Energy Efficiency: Role in Sustainable Access in the Asia Pacific Region

Amit Bando, Executive Director

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What is IPEEC?

IPEEC: High-level International Forum

Providesglobal leadership on energy efficiency by identifying and

facilitating government implementation of policies and programs that yield high energy efficiency gains.
Promotes information exchange on best practices and facilitates

initiatives to improve energy efficiency.

Reports to G20 Summit, Clean Energy Ministerial and others. Partners with industry to promote rapid deployment of energy

efficient technology.
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IPEEC is an Autonomous Entity

Members account for over 75% of world GDP and energy use
European Union United Kingdom France Canada USA Mexico Brazil Japan Republic of Korea China India Australia Germany Italy Russia

Established in 2009 at the G8 summit in L'Aquila, Italy. The IPEEC Secretariat is located in Paris, France.
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Energy Efficiency: More Than Just Energy Savings

Government Action to Promote Energy Efficiency
Sustainable Development: Enhanced Energy Access Climate Change Mitigation: Reduced GHG Emissions Energy Security: Reducing Energy Use

Low Carbon Economy

Improved air quality Jobs created Lower energy cost
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Definitions of Energy Efficiency Potential

National Action Plan for Energy Efficiency (2007). Guide to Resource

Planning with Energy Efficiency. Prepared by Snuller Price et al., Energy and Environmental Economics, Inc. p. 2-2. <www.epa.gov/eeactionplan>
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Context

Urbanization
Between 2005-2010, urban

population overtook the rural population rising from 49% to 51%

By 2030, a majority or 2.7 billion

Urban population, Asia-Pacific subregions, 1990 and 2010

people will live in cities and towns equivalent to adding a new town of 137,000 people every day for next 21 years!
In the last two decades the Asia-

Pacific urban proportion has risen by 29% more than any other region

Source: Statistical Yearbook for Asia and the Pacific 2011, UNESCAP 7

Energy Intensity
Today, Asia covers the lions share

of the worlds primary energy consumption Between 2007 and 2030, the region is projected to account for 45-50% of the increase in world primary energy demand
Non-OECD Asian nations will lead

Global Primary Energy Intensity (2009)

industrial energy demand by an average of 2.3 to 2.6% per year projected annual growth in OECD nations of 0.5% / year

Energy Access
Worldwide, 1.4 billion do not have access to electricity

Almost 800 million in Asia-Pacific By 2030, 1.2 billion people globally are expected to remain without electricity most of them in sub-Saharan Africa and South Asia

Worldwide, 2.7 billion people rely on traditional use of biomass for cooking

Almost 2 billion in Asia-Pacific In Asia-Pacific, the number of people using biomass is likely to decrease from the current 1.937 billion to 1.769 billion

Global energy needs are estimated to grow > 50%

developing countries contributing to nearly th of this increase

To meet the target of achieving universal access to modern energy services by

2030, investments of US$ 756 billion (or US$ 36 billion per year) is needed (Source: Energy Plus Report, UN, 2012)
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Energy Efficiency Trends in the Asia Pacific Region

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Energy Intensity Trends

Global energy intensity has decreased by 1.4% p.a. since 1990 Largest reductions found in the regions with the highest energy intensities

(China, CIS and India) Industry and power generation accounted for almost of that reduction (about 30% and 15%, respectively)
Per capita energy consumption to 2030 is likely to grow at about the same rate

as in 1970 - 90 (0.7% p.a.)

Energy per unit of GDP continues to improve globally, and at an accelerating

rate This acceleration is important as restrains the overall growth of primary energy. Ex: During the 11th Five Year Plan in China, through various EE initiatives, energy consumption grew at an annual average of 6.6% compared to average annual growth rate of 11.2% for the national economy

Energy Efficiency Regulatory Trends Globally

BUILDINGS A EU Directive on the energy performance of buildings (2009) harmonised standards for new buildings, making mandatory buildings certificates for the sale or rent of dwellings
In most countries, standards exist for
Regions with efficiency standards on new buildings

both dwellings and service sector buildings, except in Africa and in Asia where most often standards only apply to non-residential buildings
Source: WEC Survey, 2010

Energy Efficiency Regulatory Trends Globally - 2

LABELLING AND APPLIANCE STANDARDS EU has mandatory labelling for several electrical appliances In OECD Asia and America, about 70% of the countries have implemented labels for refrigerators In Africa, the Middle East and non-OECD Asia, labels are not widespread: they exist for refrigerators in less than 20%

Source: WEC Survey, 2010

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Energy Efficiency Market Penetration

Energy efficiency firms attracted nearly $1.1 billion in

venture capital in 2010, almost double that of 2007.* LIGHTING: LED is the fastest growing market at a CAGR of 14.9% from 2011 to 2016

Asia will witness the highest growth (CAGR of 16.6%)

BUILDINGS: EE market $87.0bn in 2012 GREEN IT: Cloud computing revenue to continue worldwide

growth at a compound annual growth rate (CAGR) of 28.8%

Market increase: US$46 billion (2009) to US$210.3 billion (2015) EE measures could drive total data center energy expenditures down from $23.3 billion in 2010 to $16.0 billion in 2020 (28% reduction in GHG emissions from 2010 levels)
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Energy Efficiency Financing Trends

Energy Efficiency & Renewable Energy deal value rose 40% year on year in

2011 The rise was fuelled by a big increase in US$1bn plus deals - almost all from a wave of solar, EE and wind power deals Rebounded in 2010 off the 2009 low of 319 Median deal value rose 25% year on year, from US$28.1m to US$35.2m

The total number of 2011 deals dipped 6% year on year but still high at 570

Increased deal value is not just coming from the largest deals

Asia-Pacific targets accounted for US$4.6bn but Asia Pacific buyers

completed US$9.4bn of transactions in 2011 Just under half of this bidder total was accounted for by the two big European purchases by Toshiba and China National Bluestar.

