A Global Overview of Energy Efficiency & Investment Trends


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A Global Overview of Energy Efficiency & Investment Trends

  1. 1. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends A Global Overview of Energy Efficiency & Investment Trends Renewable Energy and Energy Efficiency Partnership (REEEP) Green Investment Summit 2010 Maaike Göbel Jakarta, Indonesia Manager Southeast Asia & Pacific 13 July 2010 REEEPGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Overview O i  An example from Palau  Energy efficiency vs. conservation  Global energy efficiency overview  Economics of energy efficiency  Policy settings  RETscreen  REEEP’s response to the region’s changing priorities 1
  2. 2. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends The journey to 2
  3. 3. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends 3
  4. 4. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends 4
  5. 5. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends 5
  6. 6. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends 6
  7. 7. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends 7
  8. 8. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends 8
  9. 9. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Three reasons for countries to focus on energy efficiency 9
  10. 10. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Security of supply : 2/3 of oil comes from politically sensitive areas of the worldGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends The rise in energy demand will be driven primarily by emerging markets g g Source: BP Yearbook, IEA China accounts for 15% of world energy demand, with 19% of the world’s population. 10
  11. 11. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends The hidden benefit: 50% of increase in energy demand in the last 20 years has been absorbed by energy savings y y gy g 160 140 120 50% Additional energy use without 100 savings joules 80 exaj 60 Actual energy use 40 20 Source: IEA 0 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends There is still huge savings potential: today 80% of primary energy is wasted gy Source: ABB 2007 11
  12. 12. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Stern identified that immediate action will cost far less than delaying y gGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Today’s leaders are aware of the importance of saving energy "China tt h great importance t energy conservation. "Chi attaches g t i t to g ti President P id t We … give top priority to conservation." Hu Jintao "We recognise that we have to act on climate change in our own Prime Minister interest … we have adopted an ambitious National Action Plan ... Manmohan Singh We are committed to ambitious time-bound outcomes that will increase the energy efficiency of our economy … " "If I were emperor of the world, I would put the pedal to the US Secretary of Energy floor on energy efficiency and conservation …" Steven Chu Recognizing that the cleanest source of energy is more President Barack Obama efficient energy use, the Presidents committed the relevant and agencies … to accelerate energy efficiency improvements … President Felipe Calderón 12
  13. 13. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends In absolute terms, China’s stimulus package has the largest g green stimulus elementsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends In many countries, green stimulus packages were used to target energy efficiency g gy y Green stimulus regional ranking in USD bn Green stimulus ranking as a % of total stimulus UK 2.1 Spain 5.8% Australia 2.5 UK 6.9% Canada 2.6 Canada 8.3% France 7.1 Australia 9.3% Japan 12.4 US 12.0% Germany 13.8 Germany 13.2% EU 22.8 France 21.2% S. Korea 30.7 China 37.8% US 112.3 EU 58.7% China 221.3 S. Korea 80.5% 0 50 100 150 200 250 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Source: HSBC 2009 13
  14. 14. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Energy intensity continues to decline around the world Source: IEAGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Energy intensity continues to decline around the world 14
  15. 15. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Japan scores best and aims to further improve EE by >30% by 2030 20.0 18.0 18 0 Primary energy supply per GDP 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 Japan EU-27 US Australia Canada South Korea Thailand Middle East Indonesia China India Russia World Index: Japan=1 Source: IEA 2006, METIGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Industry efficiency in China is significantly below world average Above world Coal consumption for 370 average power supply (gce/kW h) 301 + 23 % Energy consum ption for 714 steel (kgce/t) 610 + 17 % Energy consum ption for 153 cem ent (kgce/t) 127 + 20 % Energy consum ption for 104.3 crude oil processing p g (kgce/t) 73 + 43 % Energy consum ption for 986 ethylene (kgce/t) 629 + 57 % Energy consum ption for 1314 synthetic ammonia 1000 + 31 % (kgce/t) Average in China W orld Average Source: National Energy Bureau 15
  16. 16. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Energy efficiency could deliver 54 % of emission reductions – why don’t we use all potentials 45 550  450  Gigatonnes Policy  Policy  Scenario Scenario 40 9%  Nuclear  14%  CCS  Renewables & biofuels 35 23%  Energy efficiency 30 54%  25 20 Source: World Energy Outlook 2008, IEA 2005 2010 2015 2020 2025 2030 Reference Scenario 550 Policy Scenario 450 Policy Scenario Although there is a strong evidence of the effect of energy efficiency, practical implementation on the ground is still facing fundamental barriers.Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends 16
  17. 17. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Energy efficiency - Asia EE MAtrix 0 1 Singapore 2 Australia Malaysia 3 Market Attrativeness Thailand China China 4 Korea Singapore Philippines Korea Vietnam 5 India India Australia Cambodia 6 Cambodia Thailand Philippines Indonesia Vietnam Indonesia 7 Malaysia Lao PDR 8 9 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Financial AttrativenessGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Market forces alone don’t deliver cost effective savings – supportive policies / incentives are needed Source: IEA WEO 2008 The number of countries applying mandatory energy standards for buildings increased over 60% between 1994 and 2009; currently 61 countries have such codes implemented 17
  18. 18. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Effective energy savings programs must consist of a whole package of measuresGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends 18
  19. 19. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment TrendsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends www.retscreen.net 19
  20. 20. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends REEEP was established to accelerate RE/EE focusing on developing and emerging economies • REEEP acts as a market facilitator by reducing market barriers for renewables and energy efficiency systems • REEEP accelerates market development through a focus on: • policy/regulation development and improvement • finance and business models • REEEP is driven by a bottom-up approach to meet the real needs on the ground • REEEP works with governments as well as with the private sector • REEEP is committed to the achievement of MDGs and aims to improve access to sustainable clean energy for the poorGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends REEEP’s response to the region’s changing priorities Energy efficiency increases a nation’s security of supply since it can now do more with less energy thus reducing the amount of energy it has to import 20
