National Energy Efficiency& Conservation (EE&C)

Policy

Department of Renewable Energy

April, 20181

Outline of the Presentation

• Vision and Mission

• Organogram of DRE

• Trajectory of the EE&C Policy Formulation

• EE&C Policy Structure

• Policy Contents

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Department of Renewable Energy (DRE)

Vision

Provision of diverse forms of green and renewable energy solutions

and energy efficiency options aimed at enhancing energy security

and sustainable development of the country.

Mission

To promote all forms of available and viable renewable energy

resources and technologies from supply side of energy chain

through applied research, development, capacity building,

demonstration projects and devising appropriate incentive

schemes while actively embracing energy conservation and

efficiency measures from demand side of energy chain.

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Department of Renewable Energy

Alternate DivisionPolicy and

Coordination Division

Research and Development

Division

Program Coordination

Section

Rural Electrification

Section

CDM Section

Research Section

Energy Conservation

Section

Solar Section

Wind Section

Bio-energy Section

Hydropower Section

Trajectory of the Policy formulation

Sl.No

Activity Date

1. GNHC approved the concept note of the EE&C policy 11th April 2014

2. Face to face consultation with stakeholders Aug & Sept 2014

3. 1st stakeholder consultation workshop (framework) 26th Sept 2014

4. Bilateral stakeholder consultation (policy matrix) 20-24th April 2015

5. Presentation of 1st draft policy to individual stakeholders

1st -9th Dec 2015

6. Final stakeholder consultation workshop 19th April 2016

7. Finalization of the draft policy May- July 2016

8. 2nd PPCC meeting with directives on review of the draft policy

26th January 2017

9. Draft Policy approved in the 3rd PPCC meeting 31st March 20175

Trajectory of the Policy formulation

Sl.No

Activity Date

10. Draft policy uploaded on Ministry’s website for comments

13th May 2017

11. Comments from GNHC to PPD, MoEA 18th August 2017

12. Review of the Policy and Stakeholder consultation (MoF) 5th October 2017

13. Approval by Ministry on the draft Policy and sent to GNHC

2nd and 9th

November 2017

14. Comments from GNHC to DRE via email 4th Dec 2017

15. Final draft policy sent to GNHC by PPD, MoEA 11th Dec 2017

16.

17.

Presentation to policy screening members

Presentation to Committee of Secretaries

22nd Dec 2017

7th March 2018

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Structure of the EE&C PolicySection 1: Introduction

Section 2: Rationale

Section 3: Title and Operative period

Section 4: Objectives

Section 5: Building Sector

Section 6: Appliance Sector

Section 7: Industrial Sector

Section 8: Transport Sector

Section 9: Institutional Arrangement

Section 10: EE&C Action Plan

Section 11: Monitoring & Evaluation

Section 12: Amendments

Section 13: Interpretation of the Policy

Section 14: Definitions of concepts

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1: Introduction

1. Importance of GNH as development philosophy and its

focus on developing national plans

2. Narrates about country’s impressive GDP growth with

increased urbanization and reduced poverty rate.

3. The EDP 2016 emphasizes the requirement to adopt this

EE&C policy and pursue energy efficient productive

activities in the four major sectors.

4. Helps to maintain carbon neutrality commitment and befits

the country’s Nationally Determined Contribution.

5. EE&C potentials are based on findings from the detailed

energy audits carried out in energy consuming sectors

(Building, Appliances, Industry and Transport).

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2: Rationale➢ EE&C measures will contribute to global commitment on the

climate change front to UNFCCC and other international forums

• Increasing economic prosperity is expected to drive up the country’s demand for energy, including fossil fuels like petroleum products.

• Lower intensity of energy use hence decoupling economic growth from consumption of energy resources and carbon emissions.

➢ Pursuit of EE&C measures will also align with the United Nation’s Sustainable Development Goals.

• Reduced energy intensity will contribute to climate action through reduction in GHG emissions

➢ Freeing up energy resources for export and earn additional revenues to support socio-economic development goals (In 2014, export- 5,179 million kWh with earning-10,698 Million, Import Nu 8,432 million).

• Annual saving potential in electricity consumption, averaged over 15 projected years Nu 320.00 Million per annum @2.07 per Unit -155million kWh annually)

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2: Rationale continued➢ Import bill for transport fuel increased from Nu 1.1 Billion to

8.4 Billion in 2014. Efficient fuel usage, promotion of public

transport system, fuel efficient vehicles, electric/hybrid cars

can address in reducing the fuel consumption.

➢ If 10% of the vehicle fleet becomes electric, the annual

saving is estimated at Nu 467.00 Million.

➢ EE&C measures in the building sectors, which consumes

significant fuel wood for cooking and heating, will reduce

the consumption and reduce the pressure on forests and

enhance carbon sequestration capacity.

➢ Adoption of energy efficient production processes and

technologies will improve the productivity, profitability and

competitiveness of our industries by lowering the operating

costs.

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3: Title, Operative Period & Enforcement

1. This Policy shall be known as “National Energy Efficiency &

Conservation Policy 2018”.

2. This Policy will come into effect from XXXX date of

approval by the cabinet and remain in force until

superseded or modified.

3. All EE&C measures are governed by this Policy.

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4: Objectives1. Improve energy security by reducing energy intensity in

the Country through adoption of EE&C measures.

2. Create enabling environment for adoption of EE&C

measures by various actors in the economy,

3. Reduce adverse impacts of energy consumption from

fossil fuels, and contribute towards achiveing the Country’s

global commitment to remain carbon neutral.

4. Provide long term direction for a systematic approach for

implementation of EE&C action plan by soliciting

coordination among relevant stakeholders.

