NEAR-ZERO ZONE PROJECT

Showcasing the Power of Industrial Energy Efficiency


The U.S. Department of Energy (DOE) is implementing the Near-Zero Zone project, a demonstration project for industrial energy efficiency in Turkey. This innovative project is being executed in coordination with other U.S. government agencies and with the support of the Government of Turkey. Through a series of cost-effective energy efficiency investments, participating companies will illustrate how energy efficiency can make industry more profitable, reduce dependence on energy imports, bolster energy security, and cut carbon emissions. This project promises to serve as a model for industrial energy efficiency in Turkey and beyond.

HOW IT WORKS

This first-of-a-kind demonstration project pairs approximately 20 companies in the Ataturk Organized Industrial Zone (IAOSB) in Izmir, Turkey with technical resources and expertise needed to achieve significant energy savings.

Key components of the Near-Zero Zone project include:

  • Zone-Wide Energy Assessment: An initial energy audit by U.S. experts will identify current energy usage by participating companies.
  • Company-Specific Studies: For each participating company, technical experts will identify energy efficiency opportunities and assess the related costs of implementation, expected savings, and impact on profitability.
  • Energy Efficiency Upgrades: Based on the experts’ assessments, companies will choose which energy efficiency investments to pursue. They will then meet with equipment and service suppliers, as well as various lenders, in order to maximize their savings and profitability. Potential financing entities include OPIC, Ex-Im Bank, EBRD, TURSEFF, private banks, and ESCOs.
  • Energy Efficiency Results: After the energy efficiency measures have been undertaken, DOE will work with Turkish business organizations to disseminate an assessment of the project’s impact to companies across Turkey.


PROJECT BENEFITS

This project promises to strengthen the economic relationship between the U.S. and Turkey, a key goal laid out by President Obama and Prime Minister Erdogan during their meeting in April 2009. It will help expand Turkey’s energy efficiency and clean energy markets and – in light of Turkey’s strong ties with the Middle East, Africa, Central Asia, and Europe – may also provide new opportunities for providers of energy efficient goods and services to reach markets beyond Turkey’s borders.


WHY THE IAOSB?

The IAOSB zone is an ideal host because it includes companies of varying sizes operating in diverse sectors. In addition, all of the zone’s utilities, including electricity, heat, and wastewater treatment, are provided on-site, expanding the opportunities for energy efficiency savings. Finally, the zone is located near one of Turkey’s largest ports in a region with significant renewable energy potential, amplifying the potential for related trade and investment.

CONCRETE RESULTS

By providing Turkey with a replicable model for industrial energy efficiency, this project will support the Turkish government’s efforts to reduce industrial energy consumption and carbon emissions. It will provide Turkish companies with access to advanced technologies, financing opportunities and best practices as they strive to reduce their own energy costs. In addition, by disseminating results through Turkish business associations, the project is expected to promote further investment in industrial energy efficiency in Turkey and the wider region.

PARTNERS AND FUNDING

DOE is actively collaborating with a number of partners, each of whom will play an important role in the project’s implementation. These include Turkish government agencies (Ministry of Energy and Natural Resources and EIE); various U.S. government agencies including the Department of State, Department of Commerce, Overseas Private Investment Corporation, U.S. Trade and Development Agency, and the Export-Import Bank; and international organizations including the European Bank for Reconstruction and Development and TURSEFF, an entity composed of four Turkish banks. The project is also receiving support from companies including Shaw Group and GE Ecomagination.

The involvement of these partners will help to increase opportunities for private sector companies to participate, whether by providing technical assistance to complete the energy efficiency assessments or supplying equipment and services to support implementation.

Strong anticipated results of this public-private partnership could allow Turkey to serve as a model for industrial energy efficiency in the region and beyond.

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ADDITIONAL INFORMATION

The Near-Zero Zone project taking place at the Ataturk Industrial Zone (IAOSB) in Izmir, Turkey is being led by the U.S. Department of Energy (DOE) and involves many other U.S. agencies (State, Commerce, Trade Development Agency, Overseas Private Investment Corporation and Export-Import Bank). On July 7th, U.S. Ambassador to Turkey Francis Ricciardone will visit the Near-Zero Zone project at the IAOSB site to meet with the 20 participating Turkish companies and the IAOSB management team. He will be given a tour of the site and will make a press statement to the media regarding the excellent U.S. and Turkish cooperation on this exciting industrial energy efficiency project. The Near-Zero Zone project is designed to be replicated throughout Turkey, with the hope of supporting Turkey's capacity to become a regional leader in industrial energy efficiency.

In January, the US Trade Development Agency (TDA) completed its definitional mission which helped to identify 20 companies in the IAOSB that would have significant energy efficiency potential. In February, DOE completed it baseline energy audits with the support of its Oak Ridge National Lab experts. DOE has been pleased to have technical experts from Turkey's Ministry of Energy, EIE Department, come to the IAOSB zone to participate with experts from the U.S. in both the definitional mission phase and the baseline energy audits. It has been a great opportunity to share technical information and discuss how industrial energy efficiency can be encouraged throughout Turkey and the region.

In recent months, DOE identified several experts from U.S. companies to conduct the detailed and extensive Technical Assessments which are the critical next step to the project. These assessments are being provided to the 20 Turkish companies free of charge. GE, Shaw Group, and Johnson Controls will conduct about half of the technical assessments through the U.S. State Department Global Partnership Initiative. In addition, TDA, which has provided a grant for this project, will soon select a company to do the remaining 10 technical assessments.

When these technical assessments are completed, they will provide each of the 20 participating Turkish companies which specific recommendations on how to reduce energy consumption and improve their profitability by modifying equipment, manufacturing processes, management or operational systems, etc. The technical assessments will also indicate the anticipated costs of each recommendation, payback periods, and impact on company profitability. The companies will use this information to determine what energy efficiency measures they will implement in the near and medium terms. The Turkish companies will be able to choose the recommendations they will pursue based upon their cost-benefit analysis and management needs. They will also choose the equipment and service suppliers who they will use to undertake the implementation of their selected recommendations. They may choose equipment and service suppliers from Turkey, the U.S., Europe, or elsewhere.

A U.S. Commerce Department trade delegation is planned for this fall to bring potential U.S. equipment and service suppliers to Izmir where the companies participating in the Near-Zero Zone project will have an opportunity to talk to them. This will be a unique opportunity to build new US-Turkish trade relationships around the energy, energy efficiency, and manufacturing sectors. The U.S. companies will also meet with many other Turkish companies in Izmir, Istanbul and Ankara.

In addition, DOE will be bringing in various lenders once the assessments are in the hands of the Turkish companies. Lenders who have expressed an interest in this project include the Overseas Private Investment Corporation, US Export Import Bank, EBRD, TURSEFF, KOSGEB, and various private financial institutions. The Turkish companies will have the opportunity to select the financing mechanism that is most appropriate for them.

In the coming weeks and months, when the technical assessments are being conducted, DOE hopes to once again invite EIE technical experts to participate in the technical assessment process for a day or two.

A major goal of the Near-Zero Zone project is to ensure that companies throughout Turkey ultimately learn about the project's results and are inspired to undertake their own energy efficiency upgrades. The project's replicability throughout Turkey and beyond will be an important outcome of this effort. DOE will continue you to share information about the project's progress over time and will ultimately disseminate the results of the project through various Turkish business associations in 2012.