INDUSTRIAL ENERGY APPLIANCES EFFICIENCY AND … · INDUSTRIAL ENERGY EFFICIENCY The ... to...

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INDUSTRIAL ENERGY EFFICIENCY The industrial sector accounted for about 29% of the total final energy demand in 2011 1 . Not only will industry continue to remain one of the major final energy consuming sectors, but its share in the total final global energy consumption will be higher than present levels. Demand for energy use in the industrial sector over the next two decades is expected to rise at rates higher than in the transport and building sectors because of its potential to contribute to higher economic growth and job opportunities. Widespread adoption of energy efficiency measures could reduce industrial energy use by over 25%. That potential is significant: it represents 3.92 Gt CO2 – an 8% reduction in global energy use and a 12.4% reduction in global CO2 emissions. In addition, it provides several distinct advantages and spin-offs at the individual enterprise level such as increased competitiveness, improved operational efficiencies and productivity, reduced material losses and solid waste, decreased water use, and improved product quality. Such benefits have the potential to add another 50% in economic benefits on top of direct energy cost reductions. 1 IEA, WEO, 2013 ENERGY EFFICIENCY ACCELERATOR

Transcript of INDUSTRIAL ENERGY APPLIANCES EFFICIENCY AND … · INDUSTRIAL ENERGY EFFICIENCY The ... to...

INDUSTRIAL ENERGY EFFICIENCYThe industrial sector accounted for about 29% of the total � nal energy demand in 20111. Not only will

industry continue to remain one of the major � nal energy consuming sectors, but its share in the total

� nal global energy consumption will be higher than present levels. Demand for energy use in the

industrial sector over the next two decades is expected to rise at rates higher than in the transport and

building sectors because of its potential to contribute to higher economic growth and job opportunities.

Widespread adoption of energy e� ciency measures could reduce industrial energy use by over 25%.

That potential is signi� cant: it represents 3.92 Gt CO2 – an 8% reduction in global energy use and a 12.4%

reduction in global CO2 emissions.

In addition, it provides several distinct advantages and spin-o� s at the individual enterprise level such as

increased competitiveness, improved operational e� ciencies and productivity, reduced material losses

and solid waste, decreased water use, and improved product quality. Such bene� ts have the potential to

add another 50% in economic bene� ts on top of direct energy cost reductions.

1 IEA, WEO, 2013

APPLIANCES AND EQUIPMENTThe global transition to effi cient appliances and equipment will signifi cantly

contribute to achieving the UN Secretary-General’s Sustainable Energy for

All (SE4All) goal of doubling the global rate of energy effi ciency. High-impact

appliances and equipment, such as residential refrigerators, air conditioners,

electric motors, and distribution transformers will account for close to 60%

of global electricity consumption by 2030. For example, the world market for

room air conditions is growing at 6.5% per year since 2009, with emerging

economies such as Brazil and Indonesia growing above 20% and 10% per year,

respectively. While, the refrigerator stock in developing countries is expected to

more than double by 2030 to 1.6 billion units. Similarly, the installed stock of

transformers in developing countries is expected to nearly triple by 2030.

ENERGY EFFICIENCY ACCELERATOR

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MARKET BARRIERS

While energy e� ciency measures have repeatedly demonstrated their

e� ectiveness in increasing industrial competitiveness and productivity,

they have yet to attain mainstream recognition as a priority and

as a strategic investment for future pro� tability. Various barriers to

energy e� ciency exist, preventing enterprises from changing their

practices and making the necessary investments in energy e� ciency.

Energy e� ciency and management policies and programs have an

important role to play in removing or reducing these barriers and in

encouraging industry end-users’ action. Despite the availability of

numerous proven best practice policies and documented lessons learned,

in many countries policies and regulatory frameworks for promoting and

supporting industrial energy e� ciency remain weak and largely incomplete.

The root causes of such gaps and delays vary from country to country

but certainly include: inadequate information, skills, and methods to

assess the costs and bene� ts of industrial energy e� ciency policies and

measures; limited institutional capacity for policy design, development

and implementation; non-availability of customized technological

solutions at local levels; human and � nancial resources constraints;

inappropriate tari� structures; distorted market incentives; and inadequate

regulatory or legal frameworks to support energy service companies.

MARKET SECTORS

Five energy intensive industries – chemicals, iron and steel, non-metallic minerals (cement,

glass, bricks and ceramics), pulp and paper, and re� ning – accounted for about 50% of the total

industrial sector energy consumption in 2010.2 Wide variations exist in the speci� c energy

consumption (SEC) across these industries at the individual plant and facility level. The variation in

SEC is often attributable to vintage, size, technology, operating practices, and raw materials used,

making high SEC plants in these energy intensive industries main candidates energy e� ciency

improvement e� orts. By applying current best available technologies, the technical potential to

reduce energy use in the cement sector is 18%, 26% in pulp and paper, 24% in chemicals, 21% in

iron and steel, and 11% in aluminum.3

Small and Medium Enterprises (SMEs) comprise an increasingly important part of the global

economy, and reducing energy use in this economic sector is a key lever for limiting greenhouse

gas emissions. A large percentage of the energy intensive ind ustries in sectors such as iron &

steel (secondary metallurgical processing), chemicals, textile, bricks, and non-ferrous secondary

processing are in this sector, especially in developing countries. The participation of this sector

in improving their EE is critical to meeting low carbon goals as well as in providing employment

opportunities to ever growing populations. Formulation and implementation of enabling policies,

technologies and integrated strategies that accelerate the adoption of energy e� ciency in SMEs

is of paramount importance. Various studies in developing countries indicate that there exists

a saving potential of 15-25% in energy intensive SMEs through adoption of energy e� cient

technologies and practices.

SUPPORTING ORGANIZATIONS

Various organizations are promoting energy e� ciency and are expected to support the program. The list includes United Nations Industrial

Development Organization (UNIDO), Institute for Industrial Productivity (IIP), The Energy and Resource Institute (TERI) India, Global Superior Energy

Performance (GSEP), International Energy Agency (IEA), United Nations Environment Programme (UNEP), World Business Council for Sustainable

Development (WBCSD), International Partnership for Energy E� ciency Cooperation (IPEEC), Clean Energy Ministerial (CEM), Korean Energy Management

Corporation (KEMCO), Clean Energy Solutions Center (CESC), International Copper Association (ICA), U.S. Department of Energy (DOE), the Clean Industry

Platform, as well as the UN Foundation (UNF) and a number of energy and environmental NGOs and think tanks. International development banks such

as the World Bank, the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), the Inter-American

Development Bank (IADB), the Asian Development Bank (ADB) and the African Development Bank (AfDB) can provide project � nancing and introduce

programs for mainstreaming energy e� ciency � nance including in supply chains, while private � nancial institutions can provide project � nance for

large-scale energy e� ciency projects. Business leaders, energy e� ciency service companies and trade allies including Ingersoll Rand, Schneider Electric,

Siemens and others can share best practices and case studies based on their own experience and expertise.

2 US EIA, International Energy Outlook 2014, September 2014. It is to be noted that the USEIA report considers the industrial sector as comprising a diverse set of industries, including manufacturing (food, paper, chemicals, re� ning, in and steel, nonferrous metals, non-metallic minerals, and others) and nonmanufacturing (agriculture, mining, and construction).3 IEA, Tracking Clean Energy Progress, 2014.

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KEY STAKEHOLDERS

The following stakeholders will be involved in the planning and implementation process:

GOVERNMENT

• Energy and environment ministers

• Utility commissions

• Air/water quality boards

• Regional/local economic development entities

• State energy o� ces

UTILITIES AND SERVICE PROVIDERS

• Utilities

• Energy suppliers

• Third party program administrators, operating on behalf of utilities

• Engineering � rms

• Local trades / installers

END-USERS AND INDUSTRIAL GROUPS

• Industrial facility and energy managers

• Industrial company senior manage-ment

• Industrial energy and sustainability leaders

• Industrial � nancing leaders

• Industry trade associations

COMMITMENTS

To meet the goal of doubling energy e� ciency in the industrial sector by 2030, the IEE Accelerator seeks commitments from a combination of 25

national and sub-national governments, public utilities, � nancial institutions, industrial companies and industry associations to help accelerate global

EnMS and adoption of Energy E� ciency measures. The following commitments/goals could be proposed by 2030:

• National and sub-national governments commit, through their government-led energy management programs, to encourage adoption of EnMS

by companies responsible for 50% of industrial energy use in their territory and promote energy e� ciency in energy intensive SMEs.

