Implementing Electricity Load Management: Lessons Learned from Efficient Lighting Programs ESMAP...
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Transcript of Implementing Electricity Load Management: Lessons Learned from Efficient Lighting Programs ESMAP...
Implementing Electricity Load Management: Lessons Learned from Efficient Lighting ProgramsESMAP Knowledge Exchange Series
April 12, 2006
Ashok SarkarESMAP, Energy & Water Department, World Bank
Power Crises: The Context
1.6 billion people do not have access to modern energy resources
Per capita electricity consumption in developing countries continues to be low
Energy and peak shortages prevail resulting in high outage costs
Cost of supply capacity expansion is high and limited by capital constraints
Power delivery infrastructure is weak and loss-prone
Power Inequities
Source: NASA website http://antwrp.gsfc.nasa.gov/apod/ap001127.htmlYear: 2000
23 industrialized countries consume half of world’s total lighting energy use
Strategies for Electricity Load Management Broad Objectives:
Utility perspective: Reduce shortages or “crises” Consumer perspective: Increase reliability, reduce costs
Array of Technology Options: Supply-side, T&D and Demand-side measures (Demand Side Management-DSM)
Menu of Approaches: Public policy / Regulatory based: Appliance minimum energy performance
standards and labeling systems, industry energy consumption norms, mandatory energy audits, utility demand side management, information campaigns, etc.
Market-driven: Energy efficiency performance contracting through ESCOs, etc.
Lighting options stand out in many ways: Clear economics, easy to understand, positive impact on the electric utility, Upstream benefits (avoided T&D losses), “visible” impact on quality of life
Many other lighting options exist – Fluorescent tube lights, LEDs, etc. The focus of the presentation is limited to Compact Fluorescent
Lamps (CFLs) applications
STRATEGIC CONSERVATION
0
2
4
6
8
10
12
14
16
PEAK DEMAND CLIPPING
0
2
4
6
8
10
12
LOAD SHIFTING
0
2
4
6
8
10
12
VALLEY FILLING
0
2
4
6
8
10
12
Lighting: A Global Priority
$185
$48
Electric Lighting
Fuel-Based Lighting
Global Lighting Electricity Use•Residential – 28%•Service/Commercial 48%•Industry – 16%•Street Lighting – 8%
•Global Lighting Savings PotentialSavings Potential % of total savings
•Residential: 40-60% 27%•Commercial 25-40% 31%•Industrial 15-25% 7%•Streetlighting 25-30% 6%•Residential 92-99% 29% (Fuel-based)
A $230 billion Market
Source: Evan Mills, 2002
Simple Comparison: CFLs vs. Incandescent Bulbs
CFLs are typically guaranteed for 8,000 hours. (Incandescent bulbs typically last 500 to 4000 hours, depending on exposure to voltage spikes.)
CFLs use about four times less electricity. For example, a 15-watt CFL produces the same amount of light as a 60-watt incandescent bulb (approximately 900 lumens). With electricity tariff rate of $0.10 per kWh:
CFL will save $36.00 in electricity (compared to the incandescent bulb) during its rated life.
CFLs costs about $2.75 each (American Discount Stores)
Incandescent bulbs cost about $0.50 each.
Payback period for buying the CFL instead of the incandescent bulb is, therefore, 500 hours, which is 100 days at 5 hours per evening.
