4. IPEEC is an
Autonomous Entity
3
Established in 2009 at the G8 summit in Italy; Reports to G20, Clean
Energy Ministerial & others
Facilitates Rapid Deployment of Clean Technologies Worldwide
The IPEEC Secretariat is located in Paris, France
Members account for over 80% of world GDP and energy
use.
Italy
Russia
Japan
Republic of
Korea
China
India
Australia
Germany
United
Kingdom
France
Canada
USA
Mexico
Brazil
EU
South
Africa
6. More Than Just Energy
Savings
5
Government Action to Promote Energy Efficiency
Climate Change
Mitigation:
Reduced GHG
Emissions
Sustainable
Development:
Enhanced Energy
Access
Energy
Security:
Reducing
Energy Use
Low Carbon Economy
•Improved air quality
• Jobs created
• Lower energy cost
7. Global additional investment
by end-use sector
Transport
0
200
400
600
800
1 000
1 200
2015 2020 2025 2030 2035
Services
Residential
Industry
Billiondollars(2011)
Additional investments required in end-use efficiency are $11.8 trillion over
2012-2035; saving consumers $17.5 trillion in energy expenditures in this period
(Source: IEA)
The Efficient World Scenario relative to the New Policies Scenario
8. Power generation
Industry
Transport
Other
Room to manoeuvre
The Efficient World Scenario
Delays Carbon Lock-in
Energy efficiency can delay “lock-in” of CO2 emissions permitted under a 2°C
trajectory – which is set to happen in 2017 – until 2022, buying five extra years
5
10
15
20
25
30
2011 2015 2020 2025 2030 2035
Gt
2 °C trajectory
Lock-in of existing
infrastructure
2017
Lock-in of infrastructure
in New Policies Scenario
in 2017
2022
35
Lock-in of infrastructure
in Efficient World Scenario
in 2022
9.
10. Barriers to Energy Efficiency
Barrier Examples
Market Market organisation and price distortions prevent customers from appraising
the true value of energy efficiency.
The principal agent problem, in which the investor does not reap the rewards
of improved efficiency (the classic case being the landlord-tenant situation).
Transaction costs (project costs are high relative to energy savings).
Financial Up-front costs and dispersed benefits discourage investors.
Perception of EE investments as complicated & risky - high transaction costs.
Lack of awareness of financial benefits on the part of financial institutions.
Information and
awareness
Lack of sufficient information and understanding, on the part of consumers,
to make rational consumption and investment decisions.
Regulatory and
institutional
Energy tariffs that discourage EE investment (such as declining block prices
and fuel subsidies).
Incentive structures encourage energy providers to sell energy rather than
invest in cost-effective energy efficiency.
Institutional bias towards supply-side investments.
Technical Lack of affordable energy efficiency technologies suitable to local conditions.
Insufficient local capacities to identify, develop, implement and maintain
energy efficiency investments.
12. Urbanization
Between 2005-2010, urban
population overtook the rural
population
rising from 49% to 51%
By 2030, a majority or 2.7 billion
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
11
Urban population, Asia-Pacific subregions,
1990 and 2010
Source: Statistical Yearbook for Asia and the Pacific 2011, UNESCA
13. Energy Intensity
Today, Asia covers the lion’s
share of the world’s 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 industrial energy demand
by an average of 2.3 to 2.6%
per year
projected annual growth in
OECD nations of 0.5% / year
12
Global Primary Energy Intensity (2009)
14. 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 ½ 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
16. Energy Service
Companies (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 China’s ESCO industry to reach $17
billion by 2015, increasing its share of the APAC regional
market to over 90% (Source: Pike Research).
18. IPEEC Clears Roadblocks to
Successful EE Financing
Critical financial and market roadblocks that need to be addressed:
Fixed cost of lending incentivizes banks to focus on large corporate
loans.
Information asymmetry between banks and borrowers:
Adverse selection: Average pricing will attract risky borrowers and turn away
attractive borrowers;
Moral Hazard: Risky behavior as borrower knows that bank has imperfect
oversight.
Lack of credit bureaus & clear credit history increases risk-assessment costs.
Inadequate knowledge and experience with the product .
Inefficient price signals – consumption disconnected from cost.
Network of contractors & suppliers unavailable or inexperienced.
19. 18
IPEEC is your partner.
Thank you!
Any questions? Please contact:
Amit.Bando@ipeec.org
contact@ipeec.org
9 rue de la Fédération
75739 Paris
France
Editor's Notes
7
EE improvement is often hampered by market, financial, information, institutional, and technical barriers.
According to survey and interviews, while consumer awareness and low energy prices are two major barriers to EE commonly mentioned worldwide, the lack of affordable financing and the perceived riskiness of EE ranked especially high in the EBRD region.
EE policy doesn’t deliver
EE savings exist, but in small pockets trapped beneath the these barriers rather than beneath the earth’s surface.