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Why Implementing Green Technologies in Business is Profitable?

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Why Implementing Green Technologies in Business is Profitable?
Country: Kyrgyzstan
An interview with Maksat Damir uulu, SWITCH-Asia PERETO Project Manager

Tourism remains one of the most important industries in Kyrgyzstan. To actively promote it, the government has designed the State Programme for the Development of the Tourism Industry and the National Development Strategy of Kyrgyz Republic until 2040. These documents reflect the principles of sustainable development through more careful use and management of natural resources, development of country regions, ensuring environmental sustainability and restoration of the environment.

Maksat Damir uulu, Project Manager of the EU funded SWITCH-Asia PERETO project (Promotion of Energy and Resource Efficiency in Tourism Industry of Kyrgyzstan) told economist.kg why the introduction of a sustainable tourism model in Kyrgyzstan is the most promising direction for business and how this sector is interconnected with the green economy.

PERETO is the first project that promotes energy efficient measures in the Hospitality, Restaurant and Catering (HoReCa) segment and tourism industry. What else does it include?

PERETO includes practices of sustainable development and consumption as well as implementation of renewable energy based equipment in HoReCa segment and tourism: resorts, sanatoriums, boarding houses, guest houses, among others. The project is funded by the European Union under the SWITCH-Asia programme and supported by the European Union Delegation to the Kyrgyz Republic in cooperation with the Ministry of Economy and the Department of Tourism.

Why does Kyrgyzstan need sustainable tourism?

In October 2019, Kyrgyzstan ratified the Paris Agreement, a legally binding international treaty that sets long-term goals to guide all nation to substantially reduce global greenhouse gas emissions to limit the global temperature increase in this century to 2 degrees Celsius while pursuing efforts to limit the increase even further to 1.5 degrees; review countries’ commitments every five years; and provide financing to developing countries to mitigate climate change, strengthen resilience and enhance abilities to adapt to climate impacts. Within the framework of the Paris agreement and the transition to a green economy, Kyrgyzstan has the opportunity to receive funding from the Green Climate Fund, where developed countries allocate about $100 billion annually. The demand for sustainability in the tourism industry will rapidly increase in the whole world. Therefore, our entrepreneurs have to act now if they want to be able to compete. Sustainable tourism is tourism which satisfies the needs of modern tourists while also preserving natural resources. Its main principle is to travel mindfully and do no harm to the environment.

You talk about transition to a “green economy”. What is its main aspect?

A green economy is a low-carbon economy that uses resources efficiently and serves the interests of the whole society. Global trends in the green economy are energy efficiency and the introduction of renewable energy sources (RES). Alternative energy is obtained from sustainable sources: sun, wind, water, biofuels, tides. Unlike fossil fuels (oil, natural gas, coal), these energy sources do not deplete, so they are called renewable.

What is the potential of renewable energy sources in Kyrgyzstan?

Unfortunately, the practical use of RES in Kyrgyzstan is less than 1%, although according to the State Committee of Industry, Energetics and Subsoil Use:

  • Solar energy potential is estimated at 490 million kWh/year;

  • Small hydropower can output  5-8 billion kWh/year and the total hydropower potential of the country is 142 bil. kWh/year;

  • Wind energy potential is estimated at 44.6 million kWh/year;

  • The possibility of universal bioenergy usage is equal to 1.3 billion kWh/year;

  • Geothermal energy is considered another promising, but not estimated, type of renewable energy in the Kyrgyz Republic; it uses the Earth's heat to produce electricity. The temperature of the subsoil allows heating the upper layers of the Earth and underground reservoirs. This type of renewable energy could be effective in regions where hot springs are located close to the surface of the earth's crust.

  • The total hydropower potential of the country is 142.5 billion kWh. Thus, Kyrgyzstan ranks 3rd in the CIS (Commonwealth of Independent States) after Russia and Tajikistan. However, the percentage of development is only 10%.

How should entrepreneurs start introducing "green" innovations in the tourism business?

