500
b. Heat insulation application cost 1 set US$ 2300
Total US$ 3800

Non heat insulation!
Steam to Factories

No. 1
BoilerNo. 2
BoilerNo. 3
Boiler1725
LBS/h

500kg/h

300kg/h
Steam Header

Figure I-6-3(3)

Bare Pipe,
Surface temperature= 135°C

Boiler Piping Schematic Diagram

Energy conservation achieved by introducing of controlling the number of
air compressors in service
1) Introduction of controlling the number of air compressors in service
Figure I-6-4 shows the method of installing a new reservoir tank andcontrolling the number by three air compressors.
2) Effects expected from introduction of controlling the number of aircompressors in service
Presently, the No. 1 air compressor is repeating loading/unloading in a cycleof 5 seconds. The unloading state is the standby state of the air compressor
not delivering compressed air. Air is accumulated in the newly installed
reservoir tank. The status of air accumulation is indicated by the tankpressure, with which the system controls air compressor ON/OFF. By
stopping the operation after the unloading operation, energy conservation
can be achieved.

I-32

Control Method for Number of Air
Compressors in service(After Improvement)

Present Situation

Reservoir
Tank

Air Compressor
75 kW

Reservoirtank
Air Compressor

1.0 m3

No. 1

No. 1

1.0 m3

0.3 m3

37 kW
No. 2

No. 2

No. 3

No. 3

2.0 m3Compressed Air
to Factories

Compressed Air
to Factories

0.3 m3

New Reservoir
Tank

Pressure
Signal37 kW<Air Compressor Operating Condition
by Diagnosis Data>
No. 1 Air Compressor : Works
No. 2 & 3 Air Compressors : Stop

5sec

Figure I-6-4（ON,OFF）

No. 1 air compressor’s
Current

Load 150A
Unload100A

Operation
SignalNumberControl
Equipment

5sec

Control Method for Numbers of Air Compressors in Service(Expected effects)
Electricity for unloading =√3 × 0.4 × 100 × 0.85 = 58.9 kW
Annual electricity for unloading = 58.9 kW × 16 h/d × 300 d/y × 0.8 × 1/2= 113088 kWh (air compressor load rate
assumed to be 0.8)
The energy conservation effect is:113088 kWh/y × US$0.122/kWh = US$13797/y

I-33

3) Equipment investment amount US$23,500 (Japan-based investment
amount)a. Unit for controlling the number of
air compressors in service
1 set
US$ 12500
3
1 set
US$ 6000b. Reservoir tank 2 m
c. Installation cost
1 set
US$ 5000
Total US$ 3800
(4)Energy conservation achieved by changing the position of the lighting
apparatus
1) Places requiring apparatus position change (improvement)
Following two places are large and wide room, and there are many local
lamps. This method is applied to anywhere in the rooms.
a. Changing the position of the fluorescent lamp for the cutting machineon the fourth floor in the new factory (Figure I-6-5)

Lowering of Fluorescent Lamps
Position(After Improvement)

Present Situation500
H=1800
H=1300Working
Table

Working
Table

Lower 0.5 m the fluorescent lamps
position

Figure I-6-5

Changing the Position of the Fluorescent Lamp on the Fourth
Floor in the New Factoryb. Changing the position of the fluorescent lamp for the sewing machineon the second floor in the old factory (Figure I-6-6)

I-34

Lowering of Fluorescent Lamps
Position(After Improvement)

Present Situation400
H=1700
H=1300Working
Table

Working
Table

Lower 0.4 m the fluorescent lamps
position

Figure I-6-6 Changing the Position of the Fluorescent Lamp on the Second
Floor in the Old Factory2) Expected effects
Illumination on the working table is closely related with the distance H
between the lighting apparatus and working surface. In other words, if H is
reduced to a half, illumination becomes 4 times larger.
By lowering the position of the lighting apparatus, illumination is greatly
improved. Consequently, the number of apparatuses can be reduced andtherefore energy conservation can be achieved.
a. Expected effects for the cutting machine on the fourth floor in the newfactorya) Number of lighting apparatuses at present: 40 W × 2 pieces × 208
lampsb) Number of lighting apparatuses required to obtain the same
illumination when the position of the apparatus is lowered:
208 lamps × (1300/1800)2 = 109 lampsc) Number of apparatuses reduced : 208 – 109 = 99 lampsd) Energy conservation: 7.92 kW (40 W × 2 pieces ×
99 lamps)e) The energy conservation effect is :7.92 kW × 16 h/d × 300 d/y × 0.8 × US$0.122/kWh = US$3710/y(lighting load rate assumed to be 0.8)

I-35

b. Expected effects for the sewing machine on the second floor in the oldfactorya) Number of lighting apparatuses at present: 40 W × 2 pieces × 128
lampsb) Number of lighting apparatuses required to obtain the same
illumination when the position of the apparatus is lowered:
128 lamps × (1300/1700)2 = 75 lampsc) Number of apparatuses reduced : 128 – 75 = 53 lampsd) Energy conservation: 4.24 kW (40 W × 2 pieces ×
53 lamps)e) The energy conservation effect is :4.24 kW × 16 h/d × 300 d/y × 0.8 × US$0.122/kWh = US$1986/y(lighting load rate assumed to be 0.8)
3) Equipment investment amount US$6,000 (Japan-based investment amount)a. Cost for changing the apparatus position on the fourth floor
US$ 3000in the new factoryb. Cost for changing the apparatus position on the second floor
in the old factory
US$ 3000
Total
6.3

US$ 6000

Summary of Energy Conservation Effects
Table I-6-2 shows the summary of energy conservation effects
Table I-6-2

Summary of Energy Conservation Effects

Company name

Item

M&V International
Manufacturing Ltd.

June Textiles Co., Ltd.

US$/y
US$
Expected
Equipment
effectinvestment amount

US$/y
US$
Expected
Equipment
effectinvestment amount

1. Heat recovery from diesel
engine exhaust gas

7010

98600

–

–

2. Heat insulation for steam
piping

772

2850

2516

3800

3. Drain heat recovery in theironing process

–

–

2443

27000

4. Controlling the number of
air compressors in service

–

–

13797

23500

5. Making the lighting
equipment’s efficiency
higher

4885

–

5696

6000

12667

101450

24452

60300

Total

I-36

7.

Guideline for Promotion of Energy Conservation

7.1

Overview of Processes in the Garment Industry
The manufacturing processes are shown in Figure I-7-1. Which process uses utilities
such as electricity, water, steam, compressed air, etc. how should be grasped first.

Original
cloth

Cutting

Putting on
buttons andlabelsSewingFirst
inspection

Ironing

Compressed air

Secondinspection

Packing

Shipping

SteamElectricity

Figure I-7-1

Grasping the Actual Status of Energy Consumption(1)

Data collection in advance
Data should be collected in advance and filled in Factory Energy Use Status
Table (i.e. enter the production volume and used quantities of electricity, fuel,steam, water, and compressed air).

(2)

Prepare a graph showing the amount of energy used.
For example, a graph showing the power volume used in the factory is preparedin Figure I-7-2.
(kWh)

2002
Electricity consumption

7.2

Manufacturing Processes in the Garment Industry

2003

Jan.

Feb. Mar. Apr. May. Jun.

Figure I-7-2

Jul.

Aug. Sep. Oct. Nov. Dec.

The Power Volume Used in the Factory (Example)

I-37

(3)

Prepare a graph showing the production volume and energy intensity inthe factory.
For example, a graph showing the sweater production volume and power
consumption is prepared in Figure I-7-3.
(kWh)(Remarks)
Sweater production volume
power consumption

Power consumption (kWh)/Sweater production volume

2003
Figure I-7-3(4)

Sweater production volume

Jan.

Feb.

Mar.

The Sweater Production and Power Consumption (Example)

Enhancement of energy management
Measuring instrument should be installed for respective utilities so that periodic
measurement, data collection, and management of the energy volume used in thefactory will be possible.
1) Electricity

Installing a meter for electrical energy generated byeach diesel power generator
Installing a meter for electrical energy in each process2) Steam: Installing a meter for the fuel volume used for eachboiler
Installing a flow rate meter for water supply to eachboiler3) Compressed air : Installing a flow rate meter for each process4) Lighting: Installing a meter for electrical energy in each process
7.3:

Extraction of Problems with Energy Conservation Check List
When graphs of the energy consumption data collected, production volume, andenergy volume used and intensity are available, check should be made according to
the check list given below to extract problems in energy conservation.

I-38

1) Electricity managementa. How to determine the contracted electricity and the system of theelectricity charge should be understood.
b. The contracted electricity and maximum demand electricity as well as
the electricity volume used should be reduced.
c. Isn’t wasted electricity found in comparison between months and withthe previous year when the graph showing the used electricity volume ischecked?
d. Is electricity consumption being improved?
2) Energy Conservation Check Points for Major Equipment
a. Electricity receiving/transforming equipment• Isn’t there any transformer that can be shut down in the nighttime oron holidays?
• Is the power factor being improved?
b. Air compressor equipment• Isn’t there leak from piping?
• What about ventilation? Isn’t the air compressor intake temperaturehigh?
• Can’t the delivery pressure of the air compressor be dropped?
• What is the air compressor’s capacity adjusting system?
• Is the air compressor shut down when it is not used?
• What operation is performed against variation of the used volume?
• Has introduction of controlling the number of air compressors inservice been studied?
c. Blower and pump
• Are they shut down when they are not necessary?
• Doesn’t the flow rate or pressure have a too large margin?
• Is the flow rate adjusted, and by what?
• Was changing the number of revolutions or impeller cutting studied?
• Was controlling the number of revolutions studied?
d. Boiler equipment• Is the air-fuel ratio for combustion adequate?
• Is heat insulator applied to the boiler furnace wall?
• Is heat insulator applied to steam piping?
• Is drain recovered efficiently after the use in the process?

I-39

e. Lighting• Is lighting turned off when or where it is not required?
• Is daylight used and is lighting turned off?
• Is spot lighting also used?
• Is illumination adequate and is it measured?
• Was adoption of high-efficiency lighting apparatuses studied?
f. Air-conditioning equipment• Can’t the heat load generated from components and outer air load be
reduced?
• Can’t heat insulation for the building and daylight shielding be
improved?
• Is the set value for room temperature adequate?
• Can’t the air conditioner running time be reduced?
• Isn’t air conditioning run in unnecessary spaces?
• Is the filter cleaned periodically?
• Upon renewal, new installation, or expansion, was adoption of theice heat storage type studied?
7.4

Energy Conservation Approaches
After problems are extracted according to 7.3 Extraction of Problems with Energy
Conservation Check List, approaches for solving the problems are required.
Following are the energy conservation approaches for problem solution.
Energy conservation should be studied according to these approaches. The result ofstudying energy conservation should be forwarded to the energy conservation actions
based on the considerations of the energy conservation effects and equipment
investment.
Examples of approaches:
Approach 1 : Reduction of Maximum Electricity with a Demand Controller
Approach 2 : Power Factor Improvement Method
Approach 3 : Energy Conservation Technique for Air Compressors
Approach 4 : Energy Conservation and Cost Reduction through Control of the
Number of Air Compressors in Service
Approach 5 : Control of the Number of Revolutions for Blowers and Pumps
Approach 6 : Making Efficiency Energy Supply Higher by Co-generation System
Approach 7 : Application of High-efficiency Lighting Apparatuses

I-40

Approach 1:
1.

Reduction of Maximum Electricity with a Demand Controller

Operation of Demand Controller
The demand contract is a contract system based on the maximum electricity.
Consumption once a large value occurs, this value is the contracted electricity forcoming one year. Reduction of the contracted electricity from 612 kW to 522 kW bysuppressing the maximum electricity is described below.
If it is estimated that the actual electricity used is likely to exceed the target electricity
of 522 kW, individual shutdown commands 1 to 3 are sequentially issued to shut down
non-important loads in the factory and suppress the value below the target electricity.
After 30 minutes, power-on is performed (sequentially by timers) automatically toachieve demand control and operation in unmanned and automatic mode.

Individual shutdown command 1
Individual shutdown command 2
Individual shutdown command 3

Power company

Target electricity 522 kW(set value)

Monitoring of the
maximum electricity
Electricity
used

30 minutes

Factory

Demand controller

I-41

2.

Schematic Diagram of Demand Controller
The factory receives electricity from the power company. This system monitors the
maximum electricity at the electricity receiving point as shown below and shuts down
the non-important loads in the factory with the shutdown signals from the load
shutdown control panel to suppress the peak electricity. By suppressing the maximum
electricity (peak), the contracted electricity can be maintained low and a significant
amount of electricity charge can be reduced.

Power company
Shutdown
DemandcommandLoad shutdown control panel (newly installed)
controller(newly installed)
2 signals
3 signals

3.

Hazard lightrunningcommand 3

Individual
shutdown
command 1

Factory

2 signals

Individual
shutdown

Monitoring of
the maximum
electricity

Individual
shutdown
command 2

Detector(newlyinstalled)

ExhausterControl panel(modified)Exhauster 55 kW
No. 1 to 3 shorting
2.25 kWNo. 1 to 3 exhaust fans(modified)
11 kW × 3 sets

Blower control panel(modified)Blower 55 kW
Screw conveyer
1.5 kW

57.25 kW33 kW

56.5 kW

Investment Effect by the Demand Controller
If it is assumed that the present contracted electricity of 612 kW is suppressed to 522
kW by execution individual shutdown commands 1 and 2 in the table below, the amountof introduction merit is 1.45 million yen annually.
Since a peak may occur any time in the present status (blind state), it is recommended to
introduce the demand controller.
Once the demand controller is introduced, the maximum electricity can be easily
managed and therefore it is easy to implement energy conservation measures.
Equipment tobe shut down

Savedelectricity

Investment effect/year

Total investment
effectIndividual shutdown
command 1

Exhauster

57.25 kW57.25 kW × 1575 yen/kW × 0.85 × 12
= 919,721 yen

919,721 yen

Individual shutdown
command 2

Exhaust fan

33 kW

33 kW × 1575 yen/kW × 0.85 × 12
= 530,145 yen

1,449,866 yen

Individual shutdown
command 3

Blower

56.5 kW56.5 kW × 1575 yen/kW × 0.85 × 12
= 907,762 yen

2,357,538 yen

If up to individual shutdown command 3 is implemented, the effect is approximately 2.3
million yen annually.

I-42

Approach 2:
1.

Power Factor Improvement Method

If the present maximum electricity is 210 kW and the power factor is 98%, the capacity
required for the capacitor for improvement to a power factor of 100% is as follows:

210 kW
Capacity required
for the capacitor

Capacity required for the capacitor

2.

Installation of the power factor improving capacitor

Power company
6600 V

Existing capacitor
Existing
30 kVA × 2 sets
37 kW

Newly installed 30 kVA
Low-voltage capacitor

Dust collecting
blowerI-43

Approach 3:

Energy Conservation Technique for Air Compressors(1) Renewal to a new machine (high-efficiency air
compressor)(4) Reduction of the delivered air pressure anduse-end pressure<Expected effect> Energy conservation of 7 to 15% (perair compressor)<Expected effect> If a delivery gauge pressure of 0.69
MPa (7 kgf/cm2) is dropped to 0.59
MPa (6 kgf/cm2), energy conservation
is approximately 9%.

(2) Adoption of the system controlling the numberof air compressors in service<Expected effect> Realization of the minimum necessary
air compressors in service(3) Improvement of installation (intake) condition

Measures for
reduction ofpressure losses• Lowering the intake air temperature• Reduction of the intake resistance<Expected effect> Realization of operation with optimum
energy conservation
Improvement
measuresa. Periodic maintenance of
supplementary equipment (filters,
etc.)
b. Loop piping and review of pipe
diametera. Review of the intake port andexhaust port
b. Optimization of the ventilation fan
capacity(5) Repair of air leak from piping<Expected effect> If 10 positions of 1 mm dia. hole
are repaired, energy conservation
corresponds to a 5.5 kW aircompressor.

I-44

Approach 4:

Energy Conservation and Cost Reduction through Control of the Number of Air Compressors in Service
Number of air compressors in service control system

Individual supply system (before improvement)

Controlling the number of
air compressors in service

Shut down
Reciprocal

Shut down
Screw

Plant C

Plant C

Plant B

Compressed
air tank

Plant B
Plant E
Miscellaneous (common)

Screw

Plant E
Miscellaneous (common)

Screw
Load/unload operation
prerequisite operation

Application
Air compressor

I-45

Time
Plant C only

Electricity consumption per day
kW/dayLoad
operation

UnloadShut down

Unload 20A
Reciprocal type

UnloadkW/dayPlant B only

Operation

Load
25A
Unload 20A

Screw type

Load
operation

Shut down
Time of load
operation andshutdown

UnloadkW/dayOperation
Plant E only

Load
50A
Unload 41A

Screw type

kW/dayOperation (load: 51A-55A)

Load
operation

Time
kW/dayShutdown

UnloadkW/dayOperation (load: 65A-??A)

Operation

Load
operation

Electricity
consumption
per day

Miscellaneou
kW/dayLoad
operation

Time

kW/dayShutdown

Screw type

Total
Annual electricity volume(265 days)

day

Total
Annual electricity volume(265 days)

yenElectricity charge(@18 yen/kWh)Electricity charge(@18 yen/kWh)Cost reduction effect1,467,300 yen/y

day

yen

Approach 5:

Revolution Control for Blowers and Pumps

If the intake air flow rate is Q m3/min, the pressure is H mmAq, and the efficiency is η,
the required electricity P kW for the blower is:
P = QH/6120η.
If the number of revolutions is N rpm and the constant is k, the relationship between thenumber of revolutions and power is as follows:
Q = k1N, H = k2N2
P = k3N3

Pressure (HmmAq)

The outlet damper is
In the figure at right, if the outlet damper
narrowed down.
is narrowed down to reduce the air flowrate of the blower that is running at the
number of revolutions N1 and air flowrate Q1 to Q2, the resistance curve of
piping changes from OR1 to OR2, powerchanges from rectangle OH1R1Q1 to
OH2R2Q2. Power does not decrease verymuch when the air flow rate is reduced
Flow rate Q (m3/minute)by narrowing down the damper.
In contrast, N1 is reduced to N2 by controlling the number of revolutions, power reducesfrom the area of rectangle OH1R1Q1 to the area of OH3R2Q2.
As you see, controlling the number of revolutions is more advantageous that controllingthe outlet damper in energy conservation.
Generally, an inverter unit (VVVF) is adopted for controlling the number of revolutions.

I-46

2.

3.

4.
5.

6.

High-efficiency Power Generation and Highefficiency Exhaust Heat Recovery
Adoption of a diesel engine enabling high-efficiency
shaft power.
Stable and high-efficiency exhaust heat utilization
through operation of collaborating lines.
Easy Fuel Supply
Adoption of a diesel engine enabling each fuel supply (Aheavy oil)Low-pollution Diesel Pack
Low noise by adopting the sound-proof cubicle [75dB(A)].
Low NOX in exhaust gas by the (optional) denitration
unit.
Compact unit
Adoption of a diesel engine (1500/1800 rpm).
High economy
Reduction of the energy cost with the inexpensive
electricity unit price and through high-efficiency exhaust
heat utilization.
Reduction of the equipment cost through introduction of
the system matching the electricity and heat demands.
Reservation of electricity against disasters.

Energy Efficiency
High-efficiency system that suppresses the losses of primaryenergy (100%) to 22 to 28%.
Power generation losses 3-4%
Primary energy 100%

1.

Making Energy Supply Efficiency Higher by Co-generation System

Electricity
36 to 39%
Cooling water
Exhaust gas

Heat exchange

Approach 6:

Overallefficiency
72 to 78%Heat
35 to 39%

Others: 4
to 5%

Exhaust gas losses

15 to 18%
Economy Comparison
With the economic merit, the equipment cost for introducing
the co-generation system can be recovered in 3 to 5 years(simple investment recovery period).

7.

Before introduction of co-generation
systemCost for heat value
generation bydirect combustion

After introduction of co-generation
systemCost for heat value
generation byfollow-up
combustion

Electricity
priceElectricity
priceElectricity charge supporting
private power generation
Private power generation
running cost

Heat recovery system flow chart (typical example)
Exhaust gas heatexchanger• Power generationand hot watersupply system

Exhaust gas

Hot/cold water heatexchanger

Exhaust gas

Hot water
supplyExhaustgas heatexchanger

Water
supplyElectricity

Powergenerator

Hot/cold water
heat exchanger

Flow
rate
Cooling
water

Power
Exhaustgas
Gas turbine

Hot water
supplyCooling
water heatexchanger

Gas or diesel
engineWater
supplyPower
generator

Fuel

Fuel

• Power generation andsteam/hot water supply
systemExhaust gas

Steam

Steam
Exhaust heat boiler

Exhaust gas
boilerElectricity

Powergenerator

Water
supplyExhaust gas

Exhaustgas
Cooling
water

Water supply

Power

Exhaustgas
Gas turbine

Hot water
supplyGas or diesel
enginePowergenerator
Cooling water heatexchanger

Water
supplyFuel

Fuel• Power generation, air conditioning, and hot
water supply system (gas or diesel engine)

Exhaust gas

Hot water absorption cooler

Exhaust gas heat exchanger
Exhaust gas

Warming heat Warming
exchanger

Electricity

Powergenerator

Exhaustgas
Coolingwater

High temp. Low temp.
water tank water tankGas or diesel
engineHot water supply
Hot/cold water heat exchanger

High water tank
Fuel

Cooling

Cooling water heat exchanger

I-47

Water supply

Application of High-efficiency Lighting Apparatuses

Incandescent lamp

Type of light source

Fluorescent lamp

Lamp
Power

HID lamp

Input
Power

Total
luminous flux
(1)

Color
Average color Rated life
Overallefficiency (2) temperature rendering

Incandescent lamp

index [Ra]

Incandescent lamp
General lighting
Ball bulb
Crypton lamp
Halogen lamp
Single-ended moldWith infrared rediation reflection film

Small type (low-voltage type)Double-ended moldFluorescent lamp

Bulb type fluorescent lamp
Electronic lighting – bulb color
Electronic lighting – daylight whitecolor
4-tube type – daylight white color
General fluorescent lamp
White
Same as above (power saving type)Three-wavelength type – daylightwhite color
Same as above (power saving type)High-frequency Hf) type
32W lighting – daylight white color
45W lighting – daylight white color
Compact type
27W type – daylight white color
36W type – daylight white color

HID lamp

Color rendition
improved highpressure sodium lamp

General highpressure sodium
lamp

Metal halide lamp

Fluorescentmercury lamp

Hf type threewavelength
fluorescent lamp

Three wavelength
Mitsubishi longtype fluorescentfluorescent lamp
lamp

General whitefluorescent lamp

Compact
fluorescent lamp

Bulb type
fluorescent lamp

Halogen lamp

Generalincandescent lamp

Overall efficiency (1m/w)

Approach 7:

Fluorescent mercury lamp
Metal halide lamp
Same as above (Double-ended mold)
High-pressure sodium lamp
Same as above (improved rendering type)

I-48

List of Attachments
Attachment I-1: COUNTRY REPORT ON ECONOMIC AND ENERGYSITUATION IN CAMBODIA
Attachment I-2: The Energy Conservation Technology Realized in Japanese Garment
Industry: Presentation Slide List
Attachment I-3: The Energy Conservation Technology Realized in Japanese Garment
Industry
Attachment I-4: Information Required for ASEAN Industry Audit (Garment Industry)
Attachment I-5: Company Information for Factory Energy Conservation /Questionnaire (M&V International Manufacturing Ltd.)
Attachment I-6: Company Information for Factory Energy Conservation /Questionnaire (June Textiles Co., Ltd.)
Attachment I-7: COUNTRY REPORT ON ECONOMIC AND ENERGYSITUATION IN CAMBODIA by ACE

KINGDOM OF CAMBODIA
NATION RELIGION KING*********

COUNTRY REPORTON

ECONOMIC AND ENERGY SITUATION IN
CAMBODIA

Ministry of Industry Mines and Energy (MIME)
Department of Energy Technique (DET)#47 Norodom Blvd., Phnom Penh, Cambodia.
Fax : (855) 23 428 263
E-mail : samy@forum.org.kh
Ⅰ－A－ 1ECONOMIC SITUATIONCOUNTRY OVERVIEW
Cambodia located in South East Asia borders by Thailand and Laos to the northVietnam to the east, gulf of Thailand and Vietnam to the South and the west part border by
Thailand gulf of Thailand. Cambodia has a total area of 181,035 Km2 divided into 24
provinces and one municipality according to the final census results of 1998 shows the total
population of 11,437,656 and 85% of the people live in rural areas and mostly based on
agriculture. The GDP per capita is varies between $240-$290 with an average growth rate of
1-4% (1997 - 1999). Literacy and education shows adult literacy as 68.8%, literacy rate arehighest in Phnom Penh with rate of 90.9%, 74.8% and 82.2% for both sexes (see table 1)
when compared with these rates, the rural sector rates were substantially lower and the male,
female and both sexes literacy rates were 77.9%, 54.7% and 65.2%respectovely, as expected,
male rate were higher than female rate in all sectors. Adult literacy rates appear to haveincrease by approximately 2.5% during the past few years.
Table 1 : Adult literacy rates by sex and Status, Cambodia
Type/ Sex
Both sexes
Male
FemaleCambodia
67.8
80.0
57.7

Phnom Penh
82.2
90.9
74.8

Other Urban
72.9
84.0
63.7

Rural
65.2
77.9
54.7

In common with other countries on the region, Cambodia possesses unique culturaland natural assets that have considerable international appeal. The most well known place inCambodia is the temple city Angkor situated about 300Km North of Phnom Penh in theprovince Siem Reap, just a few Km from Siem Reap town. 95% of the population practice
Buddhism as their religion the remaining Moslem and Christian.
1 Geographic condition including land use pattern and ownership
The tropical climate varies between 20°C-35°C throughout the year fully one-forth of
the total land and of the country is appropriate for cultivation by geography condition the
country divided into 4 regions: Plain region, Tonle Sap region, Coastal region and Plateau
mountain region
2 Demographic condition including rural urban migrate
The final population of Cambodia as on March, 1998 according to the 1998 census is11,437,656, the population of Cambodia by sex and urban rural residence is given in Table 2.
Table 2. Population of Cambodia by sex and urban rural residence
Total/Urban/Rural
Total
Urban
Rural

Both Sexes
11,437,656
1,795,575
9,642,081

Males
5,511,408
878,186
4,633,222

Females
5,926,248
917,389
5,008,859

Refer to the 1998 census 4/5 of the population live in the Central plains, which are
dominated by the Mekong River and Tonle Sap Lake. Cambodia's population density was 63
inhabitants/Km2 in 1998 in comparison to that was the density of population 37
inhabitant/Km2 in 1981 and 54 inhabitant/Km2 in 1993. In 1998 the Plain Region showed thehighest density of population (235 inhabitants/Km2) the Province Kandal with 300
persons/Km2; with the Capital Phnom Penh 3,744.5 persons/Km2, followed by Takeo with
Ⅰ－A－ 2

222, Prey Veng with 194, Svay Rieng 161 and Kampong Cham with 164 inhabitants/Km2.
The lowest density of population was found in the Plateau and Mountain Region (17.5
Persons/Km2) Mondulkiri with 2.2 Persons/Km2, Stung Treng 7.3 Persons/Km2, Ratanakiri
and Preah Vihear each with 8.7 Persons/Km2 Kampong Speu with 85 inhabitants/Km2. The
Coastal Region shows identity of 49 inhabitants/Km2 and the Tonle Sap Region shows 51.8
Persons/Km2.
Compared to other countries in this region the density of population of Vietnam's Red
River Dilta is more than one thousand in habitant per Km2.
3 Administration
Cambodia is a constitutional Monarchy King Norodom Sihanouk is the head of state.
Prime Minister head a government The National Assembly has 122 members. The
Administration of Government is through 24 provinces and a capital Phnom Penh is the
Political cultural and economic center.
4 Economic and Social Situation
The Cambodia economy was devastated during the war in 1970's and 1980's. Since thattime some progress has been made in rebuilding the economy most of the labor force areengaged in agriculture while rubber, fisheries, gem mining and food processing are the mainindustries. Last two year some same cement jute and cotton factories has been re-establishedand the clothing manufacture and tourist industries have expanded. Private investors from
France, Malaysia, Singapore, Thailand. South Korea have established themselves in recent
Nears. Cambodian main import are petroleum, automobiles, motorcycles, machinery
equipment and construction materials. The gross domestic product (GDP) and the GDP
percent from 1994 to 1999 shown in the Table below.
1994
1995 1996 1997
1998 1999
Gross domestic product GDP (in MUS$) 2,385 2,923 3, I I3 3,033 2,868
3,182
GDP per capita (USS)
241
284
291
27-1
251 271
GDP (%in crease)
4% 7.60% ° 7.0% 1.0%
I.0% 4.0%
Transportation and communications there are six national highways which emanatefrom Phnom Penh of those, except for the highway to Sihanouk Ville and to Kompong Cham,
all other highways are in poor repair some of the small roads are impassable. While there issome public transport in the capital and some provincial cities, many Cambodians use
bicycles and motorcycles for travel. Walking and buffalo drawn casts are commonplace.
Railway services are available from Phnom Penh to Battambang, the Thailand border and to
Sihanouk Ville.
There are several private companies participate in the Telecommunication Systemsuch as : Mobitel, SAMART Shinawatra etc. Development in this sector became better
compared to the past two years.
Health and welfare Adequate medical care is not available to the large past of the
population. The Government is implementing a basic health care system and Internationalrelief organisation are working with hospitals to improve the system. The sanitation is poor.
Potable water is not read available, the life expectancy in 1995 was 53yrs for females and50yrs for males.
Situation in the Past and at Present
1. Cambodia's power sector was severely damaged by years of war and neglect. In
spite of the Government's efforts, its institutions remain weak and power supply is unreliable,
costly, and mostly limited to urban areas. Consequently, only 12 percent of the households
Ⅰ－A－ 3have access to electricity: the lowest electrification ratio among East Asian countries. In mostcities, deficiencies in the power supply remain due to weak management and poor conditionsof generation and distribution facilities. Further, the lack of a transmission system prevents a
more efficient use of power supply options resulting in one of the highest electricity costs inthe world.
2. After a two-year economic slowdown caused by a long political stalemate and East
Asia's financial crisis, political stability is emerging and Cambodia appears to be ready toresume a sustained economic growth. GDP growth for 1999 is expected to reach 4% (asopposed to 1% in 1998) and gradually increase to 6% in 2001while Cambodia initiates a newera as a member of the ASEAN. Important part of this growth will be associated to industrial
expansion stemming from regional trade opportunities and located mostly in the Phnom Penh
– Sihanouk ville area. Therefore, the next 4 to 5 years will be characterized by an increasing
demand for infrastructure in this area. However, while macro economic stability and growth
are expected to be achieved progress has yet to be made in addressing fundamental fiscal
problems, including a weak domestic revenue mobilization and inefficient public expenditure
management. The efficient development of the power sector, open to private participation,
will be critical to support Cambodia's goal for sustainable economic growth and social
development due to the following reasons (a) the reliable provision of electricity services atlower costs is an essential condition for the growth of a competitive industry, and (b) power
investments for the period 1999-2003 are expected to reach I1% of domestic investment and2-2.5% of GDP, hence, a power sector successful in attracting direct private investment will
minimize the use of public resources thus reducing the pressure on fiscal management
problems and releasing public fluids for social objectives.
3. Cambodia's power sector is today at a crossroads. After a period of emergency
rehabilitation and reconstruction, the sector is ready to face development objectives aimed at:(a) improving sector efficiency and reducing electricity costs; (b) consolidating the ongoingreform; and (c) addressing the sector's social concerns, particularly the extension ofelectricity services to rural areas. It is therefore necessary to formulate and implement a
power sector strategy addressing the most salient problems of the sector:• lack of a legal and regulatory framework, including the lack of transparency andcompetition in the current process for private sector entry;• an entrenched public-oriented approach towards the management of public
utilities;• poor technical, commercial and financial performance of the sector;• weak investment planning;• lack of resources and strategy to provide electricity services to rural areas; and• a weak human resource base.
1.3.1 Energy resources
The energy situation in Cambodia is characterized by its very low conventional by itsvery low conventional energy consumption as compared to other Asian countries. The major
sources of energy for Cambodia are biomass and imported petroleum products. Biomassenergy sources account for an overwhelming share; total woodfuel consumption during 1994
was estimated to be 1617 ktoe (FAO, 1997).
Cambodia’s sources of energy consist primarily of indigenous supplies of wood, which
together with other forms of biomass represented 83% of the total energy supply in 1995,
while the remaining 17% consisted of imported petroleum products

Ⅰ－A－ 4

Diesel oil and gasoline account for the bulk of petroleum product imports.
Table Estimated Energy Supplies, 1995
Energy Source
Wood
Other Biomass & Dung
Petroleum Products
Fuel Oil
Diesel Oil
Kerosene
Kerosene Jet Fuel
Motor Gasoline
LP GasTotal

Tones
5,621,035
113,300
419,475
50,553
183,43125,015
10,748145,983
3,745

Terajoules
81,505
1,645
1,8107
2,056
7,835
1,112
468
6,467
170
101,257

1000TOE
1,941
39
431
49
187
26
11
154
4
2,411

% of Total
80.5 %
1.6 %
17.9 %
2.0 %
7.7 %
1.1 %
0.5 %
6.4 %
0.2 %
100 %

Tones of Oil Equivalent Source: MIME, Energy Department

Electricity in Cambodia is generated in 22 isolated systems, mostly from diesel
generators. Total installed capacity of electricity generation in Cambodia is estimated to be
122MW, of which 85MW are in Phnom Penh. As a result of the small size of generation units(300KW to 5MW unit size), dependence on oil-based generation, and large distribution losses,
the unit cost of electricity in Cambodia is among the highest in the region.
1.3.2 Demand and Supply Forecasts
Table 2 Energy Demand Scenario *, 1995-2020
Terajoules
Total
Wood
Charcoal
Other Bio.
LP Gas
KeroseneJet Fuel
Gasoline
DieselFuel OilElectricity
Households
Wood
Charcoal
Kerosene
LP GasDieselElectricity
Other
Service Sector