Energy Efficiency Financing Trends

Asia Pacific deals by sector

Source: Final Renewables Deals 2012 Outlook 2011 Review, PwC.

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ESCOs
The ESCO industry in Asia Pacific is poised to grow

From $3.0 billion in annual revenue in 2009 to $18.5 billion by 2016 421% increase from 2010 levels

Example: Despite not even being operational until 1998, annual revenues for Chinas ESCO industry to reach $17 billion by 2015, increasing its share of the APAC regional market to over 90% (Source: Pike Research).

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Sectoral Performance: Selected Overview

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Zero Energy Buildings (ZEB)

ZEB market remains a small fraction of the overall building

construction industry

Technologies required to make zero energy buildings possible,

add significant upfront cost

Worldwide revenue from ZEBs will grow rapidly over the next two

decades, reaching almost $690 billion by 2020 and nearly $1.3 trillion by 2035 (Annual growth rate of 43% - mostly in the EU).

EUs Energy Performance of Buildings Directive (EPBD) will require near ZEB construction in public buildings by 2019 and in all new construction by 2021.

Lighting
Sales of LED lighting systems will increase rapidly over the next 10

years, accelerating sharply after 2015 Unit shipments (lamps & luminaires) will rise from 66 million in 2011 to 542 million in 2021 a 700% increase Translating into cumulative revenues of $11 billion from 2011 through 2021 for LED lighting in Asia Pacific Japans 21st Century Light Project; Chinas commitment to LED is enormous ex: Shenzhen plans to install LEDs in more than 90% of public lighting applications, street lighting, and commercial spaces in the next decade.

Motors
Account for 60% of industrial electricity consumption and about 15% of final

energy use in industry worldwide (IEA 2007) Endusers now spend USD 565 billion per year on electricity used in motors; by 2030, that could rise to almost USD 900 billion* Electronic motor controls that allow for variable speed drives (VSD) have good market potential By 2030, if BAU, energy consumption will rise to 13 360 TWh per year and CO2 emissions to 8 570 Mt per year Using the best available motors will typically save about 4% to 5% of all electric motor energy consumption Linking these motors with electromechanical solutions that are costoptimised for the enduser will typically save another 15% to 25% The potential exists to costeffectively improve energy efficiency of motor systems by roughly 20% to 30% Would reduce total global electricity demand by about 10%

Smart Meters
In 2008, less than 4% of the global installed base of 1.5

billion electricity meters could be considered smart 4 years later this penetration has grown to over 18%, and is expected to exceed 55% by 2020 The North American market has already peaked European market has begun its growth period
The Asia Pacific region will continue to outpace all other

regions driven by major deployments in China, utilizing a different breed of smart meter technology

Green Data Centers

Consume around 1.5% of the worlds energy Annual market opportunity exceeds $45 billion worldwide by 2016

The Asia Pacific region is projected to have the highest revenue growth through 2016

Compound annual growth rate (CAGR) of just under 30% (2011 2016)

Double-digit revenue growth is also projected for Europe and NorthAmerica (CAGRs of almost 27% for both markets)

If BAU continues, GHG emissions will be 1326 million tons of CO2e

Best practices could reduce that by 13%

Energy Efficiency Planning in Asia-Pacific

Strengths
Increases sustainability Increases energy security Creates of market leader Increases energy access

Weaknesses
Cost of investments Lack of skilled personnel Lack of consumer awareness on need for Energy Efficiency Weak in-country R & D

Opportunities
Increased value and lifespan Investment relief (tax) Market for new innovations Socio-economic co-benefits Competitive advantage

Threats
Rebound effect (effort does not reduce energy consumption as planned) Fall in energy prices leading to expensive conservation

Moving Forward
Governments need to commit by: Providing an overarching policy framework combining mandatory and voluntary policies and strengthening enforcement Promoting greater awareness of EE Playing an essential role as integrator of the value chain Establishing funding mechanisms to jump-start EE financing Particularly in the short term Institutionalizing standard-selling & enhancing professionalism within the industry by creating proper accreditation & certification standards Publicizing accurate information about EE product suppliers and ESCOs Removing/rationalizing other barriers that distort markets Such as energy subsidies

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Moving Forward - 2
And Businesses need to Move towards an integrated value chain approach where suppliers extend their service portfolio to offer complete solutions (auditing, installation, maintenance and financing solutions) Develop innovative financing vehicles for EE projects by collaborating with financial institutions & develop expertise in EE project financing Increase awareness of EE and enhance industry professionalism Adopt a more active role in promoting EE and in professionalizing the industry from within by setting standards and benchmarks energy suppliers and ESCOs can lead effort Bring in the best practices from experiences in other countries multinationals can act as catalysts

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Thank You!
Please contact us for further details: Amit Bando: amit.bando@ipeec.org Tel: + 33 (0) 1 40 57 65 24

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