Energy efficiency potential in SPECA countries

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Energy efficiency potential in SPECA countries
ESCAP United Nations Economic and Social Commissi
on for Asia and the Pacific
UNECE United Nations Economic Commission for Euro
pe
Report by V. Kasymova

• Workshop on Energy Efficiency Opportunities in
  Central Asia, including SPECA countries
  
• 18-21November 2008
• Almaty, Kazakhstan

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Energy efficiency potential in SPECA countries

• Energy saving potential is estimated at 35-40 of
  the total energy consumption
  
• high energy intensity of GDP in the countries of
  Central Asia
  
• increase in emissions of CO2 and deterioration of
  environmental situation in the region
  
• high degree of deterioration of equipment and
  facilities of power and heat companies
  
• imperfection of technology and a high level of
  energy losses in production, during transporting
  and use of energy
  
• low use of renewable energy sources

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GDP energy intensity analysis for 2000-2005

• The most rapid growth rates
• 3 times in Kyrgyzstan, from 0.56 toe to 1.7
  toe/1000 USD
  
• in Tajikistan from 1.22 to 2.24 toe
• in Turkmenistan from 1.78 to 2.95 toe
• in Kazakhstan from 1.74 to 2.01 toe.
• Reduction of the rate
• double reduction in Uzbekistan from 4.18 to 2.62
  toe/1000 USD
  
•               in Azerbaijan from 2.87
  to 1.65 toe
  
• The world in general from 0,30 to 0,32 toe
• Asia from 0.59 to 0.65 toe

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Emissions of CO2 to TER for the period of 2000 -
2005, (t CO2/toe)

• Decreased
• in Kazakhstan from 3.14 to 2.96
  
  
• Increased
• in Kyrgyzstan from 1,88 to 1,95
• in Uzbekistan from 2,29 to 2,34
• in Turkmenistan from 2,47 to 2,54
• in Tajikistan from 1,52 to 1,64
• in Azerbaijan from 2,2 to 2,26
• World in general from 2,32 to 2,37
• Asia from 1,92 to 2,01

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Emissions of CO2 to the GDP for the period of
2000 - 2005(kg CO2/1 USD)

• The most rapid growth rates
• in Turkmenistan from 4.78 to 7.15
  
  
• in Tajikistan from 1.86 to 3.68
• in Kyrgyzstan from 1.05 to 1.85
• in Kazakhstan from 5.46 to 5.95
• The rates decreased in
• in Azerbaijan from 6.94 to 3.73.
  
  
  
• in Uzbekistan from 9.57 to 6.14
• Remained unchanged
• World as a whole 0.69 -0.69
• Asia 1.25 -1.25

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Emissions of CO2 per capita for the period of
2000-2005, (t CO2 per person)

• Intensive growth rates
• Kazakhstan from 8.26 to 10.8
• Turkmenistan from 6.59 to 8.59
• Azerbaijan from 3.51 to 3.53
• Kyrgyzstan from 1.05 to 1.06
• Tajikistan from 0.72 to 0.87
• Decrease in
• Uzbekistan from 4.64 to 4.24 ?
• World as a whole from 3.89- 4.22
• Asia from 1.13 -1.25

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Challenges in using the energy saving potential

• Economic caused by
• a surge in energy costs
• increase of the energy component in the cost
  structure of products
  
• lack of investment from the state, and consumers,
  
  
• lack of partnership mechanisms between the state
  and the private sector in energy saving,
  
• high bank rates on loans
• low paying capacity of consumers
• poor economic incentives for energy-saving
  measures
  
• almost a absent funding scheme based on best
  practices of investments in energy conservation
  
  
• leasing, third party financing, production of
  energy-saving bonds, etc.
  
• poor diversification of fuel and electricity
  sources

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Challenges in using the energy saving potential

• Informational - due to the lack of access to
  databases and the use of information services and
  energy consulting and auditing companies,
  manufacturers of energy-efficient and
  energy-saving equipment.
• Lack of large-scale information campaigns in the
  media to raise awareness in all segments of
  society and the public about the benefits of
  efficient use of energy and the impact of
  wasteful consumption and theft.
• A number of unresolved issues on inter-state
  level, concerning the formation of common energy
  market in Central Asia and facilitated access of
  private enterprises into it.

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Challenges in using the energy saving potential

• Environmental caused by affecting the
  environment by energy facilities during the
  production, recycling, transportation and use of
  energy by end-users
• Scientific and technical problems connected
  with the reduction in funding of research work in
  the field of energy efficiency and conservation,
  low efficiency of the mechanism of scientific and
  technological developments implementation.
• Legal - the majority of energy conservation laws
  are the laws of indirect action, requiring a
  significant number of regulations.
  
