Aceee 2006

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  • Aceee 2006

    1. 1. Public Benefits Funds are not Enough to Secure Energy Efficiency and Energy R&D Activities: lessons from Brazil Gilberto De Martino Jannuzzi Universidade Estadual de Campinas and International Energy Initiative Alan Poole Independent Consultant 2006 ACEEE Summer Study on Energy Efficiency in Buildings - August 13-18 2006
    2. 2. Contents <ul><li>The nineties: Energy sector reforms </li></ul><ul><li>Wirecharge and creation of Public Benefit Fund </li></ul><ul><li>The impacts on funding levels for EE and R&D </li></ul><ul><li>Lessons learned </li></ul><ul><li>Concluding remarks </li></ul>
    3. 3. Power sector re-structuring <ul><li>Started in the early nineties: preparation for the privatization </li></ul><ul><li>Discussions for the creating of obligatory investments in EE and R&D </li></ul><ul><li>1997 – Regulatory Agency </li></ul><ul><li>1998 – Regulator established compulsory investments in EE and R&D for utilities– 1% of annual revenues (Privatized distributing utilities) </li></ul><ul><li>2000 – National Congress created a National Public Fund for EE and R&D (all utilities) </li></ul><ul><li>2004 – Changes in the allocation of the 1% Funds (political attacks) </li></ul>
    4. 4. The allocation of the 1% fund (since 2004) Regulator National Public Interest Fund Generation Transmission Distribution > 0,4% R&D > 0,2% R&D > 0,5% EE Utilities Design and Implementation Design and Implementation 0,2% EPE 0,4% 0,2% Public Interest EE Public Interest R&D 1% sales$$$ 0,1% Board: Government, Academia, Private Sector 2004
    5. 5. The administration of PBF <ul><li>During 1998-2000: Utilities under Regulator supervision </li></ul><ul><li>Since 2000: part of the funds managed by utilities (under Regulators oversight) and part by a Board of appointed members from government, academia and private sector </li></ul><ul><li>The regulator periodically sets rules for investment allocation and oversees the implementation and expenditures </li></ul><ul><li>CTEnerg´s Board: 9 members Ministry of Science and Technology (3) </li></ul><ul><li>Ministry of Mines and Energy (1) </li></ul><ul><li>The regulator (1) </li></ul><ul><li>Academia (2) </li></ul><ul><li>Private sector (2) </li></ul><ul><li>PBF’s administration: a mixture of utility administration with the regulator’s oversight and a non-governmental decision maker </li></ul>
    6. 6. The original vision for CTEnerg´s set-up <ul><li>The Ministry of Science and Technology contracted an NGO to be in charge of the technical and administrative management of the various R&D Funds created (14 different funds for R&D were created out of wide economic re-structuring reforms) </li></ul><ul><li>The Centre of Strategic Studies and Management in Science, technology and Innovation </li></ul><ul><li>- technology foresight exercises </li></ul><ul><li>- provide technical support to the Board </li></ul><ul><li>- monitoring and evaluation of investments made </li></ul><ul><li>Idea: to take away political interference and governmental influence </li></ul>
    7. 7. Allocation of Wire Charge Fees from 1998-2006 as % of annual sales (Distributing Utilities) R&D: since 2000 half of the resources are allocated to the Public Fund CTEnerg 0.15% 0.60% 0.25% From 2006 0.10% 0.40% 0.50% 2004-2005 - 0.50% 0.50% 2000-2003 - 0.10% 0.90% 1998-1999 EPE R&D Energy Efficiency
    8. 8. What have been the impacts?
