case study of energy efficiency in asia and internationally: some examples and food for thought
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Case Study of Energy Efficiencyin Asia and Internationally:
Some Examples and Food for Thought
Peter du Pont, Ph.D.Chief of Party, ECO-Asia Clean Development and Climate Program
14 May 2009
Presented at:First Mekong Energy and Ecology Training (MEE NET)
Bangkok, Thailand
2
U.S. contributionto offset
emissions of officials flying to
international climate change
meetings
3
What’s Happening?
Chaos or Opportunity?
Disclaimer
• I am not Asian• I do not “represent” Asia• I live in Asia, and have for 17 years• My role is as a consultant and facilitator
Designing, implementing, and monitoring EE programs Lots of failures, a few successes ;-)
• I have been involved with a number or regional and international organizations International Institute for Energy Conservation APEC Energy Standards Information System (www.apec.esis.org) APEC Expert Group on Energy Efficiency & Conservation (
www.egeec.apec.org) International CFL Harmonisation Initiative (www.apec.esis.org/cfl) Efficient Lighting Initiative (ELI) (www.efficientlighting.net) USAID ECO-Asia Clean Development and Climate Program (
www.cleanenergyasia.net)
Objectives of This Talk• Identify key issues related to energy efficiency (EE) in
context of energy policy• Highlight and explain some case studies• Address issue of how much EE costs• Present some questions in a range of topic areas
• Caveats: This presentation discusses experience with in EE in commercial
energy Does not address transportation energy Does not address links between energy and poverty
Topics Covered
• About the ECO-Asia Clean Development and Climate Program
• Overview of energy and carbon scenarios• What drives energy demand and how reliable are demand
forecasts?• Some case studies and examples of Energy Efficiency
policies and programs• How much does Energy Efficiency cost?• Issues, themes and food for thought
About the ECO-Asia Clean Development and Climate
Program
9
ECO-Asia Clean Development and Climate Program Geographic Coverage
ChinaIndiaIndonesiaPhilippinesThailandVietnam
These 6 countries account for 96% of the GDP of Asia’s developing countries
10
USAID-funded review of clean energy priorities in Asia
Objectives• Identify clean energy priorities –
technologies, sectors, and initiatives• Identify opportunities for regional action
Methodology• organized “listening tours” with 220 key
energy stakeholders in the 6 countries• researched and prepared more than 300
profiles on clean energy institutions, policies, programs
• prepared in-depth country reports on the clean energy opportunities in the 6 countries
11
Current26 billion metric tons CO2
203040 billion metric tons CO2
Source: APERC, TERI
INCREASING CO2 EMISSIONS Developing Asia’s CO2 Emissions Will Increase 4-Fold
12
Projected CO2 Emissions by Sector (2002 - 2030)
2002 2030Source: APERC, TERI
ELECTRICITY IS MAJOR SOURCEMore than half of CO2 emissions from power plants
13
Ranking of clean energy options for regional cooperation
14
Implementing Just These Options Can Reduce Future Emissions from Asia’s Developing Economies by 25%
ECO-Asia CDCP: Three sectors + three locations
What Drives Energy Demand and How Reliable are Demand
Forecasts?
What Drives Energy Demand?
• Incomes rise• People buy more stuff• The “force” is basically unstoppable
Increased Saturation of Air ConditionersHelps Drive Demand
Source: APERC 2006
Growth in Personalized Transport Will Fuel Demand for Oil
Growth in Number of Vehicles in Asia (1973-2002)
How Scientific Are Demand Forecasts?• Forecasting is an art, not a science• Forecasters historically have tended to err on the side of
overbuilding• Forecasts to not tend to take into account possible EE
improvements• Cost of over building is rarely analyzed by fiscal agencies
(no penalty for getting “caught”)
Over Time, Demand Forecasts Tend to be High (1)
Actual
Forecast
Actual
Forecast
Over Time, Demand Forecasts Tend to be High (2)
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Peak D
em
an
d (
MW
)
Jun-93
Dec-94
Oct-95
Apr-96
Oct-96
Jun-97
Sep-97
Sep-98(RER)
Sep-98(MER)
Sep-98(LER)
Feb-01
Aug-02
Jan-04(LEG)
Jan-04(MEG)
Jan-04(TEG)
ACTUAL
Over Time, Demand Forecasts Tend to be High (3)
Actual
1997 Forecast
Some Case Studies and Examples of Energy Efficiency Policies and Programs
Policy Action on Energy Efficiency Can Clearly Make a Difference (U.S. States vs. Federal)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
19
60
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
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82
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84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
KW
h
12,000
8,000
7,000
California
U.S.