Wood
Charcoal
Kerosene
LP Gas1994

1995

94,148 94,583
77,721 77,721
1,097 1,097
1,754 1,642
103
170
1,323 1,112
725
468
6,002 6,089
4,580 5,393
65
64
777
827
81,530 81,395
77,329 77,329
935
935
1,046
879
35
57
80
176
352
378
1,754 1,642
918
989
23
23
149
149
278
233
69
113

1996

1997

1998

1999

2000

2,005

2,010 199505% / Yr

99,123 102,848 106,797 1,110,861 115,104 138,463 152,244
79,980 82,288 84,662
87,103 89,616 103,552 106,344
1,121
1,143
1,167
1,189
1,213
1,367
1,357
1,633
1,625
1,616
1,608
1,600
1,559
1,351
212
257
310
362
421
729
1,050
1,420
1,481
1,549
1,607
1,678
2,081
2,430
725
761
799
389
881
1,125
1,435
7,301
8,073
8,939
9,836 10,766 15,288 20,284
5,751
6,149
6,576
7,031
7,521 10,539 14,783
73
79
86
93
102
158
249
907
991
1,093
1,191
1,308
2,066
2,962
83,830 86,224 88,685
91,215 93,819 108,240 110,608
79,536 81,804 84,134
86,527 88,985 102,546 104,730
957
979
1,002
1,026
1,050
1,179
1,135
1,117
1,155
1,190
1,226
1,263
1,468
1,512
88
120
153
187
222
416
546
84
86
88
91
93
106
107
415
45
501
551
607
967
1,229
1,633
1,625
1,616
1,608
1,600
1,559
1,351
1,057
1,129
1,231
1,310
1,420
2,104
3,189
18
16
13
11
10
5
3
149
147
146
143
142
152
165
303
325
359
381
415
614
918
124
138
158
175
199
313
504
Ⅰ－A－ 5

3.9%
2.9%
2.2%
-0.5%
15.7%
6.5%
9.2%
9.6%
6.9%
9.4%
9.6%
2.9%
2.9%
2.3%
5.3%
22.1%
-4.9%
9.8%
-0.5%
7.8%
0.2%
10.2%
10.7%

DieselElectricity
Industry
Wood
Charcoal
Diesel Oil
Fuel OilElectricity
Transport
Gasoline
DieselJet Fuel
Fuel Oil

33
80
367
391
405
405
307
370
13
13
22
22
63
63
58
57
11,174 11,674
6,002 6,089
4,445 5,116
725
468
2
1

36
426
465
425
15
25
72
66
13,633
7,031
5,606
725
1

39
464
512
468
17
28
78
72
14,832
8,073
5,997
761
1

43
512
564
515
18
30
85
80
16,154
8,939
6,414
799
1

46
553
619
565
20
33
92
87
17,537
9,836
6,861
839
1

50
605
681
622
22
37
101
96
18,988
10,765
7,341
881
1

75
945
1,096
1,001
36
59
157
154
26,712
15,288
10,299
1,125
1

114
1,486
1,764
1,611
58
95
248
247
36,18820,284
14,4681,435
1*Demand by final consumers, not including fuel for electricity generation or wood for charcoal
Cambodia’s energy supplies forecasting 1990-2010 has not yet been estimated
ELECTRICITY SECTOR
A. Ministry of Industry, Mines and Energy (MIME)MIME is responsible for policy and planning of the electricity sector and also formanagement of supplies in 19 provinces of Cambodia.
One of MIME's important activities is its leading rule in Renewable Energy activities
throughout the rural area. This includes Solar Energy, Biomass and Biogas, Hydropower. The
potential for wind energy in Cambodia has not yet been assessed.
B. Electricity Authority of Cambodia (EAC)
The ElectricityAuthority of Cambodia is being enacted under the proposed Electricity
Law and will be responsible for regulating the provision of electricity power services. The
responsibilities of EAC are expected to include:• Licensing of companies for generation, transmission, distribution and retailing ofelectricity, including consolidated and subcontractor arrangements• Review and approval of tariffs• Monitoring of investments and power acquisitions by license,• Development and monitoring of performance, technical, safety and environmental
related standards• Certification and inspection of metering• Establishment of accounting standards• Enforcement of electricity law
C. Electricity du Cambodge ( EDC)
EDC is a public sector utility that has the non-exclusive responsibility for generation,transmission, distribution and retail of electricity throughout Cambodia. It presently provides
the supplies to the nation's capital Phnom Penh and through grid extension to Kandal province
and also the provincial cities of Sihanouk ville, Steam Reap and Kompong Cham. EDC is also
expected to assume responsibility, for the fist three to five years, of the network rehabilitationand expansion being funded by the ADB in seven main provincial towns
Ⅰ－A－ 6

-0.6%
9.2%
10.5%
10.5%
10.5%
10.5%
9.5%
10.4%
8.6%
9.6%
7.2%
9.2%
0.0%

Phnom Penh has the largest power system in the country. It serves about 80,000
customers with a peak demand of 85MW Key data 2 as 31 December 1999 for EDC include:• Total installed generation capacity• Maximum generation output• Energy Generation• Energy Sales (excludes own usage)• System Losses• 115 kV Network• 22 kV Network

115 MW
97MW
387 GWh284 GWh
24.05 %
23 circuit-km
341.04 circuit-km

D. Demand/Supply Forecasts 1999-2016 key issue
Over the past several years, the demand for electricity has been growing along withthe economic growth. The demand growth has averaged 30-40MW per year. The productionof electricity in Cambodia has not respected to the demand The present role of EDC is toimprove the efficiency of generation, transmission and distribution on electric power in
Cambodia.
Electricity Demand
The demand and energy forecasting is important for the electric power system
planning The forecasting of electricity for Cambodia has been formulated by several
institutions, such as EDC (Corporate Planning Department), in 1994, Worley International
Corporation in 1994, which was funded by World Bank project, the NEWJEC Inc. (German
Company) funded by Asian Development Bank in 1998, and Nippon Koei in 1996 under the
project of Japan International Cooperation Agency (JICA)
Table 3 Expected Power Generation output for Cambodia (MW)-Base Case
Year
Banteay Meanchey
Battambang
Kampong Cham
Kampong Chhnang
Kampong Speu
Kampong Thom
KampotKandalKoh Kong
KratieMondul Kiri
Phnom Penh
Preach Vihear
Prey Veng
PursatRatanak Kiri
Siem Reap
Sihanouk Ville
Stung Treng
Svay Reing
Takeo
Total

1998
4.0
3.5
4.9
1.1
1.0
1.5
2.7
2.2
0.7
1.9
0.1
60
0.3
1.7
1.3
0.9
3.0
2.9
0.2
1.0
1.5
97

2000
5.9
5.7
7.8
1.6
2.0
2.4
4.8
3.9
0.9
3.2
0.2
93
0.5
3.0
2.3
1.1
4.2
3.4
0.5
1.6
2.4
150

2002
8.0
8.6
10.5
2.2
2.9
3.4
8.1
5.5
1.2
4.4
0.3
131
0.7
4.4
3.2
1.3
5.6
4.1
0.7
2.2
3.4
212

2004
10.0
12.0
13.0
2.8
3.8
4.5
10.1
6.7
1.4
5.7
0.4
170
1.0
5.5
4.2
1.5
7.1
4.8
0.9
2.8
4.2
273

2006
12.0
15.0
15.2
3.4
4.7
5.3
13.9
7.9
1.7
6.8
0.5
207
1.1
60.6
5.0
1.7
8.4
5.5
1.1
3.2
4.9
331

Source: Government of Cambodia, MIME Nov. 1998
Ⅰ－A－ 7

2008
14.5
18.5
17.9
4.0
5.9
6.4
16.3
9.2
2.0
8.0
0.6
256
1.4
7.8
5.9
1.9
10.0
6.3
1.3
3.9
5.8
404

2010
17.3
22.4
20.5
4.7
7.2
7.5
18.9
10.6
2.3
9.4
0.7
304
1.6
9.0
6.9
2.2
11.5
7.3
1.5
4.4
6.7
477

2012
20
27
23
5
9
9
25
12
3
11
1
356
2
10
8
2
13
8
2
5
8
558

2014
24
31
26
6
12
10
28
13
3
12
1
418
2
11
9
3
15
10
2
6
8
651

2016
26
33
29
7
16
11
33
15
4
14
1
484
2
13
11
3
17
11
2
6
9
746

RENEWABLE ENERGY SECTORa) Institutional Setting
In 1995, a working group called " Solar Energy Application (SFA) " was formed byTechnical Energy Department of Ministry of Industry Mines and Energy SEA takes
responsible in renewable energy and plays the role such as follow:-

cooperation and coordination with Ministries, agencies concerning and donor,
data collection basically for study,
research, setting up the solar energy system I pilot project), training local people.
promoting and disseminating of this field,
report to MIME the results of the study.

b) Present use Potential and Direction for Development
Since a beginning of the oil crisis 1973, which remarkably influenced power
development programs all over the world massive technological and research offers arc borne
concentrated in the field of Renewable Energy resources. In solar sector for electricity
generation, the conversion process via solar cells is being more and more attractive and u is
becoming the most promising.
Refer to technological development of the world time by time. day by day andaccording to the situation in Cambodia that technological development in all field are veryslightly development such as energy sector of this renewable energy which is very slowly
developed compared with the neighboring countries. Even through the royal government's
offer improving and developing of all sectors same priority sector has been promoted day byday.
The Royal Government also pushed all ministries takes more attention for rural andremote areas development.
Solar Energy
Cambodia has a tropical climate with favorable condition for the utilization of solar
energy. This is reflected in the annual mean temperature in the low-lying plain, which is about
26ºC. Measurement during 1981-1988 at Phnom Penh indicate that the average sunshine
duration varied between 6.1 and 9.7 hours per day in August and December respectively.
The total PV capacity about 204,586 Wp was installed in Cambodia since 1997. The
PV installation use for private rural houses, schools, health center, orphans, pagodas
telecommunication, etc..
The most recently under the financing of New Energy and Industrial Technology
Development Organization (NEDO), we have installed the PV battery, charging system inPhnom Chino and PV water pumping in school at Kompong Chnaing province. We hope thatthe out put of projects will:-

increase the economic condition of people of thoseareas increase the knowledge of the people
as a bridge for transfer the civilization and technology (people will get information
through the radio and TV)

Ⅰ－A－ 8

Hydropower
Cambodia is the one of the South-East Asian country rich in water resources and has thesecond largest hydropower potential in the lower Mekong Basin According to the latest
preliminary study the total hydropower potential of the country is estimated at 10,000MW,
which 50% is in the Mekong, 40% in its tributaries and the remaining 10% in the southwestern coastal area outside the Mekong river basin
Cambodia's future demand is projected at 175MW in 2000, 380MW in 2010 and
760MW in 2020, due to the improving situation this increase in demand cannot be satisfied by
the existing power station, The most urgent action for the utilities lies in the rehabilitation andupgrading of existing power plants, This is considered critical as a continued shortage in theelectricity supply will seriously restrain the ongoing reconstruction and socio-economic
development of the country.
The need for Cambodia will be to use Cambodia's Hydropower potential in order tomeet future electricity demand and to reduce the dependence upon imported fuel and to
exchange of hydropower with neighboring countries.
Before the civil war, the Kirirom I Hydropower station was running with an installedcapacity of 10MW, and energy was delivered to Phnom Penh through a 110 kV transmission
line over a distance of 120Km. This Hydropower Plant was completed in 1968 as the firsthydropower station in Cambodia, but it was completely destroyed during the war after only 13
months of operation. However the facilities have been started to restore by Austrian andSwedish Aid projects. The Prek Thnot project with an installed capacity of 18MW was
implemented near the Kirirom I Hydropower station, but the construction was interrupted in1970 due to the war In 1992 one small Hydropower Station at Present in Cambodia, and all of
the operating generator; now are diesel and okil-fired engines depending on imported oil
Wind Energy
Up to present the generation of electricity from wind still yet implemented even. We
have the potential of this resource especially at the coast and the mountainous regions which
tile wind velocity generally is about l0m/s Measurements during 1981-1990 at Phnom Penh
indicate that the average wind velocity varied between 4.8 and l4.8 m/s in January and July
respectively. There are some installation of wind energy for water pumping implemented by
the NGO, (Christian Outreach) for irrigation in some place of Prey Veng Province about 5
unit:
Biomass
As in almost all Asian countries, biomass energy plays a major role in satisfying therural energy elements of Cambodia. According to an estimate by the FAQ, wood fuelconsumption in 1994 was 1,618 ktoe, and accounted for 84% of the total energy consumption
in the country. The total potential available wood fuels during the same year was 24.5 million
toe. Besides, and estimated amount of 167 ktoe of agro-industrial processing residues werealso available as fuel in 1994 (FAO 1997). Due to lacking of modern technology in this field
the development of the biomass system still very low. In Cambodia the biomas system arebasically from Agriculture wastes and generally used for cooking and small handicrafts inrural areas.
Biomass is also used in the industrial sector for copra drying and steam generation.
However, no reliable estimates of the amount of Biomass energy consumption for these
purposes are available.
Ⅰ－A－ 9

BiogasThe Biogas system in Cambodia mostly base on the domestic animal wastes such as
cows, buffaloes, pigs, etc...
The systems were implement by Christian Outreach, Food Agriculture Organization,
Padex,;;; in some Provinces : Prey Veng, Kandal, Kompong Speu, Svay Rieng, Ta Keo, Kom
Pot, and Siem Riep, There seems to be considerable potential for biogas development in
Cambodia. The energy potential of biogas from recoverable animal wastes in the country has
been estimated to be about 228 ktoe/year (Bhattacharya et al., 1997).

REFERENCES :---General Population Census of Cambodia 1998
National Institute of Statistics, Ministry of Planning, Phnom Penh.
Funded by : United Nations Population Fund, July 1999
Report on the Cambodia Social-Economic Survey 1999
National Institute of Statistics, Ministry of Planning, Phnom Penh
Sponsored by : United Nations development Programme, Swedish International
Development Cooperation Agency and Executed by the World Bank
Report on Energy Policy and Conservation in Cambodia
Ministry of Industry Mines and Energy (MIME), Technical Energy Department
Sponsored by : New Energy and Industrial Technology Development Organization(NEDO), Japan

Ⅰ－A－ 10

The Energy Conservation Technology Realized in Japanese Garment Industry
Presentation Slide List
Ｎｏ．

Ｔｉｔｌｅ

1

The Energy Conservation Technology Realized in Japanese Garment Industry

2

Electric Power Management

3

Steps for Power Saving Promotion

4

Peak Cut by Demand Controller
a. Check & improvement of daily load (example)

5b. Execute approximate demand management by demand controller

6Power Factor Improvement

7

Guidance for Management (Example)

8

Energy conservation guidance for illumination facilities (example)

9

Illumination Standard of Factories & Offices

10Energy conservation by introduction of high-efficiency lighting apparatus

11

Check points of compressors for enegy conservation

12

Energy conservation cost-down by control system of number of compressors (example)

13

Guidance for air-conditioning electric power (example)

14

Guidance for energy conseeeervation of boiler

15

Diesel Engine Generator Energy Saving,

16

Heat recovery system flow (example)

17

More information

Diesel Engine Energy Efficiency

18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Ⅰ－A－11

Ｎｏｔｅ
Cover Sheet

The Energy Conservation Technology
Realized in Japanese Garment Industry

December, 2002 at Cambodia
February, 2003 at Philippine
The Energy Conservation Center, Japan〔ECCJ〕1

ECCJ

Electric Power Management(1) Priority Efforts for Energy Conservation① Understand the structure of electricity rates② Grasp the current status of electricity usage(2) Reduce the contract demand & maximum
demand of electricity as well as electricity
consumption volume

2

ECCJ

Ⅰ-A-12

Steps for Power Saving Promotion* First step: appropriate usage & management ofexisting facilities* Second step: introduction of energy conservationequipment* Third step: radical modification of production facilities &process, etc.
Start from small-scale investment of the first & second
steps, going on to the next step
3

ECCJ

Peak Cut by Demand Controller
a. Check & improvement of daily load (example)
electricity

electricity

230

160

90

8

16

8

(actual status)

16(after improvement)

4

ECCJ

Ⅰ-A-13

b. Execute appropriate demand management by demand controller
Analyze the daily load curve of the day when the maximum electricity was recorded
kW

224kW

230

D
C
B

115

A

8

(hours)16

Load diagnosis (example)
A …. power capacity of vulcaniztion press & oil pressure: 100KW
B …. power capacity of mixing roll: 50kW
C …. power capacity of air-conditioner: 50kW
D …. power capacity of compressor & lightening: 50kW

5

ECCJ

Power Factor Impovement
a. When the required volume of condenser is calculated to improve the power rate from 98% (theactual maximum electric power 210kW) to 100%,, the results would be as below.
210kW

cosθ=0.98
Required volume of condenser

Required volume of condenser= 210×tanθ=210×0.2=42KVA

b. location method of condenser for
power rate improvement

The Chugoku Electric Power
6600V

Existing
condenser
Existing
30KVA×2 units
37kW

Dust collector blowerc. comparison of investment & merit

New low
power
condenser
30KVA

・investment 30KVA condenser … 50,000 yen (Instrument cost only. Setting work cost excluded.)・merit … cost reduced by approximately 20,000 yen/y

6

ECCJ

Ⅰ-A-14

Guidance for Management (example)

Electricity consumption

Present a graph to the employees so that they would be aware of electricity
consumption.
1995
1996

Jan. Feb. Mar. Apr. May June July Aug. Sep.

Make a graph of electricity Present a graph to the employees so that they would beaware of electricity consumption of pajama production to promote awareness of energy
conservation.

ECCJElectricity intensity

Pajama production volume(remarks)(1996)

Pajama production volume
Electricity intensity(electricity consumption (kWH) /pajama production volume)

Jan.

Feb.

7

Mar.

Energy conservation guidance for illumination facilities (example)

1. Automatic blink switch (pattern control by time zone) & adjustment oflightening by natural light for window-sides.
2. Turn off the lights of vacant rooms.
3. Take off lamps which are not used, and use natural light for effectiveenergy conservation.
4. Change wide area illumination to local illumination.
5. Usage of too many fluorescent lamps causes elevation of temperature,
and would be a load to the air-conditioner.
Improve the situation by changing ceiling illumination to local illumination.

8

ECCJ

Ⅰ-A-15

Illumination Standard of Factories & Offices
illumination
LX

3,000

2,000

1,500

factory
work
production of precision instrument & electronic
components, fine optical works at printing factories

officelocation

location
dashbord & control
board at control roometc.

･assembling(a), -audit(a), -test(a)･sorting(a), -planning, -designing
office room (a), business room, design room, drawing room, entrance hall (daytime)sorting, audit at fabric factories, typesetting & calibration design room, drawingroom
at printing factories, fine opticas works at chemicalfactories such as diagnosis

1,000･assembling(b), -audit(b), -test(b)･sorting(b)
750

500

300

200

normal optical works of regular production processes

control roomelectricity room
air-conditioning roomrough optical works･specific duties･packaging(b), -packing(b)(c)office room (b), executive room, meeting room, printing
room, TEL exchange room, computer room, control room,
clinicmeeting room, reception office, ●power distribution panel, dashboard at electricity room&
waiting room, dining hall,machinery room
kitchen, recreation room,●reception
training room, janitor's room,
storeroom, work room, vault,
entrance hall(nighttime),electricity room, auditorium,
elevator hallmachinery room, elevator-･assembling(c), -audit(c), -test(c)･sorting(b), -packaging(a), -desk work at warehouses

washroom, bathroom,
corridor, stair, lavatory,
rest room150

entrance, corridor,
passage, warehouse,stair, rest room,
lavatory

100

rough optical works･specific duties･packaging(b), -packing(b)(c)75

works such as loading, unloading & removing

50

indoor escape stair,warehouse, indoor
power equipment

indoor escape stairoutdoor(passage forpremise security)

30
20
10

Remarks: 1. (a) in the chart indicates those which are fine and weak in contrast, which require high accuracy. (b): interim of (a) & (c). (c): rough ones, which are strong in contrast
2. (office room): for optical work or when you feel the interior of the room dark, due to the bright sunshine outdoor, (a) should be applied.

9

ECCJ

Energy conservation by introduction of high-efficiency lighting apparatus

HID lamp

fluorescent lamp

incandescent lamps

lamp
power
(W)

incandescent lamps
for general use
ball lamp
krypton lamp
halogen lamp
single-ended moldwith infrared radiation reflexion
film
small type (low pressure type)
double-ended moldbulb type fluorescent lamp
electric lighting bulb color
electric lighting neutral whitecolor
4 pipe tube neutral whitecolor
general fluorescent lamp
whiteditto (electricity-saving type)3-wavelength type - neutral
white color
ditto (electricity-saving type)
HF type
32W lighting - neutral whitecolor
45W lighting - neutral whitecolor
compact type
27W lighting - neutral whitecolor
36W lighting - neutral whitecolor
fluorescent mercury lamp
metal halide lamp
ditto (double-ended mold)high-pressure sodium lamp
ditto (improved rendering type)

input
power
(W)

total
luminous
flux (1)
(lm)

60
67
60

60
57
60

810
705
840

100

100

85

85

50
500

overallefficiency (2)(lm/W)

color
average color
temperatur rendering
index
e
(Ra)
(K)

life
(h)

13.5
12.4
14

2850
2850
2850

100
100
100

1000
2000
2000

1600

16

2900

100

1500

1680

19.8

2900

100

2000

50
500

1000
10500

20
21

3000
3000

100
100

2000
2000

25

25

1520

60

2800

84

6000

25

25

1460

58.4

5000

88

6000

23

23

1550

67.4

5000

84

8000

40
36

43
39

3000
3000

69.8
76.9

4200
4200

61
61

12000
12000

40

43

3450

80.2

5000

88

12000

36

39

3450

88.5

5000

88

12000

32

35

3200

91.4

5000

88

12000

45

49

4500

91.8

5000

88

12000

27

34

1800

62.9

5000

88

7500

36

40

2900

72.5

5000

88

9000

400
400
250
360
360

427
444
269
386
390

22000
40000
20000
47500
36000

51.5
90.1
76
123.1
92.3

3900
3800
4300
2050
2100

40
70
85
25
60

12000
9000
6000
12000
12000

remarks:
1. incandescent lamp is 0 hour index. Others are 100 hours total luminous flux. Index.
2 Total luminous flux. divided by input power. Indicates the brightness per input power.

ECCJ

Ⅰ-A-1610

Check points of compressors for energy conservation(1)Renewal to new type (high-efficiency compressor)<expected effect> energy conservation at 7-15%(2)Introduction of control system of number of machines<expected effect> realization of minimum operatingmachines(3)Improvement of locating (intake air) conditions●decline of intake air temperature●reduction of intake air temperature resistance<expected effect> realization of optimized energy
conservation operation
Improvement measures:a. revision of inlet & exhaust outlet
b. optimization of ventilation fan volume(4)Reduction of discharge pressure & terminal in use<expected effect>discharge gauge pressure: 0.69MPa(7kgf/cm2) to 0.59MPa
If pressure is reduced to (6kgf/cm2), energy conservation
is at appr. 9%.

(5)Repair of piping air-leak<expected effect>
improvement of
1mmφhole×10 points- energy conservationequivalent to 5.5kW
compressor

Measures for pressure loss reduction:a. regular maintenance of peripherals(filter, etc.)
b. looping of pipelaying, revision of pipe diameter*Expected effect data differ due to use conditions & environment.
Confirm to the manufacturer about the measures & effect .

11

ECCJ

Energy conservation cost-down by control system of number of compressors (example)<calculated by compressor current measurement>

Individual supply method (before improvement)

Total 526.05kWH/day
annual electricity volume (265days): 139,403kWH
electricity rate (@18yen/kWH): 2,509,254 yen

ECCJcompressor number control method (after improvement)

Total 214.24kWH/day
annual electricity volume (265days): 56,774kWH
electricity rate (@18yen/kWH): 1,021,932 yen
Cost-down effect1,487,300 yen/year

Ⅰ-A-17

12

Guidance for air-conditioning electric power (example)(e.g.1) Energy conservation of air-conditioning (cooling)*reinforce the emission fan of the ceiling to exhaust hot air of the ceiling.
*curtains for windows are preferable.
(e.g.2) Energy conservation of air-conditioning (cooling)*set the temperature at 28℃.
(by setting the temperature 1℃ higher, energy conservation at appr.10% could
be expected for air-conditining heat source. )(e.g.3) Consideration of introduction of eco-ice
peak difference between daytime & nighttime is large, due to air-conditioning load
(cooling) in the summer.
Eco-ice is a system to restrain the electricity usage by storing the electricity toheat source, and supply heat source in the daytime

13

ECCJ

Guidance for energy conservation of boiler(e.g.1) Prevention of diffuse heat loss from vapor piping
reinforce the thermal insulation of vapor piping of factories to prevent diffuse
heat loss(e.g.2) renovation of degradation & efficiency improvement of decrepit boiler*merit calculation was done and degradation renovation plan was proposed
for the factory*the vapor header part was not kept warm, causing heat loss. Reinforcementof the thermal insulation of vapor piping would prevent diffuse heat loss

14

ECCJ

Ⅰ-A-18

Diesel Engine Generator Energy Conservation

Cooling water
Exhaust gas

Heat 35～39%

Energy efficiency

Electricity 36～39%
Heat exchanger

Primary energy

Diesel Engine Energy efficiency

72～78%

Others
4～5%

Exhaust gas
loss
15～18%15

ECCJ

Heat recovery system flow (example)
heat exchanger of
exhaust gas●Power generation& hot water supply
systemexhaust gas

gas ordieselengine●Power generation &vapor hot water supply
systemexhaust gas

gas ordieselengine●Power generation, air-conditioning & hot water
heat exchanger of
exhaust gas
supply systemexhaust gas

ECCJgas ordieselengine

16

Ⅰ-A-19More Information• You can find information regarding
ECCJ’s activities as well as trends ofenergy efficiency and conservationin Japan through accessing ECCJ’s
Internet Home Page:• URL:
http://www.eccj.or.jp/index_e.html
17

ECCJ

Ⅰ-A-20[A]Information Required for ASEAN Industry Audit(Garment Industry)[Ⅰ] Necessary information （Answers to Questionnaire） before audit execution(We want following information by November 29, 2002)
1. Company general information for factory energy consumption:
2. Production of major products
3. Utility consumption data
3-1~3 Garment-making process including generator power plant if you
have (Daily, Monthly and Annual)
4. Electric power receiving
5. Boiler[Ⅱ] Necessary information during the audit execution
6. Necessary drawings and documents including energy intensity
7. Energy conservation plan
8. Energy conservation items in the past (including results)
9. Energy conservation items undergoing (including expected results)
10 Problem items if you have.
[Ⅲ] Item as requirement for garment maker selection
Two factories in the area of Phnom Penh
[Ⅳ] Necessary measuring instruments
Please prepare following measuring instruments for audit execution.
Temperature gauge, (Non-touch radiance type)
Illuminant meter,
Clamp type Ammeter (0~300A or 500A),
Clamp type Wattmeter
Etc.

Ⅰ－A－21

表Ⅰ－３－２Company Information for Factory Energy Conservation / Questionnaire[Garment Industry]
Company Name M & V International Manufacturing Ltd.
Replied by

Mr. WENY Wei,

Mr. SU Chin Pha

Division

Admin. Dept. officer,

Date

December 11 2002

Maintenance Manager

1. General
1

Name of Factory

V3 Factory of M & V international Manufacturing Ltd.

2

Address

No.1623 CHAK ANGRE KRAUM, Phnom Penh, Cambodia Tel: 855-23-425041

3

President(Headquarter In MACAO)

Factory Manager

Mr. WENY Wei

Energy Manager

Mr. SU Chin Pha

4Type of Industry

Garment (Sweater Production)

5

CapitalNo reply

6

Annual Sales AmountNo reply

7

Number of Employees

Staffs: 80 - 90, Workers Approx. 3,000 [MIME Data: 3,958](Work time: 7:00 = 11:00, 12:30 - 16:30 + Over time)

8

Number of Engineers

Job of Headquarter (MACAO)Electrical Engineers
Mechanical (Heat)Engineers

9

Organization Chart

Refer to ANNEX 4
Total 5 factories (4 in Cambodia, 1 in MACAO, China)

10 Brief Company History

V3: Established in 1994, and V3 Factory started operation in 1997

11 Meteorological

Tropical Climate

Ⅰ－A－22

1

No.

- Sweater -Garment Factory

Name of Production

1999

2288

Production Annual Production
Capacity Operating
VolumeHour(Pieces)

2. Production of Major Products

Sales
Amount(Pieces)2000

Ⅰ－A－232288

Annual Production
Operating
VolumeHour(Pieces)

Sales
Amount(Pieces)

2001

5,102,531

5102531

Sales
Amount(Pieces)286 * 8 = 2288 hours/year

365 * 6/7 - 26 = 286 days/year

Max 30,000Pcs/day

Max. 677,000Pcs/month

Total Production = 5,102,531Pcs/year

2288

Annual Production
Operating
VolumeHour(Pieces)

2002
Sales
Amount(Pieces)

MIME data (at Nov. 2002)
Total Employee = 3,958
Product = 33,500~33,600
Pcs/day

2288

Annual Production
Operating
VolumeHour(Pieces)

9

10

11

12

14

15

16

17

18

22

23

Capacity:#1= 500KVA/400kW

20

Ⅰ－A－24#3= 720KVA/576kW

19

24

25

26

27

28

Gene. #2 = 252kW, #3 = 228kW Total = 480kW (At 14:00 of December 12 2002)

18(9h/day)

Average = 3,000 ~ 3,500kWh/day#2= 720KVA/576kW

Power plant
generation (kWh)

17

16

15

14

13

12

11

10

9 City Water (t)8 Well Water (t)800m 3 /day (Tank capacity, Pump working time = 60m 3 /h * 15hours/day), Max. 900 ~ 1,000m3/day, Min. 700m3/day. No meters

21

7 River Water (m3)20

No meters

19

6 Steam (t)5 Compressed Air (m3)4 LPG (t)from EDC, 30.4days/Month13

Oil from SOKIMEX (Singapore) & CALTEX (Cambodia)

8

1,800 ~ 2,000L/day (9h/day)

7

for Generators

6

3 Diesel Oil (kL)5

Oil from SOKIMEX (Singapore) & CALTEX (Cambodia)

42,800 ~ 3,000L/day (9h/day)3

for Boilers

2

2 Fuel Oil (kL)1Month / Date

Ave. 430kWh/Month for Lighting at night ・・・・ (30kW)

Name of Utility

1 Electricity (kWh)No.

3A-1. Daily Utility Consumption
Garment-making process

29

30

31

Total

Diesel Oil (kL)

LPG (t)Compressed Air (m3)

Steam (t)River Water (m3)Well Water (t)City Water (t)

3

4

5

6

7

8

9

20

19

18

17

16

15

14

13

12

11

Power plant generation(kWh)

Fuel Oil (kL)2

10Electricity (kWh)Name of Utility

1

No.

Lower Heat
Value

Garment-making process

February

March(365*6/7-26)/12 = 23.9days/MonthNo meters

From EDC

January

3A-2 Monthly Utility Consumption

April

May

Ⅰ－A－25

June

2002
July

AugustSeptember

October

December

71,700~83,650kWh

800*23.9=19,120m3

43 ~ 48kL

67 ~ 72kL

13,000kWh

NovemberTotal

Diesel Oil (kL)

LPG (t)Compressed Air (m3)

Steam (t)River Water (m )Well Water (t)City Water (t)

3

4

5

6

7

8

9

20

19

18

17

16

15

14

13

12

11

10

Fuel Oil (kL)2Power plant generation
(kWh)

3

Electricity (kWh)Name of Utility

1No.
Unit Price
(*)

1999
PurchaseAmount(*)
Unit Price
(*)

2000

Ⅰ－A－26(kWh,kL,t,m )3Consumption

8 ~ 9hours/day, 23.9days/Month, 12 months/year

No meters

Lower Heat
Consumption
Value(kWh,kL,t,m3)

Garment-making process

3A-3 Annual Utility Consumption

PurchaseAmount(*)(kWh,kL,t,m )3Consumption*: US$ or Reils

Unit Price
(*)

2001
PurchaseAmount
(*)

860,400 ~1,003,800

229,440516 ~ 576

804 ~ 864

156,000(kWh,kL,t,m )3Consumption

PurchaseAmount(*)(US$1 = 3,950R)

US$0.35

US$0.25

R600

Unit Price
(*)

2002

4. Electric Power Receiving
Items

No.

Unit

1999

2000

2001

2002

1

Receiving VoltagekV

2Maximum DemandMW

3

Annual Electricity Consumption

MWh4

Paid Amount of Electricity

5Power Factor

6

Annual Operating Hour

h/y

8,760

7

Average Electricity

kW

30

8

Maximum Electricity

kW

9Transformer Capacity per Unit

kW

10

Number of Transformers

11

In-house Generation Capacity

Note

0.38

1,020 ~ 1,160

US$ or Reils

No Transformer

kW

1,552

5. Boiler
Boiler No.

No.
1

Type

2

Built Year

3

Nominal Capacity (Steam)
Steam Pressure (kg/cm2G)

1
Lateral
type
1998

2

4
LateralVertical typ Vertical typ
type
1996
1996
2000

10

10

4,200

1,560

3

10

10

Flue Boiler
N0.1: '97, No.2: '92 madeActual ope.: 7kg/cm2

Steam Temperature (℃)
Evaporating Volume (kg/h)
4

780

6,000

Nominal Capacity (Electricity)
Generated Electricity (kWh)Generated Voltage (kV)Power Factor

56Kind of Fuel

Bunker oil Bunker oil Bunker oil Bunker oil

Fuel Consumption

No meters

Operating Period (Hours/Day)

No Data

1999
2000
2001
2002
7

Operating Period (Hours/Year)
1999
2000
2001
2002

Ⅰ－A－27

6. Necessary Drawings and Documents
Items

No.
1

Plant Layout:

Layout is displayed as the Firebreak Chart.

2

Process Flowchart of Major Products

3

Energy Flowchart

4

Electric Skeleton Diagram

5

Structural Drawing of Major Equipment

No drawings

Measuring Points and Name of Instruments for Energy Consumption
6

Specification and Structural Drawings of Boiler

7

Energy Intensity : Energy Consumption / Output of Products

No.

