Second Quarterly Narrative Report: April 1, 2016 – June 30, 2016

The project's overarching goals are to introduce energy management principles to selected Macedonian industries based on the ISO 50001:2011 standard. The project's approach focuses on reducing energy consumption using a systematic and sustainable way founded on ISO 50001:2011 principles and methods. The Macedonian energy sector is in a transitional phase from a centrally planned and managed structure to a decentralized, regulated free market. The key challenge on the demand side is to improve the efficiency of energy usage, which has been hindered by below-market pricing for all but the largest users. On the supply side, the challenges include limited options for energy supply due to the country's lack of oil, gas, or high-quality coal reserves, and aging energy generation facilities. Recent reforms are addressing these issues, and the country is committed to further reforms to bring about the full liberalization of the energy market. Industrial manufacturing companies in Macedonia are recognizing the importance of energy and sustainability issues for their competitiveness and survival. These companies use one third of all the energy consumed in Macedonia on an annual basis, with high price volatility and stiff regional and EU competition for market share. Macedonian industries need to better understand their energy consumption patterns and adopt organizational capabilities to manage their energy use more effectively. The use of energy management systems in Macedonian industry is crucial due to increasing energy costs and efforts to sustain a competitive edge and access new markets. The USAID Industrial Management Project is a three-year initiative aimed at improving Macedonia's competitiveness and energy security while reducing greenhouse gas emissions through greater clean energy investments. The project's implementation is managed by TimelProekt, a Prime Contractor to the USAID, with PointPro Consulting and the Center for Entrepreneurship and Executive Development – CEED Macedonia as implementing Partners. The project's objectives are aligned with USAID/Macedonia's primary objective 1.3, "Increased Job-Creating Private Sector Growth in Targeted Sectors," and include interventions in the energy sector to expand domestic and foreign investment, increase exports, grow employment, and improve energy efficiency and renewable energy. The project's activities during the second quarter of 2016 focused on Component 2: Demonstration Projects. The IMP expert team successfully completed two energy efficiency upgrade projects in Messer Vardar Tehnogas and Kadino Industry Group. The project also continued to monitor and collect data on energy consumption and identify energy saving opportunities at seven pilot projects that were completed and commissioned in 2015. Companies included Duropack (DS Smith), Messer Vardar Tehnogas, Kolid International, Kadino Industry Group, Swisslion, and Mermeren Kombinat Prilep. The project continued to work with local engineering companies Energoproekt MI-GO and Filbis on energy efficiency projects. The project's accomplishments during the second quarter of 2016 included the successful completion of two energy efficiency upgrade projects and the continued monitoring and collection of data on energy consumption at seven pilot projects. The project also continued to work with local engineering companies on energy efficiency projects. The upcoming activities for the project include identifying energy saving opportunities and developing energy efficiency upgrade projects at pilot companies with Energoproekt MI-GO and Filbis.