Use renewable energy sources (RES), insulate buildings and premises, reduce the consumption of electricity, fuel, water, household materials, reduce waste, wastewater pollution, which in general will help reduce the impact on local ecosystems and increase economic benefits for local communities.

Conduct an energy audit of the facility: unlike the calculation of household and consumables, which you can do by yourself, it is better to entrust the energy audit to professionals. The PERETO project conducts energy audits with specialists visiting boarding houses, hotels, guest houses, yurt camps, hostels, restaurants and cafes, and also provides advice on the implementation of energy efficient measures in all regions of the country. All the necessary contacts are on our website and social networks.

By what percentage does the introduction of energy-efficient technologies reduce the cost of business?

Generally speaking, from 20% to 50%. At the same time, more accurate cost reduction figures depend on the goals set by the business and the specific technologies being introduced: building insulation, installation of solar panels or automated gas boilers, among others. For each business, we prepare individual recommendations, proposals and calculations. At the same time, regardless of the scale, any energy saving measures help reduce the costs of entrepreneurs. The funds released as a result of savings can be used, among other things, to expand the business, as many entrepreneurs do.

For example, from the moment of construction, the owner of the TES hotel in the city of Osh, near the Ak-Buura River, has embarked on the introduction of green technologies. The two-story building consists of 21 rooms, the second floor is built of lightweight structures, the room itself is made of bricks, and LED lighting is installed around the entire perimeter. Based on our recommendation, the hotel purchased a dishwasher, washer and dryer, all of which are rated A+ for energy efficiency. This allowed the hotel to save electricity, water and detergent costs.

Zumrat Ibraimzhanova, the owner of the Sun Rise Hotel in Osh, installed 4 new automated gas boilers in the hotel. As a result, the room became warmer, and there was an increase of customers. The hotel also has solar collectors and heat pumps. Next in line is the installation of more than 60 sensor mixers for water-saving measures.

Another owner of a small hotel in the region said last winter they spent more than $1,000 on gas heating and already saved 20% of the money on heating the building. When the outer part is also insulated, the cost reduction will be more than 50%.

What does the State currently offer businesses in the field of renewable energy?

The law “On Renewable Energy Sources” was adopted in Kyrgyzstan in 2008, and in June 2019 amendments were adopted regarding customs and tax benefits. Under the new rules entrepreneurs are no longer obligated to:

  • Pay VAT (12%) on the import of vehicles powered by an electric motor, as well as goods and equipment for the construction of power plants based on the use of renewable energy sources;

  • Pay income tax (10%) for a period of 5 years from the date of commissioning of producers of electrical and thermal energy, gas and renewable fuels in gaseous state, liquid biofuels, as well as owners of power plants based on the use of renewable energy sources.

Are there any recommendations for the travel industry that one can start following today?

  • Use materials more efficiently (cleaning products, textiles, office paper);

  • Conserve water (keep faucets and showers in good condition, use resource-efficient models of toilets, conserve water in laundries, collect and use rainwater);

  • Manage wastewater (introduce autonomous sewerage systems, use “gray water”, cleanse wastewater in the system of artificial swamps);

  • Manage and prevent waste (packaging, apply waste-free circular solutions, repair old equipment instead of buying new one, recycle furniture instead of throwing it away, sort and recycle solid waste, recycle food waste, recycle food waste into eco-fuel);

  • Supply of eco-raw materials and eco-products;

  • Environmental management of territories – create eco-friendly and resource-efficient gardens and landscaped areas, use drip irrigation, as well as manageable and efficient irrigation systems.

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

Our Achievements 

Launched in March 2020, the EU SWITCH-Asia PERETO project is designed to promote energy security and sustainable growth among businesses and consumers in the tourism sector by addressing awareness and infrastructural challenges, management and marketing strategies, access to financial instruments, and fostering political dialogue and Government support for the tourism sector. 

 

Original interview at economist.kg    I    Related stories

Photo credits © SWITCH-Asia PERETO Project