Case Study of Energy Efficiency in Asia and Internationally: Some Examples and Food for Thought

1. 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

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4. What’s Happening? Chaos or Opportunity?

5. 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)

6. 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

7. 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

8. About the ECO-Asia Clean Development and Climate Program

9. ECO-Asia Clean Development and Climate Program Geographic Coverage China India Indonesia Philippines Thailand Vietnam These 6 countries account for 96% of the GDP of Asia’s developing countries 9

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 10

11. INCREASING CO2 EMISSIONS Developing Asia’s CO2 Emissions Will Increase 4-Fold Current 26 billion metric tons CO2 2030 40 billion metric tons CO2 11 Source: APERC, TERI

12. Projected CO2 Emissions by Sector (2002 - 2030) 2030 2002 ELECTRICITY IS MAJOR SOURCEMore than half of CO2 emissions from power plants 12 Source: APERC, TERI

13. Ranking of clean energy options for regional cooperation 13

14. Implementing Just These Options Can Reduce Future Emissions from Asia’s Developing Economies by 25% 14

15. ECO-Asia CDCP: Three sectors + three locations

16. What Drives Energy Demand and How Reliable are Demand Forecasts?

17. What Drives Energy Demand? • Incomes rise • People buy more stuff • The “force” is basically unstoppable

18. Increased Saturation of Air ConditionersHelps Drive Demand Source: APERC 2006

19. Growth in Personalized Transport Will Fuel Demand for Oil Growth in Number of Vehicles in Asia (1973-2002)

20. 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”)

21. Forecast Actual Over Time, Demand Forecasts Tend to be High (1)

22. Forecast Actual Over Time, Demand Forecasts Tend to be High (2)

23. 1997 Forecast Actual Over Time, Demand Forecasts Tend to be High (3)

24. Some Case Studies and Examples of Energy Efficiency Policies and Programs

25. Policy Action on Energy Efficiency Can Clearly Make a Difference (U.S. States vs. Federal) Total Electricity Use, per capita, 1960 – 2001

26. DSM on Appliances and Equipment is Greatest Source of Savings (Australia) Abatement through Year 2010 from Australia’s Energy Efficiency Programs (Source: Australian Greenhouse Office)

27. Australia Example:Domestic Refrigerators, 1980 - 2006 Refrigerator use has fallen by more than 60% kWh/year Source: AGO

28. U.S. Example:Domestic Refrigerators, 1947 - 2004 Refrigerator use has fallen by more than 2/3 since 1973, while volume has increased and price has decreased (Source: Goldstein, NRDC 2005) U.S. Refrigerator Energy Use vs. Time, with Real Price Changes.

29. Korean Example (Standards and Labeling):Substantial Gains Can be Made Quickly (Source: Sun-Keun Lee, 2001) Change in Average Market Efficiency of Korean Appliances, 1993 – 2000

30. CASE STUDY ON INFORMATION: APEC Energy Standards Information System www.apec-esis.org

31. Objectives of APEC-ESIS • Established with APEC funding in 2002 • 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 • Facilitate and stimulate harmonization through the Standards Notification Procedure • Promote international cooperation (esp. within APEC) and reduce barriers to trade in energy-efficient products

32. View of Database from ESIS Home Page

33. View of a Country Page

34. 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

35. 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

36. Key Results from Phase 1 of the EE Revolving Fund ~ US$ 630m ~ US$ 300m ~ US$ 103m ~ US$ 57m

37. EE Savings by Measure in Phase 1 EE Revolving Fund Total EE cost savings = US$ 39 million/year

38. Phase 2 Launched in March 2006THB 2,000 million11 banks participating

39. How Much Does EE Cost?

40. World Bank Study of Fuel Options in Thailand Source: The World Bank (1993)

41. DSM vs. Cost of New Supply in Thailand (ACTUAL) Source: Electricity Generating Authority of Thailand (2001)

42. 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

43. Achievable DSM/EE Potential in 2011 Total potential of 2,459 MW

44. Commercial Costs of DSM/EE and NT2 Resources DSM/EE is 40% of the cost of NT2

45. Policies Government DEDP, EGAT, NEPO Policies Consultants ACs, RCs Services Policies Services Trade Allies Suppliers, Service Providers Equipment Services Finance ESCOs Finance Policies Finance Bankers Why Is It So Difficult to Mainstream EE? End Users Industrial, Commercial

46. Issues, Themes, and Food for Thought

47. List of Issues • Why are DSM (demand side management) and EE separate in many countries? • Institutional Issues • Information and coordination • Climate change

48. Energy Efficiency & Conservation DSM • How does DSM related to Energy Standards & Labeling ? Energy Standards & Labeling DSM • Is it possible to have a more Integrated Model? ? ? Energy Conservation: Efficiency, DSM, Standards & Labeling ? ? Why are DSM and EE Separate? • Why are DSM and Energy Efficiency Separate?

49. 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

50. 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?