• Insufficient introduction of advanced energy
  efficiency standards, regulations, energy
  accounting and monitoring.
  
• Institutional - due to the persistence of
  administrative approaches to the management of
  energy, inadequate authority or an absence of a
  public body which would be implementing the
  energy policy.

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Recommendations to handle the challenges

• Strengthen the government support and empower the
  energy efficiency structures until the
  establishment of energy efficiency institutions
  
• Improve the legal and regulatory base for energy
  saving
  
• Introduce economic and financial incentives to
  enhance the investment activities of producers
  and consumers of energy, and potential investors,
  
• Reinforce liability for violation of relevant
  rules, standards and regulations, etc.
  
• Strengthen the control over compliance with
  legislation in the sphere of energy efficiency.

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Recommendations to handle the challenges

• Improve the system of accounting and control over
  the energy consumption
  
• Improve the pricing and rating policy for energy
  to become the critical economic incentive for
  energy saving
  
• Support the RD and the ROC on energy efficiency
  and organize pilot projects
  
• Organize targeted information campaigns for
  different categories of consumers
  
• Organize effective training on energy efficiency
  and conservation

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What policy is required

• Policy of energy efficiency and energy saving
  for
  
• energy excessive countries - Kazakhstan,
  Uzbekistan, Turkmenistan and Azerbaijan - to
  preserve exports
  
• energy deficient countries - Kyrgyzstan and
  Tajikistan, Afghanistan - to reduce imports.
  
• Through the following urgent measures
• Development of state energy efficiency strategy
  and introduction of action program to improve the
  efficiency of energy use
  
• Establishment of energy efficiency institutions
  and public funds and their divisions on regional
  and local level
  
• Preparation and organization of energy audit in
  order to implement the legislative and regulatory
  rules on energy efficiency
  
• Diversification of energy consumption structure
  and development of alternative energy sources.

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What institutions are required

• - Agencies (commissions or committees) on energy
  saving and respective structures in the state,
  regional and local governments, public funds and
  so on.
• The Energy Saving Agency should be the Competent
  Authority in forecasting the demand for energy,
  implementation of integrated energy-saving
  programs, assessment of energy saving potential,
  segregated by sectors, services and communities,
  taking into account the impact of energy saving
  to the environment.
• Regulatory functions of the Energy Saving Agency
  should become a powerful tool for implementation
  of energy efficiency policies improvements.
  
• One of the main tasks of the Energy Saving Agency
  should be development and facilitation of local
  implementation of the most appropriate
  regulations and standards for energy consumption,
  providing the customers with technical assistance
  required to implement energy saving measures in
  the production, importation and usage of new
  energy-saving technologies, equipment, technical
  means and materials.

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Functions of the State Energy Saving Authority

• Allowing the energy consumers the possibility to
  participate in investments to energy-saving
  projects with the most favorable conditions
  
• Attracting investment into the energy saving
  sector from banks and other interested ministries
  and departments
  
• Issuing licenses for the production of
  energy-saving equipment and implementation of
  sustainable energy-saving technologies
  
• Organizing demonstration projects on energy
  conservation
  
• Organizing energy audits, preliminary studies, as
  well as providing consulting on inspections in
  the area of energy consumption and energy
  conservation
• Development of economic instruments and
  incentives for various players involved in the
  process of improving the energy efficiency
  
• Organizing the examination to determine the
  impact of energy efficiency measures to the
  environment
  
• Mobilizing and attracting partners for research
  and development to develop and implement new
  energy-saving technologies.

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What programs have to be developed

• Concept of energy efficiency and sustainable
  development of Central Asian Region and on its
  basis, the interstate Plan of Action for
  implementation of energy policies in Central
  Asian countries until 2020
• National Programs on Energy Efficiency of
  Economies for the period up to 2020

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Barriers and risks in implementation of Energy
Efficiency Concept for SPECA countries

• The slow progress of integration processes in
  resolving water and energy issues, in creation of
  a single energy market, etc.
  
• Disagreement of Parties in the adoption of
  Inter-state Instruments, prepared by EurAsEC,
  which could occur at the level of governments in
  Central Asia at the time of their consideration.
• Disagreements of Parties that may arise during
  harmonization of regulatory energy frameworks,
  and in developing the common Concept and the
  Program for introduction of energy saving and
  improvement of energy efficiency of economies of
  Central Asian States

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Barriers and risks

• there is no coherent system of interrelated
  indicators of energy saving, covering all levels
  of real sector of the economy and services,
  
• there are no comparative performance evaluation
  of energy and other resources saving indices, and
  therefore there is no criteria saying What
  should be saved in the first place
• energy consumption of GDP is not being determined
  on macroeconomic level, there is no balanced
  accounting and compilation of indicators between
  the real economy sectors,
• energy consumption of production is not being
  determined at the industry level, its decrease
  and the satisfaction of growing needs in energy
  from its saving is not measured,
• only the norms of decreasing the average rates of
  energy consumption for the production are set,
  resulting in a complete exclusion of the
  structural factor between the products and
  industries, with the statistical reporting forms
  covering only a portion of production the
  product and technological levels
• energy savings from energy-saving measures is not
  the sole source of all energy savings in material
  production.

