© OECD/IEA, 2008© OECD/IEA, 2008
ACEEE Market Transformation Symposium
Paul WaideSenior Policy Analyst
Energy Efficiency & Environment DivisionInternational Energy Agency
1st April 2008, Washington D.C.
Meeting Stretch Goals for Energy Efficiency:
Market transformation initiatives from around the
world
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
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
Gto
f CO
2
Alternative Policy Scenario: Key Policies for CO2 Reduction
© OECD/IEA - 2007
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
But do efficiency policies work? Half of US states have utility EE progs…
0
1000
2000
3000
4000
5000
6000
1950 1960 1970 1980 1990 2000 2010
Ave
rag
e p
er c
apit
a re
sid
enti
al e
lect
rici
ty
con
sum
pti
on
(kW
h/y
ear)
States without efficiency programs
States with efficiency programs
31%lower
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
0
300
600
900
1980 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02
PJ
Oil Natural Gas Coal and Coke Renewable Energy etc.
Denmark: gross energy demand is no longer rising with economic growth
Denmark: gross energy demand is no longer rising with economic growth
Source: Danish Energy Agency
© OECD/IEA - 2008
© OECD/IEA - 2007
QuantifyingPrincipal-AgentProblems inEnergy EfficiencyIn support of the
G8 Plan of Action
INTERNATIONALENERGY AGENCY
© OECD/IEA - 2008
Principles behind IEA’s efficiency policy recommendations for G8
A recommendation is justified when it:is likely to save a large amount of energy at low costaddresses existing market imperfections or barriersaddresses a significant gap in existing policyis supported by IEA analysis there’s a high degree of international consensus
© OECD/IEA - 2007
QuantifyingPrincipal-AgentProblems inEnergy EfficiencyIn support of the
G8 Plan of Action
INTERNATIONALENERGY AGENCY
© OECD/IEA - 2008
Principles behind IEA’s efficiency policy recommendations for G8
A recommendation is justified when it:is likely to save a large amount of energy at low costaddresses existing market imperfections or barriersaddresses a significant gap in existing policyis supported by IEA analysis there’s a high degree of international consensus
In support of theG8 Plan of Action © OECD/IEA - 2007
IEA E.E. Recommendations to G8: buildings & appliances1. Building codes: set, enforce and regularly update mandatory
energy efficiency standards for new buildings with an aim to minimise total costs over a 30-year lifetime
2. Very low energy buildings: Countries should support and encourage the construction of buildings with very low or no net energy consumption
3. Existing buildings: implement package of initiatives to address the most important barriers to energy efficiency in buildings
4. Standards and labels: All countries should adopt mandatory energy performance requirements and comparative energy labels. Adequate resources should be allocated to ensure that stringency is maintained and that the requirements are effectively enforced
5. Standby power: adopt a common 1W limit for standby power but consider allowing negotiated exceptions when merited
6. Set top boxes: adopt minimum efficiency standards for digital television adaptors
7. Low power modes: adopt policies which require electronic devices to enter low power modes automatically after a reasonable period when not being used
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE© OECD/IEA - 2007
Even the most stringent codes are not Even the most stringent codes are not costcost--optimisedoptimised over the building lifetimeover the building lifetime
Wall
0,00
0,10
0,20
0,30
0,40
0,50
0,60
0,70
0,80
0 1000 2000 3000 4000 5000 6000 7000 8000
HDD + CDD
U-v
alu
e:
W/(
m²
* K
)
Optimum
Actual
LCA
Ceiling / Roof
0,00
0,05
0,10
0,15
0,20
0,25
0,30
0,35
0,40
0,45
0 1000 2000 3000 4000 5000 6000 7000 8000
HDD + CDD
U-v
alu
e:
W/(
m²
* K
)
Optimum
Actual
LCA
e.g. U-values in European Building codes compared to Least Cost over 30 years
Most building codes are far from the level that would ensure the lowest life cycle cost over the buildings lifetime
Least Cost Wall Insulation Europe Least Cost Ceiling Insulation Europe
In support of theG8 Plan of Action © OECD/IEA - 2007
IEA E.E. Recommendations to G8: lighting & transport8. Comprehensive policy package for lighting: Countries
should adopt a comprehensive policy package aimed at achieving best-practice in lighting energy efficiency across all lighting usage sectors
9. Incandescent lamps: Governments should move to phase out the most inefficient incandescent bulbs as soon as commercially and economically viable
10. Vehicle fuel economy standards:adopt mandatory fuel efficiency standards for new light-duty vehicles. If such standards already exist, increase their stringency
11. Fuel efficient tyres: Governments should adopt new international test procedures to measure the rolling resistance of tyres and use them to set maximum rolling resistance limits and to display tyre energy labels
LIGHT’SLABOUR’S
LOSTPolicies for
Energy-efficient Lighting
INTERNATIONALENERGY AGENCY
© OECD/IEA - 2007
Global lighting electricity demand: What can be saved cost-effectively?
