Asian Energy Trends and Prospects for Asian Energy Trends and Prospects for Energy EfficiencyEnergy Efficiency

29 May 200829 May 2008

Peter du Pont, Chief of PartyPeter du Pont, Chief of PartyUSAID ECO-Asia Clean Development and Climate ProgramUSAID ECO-Asia Clean Development and Climate Program

Presented atPresented atTBLI Asia Conference 2008, Bangkok, ThailandTBLI Asia Conference 2008, Bangkok, Thailand

U.S. contributionto offset emissions

of U.S. officials flying to

international Climate Change

meetings

Overview

1. From Ideas to Action: regional analysis of clean energy options

2. Lessons from Thailand’s Energy Efficiency Successes

3. Case Study of Energy-Saving Lamps: How Hard Is It to Make the Change?

From Ideas to Action:From Ideas to Action:Regional Analysis of Asia’s Clean Regional Analysis of Asia’s Clean

Energy Options Energy Options

ECO-Asia Clean Development and Climate Program Geographic Coverage

ChinaIndiaIndonesiaPhilippinesThailandVietnam

These 6 countries account for 96% of the GDP of Asia’s developing countries

USAID-funded review of clean energy priorities in Asia

Objectives• Identify clean energy priorities –

technologies, sectors, and initiatives• Identify opportunities for regional action

Methodology• organized “listening tours” with 220 key

energy stakeholders in the 6 countries• researched and prepared more than 300

profiles on clean energy institutions, policies, programs

• prepared in-depth country reports on the clean energy opportunities in the 6 countries

Comparative Evaluation of Fuel Options

Supply-Side Energy• Coal (CCT and carbon storage)• Petroleum• Natural Gas (incl. methane capture)• Renewables (biomass, wind, solar, small

hydro, geothermal, biofuels)• Nuclear

Energy Efficiency• Power generation and transmission

efficiency• End-use efficiency (buildings, appliances,

lighting, industry, transport, etc.)

DEMAND DRIVERS

Economic growth and increased incomes are leading to large increases in energy demand

Source: APERC 2006

UNTAPPED EFFICIENCYBut regional experience shows significant potential for efficiency improvements

100

58

100

46

100

62

40

50

60

70

80

90

100

110

1993 Market Ave. 2000 Market Ave.

No

rmal

ized

Ele

ctri

city

Use

Refrig-Freezers(42% improvement)

Air Conditioners(54% improvement)

Fluorescent Lamps(38% improvement)

Efficiency gains in Korean appliances – 1993 to 2000

Source: Sun-Keun Lee, 2001

OIL AND ENERGY SECURITYSoutheast Asia will import 70% of its oil by 2030

Source: APEC 2006

Imported Oil as Share of Total Oil Consumption

Source: BP Statistics 2006

The share of primary energy from coal has risen from 43% in 1980, to 48% in 2005, and is projected to reach 51% in 2030.

Note: This data includes all of Asia, not just developing Asia

COAL RELIANCE (1)Coal is the “fuel of choice” for the next 15-20 years to meet demand

Primary Energy Mix for Asian Countries, 1980 to 2005

Oil

Gas

Coal

Nuclear

Hydro

COAL RELIANCE (2)Share of coal increasing dramatically in India, ASEAN

Note: Thailand data are for 2021, not 2030

Criteria pollutant levels in Asian megacities

Local air pollution has been linked to more than 500,000 premature deaths annually in Asia (WHO)

LOCAL AIR POLLUTIONFossil Fuels Lead to High Particulate Levels

Current26 billion metric tons CO2

203040 billion metric tons CO2

Source: APERC, TERI

INCREASING CO2 EMISSIONS Developing Asia’s CO2 Emissions Will Increase 4-Fold

Projected CO2 Emissions by Sector (2002 - 2030)