Kind of Producta(Example)
Garmentb

Garment

Kind of Energy

Unit

1999

2000

2001

2002

Production

pcs/y

300,000

320,000

320,000

350,000

Fuel Oil

kL/y

3,000

3,200

3,100

3,300

Electricity

MWh/y

3,000

3,200

3,200

3,300

Production

Sweater

Electricity (EDC)

MWh/y

156

Fuel OilkL/y804 ~ 864

Diesel Oil

kL/y516 ~ 576

5,102,531

Max. 677,000Pcs/Month
Max. 30,000Pcs/dayc

ProductiondProductione

Production

Ⅰ－A－28

7. Energy Conservation Plan

Nothing!
M & V wants to know or learn the methods how to do the energy conservation activities.

Ⅰ－A－29

8. Energy Conservation Items in the Past (including results)
Lighting:

When a fluorescent tube is blow-out, new one is exchanged from 40W to 36W.

9. Energy Conservation Items Undergoing (including expected results)
Nothing!

Ⅰ－A－3010. In case you have any problem(s) in your course of promotion of energy
conservation, please circle the number(s) of applicable item(s) among the following.
① Uncertainty of energy prospect② Less impact of energy cost to the whole cost of the enterprise3

The increasing energy cost can be covered by rising the price of products

4

Little possibility of energy shortage: M & V can receive oil soon or anytime.

5

Little potential for promoting further energy conservation⑥ Shortage of engineers: Especially pertaining to the generator (Engine) engineer(s)7Difficulty in obtaining good energy efficient equipment

8

Unreliable results from energy efficient equipment

9

Uncertainty about return of investment in energy conservation facilities⑩ Difficulty in obtaining good information such as successful case of energy saving activities⑪ Insufficient system of research and development
12

Shortage of fund for facility improvement and modification

13

Out-of-date facilities⑭ Low consciousness of employees⑮ Lack of personnel who can educate the employees⑯ Shortage of measuring equipment⑰ No time to analyze energy consumption rate
⑱ Shortage of information on government's measures⑲ Shortage of government's subsidiary measures⑳ Others (Please add comments):
Insufficient of information exchange between government and companies, and education

Ⅰ－A－31

表Ⅰ－３－３ Company Information for Factory Energy Conservation / Questionnaire[Garment Industry]
Company Name June Textiles Co., Ltd (Cambodia)
Replied by

Mr. William ONG

Mr. YI Sokham

Division

General Manager

Shipping Manager

Date

12-Dec-02

1. General
1

Name of Factory

June Textiles Co., Ltd (Cambodia)

2

Address

Russian Blvd., Borei 100 Khnong, Songkat Tek Thla, Khan Russei Keo,Phnom Penh, Cambodia Tel: 023-883-338

3President
Factory Manager

Mr. Lee Thai Khit (Managing Director)

Energy Manager

Mr. Chung Yit FANG (Mechanic and Maintenance Dept.)

4Type of Industry

Garment

5

Capital250,000,000Riels (=12MUS$)

6

Annual Sales Amount

49MUS$ (2001)

7

Number of Employees

4,393 (Staff 170) at 30/11/2002

8

Number of Engineers

Experts only ~30 people

Electrical Engineers
Mechanical (Heat)Engineers

9

Organization Chart

Refer to ANNEX 5

10

Brief Company History

License: 1992, Production start: 1993 at other factory,
Old Factory: 1994 ~ , New Factory: 1998 ~ Refer to ANNEX 7

11

Meteorological

Tropical Climate

Ⅰ－A－32

1

No.

(Casual wear)

Garment Factory

Name of Production

1999

4,290
812,000

Production Annual Production
Capacity Operating Volume
Hour(Dozens )2. Production of Major Products

812000

Sales
Amount(Dozens )2000

942,000

Ⅰ－A－33

4,290

Annual Production
Operating Volume
Hour(Dozens )942,000

Sales
Amount(Dozens )2001

1,169,869

1,169,869

Sales
Amount(Dozens )(2 Shifts/day, 7.5 hours each = 15h/d)

287 * 15 = 4,305 hours/year

365 * 6/7 - 26 = 287 days/year

4,290

Annual Production
Operating Volume
Hour(Dozens )2002(1,286,850) (1,286,850)

Sales
Amount(Dozens )MIME data (at Nov. 2002)
Total Employee = 4,041
Product = 3,100~3,800
Dozens/day

4,290

Annual Production
Operating Volume
Hour(Dozens )Name of Utility

20

19

18

17

16

15

14

13

12

11

10

Power plant
generation (kWh)9 City Water (m )3

8 Well Water (m3)

7 River Water (m3)

6 Steam (t)5 Compressed Air (m3)4 LPG (t)3 Diesel Oil (kL)

2 Fuel Oil (kL)

1 Electricity (kWh)

No.

1

2

3

5

6

Monthly data only

No meters, No data.

4

3A-1. Daily Utility Consumption
Garment-making process

7

8

9

10

11

12

13

15

16

Ⅰ－A－3414Month / Date
17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

Total

Diesel Oil (kL)

LPG (t)Compressed Air (m3)

Steam (t)River Water (m3)Well Water (m3)City Water (m3)

3

4

5

6

7

8

9

Production in 2001 (Dozens)

18

20

19

(For Reference)(IPP)

for Boilers

for Boilers(EDC)

Lower Heat
Value

e

16

15

14

13

12

11

Power plant generation(kWh)

Fuel Oil (kL)2

10Electricity (kWh)Name of Utility

1No.

Garment-making process

109,461

140,940

18

130,970

December2001

3A-2 Monthly Utility Consumption

107,233

143,520

20

137,400

January

85,760146,67016

141,200

February

125,457

146,7008

130,890March

98,354

133,77020

155,260

May

Ⅰ－A－35

115,981

125,97012

163,420

April

86,026

138,87020

248,680

June

2002

93,298142,35018

255,510July

83,173

138,27018

237,710

August95,579138,69022

175,570

September

75,305140,210

14

199,870

October

94,242

139,680

7,286

16

193,160

November

1,169,869

1,675,640

87,430202

2,169,640

Total

LPG (t)Compressed Air (m )Steam (t)River Water (m3)Well Water (m3)City Water (m3)

4

5

6

7

8

9

20

19

18

17

16

15

14

13

12

11

Power plant generation(kWh)

Diesel Oil (kL)3

10

Fuel Oil (kL)2

3Electricity (kWh)Name of Utility

1

No.

(IPP)

for Boilers

for Boilers(EDC)

Lower Heat
Consumption
Value(kWh,kL,t,m3)

Garment-making process

3A-3 Annual Utility Consumption

Unit Price
(*)

1999
PurchaseAmount(*)
Unit Price(*)

Ⅰ－A－36(kWh,kL,t,m )3Consumption

2000
PurchaseAmount(*)(kWh,kL,t,m )3Consumption*: US$ or Reils

Unit Price
(*)

2001
PurchaseAmount(*)

69205/y$265,165/yPurchaseAmount(*)

30,600480R$205,177/y

US$ = 3,950Riels

0.35$/m 3(10% Tax included)

0.3426$/L

480R/kWh

Unit Price(*)(US$ = 3,950Riels at the end of 2002)

1,675,640

87,430202kL

2169460kWh(kWh,kL,t,m )3Consumption

2002

4. Electric Power Receiving
Items

No.

Unit

1

Receiving Voltage

2

Maximum Demand

3

Annual Electricity Consumption

4

Paid Amount of Electricity

5Power Factor

6

Annual Operating Hourh/y7

Average Electricity

MW

8

Maximum Electricity

MW

9Transformer Capacity per Unit

MVA

10

Number of Transformers

11

In-house Generation Capacity

1999

2000

2001

kV

2002

Note

22kV

From EDC 2001 ~kWh

216,940

US$ or Reils$470,432

8,760

1.5
1

kW

680 From IPP 1993 ~5. Boiler
Boiler No.

No.
1

Type

2

Built Year

3

Nominal Capacity (Steam)

1

2

3

4

1993

1993

1993

(2003)

Steam Pressure (kg/cm2G)
Steam Temperature (℃)
Evaporating Volume (kg/h)
4

782

500

300

Nominal Capacity (Electricity)
Generated Electricity (kWh)Generated Voltage (kV)Power Factor

5

Kind of Fuel

Diesel oil

Diesel oil

Fuel Consumption
6

1999
2000
2001
7

Diesel oil

Total data only
Refer to Page 34

Operating Period (Hours/Day)

2002

Diesel oil

No data

Operating Period (Hours/Year)
1999
2000
2001
2002

Ⅰ－A－37

6. Necessary Drawings and Documents
Items

No.
1

Plant Layout:

Refer to ANNEX 7

2

Process Flowchart of Major Products

Refer to ANNEX 6

3Energy Flowchart

4

Electric Skeleton Diagram

5

Structural Drawing of Major Equipment

No drawings

Measuring Points and Name of Instruments for Energy Consumption
6

Specification and Structural Drawings of Boiler

7

Energy Intensity : Energy Consumption / Output of Products

No.

Kind of Producta(Example)
Garmentb

Garment

Kind of Energy

Unit

1999

2000

2001

2002

Production

pcs/y

300,000

320,000

320,000

350,000

Fuel Oil

kL/y

3,000

3,200

3,100

3,300

Electricity

MWh/y

3,000

3,200

3,200

3,300

Production

Dozens812,000

942,000

Electricity (EDC)kWh/y2,169,460

Electricity (IPP)kWh/y1,675,640

Diesel Oil

kL/y

202

Casual wearc

ProductiondProductione

Production

Ⅰ－A－381,169,869

1,280,000

7. Energy Conservation Plan

Nothing!
June Textiles Co., Ltd wants to reduce the energy cost, but there are no targets or policy for
reduction of energy cost.

Cost composition:
Raw materials: 65%
Energy cost:

12%

Labor cost:10%

Maintenance:

5%

Ohters:8%

Ⅰ－A－39

8. Energy Conservation Items in the Past (including results)
Nothing!

9. Energy Conservation Items Undergoing (including expected results)
Nothing!

Ⅰ－A－4010. In case you have any problem(s) in your course of promotion of energy
conservation, please circle the number(s) of applicable item(s) among the following.
① Uncertainty of energy prospect② Less impact of energy cost to the whole cost of the enterprise③ The increasing energy cost can be covered by rising the price of products
4

Little possibility of energy shortage

5

Little potential for promoting further energy conservation

6

Shortage of engineers

7

Difficulty in obtaining good energy efficient equipment

8

Unreliable results from energy efficient equipment

9

Uncertainty about return of investment in energy conservation facilities⑩ Difficulty in obtaining good information such as successful case of energy saving activities⑪ Insufficient system of research and development
12

Shortage of fund for facility improvement and modification

13

Out-of-date facilities⑭ Low consciousness of employees
15

Lack of personnel who can educate the employees⑯ Shortage of measuring equipment⑰ No time to analyze energy consumption rate
⑱ Shortage of information on government's measures
19

Shortage of government's subsidiary measures

20

Others (Please add comments):

Ⅰ－A－41

KINGDOM OF CAMBODIA
NATION RELIGION KING*********

COUNTRY REPORTON

ECONOMIC AND ENERGY SITUATION IN
CAMBODIA

Ministry of Industry Mines and Energy (MIME)
Department of Energy Technique (DET)#47 Norodom Blvd., Phnom Penh, Cambodia.
Fax : (855) 23 428 263
E-mail : samy@forum.org.kh
Ⅰ−Ａ−42ECONOMIC SITUATIONCOUNTRY OVERVIEW
Cambodia is a member of the Association of Southeast Asian Nations (ASEAN). It has a total
land area of 181,035 km2 divided into 24 provinces and one municipality. According to the1998 final census, the total population was 11,437,656, of which, 85 percent live in rural areas
with agriculture as the main source of income. In 1999, the GDP per capita is about USD 271.
The national adult literacy rate was 68.8 percent. Adult literacy rates appear to have increased
by approximately 2.5% during the past few years (Table 1).
Table 1: Adult literacy rates by sex and Status, Cambodia
Type/ Sex
Both sexes
Male
FemaleCambodia
67.8
80.0
57.7

Phnom Penh
82.2
90.9
74.8

Other Urban
72.9
84.0
63.7

Rural
65.2
77.9
54.7

Cambodia possesses unique cultural and natural assets that have considerable international
appeal. The most well known place in Cambodia is the temple city Angkor situated about 300
kilometers North of Phnom Penh in the province of Siem Reap, just a few km from Siem
Reap town. About 95 percent of the population practice Buddhism as their religion, and theremaining 5 percent is shared by Islam and Christianity.

1. Geographic condition including land use pattern and ownership
The climate of Cambodia is tropical. Temperatures range between 20°C to 35°C throughout
the year. About one-fourth of the country’s total land area is appropriate for cultivation. The
country has four (4) geographical regions, namely: 1) Plain region, 2) Tonle Sap region, 3)
Coastal region, and 4) Plateau mountain region
2. Demographic condition including rural-urban migratation
As of March, 1998, the total population of Cambodia was 11,437,656 people. The breakdownof population, by area and sexes is shown in Table 2.
Table 2. Population of Cambodia by Sex and Urban-Rural Distribution
Total/Urban/Rural
Total
Urban
Rural

Both Sexes
11,437,656
1,795,575
9,642,081

Males
5,511,408
878,186
4,633,222

Females
5,926,248
917,389
5,008,859

About 4/5 of the population live in the Central plains, which included the area of MekongRiver and Tonle Sap Lake. Cambodia’s population density more than doubled in 1998 to 63
inhabitants per km2 compared to 37 inhabitants per km2 in 1981. In 1998, the Plain Region
showed the highest population density about 235 inhabitants/km2, Kandal Province 300,
Capital Phnom Penh 3,744.5, Takeo 222, Prey Veng 194, Svay Rieng 161, and Kampong
Cham 164. The low population density areas were: Plateau and Mountain Region (17.5
persons/km2), Mondulkiri (2.2 persons/km2), Stung Treng (7.3 persons/mm2), Ratanakiri andⅠ−Ａ−43

Preah Vihear (8.7 persons/km2), Kampong Speu (85 inhabitants/km2). The Coastal Region
has a density of of 49 inhabitants/km2, and Tonle Sap Region is 51.8 persons/km2.
3. Administration
Cambodia is a constitutional monarchy. King Norodom Sihanouk is the head of state. Prime
Minister Hun Sen is the head of the government. It has a National Assembly consisting of
122 members elected by the people from various regions. The Administration of theGovernment covers 24 provinces; with the seat of political, cultural, and economic activities
located in Phnom Penh.

4. Economic and Social Situation
Since the 1980’s, Cambodia has achieved some progress in economic development. Majoirtyof the labor force is engaged in agriculture. Main industries include: rubber, fisheries, gem
mining and food processing. For the past two years, cement and cotton factories have been
re-established; while garment and tourist industries have been expanded. Private investors,
mainly from France, Malaysia, Singapore, Thailand, and South Korea have establishedcommercial activities in recent years that provided boost to the economy. Cambodia’s main
imports are petroleum, automobiles, motorcycles, machinery equipment and construction
materials. The gross domestic product (GDP) and GDP in percent from 1994 to 1999 areshown in Table 3.
Table 3. Total GDP, GDP per Capita, and Growth Rate 1994-1999
1994
1995 1996 1997
1998 1999
Gross domestic product GDP (in MUS$) 2,385 2,923 3, I I3 3,033 2,868
3,182
GDP per capita (USS)
241
284
291
27-1
251 271
GDP (% increase)
4% 7.60% ° 7.0% 1.0%
I.0% 4.0%

Transportation and communications. There are six national highways linking Phnom Penhwith other areas, except the highway to Sihanouk Ville and to Kompong Cham, all otherhighways are in poor conditions while some others are not passable. Public transport in thecapital and some provincial cities are few. Bicycles and motorcycles are dominantly used bycommuters. Walking and buffalo drawn casts are common sights. Railway services areavailable from Phnom Penh to Battambang (at the border of Thailand) and to Sihanouk Ville.
There are several private companies engaged in telecommunication business such as: Mobitel,
SAMART Shinawatra etc. Development in this sector has greatly improved for the past two
years.
Health and Welfare. Adequate medical care is not available to the large portion of the
population. The Government is implementing a basic health care system and Internationalrelief organisations are working with hospitals to improve the system. The sanitation is poor.
Potable water is not readily available. Life expectancy in 1995 was 53 years for females and50 years for males.

Ⅰ−Ａ−44

Situation in the Past and at Present
1. Cambodia's power sector was severely damaged by years of war and neglect. In spite of
the Government's efforts, its institutions remain weak and power supply is unreliable, costly,
and mostly limited to urban areas. Consequently, only 12 percent of the households haveaccess to electricity: the lowest electrification ratio among South East Asian countries. In
most cities, deficiencies in the power supply remain due to weak management and poor
conditions of generation and distribution facilities. Further, the lack of a transmission systemprevents a more efficient use of power supply options resulting in one of the highest
electricity costs in the world.
2. After a two-year economic slowdown caused by a long political stalemate and East Asia's
financial crisis, political stability is emerging and Cambodia appears to be ready to resume asustained economic growth. GDP growth for 1999 is expected to reach 4% (as opposed to 1%
in 1998) and gradually increase to 6% in 2001 while Cambodia initiates a new era as amember of the ASEAN. Important part of this growth will be associated to industrial
expansion stemming from regional trade opportunities and located mostly in the Phnom Penh
– Sihanouk ville area. Therefore, the next 4 to 5 years will be characterised by an increasing
demand for infrastructure in this area. However, while macro economic stability and growth
are expected to be achieved, progress has yet to be made in addressing fundamental fiscal
problems, including a weak domestic revenue mobilisation and inefficient public expenditure
management. The efficient development of the power sector, open to private participation,
will be critical to support Cambodia's goal for sustainable economic growth and social
development due to the following reasons (a) the reliable provision of electricity services atlower costs is an essential condition for the growth of a competitive industry, and (b) power
investments for the period 1999-2003 are expected to reach 11% of domestic investment and2-2.5% of GDP, hence, a power sector successful in attracting direct private investment will
minimise the use of public resources, thus reducing the pressure on fiscal management
problems and releasing public funds for social objectives.
3. Cambodia's power sector is today at a crossroads. After a period of emergency
rehabilitation and reconstruction, the sector is ready to face development objectives aimed at:(a) improving sector efficiency and reducing electricity costs; (b) consolidating the ongoingreform; and (c) addressing the sector's social concerns, particularly the extension ofelectricity services to rural areas. It is therefore necessary to formulate and implement a
power sector strategy addressing the most salient problems of the sector:• lack of a legal and regulatory framework, including the lack of transparency andcompetition in the current process for private sector entry;• an entrenched public-oriented approach towards the management of public
utilities;• poor technical, commercial and financial performance of the sector;• weak investment planning;• lack of resources and strategy to provide electricity services to rural areas; and• a weak human resource base.
1.3.1 Energy resources
The energy situation in Cambodia is characterized by its very low conventional energy
consumption as compared to other Asian countries. The major sources of energy for
Cambodia are biomass and imported petroleum products. Biomass energy sources account foran overwhelming share; total woodfuel consumption in 1994 was estimated to be 1,617 ktoe
(FAO, 1997).
Ⅰ−Ａ−45

Cambodia’s sources of energy consist primarily of indigenous supplies of wood, which
together with other forms of biomass represented 83 percent of the total energy supply in
1995, while the remaining 17 percent consisted of imported petroleum products (Table 4).
Diesel oil and gasoline account for the bulk of petroleum product imports.
Table 4. Estimated Energy Supplies, 1995
Energy Source
Wood
Other Biomass & Dung
Petroleum Products
Fuel Oil
Diesel Oil
Kerosene
Kerosene Jet Fuel
Motor Gasoline
LP GasTotal

Tones
5,621,035
113,300
419,475
50,553
183,43125,015
10,748145,983
3,745

Terajoules
81,505
1,645
1,8107
2,056
7,835
1,112
468
6,467
170
101,257

1000TOE
1,941
39
431
49
187
26
11
154
4
2,411

% of Total
80.5 %
1.6 %
17.9 %
2.0 %
7.7 %
1.1 %
0.5 %
6.4 %
0.2 %
100 %

Note : TOE -Tons of Oil Equivalent
Source: MIME, Energy Department

Electricity in Cambodia is generated in 22 isolated systems, mostly from diesel generators.
Total installed capacity of electricity generation in Cambodia is estimated at about 122MW,
of which 85 MW are in Phnom Penh. As a result of the small size of generation units (300KW
to 5MW unit size), dependence on oil-based generation, and large distribution losses, the unit
cost of electricity in Cambodia is among the highest in the region.
1.3.2 Demand and Supply Forecasts
Table 2 Energy Demand Scenario *, 1995-2020
Terajoules
Total
Wood
Charcoal
Other Bio.
LP Gas
KeroseneJet Fuel
Gasoline
DieselFuel OilElectricity
Households
Wood
Charcoal
Kerosene
LP GasDieselElectricity
Other
Service Sector

1994

1995

94,148 94,583
77,721 77,721
1,097 1,097
1,754 1,642
103
170
1,323 1,112
725
468
6,002 6,089
4,580 5,393
65
64
777
827
81,530 81,395
77,329 77,329
935
935
1,046
879
35
57
80
176
352
378
1,754 1,642
918
989

1996

1997

1998

2,010 199505% / Yr
99,123 102,848 106,797 1,110,861 115,104 138,463 152,244
3.9%
79,980 82,288 84,662
87,103 89,616 103,552 106,344
2.9%
1,121
1,143
1,167
1,189
1,213
1,367
1,357
2.2%
1,633
1,625
1,616
1,608
1,600
1,559
1,351
-0.5%
212
257
310
362
421
729
1,050 15.7%
1,420
1,481
1,549
1,607
1,678
2,081
2,430
6.5%
725
761
799
389
881
1,125
1,435
9.2%
7,301
8,073
8,939
9,836 10,766 15,288 20,284
9.6%
5,751
6,149
6,576
7,031
7,521 10,539 14,783
6.9%
73
79
86
93
102
158
249
9.4%
907
991
1,093
1,191
1,308
2,066
2,962
9.6%
83,830 86,224 88,685
91,215 93,819 108,240 110,608
2.9%
79,536 81,804 84,134
86,527 88,985 102,546 104,730
2.9%
957
979
1,002
1,026
1,050
1,179
1,135
2.3%
1,117
1,155
1,190
1,226
1,263
1,468
1,512
5.3%
88
120
153
187
222
416
546 22.1%
84
86
88
91
93
106
107
-4.9%
415
45
501
551
607
967
1,229
9.8%
1,633
1,625
1,616
1,608
1,600
1,559
1,351
-0.5%
1,057
1,129
1,231
1,310
1,420
2,104
3,189
7.8%

Ⅰ−Ａ−46

1999

2000

2,005

Wood
Charcoal
Kerosene
LP GasDieselElectricity
Industry
Wood
Charcoal
Diesel Oil
Fuel OilElectricity
Transport
Gasoline
DieselJet Fuel
Fuel Oil

23
23
149
149
278
233
69
113
33
80
367
391
405
405
307
370
13
13
22
22
63
63
58
57
11,174 11,674
6,002 6,089
4,445 5,116
725
468
2
1

18
149
303
124
36
426
465
425
15
25
72
66
13,633
7,031
5,606
725
1

16
147
325
138
39
464
512
468
17
28
78
72
14,832
8,073
5,997
761
1

13
146
359
158
43
512
564
515
18
30
85
80
16,154
8,939
6,414
799
1

11
143
381
175
46
553
619
565
20
33
92
87
17,537
9,836
6,861
839
1

10
142
415
199
50
605
681
622
22
37
101
96
18,988
10,765
7,341
881
1

5
152
614
313
75
945
1,096
1,001
36
59
157
154
26,712
15,288
10,299
1,125
1

3
165
918
504
114
1,486
1,764
1,611
58
95
248
247
36,18820,284
14,4681,435
1*Demand by final consumers, not including fuel for electricity generation or wood for charcoal
Cambodia’s energy supplies forecasting 1990-2010 has not yet been estimated

ELECTRICITY SECTOR
A. Ministry of Industry, Mines and Energy (MIME)MIME is responsible for policy and planning of the electricity sector and also formanagement of supplies in 19 provinces of Cambodia.
One of MIME's important activities is its leading role in Renewable Energy activities
throughout the rural areas. This includes solar, biomass, biogas, and hydropower. The
potential for wind energy in Cambodia has not yet been assessed.
B. Electricity Authority of Cambodia (EAC)
The ElectricityAuthority of Cambodia was established by virtue of the new Electricity Law.
The EAC will be responsible for regulating the provision of electric power services. The
responsibilities of EAC include:• Licensing of companies for generation, transmission, distribution and retailing ofelectricity, including consolidated and subcontractor arrangements• Review and approval of tariffs• Monitoring of investments and power acquisitions by license,• Development and monitoring of performance, technical, safety and environmental
related standards• Certification and inspection of metering• Establishment of accounting standards• Enforcement of electricity law
C. Electricity du Cambodge ( EDC)
EDC is a public sector utility that has the non-exclusive responsibility for generation,transmission, distribution and retail of electricity throughout Cambodia. It presently provides
Ⅰ−Ａ−47

0.2%
10.2%
10.7%
-0.6%
9.2%
10.5%
10.5%
10.5%
10.5%
9.5%
10.4%
8.6%
9.6%
7.2%
9.2%
0.0%

the supplies to the nation's capital Phnom Penh and through grid extension to Kandal province
and also the provincial cities of Sihanouk ville, Steam Reap and Kompong Cham. EDC is also
expected to assume responsibility, for the fist three to five years, of the network rehabilitationand expansion being funded by the ADB in seven main provincial towns
Phnom Penh has the largest power system in the country. It serves about 80,000 customers
with a peak demand of 85 MW. EDC’s key electricity data as of 31 December 1999 include:• Total installed generation capacity• Maximum generation output• Energy Generation• Energy Sales (excludes own usage)• System Losses• 115 kV Network• 22 kV Network

115 MW
97MW
387 GWh284 GWh
24.05 %
23 circuit-km
341.04 circuit-km

D. Demand/Supply Forecasts 1999-2016 and Key issues
Over the past several years, the demand for electricity has been growing along with theeconomic growth. The demand growth has averaged 30-40 MW per year. The production ofelectricity is not adequate to meet demand. The present role of EDC is to improve theefficiency of generation, transmission and distribution on electric power in Cambodia.
Electricity Demand
Table 4. Expected Power Generation output for Cambodia (MW)-Base Case
Year
Banteay Meanchey
Battambang
Kampong Cham
Kampong Chhnang
Kampong Speu
Kampong Thom
KampotKandalKoh Kong
KratieMondul Kiri
Phnom Penh
Preach Vihear
Prey Veng
PursatRatanak Kiri
Siem Reap
Sihanouk Ville
Stung Treng
Svay Reing
Takeo
Total

1998
4.0
3.5
4.9
1.1
1.0
1.5
2.7
2.2
0.7
1.9
0.1
60
0.3
1.7
1.3
0.9
3.0
2.9
0.2
1.0
1.5
97

2000
5.9
5.7
7.8
1.6
2.0
2.4
4.8
3.9
0.9
3.2
0.2
93
0.5
3.0
2.3
1.1
4.2
3.4
0.5
1.6
2.4
150

2002
8.0
8.6
10.5
2.2
2.9
3.4
8.1
5.5
1.2
4.4
0.3
131
0.7
4.4
3.2
1.3
5.6
4.1
0.7
2.2
3.4
212

2004
10.0
12.0
13.0
2.8
3.8
4.5
10.1
6.7
1.4
5.7
0.4
170
1.0
5.5
4.2
1.5
7.1
4.8
0.9
2.8
4.2
273

2006
12.0
15.0
15.2
3.4
4.7
5.3
13.9
7.9
1.7
6.8
0.5
207
1.1
60.6
5.0
1.7
8.4
5.5
1.1
3.2
4.9
331

Source: Government of Cambodia, MIME Nov. 1998

Ⅰ−Ａ−48

2008
14.5
18.5
17.9
4.0
5.9
6.4
16.3
9.2
2.0
8.0
0.6
256
1.4
7.8
5.9
1.9
10.0
6.3
1.3
3.9
5.8
404

2010
17.3
22.4
20.5
4.7
7.2
7.5
18.9
10.6
2.3
9.4
0.7
304
1.6
9.0
6.9
2.2
11.5
7.3
1.5
4.4
6.7
477

2012
20
27
23
5
9
9
25
12
3
11
1
356
2
10
8
2
13
8
2
5
8
558

2014
24
31
26
6
12
10
28
13
3
12
1
418
2
11
9
3
15
10
2
6
8
651

2016
26
33
29
7
16
11
33
15
4
14
1
484
2
13
11
3
17
11
2
6
9
746

RENEWABLE ENERGY SECTORa) Institutional Setting
In 1995, a working group called "Solar Energy Application (SFA)" was formed by TechnicalEnergy Department of Ministry of Industry Mines and Energy. SEA is responsible inrenewable energy and performs the following activities:-

cooperation and coordination with Ministries, agencies concerning and donor,
data collection basically for study,
research, setting up the solar energy system I pilot project), training local people.
promoting and disseminating of this field,
report to MIME the results of the study.

b) Present Use, Potential, and Direction for Development
Solar Energy
Cambodia’s tropical climate is favorable for the utilisation of solar energy. This is reflected in
the annual mean temperature in the low-lying plain, which is about 26ºC. Measurements
during the periods of 1981-1988 at Phnom Penh indicate that the average sunshine duration
varied between 6.1 and 9.7 hours per day in August and December respectively.
The total installed PV capacity was about 204,586 Wp in Cambodia. PV installations include
private rural houses, schools, health center, orphans, pagodas telecommunication, etc.
Recently, the New Energy and Industrial Technology Development Organization (NEDO),
has installed PV battery charging system in Phnom Chino and PV water pumping in school at
Kompong Chnaing province. The projects are expected to: increase the economic condition ofrural people, increase the knowledge of the people, and to transfer information and technology.
Hydropower
Cambodia is the one of the South-East Asian countries that is rich in water resources. It has
the second largest hydropower potential in the lower Mekong Basin. According to the latest
preliminary study, the total hydropower potential of the country is estimated at 10,000 MW,
of which, 50 percent is in the Mekong, 40 percent in its tributaries and the remaining 10
percent in the south-western coastal area outside the Mekong river basin.
Cambodia's demand is projected at 175 MW in 2000, 380 MW in 2010 and 760 MW in 2020.
Due to improvement in economy, the increase in power demand cannot be met by existing
power supply capacities. The most urgent action for the utilities are to rehabilitate andupgrade existing power plants. This is considered critical as a continued shortage in theelectricity supply will seriously restrain the ongoing reconstruction and socio-economic
development of the country.
The need for Cambodia will be to use Cambodia's Hydropower potential in order to meet
future electricity demand and to reduce the dependence upon imported fuel and to exchangeof hydropower with neighboring countries.
Before the civil war, the Kirirom I Hydropower station was running with an installed capacityof 10MW, and energy was delivered to Phnom Penh through a 110 kV transmission line overa distance of 120Km. This Hydropower Plant was completed in 1968 as the first hydropower
station in Cambodia, but it was completely destroyed during the war after only 13 months of
Ⅰ−Ａ−49operation. However the facilities have been started to restore by Austrian and Swedish Aidprojects. The Prek Thnot project with an installed capacity of 18MW was implemented near
the Kirirom I Hydropower station, but the construction was interrupted in 1970 due to the war
In 1992 one small Hydropower Station at Present in Cambodia, and all of the operating
generator; now are diesel and okil-fired engines depending on imported oil
Wind Energy
At present, wind energy has not been used for power generation. Wind resource, especially incoastal and mountainous regions, is about l0 m/s. Measurements during 1981-1990 at Phnom
Penh indicate that the average wind velocity varied between 4.8 and l4.8 m/s in January andJuly respectively. There are some installations of wind energy for water pumping
implemented by an NGO, (Christian Outreach) for irrigation in Prey Veng Province.
Biomass
As in almost all Asian countries, biomass energy plays a major role in satisfying the ruralenergy requirements of Cambodia. According to FAO estimate, wood fuel consumption in1994 was 1,618 ktoe, and accounted for 84% of the total energy consumption in the country.
The total available wood fuels during the same year was 24.5 million toe. In addition, an
estimated amount of 167 ktoe of agro-industrial processing residues was also available as fuelin 1994 (FAO 1997). Due to the lack of modern technology, the development of biomass
system still very low. In Cambodia, biomass systems generally use agricultural wastes forcooking and small handicrafts in rural areas.
Biomass is also used in the industrial sector for copra drying and steam generation. However,no reliable estimates of the amount of biomass energy consumption for these purposes areavailable.
BiogasBiogas system in Cambodia used animal wastes for energy. The systems were implemented
by Christian Outreach, Food Agriculture Organization, and Padex. In some provinces. Prey
Veng, Kandal, Kompong Speu, Svay Rieng, Ta Keo, Kom Pot, and Siem Riep, there seems to
be considerable potential for biogas development. The energy potential of biogas fromrecoverable animal wastes in the country has been estimated to be about 228 ktoe/year(Bhattacharya et al., 1997).

REFERENCES :---General Population Census of Cambodia 1998
National Institute of Statistics, Ministry of Planning, Phnom Penh.
Funded by : United Nations Population Fund, July 1999
Report on the Cambodia Social-Economic Survey 1999
National Institute of Statistics, Ministry of Planning, Phnom Penh
Sponsored by : United Nations development Programme, Swedish International
Development Cooperation Agency and Executed by the World Bank
Report on Energy Policy and Conservation in Cambodia
Ministry of Industry Mines and Energy (MIME), Technical Energy Department
Ⅰ−Ａ−50Sponsored by : New Energy and Industrial Technology Development Organization(NEDO), Japan

Ⅰ−Ａ−51II.

Iron and Steel Industry

Participants for audit and survey of energy conservation in major industries of ASEAN
countries (Staff members from DOE, Iron and steel companies, ACE and ECCJ)
At a meeting room of company A, Manila, Philippines (Feb. 11, 2003)

II.

Iron and Steel Industry

1.

