The energy efficiency potential for cost-effective GHG reductions worldwide: issues and barriers

Slide 1The energy efficiency potential for cost-effective GHG reductions worldwide: issues and barriers
Paul Waide, PhD
CDM Methodologies and Technical Issues Associated with Power Generation and Power Saving Project Activities
INTERNATIONAL ENERGY AGENCY
What’s Energy Efficiency Done for Greenhouse Gas Abatement?
Sector Intensities and Total Economy Effect, IEA-11
Energy intensity declines have slowed in all sectors since the late 1980s
Changes in energy/GDP decomposed
intensity effect, 1973-1998
Energy/GDP
Actual Energy Use and Hypothetical Energy Use Without Intensity Reductions, IEA-11
Without 25 years of energy savings, energy consumption would have been almost 50% higher
Is it real?
Public Interest Energy Strategies –CEC #100-03-12F
0
5,000
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1975
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GWH
Utility Programs: at a cost of ~1% of Electric Bill
Building Standards
Appliance Standards
Impacts: US vs. CA electricity use
Denmark: gross energy
demand by fuel: 35% GDP growth but energy use is slightly lower
From 1980 to 2003, there has only been a very small change in national energy consumption and from 1990 to 2004, adjusted national energy consumption increased by a mere 2.6 percent.
However, over the same period GDP grew by 32 percent, which means that every unit of GDP in 2004 required 22 percent less energy than in 1990.
Is it real?
United States Refrigerator Use (Actual) and
Estimated Household Standby Use v. Time
0
200
400
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Refrigerator Use per
Energy
350
Actual consumption will
Further information is contained
Refrigerator Label Directive 94/2/EC
Can produce major market transformation: e.g. refrigerators in EU
Average efficiency index for al
April 2003
April 2003
A+
A+
A+
A
A
A
B
B
B
C
C
C
D
D
D
E
E
E
F
F
F
G
G
G
AGENCE INTERNATIONALE DE L’ENERGIE
From random to order: products are now designed to meet discrete efficiency bands
Global CO2 Emissions in the IEA
2004 World Energy Outlook Scenarios
CO2 emissions are 16% less in the Alternative scenario in 2030,
a reduction of about 6 Gt of CO2
Source: WEO 2004
With the implementation of reasonable policies – most of which are currently in discussion but not implemented - and without assuming major technological breakthroughs, we could start bending the curve of global CO2 emissions.
And the cost need not be high – to the contrary.
Contributory Factors in CO2 Reduction, 2002-2030
Improvements in end-use efficiency contribute for more than half of decrease in emissions, and renewables use for 20%
0%
20%
40%
60%
80%
100%
49%
10%
8%
12%
21%
OECD
63%
1%
21%
15%
5%
10%
20%
How would these striking reductions come about?
The majority would come from energy efficiency measures, that would pay for themselves, and also help reduce our global energy investment needs : in spite of higher use of renewables and nuclear, the Alternative scenario would require less overall investment in energy systems.
It would also contribute to improving the energy security of all countries.
Difference in global electricity investment in the Alternative vs. Reference Scenario
2003-2030
Additional investments on the demand side are more than offset by lower investment on the supply side
-2 000
-1 500
-1 000
Consider a refrigerator: simple technical solutions exist
Q
i
Example: Tunisian 1-door refrigerator
(useful volume = 220 litres, electricity consumption = 299 kWh/year)
Residential electricity consumption scenarios in IEA countries 1990-2030
-35%
Global lighting electricity use: no-policies, current-policies and LLCC-scenarios
Benefits from least life cycle cost
compared to current policies
Implementing the LLCC scenarios would:
reduce OECD residential electricity demand by 35% and avoid 525 Mt-CO2 emissions in 2020 at a net cost of:
-$66/Tonne-CO2 in OECD-North America
-169 Euro/Tonne-CO2 in OECD-Europe
reduce global lighting electricity demand by
US$156 billion and 971 Mt CO2 in 2030 at a net cost of:
-US$158/Tonne-CO2 globally
So why doesn’t the market deliver
cost-effective savings autonomously?
Missing or partial information on EE performance and lack of common metrics
Lack of awareness re cost-effective savings potentials