2002 2030Source: APERC, TERI

ELECTRICITY IS MAJOR SOURCEMore than half of CO2 emissions from power plants

What is the Answer? There is no Single Silver Bullet

Coal• Expected nearly 4-fold increase in consumption by 2030, will lead to 13

billion metric tons of annual CO2 by 2030Petroleum• Import dependency to increase drastically (exporters turn into

importers; others will import 70-90% of their needs)Natural Gas• By 2030, countries will import between 40-75 percent of their needs. Nuclear • Even with massive investment, nuclear projected to supply only

approx. 4-8% of primary energy needs by 2030 (China, India, Thailand, and Vietnam)

Renewable Sources• Even with major expansion, current estimates project renewables to

account for 5-10% of future energy needs by 2030

Estimated energy delivery costs by clean energy type

Typical cost ofavoided electricity generation(about 6-7 US cents/kWh)

Sources: Compiled from Sims et al, 2003; Sawin 2004; LBNL, 2005 and IEA, 2006

The “least cost” options are energy efficiency, and they cost ¼ to ½ as much as building a new power plant

19

Costs of carbon reductions by clean energy option

A number of options can reduce CO2 emissions at no net cost

Ranking of clean energy options for regional cooperation

Top 6 priority clean energy technologies and sectors for regional cooperation

• Energy-efficient lighting and appliances• Clean coal technologies• Renewable energy technologies

(esp. onshore wind energy and biomass-fired electricity)

• Energy-efficiency in the transport sector• Biofuels for transportation• Methane capture

Implementing Just These Options Can Reduce Future Emissions from Asia’s Developing Economies by 25%

Thailands’ Energy EfficiencySuccess Story:

Smart Policy and FinanceNeeded to Stimulate EE

Thailand’s DSM Initiatives – Focusing on the Residential Sector

Source: EGAT

Successful Implementation of DSM in Thailand

Programs

AS of March 31, 2006

Peak Demand Energy Consumption Carbon Dioxide

Reduction Reduction Emission Reduction

(MW) (GWh) (Million tons)

1. 36 and 18 Watt Fluorescent Lamp Program 401.5 1,957.5 1.45

2. Energy Efficient Compact Fluorescent 10.0 57.2 0.04

Lamp Program      

3. Energy Efficient Refrigerator Program 236.3 2,357.9 1.74

4. Energy Efficient Air-conditioner Program 640.7 2,686.2 1.87

5. Street Light Program - 17.22 0.01

6. Energy Efficient Ballast Program 13.8 85.0 0.06

7. High Efficiency Motor Program 0.2 1.2 -

8. Green Building Program 2.6 10.3 0.01

Total 1,304.8 7,172.5 5.18

Source: Source: DSM in Thailand: The EGAT Experience. DSM in Thailand: The EGAT Experience. Mrs. Napaporn Phumaraphand, Director, DSM & Planning Mrs. Napaporn Phumaraphand, Director, DSM & Planning Division, Electricity Generating Authority of Thailand (EGAT). Presented at workshop on Energy Efficiency Division, Electricity Generating Authority of Thailand (EGAT). Presented at workshop on Energy Efficiency in Power Distribution and End Use Project, Jakarta, Indonesia. 5 June., 2006in Power Distribution and End Use Project, Jakarta, Indonesia. 5 June., 2006

Thailand Benchmarked Against U.S. Utilities(Cumulative Annual Energy Savings as a Percentage of Annual Utility Energy

Sales)RANK STATE PERCENTAGE OF ANNUAL

KWH SALES

1 Connecticut 8.3%

2 California 7.8%

3 Minnesota 7.6%

4 Washington 7.5%

5 Vermont 7.1%

6 Oregon 6.4%

7 Massachusetts 6.3%

8 Rhode Island 6.2%

THAILAND 5.2%

9 Wisconsin 4.8%

10 Montana 4.3%

U.S. Average 2.1%

Source: EGAT data for Thailand. U.S. data from ACEEE. A Nationwide Assessment of Utility Sector Energy Efficiency. August 2006.

