Energy Efficiency: The Quiet Giant


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Ambassador Richard H. Jones Deputy Executive Director
International Energy Agency

International Renewable Energy Conference & Exhibition
February 16-18, 2010
Herods & Dan Hotel, Eilat, Israel

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  • There are significant benefits to be reaped by investing in energy efficiency policy. An important reason for energy efficiency is to improve energy security, which I know is important in Israel where the majority of energy is still imported. Although some recent discoveries of offshore natural gas mean that import dependency will decline over time, there is currently still over 80% dependency on imported fuels. Energy efficiency is very important for economic prosperity as it reduces costs per GDP, creates jobs, and increases productivity.And finally energy efficiency has been demonstrated to be key in reducing greenhouse gas emissions at least cost. Let’s look at these three issues from the perspective of Israel’s energy system.
  • Energy efficiency can help address Israel’s growing energy demand and its reliance on energy imports. According to the latest available figures, Israel’s per-capita energy usage has increased by 25% since 1990.Israel’s final energy consumption in 2006 was 13.4Mtoe, of which 65% was petroleum products and 29% was electricity; the remainder waslargely natural gas and heat & steam. Total energy consumption has been rising while energy consumption per capita has dropped somewhat. This is most likely caused by the rise in population and energy prices over the period.
  • Energy efficiency can also help address Israel’s GHG emissions. Greenhouse gas emissions from Israel are holding steady due to falling emissions in heating and manufacturing but they are rising from motor vehicles and electricity generation. Electricity is generated from coal and natural gas. This provides scope for savings from energy efficiency in these two sectors. - By the way, the latest McKinsey report for Israel showed that with the current growth trajectory, Israel is expected to double its GHG emissions by 2030.
  • Analysis by McKinsey shows that around 25MtCO2e could be saved at zero or negative costs – and most of these savings from energy efficiency.It is clear that 65% of abatement can be achieved with 10 levers and that, of these ten, four relate to energy efficiency. This highlights the attention that must be given to implementing good energy efficiency policy.High penetration of concentrated solar thermal (CST) power generation. High penetration of photovoltaic (PV) power generation.Improved fuel efficiency of internal combustion engine vehicles (or switching to electric vehicles supplied by low-carbon power sources – see #9). Increased energy efficiency in new buildings by improved planning and insulation. Use of efficient lighting (LED, CFL – compact fluorescent light bulbs) and lighting control systems. Retrofit of residential buildings with improved insulation in order to improve heating and cooling efficiency. Industry fuel transition – fuel oil to natural gas. Use of landfill gas for electricity generation. Increased penetration of electric vehicles and plug-in hybrids (assuminglow carbon fuel mix). 10. Use of wind turbines for power generation.
  • This McKinsey analysis is consistent with IEA analysis that shows ee forms a major proportion of CO2 abatement potentialglobally.The World Energy Outlook alsodemonstrates the importantrole energy efficiencywillplay in reducing global GHG emissions. The 450 Scenario from WEO 2009 aimsatreaching 450 ppm CO2 by 2050. This graph shows the contributions of the differentenergy sources to GHG emissionsreductions. The main contributor to the necessary GHG emissionscuts is end-use energy efficiency, with 7.2 Gt of potentialcarbonsaved by 2030, or 52% of the overall effort.
  • The IEA has provided guidance on what policies to put in place to capture energy efficiency potential. These are covered in our 25 energy efficiency recommendations.In 2007 the IEA were given a G8 mandate to develop energy efficiency recommendations.All the concrete recommendations draw on extensive ongoing IEA research and analysis.This analysis builds on:technical/economic modeling, reviews of international policy experience, literature reviews and dialogues with stakeholders.It is important to view the recommendations presented here as a cohesive suite of measures because the barriers to energy efficiency are pervasive, dispersed and complex. As such, if governments want to significantly improve energy efficiency, no single policy implemented in isolation will be effective at achieving this aim.Second, early implementation is the key to reaping the energy saving benefits of these recommendations.
  • Although I won’t go into the detail of the recommendations here; this slide lists the 25 recommendations made.
  • Since the publication of the IEA recommendations, the IEA has followed-up with member countries and requested their self-evaluation on progress implementing the recommendations.The results were published in this publication in October 2009 They provide a good overview of the areas where progress has been made and those where energy efficiency policy is not yet being implemented.This is the scale used for countries’ self-evaluation.
