Project overview and key results

1. Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Dr. Milou Beerepoot
Dr. Gabrial Anandarajah
Mr. Pan Piyasil
17 September 2015
International Dissemination Workshop
Eastin Grand Hotel Sathorn, Bangkok
MECON Project overview and key results

2. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Introduction to MECON project
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Dr. Milou Beerepoot
MECON project initiator
Joint Graduate School of Energy and
Environment/KMUTT, Bangkok

3. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Energy efficiency is most cost-efficient solution for CO2
emission reduction and improved energy security
Energy efficiency: something to gain for everyone
World energy-related CO2 emissions abatement in the 450 Scenario relative to
the New Policies Scenario (WEO, 2012)
IEA World Energy Outlook, 2012

4. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Energy security: increasing energy demand due
to growth middle income households
• A new middle class – the population living above the poverty line
but still with low incomes - is emerging, especially in Asia:
responsible for large share of increase energy demand

5. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON project objectives
• Identify the opportunities and barriers to the
adoption of EE technologies for low income
households before they become middle
income: “new Modern Energy CONsumers” in
Greater Mekong Subregion

6. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON project consortium
University College
London - UCL
Myanmar
Engineering
Society- MES
Joint Graduate
School of
Engineering &
Environment -
JGSEE
Hanoi University
of Science and
technology-
HUST
National
University of
Laos - NUOL
Royal University
of Agriculture -
RUA

7. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON project approach
PHASE 1: background information
PHASE 3: dissemination
What do we already know?
(desk research)
What are technological conditions?
(desk research/market
survey/interviews)
What are socio-economic
conditions?
(household survey)
On the basis of
background
information:
develop solutions
and consult
stakeholders
Calculate cost-
benefit of
proposed solutions
Institutional
conditions?
Dissemination of
results
PHASE 2: development & consultation

8. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Economics of Energy Efficiency Improvements
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Dr. Gabrial Anandarajah
Senior Lecturer
UCL Energy Institute
University College London, United Kingdom

9. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
New Modern Energy Consumers
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• In 2008, new modern energy consumers accounted for 45.4% of the population in
Thailand.
• MECON share has already peaked in Thailand; peaking in Vietnam; and yet to peak in
Cambodia, Laos and Myanmar.
• Thailand will decrease to 24% by 2030.
• In Laos, Cambodia and Myanmar, the share of the MECON is expected to be in the range of
40-50% in 2030
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
0
10
20
30
40
50
60
1990 1995 2000 2005 2010 2015 2020 2025 2030
2-5$ share (%) -Thailand
Actual (%)
Projec on (%)
GDPP
0
10
20
30
40
50
60
0 5 10 15 20 25 30 35 40 45 50
2-5$ SHARE (%)
Es mated (General)
Actual-Thai (%)
Vietnam

10. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON Energy Consumptions
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Three scenarios have been developed for each
countries (residential sector only) using LEAP
model
• Business As Usual (BAU) Scenario
• High Energy Efficiency (HEE) Scenario
• Moderate Energy Efficiency (MEE) Scenario
• Modeling MECON households during 2013-2030
• Assumptions on share of EE appliances in 2030 is
country and technology specific

11. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Energy consumptions under different
scenarios in GMS countries
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• In 2030, EE can reduce residential (MECON) energy consumptions by
2% (Thailand) -20% (Myanmar) in MEE and 16% (Thailand)-38%
(Myanmar) in HEE compared to that of BAU scenario
• Highest potential, in terms of percentage reduction, is in light bulbs

12. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Is it cost effective?
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 Simple equations were used to carry out cost benefit
analysis for selected appliances (at least five per
country): light bulbs, rice cooker, AC, TV, Fan and
refrigerator.
 The selections of appliances for the CBA are based on
three criteria: energy consumption, ownership and
future potential.
 Sensitivity analysis were carried out with hurdle rates

13. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Results: Thailand
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
*There is a net
saving over the life
time when buying an
EE appliances over
and inefficient one.
*But, it depend on
the assumptions on
costs, prices and
discount rate
*Net saving is
negative for
Refrigerator in the
case of Thailand
Sensitivity analyses on various scenarios of discount and hurdle rate - Thailand
Appliance
LCC at
discount
rate (5%)
LCC at
discount
rate (2%)
LCC at
discount
rate (8%)
LCC at
MRR hurdle
rate (8%)
LCC at
market
hurdle rate
(15.48%)
Fluorescent lamp $51.4 $59.7 $44.7 $51.5 $51.9
LED light bulb $21.2 $23.4 $19.5 $21.9 $23.8
Difference in LCC $30.2 $36.4 $25.3 $29.6 $28.1
Convent rice cooker $193.6 $221.7 $171.1 $195.7 $201.2
Efficient rice cooker $180.6 $205.2 $160.9 $183.4 $190.8
Difference in LCC $13.0 $16.5 $10.1 $12.3 $10.4
Convent AC unit $5042.1 $6,130.7 $4,243.7 $5,119.0 $5,327.7
Efficient AC unit $4289.5 $5,160.0 $3,651.0 $4,383.0 $4,636.8
Difference in LCC $752.6 970.7 $592.7 $736.0 $690.9
Convent refrigerator $347.8 $415.0 $342.6 $482.9 $528.1
Efficient refrigerator $401.8 $435.3 $374.9 $503.0 $570.9
Difference in LCC -$27.0 -$20.3 -$32.24 -$20.1 -$42.9
Convent electric fan $205.5 $236.9 $180.4 $209.9 $214.4
Efficient electric fan $165.2 $188.7 $146.4 $171.3 $177.5
Difference in LCC $40.3 $48.2 $34.1 $38.7 $36.9

14. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Cumulative discounted cost over the
time: Cambodia
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Payback period for rice cooker is 3 years and TV
is 8 years

15. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Task 3: Rebound Effect
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• A simple questionnaire survey has been carried
out (over 100 households) to understand what
would household do with additional income
coming from reduced energy bill
• The questionnaire focused on:
• Information about the household
• Household energy consumption
• Rebound effect

16. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Spending Priorities
• Spending priorities vary between the five countries, but some
trends:
– Food is a priority
– Electrical appliances were ranked 4-6 in most countries
– Expenditure on cooking fuels was only ranked highly in Thailand
– Healthcare was important in Cambodia, Myanmar and Vietnam
– Education was important in Lao PDR, Myanmar and Vietnam
• Expenditure on energy is not currently a top priority for MECON
households, but this may change as incomes rise
• MECON households may consume more energy when their income
increased on cooking fuels, purchase of new appliances, and more
usage on existing ones.

17. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Conclusions
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 MECON population is not small, 25-50% in 2030
 In 2030, EE can reduce residential (MECON) energy
consumptions by 2%-20% in MEE and 16%-38% in HEE
compared to that of BAU scenario.
 Most of the EE included in the CBA has the potential to
reduce households’ energy bills
 Potential savings depends on capital cost, electricity price
and financial availability.
 Expenditure on energy is not currently a top priority for
MECON households, but this may change as incomes rise

18. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON project key results
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Mr. Pan Piyasil
MECON project coordinator
Joint Graduate School of Energy and
Environment/KMUTT, Bangkok

19. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON project results
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Core elements of this presentation
1. Household survey amongst low-income households
Face-to-face questionnaire survey
on 1,660 low-income households
2. Market survey amongst retailers
Interview with 348 retailers
3. Policy review & stakeholder consultations
Organized in 2014 in all five countries

20. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Household survey
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
2517 2634
1664
3251
3037
0
500
1000
1500
2000
2500
3000
3500
kWh/year
Electricity consumption
per household
Common appliances found
• Lighting devices (fluorescent)
• Rice cooker
• Refrigerator
• Electric fan
• TV
Policy makers should not neglect
small appliances
For low-income households,
small appliances (rice cooker and
electric fan) can consume more
electricity than large appliances
(AC and washing machine) due to
longer using hours and several
amount of items per household.

21. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Household survey
Lighting appliance
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% Cambodia
LaoPDR
Myanmar
Thailand
Vietnam
Cambodia
LaoPDR
Myanmar
Thailand
Vietnam
Cambodia
LaoPDR
Myanmar
Thailand
Vietnam
Cambodia
LaoPDR
Myanmar
Thailand
Vietnam
Cambodia
LaoPDR
Myanmar
Thailand
Vietnam
Cambodia
LaoPDR
Myanmar
Thailand
Vietnam
Candles Batteries Incandescent Fluorescent CFL LED
Typeoflightingusedbyhouseholds(%)

22. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Market survey: energy labels in GMS
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Only Thailand and Vietnam have energy efficient
label for household appliances.
• Most energy efficient products in the GMS
countries are imported from Thailand and
contain Thailand’s Energy Label No.5.

23. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Thailand case:
Appliances with No.5 label
Low penetration of products with Label No.5
amongst Thailand’s low-income households
*EWH = electric water heater
% of appliances found in Thailand’s survey on low-income households

24. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Household survey:
Awareness versus Price
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• High awareness and
understanding of Thailand’s
No.5 label amongst low-
income households in
Thailand and Lao PDR.
• Thailand’s energy label is
recognized in Cambodia,
Myanmar, and Vietnam, but
language barrier may hinder
it effectiveness.
• Initial price of the products
still plays important role in
consumers’ purchasing
decisions.
• Financial barriers exist
amongst low-income
households.
• Low-cost access to finance
may provide a potential
solution by means of
innovative financial models,
for instance, “on-bill finance”
or “microfinance”.

25. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Market survey:
more focus on supply chain
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Retailers may need more education on EE.
• Collaboration amongst retailers, wholesalers, and producers can encourage
higher awareness and knowledge sharing.
• Upstream subsidy may provide incentive for retailers to stock more EE
appliances.
Consumer side
• Purchasing behavior in consumers
• Limited access to EE appliances
Supplier side
• Low capacity to stock EE appliances
• Low awareness and knowledge on EE
technologies amongst retailers
Low availability of EE products

26. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Challenges for EE policy:
amongst the GMS countries
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Common barriers
• Information failure: which
appliance is more efficient?
• Lack of awareness and low
priority of energy efficiency
• Availability of EE products,
especially in remote areas
Country-specific barriers
• Cases of Lao and Cambodia: fake
EE label
• Case of Myanmar: under
developed transmission lines and
energy management system
• Case of Myanmar: fixed electricity
price

27. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Opportunities for EE policy:
policy package
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Regulatory measure
• Phrasing out incandescent, and
promoting LED light bulb
• Tightening Minimum Energy
Performance Standard (MEPS) on rice
cooker, electric fan, and refrigerator
Financial measure
• Upstream subsidy to supply chain
• Direct financial aid to low-income
households
Information and capacity-building
measure
• More educational and informational
campaign to retailers
• Awareness raising by means of energy
labels
Voluntary agreements and partnerships
• More dialogue between producers,
wholesalers, and retailers
• Public-private partnership

28. Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Thank you for listening
Please visit our website at www.meconproject.com
or contact us at panpiyasil@gmail.com