Presentation by Dr. Nicholas Howarth, Research fellow, KAPSARC

1. Energy productivity as a new
paradigm for sustainable energy
transitions
4th Arab Forum for RE and EE, Kuwait, May 2018
nicholas.howarth@kapsarc.org

2. 2
Presentation Overview
1. Energy productivity: A new
concept with energy efficiency
and diversification at its heart -
enhancing value from energy
consumption economically,
socially and environmentally.
2. Some findings from KAPSARC-
UNESCWA report
3. Critical policy questions for
discussion

3. 3
Energy productivity is a new policy paradigm for realising energy transitions through
energy efficiency, structural reform and other energy and climate policies
Improving energy efficiency
– or energy productivity –
is a key pillar of
Sustainable Development
Goal 7. It is also a key
foundation of Sustainable
Energy for All’s work.

4. 4
KAPSARC-UNESCWA report: Towards a more sustainable growth model for KSA
Answer
Increase energy productivity:
the value society gets from
energy consumption
KAPSARC workshop series
KAPSARC discussion and academic papers
1. How to achieve economic prosperity through industrial
energy productivity improvement
2. Energy productivity as a new growth paradigm in the GCC
3. Global shift: The energy productivity transformation
4. Energy productivity: From policy goal to reality
5. Energy Productivity Aligning global agendas
6. Measuring the energy intensity of nations: Towards a
framework for transparent comparison
1. Energy productivity as a growth model for GCC countries
2. Energy productivity in the GCC: Evidence from a Kuznets curve
analysis
3. Evaluating building energy efficiency options for Saudi Arabia
4. Impacts of energy efficiency on growth and welfare across
generations in Saudi Arabia
5. Investing for energy productivity in the GCC: Financing the
transition
6. Growth investment and the low carbon transition: A view from
Saudi Arabia
7. Economic development and energy consumption in the GCC: An
International sectoral analysis
8. Energy pricing in Gulf countries: Explicit subsidies or forgone
revenues?
Question
How can the Kingdom’s
energy policy best support
Saudi Vision 2030 goals?
Synthesis
Report

5. 5
Sources: KAPSARC, Energy Foundation China based on Climate Policy Initiative
Energy productivity is an indicator capturing important areas of economic reform
focused on how maximum value can be created from energy consumption

6. 6
Energy productivity functions at different levels

7. 7
Diversification and energy efficiency efforts are transitioning Saudi Arabia
towards a lower energy intensity (higher productivity) growth pathway
Source: KAPSARC based on Enerdata
0.08
0.09
0.10
0.11
0.12
0.13
0.14
0.15
2000 2002 2004 2006 2008 2010 2012 2014 2016
Energyintensitytoeper10002015USDPPP
G20 Average
(~2.5% p.a.)
Saudi Arabia
~1% p.a.
~4% p.a.
Transition

8. 8
Energy productivity Kuznets curve curves for GCC and selected advanced
economies (1971-2014)
Source: 2016, Galeotti, Howarth and Lanza, KAPSARC Discussion Paper, Energy Productivity in GCC
Countries: An International Kuznets Curve Analysis

9. 9
Energy productivity growth models within a Kuznets curve framework
Source: KAPSARC, based on Galeotti, Howarth and Lanza, 2016

10. 10
0
200
400
600
800
1000
1200
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
CarbonDioxideemissions(MtCO2-e)
Non-energy intensive pathway
Diversification into high value
manufacturing and service sectors.
Strong investment into energy efficiency
and renewable energy. Increase or
maintain oil export revenue
Energy intensive pathway
Prioritize expansion of energy intensive
industry. Higher domestic energy
consumption. Downwards pressure on oil
export revenues for government.
Saudi Arabia’s Nationally
Determined Contribution to the
UNFCCC Paris Accord outlines two
development pathways and
ambition to avoid 130MtCO2-e
per year by 2030 off a dynamic
baseline
The future energy productivity pathway will also be a key driver of CO2 emissions
Source: KAPSARC based on Enerdata and Saudi Arabia’s Nationally
Determined Contribution (NDC) to the UNFCC under the Paris Accord

11. 11
0
50
100
150
200
250
300
350
400
Energyproductivity
Totalrevenue($)/EnergyUse(toe)
Develop high value
downstream
industries
Strengthen local
supply chains
Maintain competitiveness
through energy efficiency
Basic energy intensive products
Chemicals Steel Aluminium Food products
TransportUtilities FertilizersCement
Higher value added industries
Beverages
Engineering,
construction
Automotive
Health care
equipment
Household
goods
Specialty
chemicals
Aerospace and
defence
Textiles
ICT industries
Refining Industrial
conglomerates
Packaging and
containers
Industrial strategy should seek to build on the region’s strengths, strengthen local
supply chains and develop end use markets to drive demand
Source: KAPSARC based on Climateworks Australia

12. 12
A more integrated policy paradigm is needed for managing sustainable energy
transitions in the GCC
Source: KAPSARC

13. 13
Some questions for discussion arising from the report
1. What is the potential for more GCC countries to recast their growth oriented
economic plans which have environmental co-benefits through a higher profile
climate change / green growth narratives (e.g. UAE)
2. Energy intensity/productivity is a well discussed indicator, globally and in the region.
What is the potential for GCC countries to set national targets similar to other G20
countries?
3. Will higher oil prices dampen the drive for domestic energy price reform and efforts
to diversify the economy as they have in the past? What are the domestic energy
pricing models which could best keep up momentum given energy market volatility?
4. Significant value is created from oil by using it in a non-combustible way in the
production of petrochemicals. With demand growing faster than GDP and efforts to
move up the value chain of production – how can the petrochemical industry best
position itself within sustainable development strategies being pursued in the
region?