Energy Efficiency Export Opportunities
October 1997

RUSSIA ENERGY EFFICIENCY (30 September)

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 1997. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES
Company: St Petersburg Energy Company (SPBEC)

Activities: SPBEC is a private company that specializes in supplying, installation, and servicing of equipment for Russian electric utilities, electric power plants and co-generation facilities. According to a company official, the firm is successful in many regions throughout the Russian Federation and other NIS countries. The company's sales in 1996 exceeded USD 15 million. Their major customers are electric utilities.

Due to the fluid financial situation in Russia, barter trade agreements are common. Many customers that lack cash, "pay" electric utilities with their products or other goods rather than cash. As a result, electric utilities "pay" equipment suppliers and contractors with these products. Through barter arrangements, SPBEC owns and exports large quantities of industrial chemicals to Western Europe.

Objective: Currently, SPBEC officials plan to establish an educational center for their clients, which will introduce and promote modern energy-saving technologies throughout the country. The goal is to showcase Western equipment manufacturers and new technology developers to the Russian market. SPBEC is interested in developing a long-term relationship with U.S. manufacturers of energy-saving equipment and technologies for power plants and co-generation facilities. SPBEC does not expect funding from potential U.S. partners because they plan to set up the educational facility with company financing. However, SPBEC requires a firm commitment and willingness on the part of U.S. suppliers and technology developers to participate in seminars and conferences that are organized by SPBEC to demonstrate modern energy-saving technologies to Russian electric utility managers. In exchange, SPBEC will share with the U.S. suppliers its contact database of Russian customers throughout NIS. Company officials believe that their expertise, and extensive contacts in the power generation industry will assist U.S. manufacturers in penetrating the promising Russian electric utility equipment market.

Contact:
Stanislav Gronsky, Consultant
10 Stavropolskaya Street
St Petersburg 193124 Russia
Tel: 7(812) 271-1004 Fax: 7(812) 271-1220

ESTONIA ENERGY EFFICIENCY (30 September)

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 1997. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES

Electrical power is generated mainly using Estonia's oil-shale resources, which accounts for aproximately 90% of domestic fuel. As oil-shale is a domestic resource, electricity rates in Estonia in 1995 were lowest in the Baltic region. The country's two large oil-shale fired electric power plants, the Estonian Power Station and the Baltic Power Station, were built in Soviet times to supply Russia's north-western region with electricity. . . .

Energy Conservation Program

The energy conservation program was financed from the national budget and from state-guaranteed foreign loans. At the same time, there were an increase in the financial contribution to energy conservation from the other sources, not directly dependent on the state. Thus in Estonia a process towards the economical use of energy has started.

From the 1996 national budget, the following amounts were allocated for energy conservation:

  1. renovation - 13.0 million Estonian kroons;
  2. services bought by the state - 17.0 million Estonian kroons of which contracts were concluded as follows:

Loans from the European Union and the EBRD have been used. Loans from a World Bank, SIDA, and the EIB are currently being used. The majority of loan financing has gone to regional energy projects. If the projects for Tartu and Prnu are also counted as regional projects this amount would be even larger. As for the towns, the major project has been the reconstruction of the heating system of Tallinn. In association with the implementation of the energy conservation program and the reconstruction of heating systems one should give an assessment of the profitability of investments and to the pricing of heat produced using alternative fuels. In the economic forecasts an analysis has been given of the use for heating of the most widespread fuels in Estonia. Heating with black oil in an out-of-date boiler plant has been taken as the basis for comparison. In the different variants, the financing costs have also been calculated into the price of the heat. The conditions for loan financing have been taken as follows: loan period 1-10 years, loan interest 10%. The analysis shows that black oil and gas are the cheapest sources for heat production. Black oil can only be used in the biggest boiler plants with a capacity exceeding 1 MW; in smaller ones it is technically complicated. The use of gas, especially in smaller local heating systems with minimal heat loss, is promising. However, building local gas heating systems requires a relatively large capital outlay.

Implementation of the Energy Conservation Program In Estonia

Important decisions in energy policy are under active consideration. First and foremost these concern the gradual substitution of oil shale with more effective and environment-friendly energy sources. For the time being it has been found that in the countries around the Baltic Sea gas is the best alternative for traditional energy sources. In addition to the traditional use of gas for heating, it is also economically feasible to use gas in smaller capacity (50 MW and less) power plants. The share of gas in heat production is constantly increasing. In the coming years the construction of local gas heating systems likely will continue.

