Institutional conditions for encouragement of energy efficiency in GMS

1. Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional conditions for
encouragement of energy efficiency in
GMS
Milou Beerepoot
17 September 2015
JGSEE, KMUTT

2. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Content
• Relevance of institutional model to address
market and behavioral failures to EE
• Institutional organization per country in
relation to introduction of new EE policy
• Next steps
2

3. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Barriers to Energy Efficiency
in households
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Principal-agent failure
• Lack of information
• Market failures (e.g. energy subsidy)
• Behavioral failures, bounded rationality

4. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional model and EE
4
• Market barriers to EE (in households) can be addressed
by policies, programs & interventions
• A solid institutional structure is needed in order to
effectively develop and implement EE policies
• In developing countries, institutional structure for EE are
often still under development
• MECON analysed institutional structures in GMS and
discusses room for improvement

5. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional conditions to EE
5
World Bank’s formal report
331/08, ”An Analytical
Compendium of Institutional
Frameworks for Energy
Efficiency Implementation”

6. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional models for EE
6
Type Brief description Example
1
Government agency
(GA)
Agency with broad energy responsibilities U.S. Department of Energy
2
Government agency
(GA)
Agency focusing primarily on clean energy
(EE/RE/SE)
Thailand: DEDE
3
Government agency
(GA)
Agency focusing entirely on EE Mexico: PROCEL
4
Independent statutory
authority (ISA)
An independent authority created by statute
to promote EE or clean energy
U.K. Energy Saving Trust
5
Independent
corporation
(gov. owned)
An independent corporation owned entirely
by the government
Korea Energy Management
Corporation
6
Public-private
partnership (PPP)
A corporation owned partly by the
government and partly by the private sector
Germany: DENA
7
Non-governmental
organization (NGO)
Nonprofit or nongovernmental organization Austrian Energy Agency

7. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional models for EE: pros & cons
7
Type Advantage Disadvantage
1
GA with broad energy
responsibilities
Greater credibility
Have access to public funding
Large bureaucracy
Rivalry with other energy programs
2
GA focusing primarily
on EE/RE/SE
Consistent focus with EE
Greater voice in gaining resource for EE
Competition between technologies
Narrower focus, less influence
3
GA focusing entirely
on EE
Pro-EE agency culture
More dynamic management
Agency must compete for resources
Narrower focus, less influence
4
Independent statutory
authority (ISA)
Operational discretion
Flexibility
Require legislation to change scope
Competition with public agencies
5
Independent
corporation (gov.
owned)
Have access to private-sector input
Flexibility
Less access to public funding
Competition with public agencies
6
Public-private
partnership (PPP)
More access to private-sector input
Flexibility
Conflicts between public and
private perspectives
7
Non-governmental
organization (NGO)
Greater credibility to some stakeholders
Flexibility
May be lack of creditability to
public and private sectors

8. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON analysis
8
1. Stakeholder mapping of institutions acting in the
field of energy efficiency in each GMS country
2. Survey to capture the information on institutional
structure related to EE
3. Analysis of energy prices to discuss energy price
market failures
4. Development of tool to support discussions on
institutional model and room for improvement

9. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Stakeholder mapping: Cambodia
9

10. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Stakeholder mapping: Thailand
10

11. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Stakeholder mapping: Laos
11

12. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Stakeholder mapping: Vietnam
12

13. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Stakeholder mapping: Myanmar
13

14. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional setting
of the GMS countries
14
Myanmar LAO PDR Vietnam Thailand Cambodia
Responsible
government
agency
Energy
Efficiency and
Conservation
Department,
Ministry of
Industry (MoI)
Department of
Energy Policy
and Planning
(?), MoE
Energy
Efficiency and
Conservation
(EEC) Office,
Ministry of
Industry and
Trade (MoIT)
DEDE (& EPPO),
MoE
Department of
New and
Renewable
Energy, MME
Type of
organization
Model 1? Model 1? Model 1 or 3? Model 2 Model 1?
Further
analysis
Is the department
offering sufficient
institutional
capacity for EE?
Is the department
offering sufficient
institutional
capacity for EE?
Is EEC a separate
agency or part of
MoIT? Sufficient
capacity for EE?
Are roles and
responsibilities
DEDE and EPPO
suff. distinctive?
Is the department
offering sufficient
institutional
capacity for EE?
Room for
improvement?
New or adjusted
institution. model
recommended?
New or adjusted
institution. model
recommended?
New or adjusted
institution. model
recommended?
New or adjusted
institution. model
recommended?
New or adjusted
institution. model
recommended?

15. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Thailand case
15
• Elaborate institutional structure:
Agency responsible for EE &
RE implementation (DEDE)
Separate agency responsible
for policy development (EPPO)
Separate Energy Regulatory
Committee (ERC)

16. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Thailand case
16
Institutional challenges Thailand:
• EGAT (transmission) is under mandate of MoE
• PEA and MEA (distribution) are not under
mandate of MoE
• New policy with responsibilities for utilities in
EE cannot directly be imposed by MoE

17. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Thailand case
17
Institutional challenges Thailand:
• Organic growth of agencies and institutions, e.g.
MoE is relatively young as well as ERC…
• …resulting in sometimes overlapping
responsibilities, e.g. in EE & RE policy making or
energy price setting

18. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Thailand case
18
Institutional challenges Thailand:
• For some energy efficiency policies, cooperation
with other Ministries is crucial
• E.g. implementation of Building Energy Code
faces challenges due to crucial role of Ministry
of the Interior, Department of Public Works
(building permits)

19. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Next steps
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• 2nd stakeholder meeting in each partner country
• Decision Support Tool to discuss institutional
model and room for improvement
• Full analysis of institutional models and
recommendations for further development

20. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Thank you
20
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion