THE BENEFITS OF ENERGY EFFICIENCY PROGRAMS

IN OMAN

Ideas to Impactswww.energetics.com

Eng. Ridah Sabouni, CEM, PMP, CMVP

Managing Director, Middle East & North Africa

Energy Efficiency: A Key Driver for Clean Energy Transition Executive Workshop

Muscat, Oman28-29 October 2018

Energetics at a Glance

Integrated delivery of technical, analytical, andcommunication services for over 39 years

Staff members include engineers, scientists, project managers, and communication specialists

• 30+ Subject Matter Experts:Advanced Manufacturing, Energy Management, Wind, Solar, Bioenergy, Battery Storage, CHP, Fuel-efficient Vehicle Technologies, Green Building Technologies, Smart Grid, Climate Change Adaptation, and Policy/Regulatory Affairs

• Over 50% with Advanced Degrees (Ph.D., J.D., M.S.)

• BS/BA Engineering/Science Degrees

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Key clients include• U.S. Department of Energy

• State of California• State of New York

• Clean Energy Ministerial

• GCC governments• Private sector clients

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ENERGETICS BUSINESS AREAS

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ENERGETICS SERVICE OFFERINGS

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Implementation &

Deployment

Evaluation &

Metrics

Outreach &

Communications

Strategy &

Roadmapping

Analysis &

Modeling

Private Clients

GCC Governments

WHY PRIORITIZE ENERGY EFFICIENCY IN OMAN?

• Climate Change: Devastating potential impacts on the GCC

• Business case: Energy efficiency is the lowest-cost energy source

• What is the rest of the world doing?

– 86% of countries surveyed are adopting national energy-efficiency programs with quantitative targets,

– 75% of countries have set up national energy efficiency agencies,

– 60% of energy efficiency programs have end-use sector targets (i.e. targets for residential, industry or transport sectors).

5Source: 2013 World Energy Council survey of 85 countries

ENERGY EFFICIENCY AS A DRIVER FOR JOB CREATION

• A city decides to spend $15M to improve EE in public buildings. $3M/yr savings expected. Jobs impact?

6Source: ACEEE https://aceee.org/files/pdf/fact-sheet/ee-job-creation.pdf

HOW?

• How can we implement smart Energy Efficiency policies?

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OMAN ENERGY BALANCE

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34%

53%

13%

Oman Energy Balance (2014 data)

Oil Products

Natural Gas

Electricity

Source: International Energy Agency, 2014 Oman Energy Balances

59%

7%5%

0%

3%

26%

Oman Energy Balance (2014 data)

Industry Residential

Commercial and Public Services Agriculture / Forestry

Non-Specified Transportation

• Electricity is important, but a comprehensive national energy efficiency plan needs to include natural gas measures

• Industrial sector is the largest end-use sector

SUBSIDIES AND ENERGY EFFICIENCY

• Subsidy reform and energy efficiency are mutually reinforcing:

– When you reduce/eliminate fuel and electricity subsidies… – …you create a stronger case for energy efficiency

• Subsidy reform is an opportunity to re-invest government savings from subsidy reform into new programs to help Omanis become more energy efficient

– Financial incentives, technical assistance, trainings, market setup assistance

– Must immediately put these programs in place to best assist/ease the transition for the impacted Omanis

• Oman Cost-Reflective Time-of-Use Tariff for large electricity consumers – ideal time to encourage and support increased energy efficiency 9

GLOBAL EE POLICY EXAMPLE: NEW YORK

CITY RETROFIT ACCELERATOR

• Target to create 17,000 green jobs by 2035 (to perform retrofits)

• Mandate to improve energy efficiency for all existing buildings over 2,300 m2 in size: focus on 14,500 of City’s least efficient buildings

• Buildings are required to improve technology + operating practices

• Flexible adoption time period for buildings to meet requirements: Over normal replacement cycle in the next 12 to 17 years

• Jobs created for energy managers, energy auditors, ESCOs, plumbers, electricians, engineers, architects, and energy specialists