AS Eesti Gaas (Estonian Gas Co.) has begun to use a pipeline connection to Latvian gas storage facilities. Since this time the pipeline from the storage in Sigulda in Latvia to Tallinn has created more flexible gas flows to clients. Saku brewery, located near Tallinn, is one of the biggest new clients. It will also be feasible to reconstruct old hydro-power plants in Norther Estonia in the future.

Law on Energy and Harmonization According to EU Legislation

The principles of the energy policy of the Estonian government are in accordance with those of the EU. The strategy of energy generation involves the promotion of energy generation based on local fuels, enhancing the efficiency of energy production and consumption to raise the competitiveness of the Estonian economy and to reduce the damage to the environment. The Convergence of Energy Policies is a research project, which is presently being carried out in the framework of the Multicountry Energy Program of the EU-PHARE program. The result of the research will be to establish the principles for harmonization of Estonian energy policy to that of the EU.

Useful contacts:

American Embassy
Kentmanni 20,
EE0001 Tallinn,
Estonia
tel: 372 6 466 355 fax: 372 6 312 025
E-mail: econ-us@online.ee
Contact: Ms Reene Sepp, Commercial Assistant

Estonian Investment Agency
Rvala 6-602 B,
EE0001 Tallinn,
Estonia
tel: 372 6 410 166 fax. 372 6 410 312
E-mail: info@eia.ee

Estonian Chamber of Commerce and Industry
Toom-Kooli 17,
EE0106 Tallinn,
Estonia
tel: 372 6 460 244 fax: 372 6 460 245
E-mail: koda@koda.ee

Ministry of Economy
Harju 11,
EE0001, Tallinn,
Estonia
tel: 372 6 256 304 fax: 372 6 313 600

SE Eesti Energia Estonia
pst.1,
EE0001 Tallinn,
Estonia
tel: 372 6 252 445 fax: 372 6 252 200
E-mail: info@energia.ee
http://www.energia.ee

Useful Internet homepages:

http://www.ciesin.ee/ESTONIA/ - general information
http://www.hotline.ee/ - Estonian Yellow Pages

Exhibitions in 1998

1.-13.02 ENEREX '98 Energy industry, energy supply, heating and ventilation systems, industrial electronics, electrical engineering.

Organizer: Expo Balticum Ltd. Rvala pst.6-402d, EE0105 Tallinn tel: 372 6 305 770 fax: 372 6 305 769 e-mail: expobalt@expobalticum.online.ee

RUSSIA ENERGY EFFICIENCY (16 October)

Energy Efficiency Project General Procurement Notice Loan No. 3876-RU

The Government of the Russian Federation has received a loan from the International Bank of Reconstruction and Development (IBRD) in the amount of $70 million equivalent toward the cost of an Energy efficiency Project, and it intends to apply the proceeds of the loan to payments for goods, works, and services to be procured under this project.

The project will include the following components: equipment to improve efficiency in the production and distibution of heat, such as high-efficiency heating boilers, burners, and automation for them, heat transmission and distribution piping and valves, heat subdistribution units and automation for them, and heat energy meters.

Procurement of contracts financed by the loan will be conducted through the procedures specified in the World Bank's Guidelines: Procurement under IBRD Loans and IDA Credits, and is open to all bidders from eligible source countries as defined in the guidelines.

Specific procurement notices for contracts to be bid under the World Bank's international competitive bidding procedures and for large-value consultants' contracts will be announced, as they become available, in Development Business, in Russian in the local newspaper Business World, and in the quarterly information edition of the Russian Energy Saving Union Inform.

Interested eligible bidders who wish to be included on the mailing list to receive an invitation to bid, or those requiring additional information, should contact:

Project Implementation Unit
Prospect International (Ireland) Ltd. Office
Ul. Vvedenskogo, 8, Annex, 3rd Floor
117342 Moscow,Russian Federation
Contact Names: Mr. Boris Gromov, Director of PIU; Mr. Anton
Podgornov, Manager; Mrs. Elena Makeeva, Secretary
phone 7-095-333-6557, 33381-79, 33384-79, 333-6146, fax 7-095-333-75-35

RUSSIA ENERGY EFFICIENCY(16 October)

Energy Efficiency Project Equipment Loan No. 3876-RU

The Government of the Russian Federation has received a loan from the International Bank of Reconstruction and Development (IBRD) in the amount of $70 million equivalent toward the cost of an Energy efficiency Project, and it intends to apply the proceeds of the loan to payments for goods, works, and services to be procured under this project.