Project Summary
This project was intended to contribute to energy conservation, environmental
protection, and persistent economic development of ASEAN countries showing
remarkable economic growth and established as a part of the Infrastructure
Improvement for Rationalization of International Energy Use.
With ACE (ASEAN Center for Energy) as the core organization, this project attempts topromote energy conservation relating to major industries under cooperation of ASEAN
countries. As the country and industry to be surveyed in this fiscal year, Philippines andits iron and steel industry were chosen. Then, an audit plan was prepared based on thediscussion with responsible persons in this country. For four days on December 16
through 19, 2002 and February 10 through 14, 2003, audit was implemented at the sitesof two companies in the iron and steel industry with the presence of responsible personsof the Department of Energy (DOE) in Philippines.
The survey report including the Philippines’ political and economic status is discribed
below. However, we promised PSA (Philippine Steel-makers Association) and thesecompanies according to their request that the company names would not be disclosed.
Therefore, these companies are represented by e.g. “Company A”, etc.

1.1

Subjects of Study and Organizations Involved(1)Country and companies surveyedCountry: The Republic of Philippines
Companies :Company A (electric arc furnace factory) : Visit in the first visit and audit
survey in the second visit
implemented
Company C (electric arc furnace: Visit in the first visit
factory/rolling mill)Company D (electric arc furnace factory) : Visit in the first visit
Company B (rolling mill): Visit and audit survey in thesecond visit
Although four factories were visited, Company A with electric arc furnace(hereinafter reffered to as “EAF”) factory (totally 1.5 days) and Company B withrolling mill (1.5 days) were actually audited and surveyed.

II-1

(2)

Organization
1) Philippines
a. DOE (Department of Energy):
Ms. Teresita M. BORRA
Ms. Lilian C. FERNANDEZ
Mr. Jesus C. AUUNCIACION
Mr. Artemio P. HABITAN

Mr. Michel ESTRADA
Mr. Marlon R. N. DOMINGO
Mr. Antonio BASCO
Mr. Simon LEONOR
b. BOI (Board of Investments):
Mr. Ramon L. ROSALES
Ms. Amelia P. CABALLERO

Director EUMA
Division Chief
Chief Science Research Specialist,
Energy Efficiency Division
Supervisor,
ScienceResearch,
Monitoring & Evaluation Section,
Energy Efficiency Division
Energy Efficiency Division
Energy Efficiency Division
Monitoring
Energy Audit

Director, Industry Planning Dept. 3
Officer of Construction Materials,
Metal-works & Machinery Divisionc. PSA (Philippine Steel-makers Association) :Mr. Antonio P. ARROBIO
Secretary of the Philippine Steel-makers
Association (Vice President of Cathay
Pacific Steel Co.)
d.
e.
f.
g.
h.

Company A (EAF factory): 6 persons
Company C (EAF/rolling mill factory): 3 persons
Company D (EAF factory): 1 person
Company B (roll factory): 4 persons
Other companies participated in the workshop : 6 persons from 2
companies

2) ACE:
Mr. Christopher ZAMORA
3) ECCJ:
Hiroshi Shibuya
Ichiro Matsuura
Hideyuki Tanaka

Department Manager of International Engineering
Department
Technical Expert of International Engineering
Department
Technical Expert of International Engineering
Department

II-2

1.2

Political and Economic Conditions of Philippines(1)

National indicators
Country name :Area:
Population:
Capital:Language:
Religions:(2)

The Republic of the Philippines
294,554 km2
76,499 million (census value as of May 1, 2000)
Manila (population: 1.58 million)
Many languages including Filipino, English, and Ilocano
Catholicism (84%), Philippines Independent Church/
Protestant (11%), and Islam (5%)

Basic economic indicators
Table II-1-1 shows the basic economic data of Philippines.
Table II-1-1

Basic Economic Data of Philippines
1998

GNP (100 million US$)
GNP per capita (US$)
Economic growth rate (%)
Inflation rate (%)
Unemployment rate (%)
Total trade value
Exports(100 million US$) Imports

685
912
-0.6
9.8
10.0
295.0
296.6

1999
802
1045
3.4
6.7
9.8
350.4
307.4

2000
790
1007
4.0
4.4
11.2
380.8
313.9

2001
757
945
3.4
6.0
11.1
321.5
295.5

Substantial GDP growth rate : 3.4% (2001)
Nominal GDP total amount : 3,642,820 million pesos (2001)
71,438,068,586 US$ (1 US$ = 50.9927 peso on an annual average)
Current balance (on an international balance basis) : 4,504 million US$ (2001)
Trade balance (on an international balance basis) : 2,598 million US$ (2001)
Foreign currency reserves : 134,42.6 million US$ (2001)
Foreign liabilities balance : 520,60 million US$ (2001)
Exchange rate (term average) vs. US$ rate : 50.9927 (2001)
Exchange rate (term-end value) vs. US$ rate : 51.404 (2001)
Exports to Japan: 5,055 million US$ (2001) FOB
Imports from Japan : 6,097 million US$ (2001) FOB

II-3

(3)

Political system
System of government : Constitutional republic system
Head of state: Gloria Macapagal Arroyo
Assumption of office : Promoted to President from Vice-president on January
20, 2001
Parliament: Bicameral
Outline of parliament (number of seats, date of founding, term of office):
Regular members of upper house 24 (national constituency), lower house 262(by both proportional representation and single-member constituencies);
Term of office: upper house 6 year (half the seats being reelected every 3
years); lower house 3 years
Major ministries: Department of Finance, Department of National
Defense, Department of Trade and Industry,
Department of Justice, Department of Tourism,
Department of National Economic Development
Authority, Department of Transportation andCommunications, and Department of Budget andManagement(4)

Political developments• May 1998: Josef Estrada is elected to be a president of the Philippines,
largely thanks to the support of the population’s lower income brackets• October 2000: President Estrada suffers a steep fall in popularity as a resultof widespread allegations of illegal gambling, misappropriation of publicfunds, and so on. On October 12, Vice-president Gloria Macapagal Arroyo
resigns her cabinet post, and on November 2 Secretary of Trade and Industry
Roxas also resigns. Messers chairmen and many members of both houses ofCongress leave the ruling coalition, known as LAMP, and the situation moves
toward impeachment of the President.
• January 16, 2001: The refusal – at the impeachment hearings – to disclose
important evidence regarding accusations of illegal amassing of personal
wealth by the president, leads to mounting demonstrations by the generalpublic. President Estrada successively loses the support of his cabinet
members, and Ms. Arroyo is proclaimed president.
• May 1, 2001: Police clash with a huge crowd of supporters of former
president Estrada, protesting against plans for his arrest. On the same day,President Arroyo declares a state of emergency, allowing the arrest of theformer president without a court warrant.

II-4

• In the interim elections on May 14, 2001, 8 out of 13 seats up for re-electionin the upper house are captured by the ruling party coalition led by President
Arroyo. Together with those seats that the coalition held that were not up for
re-election, this gives the coalition a majority in the upper chamber.
• August 7, 2001: A cease fire is agreed between the government and the Moro
Islamic Liberation Front (MILF) following President Arroyo’s rejection offormer president Estrada’s hard-line stance against the MILF.
• November 19, 2001: An armed group supporting Misuari, honorary chairmanof the MILF and governor of the Mindanao Islamic Autonomous Region(MRMM) attacks an army post on the island of Jolo in Sulu Province. Mr.
Misuari requests postponement of the gubernatorial election set for
November 26, and the suspicion is widespread that the attack was made forthe purpose of putting off the election. On November 24, Mr. Misuari isarrested in Malaysia on suspicion of illegal entry: he is subsequently returnedto the Philippines.
• November 26, 2001: Husin wins the MNLF deputy chairman The MRMM
election. The Arroyo administration officially recognizes him as the new
governor.
• July 22, 2002: President Arroyo makes the second policy speech after theassumption of office and announces the statuses of achieving poverty
eradication, modernization of the agricultural sector, peace preservation, andmacro economy development as the pledges made in the preceding year andindicates the goal of the future policies. She focuses on employment securing
and investment invitation – and among them – shows a positive stance forsolution of labor problems for investment invitation.
(5)

Economic trend
Under the administration of President Ramos (1992-1998), a high growth wasachieved through introduction of foreign capitals and under the control ofexports by promoting economic structure reforms including reform of thegovernment’s finances and deregulation. The substantial GDP growth rate rose
steeply from a mere 0.3% in 1993 to 5.7% in 1996 and 5.2% in 1997.
The Philippine peso, too, was affected by the East Asian currency crisis, which
was sparked by a steep fall in the exchange rate of the Thai currency, the baht, in
July 1997. On top of a rising inflation rate and the government’s deteriorating
financial balance, bad weather caused by the El Ninho phenomenon led to poor
harvests, and as a result, the Philippines in 1998 recorded its first negative GDP
growth figure since 1991, at minus 0.6%.
In 1999, the output of farm crops such as rice and corn recovered thanks to
improved weather, while the manufacturing sector also held firm. Therefore, theGDP growth rate recovered to 3.4% and the GNP growth rate to 3.7% (0.4% riseII-5

in 1998) and the trade balance registered its first surplus in 11 years, at US$4300
million.
In 2000, although the farming sector experienced a slowdown, manufacturingindustry enjoyed sharp growth, and, supported by strong consumer demand andvigorous exports, the GDP growth rate showed a 4.0% increase, the GNP growthrate showed a 4.5% increase, and the trade surplus was US$6700 million.
In 2001, the GDP growth rate maintained a 3.4% increase, topping thegovernment’s target of 3.3%, supported by firm faming and service sectors andpersonal consumption in good condition, although exports and the mining andmanufacturing industries declined as a result of worldwide stagnation.
By the third quarter in 2002, the substantial GDP growth rate was 4.1 (3.0% in
the preceding year) and the substantial GNP growth rate was 4.2% (3.6% in thepreceding year). In the fourth quarter, the government’s goal for GDP 4.0% and
GNP 4.5% may be achieved because a demand increase by remittance of a large
amount by workers in overseas in Christmas season is expected.
(6)

Trades and investments between Philippines and Japan
Although Japan is a second large trade partner for Philippines, following theUnited States, Philippines shows a deficit constantly. In past years, the major
items of export to Japan were primary products such as fishery products andbanana. Recently, processed products such as semiconductors and wire harnesses
have increased. Most items imported from Japan are industrial products, among
which electronic/electrical parts and automobile parts rank higher. The trade
amount between Japan and Philippines in 2001 (exports + imports) is simply
2.1% from the standpoint of Japan but it is 16.7% from the standpoint ofPhilippines (the United States: 24%).
Japan is one of the major countries investing to Philippines and many
investments are being made to the manufacturing sector in the economic special
district. For the types of industry, major investments are made to electronics,
followed by transporting components and processed metal items.

II-6

1.3

Energy Status in Philippines
The following description is based on “Philippine Energy Plan 2002-2011” announced
in November 2001.
(1)

Primary energy consumption
Primary energy consumption in Philippines had increased 3.5% on an annual
average between 1995 and 2000. Since the GDP growth rate on an annual
average in this period was 3.5%, the energy elasticity rate to GDP was 1.0. In
2000, energy consumption was 249.5 million barrels of fuel oil equivalent.
Although the percentage of petroleum in total primary energy consumption
reduces year by year, it is still high (45.5%) and almost 100% of petroleum
depends on imports. For energy sources produced domestically, the recycle type(bagasse, agricultural waste, timber, etc.) is 30.1%, hydraulic power is 5.1%, andgeothermal energy is 8.2%.

Table II-1-2 Transition of Primary Energy Consumption (Assuming a Big Volume
Consumption of Domestic Energy)
Unit: Barrels of fuel oil equivalent (MMBFOE)
1995 (actual)2000 (actual)

2006 (forecast)2011 (forecast)DemandComposition %DemandComposition %DemandComposition %DemandComposition %Domestic
production

92.2

44.0

111.9

44.9

191.5

58.2

254.2

55.7

Petroleum

0.03

0.02

0.3

0.1

13.1

4.0

7.2

1.6

Gas

0.0

0.0

0.04

0.01

31.0

9.4

57.5

12.6

Coal

6.1

2.9

4.4

1.8

7.4

2.2

14.4

3.2

Hydraulic
power

10.7

5.1

12.3

5.1

20.1

6.1

30.1

6.6

Geothermal

10.6

5.0

19.7

8.2

30.9

9.4

42.1

9.2

Recycle type

64.8

30.9

75.1

30.1

89.1

27.1

102.8

22.6

Imports

117.5

56.0

137.6

55.1

137.6

41.8

200.2

43.9

Petroleum

114.0

54.3

113.3

45.4

117.6

35.7

175.4

38.5

Coal

3.5

1.7

24.3

9.7

20.0

6.1

24.8

5.4

Others

0.0

0.0

0.0

0.0

0.0

0.0

1.7

0.4

Total

209.7

100.0

249.5

100.0

329.1

100.0

456.1

100.0

Source: PEP 2002-2011

II-7

(2)

Electricity
For electricity generated in Philippines, 45.3 TWh was produced in 2000 and
exceeded 41.4 TWh in the preceding year by 9.3%. For the demand by
application in 2000, 36.1% was for the industrial sector, 35.3% was for the
residential sector, 26.0% was for the commercial sector, and 2.6% was for thetransportation and other sectors. For the electricity demand in 10 years from2001 to 2011 based on the estimated economic growth rate of 6% on an annual
average, an increase of 9.3% on an annual average is expected and 45.1 TWh in
2001 will increase to 110.2 TWh in 2011.
Table II-1-3

Actual/Forecast Transition of Electricity Generation
Unit: TWh
2000 (actual)

2001 (forecast)2011 (forecast)

Electricity Compogeneration sition %Electricity Compogeneration sition %Electricity Compogeneration sition %Luzon Grid

35.0

77.2

35.0

77.6

82.3

Visaya Grid

4.2

9.2

4.7

10.4

Mindanao Grid

6.1

13.6

5.4

12.0

Total in Philippines

45.3

100.0

45.1

100.0

110.2

Growth rate on
an annual
average between
2001 and 2011%

74.7

8.9

12.6

11.4

10.4

15.3

13.9

11.0

100.0

9.3

Source: PEP 2002-2011
The system of electricity industry in Philippines is characterized by the fact thatthe system is divided by clear sections that are electricity generating/transmitting
companies and electricity distributing companies. National Power Corporation(NPC) and Manila Electric Company (MERALCO), both of which are national
corporations, monopolize the electricity market. NPC performs consistent
operation of electricity generation and transmission. MERALCO distributes
electricity to Manila and adjacent areas and electricity distribution to other areas
is sold wholesale to local electrification cooperatives and NPC also sells
electricity to major industrial demands. However, since the electricity enterpriseis monopolized, the NPC’s business is not streamlined and its debt increases.
Additionally, the electricity charge increases due to electricity distribution losses,
etc., so the electricity charge in Philippines is second higher, following Japan in
Asia. As an action plan, “Electric Power Industry Reform Act (Republic Act
No.9136)” containing the action of selling NPC and putting it under private
management as a core was established in the congress in June 2001 to make theelectricity sector more efficient through entry of private capitals and introductionof the principle of competition. The Electric Power Industry Reform Act also
expresses that local electrification should be proceeded with. For rural villages,
villages of approximately 25% still cannot access the electricity transmission
network. The government’s plan aims at achieving electrification of 95%

II-8

barangays (minimum administrative units) by 2004 and full electrification by2006.
Because of the geographical features of Philippines as a country of islands, the
NPC’s electricity transmission network consists of three grids; Luzon, Visaya,
and Mindanao. Electricity is distributed by MERALCO in Manila, by electricity
distribution companies such as VECO in Visaya, and by approximately 120 local
electrification cooperatives in rural areas. The largest electricity distribution
company is MERALCO. Promotion of local electrification is under control of
National Electrification Administration (NEA), which is responsible forconstructing local electricity distribution equipment, organizing and supervisinglocal electrification cooperatives as electricity distribution organizations, andimplementing staff training, etc. but does not distribute electricity directly. For
electricity generation equipment (NPC) by grid, the Luzon grid uses thermal
power, the Visaya grid uses geothermal power, and the Mindanao grid uses
hydraulic power as major sources.
Table II-1-4 Electricity Source Constitution of Philippine (NPC) Electricity
Generation by Grid (2000)
Unit: TWhLuzon Grid

Visaya Grid

Mindanao Grid

Total

Electricity Constitu- Electricity Constitu- Electricity Constitu- Electricity Constitugeneration tion %generation tion %generation tion %generation tion %Thermal
power

20.29

65.5

0.64

17.4

0.49

9.0

21.90

54.0

Petroleum

4.97

16.0

0.36

9.8

0.49

9.0

6.30

15.5

Coal

15.32

49.5

0.28

7.6

0.00

0.0

15.60

38.5

Hydraulic
power

3.16

10.2

0.01

0.3

4.19

76.7

7.36

18.1

Geothermal
power

7.51

24.3

3.02

82.3

0.78

14.3

11.31

27.9

Total

30.96

100.0

3.67

100.0

5.46

100.0

40.58

100.0

Source:(3)

NPC 2000 Annual Report

Energy priceFor the NPC’s electrical charge by area, the energy price is approximately 2
peso/kWh in local areas (5.6 yen/kWh if 1 peso = 2.8 yen) and approximately 3
peso/kWh in urban areas (8.4 yen/kWh). Therefore, the price in urban areas ishigher.

II-9

Table II-1-5

Luzon Grid
Visaya Grid
Mindanao Grid
Philippines

NPC’s Electricity Charge
Peso/kWh
1999
2000
2.84
3.34
2.52
3.23
1.67
1.93
2.65
3.12

Source: 2000 Annual Report “National Power Corporation (NPC)”
The fuel prices (according to the data from the Energy Industry Administration
Bureau of the Department of Energy; as of September 2000) is as follows:
Gasoline (lead-free) 16.85 to 17.36 peso/L
Diesel oil
13.04
Kerosene
12.59(4)

Government offices responsible for energy conservation and promoting
organizations
1) Department of Energy (DOE)
This department aims at streamlining, integration, and adjustment of various
programs of the government in the field of energy resources in Philippines,by conducting total and integrated mining, production, management,
development, preservation, recycling, efficient utilization, continuous,adequate, and economical reservation of supply; and considerations to theenvironment.
Since DOE was established in 1992, it developed the Philippine Energy
Plan (PEP) every year and announced the future prospect and plan on theenergy supply and demand status, prospect, and governmental policy incoming 10 years. As auxiliary organizations relating to energy, Philippine
National Oil Company (PNOC), National Power Corporation (NPC), andNational Electrification Administration (NEA) are under supervision of thisdepartment.
2) Energy Regulatory Commission (ERC)
The former name was Energy Regulatory Board, which was renamed toEnergy Regulatory Commission (ERC) in June 2001. This commission is
responsible for establishing standards for the energy demand side
consumption efficiency improvement plan (DSM Program) in connection
with the energy conservation policy. This commission has jurisdiction overthe DSM framework program.

II-103) National Power Corporation (NPC)This national organization is under supervision of DOE and it is responsible
for consistent operation of electricity generation and transmission
throughout Philippine and electricity distribution to major industrial
demands.
4) Manila Electric Company (MERALCO)
This national organization is under supervision of DOE and it is responsible
for electricity distribution to Manila and adjacent areas.
5) National Electrification Administration (NEA)
This national organization is under supervision of DOE and it is responsible
for electricity distribution to rural areas and electrification of farming
villages.
6) Philippine National Oil Company (PNOC)This company is responsible as the leader of R&D for energy in Philippines.

II-11

1.4

Iron and Steel Industry in Philippines
Description below is based on the material by Philippines BOI (Board of investments).
(1)

Supply and demand of iron and steel in Philippines
The maximum iron and steel consumption in the past in Philippines wasapproximately 4 million tons in 1960. Then, the consumption has decreased. In
2000, the demand of iron and steel was 3.136 million tons, which was 5.2%
smaller than that in the preceding year. This was caused by reduction of public
enterprises due to budget shortage. In 2001, the level in 1999 was restored. In
2002, the demand will increase by 3.2% to 6.5% compared with that in 2001.
(See Tables II-1-6 and II-1-7.)
Facilities in National Steel Co. (NASCO) that had supplied more than 50% of
steel sheets, etc. was shut down in November 1999. Now, all steel sheets, etc. areimported.
Table II-1-6

Demand of Iron and Steel in Philippines(Unit: 1,000 tons)

1999

Year
Flat
Products

Local Prod’nLong
Products
Total Steel

2000

2001

Sem 1
2001

Sem 1
2002

2002 Forecast
Low

High

144

--

--

--

--

--

--

Imports

1,443

1,386

1,483

734

815

1,550

1,600

1,587

1,386

1,483

734

815

1,550

1,600

Local Prod’n

1,286

1,350

1,386

711

752

1,450

1,485

434

400

474

226

256

450

475

1,720

1,750

1,860

937

1,008

1,900

1,960

Local Prod’n

1,430

1,350

1,386

711

752

1,450

1,485

Imports

1,877

1,786

1,957

962

1,071

2,000

2,075

3,307

3,136

3,343

1,671

1823

3,450

3,560

Imports

Table II-1-7
Kind of Products
Hot rolling products

Demand of Iron and Steel in Philippines (by Kind of Product)(Unit: ton)
Sem 1, 2001

Sem 1, 2002

Increase/Decrease

366,200

420,000+14.7%

Cold rolling products

177,200

218,200+23.1%

Coating products

152,200

165,000+8.4%

Tin plate92,400110,000+19.0%

Zinc coated31,50047,100+49.5%

Pipe & tube

23,00011,700- 49.1%

Billet590,000

635,800+7.8%

Long finish

224,000

265,600+18.6%

II-12

The import in the first half of 2002 reached 59.3% of the total import in 2001.
According to the tables shown above, the volume of imported billets is large andapproximately 80% of material for producing bar steel in Philippines relies onimport.
(2)

Development and problems of iron and steel industry
Iron and steel manufacturers, foundries, and scrap traders petitioned thegovernment to inhibit or at least regulate scrap export through the policy
statement submitted to the trade industry committee in the congress, to save theiron and steel manufacturers and foundries that were facing a crisis. Since 80%of their raw materials are scrap and iron and steel products, they mentioned thatthe domestic iron and steel industry would surely be collapsed unless scrap
export is inhibited or regulated.
This industry consists of 250 companies, to which capitals of more than 10
billion peso and more than 500 thousand employees are committed, directly or
indirectly. This industry pays taxes of hundreds of million pesos to thegovernment, has economic connections with other industries and saves foreign
currencies that are important to the country. In Philippines, 13 melting
companies using EAFs in the past are reduced to 5 companies and the others
changed to single rolling mills.
1) Billet production sector
For billet production, the EAF – continuous casting system is employed.
Types of steel are plain carbon steel (structural steel), intermedium-classsteel, and high-strength steel.
Billet production in 2001 was 420,000 tons, which was 36% of the
manufacturing capacity (1,160,000 tons).
Two companies with a capacity of 300,000 tons/year are not currently
operating.
2) Rolling sector
Rolling mills produce reinforcing steel bars for civil engineering andconstruction, wire rods, and shapes and sections steel. Reinforcing steel bars
are categorized into two types; structural steel and intermediate/highstrength steel. There are about 25 manufacturers of structural steel. The
number of manufactures of intermediate steel/high-strength steel is 4. For
wire rods, inexpensive products are mainly imported from Russia andUkraine. Mills in this sector are changing to produce reinforcing steel bars.
Shapes and sections steel is produced by mainly two companies. The
capacity of overall mills is approximately 3.6 million t/y.

II-133) Company management structure
These companies are mostly family corporations. However, three companies
are stockholding companies to which foreign countries are committed.
4) Technology- Field of melting
Most companies performing melting have new excellent equipment withhigh-productivity for which auxiliary equipment and productivity havebeen enhanced and processes have been improved.
The cost of production with the equipment is fully competitive against
foreign countries, thanks to convenience of transportation, minimum
depreciation, and inexpensive personnel expenses.
- Field of rolling
Rolling mills are divided into three types; the continuous type, the semicontinuous type, and the non-continuous type, namely cross country. The
continuous type has a rolling stand with full tandem arrangement and has
a heating furnace with high-speed operation, computer control, and highfuel efficiency. There are 3 companies, each of which has a capacity of atleast 300 thousand t/y.
The semi-continuous type has a reverse type roughing mill stand or aloop type with semi-tandem arrangement. There are 12 companies andthe average capacity is 150 thousand t/y.
The non-continuous type mills has a minimum scale that meets at least
the economic requirements and it is operating with high fuel consumption
and depending man-hours mostly. Most mills belong to this category.
(3)

Present situation of iron and steel industry
1) High electricity cost: Electricity from MERALCO = US$0.11/kWh
2) High transportation and handling costs. Equipment improvement isnecessary.
3) Financing problem. Financing organizations are very careful because of thecurrency crisis in 1997 through 1998.
4) Ineffective and unnecessarily high-quality standards are forced. As a result,cost reduction is difficult.
5) New investors as well as existing manufacturers should be encouraged tomake investment so that the operation cost will be cut down throughenhancement of equipment and technology and improvement of operation.
New investments depend on how efficiently the problems 1) to 4) arehandled.

II-14

(4)

Issues of customs duties
Regarding the iron and steel industry, some developments were noticed in thepast one year.
1) A new damping act was enforced according to the WTO’s instruction.
2) A safeguard action act protecting domestic industries against the increase ofimports was approved. In 2001 through 2004, the government approved a
new customs duties structure for cutting down customs duties to materials
and products. For semi-products, customs duties will be cut down from 3%.
For final products (bars, coated steel, and pipes), customs duties will be
gradually cut down from 10% to 5%.
As these situations indicate, the iron and steel industry in Philippines is presently
in a very tough status.

In 2003, the price of imported billets has steeply increased. The price was 160 to 170
US$/t last year and the price increase is approximately 100US$/t. Therefore,
manufacturers with EAF are in the condition of full production now. Since production
might be obstructed, some companies visited in the first survey turned down the audit
at the second survey.

II-15

2.

Overview of Factories with Electrical Arc Furnace and Rolling Mill Audited
For implementation of audit and survey for iron and steel industry in Philippines, ECCJ
requested ACE to select two factories with EAF in Manila or adjacent areas.
ECCJ visited the factories of three companies and explained the purpose of audit andsurvey, and learned the factory overview, etc. ECCJ picked up two out of these threecompanies as candidates and requested DOE to realize re-visit for audit and survey atthe second visit.
By the second visit (February 2003), making a confidentiality protection duty
agreement to two companies, ECCJ carried out the audit and survey.
Overview of each iron and steel company selected is described below.

2.1

Overview of Company A (Factory with EAF)
Location:
Product:
Number of employees :Working system:
Organization:

Metro Manila
Billet160 (including 7 engineers)
8-hour work with 3 shifts
Figure II-2-1 shows the organization of Company A. The
headquarters is located in Metro Manila.

II-16

Factory Manager

Superintendent

Administration Officer

Supervisors

OfficeRank and File
Employee

Figure I-2-1
Operation overview:

Organization of Company A

This factory produces billets with a small AC EAF and acontinuous casting machine. The company was founded
about 30 years ago and continues a pattern of operation for
11 months a year. The full volume of produced billets isdelivered to a rolling mill company that is several
kilometers away.
The energy sources are electricity and petroleum. The fullvolume of electricity is purchased from Manila ElectricCompany (MERALCO). For emergency use, this factory
has a private diesel power generator for lighting andcooling water supply. A special fuel oil (mixture of diesel
oil 60% and bunker oil 40%) for the ladle heating burner.
In addition, coke and oxygen (purchased oxygen andoxygen privately generated by PSA) are used to run the
EAF. For continuous casting, LPG is purchased to cut
billets.

2.2

Equipment and Capacity of Company A(1)Equipment
EAF:

AC furnace
Rated capacity: X t/heat,
Maximum capacity: 1.4X t/heat

1 setContinuous casting machine: 2-strands billet continuous casting machine 1 set

II-17

Dust collector:

Push-in type bag filter

1 set

PSA (oxygen producing) equipment:
Air compressor:
Overhead traveling crane:
Scrap/slag carrying car:
Cooling water supplying/treatment equipment:
Electricity receiving equipment:
Emergency power supply equipment (diesel power generator):
In addition, there are lightings and air conditioners.
(2)

1 set
3 sets
9 sets2 sets
1 set
1 set
1 set

Factory layout
Figure II-2-2 shows the factory layout of Company A.
This layout shows that the EAF and continuous casting machine are installed in
the same yard.

Scrap yard

Continuous casting machine
EAF

Figure II-2-2(3)

Factory Layout of Company A

Operating system
About 140 workers with 3 shifts, 11-month operation a year
The shutdown period for maintenance is 8 hours every week and 1 monthincluding the year end and new year.

II-18

(4)

Energy in use
Table I-2-1 shows types of energy used in the factory.
Table I-2-1

Type
Special fuel oil
Diesel oil
LPG
CokeElectricity
Purchased oxygenTypes of Energy in Use

Application
Remarks
Ladle heating
Diesel oil 60%, bunker oil 40%
Truck
Continuously casting; billet cutting
EAF injection
EAF, etc.
Emergency power is privately
generated.
EAF injection
Privately generated andpurchased

II-19

2.3

Overview of Company B (Factory with Rolling Mill)
Location:
Product
Number of employees :Working system:
Organization:

About 1 hour by car from Metro Manila
Reinforcing steel bar
450 (including 56 engineers)
8-hour work with 3 shifts
Figure II-2-3 shows the organization of Company B.
The headquarters is located in Metro Manila.

Operation overview

This factory imports all billets (material) from foreigncountries and rolls them to produce reinforcing steel bars.
The production capacity is more than 300 thousand t/y.
The company is likely to be affected by economic
situations of foreign countries and seems to be making
efforts in procurement of material.
When we visited for audit and survey, operation was shut
down for a weak because of material shortage, andequipment maintenance was being implemented.

:

Factory Manager

Business Operations

Shipping

Factory Operations

Technical
Service

Figure I-2-3
2.4

Production

Factory Gen.
ServiceOrganization of Company B

Equipment and Capacity of Company B(1)Equipment
Heating furnace : Walking beam type heating furnace using bunker oilfor rolling
Capacity of heating furnace: Maximum 65 t/h or more, long
billets heatable
Burner layout: set on both sides
Exhaust heat recovery recuperator provided

II-20

Rolling machine : Tandem horizontal/vertical type, linear layout
Continuous quenching machine provided
Cooling bed
Electricity receiving/transformer equipment:
4 setsAir compressor:
6 setsCooling water supply and water treatment equipment: 1 set
In addition, there are emergency power supply equipment, lighting, and air
conditioner as the equipment in the rolling mill.
(2)

Factory layout
Figure I-2-4 shows factory layout of Company B.

Billet yard

Heating
furnace

Rolling
machineCoolingbed

Figure I-2-4(3)

Factory layout of Company B

Operating system
3 shifts, 24-hour operation

II-21

(4)

Energy consumption
Table I-2-2 lists types of energy used in the rolling mill.
Table I-2-2

Type
Heavy oil
LPG
OxygenElectricity

Types of Energy Used in the Rolling Mill

Application
Remarks
Heating furnace
Bunker oil S: 2.5 to 2.9%
Billet cutting
Billet cutting
Machine operation, lighting, etc. Emergency power is privately generated.

II-22

3.

Audit Plan
The situation at the first visit was described in the preceding section.
The purpose of audit and survey by visiting Philippines was to grasp the productmanufacturing processes, energy consumption, and actual status of exhaust heatutilization of the selected factory with EAF, offer an improvement plan for promotion ofenergy conservation, and convene a workshop to introduce the energy conservation
technologies and activities in Japan and enhance and propagate consciousness on energy
conservation for enlightenment. Further, it was intended to provide support so that
persons of ASEAN promoting energy conservation can establish the standard energy
conservation audit method, based on the status of similar industries and the technicallevels of energy conservation audit in ASEAN countries, after implementation of theenergy conservation audit.
Audit and survey were implemented during the second visit.
First, the energy conservation workshop was convened. Following the explanation onthese activities by ACE and DOE, ECCJ introduced the energy conservation technology
being implemented for the iron and steel industry in Japan to develop understanding.
Audit was implemented in two factories. Confirmation with the questionnaire sent inadvance and actual survey in the factories were performed. In the first factory,
particularly, a wrap-up meeting was held to propose the improvement plan.

3.1

Audit Proceeding(1) Company A
Company A that accepted energy conservation audit and survey owns the factory
visited in the first visit. The Factory Manager was very much concerned about
cost reduction and therefore he was very cooperative with the audit and survey.
The response to the questionnaire had been prepared. The response was checked,
factory tour was made, and then the site was re-visited to implement audit.
The meters used by the audit team were the radiation thermometer, illuminancemeter, and clamp type ammeter brought from Japan.
(2)Company B
We first brought the questionnaire and gave explanation. The actual audit andsurvey were performed on the following day only but audit itself was impossible
because factory had been shut down as described before. We checked the
response to the questionnaire, acquired information on operation, and made afactory tour to see the equipment under maintenance.

Taking photographs at the site was strictly forbidden by the both companies,
therefore visual information couldn’t obtained at all.

II-23

3.2

Selection of Equipment to be Audited and Checking the Response to theQuestionnaire
Energy used in the factory with EAF is mostly electricity (purchased electricity) used
for the EAF, motor drive to run equipment, etc. Energy conservation should be applied
to and focused on electricity.
Although the questionnaire from ECCJ was handed to these companies one day before
the audit, responses in a satisfactory level were prepared. We gained a goodunderstanding and cooperation, and were able to check the contents smoothly.
The questionnaire is attached.

3.3

Audit Schedule
During the first visit, three factories with EAF were visited but they did not accept
audit and survey. As a result, we simply learned the operation status. Company A wasabout 1 hour away by car from the Manila city center. Companies C and D were 80
km away from the Manila city center and it took more than 2 hours to visit these sites
because of traffic jam.
Actual audit and survey were performed during the second visit. It took 2 days foraudit and survey in Company A including the meeting, and 1.5 days for Company B
that determined acceptance upon the second visit.
First survey: Implemented in December 2002
December 16 (Mon.)
Meeting with DOE and ACE to discuss aboutaudit implementation.
Visited BOI to learn the current status of the ironand steel industry in Philippines.
Visited PSA to discuss a way out of the current
difficulty in finding the factories to be audited,
explain the factories to be visited, and request for
introduction.
December 17 (Tue.)
Visited Company A to learn the operation status.
December 18 (Wed.)
Visited Company C to learn the operation status.
Visited Company D to learn the operation status.
December 19 (Thu.)
Visited DOE to request for arrangement of thefactories to be visited during the second visit.
Second survey: Implemented in February 2003
February 10 (Mon.)
Workshop on making energy more efficient andenergy conservation convened (DOE, ACE,
engineers from three iron and steel
manufacturers, and ECCJ)

II-24

February 11 (Tue.)
February 12 (Wed.)