kWh
Total Electricity Use, per capita, 1960 – 2001
DSM on Appliances and Equipment is Greatest Source of Savings (Australia)
20.20.20.40.60.8
1.2
3.5
5.6
7.9
0
5
10
15
20
25
ApplianceMEPS
GreenhouseChallenge +
GES
EnergyEfficiencyStandards
for Buildings
GGAP MEEOA AustralianGovernmentOperations
LocalGreenhouse
Action
EEBP Total
An
nu
al A
bate
men
t (M
t C
O2-e
) in
2010
Abatement through Year 2010 from Australia’s Energy Efficiency Programs(Source: Australian Greenhouse Office)
Australia Example:Domestic Refrigerators, 1980 - 2006
0
200
400
600
800
1000
1200
1400
MEPS 2005 full impact
Initial MEPS introduced in 1999
Labelling introduced in 1986
kWh/year
Source: AGO
Refrigerator use has fallen by more than 60%
U.S. Refrigerator Energy Use vs. Time, with Real Price Changes.
U.S. Example:Domestic Refrigerators, 1947 - 2004
(Source: Goldstein, NRDC 2005)
Refrigerator use has fallen by more than 2/3 since 1973, while volume has increased and price has decreased
Korean Example (Standards and Labeling):Substantial Gains Can be Made Quickly
100
58
100
46
100
62
40
50
60
70
80
90
100
110
1993 Market Ave. 2000 Market Ave.
No
rmal
ized
Ele
ctri
city
Use
Refrig-Freezers(42% improvement)
Air Conditioners(54% improvement)
Fluorescent Lamps(38% improvement)
Change in Average Market Efficiency of Korean Appliances, 1993 – 2000
(Source: Sun-Keun Lee, 2001)
CASE STUDY ON INFORMATION:
APEC Energy Standards Information System
www.apec-esis.org
Objectives of APEC-ESIS
1. Established with APEC funding in 20022. Serves as clearinghouse for data and documents that specify
aspects of energy efficiency, including: Test protocols Energy performance information and labeling Energy performance categories and minimum requirements Minimum energy performance requirements Other energy performance requirements
3. Facilitate and stimulate harmonization through the Standards Notification Procedure
4. Promote international cooperation (esp. within APEC) and reduce barriers to trade in energy-efficient products
View of Database from ESIS Home Page
View of a Country Page
Current Status of ESIS
• Broadening Participation in APEC-ESIS. 38 Economy contacts participating from 17 of the 21 APEC
economies.• Sponsorship with CLASP for Global Database.
CLASP sponsored expansion of APEC ESIS database Development of Global Standards and Labeling Database
launched in August 2005 Expanded from 21 APEC economies to include 54 economies
worldwide More than 1,700 standards maintained.
• REEEP funding to expand ESIS to WESIS World Energy Standards Information System
CASE STUDY ON FINANCE:Thailand Energy Efficiency Revolving Fund
• EE Revolving Fund launched in January 2003. • Objective: stimulate financial sector involvement in EE
projects and to simplify project evaluation and financing procedures.
• Fund provides capital at 0% interest to Thai banks• Banks can on-lend at 4%• Projects vetted by DEDE to ensure they are EE or RE
projects
Key Results from Phase 1 of the EE Revolving Fund
2,0003,559
10,505
22,183
0
5,000
10,000
15,000
20,000
25,000
Appro
ved b
y DEDE
Inve
stm
ent
Savin
g Res
ult in
7 Y
ears
Lifetim
e Sav
ing
THB million
~ US$ 57m ~ US$ 103m
~ US$ 300m
~ US$ 630m
EE Savings by Measure in Phase 1 EE Revolving Fund
10,795
8,035
1,871
1,088
822
625
440
246
26
23
15,161
02,0
004,0
006,0
008,0
00
10,00
0
12,00
0
14,00
0
16,00
0
Renewable Energy
Cogeneration
High Efficiency Equipment
Process Improvements
Air Conditioning
Boilers
Energy Management and Controls
Improvement of Machinery
Insulation
Electrical System
Lighting
Annual Savings (US$ thousand/year)
Total EE cost savings = US$ 39 million/year
Phase 2 Launched in March 2006THB 2,000 million11 banks participating
Impact of EE Revolving Fund on Commercial Lending
2,000 2,0001,600
10,000
-
2,000
4,000
6,000
8,000
10,000
12,000
Phase 1 Phase 2
TH
B m
illi
on
Leverage ratio increased from 0.8 to 5
DEDE loansBank's
own loans
How Much Does EE Cost?
