© OECD/IEA - 2007 INTERNATIONAL ENERGY AGENCY Carbon abatement through energy efficiency: the...

© OECD/IEA - 2007

INTERNATIONALENERGY AGENCY

Carbon abatement through energy efficiency: the biggest opportunity yet the greatest challenge

Paul Waide

Senior Policy Analyst

International Energy Agency

8th December 2007

COP-13 REEEP Side-event: Sustainable Growth through Energy Efficiency, Bali

IPCC

What the world needs…Long term mitigation

Stab level (ppm CO2-eq)

Global Mean temp. increase

at equilibrium (ºC)

Year global CO2

emissions need to

peak

Year global CO2

emissions return to 2000 level

Change in 2050 global CO2 emissions compared to 2000

445 – 490 2.0 – 2.4 2000 - 2015 2000- 2030 -85 to -50

490 – 535 2.4 – 2.8 2000 - 2020 2000- 2040 -60 to -30

535 – 590 2.8 – 3.2 2010 - 2030 2020- 2060 -30 to +5

590 – 710 3.2 – 4.0 2020 - 2060 2050- 2100 +10 to +60

710 – 855 4.0 – 4.9 2050 - 2080 +25 to +85

855 – 1130 4.9 – 6.1 2060 - 2090 +90 to +140

•The scale of mitigation efforts over the next two to three decades will determine the opportunities to achieve lower stabilization levels

© OECD/IEA - 2007

…is not what it will get without massive change: WEO Reference

Scenario Global primary energy demand

Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms

0

2

4

6

8

10

12

14

16

18

1980 1990 2000 2010 2020 2030

billio

n to

nnes

of o

il equ

ivale

nt

0

2

4

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8

10

12

14

16

18

1980 1990 2000 2010 2020 2030

billio

n to

nnes

of o

il equ

ivale

ntOther renewablesBiomassHydroNuclearGasOilCoal

© OECD/IEA - 2007

WEO Alternative Policy Scenario:

Global Energy-Related CO2 Emissions

Global emissions grow less than half as fast as in the Reference Scenario, stabilising in the 2020s

10

15

20

25

30

35

40

45

50

1980 1990 2000 2010 2020 2030

billio

n to

nnes

(Gt) Reference Scenario 42 Gt

Alternative Policy Scenario

34 Gt

19%

27 Gt

INTERNATIONALENERGY AGENCY Improved end-use efficiency accounts for two-thirds

of avoided emissions in 2030 in the APS

Alternative Policy Scenario

Reference Scenario

Increased nuclear (10%)Increased renewables (12%)Power sector efficiency & fuel (13%)

Electricity end-use efficiency (29%)

Fossil-fuel end-use efficiency (36%)

26

30

34

38

42

2004 2010 2015 2020 2025 2030

Gt o

f CO

2

Alternative Policy Scenario: Key Policies for CO2 Reduction

© OECD/IEA - 2007

© OECD/IEA - 2007

CO2 Emissions - 450 Stabilisation Case

By 2030, emissions are reduced to some 23 Gt, a reduction of 19 Gt compared with the Reference Scenario

10

15

20

25

30

35

40

45

2005 2010 2015 2020 2025 2030

Gt o

f CO 2

CCS in industryCCS in power generationNuclearRenewablesSwitching from coal to gasEnd Use electricity efficiency

End Use fuel efficiency

Reference Scenario

450 Stabilisation Case27 Gt

42 Gt

23 Gt

Energy-Related CO2 Emissions

In support of the G8 Plan of Action

Energy Usein the NewMillennium

Trends in IEA Countries

ENERGYINDICATORS

© OECD/IEA 2007

Energy efficiency is the “Biggest Fuel” and the cleanest: historical impact for IEA-11

0

20

40

60

80

100

120

140

160

180

1973 1980 1990 2000 2004

EJ

56%

Actual energy use

Hypothetical energy usewithout efficiency improvements

Savings

Actual energy use

Energy savings due to energy efficiency improvements

~5.5 Gt CO2

If whole world has followed the same trend global abatement from energy efficiency gains over 30 years amount to ~15 Gt CO2 per annum

INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE

Avoiding 1 billion tonnes of CO2 per year

CoalCoal

CO2 SequestrationCO2 Sequestration

NuclearNuclear

WindWind

Solar PVSolar PV

Replace 300 conventional, 500-MW coal power plants with “zero-emission” power plants, or ...