  • From the progress reports it is clear that:No country has ‘fully” or “substantially” implemented more than 57% of the relevant recommendations.Two countries report less than 10% “substantial” implementation.Japan, the UK, Canada and the USA have fully or substantially implemented the most number of recommendations.Turkey has the most unimplemented recommendations, followed by Greece, Poland and Luxembourg.How is Israel doing? We don’t know, but if requested, the IEA could help evaluate energy potential savings and policy
  • Using existing technology, but putting it together through well-designed collaborations of government, banks, building owners and occupants, some truly impressive results are possible. Consider these buildings in TeveStrasse in Frankfurt, which managed to reduce energy use [click] by a remarkable 87 % thanks to progressivepolicies: to set clear energy efficiency requirements for building refurbishments; to support preferential loans for households; to provide information support for consumers and builders (including feasibility studies, direct help to projects and monitoring of results). to promote the use of passive house construction materials and techniques and passive house windows etc. to address landlord-tenant problems, in this case by adding a new floor for accommodations during the retrofit construction to help pay for the costs. Of course, one might expect to see something like this in Germany. I’m not sure there is any other country that has a popular reality TV program [click] that features, among other things, efficiency audits for homes: Frau Dr. Haus: DerImmobiliencheck. When every country has an avid audience for a program like this, then we’ll know we’re on the right track.
  • IEA is active in many other areas relating to energy efficiency.:1. The Energy Technology Perspectives 2010 report that will be released later in the year will provide our latest modelling results and scenarios for energy and emissions and the technologies necessary to achieve our targets.2. Following from the 25 recommendations and the country Progress Reports, the IEA is now beginning a new project to help countries with implementation of the recommendations. We will produce a series of short policy pathway reports where we focus in each one on the implementation of a particular policy. This will involve describing country experiences and best practice in policy design and will recommend guidelines on steps for implementation that should be useful to policymakers. 3. The IPEEC (the International Partnership for Energy Efficiency Cooperation) is an exciting new initiative to promote energy efficiency and the IEA will host the secretariat at our headquarters in Paris. This will hopefully provide good opportunities for collaboration between the two organisations. 4. We have several research projects beginning in the areas of governance, market-based instruments, energy poverty, and transport to name but a few which should yield interesting results later this year.
  • Policy Pathways should interest policy makers who seek to learn about, design, stimulate, support or modify EE policies in their home country and abroad. It can also provide insight into which policy pathways might work best given their country’s policy context. The Policy Pathways project is important because:- helps to increase the effectiveness of the IEA EE policy recommendations- Some, if not all, governments need guidance on the process for implementing and improving their EE policy portfolios.- The G20 is looking to establish an energy pillar to its activities – starting with the removal of energy subsidies. EE improvements could be strategic to the pursuit of subsidies removal. Policy Pathways could be an attractive project for the IEA to lead under the G20.
  • In July 2008 at the Energy Ministerial Meeting in Aomori, the G8, China, India and Korea - Agreed to establish the International Partnership for EnergyEfficiency Cooperation (IPEEC). There were several preparatory meetings: The IPEEC 1st prep-meeting, Paris, in Oct 2008The IPEEC 2nd prep-meeting, Tokyo, in Nov 2008 The IPEEC 3rd prep meeting Paris, in Dec 20082The IPEEC 4th prep-meeting, Washington D.C. in Feb 2009At the the IPEEC Ministerial Meeting in London on 18 December 2008 the major energy consuming countries including G8, Brazil, China, India, Korea and Mexico, and the EC and the IEA met to review the progress, and provide political guidance in order to accelerate the establishment of the IPEEC. The following statement was agreed “IPEEC will serve as a high-level forum for facilitating broad actions that yield high energy efficiency gains.IPEEC should be established and commence its operation as early as possible in 2009 according to the following principles:Equitable and voluntary participation.A dedicated Secretariat will be established to ensure the sustainability and consistency of IPEEC activities The IPEEC Secretariat will be hosted at the IEA so that IPEEC can make full use of the knowledge, experiences and capacity of the IEA.IPEEC will exchange views and seek collaboration with other international organizations and bodies to achieve synergies and avoid duplication.The work programme is now underway and includes a number of initiatives – some are networks focusing on sharing information whereas others joint projects: Cataloguing Multilateral Energy Efficiency Initiatives and National Action PlansSustainable Buildings Network (SBN)Global Energy Efficiency Action Initiative (GEEAI)Energy Management Action Network (EMAK)Assessment of Energy Efficiency Financing Mechanism (EEFAN)Improving Methods for Measuring and Verifying Energy Efficiency ImpactsSuper-Efficient Equipment Appliance and Deployment (SEAD)
  • Dr. Uzi Landau has already outlined the main details of Israel’s energy efficiency master plan. There is considerable potential for savings. Now the challenge is to implement the policy!
