Industrial Resource Efficiency:Experiences and Opportunities

Viera Feckova

Vienna, Austria

February 21, 2018

Final Product with

added value $$

Energy

Labor

Water

Raw

materials

Capital

WHY WE THINK RESOURCE EFFICIENCY (REF) IS A GOOD BUSINESS

Not valued “no-product” $$:

• wastes and emissions

• charges and fees

• defect rates and reclamations

• market positioning vis a vis competitors

(costs structure, value added products)

100%

50%

50%

The most effective and efficient measures are those

considered and implemented at the design stage

An assessment of processes, products and services to:

• Increase overall efficiency and productivity

• Improve business opportunities

• Reduce environmental risk

REF IMPROVES BOTTOM LINE & CONTRIBUTES TO SUSTAINABILITY

Even plants with the latest technology are actively seeking improvements:

• While individual equipment/lines operate on up to date levels, interconnections of different

process steps, utilities generation and use are frequently not optimized;

• Optimization of use of thermal energy across plant needs sophistication that is often not available

in house (such as pinch analysis);

• Waste heat recovery projects in many cases proved not being feasible, need sophisticated

assessment to make sure the investment provides acceptable returns;

• Renewable energy projects need technical expertise and assessment to make sure the

investment provides acceptable returns;

• Water typically costs 4-10 times more than perceived by plant staff. Consequently, water

improvement projects have shorter paybacks that perceived;

• Wastes streams typically costs 10 - 100 times more than perceived by plant staff due to high

energy and material costs (such as packaging, raw materials, chemicals);

• Waste water treatment plants tend to be effective but not efficient, thus using more than

necessary resources to achieve the output parameters;

• Benchmarking analysis shows that advanced foundry plants in Turkey can improve their

efficiency by 15-20% moving towards best European peers;

• Auto-component producers can gain 10-15% resource savings from reduction of internal scrap

generation, thereby avoiding resource spending in previous process stages

Identification of feasible REF potential remains challenge

EFFICIENCY: WHAT DO WE DO?

Scope

• Energy efficiency • Captive energy• Water efficiency & optimizing

waste water treatment plants• Material efficiency

Sectors*

• Cement • Textile • Chemicals & Fertilizers, Pharma• Light Manufacturing & Automotive• Food processing • Pulp & Paper, …

4

COMPANY LEVEL SECTOR/ MARKET LEVEL

• Identifying energy & resource efficiency

potential

• (Pre-)feasibility studies related to

energy/water/material efficiency

• Assessing E&RE projects & mainstream

deals dedicated to efficiency

• Unlocking market opportunities

Promoting advanced approaches

• Examples: • Foundry benchmarking,

• Waste heat recovery,

• Nitrogen Chemicals Benchmarking,

• Alternative Fuels for Cement In

Egypt,

• Cleaner Production Market

Assessment Pakistan, …

* region/country specific

RENEWABLE ENERGY

DISTRIBUTED/CAPTIVE/ON-SITE GENERATION

6

Grid-tied Unreliable Grid Offgrid

Base of

Pyramid

Residential

C&I

SHS

appliances/

Paygo/DESCOs

(10-200W)

2015 $1bn;

2020 $3bn;

CAGR 35%

Pico

solar

(5-10W)

Rooftop Solar/

RESCOs

(kWs)

2015: $20bn

2020: $37bn

CAGR: 13%

DISTRIBUTED POWER GENERATION

GROWTH OUTLOOK INDICATES SUBSTANTIAL POTENTIAL IN C&I

Minigrids

(5-50kW)

C&I Captive Power (MWs)

2015: $16bn; 2020 $34bn; CAGR 16%

Green Power for Mobile (kWs)

2015: $3bn; 2020: $4bn; CAGR

5%

Rural electrification

Lingo:

1. RESCO = Renewable Energy Service Company

2. DESCO = Distributed Energy Service Company

DG - GROWTH RATES

45%39% 36%

20%

0%

10%

20%

30%

40%

50%

MEA Asia (exc.India&China)

LAC India

C&I growth expected to come from:

CAGR

WHY WE THINK RENEWABLE ENERGY (RE) IS A GOOD BUSINESS

9

On site energy generation helps to

• Reduce/eliminate reliance on the local electricity grid

• Diversify sourcing of fuels

• Reduce price of heat, cold and electricity

• Reduce dependency on volatile fuel prices

• Reduce environmental footprint

• Review of possible options and

selection of the most feasible direction

for alternative energy source use

• Feasibility/pre-feasibility study to

assess a specific technology

• Identification of possibilities for

resource efficiency improvement and

reduction of operation cost

Advisory offer

Heat/cold, electricity

Electricity

Heat, electricity

Heat, electricity,

fertilizer, (waste water)

• Solar energy

• Wind energy

• Biomass

• Biogas

Sources of energy Outcome

TYPICAL RENEWABLE ENERGY ENGAGEMENTS

10

ALTERNATIVE FUELS

MARKET LEVEL

Egypt, ECA

11

THE CHALLENGE

12

Policy on waste management and recovery, including AFR

Technically and financially

capable waste management

sector

Efficiency base infrastructure for waste collection

and recovery

Sustainable AFR supply chain

Upscale of the use of AFR

Cost savings and reduction

of disposal

IFC APPROACH: COMPREHENSIVE SUPPORT ACROSS

SECTORS & GROUPS OF STAKEHOLDERS

Government and subnational agencies: help create institutional framework to integrate AFR solutions and tools to implement it

Waste management operators and project developers: help develop sustainable AFR supply chain, mobilize private investment

Cement sector players: demonstrate business case for the increased used of AFR, develop AFR infrastructure projects as required

Advice to all key groups of

sector players and stakeholdersCombination of sector- and client-level

interventions

Advice to individual firms and entities on implementing policies and procedures, development and assessment of specific AFR options

Advice on integrating AFR in the policy and strategy frameworks, strengthening technical capacity, supply chain linkages

IFC OFFERING: WASTE MANAGEMENT SECTOR PLAYERS

PaCT

Partnership for Cleaner textile

15

MARKET LEVEL

Bangladesh, Pakistan, Vietnam, India, SriLanka,…

RMG VALUE CHAIN - OUR FOCUS

16

Yarn Knitting Fabric Dyeing Cutting & Making

Spinning WeavingWashing

Finishing

Export

Cotton

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Yarn Spinning Fabricproduction

Textile wetprocessing

Garmentmanufacture

Distribution of water, energy and chemicals in textile processing (% of total)

Water Energy

IFC SOLUTIONS - FOR TEXTILE SUPPLY CHAINS

17

Global Trade

Supplier

Finance

Program

(GTSF)

Provides

short-term

financing for

suppliers and

exporters0

Financial

Institutions

Group (FIG)

Helps

factories

access

finance

through local

partner banks

Manufacturing,

Agribusiness &

Services (MAS)

Provides direct

IFC investments

(equity or

loans) to

companies

Better Work

(ILO

Partnership)

Help factories

improve

working

conditions

and comply

with

international

labor

standards

Energy &

Resource

Efficiency

Optimize cost

savings for

factories by

conserving

valuable

resources

Integrated Solutions to Maximize Developmental Impact

IFC

ADVISORY

IFC

INVESTMENT

Levis

H&M

Puma

Nike

IFC VISION FOR PACT FOR

A SUSTAINABLE AND COMPETITIVE INDUSTRY

18

Bangladesh

SEDF

With 8 brand

partners on Pilot

2010 20162013

Bangladesh

PaCT launched -

$11M

Gap & 14 other

brand partners

China Water

Program $4M

Launched – 2

brands partner

with IFC.

Vietnam

Improvement

Program $3.1 M

launched

4 brand partners

2017

Bangladesh

PaCT II launched

- $7M.

VF Corp partner

partners with

IFC to develop

Low

Carbon Road

Map

Pakistan PaCT to

be launched -

$XXGlobal PaCT to be

launched - $XX

Levis Global

Agreement

Market scoping

studies – Nepal,

Cambodia and

India

SAC – PaCT

Partnership

ZDHC – PaCT

Partnership

Sri Lanka –

Assessment of one

supplier

2018 2019?

India PaCT to be

launched - $XX

East Africa?

Mexico?

Towards an

integrated

approach to

Resource

Efficiency &

a Circular

Economy in

The RMG

value chain

CONTACT INFORMATION

19

Viera Feckova

EMENA REF Technical Lead

T: +1 202 569 4660

Email: vfeckova@ifc.org