5. Create enabling environment for the private sector

participation in adopting EE&C measures in the Country.12

5: Building Sector

In 2014, the building sector contributed 42% of the total energy

consumption. The energy performance can be improved

focussing on retrofit measures of existing buildings and

mandating energy efficient designs for new buildings.

Proposed Measures:

1. MoWHS to develop energy efficiency building codes and

align with legal framework. MoWHS will also look into

energy efficient construction materials for buildings.

2. Establish Energy Auditing and Reporting guidelines.

3. Encourage hotel industry to adopt EE&C measures and

recognize green hotels,

4. Develop capacity at all required levels to fulfil the policy

objectives.

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6: Appliance Sector

The Energy performance of the appliances can be

improved through a systematic effort of lowering the

average wattage of appliances by replacing the current

stock of appliances with more energy efficient products.

Proposed Measures:

1. NA shall develop technical specifications for the select

set of appliances and BSB to develop Standards and

Certification Scheme to promote consumer access to

energy efficient appliances.

2. MoF shall incorporate the EE$C aspects into the Public

Procurement system.

3. Explore appropriate fiscal incentives to off-set the higher

prices of labelled appliances and to accelerate

penetration of energy efficient appliances in the market.14

7: Industry Sector

The 2014 study showed that the energy consumption by the

industry sector contributes about 37% of the total energy

consumed in the Country, which can be reduced by

encouraging adoption of energy efficient technologies,

processes and building capacities within the industry sector.

Proposed Measures:

1. Industrial energy performance can be improved through

retrofits, refurbishment, technology transfer and process

modifications. This can be done with better coordination,

workshops, development of bench marks for the

industries,

2. NA will develop energy audit and reporting guidelines,

3. Carry out capacity building measures to adopt improved

technologies and processes.

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8: Transport Sector

In 2014, the energy consumption from industry sector

contributed to 17% of the total energy consumption. The

Energy performance can be improved by adoption of

sustainable transportation modalities like use of

electric/hybrid cars, mass transport system and proper

planning.

Proposed Measures:

1. MoIC will promote energy efficient transport system

including mass transport system.

2. NA will commission technical studies and research for

applicability of alternative fuels in vehicles.

3. All relevant agencies will incorporate EE&C aspects

while planning city/town developments.

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Section 9: Institutional Arrangement

1. Department of Renewable Energy (DRE), MOEA as NA anddefines its specific roles.

2. Department of Trade (MoEA) in collaboration with DRC(MoF) to monitor the import and sale of energy efficientproducts.

3. Ministry of Finance for considering the EE&C financinginstruments as recommended by NA and EE&C aspects tobe incorporated into the public procurement system.

4. GNH Commission for revewing the implementation statusand effectives of the Policy.

5. MoIC to facilitate implementation of EE&C measures in thetransport system.

6. MoWHS to develop energy efficient building codes and usethe provision of this policy as an input for integrated andgreen urban planning.

7. Thromdes/Dzongkhag Admininstrations to implement andenforce energy efficient building codes. 17

Section 9: Institutional Arrangement

8. Bhutan Standards Bureau (BSB) to certify energy performanceof the energy efficient appliances and equipment.

9. Bhutan Electricity Authority (BEA) to recategorization of HV, MVand LV Indsutries based on energy consumption andconnected load. Explore tariff instruments to incentivize EE&Cmeasures, ensure the transformer sizing and distribution systemsare optimized for energy efficient operation.

10. National Environment Commission (NEC) for consolidation ofall relevant information to prepare country’s climate changemitigation related to EE&C measures and facililate flow ofclimate finance for implementation of EE&C measures.

11. Deparment of Industries (DoI) and DCSI to coordinate withBCCI and ABI to promote and implement EE&C measures inthe industries.

12. Private sector will adopt the EE&C measures as prescribed bythe comptetent authorities.

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Section 10: EE&C Action Plan

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➢ Major energy cosnuming sectors are: Building and Appliances

sector (270,356 TOE), Industry sector (241,972) TOE and

Transport sector (121,218 TOE).

➢ The detailed energy audits and technical studies carried out

in 2014, showed substantial techno-commercially achievable

energy savings potential that will be carried out through

implementation of EE&C action plan.

➢ For the promotion of EE&C measures, the NA shall utilize the

Renewable Energy Development Trust Fund (REDTF)

established under the Alternative Renewable Energy Policy

(AREP) 2013 and amendment thereof or any other innovative

funding mechanism established by the Government.

Section 10: EE&C Action Plan

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➢ RMA shall classify bank lending for EE&C projects which lead

to increased energy efficiency in production processes or in

technologies, as “Priority Sector Lending”. The NA shall

collaborate with RMA in identifying the category of EE&C

projects eligible for priority sector lending.

➢ The GNHC and the MoF shall explore access to international

funds, in the form of climate finance and/or other

development finance assistance. Based on the proposal

submitted by the NA, the MoF and GNHC shall review EE&C

proposals and provide funding support to EE&C measures

wherever deemed necessary.

➢ The NA shall coordinate with relevant agencies for

identification of funding options from international

development partners to support EE&C projects.

Section 11- Monitoring and

Evaluation

➢ The NA shall develop a monitoring, reporting and

verification mechanisms to periodically assess the

effectiveness and relevance of EE&C programs.

➢ The NA will update concerned stakeholders regarding

policy formulation and implementation status.

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Section 12- Amendments

➢ The Government may amend this Polict, as and when

required, with at least one update in every five years.

Howeever, the terms and conditions of agreements, which

are in effect for the existing projects, shall not be

subjected to these amendments.

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Section 13- Interpretation of the

Policy

➢ In the event of conflict of interpretation, the Ministry of

Economic Affairs shall on behalf of the Government, be

the authoirty to interpret various provision of this Policy,

which shall be final and binding.

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Section 14- Definitions

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Thank You

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