Feasibility Study on Large-Scale GHG Emission-Reduction Project
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Feasibility Studies on Joint Crediting Mechanism Projects towards Environmentally Sustainable Cities in Asia Feasibility Study on a Large-Scale GHG Emissions-Reduction Project Development in the Iskandar Development Region, Malaysia March 2014 The Japan Research Institute, Limited Contents I. Summary ....................................................................................................................... 5 II. Results of the Survey .................................................................................................... 9 1. Survey background and purpose ................................................................................. 11 1-1. Background of the survey ........................................................................................... 11 1-2. Purpose of the survey .................................................................................................. 14 2. Survey plan ................................................................................................................. 16 2-1. Overall view and schedule of the survey .................................................................... 16 2-2. Structure of the survey ................................................................................................ 17 3. Survey results ............................................................................................................. 18 3-1. Outline of the survey field .......................................................................................... 18 3-1-1. The survey filed .......................................................................................................... 18 3-1-2. Development of the cooperation framework with the local partners .......................... 23 3-2 Development of the project for the realization of LCSBP .......................................... 25 3-2-1. Gathering information and analysis on the LCSBP .................................................... 25 3-2-2. Study of the technologies and products that apply to the LCSBP ............................... 32 3-2-3. Selection of LCSBP projects for demonstration and the demonstration sites ............. 35 3-2-4. Plans of the demonstration projects ............................................................................ 36 3-3. Development of the ESCO projects ............................................................................ 37 3-3-1. Selection of a local ESCO operator ............................................................................ 37 3-3-2. Selection of the buildings for the ESCO projects ....................................................... 37 3-3-3. Energy audit by TNB-ES and JFS for the ESCO project ............................................ 41 3-3-4. ESCO proposals .......................................................................................................... 63 3-4. Study on the calculation of GHG emissions reductions ............................................. 64 3-5. Financial environment in Malaysia ............................................................................. 72 3-6. Environmental impact assessment .............................................................................. 75 4. The action plans for the next fiscal year ..................................................................... 77 4-1. Summary of the action plans ...................................................................................... 77 4-2. Challenges towards realization ................................................................................... 82 3 4 I. Summary 5 6 1. Survey background and purpose In the Iskandar Development Region (IDR), an environmental agenda has been established based on the idea that the following will be essential elements of future urban development: a) climate change and global warming, b) target setting for a low carbon footprint, and c) the promotion of and positive support for a green economy through increased investment in environmental resources, green technologies and green products. Specifically, the “Low Carbon Society Blueprint for Iskandar Malaysia 2025” (hereafter called LCSBP), a roadmap toward the realization of a low carbon society, aiming at enabling socially, economically and environmentally sustainable development, has been prepared to embody such a society in future. The purpose of this survey is to advance large-scale GHG emissions-reduction project development under the JCM by embodying the LCSBP in Malaysia’s important development area of the IDR, based on the LCSBP or a roadmap to achieve the low carbon society that Japan and Malaysia have worked together to formulate, utilizing the excellent Japanese technologies and products that are now being applied to smart cities. 2. Survey Plan The implementers of this survey are JRI, Panasonic, and JFS. SMBC is responsible for the finance. Japan’s other project-related parties include research institutes such as NIES and Japanese government officials working at the Ministry of the Environment (MOE) promoting the JCM. These agencies 3. Survey results 3-1. Development of the project by the realization of LCSBP We have gathered information on and analyzed the envisioned programs in the twelve project fields set in the LCSBP. Since the IRDA has the IDR development plan, through their plan’s consistency with the LCSBP and its coordination with the existing programs, to enable it to assess how far the LCSBP implementation has progressed and where the needs lie, we have examined fields in which Japanese technologies and products can be utilized to set up demonstration projects. Comparing more than 10 development projects planned for or underway in the Iskandar area, and their developers according to requirements specified above, we have chosen the projects of Company A and Company B. 3-2. Development of the ESCO projects For structuring the ESCO projects, we have selected a local ESCO operator, concluded of an agreement with the local ESCO operator, selected by the ESCO operator of buildings for the ESCO project, implemented energy audit by the local ESCO operator and Japan Facility 7 Solutions for buildings to be included in the ESCO project, prepared an energy audit report and prepared ESCO service proposals. After 2 months negotiation, as of November 26, 2013, an agreement was concluded between the JFS and TNB-ES. JFS had identified one office building and one shopping-mall building as target buildings for the demonstration of ESCO business. JFS had also implemented energy audit for 6 days from 2nd December. As a result, we have concluded ESCO business will be possible for the shopping-mall building among the demonstration targets. 3-3. Study of the calculation of the effects for GHG emissions reductions We have calculated the GHG emissions reductions for both projects after examination of the methodologies. As a result of the analyses, we have estimated the reductions as 3,683t-CO2/year for A-project and 859 t-CO2/year for B-project of “Development of the project by the realization of LCSBP”, and 1,620 t-CO2/year for shopping-mall building of ESCO project. 4. Summary of the action plan 4-1. Development of the project by the realization of LCSBP At the sites of the developers that agreed to the utilization of Japanese smart town related technologies and products in town development in the FY2013 F/S, the initiatives will be carried out utilizing the achievements and experience in Japan (Fujisawa) and China (Dalian). Specifically, the initiatives will be implemented for the following two sites in order to achieve the LCSBP and pave the way for the promotion and spread of Japanese smart town related technologies and products. i. In mixed use development sites with high-rise apartments and commercial facilities, actualize the LCSBP in town development, and plan and review the demonstration in the show villages. ii. In the mixed development sites of detached housing and apartment houses, plan and review the actualization of the LCSBP in town development. 4-2. Development of the ESCO projects The ESCO projects (in the fiscal year 2014, the steps immediately before starting construction are regarded as the F/S targets) in relation to the two buildings (a commercial facility and an office building) where the energy audit were conducted in 2013. In fiscal year 2015, the steps including the actual installation of equipment are planned to start. 8 II. Results of the Survey 9 10 1. Survey background and purpose 1-1. Background of the survey Malaysia, aiming at joining the ranks of developed countries by the year of 2020, has formulated and been promoting the 10th Malaysia Plan 2011-2015 and the Economic Transformation Program, in which the Malaysian government specifies the principal economic fields. Concurrently, Malaysia has designated five priority large development areas called “economic corridors.” In the plan, program and corridors, the Iskandar Development Region Project for large-scale urban development is ranked among the especially important projects. Figure 1-1-1: Malaysia’s national development plan Source: Malaysian National Physical Plan 11 The Iskandar Development Region Project is designed as a large-scale urban development with the aim of improving the existing industries such as the electric power industry, electronics industry and petrochemical industry as well as at developing new industries including finance and education in a target development area of 2,216.3 square kilometers (2.5-3 times larger