  • According to the study carried out by McKinsey and company for the Israeli government there are two main barriers remaining for energy efficiency policy implementation:- Financing hurdles and rapid payback requirements: The upfront investment itself, particularly in buildings and transport, can be significant and most consumers tend to want payback for their investment within two years.- Agency issues: For instance, construction companies havelimited incentives to insulate homes beyond the level required in building codes, since it is to home owners and tenants that the benefits of lower energybills accrue.
  • All the evidence shows that energy efficiency is the least cost first step on the way to a sustainable energy future meeting environmental, economic and energy security goals.However, significant effort is required to achieve the potential identified. Right now there are numerous stimulus packages in many countries in place investing in energy-saving measures with the intention of kick-starting the economy. This provides a window of opportunity for taking action on energy efficiency and I would urge you to do so now!
  • Energy Efficiency: The Quiet Giant

    1. 1. Energy EfficiencyThe quiet giant<br />Ambassador Richard H. JonesDeputy Executive Director<br />International Energy Agency <br />Eilat-Eilot<br />International Renewable Energy Conference & Exhibition<br />February 16-18, 2010<br />Herods & Dan Hotel, Eilat, Israel<br />
    2. 2. Overview<br />Why is energy efficiency important for Israel?<br />How big is the cost-effective energy efficiency potential in Israel? <br />How to capture this potential?<br />IEA energy efficiency recommendations<br />Energy efficiency policy in Israel - potential and challenges <br />Looking forward<br />
    3. 3. 1. Why is energy efficiency important for Israel?<br />
    4. 4. What is Energy Efficiency?<br />Positive Net benefits per unit of energy use<br />Energy efficiency<br />Energy Conservation<br />Decreasing energy use<br />Increasing energy use<br />Negative Net Benefits per unit of energy use<br />
    5. 5. Three key benefits of energy efficiency<br />Improve energy security by reducing the reliance on foreign energy imports<br />Improve economic prosperity by reducing the amount of energy used per unit of GDP<br />Reduce greenhouse gas emissions by reducing overall energy consumption<br />
    6. 6. Israeli energy consumption<br />ktoe<br />toe<br />Central Bureau of Statistics, 2010<br />
    7. 7. CO2 emissions from Israel<br />CBS, 2010<br />
    8. 8. 2. How big is Israel’s energy efficiency potential?<br />Source: McKinsey and Co. 2009<br />
    9. 9. World Energy Outlook 2009 450 Scenario<br />42<br />Gt<br />Reference Scenario<br />40<br />38<br />36<br />34<br />32<br />30<br />28<br />450 Scenario<br />26<br />2010<br />2015<br />2020<br />2025<br />2030<br />7.2 Gt<br />End-useefficiency<br />Power plants<br />Renewables<br />Biofuels<br />Nuclear<br />CCS<br />52% of the required cuts in GHG emissions to achieve the 450 scenario is estimated to come from energy efficiency savings by 2030 (WEO 2009)<br />
    10. 10. 3. How to capture the energy efficiency potential?<br />
    11. 11. The IEA 25 EnergyEfficiencyRecommendations<br />Seven areas – cross-sectoral, buildings, appliances and equipment, lighting, transport, industry, and energy utilities.<br />Each recommendation: <br />Delivers significant energy savings at low cost<br />Addresses market imperfections and policy gaps <br />Has a high degree of political support<br />
    12. 12. 25 energy efficiency policy recommendations across 7 priority areas<br />1. Across sectors<br />1.1 Measures for increasing investment in energy efficiency;<br />1.2 National energy efficiency strategies and goals;<br />1.3 Compliance, monitoring, enforcement and evaluation of energy efficiency measures;<br />1.4 Energy efficiency indicators;<br />1.5 Monitoring and reporting progress with the IEA energy efficiency recommendations themselves.<br />2. Buildings<br />2.1 Building codes for new buildings;<br />2.2 Passive Energy Houses and Zero Energy Buildings;<br />2.3 Policy packages to promote energy efficiency in existing buildings;<br />2.4 Building certification schemes;<br />2.5 Energy efficiency improvements in glazed areas.