Source: The World Bank (1993)
2.12.6
4.04.9 5.0 5.1 5.2 5.5
8.2
-
2.0
4.0
6.0
8.0
10.0
DSM Hydro fromLaos
Gascombined
cycle
Lignite withFGD
Low-sulphurcoal w/o
FGD
Low-sulphur fuel
oil w/oFGD
LNG Low-sulphur
coal withFGD
Nuclear
Type of Power Plant
Co
st
of
En
erg
y (
US
ce
nts
/kW
H)
World Bank Study of Fuel Options in Thailand
DSM vs. Cost of New Supply in Thailand (ACTUAL)
Cost of Peak Power in Thailand
63
950
0
200
400
600
800
1000
1200
DSM New Coal Power Plant
Cos
t of P
eak
(US
$/P
eak
kW)
Cost of Supplying Energy in Thailand
1.3
5.0
-
1.0
2.0
3.0
4.0
5.0
6.0
DSM New Coal Power Plant
Co
st o
f Su
pp
lyin
g E
ne
rgy
(US
ce
nts
/kW
H)
Source: Electricity Generating Authority of Thailand (2001)
World Bank Study of EE/DSM Potential in Relation to the Nam-Theun 2 Hydropower Project
• Carried out in 2005• Assess whether NT2 power (about 1,000 MW, 5,500
GWh/annum) is required by the Thai system by the projected commissioning date of 2010
• Assess the achievable potential for Thailand’s initiatives at promoting EE and DSM when NT2 is proposed to come on line
Achievable DSM/EE Potential in 2011
1,499
537423
-
500
1,000
1,500
2,000
Industrial Commercial Residential
End-Use Sector
Red
uct
ion
in E
ner
gy
and
Pea
k (M
W)
Total potential of 2,459 MW
Commercial Costs of DSM/EE and NT2 Resources
0.92
2.3
0
0.5
1
1.5
2
2.5
DSM/Energy Efficiency NT2 Electricity
Energy Resource
Co
st
of
De
liv
ere
d E
ne
rgy
(T
HB
/kW
h)
DSM/EE is 40% of the cost of NT2
Why Is It So Difficult to Mainstream EE?
End UsersIndustrial, Commercial
GovernmentDEDP, EGAT, NEPO
Finance
ESCOs
Bankers
Finance
Finance
ServicesConsultants
ACs, RCs
Services
Trade AlliesSuppliers, Service Providers Services
Equipment
Policies
Policies
Policies
Policies
Issues, Themes, and Food for Thought
List of Issues
• Why are DSM (demand side management) and EE separate in many countries?
• Institutional Issues• Information and coordination• Climate change
Why are DSM and EE Separate?
• Why are DSM and Energy Efficiency Separate?
•How does DSM related to Energy Standards & Labeling
DSM Energy Standards & Labeling
?
DSM Energy Efficiency & Conservation
•Is it possible to have a more Integrated Model?
Energy Conservation:Efficiency, DSM, Standards & Labeling
??
??
Institutional Issues (1)
• QUESTION: How can you get the government commitment to allocate and train human resources to get the job done?
• Benchmarking of DSM in some Asian countries
Country Year Est’d
Location No. Staff
Comments
Thailand 1994 Utility 150 1,300 MW savings to date
Funded through tariff
Sri Lanka 1999 Utility 15 Start-up funding from World Bank
Vietnam 2001 Utility 4.5 120 MW target by 2007
Part-time staff in Power Companies
Malaysia 2001 Energy Commission
8 Start-up funding from Danida
No long-term finding
Institutional Issues (2)
• Korea and Mexico have set up national agencies which direct implementation of EE KEMCO in Korea CONAE in Mexico
• This brings a coherence to EE policy and programs• What does it take to seed and enable self-sustaining
energy efficiency agencies within a country?
QUESTION: How Can We Set Carbon and Energy Use Targets that Are Equitable?
???
???
???
Myth: Western Consultants are Needed to Help Advise Asian Governments on How to Implement EE
• Sure, there is a lot of great experience in Europe and the U.S.
• But there is also a lot of great experience• 2 Examples:
Energy labeling in Thailand Air conditioners in Australia and East Asia
• QUESTION: How can we systematize sharing of information and EE best
practices between countries in Asia?
Myth: CDM is a Mechanism that will Help Stimulate Investments in EE in Developing Countries
• Less than 95% of registered CDM projects are for EE• Transaction costs are way too high• QUESTION
Programmatic CDM may be an answer, but how quickly will it happen?
Thank you!!
For more information:
peter@cleanenergyasia.netwww.cleanenergyasia.net
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