2nd OECD-DOE Clean Energy Finance and Investment Consultation Workshop: Unlocking finance and investment for clean energy in the Philippines, 24-25 November 2022, Bohol, Philippines

1. OVERCOMING
CHALLENGES IN THE
PROCUREMENT AND
FINANCING OF EE
SERVICES
A discussion on possible problems and potential solutions
Deano Christian B. Echague
EE Officer, DBM Region 5

2. Talking Points
• Investing in Energy Efficient Equipment
• Planning & Execution of EE goals and objectives
• Possible Problems in the Procurement Process of EE
Equipment, and Solutions

3. Investing in Energy Efficient
Equipment
• DBM ROV has invested and purchased equipment with
technologies that would lower down or decrease energy
cost. These investments include the procurement of
inverter series air conditioning units, office equipment,
and a solar power system.

4. • In procuring the air conditioning units, DBM ROV set a list of
standard specifications. Using such list, the agency acquired air
conditioning units with 1.5/2.0 horsepower (HP), Inverter Powerful
Operation, and with at least 10.8 Energy Efficiency Ratio (EER). DBM
ROV opted to invest on inverter air conditioning units because this
uses a regulated compressor with variable speed settings, thus, the
compressor is not always working at full power during operation.
Further, inverter air conditioning is far more energy-efficient and uses
environment friendly freon gas than non-inverter AC units.

5. • Another project of the agency is the installation of the 50KW Solar
Power System, comprising of 40-KW on-grid and 10-KW off-grid PV
System. The project started on March 17, 2020 with a contract cost of
Four Million Six Hundred Seventy-Five Thousand Sixty-Six Pesos
46/100 (P4,675,066.46) and started to operate on the later part of
October 2020.

6. • Further, the office purchased refrigerators that are inverter series and with LED technology
computer monitors, television sets and lighting fixtures. All office equipment and appliances
are provided with individual UPS or appliance surge protectors. Furthermore, the perimeter
fence of the office is lighted by stand alone solar power lights.

7. Comparative Statement of Electricity
Consumption
between January to June 2020 and January to
June 2021
ELECTRICITY CONSUMPTION
kWh Php kWh Php
January 8,360 78,595.86 2,640 21,770.72
February 9,680 90,965.09 3,200 29,221.31
March 8,840 83,970.61 2,800 26,493.84
April 7,440 70,723.69 2,560 25,485.21
May 9,840 89,124.58 3,520 34,480.57
June 13,040 133,369.58 4,640 60,520.34
TOTAL 57,200 546,749.41 19,360 197,971.99
MONTH
2020 2021

8. Percentage Decrease in Electricity Consumption in kWh
for the period January to June 2020 vs January to June 2021
With the investments
in inverter air
conditioning units and
solar panel system,
DBM ROV consumed
a total of 19,360 kwh
for the period January
to June 2021. This
represents a 37,840
kWh or 66% decrease
in electricity
consumption from the
57,200 kwh
consumption of the
previous year.

9. Percentage Decrease in Electricity Consumption in Peso Value
for the period January to June 2021 vs January to June 2021
In terms of the decrease
or savings in peso value,
DBM ROV incurred and
paid a total of
P197,971.99 for
electricity expenses for
the period January to
June 2021, which
represents a total
decrease of P348,777.42
or 64% from the previous
year payment of
P546,749.41 for the
same period.

10. Planning & Execution
• Start with setting goals and road mapping objectives.
• Invest time and assets in researching the best equipment for your needs
(Market Study).
• Conduct the Procurement Process in accordance with existing rules and
regulations (R.A 9184 and its IRR)
• Use monitoring tools to gauge effectiveness of procured equipment.
• Conduct maintenance activities to extend the useful life of equipment.

11. Possible Problems in the Procurement
Process and Solutions
1. Wrong/invalid specifications and pricing for desired equipment.
Some equipment specifications may not be the most up to date, or can
not serve the needs of the agency. Prices of the same may also fluctuate
depending on market demand, stock availability, and logistical concerns,
especially during the pandemic period.
Solution: Conduct a more recent market study for desired equipment.
Use actual data vs. historical data with regards to EE equipment.
Conduct separate market studies for budget proposal, and actual pre-
procurement.

12. 2. Lack of budget for EE Equipment
Some agencies may have insufficient budget in investing for EE
equipment, due to other avenues requiring the financial focus of the
agency.
Solution: Identify which avenues can take budget cuts in order to
provide the needed amount for EE investments. Consider an economical
approach with usage of supplies and other consumables. Start small in
investing in EE equipment. “Plan phasing” is also a viable approach, as
it distributes the budgetary requirements for EE investments for an
extended period of time.

13. 3. Wrong mode of procurement for EE Equipment.
Some agencies may have difficulty in executing the procurement process
necessary for the desired EE equipment.
Solutions: The BAC, BAC Secretariat, and TWG of all agencies should
familiarize themselves with R.A 9184 (Procurement Law) and its IRR.
Consider the best mode of procurement per project, and do not focus on
the default mode of procurement. Observe procurement timelines from
the creation of documents until acceptance of the equipment.

14. 4. Hesitation of Procuring Entity to allocate budget for EE
Equipment.
Solution: Cost benefit Analysis. If the overall cost of an EE
equipment far outweighs the intended savings targets, re-
consideration and re-evaluation of the EE plans of the agency
should be done. It should be incumbent in an agency’s EE
planning to identify the best EE equipment that will satisfy
their requirements.

15. 5. EE Equipment are not functioning up to the standard of its intended
purpose.
Solution: Check on the monitoring tools to identify the start of the
arising concerns. Determine the intended effectiveness vs. the actual,
and then decide on the action to be taken. Maintenance of equipment
are necessary for it to function as intended.

16. In summary
• Energy Efficiency is one of the best investments an
agency can make, not only financially, but also
environmentally.
• Purchase of EE equipment should be done with proper
research, market study, and with due diligence.
• Energy Efficiency should be a long term goal, and not a
short term achievement.
• Possible problems in the procurement process of EE
equipment are mostly eliminated at the start of the
planning phase.

17. “As the saying goes, the Stone Age did not
end because we ran out of stones; we
transitioned to better solutions. The same
opportunity lies before us with energy
efficiency and clean energy.”
- Steven Chu

18. Thank you!