Prospect International (Ireland) Ltd., on behalf of the Project Implementation Unit of the Energy Efficiency Project and Municipal Heat Supply System Company of Semenov (Nizhegorodskaya oblast), now invites sealed bids from eligible bidders for the supply of the following items:

Bidding will be conducted through the international competitive bidding procedures specified in the World Bank's Guidelines: Procurement under IBRD Loans and IDA Credits, and is open to all bidders from eligible source countries as defined in the guidelines.

Interested eligible bidders may obtain further information from and inspect the bidding procedures for each lot at the address below beginning on 16 December, the lot availability date, from 0900 to 1800 hours every day excluding Saturday and Sunday.

A complete set of the bidding documents for each lot, in Russian and/or English (in case of a discrepancy between the bidding documents, the English version will prevail), may be purchased by interested bidders on the submission of a written application to the address below and upon payment of a nonrefundable fee of $240 (VAT included) or its equivalent in Russian rubles converted at the exchange rate fixed by the Central Bank of the Russian Federation on the day of payment, for each copy of the bidding documents.

The method of payment will be the following:

Any transfer or other fee is to be borne by the party purchasing the documents. In the event that the documentation could not be collected by the purchaser at the Prospect International (Ireland) Ltd. Office, bidding documents may be sent by courier for local delivery or by DHL for international delivery upon request of the purchaser.

Bids must be delivered to the address below by 1000 hours on 27 January 1998. All bids must be accompanied by a bid security of 2% of the bid price or an equivalent amount in a freely convertible currency. Late bids will be rejected. Bids will be opened in the presence of bidders' representatives who choose to attend at the address below at 1100 hours on 27 January 1998.

Interested bidders should attend at the offices of Prospect International (Ireland) Ltd. at the address below:

Project Implementation Unit
Prospect International (Ireland) Ltd. Office
Ul. Vvedenskogo, 8, Annex, 3rd Floor
117342 Moscow,Russian Federation
Contact Names: Mr. Boris Gromov, Director of PIU; Mr. Anton
Podgornov, Manager; Mrs. Elena Makeeva, Secretary
phone 7-095-333-6557, 33381-79, 33384-79, 333-6146, fax 7-095-333-75-35

RUSSIA HEATING (16 October)

Municipal Heating: The project aims to reduce the financial burden of supplying heat in municipalities. Project is being identified. Environmental Assessment Category B. $300 million (IBRD). Consulting services to be determined. Central Project Development Unit, 6 Tverskaya, Bulvar, Moscow 103009, Russian Federation, phone 7-095-232-6525, fax 7-095-232-6522. Contact: Ms. Marina Velikanova.

INDIA ENERGY EFFICIENCY (15 October)

A seminar on hospital waste recently concluded in Mumbai highlighted many problems faced by medical facilities as they are required to render their waste inert before disposal. The waste streams contains many items which are hazardous to the environment on disposal. Hospitals are uncomfortable with the idea that instead of being guardians of health they are potential hazards to health. U.S. companies have a wide open market to create a resource base for environment friendly products which promote pollution prevention in the health care industry.

Hospitals and medical establishments find themselves in a difficult situation while they explore solutions to treat the waste and escape from possible environmental fallout. Much of the waste generated by hospitals is a potential hazard at both handling and disposal sites.

Hospitals are looking for environment friendly technologies /products which are competitive to products currently available. Industry experts tell us that a significant saving in production cost is possible if following products are produced locally.

The interest generated by the seminar was tremendous. The chairman of the Central Pollution Control Board in New Delhi requested a special presentation by the EPA speaker and the speaker from Doucet and Mainka for the benefit of officials in his office.

A TV presentation which included the three US speakers and several key figures from the Indian health care industry and the municipal bodies was recorded. The Indian officials were very forthright with their commitments towards making hospital waste safe.

Comment: US firms should explore joint venture opportunities to achieve economies of scale and look seriously to this potential market.

NICARAGUA RURAL ELECTRIFICATION, CONSERVATION (10 October)

Rehabilitation of Electrical Distribution Systems

Description: The project will focus on rehabilitation of distribution lines and improvement of the electricity supply, including: rural electrification; expansion of urban distribution systems; improvement of transmission and subtransmission substations; interconnection by underwater cable of Ometepe Island; energy conservation program.

Possible bank financing: $50 million.
Estimated total cost: $100 million.