Cost Comparison of Clean Energy Options

$0

$50,000

$100,000

$150,000

$200,000

$250,000

The 30

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EE Rev

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DSM

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Cost of Delivered Electricity

Capital Cost

Demand Side Measures

Supply Side Measures

Commercial Costs of DSM/EE and NT2 Resources

0.92

2.3

0

0.5

1

1.5

2

2.5

DSM/Energy Efficiency NT2 Electricity

Energy Resource

Co

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(T

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/kW

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DSM/EE is 40% of the cost of NT2

Comparison of DSM/EE Potentials

1,373982

2,207

0

500

1,000

1,500

2,000

2,500

DSM/EE plans in 2002Load Forecast

DSM/EE assumed in2002 Load Forecast

DSM/EE in World BankStudy

Report or Study

Pea

k M

W R

edu

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n 2

011

Average cost of DSM/EE is THB 0.92/kWh

1,225 MW of DSM potential not included in PDP

Energy-Saving Lamps:Poster Child for a Climate

Success, or a Market Failure?

Phase-Out of Inefficient Lighting

• 40 countries have announced plans to “phase out” inefficient lamps within the next five years

• Technically, the solution is relatively straightforward More efficient incandescents,

halogens, CFLs, and LEDs Some problems with scale-up and

transition

• Complete phase out could reduce annual electricity use by 800 TWh and avoid 470 million tonnes of CO2 emissions by 2010

Emergence of Compact Fluorescent Lamps, or CFLs

32

Global CFL Sales

Estimating Market Size

Annual Sales Volume (in million units)

Country 2001 2002 2003 2004 2005 2006*

China (Production) 750 800 1,040 1,380 1,760 2,400

India NA 34 40 46 70* 100*

Indonesia 40 50 60 70 90

Philippines 4.5 NA NA 18 25* NA

Thailand NA NA NA NA 10 15

Vietnam NA NA 5.4 7.0 8.4 11*

Estimated Global CFL Sales and Chinese Production

0

500

1000

1500

2000

2500

3000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Nu

mb

er o

f C

FL

s

Chinese production (CALI data)

Post-1997 sales estimated

Global CFL sales

Source: IAEEL for pre-1997 data; CALI and ECO-Asia estimates for post-2007

Rum Smugglers circa 1810

So, What is the Problem?

CFL Lamp Smugglers circa 2007

Up to 50% of CFLs Produced in Asia are Shoddy

Market Share by Quality

CountryExport Quality

CFLs (%)

High Quality CFLs (%)

Medium Quality CFLs

(%)

Low Quality CFLs (%)

China 15 30 40 15India NA NA NA NAIndonesia 36 18 26 20Philippines NA 68 8 24Thailand NA NA NA NAVietnam 17 44 0 39

Source: Australian Green House Office Reports 2006, and ECO-Asia 2007

•Generally speaking, a poor-quality CFL is a lamp that burns out faster, or gives off less light, than advertised, or than prescribed by national standards and guidelines.

Worldwide, There are 43 Different Sets of Specifications for CFLs (Vary by Country)

Efficacy level per Wattage

0

10

20

30

40

50

60

70

80

0 5 10 15 20 25 30 35 40 45 50 55 60 65

Watts

Lu

men

/W

Thailand

Philippines

Indonesia-1S

Indonesia-2S

Indonesia-3S

Indonesia-4S

CALI1

CALI2

CALI3

CNIS

Vietnam

ELI

CECP

ES

ES-P

Korea

Global CFL MarketGrowth and levelling out of global CFL demand

• Global CFLi demand has surged from 1.5 Bn (2006) to 2.5 Bio in 2008• Already from 2010 the CFLi demand growth slows down followed by levelling off to a

level of around 4.2 Bn as from 2014• It is imperative to improve & secure adequate product quality levels in this process

CFL I market

0500

1.0001.5002.0002.5003.0003.5004.0004.500

2000

2003

2006

2009

2012

2015

2018

vo

lum

e(m

ln)

Initial CFL I Replacement CFL I

Source: Philips Lighting

The Way Forward

• USAID ECO-Asia CDCP is working with suppliers to develop a voluntary Quality Identification System for CFLs sold in Asia

• The system will classify CFLs as “Good,” “Better,” and “Best”

• Hopefully, this will become an international system for identifying and marking CFL quality

www.CleanEnergyAsia.net

Thank You!