10Source: http://bronxboropres.nyc.gov/2017/09/14/mayor-de-blasio-nyc-will-be-first-city-to-mandate-that-existing-buildings-dramatically-cut-greenhouse-gas-emissions/

https://retrofitaccelerator.cityofnewyork.us/

NYC RETROFIT ACCELERATOR:

CARROTS & STICKS

Technical/Financial Assistance

• City provides flexible financing options (PACE financing) + free technical support to building owners

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Annual penalties for non-compliance

• A 2,500 m2 building not meeting energy target needs to pay $60,000 (OMR 23,000) for every year in non-compliance, starting in 2030.

Carrots Sticks

Source: http://bronxboropres.nyc.gov/2017/09/14/mayor-de-blasio-nyc-will-be-first-city-to-mandate-that-existing-buildings-dramatically-cut-greenhouse-gas-emissions/

REGIONAL EE PROGRAM EXAMPLE: RAS AL KHAIMAH (UAE)

• Energy Efficiency and Renewables Office at Ras Al-Khaimah (UAE)

• Nine programs, with % reduction targets in place for each program:

1. Green Building Regulations (new buildings)

2. Building Retrofits (existing buildings)

3. Energy Management (in industry)

4. Efficient Appliances (appliance standards)

5. Efficient Street Lighting (existing + new lighting)

6. Water Reuse and Efficient Irrigation

7. Solar Programs

8. Energy From Waste

9. Efficient Vehicles

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RAK OFFICE OF ENERGY EFFICIENCY AND RENEWABLES OFFICE

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• Implementation Mechanisms & Enablers:

1. Awareness and capacity building

2. Financing mechanisms

3. Research and innovation

4. Information systems

5. Policy and regulation

RAK OFFICE OF ENERGY EFFICIENCY AND RENEWABLES OFFICE

• Timeline of program development

– Summer 2017: Senior RAK leadership buy-in

– Jul 2017: Efficiency and Renewables Office (REEM) established at RAK Municipality. Founding Director hired.

– Jan 2018: 3 additional FT staff hired to support program

– Oct 2018:

• Launch of Buildings Retrofit Program

• Voluntary Green Building Code released

• RAK Municipality pursues ISO 50001 (lead by example)

• Launch of efficient vehicle program

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CLEAR REPORTING AUTHORITY, DIRECTLY TO RAK RULER

15Source: RAK EE&R, WETEX presentation, October 2018.

RAK ENERGY EFFICIENCY AND RENEWABLE ENERGY STRATEGY 2040

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• Strategy in place, with actions for each program

• Regular strategy reviews

Source: RAK EE&R, Retrofit Program presentation, October 2018.

PROGRAM 2: ENERGY MANAGEMENT (IN INDUSTRY)

– Focus on energy audits and supporting ISO 50001 implementation in industry

17Source: RAK EE&R, Retrofit Program presentation, October 2018.

ISO 50001 IMPLEMENTATION PROJECT EXAMPLE IN OMAN

• Areej Vegetable Oils & Derivatives S.A.O.C (AVOD)

• Overall Savings since January 2018 (year-to-date):

• Natural Gas: 469,385 m3 (18%)

• Water: 19,384 m3 (11%)

• Electricity: 4,341,534 KWh (8.6%)

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KEY ENERGY EFFICIENCY POLICY TAKE-AWAYS

• Carrots & sticks are important (focus on carrots)

• Assign the responsibility of national energy efficiency to a single, central agency – it needs to be their sole job!

– Agency must be given a statutory duty and authority through a national energy efficiency law

– Agency should be responsible for…

• Developing national energy efficiency strategy and targets for all fuel types and across all sectors of the Omani economy –transportation, residential, industrial, commercial buildings, etc.

• Monitoring progress and assist other government agencies in the implementation of these programs

– With right governance structure, it can be done quickly!

