© OECD/IEA 2014

Energy Efficiency Policies

Políticas de Eficiencia Energética

David Morgado

Energy Analyst

Energy Efficiency in Emerging Economies

© OECD/IEA 2014

Topics

� Why is Energy Efficiency Important?

� Energy Efficiency per Sector:

� Cross-Sectoral

� Buildings

� Appliances and Equipment

� Lighting

� Transport

� Industry

� Energy Utilities

� Energy Efficiency Policies for Latin America and

Caribbean – Where to Start?

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Why is Energy

Efficiency

Important?

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Growing electricity generation & demand

Non-OECD Americas = South America + Caribbean except Chile and Mexico

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Energy Balance – Supply and Demand

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High Energy Demand Projected for 2035

Latin American countries will account for approximately

5% of the world’s primary energy demand growth by

2035 of which 2.7% is Brazil alone.

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Need to Promote Rational Use of Energy and Energy Efficiency

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Multiple Benefits of Energy Efficiency

IEA Publication - Capturing the Multiple Benefits of Energy Efficiency (2014)

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Energy Efficiency works

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Mto

eEJ

Coal Oil GasElectricity Other Avoided energy useTFC

Total final Consumption (TFC)

Hypothetical energy use had there been no energy efficiency

improvementsAvoided energy equal to 65% of 2010 TFC

Between 1974 and 2010 cumulative avoided energy

consumption due to energy efficiency in these 11 IEA

countries amounted to over 1 350 EJ (32 billion toe)

© OECD/IEA 2014

But potentials are going unrealised…

20%

40%

60%

80%

100%

Industry Transport Power

generation

Buildings

Unrealised energy

efficiency potential

Realised energy

efficiency potential

Energy efficiency potential used by sector in the

World Energy Outlook 2013 New Policies Scenario

Two-thirds of the economic potential to improve energy efficiency remains

untapped in the period to 2035

Policies are needed to remove barriers and facilitate market creation

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Where are the greatest potential savings?

1. Energy Efficiency in End-Uses = Appliances and Equipment

2. Energy Service Demand = Demand Response = Shift Electricity

Consumption & Reduce Peak Demand

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Government is an essential player

� Consumers can find it challenging to implement energy efficiency

� Types of barriers:

� Market Barriers

� Financial Barriers

� Information and Awareness Barriers

� Regulatory and Institutional Barriers

� Technical Barriers

� Governments can help overcome these barriers by providing direction and support (e.g. regulations, subsidies, tax incentives, awareness, etc)

© OECD/IEA 2014

Energy Efficiency

Policy Options –

sector by sector

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© OECD/IEA 2014

© OECD/IEA 2014

Cross sectoral

� Collecting and analysing data and indicators to

determine baseline, priorities, actions and track

progress

� Targets, strategies and action plans – to create a long-

term framework and roadmap to build consumer

confidence and market

� Energy markets that enable energy efficiency –

electricity price is an important factor

� Support private investment in energy efficiency –

standards and labelling, R&D, training

� Determining effectiveness and non-compliance –

monitoring & evaluation of policies and measures

© OECD/IEA 2014

Examples of cross-sectoral policies in Latin

American and Caribbean

Countries Policies covering Industry, Transport, Bui ldings, Appliances, Lighting

Brazil Plano Nacional de Eficiencia EnergéticaProgram Nacional de Conservacao de Energía Electrica

Colombia Program de Uso Racional y Eficiente de Energía e Fuentes no Convencionales

RepublicaDominicana

Plan Nacional de Eficiencia Energética

El Salvador Política Energética Nacional

Mexico Programa Nacional para el AprovechamientoSustentable de la Energía (2014 – 2018)

Peru Plan Referencial del Uso Eficiente de la Energía 2009-2018

Uruguay Uso Eficiente de la Energia (Lei)

© OECD/IEA 2014

© OECD/IEA 2014

Energy efficient building stock

� New buildings – Enforcement of energy codes and

minimum energy performance standards

� Existing buildings – Supporting investment to reduce

energy consumption

� Energy performance labels & certificates – improving

visibility of energy use and creating markets for energy

efficiency services

� Energy efficient technologies and systems – Support

investment, standards, awareness and training

Energy savings potential in this sector by 2030 will be

equivalent to the annual electricity consumption of both

Japan and the United States of America (20 EJ)

© OECD/IEA 2014

© OECD/IEA 2014

Efficient appliances and equipment

� Energy labels and minimum energy performance

standards - Focus on electrical appliances with highest

electricity consumption

� Establish testing standards – opportunity to align with

international or regional standards (important to

consider local climatic and usage conditions) to reduce

compliance costs

� Accelerate market uptake of energy efficient appliances:

� Financial incentives,

� Endorsement schemes,

� Procurement programmes,

� International collaboration and global dialogue to increase

demand and trade of efficient appliances

© OECD/IEA 2014

© OECD/IEA 2014

Bringing Energy Efficient Lighting to Market

� Phasing out incandescent lights:

� Minimum energy performance standards

� Uptake of efficient lights such as CFLs, LED, T5 +

electronic ballasts, efficient luminaires:

� Buildings Codes

� Energy Labelling

� Promotion and Awareness Campaigns

� Market Transformation – Replacement Programs

(e.g. Caribbean)

Lighting represents almost 20% of global electricity consumption

© OECD/IEA 2014

© OECD/IEA 2014

Towards efficient transport systems

� Fuel efficiency standards for light-duty and heavy duty

vehicles – opportunity for synergies in Latin America

� Improving vehicle fuel efficiency through labeling, tax

incentives

� Non-engine components – Tyres and ACs

� Eco-driving + Information Systems

� Efficient transport systems – planning,

infrastructure and price signals

IEA estimates the potential energy savings achievable through

improved transport efficiency are equivalent to the annual oil

consumption of the European Union (30 EJ per year b y 2030)

© OECD/IEA 2014

© OECD/IEA 2014

Significant Opportunities for Energy Efficiency in

the Industrial Sector

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EJ

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2015 2020 2025

US

EU28

Other OECD

China

India

Other non-OECD

IEA estimates overall potential annual energy savings in the industrial

sector by 2030 would be equivalent to the annual electricity

consumption of the United States and China combined

Global Industrial Energy Use

© OECD/IEA 2014

Key Indicator – Aggregated Industrial Energy

Intensity

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2000 2005 2010

GJ/ t

ho

usa

nd

U

SD

(P

PP

)US

EU28

Other OECD

China

India

Russia

Other non-OECD

© OECD/IEA 2014

Towards a more efficient industry � Energy management:

� Energy Audits to identify and assess energy saving opportunities

� Implementing energy saving measures

� Reporting the achievements and continuously improving

� High-Efficiency motors, transformers, compressors,

chillers, pumps and boilers:

� Minimum Energy Performance Standards

� Labeling

� Training, Audits and Technical advisory services

� Policies targeting Small and Medium Enterprises

� Complementary measures such as access to finance,

information & tools, supporting energy service

companies startup, etc

© OECD/IEA 2014

© OECD/IEA 2014

Energy Utilities as Energy Efficiency Champions

� Examples in Latin American and Caribbean:

� Electrobras (Brazil),

� Petroleum Corporation of Jamaica,

� Empresa Nacional de Energia Electrica (Honduras),

� CORPOELEC (Venezuela)

� Tackling end-use efficiency:

� Ensuring utilities support cost-effective measures towards

reducing energy consumption in all sectors

� Providing customers with information on how to understand

and manage energy use

� Using energy tariffs to fund energy efficiency programs (e.g. CFL

replacements programs, energy efficiency subsidies, etc)

© OECD/IEA 2014

Why Energy Utilities?

� Advantages:

� Ready access to capital

� Commercial relationship with end users

� A familiar brand name

� Widespread service and delivery network within

their jurisdiction

� Responsible for meeting energy demand growth

� Disadvantages:

� Overlap in commercial and societal interests

� Incentive to sell, not conserve, energy

� Need for regulatory oversight

© OECD/IEA 2014

Energy Efficiency Policies

for

Latin America and

Caribbean

© OECD/IEA 2014

Energy Efficiency Policies for Latin America and

Caribbean – Where to start?

� Identify and analyse energy data (indicators)

� Determine priority / action areas

� Develop policies / plans / programs / projects

� Work with key stakeholders

� Set targets and roadmap

� Implementation / enforcement

� Ensure effective communication

� Evaluate achievements and improve if necessary

© OECD/IEA 2014

Discussion Points for today and tomorrow

1. Where are the biggest energy savings opportunities?

2. What are the most persistent market, technical, institutional

barriers in the region?

3. What progress has been made in developing policy

interventions that overcome these barriers?

4. Which types of policies – regulatory or market or other –

have proven effective in the region?

5. Which interventions will be effective in overcoming barriers

in the region?

6. Choosing between regulatory and market policies – and tips

for combining them

© OECD/IEA 2014

Gracias

david.morgado@iea.org