<br />3. Appliances<br />3.1 Mandatory energy performance requirements or labels;<br />3.2 Low-power modes, including standby power, for electronic and networked equipment;<br />3.3 Televisions and “set-top” boxes; <br />3.4 Energy performance test standards and measurement protocols. <br />4. Lighting<br />4.1 Best practice lighting and the phase-out of incandescent bulbs;<br />4.2 Ensuring least-cost lighting in non-residential buildings and the phase-out of inefficient fuel-based lighting.<br />5. Transport<br />5.1 Fuel-efficient tyres;<br />5.2 Mandatory fuel efficiency standards for light-duty vehicles;<br />5.3 Fuel economy of heavy-duty vehicles;<br />5.4 Eco-driving.<br />6. Industry<br />6.1 Collection of high quality energy efficiency data for industry;<br />6.2 Energy performance of electric motors;<br />6.3 Assistance in developing energy management capability;<br />6.4 Policy packages to promote energy efficiency in small and medium-sized enterprises.<br />7. Utilities<br />7.1 Utility end-use energy efficiency schemes.<br />
    13. 13. Implementing energy efficiency policies: are IEA member countries on track? <br />Fully implemented<br />Substantial implementation<br />Evaluation of each IEA member country on a scalerangingfromfullyimplemented to not implemented<br />Implementation underway<br />Plan to implement<br />Not implemented<br />Non applicable<br />
    14. 14. How does implementation compare across countries – all recommendations?<br />?<br />Israel<br />
    15. 15. Package for existing buildings Frankfurt Refurbishment using Passive House Technology <br />87%<br />
    16. 16. A few other IEA activities in energy efficiency<br />Policy pathways project<br />Hosting of IPEEC secretariat<br />Projects on energy efficiency governance, market-based instruments, transport <br />
    17. 17. Next steps: Policy Pathways for Energy Efficiency<br />Objective is to identify, analyse and communicate to all governments innovative policy pathways (steps and milestones) for improving energy efficiency<br />Initial focus:<br />Case study Pathways<br /><ul><li>share best-practices for implementation of a specific EE policy</li></ul>In the future, possibly:<br />Cluster Pathways<br /><ul><li>Pathways for clusters of countries at similar stages of development and EE policy implementation</li></ul>Country Pathways<br /><ul><li>detailed, tailored sector pathways for selected governments</li></li></ul><li>IPEEC initiativeJoint Statement of the London Ministerial Meeting<br />IPEEC was launched at the 2009 G8 Energy Ministers Meeting in Rome; it will serve as a high-level forum for facilitating broad actions that yield high energy efficiency gains.<br />IEA will host the IPEEC secretariat so that IPEEC can make use of IEA expertise. <br />IPEEC meetings commenced in the fall of 2009; staff members are now being recruited. <br />Proposed Work Programme <br />Cataloguing Multilateral Energy Efficiency Initiatives and National Action Plans<br />Sustainable Buildings Network (SBN)<br />Global Energy Efficiency Action Initiative (GEEAI)<br />Energy Management Action Network (EMAK)<br />Assessment of Energy Efficiency Financing Mechanism (EEFAN)<br />Improving Methods for Measuring and Verifying Energy Efficiency Impacts<br />Super-Efficient Equipment Appliance and Deployment (SEAD)<br />
    18. 18. 4. Energy Efficiency in Israel – potential and challenges (1)<br />Steps taken…<br />Energy Master Plan – estimates potential for at least 20-35% energy savings<br />2008 government decision - 20% reduction in energy demand through improved energy efficiency by 2020<br />10 % share of renewable energy sources in electricity generation. <br />Introduction of EU bio-fuels standards<br />Labelling schemes for certain domestic appliances<br />
    19. 19. Energy Efficiency in Israel – potential and challenges (2)<br />There are two primary barriers remaining…<br />Financing hurdles and rapid payback requirements – significant upfront investment<br />Agency issues - many opportunities with net economic benefits but the consumer or company reaping the benefits of lower energy bills is not actually making the upfront investment. <br />McKinsey and Co. 2009<br />
    20. 20. 5. Conclusion<br />Energy efficiency is least cost way to achieve environmental, economic and energy security goals for our sustainable future<br />Energy efficiency is critical for Israel’s sustainable energy future<br />Significant effort still needed to achieve its full potential<br />The IEA can help!<br />Window of opportunity for action on energy efficiency now<br />
    21. 21. Thank you<br />