Equivalent light output
Incandescent Compact
Fluorescent
40 W 9 W
60 W 11 - 15 W
75 W 18 - 20 W
100 W 25 W
Source: Wikepedia website
The Economics of CFL
Case of a 15 W CFL replacing 60W incandescent Using 20% T&D loss, usage of 5 hours/day and 0.5 power factor
(to be on conservative side), the savings per CFL at power plant bus bar equals: Energy: 50 kWh/year Peak Load: 27 W
At CFL price of $2.75 and life of 8,000 hours (~4.4 yrs), the cost of savings: Energy: $0.0125 / kWh Peak Load: $102 / kW
Emissions reduction/ Carbon Credits (for grid emissions factor of 0.9kgCO2e/kWh) would result in additional revenues: @ $5/tCO2 CER Price: $ 0.99 per CFL @$10/tCO2 CER Price: $ 1.98 per CFL
Compare!Generation Supply Options: $400-1500 / kW
Efficient Lighting Programs: Illustrative Case Studies and Examples Sri Lanka India Vietnam Indonesia South Africa Ghana China
Biax Globe
Reflector Spiral
IFC: Efficient Lighting Initiative (ELI)
Sri Lanka
CEB Program: to address high cost barriers 1st Pilot Phase (1995): 600 households 2nd Demo Phase (1996): 100,000 CFLs [CFL cost of
US$7!!] 3rd Phase (19998-1999): 600,000 CFLs (through loan
scheme and direct sales) Up to 4 CFLs per customer 12 month interest free loan Payments through electricity bills or salary deductions 2 year warranty on lamps from 5 suppliers
Reduction Impacts: 34 MW Key Success Factors: CEB, Loan, Warranty
India: BELP Program
BESCOM (Bangalore City) Objective: to improve reliability, addresses high system losses, reduce evening peaks
Focused on residential customers, both CFLs and FTLs 1st Demo Phase: ~300,000 lamps in Bangalore Urban District 2nd Phase (ongoing): 2.6 million customers targeted; three
lighting suppliers (Philips, Osram, Asian Electronics) selected through tender to provide lamps with 1 year warranty
CFL Purchase Options: Direct Purchase: at discounted prices Installment Scheme: payment through 9 monthly installments
through electricity bills or salary (BESCOM staff) Average savings per CFL > Average installment Targeted Reduction: 13.5 MW (pilot), 117 MW (2nd Phase) Key Success Factors: BESCOM, Program marketing
Vietnam
EVN Objective: to address rapid demand growth, reduce rural customers power bills
1st Phase (2001-2002): Pilot 2nd Phase (2004-2007): 1 milion CFLs targeted 300,000 CFLs procured in Dec 2004 from Osram through
international tender process - ELI certification), mainly targeted to rural residential customers, 4-6 months timeframe
CFLs price $1.07 with 15-month warranty Lamps distributed through Provincial PCs and Commune
Retailing Groups (~200 in Year 1) Initially subsidy was to be provided by EVN (33% in Year 1 to
20% in Year 3)- assuming CFL cost of ~$2.50 Targeted Reduction: 120 MW (2nd Phase) Key Success Factors: Bulk procurement, Low Price
Vietnam: CFL Bulk Procurement Program
EVNRegional
PCProvincial PC
and District PC Commune Selling
Group (Distributor)
E
Village
Suppliers
GEF/IDA Funds
World Bank
Payment
Payment for CFLson consignment
PaymentPayment
Pay
men
t
CFLs
Dis
bu
rsem
ents
A
KEYA = Purchase contract between EVN and SupplierB = Standard Purchase Orders between EVN and regional PCs; regio nal PCs and Provincial PCsC = Provincial PCs provides CFLs to Commune Selling Groups on consignment basisD = Commune Selling Groups make own arrangements for CFL sale to villagesE = Standard service contracts for CFL distribution between the Provincial PCs and commune selling groups
Payment for services
CFLs
B
CFLs
B
CFLs
B
CFLs
BC
CFLs
C
CFLs
D
CFLs
D
CFLs
Source: Peter du Pont, Right Light 6 Conference, May 2005
REDUCING SUBSIDIES THROUGH CFL GIVE-AWAY PROGRAMS
CURRENT TRADITIONAL MODEL: Incremental kWh
Capital and operating costs = 5.2 cents/kWh
Revenue received = 3.0 cents/kWh
Cash contribution margin = 2.2 cents/kWh(SUBSIDY)
STRATEGIC ENERGY EFFICIENCY THROUGH CFL
Capital and operating costs = 4.4 cents/kWh
Revenue received = 3.0 cents/kWh
Cash contribution margin = 1.4 cents/kWh(SUBSIDY)
A NET LOSS (SUBSIDY) REDUCTION OF 0.8 cents/kWh SOLD
Indonesia: Potential Targeted CFL Program
Free Cash Flow for Serving Non-Java-Bali Residential Customers
$(400,000,000)
$(300,000,000)
$(200,000,000)
$(100,000,000)
$-
$100,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008
US
$
Targetted DSM
NPV of savings =US$ 240 million
NPV of savings from subsidy reduction = USD 240 million
Source: Peter du Pont/ Booz-Allen Hamilton(1999)
South Africa
Eskom Objective: to address power shortages and reduce rolling black outs
1st Phase: 300,000 CFLs for free distribution in Alexandria (north of Johannesburg)