– Some examples:

• USA: California Energy Commission (1976!), France: ADEME (1991), Dubai: Supreme Council of Energy, Taqati, RAK: Energy Efficiency and Renewables Office 19

THANK YOU ً شكرا

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www.energetics.comwww.linkedin.com/company/energetics

Ridah Sabouni, PMP, CEM, CMVP

Managing Director, MENArsabouni@energetics.com

+971 50 508 0525

BACKUP SLIDES

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ENERGY EFFICIENCY GLOBALLY

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Source: IEA Energy Efficiency 2018 Reporthttps://aceee.org/fact-sheet/jobs-investmenthttps://aceee.org/files/pdf/fact-sheet/ee-job-creation.pdf

OMAN ENERGY BALANCE

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SectorOil Products

Natural Gas Electricity

All Fuels

% of total

Industry 762 8,522 360 9,644 59%

Residential 172 0 1,028 1,200 7%

Commercial and Public Services 0 0 747 747 5%

Agriculture / Forestry 0 0 29 29 0%

Non-Specified 370 163 0 533 3%

Transportation 4,204 0 0 4,204 26%

Total 5,508 8,685 2,164 16,357 100%

% of total 34% 53% 13% 100%

Source: IEA, 2014 Oman Energy Balances

Units: thousand tonnes of oil equivalent

CEBC ENERGY EFFICIENCY WORKING GROUP

• Energy Efficiency Working Group: http://cebcmena.com/whatwedo/EEWG/

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GCC TOTAL FINAL ENERGY CONSUMPTION, 2015

Source: http://cebcmena.com/whatwedo/gcc-energy-consumption/

CEBC ENERGY EFFICIENCY WORKING GROUP

• Energy Efficiency Working Group: http://cebcmena.com/whatwedo/EEWG/

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GCC ELECTRICITY CONSUMPTION, 2015

Source: http://cebcmena.com/whatwedo/gcc-energy-consumption/

CEBC ENERGY EFFICIENCY IN THE GCC: STATUS AND OUTLOOK WHITE PAPER

• Energy Efficiency Working Group: http://cebcmena.com/whatwedo/EEWG/

• Download white paper: http://cebcmena.com/wp-content/uploads/2018/03/CEBC-Energy-Efficiency-in-the-GCC-January-2018-REV2.pdf

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CURRENT GCC ELECTRICITY TARIFFS: RESIDENTIAL SECTOR

27http://cebcmena.com/whatwedo/gcc-residential-tariffs-latest/

CURRENT GCC ELECTRICITY TARIFFS:

INDUSTRIAL, GOVERNMENT & COMMERCIAL SECTORS

28http://cebcmena.com/whatwedo/gcc-commercial-industrial-tariffs-latest/

GLOBAL POLICY EXAMPLE: NEW YORK CITY RETROFIT ACCELERATOR

29Source: https://retrofitaccelerator.cityofnewyork.us/

• In 2009, New York City enacted a comprehensive effort, called the Greener, Greater Buildings Plan (GGBP), help ensure that information about energy is provided to building decision-makers and that the most cost-effective energy efficiency measures are pursued. GGBP consists of four regulatory pieces that include:

• Local Law 84 of 2009, which requires owners of buildings that are greater than 50,000 square feet in floor area to measure, or “benchmark,” the energy use of these buildings annually and disclose this information to the City.

• Local Law 87 of 2009, which requires owners of buildings that are greater than 50,000 square feet in floor area to complete an energy audit and retro-commission building systems once every 10 years and submit the results to the City through an Energy Efficiency Report.

• Local Law 88, which requires owners of non-residential buildings greater than 50,000 square feet to upgrade lighting to meet current New York City Energy Conservation Code standards and install energy sub-meters in all non-residential tenant spaces greater than 10,000 square feet by 2025.

LEVELIZED COST OF ELECTRICITY (2017)

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Source: https://aceee.org/fact-sheet/jobs-investmenthttps://aceee.org/files/pdf/fact-sheet/ee-job-creation.pdf