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Methods to overcome the barriers

• There is a need to develop and use a single
  methodological basis for calculation of energy
  efficiency measuring indicators and indicators
  for sustainable energy use and energy saving
• There is a need to use all existing possibilities
  for integration,
  
• There is a need to advance in all international
  conventions, protocols and initiatives on energy
  efficiency and related environmental aspects
  
• In accordance with the Baku initiative there is a
  need to focus on the following seven aspects
  
• Strengthening legislative support (base)
• Increasing the involvement of stakeholders
• Development of minimum performance standards
• Strengthening institutional support
• Providing support for research and development
• Dissemination of best working practices
• Increasing public awareness.

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Institutional arrangements on international level

• The basic organizational and economic activities
  in the field of energy supply include
  
• drafting and ratification of Intergovernmental
  Treaty On the Development and Implementation of
  the Interstate Concept and National Programs on
  Energy Efficiency and Conservation until 2020
  within the EurAsEC with periodic revisions to
  define the priorities for the nearest future
• establishment of working groups to develop
  Interstate Concept and the National Program for
  energy efficiency and energy saving until 2020
  
• drafting and ratification of Intergovernmental
  Treaty on introduction of mandatory energy
  labeling of electrical appliances and their
  energy consumption certification
• transition to conduction of systematic energy
  surveys among business entities, as well as
  product energy consumption certification and the
  introduction of progressive norms system for fuel
  and energy consumption

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Organizational measures

• gradual alignment of prices and tariffs for
  energy in line with actual costs of production
  and transportation for all categories of
  consumers
• development of new and improvement of existing
  economic mechanisms that promote the improvement
  of efficient products and services
  
• joint creation by the Central Asian countries of
  the favorable investment climate to attract both
  domestic and foreign investments
  
• introduction of state examination of energy
  efficiency of designing solutions aiming to
  assess the compliance with applicable regulations
  and standards in the field of energy and to
  determine the adequacy and justification for the
  measures of energy conservation
• Joint development and introduction of a common
  minimum energy efficiency standards for major
  types of electrical appliances and energy
  labeling by energy efficiency grades

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Organizational measures

• On Interstate level - establishment of
  functioning institutional structures (EESEA
  Commission) with adequate authority,
  harmonization of regulatory framework and
  formation of investment base for energy-saving.
• On state level - adoption of regulatory legal
  acts of direct action and creation of appropriate
  institutional and financial and economic
  management schemes.
• On regional level development of target energy
  conservation programs, creation of funding
  sources and adoption of regulatory legal acts.
  
• On municipal level - preparation and
  implementation of action plans to introduce
  energy-efficient sustainable technologies and
  equipment in industry and community services,
  organization of sustainable consumption of energy
  by the entire infrastructure of the city
  (district).
• At the level of economic entities -
  implementation of activities in view of general
  economic interests

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Partners on international level

• International organizations - as the CIS and
  EurAsEC, etc. - to prepare legal instruments and
  in other organizational matters
  
• World Bank, EBRD, ADB, EC, the UNECE, UNESCAP and
  several other international organizations that
  provide support in funding and technical
  assistance to SPECA.

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Partners within CA states

• Partners within the CA states may be
• all concerned ministries, departments
• municipalities
• local authorities,
• research, design and consulting centers
• energy companies, industrial enterprises,
  services, budget organizations
  
• various Associations of energy and water
  consumers
  
• private legal entities and individuals,
• NGOs, social movements and foundations

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What is the role of regional cooperation and its
advantages

• improving the investment attractiveness of SPECA
  countries to international financial
  organizations and investment funds
  
• ensuring transparency of information on measures
  taken and results achieved, which would promote
  the mutual trust and establish best practices
  
• increasing the responsibility of States for
  implementation of the commitments accepted to
  improve the energy efficiency of economy and
  related environmental aspects
• reducing transboundary pollution and the
  vulnerability of ecosystems to the impacts of
  energy production and consumption
  
• recovery and reducing poverty of population in
  all states
  
• promoting a more successful move towards
  sustainable development in SPECA countries.

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• Thank you for your attention and support!