February 13 (Thu.)
February 14 (Fri.)

Visited Company A to implement audit andsurvey (Acceptance by Company B determined.)
Visited the persons concerned in DOE
Visited the chief secretary of PSA and acquired
iron and steel production information.
Visited Company B and explained about thequestionnaire on audit.
Visited Company B and implemented audit andsurvey.
Visited Company A and has a wrap-up meetingwith DOE and ACE.
Reported the energy conservation improvement
plans.

II-25

4.

Equipment Audited

4.1

Audit and Survey in Company A(1)

AC EAF
1) Equipment capacities
EAF: small type AC EAF
1 set
Rated capacity : X t/heat, Maximum capacity: 1.4X t/heat2) Operating method
Scrap is charged 7 times/heat on average.
For melting, the schedule is managed; the first and second times are 14
minutes, the third time is 9 minutes, four to seven times are 6 minutes each.
The tap-to-tap time is approximately 135 minutes.
As the sub-materials for melting, oxygen and coke are injected.

(2)

Continuous casting (CC) equipment
1) Equipment specifications
Continuous casting equipment : 2-stands billet CC
Casting time
: 50 to 55 minutes/heat2) Current operation
Continuous operation is performed for 11 months. For one month from the
middle of December to the middle of January, the equipment is shut down
and maintenance is implemented. The products are mostly 100 billet.
Annual operation time: 7920 h (11 m × 30 d/m × 24 h/d)(3)Power receiving/transforming equipment
1) Capacities of major equipment (Table II-4-1)

II-26

Table II-4-1
No.
1
2
3
4
5
6
7
8
9

Quantity of Major Equipment in Company A
Name

EAF
Continuous casting equipment
Dust collector
PSA equipment for oxygen generation
Air compressor
Over head traveling crane
Cooling water equipment (pump, fan)
Deep-well pump
Lighting equipment (shop, office)

Quantity
1
1
1
1
3
9
15
2
1

Remarks

2) Emergency power supply equipment (Table II-4-2)
Table II-4-2
No.
1

Emergency Power Supply Equipment in Company A

Name
Emergency diesel power generationequipment

Equipment capacity Quantity
1000 kVA

13) Operating method
Power from MERALCO is always received via the electricity
receiving/transforming equipment. Comparing with the maximum
electricity, approximately 55% on average is always received.
Upon the failure of power from MERALCO, the emergency power supply
equipment supplies electricity to cooling water equipment and lighting
equipment.
(4)

Dust collector
1) Equipment components
The equipment of the dust collector is shown below.
a. Main fan: 1 setb. Booster fan: 1 setc. Reverse fan: 1 setd. Other components : 1 set
2) Operating method
During operation of the EAF, the main fan sucking dirty air from thebuilding and the booster fan to suck directly from the furnace runcontinuously.
The reverse fan always runs for dust cleaning of the bag filter.

II-27

(5)

PSA equipment
1) Equipment components
The equipment components are shown below.
a. Vacuum pump
: 1 setb. Air blower: 1 setc. Oxygen compressor : 1 set
d. Other components : 1 set
2) Operating method
PSA runs during the operation of furnace. Insufficient oxygen is covered bypurchase of liquid oxygen.

(6)

Air compressor equipment
1) Equipment capacities
a. No. 1 reciprocal air compressor 30 kW:
b. No. 2 reciprocal air compressor 30 kW:
c. No. 3 reciprocal air compressor 30 kW:

1 set
1 set
1 set

2) Operating method
The operating method is shown in Figure II-4-1.

Unloading
No. 1
20A

Loading
37A

0.65m3To the factory

0.65m3No. 2

0.65m3
Shut down No. 3

Figure II-4-1(7)

Operating Method of Air Compressor

Cooling water equipment
1) Operating method of the cooling water equipment for the EAF
For the pump and fan, one set is in service and a reserved set is in standby
mode.

II-28

2) Operating method of the deep-well pump and cooling water equipment for
auxiliary equipment
For the pump, one set is in service and another set is in standby mode.

II-29

4.2

Audit and Survey in Company B
On the day of February 12, 2003 for audit and survey, the factory was shut down
(audit and was survey scheduled on February 11 though 13). Therefore, survey andaudit on energy conservation during factory operation were impossible. The visit to
the site and the contents that we learned are outlined below.
(1)

Heating furnace for rolling, rolling machine --- 1 line
This factory purchases 130  × 12000 mm L billets, heats in the heating furnace,
produces steel bars with a rolloing mill, and ships.
The products are reinforcing bars of 10 – 50 mm in diameter.

(2)Power receiving/transforming equipment
1) Outline of major equipment (Table II-4-3)
Table II-4-3

Major Equipment in Company B

No.
Name
Quantity
Remarks
1 Heating furnace fuel pump2
Push-in blower for combustion
1
Exhaust gas fan
1
2 Rolling machine
1
3 Tempcore machine1
Quenching equipment
4 Cutting machine1
5 Cooling water equipment for rolling machine1
6 Cooling water equipment for tempcore box
1
7 Cooling water equipment for auxiliary1equipment
8 Cooling water equipment for heating furnace
1
9 Air compressor(1) 100 kW × 14.15 m3/min
2
3(2) 200 kW × 28.3 m /min
4
10 Lighting equipment
12) Emergency power supply equipment (Table II-4-4)
Table II-4-4
No.
1

Emergency Power Supply Equipment in Company B

Name
Emergency diesel power generator
equipment

II-30

Equipment capacity

Quantity

500 kVA

13) Operating method
Electricity from MERALCO is always received via the electric powerreceiving/transforming equipment. About 70% of the contracted capacity isalways received.
Upon the failure of electric power from MERALCO, the emergency power
supply equipment supplies electricity to cooling water equipment andlighting equipment.
(3)

Air compressor equipment
1) The following air compressors are installed in this factory as shown in Table
II-4-5.
Table II-4-5

Air compressor Equipment in Company B

Air compressor
No. 1 air compressor
No. 2 air compressor
No. 3 air compressor
No. 4 air compressor
No. 5 air compressor
No. 6 air compressor

Capacity
14.15 m3/min × 100 kW
28.3 m3/min × 200 kW
28.3 m3/min × 200 kW
14.15 m3/min × 100 kW
28.3 m3/min × 200 kW
28.3 m3/min × 200 kW

2) Air receiver tank capacity
A tank with a capacity of 20.52 m3 is provided as a common receiver tankon the outlet side of No. 1 to 6 air compressors.
3) Operating method
There are enough capacities of compressed air to supply to the both big andsmall factories, but small one has been shut down. The volume ofcompressed air used during operation of the big factory is approximately 40
m3/min.
Therefore, two or three air compressors are run for operation of the big
factory to supply compressed air.
(4)

Cooling water equipment
1) Cooling water equipment for rolling mill
Only the required number of cooling water pumps and cooling tower fansare run with standby reserved machines.

II-31

2) Cooling water equipment for tempcore box (bar quenching equipment)
Only the required number of cooling water pumps and cooling tower fansare run with standby reserved machines.
3) Cooling water equipment for auxiliary equipment
Only the required number of cooling water pumps and cooling tower fansare run with standby reserved machines.
4) Cooling water equipment for heating furnace
For the cooling water pump and cooling tower fan, one set is in service andthere is no reserved equipment.

II-32

5.

Results of Survey and Measurement on Energy Conservation

5.1

Results of Survey and Measurement in Company A(1)

AC EAF
1) EAF operation
Company A consumes approximately 600 kWh/t (i.e. electric power
consumption of the overall factory divided by the billet production volume)for billet production. Since there is no data indicating power consumption ateach location, clear judgment is impossible. However, electricity unit
consumption seems to be more than 500 kWh/t if it is assumed thatelectricity consumption for auxiliary equipment other than the EAF is 100
kWh/t.
For energy loaded into the EAF, electrical energy from electrodes andreaction heat by coke and oxygen injection are mainly used. Generally,
scrap preheating and the additional heating for the furnace by heavy oilburners are used. However, this factory does not adopt these means. Since a
considerable amount of equipment investment is required to implement
them, it was determined to direct attention to the operating method.
2) Problems in operating the EAF
For operation of the EAF, 1 cycle (tap-to-tap time) requires about 2.3 hours(about 10 heats a day). The reason is that the frequency of scrap charge is 7
times on average (maximum 11 times) and much time is required for otherthan the actual scrap melting time.
Two possible causes are considered:a. The bulk density of scrap seems to be small. Therefore, cutting longscrap materials, pressing scrap with much air gaps, and so on should
increase the bulk density of scrap.
b. The inner volume of the furnace should be increased as much as
possible.
The heat loss can be reduced and, consequently, the energy consumption canbe cut down by increasing the bulk density of scrap and melting efficiency,
then shortening the cycle time (tap-to-tap time).

II-33

(2)

Power receiving/transforming equipment
1) Electricity charge system
Electricity charge system provided by MERALCO is as follows:c Basic charge: Monthly demand electricity kW × 20
pesos/kW

d Metered charge: Monthly used electrical energy kWh ×
1.85 pesos/kWhe Power factor discount rate : (Actual power factor (%) – 85) × 0.3
f Power factor discount: (c + d) × e/100

g Primary discount: (c + d) × 3/100

h Exchange rate adjustment : (c + d – f – g) × 7.04/100
i Purchased power
adjustment (PPA): Monthly used electrical energy kWh × 2.45

Electricity charge to be paid = c + d – f – g + h + i2) Problems in using electricity in this factorya. The maximum electricity is too large against the average electricity innormal use (double of the rated capacity). The maximum electricity(peak) should be reduced.
b. Presently, the power factor is approximately 98%. The power factor
should be improved.
(3)

Dust collector equipment
During operation of the EAF, the main fan and the booster fan are continuously
running. Particularly, the booster fan is the dust collecting fan for the EAF only
and it is continuously run even though the EAF is in standby mode.
According to the operation status of the EAF and the dust load, the volume ofexhaust gas from the dust collecting fan should be adjusted through therevolution control to achieve energy conservation.

(4)

Air compressor
Three air compressors have been installed.
Two air compressors are on load state but the other is run in almost unloaded
state.
It is recommended to install a 1 m3 air receiver tank and to control the number of
air compressors in service operating two air compressors for energy
conservation.

II-34

5.2

Results of Survey and Measurement in Company B(1)Heating furnace for rolling1) Operation of the heating furnace for rolling
Company B imports cold billets, heats them to up to 1240°C in a heating
furnace for rolling, rolls them to reinforcing steel bars (D-bars), and ships
them.
As a measure for energy conservation, the metal tube type recuperator isused for preheating combustion air with the exhaust gas heat.
The fuel for the heating furnace is bunker oil (S: 2.5 to 2.9%). Fuelconsumption is slightly more than 30 L/t approximately.
2) Measure for further improving exhaust heat recovery
Although fuel consumption is in a satisfactory level presently, the metal
tube type of recuperator may be changed into the regenerative burner typeusing ceramics for further improved heating element.

(2)Power receiving/transforming equipment
1) Electricity charge system (Same as company A)
Electricity charge system provided by MERALCO is as follows:c Basic charge: Monthly demand electricity kW × 220
pesos/kW

d Metered charge: Monthly used electrical energy kWh × 1.85
pesos/kWhe Power factor discount rate : (Actual power factor (%) – 85) × 0.3
f Power factor discount: (c + d) × e/100

g Primary discount: (c + d) × 3/100

h Exchange rate adjustment : (c + d – f – g) × 7.04/100
i Purchased power
adjustment (PPA):Monthly used electrical energy kWh × 2.45

Electricity charge to be paid = c + d – f – g + h + i2) Problems in using electricity in this factorya. The maximum electricity is too large against the average electricity innormal use (1.5 times of the rated capacity). The maximum electricity(peak) should be reduced.
b. Presently, the power factor is approximately 94.25%. The power factor
should be improved.

II-35

(3)

Air compressor equipment
Presently, the M-1 factory only is operating. Depending on the operation status,
two or three air compressors are run to supply compressed air.
By using the existing common air reservoir tank, controlling the number of aircompressors in service should be adopted with three air compressors to achieveenergy conservation.

II-36

6.

Recommendation for Energy Conservation and Expected Effects
Calculation of the expected effects is shown in the recommendations given below.
These are assumed values and may not match the values upon audit and survey. Please
understand that these values represent the degree of energy conservation effects.

6.1

Recommendation and Expected Effects in Company A(1)Energy conservation through reduction in the AC EAF’s tap-to-tap time1) Reduction of the tap-to-tap timea. Reduction of the number of scrap charge
Increasing the inner volume of the EAF and increasing the bulk densityof scrap can reduce the number of scrap charge. Figure II-6-1 shows thecurrent standard operation pattern of the EAF in Company A.
To increase the bulk density of scrap, long scrap material should be cut
or scrap with a small density should be pressed as a pre-treatment. As aresult, if the current average number of scrap charging times of 7 can be
reduced to 6 or 5, then the melting time is reduced by 4 minutes or 8
minutes. Assuming that the bulk density of the scrap currently charged
is low (not measured yet) and it comes close to 0.74 t/m3 by 0.03 t/m3,
the melting time can be reduced by 1 minute. With the effect of oxygen
injection additionally, the time will be shortened further.
b. Reduction of the refining time
The refining time required is 30 to 45 minutes. The time can be reducedby making oxygen and coke injection more efficient and changing thepower supply method.
2) Effects expected by reduction of the tap-to-tap time
Regarding the relationship between the scrap’s bulk density and melting
time, it is said that melting is fastest when the bulk specific gravity is 0.74
t/m3 according to experiences in Japan. (See Figure II-6-2, example inJapan.)Heat emission from the EAF and heat extraction from the cooling water for
furnace body are in proportion to time. In the site, meters were not provided
and no data was available, so it was impossible to check the heat balance of
the EAF. This heat loss is approximately 10% according to experiences inJapan.
If the overall tap-to-tap time is reduced by 10%, then the total heat loss
reduces by 1%. Further, 1% more can be reduced through efficiency
improvement, etc. This is totally 2%, that is, it is estimated that 10 kWh/t
can be reduced.

II-37

The effect can be calculated by multiplying electricity expenses and yearly
production.
In the future, the tap-to-tap time for the plain carbon steel can be reduced to
100 minutes and power consumption can be reduced to 450 kWh/t as aresult of operation improvement and so on.
3) Amount of investment to increase the inner volume of the EAF
If space increase is possible by modifying the upper part of furnace walls in
the EAF, the volume of scrap increase by 0.7 m3, that is approximately 0.5
t/charge, is possible when the upper part of the furnace walls in the EAF is
raised. Furthermore, increase of 1.4 m3 will make 1 t/charge increase of
scrap increase. Such modification should be considered to decrease charging
of scrap 1-2 times.

Melting time (min/heat)

Cost of construction for raising the upper body of furnace:
The steel materials of approximately 4 t and machining cost: US$40000
Cost of field modification and installation:
US$30000
Total:
US$70000

Bulk density of scrap in a basket (t/m3)
Figure II-6-2 Relationship Between the Scrap’s Bulk Density andMelting Time

II-38

Caster

8'

Casting 50〜55'

Dust Catcher Fan
Main
Booster
ReverseOperatingOperatingOperatingLadle 1
Ladle 2

Heating 60'

OxygenCoke
Water

Injection
Injection
OperatingElectric Power

II-39

Scrap charging
weightTap
Normal 5' 3'
Repair 25'
0'

100%
1st
Scrap
W1

90%
2 nd
Scrap
W1

14'

4'
22

3 rd
Scrap
W2

14'

4'

4 th
Scrap
W3

9'

40

4'
53

6'

5 th
Scrap
W3

4'
63

6'

6 th
Scrap
W3

4'
73

6'

4'
83

7 th
Scrap
W3

Refining

6'30〜45'
93'

Electrode up, Roof open, Scrap charge, Roof close, Electrode down

Tap

Tap End4'
123'〜１38'
Ave. 30.5'
127'〜１42'
Ave. 134.5'

Time (min)127'〜１42'〜Max. 162min

Figure II-6-1

EAF Operation Pattern in Company A

(2)Power receiving/transforming equipment
1) Reduction of the basic charge through reduction of the demand electric
power (peak)a. Operation by introducing the demand controllerc If the actual maximum electric power (15-minute demand value) islikely to exceed the target demand value, this system suppresses the loadof the EAF or automatically shuts down part of the dust collecting
equipment and PSA equipment to maintain the value below the target
demand. (Figure II-6-3)

MERALCOkW
XXXX
Target demand value(set value)

Monitoring of
maximum electricity

Actual demand value

5Company A

10

15 minutes

Demand controller

X: Since the target demand is likely to be exceeded, the load of thefactory is partly limited or automatically shut down.
Figure II-6-3

Demand Controller Methodd Equipment to be limited or shut down automatically (Assumed value)
Load to be limited
Limitation of the EAF load
Load to be shut down Shutdown of part of PSA equipment
automatically
Shutdown of part of dust collecting
fans
Total

∆500 kW∆350 kW∆150 kW∆1000 kWb. Effect expected from demand cutting ( ∆1000 kW)
Operation is performed for 11 months a year. However, since the basic
charge and so on are paid, the annual consumption is divided by 12 for
calculation of the value per month. Then, the value should be multipliedby 12 as the annual cost. The same calculation method should beapplied to 2) below.
The annual merit is US$52620/y... See Table II-6-1.

II-40

c. Equipment investment amount (Calculated as equipment equivalent of
the assumption in Table II-6-1.)(Breakdown)
Demand controller 1 set:
US$15000
Installation cost
1 set:
US$10000
Total
US$25000
2) Power factor discount through improvement of the power factor ofelectricity receiving from MERALCO
a. Power factor improvement (98 → 100%)
The Power Factor Capacitor should be enhanced.
The required capacity is 1.5 Mvar.
b. Effect expected from power factor improvement (98 → 100%)
Annual merit is US$1106/y. ...See Table II-6-2.
c. Equipment investment amount: (Calculated as equipment equivalent of
the assumption in Table II-6-2.)(Breakdown)
Vacuum switchgear 1 set: US$25000
Capacitor
1 set: US$70000
Installation cost
1 set: US$5000
Total
US$100000
For 1) and 2) above, expected effects through reduction of electricity charge
paid to MERALCO were summarized. Implementation of 1) and 2) above
can contribute to energy conservation and resource conservation
surrounding the power company and this factory on a macro basis.
(3)

Energy conservation through controlling revolutions of dust collecting fan
1) Method of controlling revolutions of dust collecting fanWith the EAF operation status and dust load as control signals, energy
conservation should be attempted through controlling revolution of the dust
collecting fan by the inverter unit. (Figure II-6-4)

II-41

To the bag filter
Main fan

Inverter unit
Booster fan
EAF
Dust load control signal

Figure II-6-4

Method of Controlling Revolutions of Dust collecting fan

2) Effects expected through controlling revolutions(Prerequisites)• While the arc of the EAF is running, revolutions of the booster fan are
100%.
• While the arc of the EAF stops (in standby mode), revolutions of thebooster fan are 50%.
• The tap-to-tap time is 135 minutes as a cycle, and the arc running timeis 98.5 minutes as a cycle. Ten cycles are performed a day. Operation
days are 330; 11 months.
• The time in which the arc stops (in standby mode) :(1440 – 98.5 × 10) min/d = 455min/d = 7.58h/d
Annual expected effect = (Motor output: X) × [1 – (1/2)3] × 7.58h/d ×
330d/y × (Unit price of electricity charge: Y)
Peso/kWh= 2190･X･Y Peso/y
US$43.8･X･Y/y with an exchange rate of 1US$ = 50 peso
3) Equipment investment amount: US$50000(Breakdown)
Inverter unit:
US$38000
Installation cost:
US$12000

II-42

(4)

Energy conservation through introduction of controlling the number of aircompressors in service
1) Introduction of controlling the number of air compressors in service
The number of air compressors corresponding to the compressed air volume
required by the factory should be run.
The number of air compressors in service is controlled by detecting thepressure of the newly installed tank (1 → 2 → 1 → 0 → 1...). (Figure II-6-5)

Recommendation on energy conservation
Newly installed receiver tank
Reciprocal air
compressor

0.65 m3

1 m3

30 kW

Factory

0.65m3
Reciprocal air
compressor

30 kW
Pressure signal

Reciprocal air
compressor(shut down)

0.65 m3
30 kW

Unit controlling thenumber of aircompressors in service

Control commandControlling the number of air compressors
in service with two air compressors

Figure II-6-5

Method of Controlling the Number of Air Compressors

2) Effects expected through introduction of controlling the number of aircompressors in service
Unloading electricity = √3 × 0.4 kV × 20 × 0.85× 0.8 (unloading rate) = 9.42 kW
Annual expected effect = 9.42 kW × 7920 h/y × 4.78 Peso/kWh = 356619 Peso/year
US$7130/y with an exchange rate of 1 US$ = 50 pesos
3) Equipment investment amount: US$23000(Breakdown)
Unit controlling the number of air compressors in service: US$15000
US$3000
Air receiver tank 1 m3:
Installation cost:
US$5000

II-43

<Assumptions for merit calculation>
Contracted electricity :Power factor:
Electricity used:
Table II-6-1

No.

10000 kW → 9000 kW (10% reduced)
98%
3000000 kWh/m

Table of Electricity Charge Through Contracted Electricity Reductionin Company A

Item

Current charge (Peso)
Electricity contracted= 10000 kW

Improved charge (Peso)
Electricity contracted= 9000 kWc

Basic charge
kW × 220 Peso/kW

2200000

1980000dMetered charge
kWh × 1.85 Peso/kWh

5550000

5550000e

Power factor discount rate
(Actual power factor rate (%) – 85) × 0.3

3.9

3.9

f

Power factor discount(c + d) × e/100

302250293670g

Primary discount(c + d) × 3/100

232500225900h

Exchange rate adjustment(c + d – f – g) × 7.04/100

507954493534i

Purchased power adjustment (PPA)kWh × 2.45

7350000

7350000jMonthly electricity charge to be paid
c+d–f–g+h+i

15073204

14853964

Merit by reduction in the contracted electricity (10000 → 9000 kW): 219240 peso/m
US$ 4385/y with an exchange rate of 1 US$ = 50 peso
The annual merit is US$ 52620/y.

II-44

<Assumptions for merit calculation>
Contracted electricity : 10000 kW
Power factor: 98 → 100%
Electricity use: 3000000 kWh/m
Table II-6-2

No.

Table of Electricity Charge Through Power Factor Improvement in
Company A
Current charge (Peso) Improved charge (Peso)(P.F = 98%)
(P.F = 100%)

Item

c

Basic charge
kW × 220Peso/kW

2200000

2200000dMetered charge
kWh × 1.85Peso/kWh

5550000

5550000e

Power factor discount rate
(Actual power factor rate (%) – 85) × 0.3

3.9

4.5

f

Power factor discount(c + d) × e/100

302250348750g

Primary discount(c + d) × 3/100

232500232500h

Exchange rate adjustment(c + d – f – g) × 7.04/100

507954504680i

Purchased power adjustment (PPA)kWh × 2.45

7350000

7350000jMonthly electricity charge to be paid
c+d–f–g+h+i

15073204

15023430

Merit through power factor improvement (98 → 100%): 49774 peso/m
US$ 995/m with an exchange rate of 1 US$=50 peso
The annual merit is US$11940/y.

II-45

6.2

Recommendation and Expected Effects in Company B(1)Heating furnace for rolling
1) Adoption of the regenerative burner for the heating furnace for rolling
Although a metal tube type recuperator for heating combustion air is used
for exhaust gas heat recovery, a regenerative burner can be adopted forfurther reduction of fuel consumption.
Since bunker oil (S: 2.5 to 2.9%) is used as the fuel, effects of sulfur toceramics should be considered but fuel consumption can be improved by atleast 10%.
Although fuel consumption is relatively good at present, we recommend
changing to the regenerative burner system using ceramic shown below.
For introduction, clearance with surrounding equipment should be checked
and whether a sufficient space for modification is provided should bestudied.
Heating furnace
Fuel changeover valve

Regenerator(heat accumulator)

Induced fan
Figure II-6-6

Intake/exhaustchangeover valve

BlowerSchematic Diagram of Heating Furnace Using Regenerative BurnerThis burner mechanism is depicted in section 7 and allows you to acquirepreheated air at a high temperature. The temperature effectiveness is morethan 85%.
Figure II-6-7 shows the relationship between the preheated air temperatureand energy conservation rate (result in Japan).
The regenerator allows you to obtain preheated air at a temperature higher
than that obtained by the recuperator and the energy conservation rate is 10
to 20% higher.

II-46

Regenerator (heat accumulator)

Energy conservation rate (%)

Recuperator

Furnacetemperature
No exhaust heatrecoveryPreheated air temperature (°C)
Figure II-6-7 Heating Furnace for Rolling with a Regenerative Burner
Containing a Ceramics Heat Accumulating Element
2) Effects expected through introduction of the regenerative burner
If it is assumed that fuel consumption is reduced by 10%, the volume is 3
L/t. Annual savings of fuel is calculated by multiplying the annual
production to the consumption.
3) Investment for introduction of the regenerative burner
For example, installing a regenerator as an equivalent of 2 Mcal/h burnercosts about US$25000, including installation cost, estimated by Japan.
When multiplying a unit number, total installation cost can be calculated,
not including reconstruction cost. Engineering a reconstruction andequipment shutdown period should be necessary.

II-47

(2)

Power receiving/transforming equipment
1) Reduction of the basic charge through reduction of the demand electric
power (peak)a. Operation by introducing the demand controllerc If the actual maximum electric power (15-minute demand value) islikely to exceed the target demand value, this system issues an alarmwith a hazard light for autonomous load limitation and suppresses the
maximum electric power below the targeted demand value. (Figure II-68)

MERALCOkW
XXX
Target demand value(set value)

Monitoring of the
maximum electricity

Actual demand value

5Company B

10

15 minutes

Demand controller

X: Since the target demand is likely to be exceeded, the hazard lightissues an alarm at this point. With this alarm, the load is limited to
the value that the production activities are not obstructed and the
maximum electricity is suppressed below the targeted demandvalue.
Figure II-6-8

Method of Demand Controller

d Equipment to be limited or shut down automaticallySince the load status on the day of audit was unknown, the object cannot
be identified.
b. Effects expected through demand cutting ( ∆500 kW)
If peak cutting of 500 kW is possible with the load limitation describedabove, the effect is as follows:
Annually US$ 26630/y...See Table II-6-3.

II-48

c. Equipment investment amount: (Calculated as equipment equivalent of
the assumption in Table II-6-3.)(Breakdown)
Demand controller
1 set:
US$ 15000
Installation cost
1 set:
US$ 10000
Total
US$ 25000
2) Power factor discount through improvement of power factor for electricity
received from MERALCOThe average electricity receiving power factor in 2002 is 94.25%. Based on
this fact, the following study was implemented:
a. Power factor improvement (94.25 → 100%)
The power factor capacitor should be enhanced.
b. Effect expected through power factor improvement (94.25 → 100%)
Annually US$ 22560/y...See Table II-6-4.
c. Equipment investment amount: (Calculated as equipment equivalent of
the assumption in Table II-6-4.)(Breakdown)
Vacuum switchgear 1 set : US$ 25000
Capacitor
1 set : US$ 75000
Installation cost
1 set : US$ 5000
Total
US$ 105000(3)

Energy conservation through introduction of controlling the number of aircompressors in service
1) Introduction of controlling the number of air compressors in service
The number of air compressors corresponding to the compressed air volume
required by the factory should be run.
The number of air compressors in service is controlled by detecting thepressure of the newly installed tank (1 → 2 → 3 → 2 → 1...). (Figure II-6-9)

II-49

Recommendation on energy conservation
Existing receiver tank

No. 1

20.52 m3

100
kW

No. 2

200
kW

No. 3

200
kW

No. 4
Shut down

100
kW

No. 5
Shut down

200
kW

No. 6
Shut down

200
kW

Factory

Pressure signal

Control command

Unit controlling the numberof air compressors in service

Controlling the number of aircompressors in service withthree air compressors

Figure II-6-9

Method of Controlling the Number of Air compressors

b. Effect expected through introduction of controlling the number of aircompressors in service
Since the factory was shut down on the day of audit, it was impossible
to grasp the running status of air compressors, particularly each aircompressor’s loading/unloading status.
Calculation of the expected effect was impossible.
c. Equipment investment amount: US$ 25000(Breakdown)
Unit controlling the number of
air compressors in service:
US$ 15000
Installation cost:
US$ 10000
Total
US$ 25000

II-50

<Assumptions for merit calculation>
Contracted electricity :Power factor:
Electricity used:
Table II-6-3

No.

8000kW → 7500kW
94.25%
1800000 kWh/y

Table of Electricity Charge Through Contracted Electricity Reductionin Company B

Item

Current charge (Peso)
Electricity contracted= 8000 kW

Improved charge (Peso)
Electricity contracted= 7500 kWc

Basic charge
kW × 220Peso/kW

1760000

1650000dMetered charge
kWh × 1.85Peso/kWh

3330000

3330000e

Power factor discount rate
(Actual power factor rate (%) – 85) × 0.3

2.775

2.775

f

Power factor discount(c + d) × e/100

141248138195g

Primary discount(c + d) × 3/100

152700149400h

Exchange rate adjustment(c + d – f – g) × 7.04/100

337642330345i

Purchased power adjustment (PPA)kWh × 2.45

4410000

4410000jMonthly electricity charge to be paid
c+d–f–g+h+i

95436949432750

Merit by reduction of the contracted electricity (8000 → 7500 kW): 110944 peso/m
US$ 2219/y with an exchange rate of 1 US$ = 50 peso
The annual merit is US$ 26630/y.

II-51

<Assumptions for merit calculation>
Contracted electricity :Power factor:
Electricity used:
Table II-6-4

No.

8000 kW94.25 → 100%
1800000 kWh/y

Table of Electricity Charge Through Power Factor Improvement in
Company B
Current charge (Peso) Improved charge (Peso)(P.F. = 98%)
(P.F. = 100%)

Item

c

Basic charge
kW × 220Peso/kW

1760000

1760000dMetered charge
kWh × 1.85Peso/kWh

3330000

3330000e

Power factor discount rate
(Actual power factor rate (%) – 85) × 0.3

2.775

4.5

f

Power factor discount(c + d) × e/100

141248229050g

Primary discount(c + d) × 3/100

152700152700h

Exchange rate adjustment(c + d – f – g) × 7.04/100

337642331461i

Purchased power adjustment (PPA)kWh × 2.45

4410000

4410000jMonthly electricity charge to be paid
c+d–f–g+h+i

95436949449711

Merit through power factor improvement (94.25 → 100%): 93983 peso/m
US$ 1880/m with an exchange rate of 1 US$=50 peso
The annual merit is US$ 22560/y.

II-52

6.3

Summary of Energy Savings
The figures below are based on assumption mentioned above and presented forreference.
Item

Company A
US$/yCompany

Expected effectCompany B

US$
Equipment
investment amount

US$/y
US$
Expected
Equipment
effectinvestment amount

1. Shortening the tap-totap time of the EAF∆10kWh/t

70000

−

−

2. Heat recovery from theheating furnace
exhaust gas−−

Fuel ∆10%25000
× No. of burners

50000

−

−

∆43.8XY
X: Motor (kW)Y: Electricity
rate
3. Controlling revolutions(Peso/kWh)of the dust collecting
fan(Equivalent toapprox. ∆3.6
kWh/t)
4. Demand control for theelectricity receiving/transforming
equipment

52620

25000

26630

25000

5. Power factor
improvement

11940

10000022560

105000

6. Controlling thenumber of aircompressors in service

7130

23000

−

25000

II-53

7.

Guideline for Promotion of Energy Conservation and Audit Manual

7.1

Manufacturing Process Overview
The factory with EAF mainly uses scrap as the material. In Philippines, since there is
no process reducing iron ore as an integrated steel mills, energy intensity per ton of
crude steel is lower. The production cost is generally low although it is greatly
dominated by the scrap price. The EAF cannot remove impurities such as Cu, Cr, andNi from the scrap, so it is not suitable for production of high-purity quality steel.
However, the EAF contributes to improvement of iron and steel products recycle rate
and the product cost is low. Therefore, its share will be expanded. The EAF andheating furnace are picked up and explained as characterized equipment in factories
with EAF.
Figure II-7-1 shows the flow of material and product in a factory with EAF.

Figure II-7-1(1)

Process Flow of Material and Product in a Factory with EAF

EAF
1) Iron and steel making processes with EAF
In iron and steel making processes, after scrap is heated, melted, andreduced (degassing, etc. are performed on the secondary refining equipment,
if necessary), molten metal is fed to the continuous casting equipment (CC)and steel blocks, such as billets and slabs are produced.
The energy consumption in the iron and steel processes occupy
approximately 75% of the total energy used in the overall factory. In theseiron and steel making processes, energy used by the EAF is the largest andoccupies the most part of energy used.
In the EAF, scrap is heated and melted by the arc heat generated between
the scrap and electrode and the electrical resistance heat generated in the
scrap. The main energy source is normally the 3-phase AC electricity.

II-54

Figure II-7-2 shows the flow chart of the EAF processes and energy conservation
measures.

Figure II-7-2 Flow Chart of EAF Processes and Energy Conservation Measures2) Energy conservation through operation and equipment improvement
In iron and steel making processes, improvement of the continuous casting
rate and improvement of EAF’s productivity through injection of
supplementary fuels such as heavy oil and carbon and oxygen injection
greatly contributed to the remarkable energy conservation performance. The
EAF has auxiliary equipment such as the dust collector and cooling water
pump, for which energy conservation is the technology common to otherequipment and therefore description is omitted. Therefore, energy
consumption improvement for the EAF itself is mainly described. The EAF
consumes a large volume of electricity. If it is assumed that the fuel isconverted into electricity in the factory at the net heat efficiency of 35.1%,
electricity of 1 kWh is considered to be equivalent to 10,258 kJ (2,450 kcal).
To reduce the cost of manufacturing molten steel with the EAF, measures
for reducing electric power consumption described below are taken. If theeffect is evaluated with 1 kWh=10,258 kJ (2,450 kcal), it can be seen thatcost reduction can be impacted by energy conservation measures.