Split incentives: Landlord-Tenant issue
EE is bundled-in with more important capital decision factors
All result in emphasis on 1st not Life-cycle costs
But what about free-riders?
Waide’s 2nd Law of Energy Efficiency:
for every free-rider there is an at least as equal, but opposite free-driver (spillover)
And the rebound effect?
It exists but is rarely large (energy service expenditure is not hypothecated and is a small proportion of GDP)
treat by applying some simple adjustment factor (e.g. say 5% for refrigerators and 50% for space conditioning)
But what about free-drivers?
Lamp costs = 2.5 Euro to 12.5 Euro
(product price from 750 Euro to 815 Euro)
Note: lifetime HPL=3yr and HPS=4yr
Energy consumption from 548 kWh to 328 kWh = 40% less CO2 emissions
Life cycle costs from 2861 Euro to 2266 Euro
Benefit to cost ratio = 9.2
Simple payback less than 3 years
BUT Mercury Vapour outsell High Pressure Sodium!!!
Low first cost rules!
Switch
Could CDM finance
high efficacy street lights?
How do we know they wouldn’t have installed HPS anyway? Be conservative: only allow 50% of savings benefits to be counted
First year incremental cost is 75 Euro per lamp (110 Euro/20yr)
CO2 savings of from 2.5 to 5 tonnes per lamp (depend on fuel mix) but only credit 1.25 to 2.5 tonnes in calculation
100% abatement cost = 40 to 80 Euros/tonne (at 50% CER)
Energy bill savings = 250 to 750 Euro per lamp (depends on tariff)
If CER cost too high let CDM pay the first cost increment, but then be repaid through the bill savings
CDM loans 75 Euro per HPS lamp. Energy bill savings used to pay back loan within from 2 to 7 years (depending on tariff)
Municipality has a net benefit of from 154 to 682 Euro per lamp
Conclusions
Energy efficiency presents a huge under-exploited cost-effective GHG saving opportunity
It merits being the single greatest focus of GHG abatement strategies in near-term
If mined effectively it allows economic growth with net reductions in GHG emissions in developed economies and much slower growth in GHG emissions in rapidly developing economies
CDM has to make EE projects a major focus
How can the CDM manage EE?
Purity vs. action? – the potentials are so big, the costs are so low and the needs so high that action must be the near term priority – CDM needs a fast track to EE project approval
How could this be done?
Compartmentalise – identify narrower groups of clear win-win categories of EE projects, set rules and invite project submissions on a fast track (guidance, speed and certainty are paramount for would be applicants)
Simultaneously, work on widening the project categories and developing the appraisal methodologies
Allow project submissions outside the above framework on a slower track
AGENCE INTERNATIONALE DE L’ENERGIE
EE, CDM and Policy Environment
Recognise that EE works best if the measures are supported by an unambiguous and comprehensive policy framework
E.g. effective energy labels give market visibility and a common performance benchmark to efficient products, this creates the environment where a CDM project might support the manufacture of such products and the benefits can be both leveraged and more easily determined (the base-case is clearer)
The same can be said of buildings, vehicles, industrial processes etc.
This implies a need for coordinated work between CDM and other UNFCCC programmes and instruments to support development of a favourable international policy environment for EE
Contacts and more information
Or contact:
Energy/GDP
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KWh
12,000
8,000
7,000
California
U.S.
kWh
0
300
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1980'82'84'86'88'90'92'94'96'98'00'02
PJ
20 000
25 000
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40 000
0: Modele de base
et 6 mm vers le refrigerateur (vol constant)
2+ ajoute isolation : +12mm vers le congelateur
et 6 mm vers le refrigerateur (vol constant)
3+ compresseur 16% plus eff. (COP 1.18)
4+ substitution d'un condenseur
a 60cm x 60cm (vol constant)
6+ compresseur VSD 32% plus eff. (COP 1.56)
0+ optimise debit de la capillaire et +30mm
isolation vers la niche

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The energy efficiency potential for cost-effective GHG reductions worldwide: issues and barriers

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