Replace 300 conventional, 500-MW coal power plants with “zero-emission” power plants, or ...

Install 200 x current US wind generation in lieu of unsequestered coal

Install 200 x current US wind generation in lieu of unsequestered coal

Install 1300 x current US solar generation in lieu of unsequestered coal

Install 1300 x current US solar generation in lieu of unsequestered coal

Install 1000 Sleipner CO2 sequestration plantsInstall 1000 Sleipner CO2 sequestration plants

Build 140 1-GW power plants in lieu of unsequestered coal plants

Build 140 1-GW power plants in lieu of unsequestered coal plants

Efficient lightingEfficient lighting Replace all inefficient lamps with efficient ones such as CFLs, LEDs, Ceramic Metal Halide

Replace all inefficient lamps with efficient ones such as CFLs, LEDs, Ceramic Metal Halide




ENERGYINDICATORS

© OECD/IEA 2007

Large performance differences still exist e.g. final energy intensity across the IEA14

Energy Intensities - Final Energy per GDP PPP: 2004

5.4 5.5 5.56.0

7.5

8.4

4.4

5.0 5.0 5.05.4

4.44.44.24.13.93.93.93.83.73.2

0

1

2

3

4

5

6

7

8

9Ir

ela

nd*

Italy

Fra

nce

United K

ingdom

Japan

Denm

ark

Gre

ece*

Spain

*

Germ

any

Aust

ria

Port

ugal*

Neth

erl

ands

New

Zeala

nd

IEA

14

Sw

eden

Norw

ay

Aust

ralia

*

Belg

ium

*

United S

tate

s

Fin

land

Canada

GJ/

US

D P

PP

2000

* Not included in IEA14




ENERGYINDICATORS

© OECD/IEA 2007

E.g. manufacturing energy intensity adjusted to a common IEA19 structure

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Fin

land

Norw

ay

Canad

a

Aust

ralia

New

Zeala

nd

Sw

eden

Neth

erl

ands

United

Sta

tes

Belg

ium

IEA

19

Sp

ain

Aust

ria

Port

ug

al

United

Kin

gdom

Japan

Italy

Gre

ece

Germ

any

Fra

nce

Denm

ark

MJ/

US

D P

PP

2000

2004 ActuaI Intensities

2004 Common Structure Intensities

© OECD/IEA - 2007

Just over half of all investment needs to 2030 of $22 trillion are in developing countries, 17% in China & another 6% in India alone

Reference Scenario:

Cumulative Investment in Energy-Supply Infrastructure, 2006-2030

Gas19%

Coal3%

Electricity53%Oil

24%

Biofuels1%

Power generation

51%

49%

OtherRefining

73%

22%5%

Exploration and development

LNG chainTransmission

and distribution

55%

37%

8%

Mining

Shipping and ports10%

90%

$5.4 trillion

$11.6 trillion

$4.2 trillion

$0.6 trillion

Exploration and development

Transmission and distribution

Total investment = $21.9 trillion (in $2006)


Difference in global electricity investment in the Alternative vs. Reference Scenario

2003-2030

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

- 500

0

500

1 000

billi

on d

olla

rs (

2000

) Difference

Additional demand-sideinvestment

Efficiency measures Avoided supply-side

investment

Generation

Transmission

Distribution


Efficiency: both the greatest and cheapest source of mitigation potential


Figure 3: Potential National Carbon Savings - 2001Insulation measures, high costs