2nd Phase: 2.7 million CFLs for low cost housing areas 3rd Phase (2006): 5 million CFLs (Western Cape Town) based on
swap-out (through door-to-door campaign or at the supermarkets) 2.5 million CFLs free distribution (to low income consumers) 2.5 million to middle- and high-income consumers at subsidized
retail price of US$0.80 (compared to normal retail prices of US$1.40)
Targeted Reduction: ~150 MW (3rd Phase)
Ghana Electricity Company of Ghana (ECG) Objective: to address
power shortages and affordability High-quality CFLs (withstands voltage fluctuations 190-260 V) by
Osram Customer purchases up to 4 CFLs per household at the price of
standard incandescent lamp Incandescent lamps returned to ECG are destroyed Approximately 4 millions CFLs per year on a sustainable basis. Estimated Reduction: ~150 MW per year (@ 27% T&D losses,
and 0.5 power factor) Proposed as a CDM project: ~122,000 tCO2e annually
Ghana Efficient Lighting Project
Provision of CFLs and incandescent lamps with operating hour counters
CFL production
Carrier
Import: containers @ 0.25 million
Distribution: boxes @ 1000s
Distribution: 1-4 CFLs
Return: 1-4 incandescent lamps
Energy Foundation
Distribution chain of CFLs
Recycling
Control group Local ECG office
Household
Annual check of counters, replacement in case of counter failure
Report of annual check
Osram
Source: CDM PDD for Ghana Efficient Lighting Project, UNFCCC website
China: Shijiazhuang Green Lighting Project Hebei Province DSM center: to address power shortages by
accelerating the penetration of CFls in open market Follow-up of the “China Green Lights Project” (NDRC, UNDP,
GEF) High-quality CFLs (ISO 9001 standards, China Compulsory
Certification, China Energy Conservation Certification) Mainstreams CDM to increase the CFL penetration rate, with
additional buyers Incandescent lamps returned to Hebei DSM Center are
destroyed Approximately 600,000 CFLs per year on a sustainable basis. Estimated Reduction: ~20 MW per year (@ 7.5% T&D losses) Proposed as a CDM project: ~86,000 tCO2e annually
China: Shijiazhuang Green Lighting Project
Source: CDM-PDD for Green Lighting in Shijiazhuang City (China), UNFCCC website
(1) Selection of CFLs ManufacturersProject Implementer will invite only CFLs manufacturers which produce CFLs which meet the quality standards.
(4-1) Provision of incentives at Hebei DSM centerIn order to receive incentives at Hebei DSM Center, interested local residents who intend to purchase CFLs have to bring their living ILs from home and fill in the CDM exchange cards.
(4-2) Provision of incentives at mobile clearinghousesIn order to receive incentives at mobile clearinghouses, interested local residents who intend to purchase CFLs have to bring their living ILs from home and fill in the CDM exchange cards.Mobile clearinghouses will move around housing estates periodically.
(2) Distribution of CDM Exchange Cards to local residentsProject Implementer will distribute CDM Exchange Cards to local residents either through residents’ committees or at streets
(5) Generation of emission reductions by replacing ordinary ILs with purchased CFLs at buyers’ homesCDM cards which contained the questionnaire will be recovered and analyzed to calculate the expected emission reductions.
(3-1) Selling of qualified CFLs at Hebei DSM center
(3-2) Selling of qualified CFLs at some retail shops designated by Hebei DSM center
China – Shijiazhuang City (Hebei Province) Green Lighting ProjectProject Implementation Scheme
Source: CDM-PDD for Green Lighting in Shijiazhuang City (China), UNFCCC website
Lessons Learned From CFL-based DSM Programs Opportunities:
Cost-effective strategy for peak load management and increased reliability of power supply
Financially viable for service territories with commercial losses or subsidies
Economies of scale bulk purchases lowered costs (Virtuous Cycle)
Synergies with carbon finance instruments (CDM) Challenges:
Managing the program delivery in a sustainable manner High transaction/ delivery costs (esp. in countries with weaker
markets and public / private sector institutions) Measurement and verification (esp. for leveraging CDM) Good quality (Voltages, induced low power factor, harmonics) “Rebound” and “Free Rider” effects
Efficient lighting technology and cost barriers are gradually disappearing … large-scale program implementation and delivery remains a challenge…best practice business models could be replicated
Our Energy Future…the Path is Clear...
OR
Electric incandescent lamp converted into a fuel oil lampfrom Ghana marketplace (Source: Evan Mills, 2002 [Photo Credit: Rick Wilk])