Anticipated procurement: Transmission and distribution materials and equipment would be procured.

Contact: Empresa Nicaraguense de Electricidad, Managua, phone 505-2-67-2461, fax 505-2-67-4258.

Status: Under identification.

UKRAINE EXPERIENCING POWER BLACKOUTS (17 October, Itar-Tass)

Ukraine's power companies, hobbled by failure of consumers to pay bills, have been forced to institute twice-daily blackouts of three hours each in Lvov and other major cities. The government hopes to solve the energy crisis through privatization of the electricity supply system.

MCDONALD'S AUSTRALIA GOES FOR EFFICIENCY (10 October, The Solar Letter)

McDonald's has said it will seek to reduce greenhouse emissions from its restaurants in Australia through efficiency and possibly the use of solar. Australia's Minister for Resources and Energy said the chain will examine stoves, hot water systems, lighting and air conditioning for possible energy savings.

MCDONALD'S HEATS RESTAURANT WITH GEOTHERMAL (16 October, PR Newswire)

Construction started Tuesday for a new prototype McDonald's restaurant that will feature geothermal heating and cooling, the first in the restaurant chain to use the energy-efficient system.

After Detroit Edison signed a long-term power supply agreement with McDonald's, the two companies have been working together the last several months to review restaurant design and determine potential energy cost savings.

The new restaurant, at Ford and Hix roads, will open in December and be the sixth McDonald's in Westland. The 3,600-square-foot restaurant will include a two-story Ronald's Playplace and have seating for 65. It also will be clad mostly in brick and have neon signage.

"Geothermal systems have been used widely by residential customers for a number of years, but this is one of the first commercial restaurant applications," said Dennis Manning of Detroit Edison. "By monitoring energy usage at this restaurant and comparing it with a similar McDonald's in the area, we will be able to determine whether geothermal will be the wave of the future for McDonald's."

The use of energy-efficient interior and exterior lighting, improved insulation values, triple-glazed windows and high-efficient motors also have McDonald's officials enthused about their "environmentally clean, earth- friendly" restaurant.

CANADIAN HOSPITALS SEE EFFICIENCY SAVINGS (17 October, Canada Newswire)

In the fight to improve health care with reduced budgets, the David Thompson Health Region has found a winning strategy.

The Health Region is upgrading the lighting and mechanical systems in eight facilities to enhance indoor comfort for patients and staff. These new energy efficient systems will actually reduce the Region's facility costs by $202,000 a year, representing 25 per cent of the annual utility costs. Honeywell guarantees the savings through a performance contract, and the $978,000 project will pay for itself within five years.

The project includes upgrades to the hospitals at Bashaw, Bentley, Innisfail, Lacombe, Ponoka, Rimbey, Trochu and Sundre, with energy saving measures customized to the needs of each facility. At the Innisfail Health Centre, for example, the existing multiple-condenser air conditioning system is being replaced with a central system that will reduce the number of compressors needed to cool the building, allowing the system to run more efficiently on less energy. Equipment in good condition that is no longer needed in one building can be installed in one of the smaller health centres.

New energy efficient lighting will be installed in all eight buildings. Upgrades to the building automation systems will integrate control of the heating, cooling, lighting and energy management functions. Integration enhances building operator efficiency and effectiveness, and will help flatten energy use. By controlling and re-scheduling operation of equipment away from peak use periods, the hospitals can significantly reduce their utility bills.

The project is now underway and is scheduled for completion in April 1998.

The David Thompson Health Region is one of 17 health regions in the province of Alberta. It serves a population of more than 176,000 people, and operates eight acute care facilities, 12 community health centres and 14 long-term care facilities.

DUKESOLUTIONS GETS $150M EFFICIENCY CONTRACT (2 October, PR Newswire)

DukeSolutions, the new integrated energy services subsidiary of Duke Energy, will execute a second government contract to improve the energy efficiency of federal and state facilities across the nation. The contract is valued up to $150 million.

This newly awarded contract covers 46 states, the District of Columbia and Puerto Rico. A previous contract worth up to $100 million covers facilities in North Carolina, South Carolina, Virginia and Georgia. With the new contract, DukeSolutions takes its place in an elite group of 11 companies that will make energy-saving improvements at all types of federal or state facilities from military bases to courthouses to schools to office complexes.

DukeSolutions' proposal is based on an alliance with EMCOR Group Inc. (Nasdaq: EMCG), the largest mechanical and electrical construction and facilities services company in the country. By using EMCOR's nationwide network of construction and maintenance operations, DukeSolutions expects to bring savings measures on-line quickly and consistently.