II-55

Normally, the EAF suffers stationary losses such as heat losses by coolingwater and heat losses due to emission from the furnace body. If energy
loaded into the EAF is increased and the tap-to-tap time can be shortened,that is, the loaded energy volume is increased and productivity (tapping
volume per unit time) can be increased, the rate of the stationary losses
reduces and energy consumption can be reduced. Therefore, productivity
improvement is a powerful means for energy conservation of the EAF. Table
II-7-1 shows the heat balance (example) of the EAF. For theoretical analysisof the energy balance of the EAF, 1 kWh ≠ 860 kcal = 3,600 kJ is used.
Table II-7-1

Heat Balance of EAF

II-56

The following measures are taken to improve the productivity of the EAF:
• Increase of the transformer capacity• Reduction of electric power consumption through utilization of thescrap heating/melting burner, oxygen injection, powder injection, andscrap preheating• Shortening of the power off time
• Improvement of heat efficiency• Introduction of the secondary refining equipment
Below are the descriptions for each measure.
a. Increase of the transformer capacity
In recent years, the transformer capacity of the EAF has increased; RP(Regular Power) → HP (High Power) → UHP (Ultra High Power).
Table II-7-2 shows the relationship between the furnace capacity andtransformer capacity.
Four technologies; c Improvement of the UHP electrodemanufacturing technology, d Improvement of heat resistance throughimprovement of the furnace wall/ceiling water cooling technology andrefractory technology, e Improvement of the operation technology suchas slag foaming technology, and f Arc stabilization at the initial stageof melting by residual molten metal operation, contributed to making
the transformer larger and allowing to load high power.
b. Reduction of electric power consumptionc Scrap heating/melting burner
By providing a scrap heating/melting burner, using kerosene, heavy oil,natural gas, etc., and supplying the required volume of oxygen at thesame time, scrap heating and melting are promoted. Normally, theburner is provided toward the cold spot.
Figure II-7-3 shows the effect of reduction of electric power
consumption by the heavy oil burner and Figure II-7-4 shows anexample of providing the scrap heating/melting burner. The effect of thescrap heating/melting burner is 5 to 9 kWh/L-oil.

II-57

Table II-7-2

Relationship Between the EAF Capacity and Transformer
Capacity

Figure II-7-3 Effect of Heavy Oil Burner on Reduction of Electric Power Consumption

II-58

Scrap heating/melting
burnerFigure II-7-4

Example of Providing the Scrap Heating/Melting Burnerd Oxygen injection operation
The oxygen injection operation directly blows oxygen to the scrap or
molten steel, promotes scrap cutting and Fe oxidization, and improves
the heating and melting speeds. In contrast to these effects, the yield oftapping becomes low. To solve this drawback, carbon injection wasdeveloped. Presently, electric power consumption is reduced byeffectively combining c Scrap heating/melting burner, d Oxygen
injection, and e Carbon injection together. Electricity of 5.5 kWh per 1
m3N/t of oxygen is reduced. For 20 m3N/t or above, this effect for the
reduction of electric power consumption is halved. If oxygen is further
increased, the losses by metal oxidization increase as an adverse effect.
Figure II-7-5 shows the effect of oxygen injection.

II-59

Electric power consumption (kWh/ch-t)

Figure II-7-5

Effect of Oxygen Injectione Injection of carbon and aluminum ash
If oxygen and coke powder is injected into the furnace concurrently
with scrap melting by electricity, oxidization heat of Fe and C promotes
scrap melting. The CO gas generated by reaction between FeO and C in
the slag causes the slag foaming phenomenon after melt-down, the arc is
sub-merged in slag, then the heat radiation from arc is prevented totransmit to the furnace wall, therefore the electricity loading efficiency
is improved.
This sub-merged arc allowed the operation with a higher power factor
and loading of higher power. As a result, improvement of power
consumption, life elongation of furnace wall, and improvement of thetapping yield were achieved.
Recently, aluminum ash is used as part of combustion supporting
materials. Aluminum ash contains 30 to 40% metal aluminum. With theoxidization reaction heat of the aluminum ash, power consumption canbe reduced and this reduction effect is 4 to 6 kWh/kg/alum. Further,
addition of aluminum ash prevents abrupt reaction between C in steel
and oxygen and prevents boiling.

f Scrap preheating
For scrap preheating, the exhaust gas sensible heat as the main heat loss
source of the EAF is used to preheat scrap. Traditionally, the charging
buckets containing scrap were put into preheating baths located in theexhaust gas line for drying and preheating. From the standpoint ofefficiency and shortening of the processing time, scrap is directly charge
in the exhaust gas line on the EAF or two EAFs are used alternately atpresent. (See (3).) Figure II-7-6 shows the schematic diagram of scrap

II-60

preheating.

Figure II-7-6

Schematic Diagram of Scrap Preheating

Table II-7-3 summarizes an example of reduction for electric power
consumption.
Table II-7-3

Example of reduction for electric power consumption

OxygenOilNatural Gas
Coke
Aluminum dross
Scrap pre-heater

0 to 20 m3N/t> 20 m3N/t
0 to 5L/t

5.5 kWh/m3N
2.7 kWh/m3N
9.0 kWh/L
8.5 kWh/m3N
3.0〜8.3 kWh/kg
5.0 kWh/kg-Aluminum
20 to 40 kWh/tc. Shortening of power off time
To shorten the tap-to-tap time, the measure of shortening the power offtime described below should be implemented concurrently. Figure II-7-7
shows an example of survey on the tap-to-tap time and power off time.
c Shortening of the scrap charging time by speedup of the movement of
furnace cover up/down and swing, and electrode up/downd Shortening of the electrode connection timee Improvement of the furnace’s heat resistance by water-cooling of
furnace walls and shortening of the furnace repair period

II-61

f Shortening of the tapping time through adoption of the EBT (eccentric

Tap-to-tap time (minutes)

bottom tapping) furnace and by the system of receiving molten steel
with a ladle car

Figure II-7-7

Relationship Between the EAF’s
Tap-to-tap Time and Power off Time

d. Improvement of heat efficiency
Adoption of the EBT furnace, computer control of power-on time, slag
foaming technology, bottom blast of gas, and secondary combustion in
furnace will contribute to improvement of heat efficiency. It is said thatheat efficiency of the DC EAF increases by stirring of molten steel by
DC arc and electromagnetic force (electric power consumption is lower
than that of the AC EAF).
e. Introduction of the secondary refining equipment
By adding equipment such as LF (ladle furnace) that refines in the ladle,
the hit rate of the temperature and constituents to the targeted values is
improved. Additionally, the CC operation is stabilized and quality ofsteel billets and blooms is improved.
Particularly, by separating the EAF functions from the functions ofrefining with the ladle, the temperature of tapping from the EAF can belowered, the tap-to-tap time can be shortened, and the sequencial CC(continuous casting) number can be increased. Note, however, using LF
for the steel type that does not require LF causes demerits.

II-62

f. Lowering the tapping temperature and reduction of the number of EAFs
in service
If speedup of downstream processes (mainly CC) is attempted and thefurnace and ladle are made larger, heat radiation from the ladle andmolten steel in the ladle relatively reduces. Since the tapping
temperature corresponding to this radiation heat value can be lowered,electric power consumption of the EAF can be reduced. If the tapping
temperature is lowered by 10oC, electric power consumption reduces by
3 kWh/t.
It is said that, if the time from completion of tapping from the EAF tocompletion of CC can be shortened from 150 minutes to 100 minutes,
electric power consumption reduces by 50 kWh/t. Thus, CC speedup iseffective for increase of productivity and reduction of electric power
consumption.
If an EAF in service can be reduced while the production volume ismaintained, a significant volume of energy conservation can beachieved and therefore a large economic effect can be expected.
Therefore, if plural EAFs are provided, reduction of the number offurnaces in service should always be kept in mind. To reduce thenumber of furnaces in service, the necessary tap-to-tap time for the
furnace in service should be obtained and various improvements shouldbe implemented to achieve the tap-to-tap time. Reduction of the numberof furnaces in service can result in large cost reduction (energy
reduction), so it is often implemented as a means of energy
conservation.
g. Computer control of power-on time (optimization of loaded electricity
volume)Since voltage/current automatic control is effective for cost reduction
such as improvement of electrode’s electric power consumption as wellas energy conservation, computer control is adopted for most furnaces.
h. Reduction of heat losses by cooling water
Heat losses by cooling water are 10% plus of the heat input to the EAF.
Reduction of these losses is a major issue of energy conservation for
EAFs.
Water-cooling of the furnace body greatly contributes to making thefurnace larger and adoption of UHP and it is useful for energy
conservation of the EAF in spite of heat losses by water-cooling.
However, there are cases in which the water-cooled area is increased too
much and heat losses increase, electric power consumption increases,
and the tap-to-tap time cannot be shortened. Review of the water-cooledarea will be one of the issues for energy conservation.

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i.

Relationship between the tap-to-tap time and electric power
consumption
Table II-7-4 shows the relationship between the EAF’s tap-to-tap timeand electric power consumption.
Table II-7-4 Relationship Between Tap-to-Tap Time andElectric Power Consumption
Electric power consumption

3) Exhaust heat recovery and equipment modernization
a. Improved EAF
There are factories that have installed two EAFs installed as the twinshell furnace, each of which alternately has the function of theheating/melting furnace or scrap-preheating furnace, or have installed
the shaft furnace that continuously heats scrap. These factories havestarted operation with the full volume of preheated scrap and thenheated/melted with several new proposed processes in this paper aiming
at reduction of electric power consumption by 20%. Although the result
is not announced, EAFs at 250 kWh/t or below will appear soon.
b. Exhaust heat recovery
Heat recovery from the EAF’s cooling water and exhaust gas is possible.
However, in Japan, there is no implementation example in terms of theuse of hot water as a result of exhaust heat recovery and the recovery
cost.
(2)

Heating furnace for rolling
1) Rolling process
The rolling mill processes heats steel blocks (billets, blooms, slabs) to thespecified temperature in the heating furnace, rolls them with the rolling milland finishes to the desired shape and size.
Normally, most products finished by rolling mill in the factory with EAF are
hot rolling products such as shapes and sections, bar and wires, etc.

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Figure II-7-8 shows the flow chart of the primary rolling process and energy
conservation measures.

•
•
•
•
•
•
•
•
•

Improvement of air/fuel ratio
Improvement of recupirator heat recovery
Extraction of billet at a lower temperature
Improvement of heat pattern
Hot charge rolling/Hot direct rolling
Improvement of heat loss, cooling water loss
Improvement of heat transfer
Improvement of production plan
Optimization of combustion air fan capacity

•
•
•
•
•
•

Figure II-7-8

Improvement of yield
Optimization of auxiliary equipment,
Capacity (cooling water pump,
Mill motor fan, etc)
Increase of productivity
Prevention of idling

Flow of Hot Rolling Process and Energy Conservation Measures
Energy conservation measures for the heating furnace that consumed themost part of energy in the hot rolling processes are described below.

2) Energy conservation through operation and equipment improvement
For energy used in the hot rolling process, the fuel is 60% and the restelectricity and steam. Remarkable energy conservation performance has
been shown as reduction of fuel consumption for the heating furnace.
Before the oil crisis, fuel consumption of many heating furnaces exceeded
450 Mcal/t but furnaces at 200 Mcal/t or below have appeared recently.
Table II-7-5 shows an example of a heating furnace’s heat balance.

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Table II-7-5

Example of a Heating Furnace’s Heat Balance

Heating furnaces are categorized into the batch type and continuous type.
The batch type mainly reheats special-shape material, however thecontinuous type is the main stream for mass production. As continuous
heating furnaces, there are the pusher type, walking beam type, and walking
hearth type. Since the construction cost of the pusher type is low, it isadopted for small furnaces at 150 t/h or below. For large furnaces, thewalking beam type is used. The walking hearth type is used for heating orheat treatment of special materials such as steel rods.
As the causes for reduction of the furnace’s heat efficiency, there are heatlosses due to consumption for heat keeping or heat increasing based on
external factors such as material waiting and rolling mill troubles as well asheat losses such as exhaust gas heat losses that occur in the normal furnace

II-66

operation. Care must be taken to keep the temperature constant and to risetemperature because an unexpected large volume of heat value is required.
Additionally, effects of the rolling speed (heating furnace’s load rate) to heatlosses cannot be ignored.
Energy conservation measures are described below.

Fuel consumption (%)

a. Improvement of combustion air ratio
The combustion air ratio should be maintained adequately and the infurnace pressure controller should be adjusted to reduce the volume of
air entering in from the outside. Figure II-7-9 shows the relationshipbetween the air ratio and fuel consumption. For example, if the air ratio
is reduced from 1.5 to 1.2 at an exhaust gas temperature of 500°C, thefuel can be reduced by 9%.

Figure II-7-9

Relationship Between Air Ratio and Fuel Consumption

b. Enhancement of exhaust heat recovery
If the heat transmission surface of the air pre-heater (recuperator)
becomes dirty, its performance is extremely degraded and fuelconsumption increases. Therefore, simple heat balance calculation
should be performed on a regular basis to maintain the heat transfer
efficiency at the initial stage of installation.

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If the performance is not restored, the air pre-heater should be repaired,reinforced, or replaced depending on the cause.
c. Low temperature extraction
If steel blocks are extracted from the heating furnace at a lower
temperature, fuel consumption decreases but electric power
consumption increases. Therefore, these effects should be fully analyzed
for extraction at the optimum temperature in order to achieve energy
conservation. In this case, attention should be paid to the skid mark. If
extraction at a low temperature is possible, reduction of fuelconsumption by 3 to 5 Mcal/t can be expected by lowering theextraction temperature of 10°C.
d. Improvement of hot charging rate
The designed fuel consumption of the heating furnace that heats cold
steel blocks only is approximately 300 Mcal/t to 400 Mcal/t. On theother hand, in factories with EAF producing deformed reinforcing bar,
there are many heating furnaces for rolling at a fuel consumption of 200
Mcal/t or below. The reason is that high-temperature steel blocks
produced in the continuous casting equipment are charged into theheating furnace for rolling (hot charge rolling=HCR) or rolled by therolling machine (hot direct rolling=HDR).
To implement hot charging, it is of course desirable that the CC is close
to the heating furnace. However, there is a difference between the CC’scapacity and the rolling mill capacity, 100% hot charging is difficult.
Therefore, a heat insulation box is normally provided to temporarily
store the high-temperature continuously cast billets as a buffer function.
The heat-keeping box is made of steel plates with lining of heatinsulation material and has a removable cover for loading/unloading thebillets.
Energy conservation by hot charging is approximately 20 Mcal/t per
100°C of charging temperature.
e. Prevention of heat losses due to radiation and heat transmission
For furnaces recently installed, the walls are covered with ceramic fiberof a low specific heat. The heat insulation effect is excellent and theaccumulated heat volume is small. Thus, heat losses from furnaces walls
are improved.
Even though furnace walls of an existing furnace are made of bricks,
both heat radiation volume and accumulated heat volume can be
reduced by approximately 30 to 40% by lining a 50 mm thick ceramic
fiber on the inner walls of the furnace.

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f. Prevention of heat losses from the opening
If an opening is provided, heat in the furnace goes out of the furnace as
the radiation heat. Further, leakage of combustion gas results in heatlosses. Therefore, the opening should be minimized.
g. Prevention of heat losses from cooling water
For continuous heating furnaces, the cooling heat loss from the watercooling skid pipe occupied 10 to 15% of fuel consumption. To reducethe cooling heat loss, the double heat insulation method for the skid wasdeveloped. This method can be adopted for the existing furnaces as well
as newly installed furnaces and heat losses are down by half.
Figure II-7-10 shows an improvement example.

Figure II-7-10

Double Heat Insulation for Water-Cooling Skid Pipeh. Improvement of the heat transmission efficiency in the furnace
Steel blocks in the furnace are mainly (approximately 95% or more)heated by heat radiation of combustion gas (gas radiation of CO2 andH2O and solid radiation of high-temperature fine carbon particles
contained in the flame). Therefore, the “optical thickness of gas” should
be sufficiently large and the furnace volume is required to meet the
specified capacity.
Whether the required furnace volume is reserved should be studied, andif it is insufficient, elaborations such as changing the furnace shape by
providing a partition wall for promotion of heat transmission in the
furnace are necessary. Additionally, the high-temperature gas flows on
the upper part of furnace only, the gas temperature on the lower partmay be low, and the radiation heat transmission volume may be small.
Therefore, measures to improve uniformity of the in-furnace
temperature in the vertical direction should be studied.

II-69

i.

Prevention of heat losses due to external factors
If the air-fuel ratio of the heating furnace is adequately controlled andcontinuous operation is possible at a heating speed (t/h) within thespecified range, fuel consumption can be maintained in a very goodlevel.
However, in the actual operation, operation may have to be performed at
a higher or lower heating speed or heat may have to be kept for many
hours because of the relationship with the preceding and following
processes. As a result, the annual average fuel consumption may be
extremely poor.
If such a condition occurs, actions for removing the cause are required
and the production schedule itself may have to be changed or improved.
For example, improvement should be made so that the furnace can be
operated in a scheduled manner, by adjusting the production speed withthe preceding and following processes and taking actions against
troubles in the preceding and following processes. Additionally, criteria
for keeping the temperature constant and rising temperature of thefurnace should be specified for control.
Then, the heat value is improved very much. If there are multiple rollinglines (and therefore multiple lines of heating furnaces) to produce
various products, the production capacity of the continuous casting
equipment often does not match the production capacity of the rollinglines. Some rolling lines may have to be shut down frequently. If such a
condition constantly occurs and cannot be solved by adjustment of the
production schedule and operation procedure, measures such as
reduction of heat radiation losses and heat accumulation losses bymeans of replacing the heat insulation material of the heating furnacewith ceramic fiber are indispensable.

3) Energy conservation through exhaust gas heat recovery
a. Heat regenerative type burner
If the air pre-heater is old and should be replaced, installation of theregenerative burner should be studied.
b. Regenerative burner system
By repeating combustion and heat recovery alternately at an interval oftens of seconds with a “pair” of burners A and B containing the heataccumulating unit, a temperature efficiency of at least 85% (preheated
air temperature higher than 1,000°C) can be obtained. The reason is thatburner B is an exhaust port when burner A is performing combustionand heat is exchanged between exhaust gas of burner A and the heataccumulation unit of burner B. On the other hand, on burner A that is

II-70

performing combustion, heat is exchanged between the heataccumulation unit and combustion air and high-temperature air is
supplied to burner A.
This system uses alumina refractory for the heat exchanging element
unit and the high-temperature parts are the burner and heat exchanging
element unit only. Since the exhaust gas line and air tube line are at a
low temperature, the system is compact. Also, the heatrecovery/combustion changeover valve is provided on the lowtemperature side, so wear is small as a feature and fuel can be saved by
30 to 50%. Additionally, despite that the preheated air temperature ishigh, NOX is 150 ppm or below as an excellent feature.
Figure II-7-11 shows the regenerative burner system and Figure II-7-12
shows the preheated air temperature rise effect.

Furnacebody

Exhaust gas

Air

4-way changeover valve

Figure II-7-11

Regenerative Burner Systemc. Sensible heat recovery from skid cooling water
If a heating furnace exhaust gas boiler is installed, heat recovery is
possible for preheating the supplied water.

II-71

d. Furnace exhaust gas boiler
Installation should be studied by considering reduction of the exhaustgas volume as a result of fuel consumption reduction through hot
charging.
If the regenerative burner is installed, the exhaust gas temperature is 200
to 300°C. The merit of installing the exhaust heat boiler reduces and theinvestment effect decreases.

Figure II-7-12

Preheated Air Temperature Rise Effect4) Yield improvement and trouble reduction
Yield improvement results in energy conservation at the rolling processes
and the upstream processes. It is important to improve the yield by reducing
scale losses, crop losses, and mis-roll. If a trouble occurs in the rolling line,
fuel consumption of the furnace becomes low, the mis-roll rate increases,
and the yield is worsened. Therefore, it is important to reduce equipment
troubles. Trouble reduction is directly linked to energy conservation.

II-72

Grasping the Actual Status of Energy Consumption
First, we should recognize what process in manufacturing processes uses utilities suchas electricity, water, steam, compressed air and how they should be grasped.
(1)

Data collection in advance
Data should be collected in advance and input in Factory Energy Use Status
Table prepared by each factory (i.e. input the production volume and used
quantities of electricity, fuel, steam, water, and compressed air).

(2)

Prepare a graph showing the energy consumption
For example, a graph showing the electricity volume used in the factory should
be prepared as shown in Figure II-7-13.

(kWh)
2002

Electricity consumption

7.2

2003

Jan.

Feb. Mar. Apr. May. Jun.

Figure II-7-13
(3)

Jul.

Aug. Sep. Oct. Nov. Dec.

Electricity Volume Used in the Factory (Example)

Prepare a graph showing the production volume and energy intensity inthe factory.
For example, a graph showing the production volume and electricity
consumption should be prepared as shown in Figure II-7-14.

(4)Enhancement of energy management
Measuring instrument should be installed for respective utilities so that periodic
measurement, data collection, and management of the energy volume used in thefactory will be possible.

II-73

(kWh)(Remarks)

Production volume

Production volume
Electricity consumption

Electricity consumption (kWh)/Production volume

2003

Jan.

Figure II-7-14

7.3

Feb.

Mar.

Production Volume by Electricity Consumption (Example)

Extraction of Problems by Energy Conservation Check List
When graphs of the energy consumption data collected, production volume, andenergy consumption and intensity are available, check should be made according to
the check list given below to extract problems in energy conservation.
1) Electricity managementa. How to determine the contracted electricity and the system of the electricity
charge should be understood.
b. The contracted electricity and maximum demand electricity as well as thepower consumption used should be reduced.
c. Isn’t electricity loss found in comparison of monthly data with those ofprevious year in checking the graph showing the electric power
consumption?
d. Is electric power consumption being improved?
2) Energy conservation check points for major equipment
a. Electricity receiving/transforming equipment• Isn’t there any transformer that can be shut down in the nighttime or on
holidays?
• Is the power factor improved?
b. Air compressor• Isn’t there leakage from piping?
• What about ventilation? Isn’t the air compressor intake temperature high?
• Isn’t it possible to drop the delivery pressure of the air compressor?

II-74

• What is the air compressor’s capacity adjusting system?
• Is the air compressor shut down when it is not used?
• What is the operation to be performed against variation of the usedvolume?
• Has introduction of controlling the number of air compressors in service
been studied?
c. Blower and pump
• Are they shut down when they are not necessary?
• Doesn’t the flow rate or pressure have a too large margin?
• Is the flow rate adjusted, and by what?
• Was changing the number of revolutions or impeller cutting studied?
d. Lighting• Is lighting turned off when or where it is not required?
• Is daylight used and is lighting turned off?
• Is illumination adequate and is it measured?
• Was adoption of high-efficiency lighting apparatuses studied?
e. Air-conditioning equipment• Can’t the heat load generated from components and outer air load be
reduced?
• Can’t heat insulation for the building and daylight shielding be improved?
• Is the set value for room temperature adequate?
• Can’t the air conditioner running time be reduced?
• Isn’t air conditioning run in unnecessary spaces?
• Is the filter cleaned periodically?
• Upon renewal, new installation, or expansion, was adoption of the ice heatstorage system studied?

II-75

7.4

Energy Conservation Approaches
After problems are extracted according to the Energy Conservation Check List,
approaches for solving the problems are required.
The following are the energy conservation approaches for problem solution.
Energy conservation should be studied according to these approaches. The result ofstudying energy conservation should be forwarded to implement the energy
conservation actions based on the economical evaluation with use of the energy
conservation effects and equipment investment.
Examples of approaches:
Approach 1: Reduction of Maximum Electric Power with a Demand Controller
Approach 2: Power Factor Improvement Method
Approach 3: Energy Conservation Technique for Air Compressors
Approach 4: Energy Conservation and Cost Reduction through Control of the
Number of Air Compressors in Service
Approach 5: Control of the Number of Revolutions for Blowers and Pumps
Approach 6: Application of High-efficiency Lighting Apparatus

II-76

Approach 1:
1.

Reduction of Maximum Electric Power with a Demand Controller

Operation of Demand Controller
The demand contract is a contract system based on the maximum electric power.
Consumption once a large value occurs, this value is the contracted electric power for
coming one year. Reduction of the contracted electric power from 612 kW to 522 kW
by suppressing the maximum electric power is described below.
If it is estimated that the actual electric power consumption is likely to exceed thetargeted electric power of 522 kW, individual shutdown commands 1 to 3 aresequentially issued to shut down the equipment not critical in the factory and suppress
the value below the targeted electric power.
After 30 minutes, the stopped equipment started up automatically (sequentially bytimers) to achieve demand control and operation in unmanned and automatic mode.

Individual shutdown command 1
Individual shutdown command 2
Individual shutdown command 3

Power company

Targeted electric power 522 kW(set value)
Monitoring of the maximum
electric power
Electricity
used

30 minutes

Factory

Demand controller

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2.

Schematic Diagram of Demand Controller
The factory receives electricity from the power company. This system monitors the
maximum electric power at the electricity receiving point as shown below and shuts
down the non-important equipment in the factory with the shutdown signals from theload shutdown control panel to suppress the peak electric power. By suppressing the
maximum electric power (peak), the contracted electricity can be maintained low and asignificant amount of electricity charge can be reduced.

Power company
Shutdown
Demandcommand
Shutdown control panel (newly installed)
controller(newly installed)
2 signals
3 signals

3.

Patlite indicating
runningcommand 3

Individual
shutdown
command 1

Factory

2 signals

Individual
shutdown

Monitoring of
the maximum
electricity

Individual
shutdown
command 2

Detector(newlyinstalled)

ExhausterControl panel(modified)Exhauster 55 kW
No. 1 to 3 shorting
2.25 kWNo. 1 to 3 exhaust fans(modified)
11 kW × 3 sets

Blower control panel(modified)Blower 55 kW
Screw conveyer
1.5 kW

57.25 kW33 kW

56.5 kW

Investment Performance by the Demand Controller
If it is assumed that the present contracted electric power of 612 kW is suppressed to
522 kW by execution individual shutdown commands 1 and 2 in the table below, theamount of introduction merit is 1.45 million yen annually.
Since a peak may occur any time in the present status (non-monitoring state), it isrecommended to introduce the demand controller.
Once the demand controller is introduced, the maximum electricity can be easily
managed and therefore it is easy to implement energy conservation measures.
Equipment tobe shut down

Savedelectricity

Investment effect/year

Total investment
effectIndividual shutdown
command 1

Exhauster

57.25 kW57.25 kW × 1575 yen/kW × 0.85 × 12
= 919,721 yen

919,721 yen

Individual shutdown
command 2

Exhaust fan

33 kW

33 kW × 1575 yen/kW × 0.85 × 12
= 530,145 yen

1,449,866 yen

Individual shutdown
command 3

Blower

56.5 kW56.5 kW × 1575 yen/kW × 0.85 × 12
= 907,762 yen

2,357,538 yen

If up to individual shutdown command 3 is implemented, the effect is approximately 2.3
million yen annually.

II-78

Approach 2:
1.

Power Factor Improvement Method

If the present maximum electricity is 210 kW and the power factor is 98%, the capacity
required for the capacitor for improvement to a power factor of 100% is as follows:

210 kW
Capacity required
for the capacitor

Capacity required for the capacitor

2.

Installation of the power factor improving capacitor

Power company
6600 V

Existing capacitor
Existing
30 kVA × 2 sets
37 kW

Newly installed 30 kVA
Low-voltage capacitor

Dust collecting
blower

II-79

Approach 3:

Energy Conservation Technique for Air Compressors(1) Renewal to a new machine (high-efficiency air
compressor)(4) Reduction of the delivered air pressure anduse-end pressure<Expected effect> Energy conservation of 7 to 15% (perair compressor)<Expected effect> If a delivery gauge pressure of 0.69
MPa (7 kgf/cm2) is dropped to 0.59
MPa (6 kgf/cm2), energy conservation
is approximately 9%.

(2) Adoption of the system controlling the numberof air compressors in service<Expected effect> Realization of the minimum necessary
air compressors in service(3) Improvement of installation (intake) condition

Measures for
reduction ofpressure losses• Lowering the intake air temperature• Reduction of the intake resistance<Expected effect> Realization of operation with optimum
energy conservation
Improvement
measuresa. Periodic maintenance of auxiliary
equipment (filters, etc.)
b. Loop piping and review of pipe
diametera. Review of the intake port andexhaust port
b. Optimization of the ventilation fan
capacity(5) Repair of air leak from piping<Expected effect> If 10 positions of 1 mm dia. hole
are repaired, energy conservation
corresponds to a 5.5 kW aircompressor.

II-80

Approach 4:

Energy Conservation and Cost Reduction through Control of the Number of Air Compressors in Service
Number of air compressors in service control system

Individual supply system (before improvement)

Controlling the number of
air compressors in service

Shut down
Reciprocal

Shut down
Screw

Factory C

Factory C

Factory B

Compressed
air tank

Factory B
Factory E
Miscellaneous (common)

Screw

Factory E
Miscellaneous (common)

Screw
Load/unload operation
prerequisite operation

Application
Air Compressor capacity

II-81

Time
Factory C only

Electricity consumption per day
kW/dayLoad
operation

UnloadShut down

Unload 20A
Reciprocal type

UnloadkW/dayFactory B only

Operation

Load
25A
Unload 20A

Screw type

Load
operation

Shut down
Time of load
operation andshutdown

UnloadkW/dayOperation
Factory E only

Load
50A
Unload 41A

Screw type

kW/dayOperation (load: 51A-55A)

Load
operation

Time
kW/dayShutdown

UnloadkW/dayOperation (load: 65A-??A)

Operation

Load
operation

Electricity
consumption
per day

Miscellaneous
kW/dayLoad
operation

Time

kW/dayShutdown

Screw type

Total
Annual electricity volume(265 days)

day

Total
Annual electricity volume(265 days)

yenElectricity charge(@18 yen/kWh)Electricity charge(@18 yen/kWh)Cost reduction effect1,467,300 yen/y

day

yen

Approach 5:

Control of the Number of Revolutions for Blowers and Pumps

If the intake air flow rate is Q m3/min, the pressure is H mmAq, and the efficiency is η,
the required electricity P kW for the blower is:
P = QH/6120η.
If the number of revolutions is Nrpm and the constant is k, the relationship between thenumber of revolutions and power is as follows:
Q = k1N, H = k2N2
P = k3N3

Pressure (HmmAq)

The outlet damper is
In the figure at right, if the outlet damper
narrowed down.
is narrowed down to reduce the air flowrate of the blower that is running at the
number of revolutions N1 and air flowrate Q1 to Q2, the resistance curve of
piping changes from OR1 to OR2, powerchanges from rectangle OH1R1Q1 to
OH2R2Q2. Power does not decrease verymuch when the air flow rate is reduced
Flow rate Q (m3/minute)by narrowing down the damper.
In contrast, N1 is reduced to N2 by controlling the number of revolutions, power reducesfrom the area of rectangle OH1R1Q1 to the area of OH3R2Q2.
As you see, controlling the number of revolutions is more advantageous that controllingthe outlet damper in energy conservation.
Generally, an inverter unit (VVVF) is adopted for controlling the number of revolutions.

II-82

Application of High-efficiency Lighting Apparatuses

Incandescent lamp

Type of light source

Fluorescent lamp

Lamp
Power

HID lamp

Input
Power

Total
luminous flux
(1)

Color
Average color Rated life
Overallefficiency (2) temperature rendering

Incandescent lamp

index [Ra]

Incandescent lamp
General lighting
Ball bulb
Crypton lamp
Halogen lamp
Single-ended moldWith infrared radiation reflex film
Small type (low-voltage type)Double ended moldFluorescent lamp

Bulb type fluorescent lamp
Electronic lighting – bulb color
Electronic lighting – daylight whitecolor
4-tube type – daylight white color
General fluorescent lamp
White
Same as above (power saving type)Three-wavelength type – daylightwhite color
Same as above (power saving type)High-frequency Hf) type
32W lighting – daylight white color
45W lighting – daylight white color
Compact type
27W type – daylight white color
36W type – daylight white color

HID lamp

Color rendition
improved highpressure sodium lamp

General highpressure sodium
lamp

Metal halide lamp

Fluorescentmercury lamp

Hf type threewavelength
fluorescent lamp

Three wavelength
type fluorescent
lamp

General whitefluorescent lamp

Compact
fluorescent lamp

Bulb type
fluorescent lamp

Halogen lamp

Generalincandescent lamp

Overall efficiency (1m/w)

Approach 6:

Fluorescent mercury lamp
Metal halide lamp
Same as above (double ended mold)
High-pressure sodium lamp
Same as above (improved rendering type)

II-83

List of Attachments
Attachment I-1: Philippines (COUNTRY REPORT ON ECONOMIC AND ENERGYSITUATION)
Attachment I-2: The Energy Conservation Technology Realized in Japan Steel
Industry: Presentation Slide List
Attachment I-3: The Energy Conservation Technology Realized in Japan Steel
Industry
Attachment I-4: Information Required for ASEAN Industry Audit (EAF Steel
Industry)
Attachment I-5: Company Information for Factory Energy Conservation /Questionnaire (EAF Steel Industry)
Attachment I-6: Data and Information on Philippines prepared by ACE

Philippines
The Philippines is important to world energy markets because it is a growing consumer ofenergy, particularly electric power, and a major potential market for foreign energy firms. It
also may become a major producer of natural gas.
BACKGROUND
The new millennium has brought about important changes to the island nation of the Philippines.
With the installation of former Vice-President Gloria Macapagal-Arroyo on January 20, 2001,
the Philippines has undertaken an economic transformation, deregulating its energy sector andoffering new incentives for foreign investment. President Macapagal-Arroyo, a trained
economist, came into power when former President Joseph Estrada was forced from office.
Under Macapagal-Arroyo, key economic indicators, including GDP growth rate, foreign
investment, and inflation have trended favorably. But while a certain degree of success has beenachieved, the country’s fiscal deficit, declining currency, and regional inequality are still
problematic. A major natural gas discovery in the Malampaya field, officially inaugurated in
October of 2001, coupled with increasing military support from the United States could prove tohave a significant impact on the country's future.
ECONOMYReal Gross Domestic Product (GDP) grew by 4.6 % and Gross National Product (GNP) by 5.2%
in 2002. This increase exceeded both Philippine and international expectations. Much of thecountry's renewed economic vibrancy results from improved agricultural yields with a positive
growth of 3.5%, as well as from an increase in domestic consumption brought about by curbed
inflation. Growing confidence in the Macapagal-Arroyo administration, as well as the excitement
surrounding the sizable Malampaya natural gas field also have had a positive effect. Foreign
investment shot up 171%, to $3.4 billion in 2001, as investors gained confidence in Manila's
political climate as well as a newly deregulated and privatized energy sector.
In services, benefits of deregulation in the telecommunication sector grew robustly by 8.9%.
Trade continues to benefit from strong consumer demand, as giant local retailers opened up newmalls in regions outside Metro Manila.
With the economy on healthy footing in 2002, it was forecasted that a sustained GDP growthwould be 4.2 – 5.2 percent and GNP by 4.5 – 5.4 percent. Agriculture is expected to pace 3 – 4%
in 2003 as the government continues to implement El Nino mitigating measures and otherproductivity-enhancing measures like distribution of high yielding seeds.
In industry, policies that will boost mining, housing and Small to Medium Enterprises (SME’s)
will support industrial growth in 2003 by 3.4 – 4.4%. Tariff rates for capital goods and other
inputs not locally produced have been reduced to one percent in December 2002; this should
provide buffer to manufacturing sector as they cope with expected oil price increases.