• Public utilities (or third party program administrators on their behalf ) commit to incorporating incentives and technical assistance to support the

implementation of EnMS in their demand-side management program o� erings available to companies responsible for 50% of industrial energy

use in their service territory and energy intensive SMEs.

• Financial institutions commit to mainstreaming energy e� ciency � nancing into standard loan operations, coupled with technical assistance for the

implementation of EnMS, based on the successful EBRD Sustainable Energy Initiative (SEI), in at least 50% of their region of operation.

• Large Industrial companies commit to implementing veri� able energy management approaches, such as ISO 50001 across their enterprise and to

share their success stories. They also commit to share tools and training to spread EnMS across their supply chain.

• Industry associations commit to supporting the roll-out and implementation of sector-speci� c collaborative frameworks, convening company

leadership and action around common energy reduction goals and energy management activities amongst their membership.

ROLE OF THE INDUSTRIAL ENERGY EFFICIENCY ACCELERATOR

Engagement of the Industrial Sector is instrumental to meet SE4ALL’s goal of doubling energy e� ciency by 2030. The Industrial Energy E� ciency

Accelerator will secure public commitments by governments, industrial corporations and associations, utilities, and � nancial institutions to drive the

adoption of Energy Management Systems (EnMS ) in Industry. It will serve as a knowledge platform for developing and sharing best practices and

information on energy management in the industrial sector, including policies, tools and instruments. Further, it would provide analytical support at the

regional, national and sub-national levels to evaluate the e� cacy of various policy options. The accelerator will also analyse the tools and instruments

best suited for promoting successful policies under local circumstances and conditions.

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www.se4all.org/energye� ciencyplatform/

For more information on the Industrial Energy E� ciency Accelerator program,

please contact one of the following:

[email protected]

Rwww.se4all.org energyefficiencyplatform

APPLIANCES AND EQUIPMENT

NEXT STEPSThe first step is to review and refine the proposal withglobal program sponsors and key stakeholders forpresentation to the SE4All Executive Committee (EXCOM).Given EXCOM approval, an ad hoc steering council wouldbe formed to complete detailed planning for the Platformand the recruiting of potential national governmentsto make commitments in 2014.

!ENERGY EFFICIENCY ACCELERATOR

The Global Energy Efficiency Accelerator Platform is a partnership comprised of a large number of institutions, businesses and governments which include among others

Accenture, Asian evelopment Bank, European Bank for econstruction and evelopment, Inter-American evelopment Bank, I EI ( ocal Governments for Sustainability), International

opper Association, International Energy Agency, ohnson ontrols, hilips, UN , UNE , UN Foundation, World Business ouncil for Sustainable evelopment, World Bank (ES A ), World esources Institute.

ommunication material produced by UNE as a contribution to SE4A .

Rwww.se4all.org energyefficiencyplatform

APPLIANCES AND EQUIPMENT

NEXT STEPSThe first step is to review and refine the proposal withglobal program sponsors and key stakeholders forpresentation to the SE4All Executive Committee (EXCOM).Given EXCOM approval, an ad hoc steering council wouldbe formed to complete detailed planning for the Platformand the recruiting of potential national governmentsto make commitments in 2014.

!ENERGY EFFICIENCYACCELERATOR

The Global Energy Efficiency Accelerator Platform is a partnership comprised of a large number of institutions, businesses and governments which include among others

Accenture, Asian evelopment Bank, European Bank for econstruction and evelopment, Inter-American evelopment Bank, I EI ( ocal Governments for Sustainability), International

opper Association, International Energy Agency, ohnson ontrols, hilips, UN , UNE , UN Foundation, World Business ouncil for Sustainable evelopment, World Bank (ES A ), World esources Institute.

ommunication material produced by UNE as a contribution to SE4A .

Accelerator_Industry6.indd 4 6/15/15 3:59 PM