The contracts are some of the first awarded in the wake of the Energy Policy Act of 1992, which requires that federal facilities cut energy consumption by 30 percent by 2005.

The government contracts will be administered by the U.S. Army Engineering & Support Center in Huntsville, Ala.

Originally awarded to Duke Engineering & Services Inc., the contracts will be executed by DukeSolutions, the engineering company's sister firm created to provide full scope energy efficiency technology and supply services. DukeSolutions will submit proposals for these types of projects going forward.

DukeSolutions is a wholly owned subsidiary of Duke Energy that provides integrated, custom solutions to reduce costs and improve energy efficiency for industrial, commercial, governmental and institutional customers.

HONEYWELL WINS CANADIAN EFFICIENCY CONTRACT (26 September, Canada NewsWire)

Nine Government of Canada buildings in Nova Scotia are to undergo money-saving energy retrofits under the Federal Buildings Initiative (FBI) program. The announcement was made today by the Honourable Alfonso Gagliano, Minister of Public Works and Government Services.

Honeywell Ltd., of Dartmouth, Nova Scotia, submitted the most competitive bid in response to a public tender call. Under the terms of the contract, the company will upgrade the lighting and ventilation systems in the nine buildings located in Antigonish, Bridgewater, Halifax (2), Kentville, New Glasgow, Shelburne and Sydney (2). The work is scheduled for completion in early June 1998.

The FBI program uses a unique financing mechanism, in conjunction with private-sector partnerships, to upgrade government facilities at no cost to government. The program uses money saved on energy bills to fund the energy efficiency upgrades. Projects usually pay for themselves in six to eight years.

Funding for this project, valued at $769,083, was provided for in the February 1997 federal budget and is therefore built into the existing fiscal framework.

ONSITE TO DEVELOP RUSSIA EFFICIENCY PROJECTS (16 October, PR Newswire)

Onsite Energy Corporation (OTC BULLETIN BOARD: ONSE) ("Onsite") announced today that it has been selected by the California Energy Commission ("CEC") through its International Energy Fund for development support of four energy efficiency projects in the Republic of Panama. These project sites include two major hotels, a food processing plant and a chain of supermarkets. The grant to fund the project comes from the CEC and is in the amount of $75,000.

These projects are a result of the First Regional Symposium for Energy Efficiency and Distributed Generation, which took place in Panama in May this year. Onsite Energy organized the symposium with the financial support of the CEC.

The symposium, which was attended by representatives from eight Latin American and Caribbean nations, was successful in creating awareness of new technologies and energy services available for energy efficiency and distributed generation. This event also enabled participants to identify project opportunities for energy services and distributed generation development. Onsite plans to leverage the CEC grants and Onsite's unique qualifications to expand its marketing efforts throughout Latin America. This will be accomplished by strengthening and expanding its existing public and private sector alliances in the region and enhancing its presence through the implementation of major efficiency projects.

ONSITE SIGNS ENERGY EFFICIENCY DEALS (6 October, PR Newswire)

Onsite Energy Corporation (OTC Bulletin Board: ONSE) ("Onsite") announced today that it has entered into a master energy efficiency services agreement with a major manufacturer headquartered in Southern California. Phase one of the project, which will provide energy efficiency lighting equipment at the manufacturer's Southern California facility, should generate gross revenues of approximately $180,000. Onsite estimates that the phase one lighting and occupancy sensor project should result in savings of approximately $77,000 in annual energy costs. Onsite will also provide post-installation measurement and savings verification services over a three-year period following completion of the project.

In addition, Onsite announced that it has been selected by a large Northern California city to upgrade the lighting system at its Water Pollution Control Plant. Onsite expects to generate revenues of approximately $265,000 on this project. The lighting upgrade, which includes retrofit of more than 2,000 interior and exterior fixtures, should result in savings in excess of $45,000 per year in energy costs. The local utility incentive contribution through Onsite's Power Savings Partners contract with Pacific Gas & Electric is estimated at $114,000 over a five-year period.

"Companies continue to contract for energy efficiency projects in this era of deregulation," stated Richard T. Sperberg, president and chief executive officer of Onsite Energy Corporation. "This validates our belief that implementation of energy efficiency projects effectively delivers energy savings over the life of the installed equipment, often significantly below the purchase price of that same power from either the local utility or through the evolving competitive power market."

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