Ⅱ－A－1

Services is expected growing 5.2 – 6.3%, led by telecommunication, trade and private services.
Policies to liberalize air transportation, and measures to boost housing should further keep
services healthy. In banking and finance, the implementation of the Special Purpose Vehicle Act
will pave the way for greater financial activity in 2003 and over the medium term. Continued
macroeconomic stability, especially those relating to fiscal policy, will be important to sustaining
economic growth.
ENERGYThe Philippines' energy sector is relatively dynamic. Major reforms are underway, as are projects
to electrify isolated villages, to reduce the Philippines' dependence on imported oil, and tochange the relative composition of fuel consumption. The Philippine Energy Plan (PEP) for theperiod 2003-2012 complements and reinforces the macroeconomic goals of the arroyo
administration to promote balanced economic growth, poverty alleviation and a market basedenergy industry. With this macroeconomic goals as basis, Department of energy sets down thegoals for the energy sector which is as follows: 1) Stable and secure energy supply 2) Wider
access to energy supply 3) Fair and reasonable energy prices 4) Clean and efficient energy fuels
and infrastructures 5) Enhanced consumer welfare and protection 6) Technology transfer andmanpower development 7) Job creation from energy activities
OIL
The Philippines began 2001 producing an average of only 1,000 barrels per day (bbl/d) of oil.
Production jumped to 20,000 bbl/d by October, and reached 22,000 bbl/d by year's end. This
dramatic increase was due primarily to the discovery of new deep-sea oil deposits beneath thenatural gas-bearing structures in the Malampaya field. But while new hydrocarbon discoveries
will significantly reduce the Philippines' oil import bill, the country is still a highly dependent net
oil importer. The Philippines consumed 356,000 bbl/d on average in 2001 and produced 8,460
bbl/d, resulting in net oil imports of 347,540 bbl/d.
This dependence on imported oil makes the Philippine economy vulnerable to sudden spikes inworld oil prices. For example, the Philippine oil import bill increased over 70% during the firsteight months of 2000. The Philippine Institute of Petroleum estimates that local oil companies
lost between 3.5-4.0 billion pesos in 2000 due to their inability to adjust petroleum prices to fullyreflect the increased cost of imported oil and foreign exchange depreciation. Oil consumption is
expected to increase by 5.9% annually over the next several years as economic growth increases
demand in most sectors. Oil demand for power generation, however, is expected to decline byover 50% by 2011, as the government retires aging oil-fired electric power plants and switches tonatural gas and alternative power sources.
Despite small proven oil reserves, the Philippines had enjoyed a recent wave of optimism
amongst domestic and foreign drillers. In October of 2001, exploration underneath the
Malampaya gas field revealed an estimated 85 million barrels of oil condensate. Shell
Philippines Exploration (SPEX) has committed $4.5 billion to the combined oil/natural gas
project, and anticipates potential crude oil production of 35,000-50,000 bbl/d by 2003. In
addition, six new offshore explorations have commenced in the Malampaya basin, led by Nido
Petroleum, Philippines National Oil Company Exploration Corp., Trans-Asia Oil, Unocal Corp.,
Ⅱ－A－2

and Philodril. Also, Trans-Asia has conducted exploratory drilling at the San Isidro well in the
East Visayan Basin. This area may contain as much as 60 million barrels of oil according tosome estimates. The Philippine government estimates reserves of up to 246 million barrels innorthwestern Palawan, and 37.4 million barrels in the Minduro-Cuyo basin. The Philippines
National Oil Company also expects to begin drilling in Lagao, Lambayong province in July of
2002, seeking an estimated 561 million barrels of oil.
Refining & Downstream
The Philippines' downstream oil industry is dominated by three companies: Petron, Pilipinas
Shell (Royal Dutch/Shell's Philippine subsidiary), and Caltex (Philippines). Petron is thePhilippines' largest oil refining and marketing company. The company was a wholly owned
subsidiary of the state-owned Philippine National Oil Company (PNOC) until 1994. Currently,
the Philippine government and Saudi Aramco each own 40% of the company, with the remaining
20% held by portfolio and institutional investors, making it the only publicly listed firm amongst
the three oil majors. Petron's Limay, Bataan refinery has a crude processing capacity of 180,000
bbl/d. Petron's market share at the start of 2002 was 38.3%, a 3.4% gain over 2001. Caltex(Philippines), a subsidiary of Caltex, the Texaco-Chevron joint venture based in Singapore,
operates a 86,500-bbl/d refinery, two terminals, and more than 1,000 gasoline stations
throughout the Philippines. Its market share is 23.8%, a 2.2% gain over 2001. Pilipinas Shell has
a 153,000-bbl/d refinery, one of the largest foreign investments in the Philippines, and operates
some 1,000 Shell gas stations. Shell's market share is 38%, a 4.7% gain over 2001. Overall,Philippine refineries run at around 80% of capacity, and there is not a great deal of demand for
new refinery construction.
Oil market deregulation, beginning in 1998, continues to have a significant effect on the industry.
Since deregulation started, 62 new firms, including TotalfinaElf, Flying V, SeaOil (Philippines),
Eastern Petroleum, Trans-Asia Energy and Unioil Petroleum Philippines Inc., have invested $13
billion and built approximately 312 new retail stations. By the end of 2000, the new players had
amassed 10.4% of the local oil market. These new entrants have organized the "New Players
Petroleum Association of the Philippines" (NPPAP), and have been credited with putting
significant downward pressure on retail fuel prices in the country. Currently, the Philippines
enjoys the lowest fuel prices of any non oil-exporting Asian country. However, price swings
associated with deregulation and higher world oil prices have angered many impoverished
Filipinos. Despite public calls for explicit price controls, the government has remainedcommitted to deregulation . In December 1999, the Supreme Court upheld the constitutionalityof the country's deregulation program. The NPPAP has shown some opposition to the program,claiming its provisions are insufficient as new players have not been able to capture at least 30%of the market.
Major downstream developments on the horizon include a $600 million naptha cracker plant to
be built by the Philippine National Oil Company in conjunction with Brunei's Mashor Group and
Malaysia's Petron. The plant, which most likely will be supplied with natural gas from theIndonesian Dongi field, would enable the Philippines to become an independent producer ofadvanced petrochemical products and plastics. The government has also called for a new LNG
receiving terminal to be built in Bataan to receive imported natural gas.

Ⅱ－A－3

In January 2000, the Philippines' Department of Energy announced plans to accelerate the phaseout of leaded gasoline. Leaded gasoline is banned already in Manila.
NATURAL GAS
The Philippines has 3.693 trillion cubic feet (Tcf) of proven natural gas reserves, but nosignificant production at the present. While in the past the gas sector has not been developed
extensively, the government has made expanding gas use a priority, particularly for electric
power generation, in an effort to cut oil import expenses. The government expects total domestic
natural gas production to increase annually by 146.4 billion cubic feet (Bcf) to reach 1.5 Tcf by
2011.
The impetus for the dramatic change in the country's natural gas sector is the Malampaya
offshore field. Malampaya is the largest natural gas development project in Philippine history,
and one of the largest-ever foreign investments in the country. Shell Philippines Exploration(SPEX, operator, with a 45% stake), Texaco (45%), and the PNOC (10%) have come together toform the Malampaya Deepwater Gas-to-Power Project. The Malampaya field is located in theSouth China Sea, off the northern island of Palawan, and contains an estimated 2.6 Tcf of naturalgas. A 312-mile (504-kilometer) pipeline links the field to three power plants in Batangas. The
pipeline is among the longest deep-water pipelines in the world, with half of its length more than
600 feet deep. With completion of the sub-sea pipeline and conversion of the first of three power
stations, (San Rita, operated by British Gas and Philippines 1st Gas Corp.), the Malampaya
project was officially inaugurated on October 16, 2001. Gas from Malampaya eventually will
fire three power plants with a combined 2,700-megawatt (MW) capacity for the next twenty
years and will displace 26 million barrels of fuel oil, according to the government. The
BG/Philippines 1st Gas Corp. partnership has announced that it expects to have a second station,
the San Lorenzo facility, converted for natural gas use by 2003. The government has publicly
considered selling a 10% share in the Malampaya project to the public; however no date has yet
been set for the IPO.
An $80 million joint venture between PNOC, RoyalDutchShell and Brunei's Mashor Group, toexpand the pipeline from Batangas to Metro Manila is being planned. This pipeline would supply
gas to additional power plants as well as the industrial and commercial sectors. PNOC has alsocommenced plans with Malaysian Petronas to build a 620-mile (1000-kilometer) line between
the two countries, completing one of the five components in the developing ASEAN power grid.
A number of foreign and domestic firms also are looking at onshore and offshore exploration
projects in the Philippines. A consortium of five companies (PNOC as operator holding 78.75%,
and four Australian companies) is exploring natural gas fields on and around Fuga Island under
Geophysical Survey and Exploration Contract 84. This area has been estimated to contain up to 5
Tcf of natural gas, but this is still unconfirmed. The Fuga 1 exploration well was plugged andabandoned in June 2000 after producing no hydrocarbons. This area, to the north of Luzon, is
still being considered, however, for a pipeline to Taiwan if a large enough gas find comes into
production. Also, exploration is soon to begin in Southern Cebu by two undisclosed American
firms, as well as in the Sultan Kodurat province by undisclosed European and Middle Eastern
firms. Three natural gas fields were closed down in 2001. Fields in the Tukankuden and the
Cotabato Basin were shut down due to the proximity of rebel soldiers, while another field in
Ⅱ－A－4

Victoria, Tarlac, was closed because the gas discovered was too saturated with water forcommercial production.
The Philippine government is developing a policy framework for the emerging gas industry that
foresees the government's role as that of facilitator while attempting to ensure competition.
Domestic development is to be encouraged, but competition from imported gas also is to beallowed. Gas supply to wholesale markets will have market-set prices, while prices for captive
markets and small consumers will be regulated.
COAL
Development of new natural gas projects in the Philippines has come largely at the expense of
the country's struggling coal industry. Despite producing 1.49 million short tons in 2000, PNOC
announced that it plans to close its national coal subsidiary. The government also announced thatmany of the country's coal-fed power plants are being considered for conversion to natural gas,including the 600-MW Calaca plant south of Manila. Napocor, the National Power Company,
has followed suit, ordering its coal-fired plants to operate at diminished capacity in order toallow more capacity for natural gas-fired plants. The country has decided to restructure the use ofits 366 million short tons of estimated coal reserves, which is mostly low-rank lignite, forprocessing in smaller "clean coal" plants, for eventual end-use as household fuel, and briqueting.
In the Department of Energy's 2002-2009 energy plan, three new smaller-scale plants areplanned, including a $62 million 50-MW power plant in Isabela, which should be completed by
2005.
The Philippines consumed 9.5 million short tons of coal in 2000, eight million short tons ofwhich were imported. Indonesia and China are major exporters of coal to the Philippines, andboth have been in negotiations with Manila about increasing their quotas. There has been very
little new exploration for coal in the Philippines since a methane explosion in 1997 killed many
workers and caused public hostility to the industry. New plants have faced increasing opposition
from both agricultural and church groups.
World Trade Organization (WTO) regulations require that the Philippines lift import restrictions
on coal. Since the 1970s, when the National Coal Authority was created, Philippine coal
importers have been required to obtain a government certificate of compliance before importing
coal, allowing the authorities to force importers to buy domestic coal each time they purchased
coal from abroad. President Macapagal Arroyo has committed to honoring the international coalsupply contracts approved by the previous government.
ELECTRICITY
Energy production in the Philippines is concentrated in the electricity sector. Geothermal power
accounts for the country's largest share of indigenous energy production, followed byhydropower, coal, oil and gas. The Philippine government has made shifting from reliance on
imported oil a major goal, and is pushing the current boom in natural gas-fired electricity
development.

Ⅱ－A－5

The most significant event in the Philippine energy industry in recent years has been the Power
Industry Reform Act of 2001. After 7 years of congressional debate and court cases, the Act
came into force on June 26, 2001. The act has three main objectives: 1) to develop indigenous
resources; 2) to cut the high cost of power in the Philippines; and 3) to encourage foreign
investment. Passage of the Act sets into motion the deregulation of the power industry and thebreakup and eventual privatization of state-owned enterprises. Actual sale of state assets andimplementation of the program is not likely to take place until late 2002 or 2003.
The legislation requires the state-owned utility National Power Corporation (Napocor) to breakup its vertically integrated assets into smaller sub-sectors such as generation, transmission,
distribution and supply in order to prepare for eventual privatization. The result will be a system
in which privatized generators would sell directly to private distribution companies. Working
with consultants from Hunton and Williams, Napocor has designated two new subsidiarycompanies designed solely for eventual privatization. These two firms, Transco and Psalmcorp,
will entail the state's high voltage transmission lines and infrastructure, and power plants,
respectively. The government also will sell off its share of Meralco, a smaller company thatserves Manila and the immediate surrounding area by buying power from various Independent
Power Producers (IPPs).
Napocor will need to transfer its existing power purchase obligations to private distributors, andalso to renegotiate high-priced contracts. The cost savings lie in the fact that private distributors
will likely be unwilling to enter into agreements that are above market rates. There are otherfinancial incentives for the government as well. Napocor's huge debt and $9 billion in powerpurchase agreements are unsustainable, and the government must already contribute $300
million per year to keep Napocor afloat. Finally, the government needs more foreign investmentin the sector as demand is projected to outpace supply by around 2005 at current rates ofinvestment.
In order to make the sale of Napocor more attractive to investors, the government has absorbed asignificant amount of Napocor's $6.7 billion debt. In addition, the $9 billion in power purchaseagreements with IPPs also will be sold off. The transmission system will be transferred to anindependent company, Transco, which is scheduled for privatization by mid-2002. Privatizationof Transco, however, is contingent upon congressional approval for the rules governing a newwholesale spot market as well as a reduced transmission tariff, or "wheeling charge". According
to deregulation laws, no one potential buyer will be allowed to own more than 30% of thePhilippines' generating assets.
Electricity demand in the Philippines is expected to grow by around 9% per year through 2009,
necessitating as much as 10,000 megawatts (MW) of new installed electric capacity. Current
contracts will provide about half of that amount, with the remainder expected to be filled oncethe market deregulates. Medium-term increases in power demand are to be satisfied largely by
the three gas-fired plants (Ilijan, Santa Rita, and Sucat) that will be linked to the Malampaya gas
field, plus the coal-fired 470-MW Quezon Power Project that was inaugurated in June 2000. The
Korea Electric Power Corporation (KEPCO) plans to complete the 1,200-MW Ilijan plant in2002. KEPCO will run the plant under a build-operate-transfer scheme for 20 years, after which
ownership will revert to Napocor. Minority stakeholders in the plant are Southern Energy of the
Ⅱ－A－6

United States (20%) plus Mitsubishi (21%) and Kyushu Power (8%) of Japan. First Gas Power
completed its 1,020-MW plant at Santa Rita in August 2000, with the plant running oncondensate until gas becomes available. First Gas Power's subsidiary FGP Corporation isbuilding a 500-MW power plant nearby the First Gas facility in Santa Rita, in Sucat. Operators
are expected to begin by 2006.
Other power facilities planned, under construction, or recently completed include four smallhydroelectric plants with a total capacity of 650 MW in the Mindanao region and three small
diesel-fired plants in Oriental Mindoro operated by Southern Energy. The CE Casecnan Water
and Energy Company (a subsidiary of California Energy International) is constructing a
multipurpose irrigation and 150-MW hydroelectric facility in Luzon.
Southern Energy is the Philippines' largest IPP, operating five power plants in the country.
Southern's new coal-fired Sual plant began commercial operation in late 1999. The 1,218-MW
plant is located about 130 miles north of Manila, and reportedly is the nation's largest andlowest-cost electricity producer. Napocor is the sole purchaser of Sual electricity.
Several power-generating facilities also are under extensive rehabilitation. The 100-MW Binga
hydroelectric plant in Itogon, Benguet has been under renovation since 1993 following damage
from a 1990 earthquake. Due to political factors, this renovation has so far been unsuccessful,with the dam in worse shape now than in 1993. A larger project is the $470 million contract with
Argentine firm IMPSA (Industrias Metalurgicas Pescarmona Sociedad Anonima ) to rehabilitate
and operate the 750-MW Caliray-Botocan-Kalayaan (CBK) power complex in Laguna, south of
Manila. The CBK complex is the grid regulator in Luzon, and as such is able to transmit power
to other plants on the grid in the event of breakdowns. IMPSA, in conjunction with new partner
Edison Mission Energy of the United State, was able to get a performance undertaking guarantee
despite Napocor's and some government officials' objections, facilitating long-delayed financingof the project.
In March 2000, Texas-based El Paso Energy International and Hawaiian Electric Industries
formed a 50-50 joint venture to own and operate five power plants now owned by East Asia
Power Resources Corporation, a public Philippine company. The total generation capacity of theventure's holdings will be 390 MW. The oil-fired plants are located in Manila and Cebu.
Volatility in electric power prices has angered many Filipinos, who blame the Power Industry
Reform Act of 2001. The Act calls for an Energy Regulatory Board, which reviews and approves
applications by the National Power Corporation for price increases. Controversy over pricing
still exists, however, as the Association of Philippine Electric Cooperatives demonstrated in May
of 2001 with an organized blackout to protest a 30 centavo rate increase instigated by Napocor.
The Philippines, due to its geography, has problems linking all of its islands together into one
grid and ensuring availability of electric power to the remaining 9,708 villages without electricity.
The government has set a target date of 2004 for electrification of all these villages through the
14-billion peso "O-Ilaw" program, and also is taking steps to link together the country's threemajor power grids (Luzon, Visayas, and Mindanao). As of March, 2002, the government claims

Ⅱ－A－7

the project is 85.6% complete. Where it is not economical to link small islands' grids into thenational grid, separate local systems are being established around small generating plants.
Renewables
The Philippines is the world's second largest producer of geothermal power, with an available
capacity of 1,931 MW, according to the Philippine government. The government would like tobring on another 990 MW, bringing capacity to 2,921MW, and exceeding the U.S. capacity of
2,775 MW. Geothermal power currently makes up around 16% of the Philippines' installed
generation capacity, most of which has been developed by the PNOC - Energy Development
Corporation (PNOC-EDC). Privatization of PNOC-EDC is expected in the near future, withseveral firms already expressing interest. PNOC-EDC bought Napocor's geothermal assets in
March 2001. Kyushu Electric company is in a joint venture with PNOC-EDC to develop a 40MW geothermal plant in Sorsogon, Albay province, and Marubeni of Japan has expressed its
intent to build the 100-MW Cabalian geothermal plant in Leyte. California Energy's Philippine
unit is working with PNOC to develop three new geothermal power plants in Leyte, producing a
total of 540-MW of electricity. Plans are underway to develop nine new facilities in Luzon,
ranging from 20 MW to120 MW that will eventually bring a total of 440 MW of geothermalenergy to the grid. By 2004, the new 40-MW Mambucal and 40-MW Rangas power stations in
Dauan, Negros Oriental are expected to come online.
Besides geothermal, the Philippines also is exploring the use of other renewables for electricity
generation, particularly in the country's unelectrified villages. In December 2000, WorldWater
Corp. signed an agreement with Cebu Electric Cooperative to provide 1,200 homes with solar
electrification. In March 2001, the Philippine and Spanish governments, in conjunction with BP,
agreed to a $48 million contract to bring solar power to 150 villages. BP and the government ofAustralia also have partnered with the Philippines to supply solar power to rural villages,
bringing 1,145 solar-powered systems to 52 new municipalities. New solar-powered facilities
were also inaugurated for villages on Samal Island on December 7, 2001.
The Philippines appears to have a strong potential for wind farming. The United States
Department of Energy wind mapping survey estimates that wind resources in the Philippines
have a power generation potential of as much as 70,000 MW, seven times the country's current
power demand. Garrad Hassan Ltd. of the United Kingdom has expressed interest in a $220
million wind power pilot project. Another wind power project is the 40-MW, PNOC-EDC
Northern Luzon project in Ilocos Norte, scheduled to begin operations in 2002. PNOC and theJapan Bank of International Cooperation also plan to build a $64.7 million, 40-MW wind farm in
Burgos. The Burgos facility will be the country's first commercial wind farm, and may possibly
be connected by a spur line to the Luzon Island power grid. This project is the first in a series ofthree to add 120 MW of wind power to the NAPCOR grid. A biomass waste-to-energy plant isplanned for Negros Occidental that would use 450 tons of municipal waste and bagasse per hour.
Nuclear
In March 2000, the government announced that it would build a 600-MW nuclear power plant
similar to the Bataan plant by 2020. However, the Bataan plant was declared inoperable due to
its location on an earthquake fault, and the government continues to pay $250,000 per day to
Ⅱ－A－8

service the debt on the inoperable plant. The Triga Research Reactor, which dates from 1963, isto be replaced with a new 20-MW research reactor. However, though as it may say, energy from
Nuclear sources is very unpopular proposition among Filipinos.

Ⅱ－A－9

The Energy Conservation Technology Realized in Japanese Steel Industry
Presentation Slide List
Ｎｏ．

Ｔｉｔｌｅ

Ｎｏｔｅ

1

The Energy Conservation Technology Realized in Japanese Steel Industry

2

Main Activities of ECCJ

3

Trends of Energy Consumption (Final Energy Consumption by Sector)

4

Why did the manufacturing industry of Japan succeed in the energy conservation after

Cover Sheet

the Oil Crisis?
5

Trends of Crude Steel Production of EAF in Japan

6

Activity Incentives for Energy Conservation

7

Trends of EAF Operation Data in Japan

8

Example ot Trend in Opereation Indexes of EAF

9Example of the Energy Items in Japan's Mini Mill

10

Several Energy Saving Technology in Material Flow Chart

11

Energy Conservation for EAF-Mini Mill Factory 1) 1-1) a)

12

Energy Conservation for EAF-Mini Mill Factoryb)

13

Energy Conservation for EAF-Mini Mill Factoryc)14

Energy Conservation for EAF-Mini Mill Factory 1-2) 2) 3)

15

Conceptual Drawing of Heat Balance at EAF

16

Example of Heat Balance in EAF

17

Influence of Oxygen and Reheat on Power Consumption

18

Example of Heat Balance in EAF (With Al ash)

19

Secondary Conductive Arm

20

Relationship between Power Consumption and the Time from Tapping to the End of casting21

Hot Recycling of EAF Slag (Less slag-off after tapping)22

Several Type in Recent Scrap Preheating

23

Shaft Furnace A (2 Finger Type)24

Shaft Furnace B

25

Effect of VVVF

26

Regenerative Burner of Ladle

27

Concept Drawing of Regenerative Burner

28

Regular Industrial Furnace

29

High-performance Industrial Furnace (1)30

High-performance Industrial Furnace (2)31High-performance Industrial Furnace & Regular Industrial Furnace

32

Demonstration of energy conservation effect by High-performance Industrial Furnace

33

Effect of Heat Pattern Change in Furnace

34

Transition of Total Energy Intensity (Crude oil equivalent)

35

Energy Cast Ratio in Small and Medium Industries (Japan)

36

More information
Ⅱ－A－10

The Energy Conservation Technology
Realized in Japanese Steel Industry

February, 2003
The Energy Conservation Center, Japan〔ECCJ〕1

ECCJ

Main Activities of ECCJ
Industry① Energy conservation audits services for factories② Education & training on energy conservation③ State examination for energy managers (assigned by the Gov.)④ Technological development⑤ Disseminating (conference for successful cases of E-C
activities, excellent energy conserving equipment, etc.)⑥ ISO14001 seminar for environmental inspectors

Residential&
Commercial① Energy conservation audits services for buildings② Ranking catalogue for energy efficient appliances③ Promotion of Energy labeling system④ International energy star program implementation⑤ Smart driving for energy conservation – Stop idling –⑥ Energy conservation “navi”⑦ Establishment of “energy conservation republic”⑧ ESCO research and development

Overall① Energy conservation campaign & exhibition (ENEX)② Commendation (grand energy conservation prize)③ Information & data base
④ Publicity and publishing⑤ Consulting service through e-mail⑥ International cooperation

ECCJ

Ⅱ-A-112

1. Trends of Energy Consumption
Final Energy Consumption by Sector

index
1965=100
1999/196510（10 kcal）

400,000

Transport
Commercial
Residential
Industrial Sector
Non-Energy

350,000
300,000

23.0%

9.2%

Transport

9.8%

200,000
8.9%

Commercial

11.5%

(572)

217

(479)

105

(257)

11.2%

13.8%

13.3%

7.4%

100,000

9.9%(1965)

50,00065.2%

Industrial Sector(1973)(1980)

65.6%

57.8%

65

67

(1999)(1990)

Index
1973=100
1999/1973

49.0%

52.5%

Non-Energy

0

ECCJ

188

Residential

17.6%

150,000

(486)

12.3%

20.8%

16.4%

250,000

213

24.9%

69

71

73

75

77

79

81

83

85

87

89

91

93

95

97

99

F.Y.

3

Why did the manufacturing industry of Japan succeed in theenergy conservation after the Oil Crisis?
• Cost reduction (enforcement of international competitiveness) and self-help
efforts by companies• Regulation measures by Government（Energy Conservation Law）
• Support and subsidy system by Government（finance, tax, subsidiary aid）

Mutual effect, synergy

Japan became the first class in energy conservation technology by the
rapid progress of energy conservation.
4

ECCJ

Ⅱ-A-12

Trend of Crude Steel Productionof EAF in Japan

5

ECCJ

Activity Incentives for Energy Conservation
1. Cost-down of Energy, Fuel and Electricity
2. Improvement in Productivity
and Rationalization in Production System
3. Fulfillment of Company’s Social Responsibility,
Load Reduction to Global Environment

6

ECCJ

Ⅱ-A-13

Trend of EAF Operation Datain Japan7

ECCJ

Tap to Tap Time (min)Unit Power Consumption of EAF(kWh/t-good steel)

Example of Trend
in Operation Indexes of EAF

8

ECCJ

Ⅱ-A-14

Example of the Energy Items
in Japan’s Mini Mill
(Products: Steel Bars for Concrete Reinforcement)
13%
10%

4%

52%
9%

Ratio （％）

12%
EAF (Power)
EAF (Chemical Reaction：O2、Oil、Others)
Auxiliaries of Steel Making Shop (Power)
Burner (Ladle+Tundish)Burner ( Reheating Furnace )Rolling Mill Shop (Power)

9

ECCJ

Several Energy Saving Technology
in Material Flow Chart
VVVF (4)Decrease of Input Power (2)Decrease of Heat Loss (3)Bag
Filter

Scrap

Preheating（１）

Decrease of Holding Time (6)Regenerative
Burner (5)DHCR ( Direct Hot Charge Rolling )Continuous RollingType 1Connecting of Billet
Connecting of Bar

Type 210

ECCJ

Ⅱ-A-15

Energy Conservation for
EAF-Mini Mill Factory1) Energy conservation in EAF shop1-1) EAFa) Increasing of input energy
Enrichment of O2●

According to above countermeasure■

Increasing of Oil ( Burner ), Carbon,
Low cost alloys (Al ash, Bundle madefrom Can, etc )
11

ECCJ

b) Increasing of efficiency in input energy
Power
Common (DC, AC ) :●VVVF control of electrode lifting
Foaming slag control in refining stage, etc
AC： Al-arm, Reactor ( in case of enoughcapacity of power station andhigh voltage operation), etc
○

○

●

Other
Post combustion (Shaft furnace), Supersonic lance, etc
12

ECCJ

Ⅱ-A-16c) Decreasing of output energy
Increasing of heat size
● Decreasing of Tap to Tap time and waiting timeof the time after tapping ( from tapping to thestart of ladle teeming )● Decreasing of heat loss by slag
Hot recycle of slag, Control of scrap’s dust, etc● Scrap preheating●○

Shaft furnace with decreasing technology
of dioxin● Others
13

ECCJ1-2) Others
Decreasing of power saving in auxiliaries●○

VVVF control in the motor of dust collector, etc

2) Energy conservation in Ladle and CC●

Regenerative burner of ladle●

Matching of the productivity between EAF and CC

3) Energy conservation in Rolling Mill
Regenerative burner of reheatig furnace● DHCR (Direct Hot Charge Rolling ), etc●●

Matching of the productivity between CC and Mill
14

ECCJ

Ⅱ-A-17

Conceptual Drawing ofHeat Balance at EAF

15

ECCJ

Example of Heat Balance
in EAF16

ECCJ

Ⅱ-A-18

3 kwh/t

Influence of Oxygen and Reheat
on Power Consumption

1 Nm3/t

17

ECCJ

Example oｆ Heat Balance
in EAF ( With Al ash )Output
Input

18

ECCJ

Ⅱ-A-19

Secondary Conductive Arm

19

ECCJ

Relationship between Power Consumption andthe Time from Tapping to the End of Casting

20

ECCJ

Ⅱ-A-20Hot Recycling of EAF Slag
( Less slag-off after tapping )

21

ECCJ

Several Typein Recent Scrap Preheating

22

ECCJ

Ⅱ-A-21

ECCJ

23

ECCJ

24

Ⅱ-A-22Effect of VVVF

25

ECCJ

Regenerative Burner of Ladle
Exhaust Gas

Fuel Gas
920Mcal/hEffectSwitching Valve
Regenerator

Reduction Ratio of Fuel

Fuel Gas
600Mcal/h= -51%[Condition ]・Ladle Capacity；100 t
・Heating Time；10 hour

Conventional

Regenerative Burner
26

ECCJ

Ⅱ-A-23

Concept Drawing of Regenerative Burner

Flame

Fuel

Fuel Gas
Furnace

BurnerCeramic
Regenerator

Exhaust Gas
air

Combustion air

ECCJ

Four-wings
Switching valve

27

Regular Industrial Furnace
When waste heat recovery is not implemented, theexhaust temperature is almost equal to furnace
heating temperature
ExhaustBurnerFuel

Blower28

ECCJ

Ⅱ-A-24

High-performance Industrial Furnace (1)Typical energy conservation is to preheat the combustion air withthe metal heat exchanger.

Recuperator(metal)BurnerFuel

Combustion air

Blower

29

ECCJ

High-performance Industrial Furnace (2)Locate a pair of burners with a built-in ceramic storage heat exchanger.
Combust and exhaust in turn, implement high temperature preheat (heat recovery)of combustion air.
Fuel switching valve

BurnerRegenerator(ceramic)

Induced draft fan

Switching valves for air
supply & exhaust

Blower30

ECCJ

Ⅱ-A-25

High-performance Industrial Furnace & Regular Industrial Furnace

Regenerator

Energy conservation ratio (%)

Recuperator

Furnace temperature

No exhaust heat recovery

20

Preheat air temperature (℃)
31

ECCJ

Energy conservation ratio (%)

Demonstration of energy conservation effectby High-performance Industrial Furnace

Processing temperature (℃)
furnace (sequent)ladle
heat treatment furnace
melting furnace

furnace (batch)heat treatment (sequent)gas treatment furnace“Field test program of introduction of high performance industrial furnace” (1998-2000)
32

ECCJ

Ⅱ-A-26

Effect of Heat Pattern Change in Furnace

Temperature(℃)

Furnace temperature(heat pattern)

Slab average temperature

Heat pattern Fuel usage

Remarks

1.0

Conventional

0.93

Improved

Time
33

ECCJ

Transition of Total Energy Intensity (crude oil equivalent)(50t/heat EAF)

Crude oil equivalent energy intensity (L/t)

250
221

200
171
190

150

185

159

154

173

143

Performance of energy conservation for
5 years=10.5%

100

Energy conservation effect by
sequent rolling=4.1% (FY2002)

Performance of energy
conservation for 3
years=8.1%

50
Electricity/total = 88％

Electricity/total = 85％

Electricity/total = 93％(estimate)

FY

0
1995

1996

1997

1998

1999

2000

2001

2002
34

ECCJ

Ⅱ-A-27

Energy Cost Ratio in Small & Medium Industries (Japan)
Energy cost percentage

OthersFurniture

Electric Machine

General MachineTransportation Equipment

Publication, printing

Beverage, tobacco,feed

Wood products

Chemical industry

Food

Precision instrument

Garment

Rubber products

Plastic products

Non-ferrous metal

Pulp & paper products

Petroleum & coal products

Iron & steel

Metal products

Textile products

Ceramic products

Energy cost percentage

ECCJ

Fuel cost percentage( ) indicate sample numbers / Total samples: 733

35

More Information• You can find information regarding
ECCJ’s activities as well as trends ofenergy efficiency and conservationin Japan through accessing ECCJ’s
Internet Home Page:• URL:
http://www.eccj.or.jp/index_e.html
36

ECCJ

Ⅱ-A-28

[A]Information Required for ASEAN Industry Audit(EAF Steel Industry)[Ⅰ] Necessary information （Answers to Questionnaire） before audit execution(We want following information by November 29, 2002)
1. Company general information for factory energy consumption
2. Production of Major Products
3. Utility consumption data
3-A Steel-making process (Daily, Monthly and Annual)
3-B Rolling process (Daily, Monthly and Annual)
4. Electric power receiving
5. Boiler
6. Major energy consuming facilities[Ⅱ] Necessary information during the audit execution
7. Necessary drawings and documents including energy intensity
8. Energy conservation plan
9. Energy conservation items in the past (including results)
10. Energy conservation items undergoing (including expected results)
11 Problem items if you have.
[Ⅲ] Item as requirement for steel maker selection
Two factories in the area of Manila, Philippines[Ⅳ] Necessary measuring instruments
Please prepare following measuring instruments for audit execution.
Temperature gauge (Non-touch radiance type)
Luxmeter,Clamp type Ammeter (0~300A or 500A),
Clamp type Wattmeter
Pressure gauge,
Gas analyzer,
Thermo-camera

Ⅱ－A－29

[B] Company Information for Factory Energy Conservation / Questionnaire[EAF Steel Industry]
Company Name
Replied by
DivisionDate
1. General
1

Name of Factory2

Address

3

President
Factory Manager
Energy Manager

4

Type of Industry

5

Capital6

Annual Sales Amount7

Number of Employees

8

Number of Engineers
Electrical Engineers
Mechanical (Heat)Engineers

9

Organization Chart

10

Brief Company History

11

MeteorologicalⅡ－A－303

2

1

Steel-making process

Name of Production7) Others

6) Water gas5) Compressed air4) Nitrogen3) Oxygen2) Steam1) Electric power

Utility4) Sheet3) Shape steel2) Steel bar

1) Plate

Rolling process

4) CC slab.

