Case Study of Energy Efficiency
in 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
U.S. contribution
to offset
emissions of
officials flying to
international
climate change
meetings
2
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
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
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
INCREASING CO2 EMISSIONS
Developing Asia’s CO2 Emissions Will Increase 4-Fold
Current
2030
26 billion metric tons CO2
40 billion metric tons CO2
Source: APERC, TERI
11
ELECTRICITY IS MAJOR SOURCE
More than half of CO2 emissions from power plants
Projected CO2 Emissions by Sector (2002 - 2030)
Residential
7%
Residential
5%
Commercial
2%
Transport
11%
Electricity
Generation
45%
Industry
29%
Transformation
6%
2002
Source: APERC, TERI
Commercial
2%
Transport
12%
Electricity
Generation
55%
Industry
23%
Transformation
3%
2030
12
Ranking of clean energy options for regional cooperation
13
Implementing Just These Options Can Reduce Future Emissions
from Asia’s Developing Economies by 25%
14
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 Conditioners
Helps 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)
Forecast
Actual
Over Time, Demand Forecasts Tend to be High (2)
Forecast
Actual
Over Time, Demand Forecasts Tend to be High (3)
55,000
50,000
Jun-93
45,000
Dec-94
Oct-95
Peak Demand (MW)
40,000
Apr-96
Oct-96
35,000
Jun-97
Sep-97
30,000
Sep-98(RER)
25,000
Sep-98(MER)
1997
Forecast
Sep-98(LER)
20,000
Feb-01
Aug-02
15,000
Jan-04(LEG)
Jan-04(MEG)
10,000
Jan-04(TEG)
ACTUAL
5,000
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Actual
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)
kWh
14,000
12,000
12,000
U.S.
10,000
8,000
KWh
8,000
7,000
6,000
California
4,000
2,000
Total Electricity Use, per capita, 1960 – 2001
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
0
DSM on Appliances and Equipment is Greatest
Source of Savings (Australia)
Annual Abatement (Mt CO2-e) in 2010
25
20
0.8
0.6
0.4
0.2
20.2
EEBP
Total
1.2
3.5
15
5.6
10
7.9
5
0
Appliance
MEPS
Greenhouse
Challenge +
GES
Energy
Efficiency
Standards
for Buildings
GGAP
MEEOA
Australian
Local
Government Greenhouse
Operations
Action
Abatement through Year 2010 from Australia’s Energy Efficiency Programs
(Source: Australian Greenhouse Office)
Australia Example:
Domestic Refrigerators, 1980 - 2006
Refrigerator use has fallen by more than 60%
1400
Initial MEPS
introduced in 1999
MEPS
2005 full
impact
1000
800
Labelling
introduced in 1986
600
400
200
20
06
20
04
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
0
20
02
kWh/year
1200
Source: AGO
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.
Korean Example (Standards and Labeling):
Substantial Gains Can be Made Quickly
Normalized Electricity Use
110
100
100
90
Fluorescent Lamps
(38% im provem ent)
80
70
60
Refrig-Freezers
(42% im provem ent)
Air Conditioners
62
58
(54% im provem ent)
50
46
40
1993 Market Ave.
2000 Market Ave.
(Source: Sun-Keun Lee, 2001)
Change in Average Market Efficiency of Korean Appliances, 1993 – 2000
CASE STUDY ON INFORMATION:
APEC Energy Standards
Information System
www.apec-esis.org
Objectives of APEC-ESIS
1. Established with APEC funding in 2002
2. 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
~ US$ 630m
THB million
25,000
22,183
20,000
~ US$ 300m
15,000
10,505
10,000
~ US$ 57m
5,000
~ US$ 103m
3,559
2,000
ul
ti
Re
s
g
vi
n
Sa
in
g
Sa
v
Ye
n
7
es
In
v
Li
fe
tim
e
t
tm
en
E
ED
D
by
A
pp
ro
v
ed
ar
s
0
EE Savings by Measure in Phase 1 EE Revolving
Fund
Total EE cost savings = US$ 39 million/year
Lighting
23
Electrical System
26
Insulation
Im provem ent of Machinery
Energy Managem ent and Controls
246
440
625
Boilers
Air Conditioning
822
1,088
Process Im provem ents
1,871
High Efficiency Equipm ent
8,035
Cogeneration
10,795
15,161
Renew able Energy
0
0
00
,
2
0
00
,
4
0
00
,
6
0
00
,
8
0
00
,
10
0
00
,
12
Annual Savings (US$ thousand/year)
0
00
,
14
0
00
,
16
Phase 2 Launched in March 2006
THB 2,000 million
11 banks participating
Impact of EE Revolving Fund on Commercial Lending
12,000
THB million
10,000
Leverage ratio increased from 0.8
to 5
8,000
DEDE loans
6,000
10,000
Bank's
ow n loans
4,000
2,000
2,000
1,600
2,000
Phase 1
Phase 2
How Much Does EE Cost?
World Bank Study of Fuel Options in Thailand
C os t o f Ene rgy ( U S c e nt s /k W H )
1 0 .0
8 .2
8 .0
6 .0
4 .9
5 .0
5 .1
5 .2
LN G
5 .5
4 .0
4 .0
2 .1
2 .6
2 .0
DS M
H y dro from
G as
Lignite w ith
Low -
Low -
Laos
c om bined
FGD
s ulphur
s ulphur fuel
s ulphur
c oal w /o
oil w /o
c oal w ith
FGD
FGD
FGD
c y c le
Low -
N uc lear
T y p e o f P o w e r P la n t
Source: The World Bank (1993)
DSM vs. Cost of New Supply in Thailand (ACTUAL)
C o st o f P eak P o w er in T h ailan d
6 .0
1200
5 .0
5 .0
4 .0
3 .0
2 .0
1 .3
1 .0
C o st o f P e ak (U S $ /P e a k kW )
C o st of S up p lying E n e rg y ( U S ce n ts/kW H )
C ost of S upplying E nergy in T hailand
950
1000
800
600
400
200
63
0
-
DSM
N e w C o a l P o w e r P la nt
DSM
Ne w C o a l P o we r P la nt
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
Reduction in Energy and Peak (MW)
Achievable DSM/EE Potential in 2011
2,000
1,499
Total potential of 2,459 MW
1,500
1,000
537
500
423
Industrial
Commercial
End-Use Sector
Residential
Commercial Costs of DSM/EE and NT2 Resources
Cost of Delivered Energy
(THB/kWh)
2.5
2
1.5
DSM/EE is
40% of the
cost of NT2
2.3
1
0.5
0.92
0
DSM/Energy Efficiency
Energy Resource
NT2 Electricity
Why Is It So Difficult to Mainstream EE?
Policies
Policies
Government
DEDP, EGAT, NEPO
Services
Consultants
ACs, RCs
Policies
Services
Trade Allies
Suppliers, Service Providers
Equipment
End Users
Services
Industrial, Commercial
Finance
Finance
ESCOs
Policies
Finance
Bankers
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?
Energy Efficiency
& Conservation
DSM
•How does DSM related to Energy Standards & Labeling
DSM
?
Energy Standards
& Labeling
•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 Location
Est’d
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.net
www.cleanenergyasia.net