No incentive for Asian firms to be green

Organizations in region recognize benefits of saving energy but don't have incentives to implement energy efficiency measures, says Schneider Electric.
Written by Liau Yun Qing, Contributor

SINGAPORE--While Asian companies understand the benefits of saving energy, incentives are just not forthcoming enough to encourage them to spend the money to implement energy efficiency tools, noted an executive from Schneider Electric.

Speaking at a briefing Wednesday, Stuart Thorogood, senior vice president of Schneider Electric Southeast Asia, said the biggest problem to the lack of energy efficiency among firms in the Asia-Pacific region is "finding the real incentive to spend the money to make changes". Headquartered in France, Schneider Electric held the Southeast Asia launch of its integrated energy management solutions here.

As an example, Thorogood pointed out to energy audits conducted by the company in 26 firms in Thailand. He said none of the companies picked up Schneider Electric's suggestions to carry out energy savings.

He attributed the reluctance to financial decisions. "[While] they knew they could make a difference [by] saving energy [as] we were showing return on investments of six to nine months, there was still a reluctance to spend the money [on the solutions] or to get the attention of the CEO or the CFO to say, 'Yes, we'll put the money on the table.'," he noted

Another executive observed that firms, especially those in Southeast Asia, also do not have any idea how much money they are spending for different energy consumption points.

"They know how much they spend in overhead, travel and IT, but not how much on air-conditioning or lighting," said Thierry Nicolet, senior vice president, press and industrial relation, global marketing.

This makes it difficult for firms to understand how much they can benefit from energy management, he said.

Energy crisis looming large
In his speech, Thorogood said that while last year's economic crisis is over, the energy crisis is looming large. He noted that by 2030, electrical demand will double, while there is a need to cut carbon dioxide emissions by half to avoid dramatic climate changes.

Schneider Electric advocates energy management to reduce power consumption as a solution to the world's energy dilemma. According to Thorogood, original energy sources like coal start out with 100 units of energy, which get reduced to 33 units by the time these reach the consumer due to energy lost during transfer.

He noted that one unit of energy saved by the consumer would mean three units not generated at the power plant.

Nelson Yeap, president of Schneider Electric Singapore, added that renewable energy such as solar and wind power may not be the answer to the world's energy needs.

He quoted Exxon Mobile as saying that come 2030, fossil fuel will still remain the predominant energy source and account for nearly 80 percent of demand.

Compared with fossil fuel, renewable sources--which account for 13 percent of today's energy--will increase to about 15 percent in 2030, said Yeap referring to International Energy Agency's 2008 research findings.

The ZDNet Asia IT Priorities 2010 survey found that green technology was the lowest among business priorities as organizations in Asia focused on increasing productivity and saving cost.

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