3) CC Bloom

2) CC billet

1) Steel ingot

No.

1999

Production Annual Production
Capacity Operating Volume
Hour
(ton)

2. Production of Major Products

Sales
Amount(ton)

2000

Ⅱ－A－31

Annual Production
Operating Volume
Hour
(ton)

Sales
Amount(ton)

2001
Annual Production
Operating Volume
Hour
(ton)

Sales
Amount(ton)

2002
Annual Production
Operating Volume
Hour
(ton)

Sales
Amount(ton)Name of Utility

20

19

18 Production (t/y)

17

16 City Water (m3)

15 Well Water (m3)

14 River Water (m3)

13 Steam (t)12 Compressed Air (m3)

11 Nitrogen (m3)

10 Oxygen (m3)

9 Coke (t)8 Coal (t)7 Natural Gas (m3)

6 LPG (t)5 Gasoline (kL)

4 Kerosene (kL)

3 Diesel Oil (kL)

2 Fuel Oil (kL)

1 Electricity (kWh)

No.

1

2

3

4

5

6

7

8

9

10

11

12

13

15

16

Ⅱ－A－3214Month / Date
17

18

19

20

21

3A-1. Daily Utility Consumption
Steel-making process (Scrap pretreatment, Steel-making, Casting, Material handling and Transportation)

22

23

24

25

26

27

28

29

30

31

Total

Diesel Oil (kL)

Kerosene (kL)

Gasoline (kL)

LPG (t)Natural Gas (m3)Coal (t)Coke (t)Oxygen (m3)

Nitrogen (m3)Compressed Air (m3)

Steam (t)River Water (m3)Well Water (m3)City Water (m3)

3

4

5

6

7

8

9

10

11

12

13

14

15

16

20

19

18

Production (t/y)

Fuel Oil (kL)2

17Electricity (kWh)Name of Utility

1

No.

Lower Heat
Value

January

February

March

April

May

Ⅱ－A－33

June

2001
July

AugustSeptember

Steel-making process (Scrap pretreatment, Steel-making, Casting, Material handling and Transportation)

3A-2 Monthly Utility Consumption

OctoberNovember

December

Total

Fuel Oil (kL)

Diesel Oil (kL)

Kerosene (kL)

Gasoline (kL)

LPG (t)Natural Gas (m3)Coal (t)Coke (t)

2

3

4

5

6

7

8

9

20

19

18

17

16 City Water (m3)

15 Well Water (m3)

14 River Water (m3)

13 Steam (t)12 Compressed Air (m3)

11 Nitrogen (m3)

10 Oxygen (m3)Electricity (kWh)Name of Utility

1

No.

Lower Heat
Consumption
Value(kWh,kL,t,m3)
Unit Price
(PHP)

1999
PurchaseAmount(PHP)
Unit Price(PHP)

Ⅱ－A－34(kWh,kL,t,m )3Consumption

2000
PurchaseAmount(PHP)(kWh,kL,t,m )3Consumption
Unit Price
(PHP)

2001
PurchaseAmount(PHP)Steel-making process (Scrap pretreatment, Steel-making, Casting, Material handling and Transportation)

3A-3 Annual Utility Consumption(kWh,kL,t,m )3Consumption

Unit Price
(PHP)

2002
PurchaseAmount(PHP)Name of Utility

20

19

18 Production (t/y)

17

16 City Water (m3)

15 Well Water (m3)

14 River Water (m3)

13 Steam (t)12 Compressed Air (m3)

11 Nitrogen (m3)

10 Oxygen (m3)

9 Coke (t)8 Coal (t)7 Natural Gas (m3)

6 LPG (t)5 Gasoline (kL)

4 Kerosene (kL)

3 Diesel Oil (kL)

2 Fuel Oil (kL)

1 Electricity (kWh)

No.

1

2

3

4

5

6

7

8

9

10

11

12

13

15

16

Ⅱ－A－3514

Month / Date

3B-1. Daily Utility Consumption
Rolling process (Heating Furnace, Rolling, Transportation & Shipping)

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

Total

Diesel Oil (kL)

Kerosene (kL)

Gasoline (kL)

LPG (t)Natural Gas (m3)Coal (t)Coke (t)Oxygen (m3)

Nitrogen (m3)Compressed Air (m3)

Steam (t)River Water (m3)Well Water (m3)City Water (m3)

3

4

5

6

7

8

9

10

11

12

13

14

15

16

20

19

18

Production (t/y)

Fuel Oil (kL)2

17Electricity (kWh)Name of Utility

1

No.

Lower Heat
Value

January

February

March

April

May

June

2001

Ⅱ－A－36

Rolling process (Heating Furnace, Rolling, Transportation & Shipping)

3B-2 Monthly Utility Consumption

July

AugustSeptember

OctoberNovember

December

Total

Fuel Oil (kL)

Diesel Oil (kL)

Kerosene (kL)

Gasoline (kL)

LPG (t)Natural Gas (m3)Coal (t)Coke (t)

2

3

4

5

6

7

8

9

20

19

18

17

16 City Water (m3)

15 Well Water (m3)

14 River Water (m3)

13 Steam (t)12 Compressed Air (m3)

11 Nitrogen (m3)

10 Oxygen (m3)Electricity (kWh)Name of Utility

1

No.

Lower Heat
Consumption
Value(kWh,kL,t,m3)
Unit Price
(PHP)

1999
PurchaseAmount(PHP)
Unit Price(PHP)

Ⅱ－A－37(kWh,kL,t,m )3Consumption

2000

Rolling process (Heating Furnace, Rolling, Transportation & Shipping)

3B-3 Annual Utility Consumption

PurchaseAmount(PHP)(kWh,kL,t,m )3Consumption
Unit Price
(PHP)

2001
PurchaseAmount(PHP)(kWh,kL,t,m )3Consumption

Unit Price
(PHP)

2002
PurchaseAmount(PHP)

4. Electric Power Receiving
Items

No.

Unit

1

Receiving VoltagekV

2Maximum DemandMW

3

Annual Electricity Consumption

MWh4

Paid Amount of Electricity

PHP

5Power Factor

6

Annual Operating Hourh/y7

Average Electricity

MW

8

Maximum Electricity

MW

9Transformer Capacity per Unit

MVA

10

Number of Transformers

11

In-house Generation Capacity

1999

2000

2001

2

3

4

MW

5. Boiler
Boiler No.

No.
1

Type

2

Built Year

3

Nominal Capacity (Steam)

1

Steam Pressure (kg/cm2G)
Steam Temperature (℃)
Evaporating Volume (t/h)
4Nominal Capacity (Electricity)
Generated Electricity (kWh)Generated Voltage (kV)Power Factor

5

Kind of Fuel
Fuel Consumption

6

Operating Period (Hours/Day)
1999
2000
2001
2002

7

Operating Period (Hours/Year)
1999
2000
2001
2002

Ⅱ－A－382002

NoteName of Equipment

Rolling process

Utility

OthersTransportation/Material
4.1
handling

4

3.3 Oxygen generator
Water treatment/supply
3.4
station
3.5 Others

3.2 Steam boiler

3.1 Power generation

3

2.6 Others

2.5 Heating furnace

2.4 Cold rolling mill

2.3 Shape steel mill

2.2 Steel bar mill

2.1 Plate mill2

1.7 Others

1.6 De-dusting equipment

1.5 Continuous casting

1.4 Ingot casting

Ladle/Tundish heater

1.3 2nd refining equipment

Steel-making process
Scrap pretreatment,
1.1
Handling
1.2 Electric furnace

1

No.

Built Year

Kind of
Product

6. Major Energy Consuming Facilities
Kind ofEnergyNominalOutput of
Product
H/Day

OutputⅡ－A－39

D/Y

1999
H/Day

D/Y

2000
Output

H/Day

2001
D/Y

Operating Period and Output

Output

H/Day

D/Y

2002
Output7. Necessary Drawings and Documents
Items

No.
1

Plant Layout

2

Process Flowchart of Major Products

3

Energy Flowchart

4

Electric Skeleton Diagram

5

Structural Drawing of Major Equipment
Measuring Points and Name of Instruments for Energy Consumption

6

Specification and Structural Drawings of Boiler

7

Energy Intensity : Energy Consumption / Output of Products

No.

Kind of Producta(Example)
Steel bar

Kind of Energy

Unit

1999

2000

2001

2002

Productiont/y300,000

320,000

320,000

350,000

Fuel OilkL/y30,00032,00031,00033,000Electricity

MWh/y30,00032,00032,00033,000b

Production

cProductiondProductione

ProductionfProduction

Ⅱ－A－408. Energy Conservation Plan

Ⅱ－A－41

9. Energy Conservation Items in the Past (including results)

10. Energy Conservation Items Undergoing (including expected results)

Ⅱ－A－42

11. In case you have any problem(s) in your course of promotion of energy
conservation, please circle the number(s) of applicable item(s) among the following.
1

Uncertainty of energy prospect2

Less impact of energy cost to the whole cost of the enterprise3

The increasing energy cost can be covered by rising the price of products

4

Little possibility of energy shortage

5

Little potential for promoting further energy conservation

6

Shortage of engineers

7

Difficulty in obtaining good energy efficient equipment

8

Unreliable results from energy efficient equipment

9

Uncertainty about return of investment in energy conservation facilities

10

Difficulty in obtaining good information such as successful case of energy saving activities

11

Insufficient system of research and development

12

Shortage of fund for facility improvement and modification

13

Out-of-date facilities

14

Low consciousness of employees

15

Lack of personnel who can educate the employees

16

Shortage of measuring equipment17

No time to analyze energy consumption rate

18

Shortage of information on government's measures

19

Shortage of government's subsidiary measures

20

Others (Please add comments)

Ⅱ－A－43

Philippines
The Philippines is important to world energy markets because it is a growing consumer ofenergy, particularly electric power, and a major potential market for foreign energy firms. It
also may become a major producer of natural gas.
BACKGROUND
The new millennium has brought about important changes to the island nation of the Philippines.
With the installation of former Vice-President Gloria Macapagal-Arroyo on January 20, 2001,
the Philippines has undertaken an economic transformation, deregulating its energy sector andoffering new incentives for foreign investment. President Macapagal-Arroyo, a trained
economist, came into power when former President Joseph Estrada was forced from office.
Under Macapagal-Arroyo, key economic indicators, including GDP growth rate, foreign
investment, and inflation have trended favorably. But while a certain degree of success has beenachieved, the country’s fiscal deficit, declining currency, and regional inequality are still
problematic. A major natural gas discovery in the Malampaya field, officially inaugurated in
October of 2001, coupled with increasing military support from the United States could prove tohave a significant impact on the country's future.
ECONOMYReal Gross Domestic Product (GDP) grew by 4.6 % and Gross National Product (GNP) by 5.2%
in 2002. This increase exceeded both Philippine and international expectations. Much of thecountry's renewed economic vibrancy results from improved agricultural yields with a positive
growth of 3.5%, as well as from an increase in domestic consumption brought about by curbed
inflation. Growing confidence in the Macapagal-Arroyo administration, as well as the excitement
surrounding the sizable Malampaya natural gas field also have had a positive effect. Foreign
investment shot up 171%, to $3.4 billion in 2001, as investors gained confidence in Manila's
political climate as well as a newly deregulated and privatized energy sector.
In services, benefits of deregulation in the telecommunication sector grew robustly by 8.9%.
Trade continues to benefit from strong consumer demand, as giant local retailers opened up newmalls in regions outside Metro Manila.
With the economy on healthy footing in 2002, it was forecasted that a sustained GDP growthwould be 4.2 – 5.2 percent and GNP by 4.5 – 5.4 percent. Agriculture is expected to pace 3 – 4%
in 2003 as the government continues to implement El Nino mitigating measures and otherproductivity-enhancing measures like distribution of high yielding seeds.
In industry, policies that will boost mining, housing and Small to Medium Enterprises (SME’s)
will support industrial growth in 2003 by 3.4 – 4.4%. Tariff rates for capital goods and other
inputs not locally produced have been reduced to one percent in December 2002; this should
provide buffer to manufacturing sector as they cope with expected oil price increases.

Ⅱ‐ A‐44Services is expected growing 5.2 – 6.3%, led by telecommunication, trade and private services.
Policies to liberalize air transportation, and measures to boost housing should further keep
services healthy. In banking and finance, the implementation of the Special Purpose Vehicle Act
will pave the way for greater financial activity in 2003 and over the medium term. Continued
macroeconomic stability, especially those relating to fiscal policy, will be important to sustaining
economic growth.
ENERGYThe Philippines' energy sector is relatively dynamic. Major reforms are underway, as are projects
to electrify isolated villages, to reduce the Philippines' dependence on imported oil, and tochange the relative composition of fuel consumption. The Philippine Energy Plan (PEP) for theperiod 2003-2012 complements and reinforces the macroeconomic goals of the arroyo
administration to promote balanced economic growth, poverty alleviation and a market basedenergy industry. With this macroeconomic goals as basis, Department of energy sets down thegoals for the energy sector which is as follows: 1) Stable and secure energy supply 2) Wider
access to energy supply 3) Fair and reasonable energy prices 4) Clean and efficient energy fuels
and infrastructures 5) Enhanced consumer welfare and protection 6) Technology transfer andmanpower development 7) Job creation from energy activities
OIL
The Philippines began 2001 producing an average of only 1,000 barrels per day (bbl/d) of oil.
Production jumped to 20,000 bbl/d by October, and reached 22,000 bbl/d by year's end. This
dramatic increase was due primarily to the discovery of new deep-sea oil deposits beneath thenatural gas-bearing structures in the Malampaya field. But while new hydrocarbon discoveries
will significantly reduce the Philippines' oil import bill, the country is still a highly dependent net
oil importer. The Philippines consumed 356,000 bbl/d on average in 2001 and produced 8,460
bbl/d, resulting in net oil imports of 347,540 bbl/d.
This dependence on imported oil makes the Philippine economy vulnerable to sudden spikes inworld oil prices. For example, the Philippine oil import bill increased over 70% during the firsteight months of 2000. The Philippine Institute of Petroleum estimates that local oil companies
lost between 3.5-4.0 billion pesos in 2000 due to their inability to adjust petroleum prices to fullyreflect the increased cost of imported oil and foreign exchange depreciation. Oil consumption is
expected to increase by 5.9% annually over the next several years as economic growth increases
demand in most sectors. Oil demand for power generation, however, is expected to decline byover 50% by 2011, as the government retires aging oil-fired electric power plants and switches tonatural gas and alternative power sources.
Despite small proven oil reserves, the Philippines had enjoyed a recent wave of optimism
amongst domestic and foreign drillers. In October of 2001, exploration underneath the
Malampaya gas field revealed an estimated 85 million barrels of oil condensate. Shell
Philippines Exploration (SPEX) has committed $4.5 billion to the combined oil/natural gas
project, and anticipates potential crude oil production of 35,000-50,000 bbl/d by 2003. In
addition, six new offshore explorations have commenced in the Malampaya basin, led by Nido
Petroleum, Philippines National Oil Company Exploration Corp., Trans-Asia Oil, Unocal Corp.,
Ⅱ‐ A‐45

and Philodril. Also, Trans-Asia has conducted exploratory drilling at the San Isidro well in the
East Visayan Basin. This area may contain as much as 60 million barrels of oil according tosome estimates. The Philippine government estimates reserves of up to 246 million barrels innorthwestern Palawan, and 37.4 million barrels in the Minduro-Cuyo basin. The Philippines
National Oil Company also expects to begin drilling in Lagao, Lambayong province in July of
2002, seeking an estimated 561 million barrels of oil.
Refining & Downstream
The Philippines' downstream oil industry is dominated by three companies: Petron, Pilipinas
Shell (Royal Dutch/Shell's Philippine subsidiary), and Caltex (Philippines). Petron is thePhilippines' largest oil refining and marketing company. The company was a wholly owned
subsidiary of the state-owned Philippine National Oil Company (PNOC) until 1994. Currently,
the Philippine government and Saudi Aramco each own 40% of the company, with the remaining
20% held by portfolio and institutional investors, making it the only publicly listed firm amongst
the three oil majors. Petron's Limay, Bataan refinery has a crude processing capacity of 180,000
bbl/d. Petron's market share at the start of 2002 was 38.3%, a 3.4% gain over 2001. Caltex(Philippines), a subsidiary of Caltex, the Texaco-Chevron joint venture based in Singapore,
operates a 86,500-bbl/d refinery, two terminals, and more than 1,000 gasoline stations
throughout the Philippines. Its market share is 23.8%, a 2.2% gain over 2001. Pilipinas Shell has
a 153,000-bbl/d refinery, one of the largest foreign investments in the Philippines, and operates
some 1,000 Shell gas stations. Shell's market share is 38%, a 4.7% gain over 2001. Overall,Philippine refineries run at around 80% of capacity, and there is not a great deal of demand for
new refinery construction.
Oil market deregulation, beginning in 1998, continues to have a significant effect on the industry.
Since deregulation started, 62 new firms, including TotalfinaElf, Flying V, SeaOil (Philippines),
Eastern Petroleum, Trans-Asia Energy and Unioil Petroleum Philippines Inc., have invested $13
billion and built approximately 312 new retail stations. By the end of 2000, the new players had
amassed 10.4% of the local oil market. These new entrants have organized the "New Players
Petroleum Association of the Philippines" (NPPAP), and have been credited with putting
significant downward pressure on retail fuel prices in the country. Currently, the Philippines
enjoys the lowest fuel prices of any non oil-exporting Asian country. However, price swings
associated with deregulation and higher world oil prices have angered many impoverished
Filipinos. Despite public calls for explicit price controls, the government has remainedcommitted to deregulation . In December 1999, the Supreme Court upheld the constitutionalityof the country's deregulation program. The NPPAP has shown some opposition to the program,claiming its provisions are insufficient as new players have not been able to capture at least 30%of the market.
Major downstream developments on the horizon include a $600 million naptha cracker plant to
be built by the Philippine National Oil Company in conjunction with Brunei's Mashor Group and
Malaysia's Petron. The plant, which most likely will be supplied with natural gas from theIndonesian Dongi field, would enable the Philippines to become an independent producer ofadvanced petrochemical products and plastics. The government has also called for a new LNG
receiving terminal to be built in Bataan to receive imported natural gas.
Ⅱ‐ A‐46In January 2000, the Philippines' Department of Energy announced plans to accelerate the phaseout of leaded gasoline. Leaded gasoline is banned already in Manila.
NATURAL GAS
The Philippines has 3.693 trillion cubic feet (Tcf) of proven natural gas reserves, but nosignificant production at the present. While in the past the gas sector has not been developed
extensively, the government has made expanding gas use a priority, particularly for electric
power generation, in an effort to cut oil import expenses. The government expects total domestic
natural gas production to increase annually by 146.4 billion cubic feet (Bcf) to reach 1.5 Tcf by
2011.
The impetus for the dramatic change in the country's natural gas sector is the Malampaya
offshore field. Malampaya is the largest natural gas development project in Philippine history,
and one of the largest-ever foreign investments in the country. Shell Philippines Exploration(SPEX, operator, with a 45% stake), Texaco (45%), and the PNOC (10%) have come together toform the Malampaya Deepwater Gas-to-Power Project. The Malampaya field is located in theSouth China Sea, off the northern island of Palawan, and contains an estimated 2.6 Tcf of naturalgas. A 312-mile (504-kilometer) pipeline links the field to three power plants in Batangas. The
pipeline is among the longest deep-water pipelines in the world, with half of its length more than
600 feet deep. With completion of the sub-sea pipeline and conversion of the first of three power
stations, (San Rita, operated by British Gas and Philippines 1st Gas Corp.), the Malampaya
project was officially inaugurated on October 16, 2001. Gas from Malampaya eventually will
fire three power plants with a combined 2,700-megawatt (MW) capacity for the next twenty
years and will displace 26 million barrels of fuel oil, according to the government. The
BG/Philippines 1st Gas Corp. partnership has announced that it expects to have a second station,
the San Lorenzo facility, converted for natural gas use by 2003. The government has publicly
considered selling a 10% share in the Malampaya project to the public; however no date has yet
been set for the IPO.
An $80 million joint venture between PNOC, RoyalDutchShell and Brunei's Mashor Group, toexpand the pipeline from Batangas to Metro Manila is being planned. This pipeline would supply
gas to additional power plants as well as the industrial and commercial sectors. PNOC has alsocommenced plans with Malaysian Petronas to build a 620-mile (1000-kilometer) line between
the two countries, completing one of the five components in the developing ASEAN power grid.
A number of foreign and domestic firms also are looking at onshore and offshore exploration
projects in the Philippines. A consortium of five companies (PNOC as operator holding 78.75%,
and four Australian companies) is exploring natural gas fields on and around Fuga Island under
Geophysical Survey and Exploration Contract 84. This area has been estimated to contain up to 5
Tcf of natural gas, but this is still unconfirmed. The Fuga 1 exploration well was plugged andabandoned in June 2000 after producing no hydrocarbons. This area, to the north of Luzon, is
still being considered, however, for a pipeline to Taiwan if a large enough gas find comes into
production. Also, exploration is soon to begin in Southern Cebu by two undisclosed American
firms, as well as in the Sultan Kodurat province by undisclosed European and Middle Eastern
firms. Three natural gas fields were closed down in 2001. Fields in the Tukankuden and the
Cotabato Basin were shut down due to the proximity of rebel soldiers, while another field in
Ⅱ‐ A‐47

Victoria, Tarlac, was closed because the gas discovered was too saturated with water forcommercial production.
The Philippine government is developing a policy framework for the emerging gas industry that
foresees the government's role as that of facilitator while attempting to ensure competition.
Domestic development is to be encouraged, but competition from imported gas also is to beallowed. Gas supply to wholesale markets will have market-set prices, while prices for captive
markets and small consumers will be regulated.
COAL
Development of new natural gas projects in the Philippines has come largely at the expense of
the country's struggling coal industry. Despite producing 1.49 million short tons in 2000, PNOC
announced that it plans to close its national coal subsidiary. The government also announced thatmany of the country's coal-fed power plants are being considered for conversion to natural gas,including the 600-MW Calaca plant south of Manila. Napocor, the National Power Company,
has followed suit, ordering its coal-fired plants to operate at diminished capacity in order toallow more capacity for natural gas-fired plants. The country has decided to restructure the use ofits 366 million short tons of estimated coal reserves, which is mostly low-rank lignite, forprocessing in smaller "clean coal" plants, for eventual end-use as household fuel, and briqueting.
In the Department of Energy's 2002-2009 energy plan, three new smaller-scale plants areplanned, including a $62 million 50-MW power plant in Isabela, which should be completed by
2005.
The Philippines consumed 9.5 million short tons of coal in 2000, eight million short tons ofwhich were imported. Indonesia and China are major exporters of coal to the Philippines, andboth have been in negotiations with Manila about increasing their quotas. There has been very
little new exploration for coal in the Philippines since a methane explosion in 1997 killed many
workers and caused public hostility to the industry. New plants have faced increasing opposition
from both agricultural and church groups.
World Trade Organization (WTO) regulations require that the Philippines lift import restrictions
on coal. Since the 1970s, when the National Coal Authority was created, Philippine coal
importers have been required to obtain a government certificate of compliance before importing
coal, allowing the authorities to force importers to buy domestic coal each time they purchased
coal from abroad. President Macapagal Arroyo has committed to honoring the international coalsupply contracts approved by the previous government.
ELECTRICITY
Energy production in the Philippines is concentrated in the electricity sector. Geothermal power
accounts for the country's largest share of indigenous energy production, followed byhydropower, coal, oil and gas. The Philippine government has made shifting from reliance on
imported oil a major goal, and is pushing the current boom in natural gas-fired electricity
development.

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The most significant event in the Philippine energy industry in recent years has been the Power
Industry Reform Act of 2001. After 7 years of congressional debate and court cases, the Act
came into force on June 26, 2001. The act has three main objectives: 1) to develop indigenous
resources; 2) to cut the high cost of power in the Philippines; and 3) to encourage foreign
investment. Passage of the Act sets into motion the deregulation of the power industry and thebreakup and eventual privatization of state-owned enterprises. Actual sale of state assets andimplementation of the program is not likely to take place until late 2002 or 2003.
The legislation requires the state-owned utility National Power Corporation (Napocor) to breakup its vertically integrated assets into smaller sub-sectors such as generation, transmission,
distribution and supply in order to prepare for eventual privatization. The result will be a system
in which privatized generators would sell directly to private distribution companies. Working
with consultants from Hunton and Williams, Napocor has designated two new subsidiarycompanies designed solely for eventual privatization. These two firms, Transco and Psalmcorp,
will entail the state's high voltage transmission lines and infrastructure, and power plants,
respectively. The government also will sell off its share of Meralco, a smaller company thatserves Manila and the immediate surrounding area by buying power from various Independent
Power Producers (IPPs).
Napocor will need to transfer its existing power purchase obligations to private distributors, andalso to renegotiate high-priced contracts. The cost savings lie in the fact that private distributors
will likely be unwilling to enter into agreements that are above market rates. There are otherfinancial incentives for the government as well. Napocor's huge debt and $9 billion in powerpurchase agreements are unsustainable, and the government must already contribute $300
million per year to keep Napocor afloat. Finally, the government needs more foreign investmentin the sector as demand is projected to outpace supply by around 2005 at current rates ofinvestment.
In order to make the sale of Napocor more attractive to investors, the government has absorbed asignificant amount of Napocor's $6.7 billion debt. In addition, the $9 billion in power purchaseagreements with IPPs also will be sold off. The transmission system will be transferred to anindependent company, Transco, which is scheduled for privatization by mid-2002. Privatizationof Transco, however, is contingent upon congressional approval for the rules governing a newwholesale spot market as well as a reduced transmission tariff, or "wheeling charge". According
to deregulation laws, no one potential buyer will be allowed to own more than 30% of thePhilippines' generating assets.
Electricity demand in the Philippines is expected to grow by around 9% per year through 2009,
necessitating as much as 10,000 megawatts (MW) of new installed electric capacity. Current
contracts will provide about half of that amount, with the remainder expected to be filled oncethe market deregulates. Medium-term increases in power demand are to be satisfied largely by
the three gas-fired plants (Ilijan, Santa Rita, and Sucat) that will be linked to the Malampaya gas
field, plus the coal-fired 470-MW Quezon Power Project that was inaugurated in June 2000. The
Korea Electric Power Corporation (KEPCO) plans to complete the 1,200-MW Ilijan plant in2002. KEPCO will run the plant under a build-operate-transfer scheme for 20 years, after which
ownership will revert to Napocor. Minority stakeholders in the plant are Southern Energy of the
Ⅱ‐ A‐49

United States (20%) plus Mitsubishi (21%) and Kyushu Power (8%) of Japan. First Gas Power
completed its 1,020-MW plant at Santa Rita in August 2000, with the plant running oncondensate until gas becomes available. First Gas Power's subsidiary FGP Corporation isbuilding a 500-MW power plant nearby the First Gas facility in Santa Rita, in Sucat. Operators
are expected to begin by 2006.
Other power facilities planned, under construction, or recently completed include four smallhydroelectric plants with a total capacity of 650 MW in the Mindanao region and three small
diesel-fired plants in Oriental Mindoro operated by Southern Energy. The CE Casecnan Water
and Energy Company (a subsidiary of California Energy International) is constructing a
multipurpose irrigation and 150-MW hydroelectric facility in Luzon.
Southern Energy is the Philippines' largest IPP, operating five power plants in the country.
Southern's new coal-fired Sual plant began commercial operation in late 1999. The 1,218-MW
plant is located about 130 miles north of Manila, and reportedly is the nation's largest andlowest-cost electricity producer. Napocor is the sole purchaser of Sual electricity.
Several power-generating facilities also are under extensive rehabilitation. The 100-MW Binga
hydroelectric plant in Itogon, Benguet has been under renovation since 1993 following damage
from a 1990 earthquake. Due to political factors, this renovation has so far been unsuccessful,with the dam in worse shape now than in 1993. A larger project is the $470 million contract with
Argentine firm IMPSA (Industrias Metalurgicas Pescarmona Sociedad Anonima ) to rehabilitate
and operate the 750-MW Caliray-Botocan-Kalayaan (CBK) power complex in Laguna, south of
Manila. The CBK complex is the grid regulator in Luzon, and as such is able to transmit power
to other plants on the grid in the event of breakdowns. IMPSA, in conjunction with new partner
Edison Mission Energy of the United State, was able to get a performance undertaking guarantee
despite Napocor's and some government officials' objections, facilitating long-delayed financingof the project.
In March 2000, Texas-based El Paso Energy International and Hawaiian Electric Industries
formed a 50-50 joint venture to own and operate five power plants now owned by East Asia
Power Resources Corporation, a public Philippine company. The total generation capacity of theventure's holdings will be 390 MW. The oil-fired plants are located in Manila and Cebu.
Volatility in electric power prices has angered many Filipinos, who blame the Power Industry
Reform Act of 2001. The Act calls for an Energy Regulatory Board, which reviews and approves
applications by the National Power Corporation for price increases. Controversy over pricing
still exists, however, as the Association of Philippine Electric Cooperatives demonstrated in May
of 2001 with an organized blackout to protest a 30 centavo rate increase instigated by Napocor.
The Philippines, due to its geography, has problems linking all of its islands together into one
grid and ensuring availability of electric power to the remaining 9,708 villages without electricity.
The government has set a target date of 2004 for electrification of all these villages through the
14-billion peso "O-Ilaw" program, and also is taking steps to link together the country's threemajor power grids (Luzon, Visayas, and Mindanao). As of March, 2002, the government claims
Ⅱ‐ A‐50

the project is 85.6% complete. Where it is not economical to link small islands' grids into thenational grid, separate local systems are being established around small generating plants.
Renewables
The Philippines is the world's second largest producer of geothermal power, with an available
capacity of 1,931 MW, according to the Philippine government. The government would like tobring on another 990 MW, bringing capacity to 2,921MW, and exceeding the U.S. capacity of
2,775 MW. Geothermal power currently makes up around 16% of the Philippines' installed
generation capacity, most of which has been developed by the PNOC - Energy Development
Corporation (PNOC-EDC). Privatization of PNOC-EDC is expected in the near future, withseveral firms already expressing interest. PNOC-EDC bought Napocor's geothermal assets in
March 2001. Kyushu Electric company is in a joint venture with PNOC-EDC to develop a 40MW geothermal plant in Sorsogon, Albay province, and Marubeni of Japan has expressed its
intent to build the 100-MW Cabalian geothermal plant in Leyte. California Energy's Philippine
unit is working with PNOC to develop three new geothermal power plants in Leyte, producing a
total of 540-MW of electricity. Plans are underway to develop nine new facilities in Luzon,
ranging from 20 MW to120 MW that will eventually bring a total of 440 MW of geothermalenergy to the grid. By 2004, the new 40-MW Mambucal and 40-MW Rangas power stations in
Dauan, Negros Oriental are expected to come online.
Besides geothermal, the Philippines also is exploring the use of other renewables for electricity
generation, particularly in the country's unelectrified villages. In December 2000, WorldWater
Corp. signed an agreement with Cebu Electric Cooperative to provide 1,200 homes with solar
electrification. In March 2001, the Philippine and Spanish governments, in conjunction with BP,
agreed to a $48 million contract to bring solar power to 150 villages. BP and the government ofAustralia also have partnered with the Philippines to supply solar power to rural villages,
bringing 1,145 solar-powered systems to 52 new municipalities. New solar-powered facilities
were also inaugurated for villages on Samal Island on December 7, 2001.
The Philippines appears to have a strong potential for wind farming. The United States
Department of Energy wind mapping survey estimates that wind resources in the Philippines
have a power generation potential of as much as 70,000 MW, seven times the country's current
power demand. Garrad Hassan Ltd. of the United Kingdom has expressed interest in a $220
million wind power pilot project. Another wind power project is the 40-MW, PNOC-EDC
Northern Luzon project in Ilocos Norte, scheduled to begin operations in 2002. PNOC and theJapan Bank of International Cooperation also plan to build a $64.7 million, 40-MW wind farm in
Burgos. The Burgos facility will be the country's first commercial wind farm, and may possibly
be connected by a spur line to the Luzon Island power grid. This project is the first in a series ofthree to add 120 MW of wind power to the NAPCOR grid. A biomass waste-to-energy plant isplanned for Negros Occidental that would use 450 tons of municipal waste and bagasse per hour.
Nuclear
In March 2000, the government announced that it would build a 600-MW nuclear power plant
similar to the Bataan plant by 2020. However, the Bataan plant was declared inoperable due to
its location on an earthquake fault, and the government continues to pay $250,000 per day toservice the debt on the inoperable plant. The Triga Research Reactor, which dates from 1963, is
Ⅱ‐ A‐51

to be replaced with a new 20-MW research reactor. However, though as it may say, energy from
Nuclear sources is very unpopular proposition among Filipinos.

Ⅱ‐ A‐52

Regardless of the whole or a part of the report, the reportshall not be disclosed without the prior consent of theInternational

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