  21. 21. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends REEEP assists Chinese government in introducing special fiscal support to promote energy efficiency in buildings Aim: Promote suitable financing models for energy efficiency interventions for building sector Objectives: Conduct market survey and barrier analysis on current financing mechanisms that promote EE in existing buildings in China Develop two C ese case stud es o e e gy co se vat o evelop Chinese studies on energy conservation projects in existing large-scale public and residential buildings Submit new recommendations to the Chinese government for financing mechanisms to accelerate EE in buildings Implementing Partner: Energy Research Institute of National Development Reform CommissionGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Importance of energy efficient standards: REEEP supports LED standards in China Aim: Support the inclusion of Light Emitting Diodes (LEDs) in the Chinese government’s promotion of energy efficient lighting solutions by developing standardized test methods and evaluation criteria for LED lighting products Objectives: Market assessment of current LED industry in China, including existing national and international testing methods and evaluation criteria for LED lighting products Develop appropriate LED testing methods and evaluation criteria for meeting current needs in China Test the feasibility of the newly developed LED testing methods and evaluation criteria within China Implementing Partner: National Lighting Test Center 21
  22. 22. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Low-carbon tourism project in Fiji – sectoral approach • C ti g a model t adopt a stakeholder Creating d l to d t t k h ld approach to a low-carbon tourism sector in Fiji • Promoting a range of energy efficiency and small-scale renewable energy technologies available to the hotel & resort sector in Fiji • Raising awareness of related carbon financing opportunities fi i t iti • Project outputs: – Reduce GHG emissions through demand-side abatement initiatives in Fiji’s hotel and resort sector. – Enhance Fiji’s ecoTourism credential.Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Energy efficiency opportunities in Indonesia 22
  23. 23. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Indonesia Kemitraan project  Working with local governments across Indonesia  Increased investment flow into energy efficiency  Identifying suitable investment opportunities  Technical and financial analysis  Outcomes  High interest from local governments in climate protection  Practical opps:  Street lighting  Waste managementGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Street lighting  Conditions for success  Involvement of DGEEU & PLN  Equitable risk sharing between ESCOs and client  Financing  Direct financing  Debt financing  Bonds  ESCOs 23
  24. 24. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Street lighting  ESCOs  Performance contracts  Third party financingGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Waste management  Collection of waste in Indonesia 40-50%  New law passed in 2008 on waste management  clear signal of the government commitment to improving municipal waste management  10milion t annually of waste  Potential for 400milion m3 of methane  80MW of power generation  US$10m in carbon credits revenue 24
  25. 25. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Financing options  Direct financing from government limited and supplemented by donor funding  Project finance difficult – market is unstable  PT Gikoko – gas flaring project  Programme management approach instead of individual project finance  Arranged for ERPA – received advanced payment for CERsGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Emerging lessons  RE & EE policy solutions have to be tailor-made to best fit into national circumstances – there is no best solution  Activities only deliver sustainable results if they are part of the whole energy value chain  The public sector role as a major energy consumer and investor must be mobilised  RE & EE have to be an integrated part of energy planning and legislature – this is also true for low carbon plan • The greatest barrier for energy efficiency is lack of information, institutional support and not technology • Standards and labels are the most effective policy for end use EE end-use • SWH are the most effective low carbon energy option in cities and buildings • Rural energy programmes must address the thermal energy needs and generate income to ensure success • Local funds are available but cannot be utilised due the lack of instruments • Political support is crucial to achieve high impact – work with your government • Have a look at www.retscreen.net to help you assess the financial viability of your intended measure 25
  26. 26. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trendsthank youGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Renewable Energy & Energy Efficiency Partnership Southeast Asia and Pacific Regional Secretariat thank you 18 Kavanagh St Southbank VIC 3006 Melbourne T: +61 3 9929 4100 www.reeep.org Maaike.gobel@reeep.org www.reegle.info 26
  27. 27. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Renewable Energy and Energy Efficiency Partnership  an i t international partnership established at the 2002 W ld S ti l t hi t bli h d t th World Summit it on Sustainable Development in Johannesburg  working primarily in developing countries and in countries in transitionGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends REEEP’s focus facilitating the development of market conditions for the accelerated uptake of renewable energy and energy efficient technologies through:  structuring policy and regulatory initiatives for clean energy, and  facilitating financing for clean energy projects REEEP adds unique value of bringing the private sector to the table 27
  28. 28. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends REEEP partners - businesses - G8 countries - developing countries - NGOs Currently some 300 partners: • 42 Governments • International organisations, NGOs and businesses, universitiesGreen Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends Regional Secretariats delivering value 28
  29. 29. 7/14/2010Green Investment Summit 2010, Jakarta, IndonesiaA Global Overview of Energy Efficiency & Investment Trends REEEP’s goals: i increase th sustainability of d the t i bilit f demand and supply side d d l id of energy systems  reduce market barriers and financial obstacles for renewables and energy efficiency systems  establish on-the-ground project activities that are targeting policy improvements and innovative finance mechanisms  improve energy access for the poor through reliable and clean energy services  replicate success across the developed and developing world 29