1. Background

The Municipal Energy Efficiency Program (MEEP) is funded by United States Agency for International Development (USAID) and is aimed at establishing sustainable market mechanisms for financing of energy efficiency projects in Bulgaria. The specific mechanism for project financing established by MEEP is the Development Credit Authority (DCA) Guarantee mechanism. This mechanism provides guarantees from the US Treasury through the US Agency for International Development (USAID) on behalf of potential borrowers in favor of a local bank for 50% of outstanding principle of loans for energy efficiency projects. The presented Energy Efficiency Project in the Pirinsko Pivo Brewery was the first ever in the world to use this mechanism.

The participants in Project are Pirinsko Pivo Brewery – the beneficiary of the Project, Energy Efficient Systems Ltd. (EES), Electrotek Concepts and United Bulgarian Bank (UBB). Energy Efficient Systems Ltd. developed and implemented the energy efficiency Project, Electrotek Concepts developed the business plan and the loan application for financing from UBB which provided the credit in conformity with the conditions of MEEP.

Pirinsko Pivo is middle-sized brewery for the scale of the Bulgarian Market and was equipped with relatively obsolete machinery. It was established in 1967 as a bottling facility for beer, supplied by other breweries. In 1971 starts the full-scale production and bottling of beer. In 1997 the brewery was registered as a Joint Stock Company. At the time of the Project start the market share of the brewery on the Bulgarian market was 4%, the whole output being intended for the domestic market. The serious difficulties met in keeping these positions and the necessity of their widening led to the development of a Program for further development of the company.

2. Goals

In the framework of the Business-plan for the company development embedded was a vision for radical improvement of the energy efficiency, as a serious opportunity for increasing the competitiveness and the market positions. The findings of the comprehensive energy audit, carried-out in the beginning of the project showed that considerable part of the total production cost belongs to the energy cost and they were considerably higher than the corresponding costs of the leaders in the branch. A strategy for speeding-up the implementation of an Integrated Energy Efficiency System was adopted, directed to decrease of the total energy cost with no less than 25% by applying of reasonable financing schemes.

3. Activities

The execution of the Project passed through the following stages:

• Comprehensive Energy Audit: September – December, 1999;
• Development of Business-plan: January – March, 2000;
• Incorporation of the Project in MEEP;
• Design of Integrated System for Energy Efficiency: January – May, 2000;
• Selection of suppliers of the required equipment: May, 2000;
• Delivery and installation of the equipment: June – October, 2000;
• Implementation and operation of the Integrated Energy Efficiency System: July – December, 2000;
• Performance monitoring and verification: October 2000-October 2001.

As a result of the comprehensive energy audit the following groups of Energy Conservation Opportunities (ECO) were formulated:

• Monitoring and control system. The installation of new measuring devices enabled the measurement information to be fed in a computer system, processing the production and consumption data and making possible to monitor and to keep the energy consumption within the prescribed standards. This ECO led to annual savings of 97 MWh of electric energy and 101 tons of heavy fuel oil. This measure is a base of the new Energy Management System, efficiently integrated into the Plant Management System.
• Steam distribution improvement, including investigation of the technical condition and reconstruction of the steam and hot condensate distribution pipeline, change of the heat insulation and the pipe-supporting system, installation of reduction valves, highly effective steam traps, re-habilitation of the heating systems, etc. Based on the current annual production, this measure lead to savings of 379 tons of heavy fuel oil and 2,038 m3 of water.
• Retrofit of the boiler house, including reparation of a boiler, rehabilitation of the heavy fuel oil system, the burners, the softening installation and change of the air fan. Based on the current annual production, the implementation of this measure lead to savings of 135 MWh of electric energy and 346 tons of heavy fuel oil.
• Refrigeration system improvement including change of the isolation and implementation of automatic control of the compressors which are the largest consumers of electric energy. Based on the current annual production, the implementation of this measure lead to savings of 170 MWh of electric energy.
• Lighting improvement. A new energy saving lighting system was designed. This measure included sectioning and automatic control. Based on the current annual production, this lead to savings of 53 MWh of electric energy.
• Air compressor replacement. The most frequently used piston compressor is replaced with a new screw type compressor, which consumes 30% less power. As a result of this measure, electric energy savings are achieved and maintenance expenses for the compressor station are reduced. Based on the current annual production, the implementation of this measure will lead to savings of 95 MWh of electric power, 14 tons of heavy fuel oil and 252 m3 of water.
• Filling and Bottling Machine replacement. A new filling and bottling machine with reduced electric consumption and increased productivity was installed. In addition to the savings of electric energy, the number of broken bottles was reduced. Based on the current annual production, the introduction of this measure lead to savings of 89 MWh electric energy, 56 tons of heavy fuel oil and 773 m3 of water.

4. Results

The Project was completely implemented by November 2000.

1. Energy Savings. The main goal and therefore the main result of the Project were the reduction of the energy expenses of Pirinsko pivo. The proposed measures lead to saving of 27% of the electric energy, 35% of the heavy fuel oil and 1% of the water consumed for production.

The results from the implementation of the Energy Efficient Measures are presented in the Table below, the savings for 2000 and 2001 are actually obtained and those for the following years are anticipated, taking into account the planned increase of output.

Table 1

The direct energy savings helped reduce the final cost of a bottle of beer by 6.4%. The products of Pirinsko Pivo are situated in the lowest price segment of the beer market, which is the most price sensitive segment. The decrease of product costs gave Pirinsko Pivo more flexibility in its pricing policy which, eventually, coupled with the increase in production capacity helped them increase their market share by over 100% and double their sales.

2. Decreasing the emissions of greenhouse gas. Important positive result of the project implementation is greenhouse gas emission reduction. As a result of the reduced consumption of heat, CO₂ emission due to heavy fuel oil burning was reduced by 35% and emissions due to the production of the electric energy consumed were reduced by 27%. From 2000 to 2004, for the forecasted level of production, CO₂ emissions will be reduced by 17,218 tons.

Reduction of fuel consumption leads to reduction of noxious gas emissions to the atmosphere, most important of which is SO₂ emissions reduction. For the period from 2000 till 2004, for the forecasted level of production, SO₂ emissions will be reduced by 316 tons.

3. Other ecological improvements connected to the Project implementation. Some of the proposed measures lead to reduction of water consumption. From 2000 till 2004, for the forecasted level of production, water savings will be 14,000 m³.

4. Reduction of noise level. High level of noise characterized the old compressor. With the change of the compressor the noise level considerably decreased.

5. Catalyst of improvements in technology and management. Project implementation lead to many positive results such as increase in the efficiency of the technological equipment. Along with that, the maintenance expenses decreased and the equipment reliability increased. In the future this will allow considerable production increase without changes in the technological equipment. The results obtained encouraged the company to make further investments in the technology innovations, continuing the successful partnership with UBB.

6. Dissemination of the experience gathered. Two seminars took place, organized in the framework of MEEP with the participation of specialists from the branch, representatives of banks, of industrial enterprises and of the State Agency for Energy Efficiency, where the experience from the implementation of this pilot project was discussed in detail. As a result the interest to MEEP itself increased and to the issues of the energy efficiency on National scale.

7. The project results prove the expediency and the efficiency of the financing scheme for energy efficiency projects from the Municipal Energy Efficiency Program.