    9. 9. Utilities’ investments in EE programs PROCEL: Average US$ 14 million/year 1994-2003 Utilities’ compulsory investments: average US$ 57 million/year 0.56 0.52 0.53 0.31 na na Average Cost-benefit ratio 499 110 100% - 118.1 2003/04 234 56 100% - 39.8 2002/03 351 84 99% 1% 57.2 2001/02 892 251 94% 6% 35.4 2000/01 994 369 40% 60% 75.9 1999/00 754 250 32% 68% 68.3 1998/99 energy savings (GWh/y) avoided demand (MW) % End-use programs % Supply-side programs Investments (US$ millions) Cycle
    10. 10. Breakdown of utilities’ investments in EE (%) 1998-2003
    11. 11. Utilities’ investments in R&D 69.0 2002/2003 179.7 2003/2004 356.3 Total 53.9 2001/2002 39.1 2000/2001 10.2 1999/2000 4.4 1998/1999 Total invested (US$ millions) Cycle
    12. 12. And what about the CTEnerg Fund?
    13. 13. Public Energy Fund investments CTEnerg 63% 39.4 2005 - 52.0 2006 9% 54.1 2004 35% 64.8 2003 34% 20.1 2002 62% 34.5 2001 % spent in R&D projects Total budget (US$ millions)  
    14. 14. Lessons (1/2) <ul><li>Utilities </li></ul><ul><ul><li>Energy Efficiency </li></ul></ul><ul><ul><ul><li>PBF have raised the investment levels in EE </li></ul></ul></ul><ul><ul><ul><li>Leveraging effect of these resources have been small </li></ul></ul></ul><ul><ul><ul><li>Some utilities have improved program design, many others have not </li></ul></ul></ul><ul><ul><ul><li>No significant effort in MEV </li></ul></ul></ul><ul><ul><ul><li>Experience with performance contracting and improved cost-benefit ratio </li></ul></ul></ul><ul><ul><ul><li>Started significant ESCO development </li></ul></ul></ul><ul><ul><li>R&D </li></ul></ul><ul><ul><ul><li>Important learning process </li></ul></ul></ul><ul><ul><ul><li>Some utilities starting to think more strategically </li></ul></ul></ul><ul><ul><ul><li>Capacity building around the country </li></ul></ul></ul><ul><ul><ul><li>Evaluation: inexistent </li></ul></ul></ul>
    15. 15. Lessons (2/2) <ul><li>CTEnerg </li></ul><ul><ul><li>Public interest EE and energy R&D Fund </li></ul></ul><ul><ul><li>Was able to attract $ from the private sector </li></ul></ul><ul><ul><li>Was not able to spend the allocated budget </li></ul></ul><ul><ul><li>R&D planning? </li></ul></ul><ul><ul><li>EE </li></ul></ul><ul><ul><ul><li>Courses, scholarships, research grants </li></ul></ul></ul><ul><ul><ul><li>Upgrade of National Laboratories (certification MEPS) </li></ul></ul></ul><ul><ul><li>R&D </li></ul></ul><ul><ul><ul><li>Renewables </li></ul></ul></ul><ul><ul><ul><li>National Fuel Cell Program </li></ul></ul></ul><ul><ul><ul><li>Natural gas </li></ul></ul></ul>
    16. 16. Final considerations <ul><li>PBF were important to secure and increase the funding levels after reforms </li></ul><ul><li>Areas of attention: </li></ul><ul><ul><li>The administration and governance </li></ul></ul><ul><ul><ul><li>The split administration of resources between utilities and CTEnerg is still evolving but needs to prove results </li></ul></ul></ul><ul><ul><ul><li>Utilities are responsible for the main investments in EE, there must be a revision in the regulation in order to give positive incentives for better programs </li></ul></ul></ul><ul><ul><ul><li>There is a great lack of coordination amongst the main actors (regulator, CTEnerg, utilities). Very fragmented efforts. </li></ul></ul></ul><ul><ul><li>The need to improve collaboration and pooling of more resources into EE and R&D </li></ul></ul><ul><ul><li>Monitoring and independent ex-post evaluation </li></ul></ul><ul><ul><li>Political attacks have increased and unless results can be demonstrated there is a danger of losing funding for EE and R&D </li></ul></ul>

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