-1000

-800

-600

-400

-200

0

200

400

600

800

1000

0 2 4 6 8 10 12

Carbon saved (million tonnes/year)

Ne

t a

nn

ua

l co

st o

f c

arb

on

sa

ved

(£

/to

nn

e)

12

13

1 7 8 2

143

4 915

5

11

6

10

1. Loft insulation from 0mm2. Loft insulation from 50mm3. Loft insulation from 75mm4. Loft insulation from 100mm5. Loft insulation from 150mm6. Loft insulation from 200mm7. Pre '76 cavity insulation8. Post '76 cavity insulation

9. Solid wall insulation10. Low-e glazing11. Draughtproofing12. Cylinder insulation from 0mm13. Cylinder insulation from 25mm14. Cylinder insulation from 50mm15. Floor insulation

1507r

Courtesy: P. Davidson BRE

Example: UK residential buildingsExample: UK residential buildingsExample: UK residential buildingsExample: UK residential buildings


Policy is needed: the market doesn’t deliver all cost-effective savings

Policy is needed: the market doesn’t deliver all cost-effective savings

Missing or partial information on EE performance and Missing or partial information on EE performance and lack of common metricslack of common metrics

Lack of awareness re cost-effective savings potentials – Lack of awareness re cost-effective savings potentials – low visibilitylow visibility

Split incentives: Capital vs. O&M budgetsSplit incentives: Capital vs. O&M budgetsEE often a minor determinant of capital-acquisition EE often a minor determinant of capital-acquisition

decisions decisions EE is bundled-in with more important capital decision EE is bundled-in with more important capital decision

factorsfactorsAll result in emphasis on 1All result in emphasis on 1stst not Life-cycle costs not Life-cycle costs


A comprehensive policy package is needed to deliver these savingsA comprehensive policy package is needed to deliver these savings

Policy must identify and address Policy must identify and address allall barriers to be barriers to be successfulsuccessful

The broad economic issues of energy prices, technology The broad economic issues of energy prices, technology costs and financing are just one setcosts and financing are just one set

Stimulating a massive increase in awareness of actors at Stimulating a massive increase in awareness of actors at all levels is essentialall levels is essential

Stronger and more comprehensive regulatory measures Stronger and more comprehensive regulatory measures needed to correct market failuresneeded to correct market failures

Capacity building at all levels is requiredCapacity building at all levels is requiredCompatibleCompatible supporting instruments are needed supporting instruments are needed


Annual expenditure on energy and climate-change related activities

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ply-

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inve

stm

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EO

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O A

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yS

cena

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dditi

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dem

and-

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inve

stm

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Glo

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arbo

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arke

t (20

06)

Pub

lic e

nerg

y-re

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&D

inIE

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cono

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irca

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)

CD

M/J

I (20

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nerg

y-ef

ficie

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R&

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IEA

eco

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ies

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ty(2

006)

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ergy

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cy (2

006)

CD

M/J

I ene

rgy

effic

ienc

y (2

006)

Mea

n an

nual

exp

endi

ture

(US

$bn)


Conclusions: energy efficiencyConclusions: energy efficiencyConclusions: energy efficiencyConclusions: energy efficiency

Energy efficiency presents a Energy efficiency presents a hugehuge under-exploited under-exploited cost-effective GHG saving opportunity cost-effective GHG saving opportunity

It merits being the single greatest focus of GHG It merits being the single greatest focus of GHG abatement strategies in near and medium-termabatement strategies in near and medium-term

The most effective policy approaches address all The most effective policy approaches address all barriers by applying portfolios of measures and by barriers by applying portfolios of measures and by being rigorous in design, implementation and being rigorous in design, implementation and evaluation evaluation

EE is cheap but is not free. Current resource EE is cheap but is not free. Current resource allocation is insufficient, imbalanced and often allocation is insufficient, imbalanced and often disjointeddisjointed

© OECD/IEA - 2007 INTERNATIONAL ENERGY AGENCY Carbon abatement through energy efficiency: the...

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