Road map-for-energy-efficiency-conservation oicci

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  • 1.Page1 AROADMAPFOR ENERGYEFFICIENCY& CONSERVATION INPAKISTAN APositionPaperpreparedbyOICCIEnergySubcommittee

2. AROADMAPFORENERGYEFFICIENCYANDCONSERVATIONINPAKISTAN Page2 Acknowledgements: a) ProgasPakistanLimited b) PakistanPetroleumLimited c) Mr.JavedAkbar d) Mr.MuqtadarQureshi,ChevronPakistan e) Mr.UbaidurRahman,ChevronPakistan f) Mr.SarfrazNadir,InternationalPower g) Mr.AbbasBilgrami,ProgasPakistanLimited ResourceMaterial: a) ExxonMobilOutlookforEnergy2030 b) BPGlobalEnergy c) NewZealandEnergyStrategyMinistryofEnvironment d) IntegratedEnergyPlan,DepartmentofMinesandEnergy,SouthAfrica e) IntegratedEnergyPlan20092022,MinistryofFinance,GovernmentofPakistan f) HardTruths,NationalPetroleumCouncil,USA g) CaribbeanYouthEnvironmentNetwork h) PossibilitiesforEnergyConservation100tipsforDaytoDayLife,M.U.Borekar,V.S.Sapkal,R.S. Sapkal 3. AROADMAPFORENERGYEFFICIENCYANDCONSERVATIONINPAKISTAN Page3 TableofContents 1. ExecutiveSummary ............................................................................................................... 04 2. ThePurposeofPreparingthisDiscussionPaper................................................................... 07 3. TheSituation:Locally&Internationally ................................................................................ 09 4. Efficiency:reducingdemandgrowth..................................................................................... 12 5. Growingglobaldemand ........................................................................................................ 15 6. Residential/commercialdemand .......................................................................................... 16 7. TheImportanceofEnergyEfficiencyandEnergyConservation ........................................... 19 8. ThePakistanEnergyEfficiencyandConservationStrategy .................................................. 20 9. TheProgressWeCanMake................................................................................................... 22 10. OurActions............................................................................................................................ 23 11. PromotingEnergyEfficiency ................................................................................................. 25 12. Conclusion ............................................................................................................................. 28 APPENDIX1................................................................................................................................... 29 APPENDIX2................................................................................................................................... 33 APPENDIX3................................................................................................................................... 34 4. AROADMAPFORENERGYEFFICIENCYANDCONSERVATIONINPAKISTAN Page4 EXECUTIVESUMMARY Introduction The Sub Committee on Energy under the auspices of the OICCI (the Chamber) has been empowered to produce a Position Paper on Energy Efficiency and Energy Conservation in Pakistan. Key drivers are to develop a document that is not only simple to understand but whichisalsoaccompaniedbyrecommendationsforeffectivegovernanceandimplementation onacountrywidescale.Thedocumentconsidersboththemacroandmicrolevelperspectives ofenergyusageinPakistanandproposesaroadmapthatprovidestheopportunitytomake quickwinsaswellaslaysdownmediumtermandstrategicgoalswhichlookattheregulatory framework,infrastructure,publicoutreach,fiscalpolicyandeducation. TheManagingCommitteeoftheChamberandallmembersareinvitedtodebateandsupport theproposalsoutlinedinthispaperwithaviewtoultimatelymakingrecommendationstothe GovernmentofPakistan. TheSituation From1980tillpresentday,thedemandforenergyinPakistanhasgrownalmostsixfoldandit isestimatedthatitwouldagaindoubleby2015.Withaninordinatelysignificantdependence on hydrocarbons as its primary energy source, the situation is not sustainable. The state of affairsisnothelpedbyagrowingpopulationwithalowmedianage,lowpercapitaenergy consumptionyethighenergyintensityandarecentboomincheapbutenergyhungryhome appliances.Contrarytothissituation,energydemandindevelopedeconomiessuchasOECD (OrganisationforEconomicCooperationandDevelopment)memberstatesisactuallyexpected to be lower in 2030 versus 2005 levels, despite amore than 50% projected growth in their economies.Thiswouldonlybepossibleduetosignificantadvancementsinenergyefficiencyin thesecountriesandPakistanwouldbenefitfromthestudyoftheirmodels. For Pakistan, the continued dependency on bio mass and petroleum products could have disastrous consequences in the short to medium term. Assuming current global oil prices remain unchanged, Pakistans import bill for its energy needs could easily exceed an unaffordableUS$40billioninthenextdecadeorso.Theexistingenergyinfrastructureisalsoin a desperate need of an upgrade: transmission and distribution is inefficient, major water reservoirsarelosingcapacityandthecurrentpricingstrategyprovidesnumerousopportunities forarbitragewhichcreateanexpensiveimbalanceintheenergymix. Pakistanalsolagsfarbehinditspeergroupintermsofrelyingoncoalasaresourceforits energyneeds,despitehavingnumerousprovencoalreserveswithinitsterritories.Pakistanhas agenerallymildtowarmclimate,alargeareaandcoastlineaswellasnumeroussourcesof fresh water, all of which provide excellent opportunities for exploiting alternative and renewable energy sources. Unfortunately Pakistan has yet to take full advantage of these bountiesofnature. 5. AROADMAPFORENERGYEFFICIENCYANDCONSERVATIONINPAKISTAN Page5 EfficiencyLeadstoSustainability Pakistanlikeotherdevelopingcountriesisexpectedtodoubleitsdemandforenergyevery12 years. NonOECD electricity demand is expected to be responsible for 80 percent of total growthinelectricitydemandthrough2030.Atthattime,electricpowergenerationwouldstill accountforthebiggestshareinprimaryenergydemandwithcoalasthemainfuel.Inaworld thatiscontinuouslybecomingmoreenergyefficient,Pakistansrelativeinefficiencyisevident throughitshighenergyutilizationperunitofDollarGDP.Rapidlydepletingnaturalresources and climate change awareness will result in tougher global legislation on how countries consumeenergyresources.Pakistancanreduceemissionsbyincreasingefficiencyindaytoday operations, using new energy efficiency technologies and by reducing flaring and venting of hydrocarbonsintheE&Psector.TheChambercanplayavitalroleinmakingnewindustrial technology accessible to the public to also enable the end consumer to reduce energy consumption. This is important because whilst about 10 percent of petroleum related greenhousegasemissionsarefromindustryoperations,90percentarefromconsumeruseof petroleumsuchastransportation,includingairtravel. AsmallconsolationisthatcurrentlyenergyconsumptioninPakistanpercapitaremainsvery low,butinthatalsoliesthepotentialforrapidgrowthwhichcannotbesustainedifwedonot havereliable,cleanandeconomicalsourcesofenergy. TheWayForward ThekeyissuesPakistaniscurrentlyfacedwithregardingitsenergyneedsareinefficientenergy utilization, the indiscriminate use of subsidies, lack of public awareness, ineffective or unenforced legislation, poor governance and under developed infrastructure. In order to provide the necessary strategic and operational impetus, the government should consider makingenergyefficiencyandenergyconservationkeythemesintheIntegratedEnergyPlan 20102025andthe10thFiveYearPlan.ThispaperproposesthecreationofaMinistryof Energy tasked with facilitating investment in energy efficiency measures and maintaining Pakistanssecurityofenergysupply.TheMinistrycouldassistinthedevelopmentofasound nationalenergyconservationandenergyefficiencypolicyinfrastructure.Thiswillincludethe regulatoryframework,buildingcodesandeducationalprogrammes. The concept of using smart technology, coupled with smart consumer behaviour must be instilledintothenationbythegovernmentthrougheducation,sensiblepricingandthrough incentivizing consumers. The Chamber should lead by example and demonstrate how it has usedtheseprinciplestoconserveenergy.ThemultinationalmembershipoftheChamber,many of whom are global corporations having extensive presence in all corners of Pakistan, is especiallywellplacedtoaddasubstantialpushtosuchinitiatives.Itisthereforenosurprise thatby2030energysavedthroughimprovedefficiencyispredictedtobesosignificantthatit wouldbecomeanimportantfuelinitsownright.AdevelopingnationlikePakistanwouldfind itmorecosteffectivetoincreaseitsenergysupplythroughefficiencyandconservationefforts ascomparedtobuildingnewgenerationcapacity.Thereareotherbenefitstobehadaswell, 6. AROADMAPFORENERGYEFFICIENCYANDCONSERVATIONINPAKISTAN Page6 forexampleimprovedbuildinginsulationcanmakepeoplehealthier,reduceheatingcostsand reductioninenergyrelatedgreenhousegasemissions,andeaseenergysupplyconstraintsin winter. Conclusion Anationdoesnotbecomeenergyinefficientovernight;itisaslowprocessthatisinfluencedby amultitudeofsocial,political,financialandeconomicconsiderations.Whilealargenumberof barriershavetobeovercomeinthedrivetowardsenergyefficiency,itisquitepossibletomake meaningfulgainsinarelativelyshorttime.Providedthatthereiscompletealliancebetweenall stakeholders(whichinthiscaseincludeseveryone),itisestimatedthatby2015therecouldbe energysavingsofalmost20%inPakistansoverallenergyconsumption. This paper proposes that the Chamber, in collaboration with its members and business partners,developsanEnergyEfficiencyandEnergyConservationProgrammethatfocuseson providingthepeopleofPakistanwithreallife,simpleandtangiblewaystosaveenergy. Naturally, the government would need to play a leading role in setting up accurate pricing policies,deviseandenforceminimumenergyperformancestandards,incentiviseinvestmentin energy efficiency measures and increase overall public education and awareness on the importance of energy efficiency and conser