0
1 0 0 0
2 0 0 0
3 0 0 0
4 0 0 0
5 0 0 0
6 0 0 0
1 9 9 5 2 0 0 0 2 0 0 5 2 0 1 0 2 0 1 5 2 0 2 0 2 0 2 5 2 0 3 0
Lig
hti
ng
ele
ctri
city
co
nsu
mp
tio
n (
TW
h)
N o P o lic ie s
C u rre n t P o lic ie s
L L C C fro m 2 0 0 87 4 5 T W h = 1 5 %
1 6 3 5 T W h = 3 8 %
In support of theG8 Plan of Action © OECD/IEA - 2007
IEA E.E. Recommendations to G8: industry & cross-sectoral12. Industry: gather energy performance indicators13. M&V, Fiscal, Finance:
adopt, and publicise, a common energy efficiency savings verification and measurement protocolreview current subsidy and fiscal incentive programmes
14. National plans: set goals and formulate action plans for improving energy efficiency in each sector. Energy efficiency policy agencies should be adequately resourced. Best practice action plans should:assess energy consumption by end-use in all sectorsidentify the economy's energy savings potentialsestablish objectives and adequate methods for evaluating the success of the plan
15. Reporting progress: track progress in implementing each of the concrete recommendations and provide the IEA with regular updates
© OECD/IEA - 2007
QuantifyingPrincipal-AgentProblems inEnergy EfficiencyIn support of the
G8 Plan of Action
INTERNATIONALENERGY AGENCY
© OECD/IEA - 2008
* 2006 recs* 2007 recs
200
250
300
350
400
450
500
550
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
EX
AJO
UL
ES
Equipment
Transport
Lighting
Buildings
2030 low savings estimate 50 EJ
WEO 2006 Projection
2030 moderate savings estimate 83
EJ
Estimated impact of full implementation of IEA G8 policy recommendations on
world energy demand1
© OECD/IEA - 20071provisional estimates for final energy
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Who’s doing what?
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Major economies are setting ambitious efficiency targets
China: -20% energy/GDP by 2010 (-4% p.a.)Japan: -30% energy/GDP by 2020 (-2.9% p.a.)EU: -20% by 2020 (-1.8% p.a.)
Broader context are GHG reductions targets e.g.EU: -20% by 2020 but -30% if global agreementJapan: -50% by 2050France: -75% by 2050UK: at least -60% by 2050 but will be made legally binding with three intermediate carbon budget steps e.g. -26-32% by 2020 (5 year carbon budgets with binding limits each 15 years)
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
European Union Legislative Acts
End-use energy efficiency directivesEnergy labelling of household appliances (1992) Boiler, ballast and refrigerator efficiency standards + VAs other equipment (1995 onwards)Energy Performance in Buildings (2002) Eco-design of energy using products (2005)Energy services (2006)EU EE Action Plan (2006)
Other Combined Heat and Power (2004) + Emissions Trading Scheme for industry + power sectors
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
0
5
10
15
20
25
30
35
40
45
50
A+ A B C D E F G
Mar
ket
shar
e (%
)
2003 1st 3 months
1997
1990-2 (GEA)
Labelling can produce major market Labelling can produce major market transformation: e.g. refrigerators in EUtransformation: e.g. refrigerators in EU
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
The new The new
Chinese Chinese
Room airRoom air--
conditioner conditioner
energy label energy label
© OECD/IEA - 2008
61 countries with more than 80% of the world’s population have standards and labelling
M a n d a t o r y s t a n d a r d s V o l u n t a r y S t a n d a r d s C o m p a r a t i v e L a b e l E n d o r s e m e n t L a b e l
A l g e r i a *
A u s t r a l i a
B a n g l a d e s h *
B u l g a r i a
B r a z i l *
C a n a d a
C h i l e *
C h i n a
C o l u m b i a *
C z e c h R e p u b l i c
E g y p t *
E s t o n i a
E U
H u n g a r y
I n d i a *
I r a n
I s r a e l
J a p a n
K o r e a
L i t h u a n i a *
M a l a y s i a
M a l d i v e s *
M e x i c o
N e p a l *
N e w Z e a l a n d
P e r u *
P h i l i p p i n e s
P o l a n d
E U
I n d i a
I n d o n e s i a *
K o r e a
S w i t z e r l a n d
A l g e r i a *
A r g e n t i n a *
A u s t r a l i a
B a n g l a d e s h *
B u l g a r i a
B r a z i l
C a n a d a
C h i l e *
C h i n a *
C o l u m b i a *
C z e c h R e p u b l i c
E g y p t *
E s t o n i a
E U
H o n g K o n g
H u n g a r y
I n d i a
I n d o n e s i a
I r a n
I s r a e l
J a p a n
K o r e a
L i t h u a n i a *
M a l a y s i a *
M a l d i v e s *
M e x i c o
N e p a l *
N e w Z e a l a n d
A u s t r a l i a
B r a z i l
C h i n a
C h i n e s e T a i p e i
E U
J a p a n
K o r e a
S i n g a p o r e
S w i t z e r l a n d
U K
U S A
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Policy coverage as a share of residential electricity use is still
incomplete
Policy coverage as a share of Policy coverage as a share of residential electricity use is still residential electricity use is still
incompleteincomplete
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MEPS
VAsCom
paris
on label
sEndors
emen
t Lab
els
Standar
ds and la
bels
Co
vera
ge
of
po
licy
mea
sure
EUAUS-NZJapanUSA-CANChina
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Policy coverage as a share of residential electricity use is still
incomplete
Policy coverage as a share of Policy coverage as a share of residential electricity use is still residential electricity use is still
incompleteincomplete
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MEPS
VAsCom
paris
on label
sEndors
emen
t Lab
els
Standar
ds and la
bels
Co
vera
ge
of
po
licy
mea
sure
EUAUS-NZJapanUSA-CANChina
EU Eco-design Directive:
21 product standards pending, including proposed horizontal 1W standby limit
© OECD/IEA - 2008
3.0
3 .5
4 .0
4 .5
5 .0
5 .5
6 .0
6 .5
7 .0
2.0 2 .5 3 .0 3.5 4 .0 4 .5
COP
kW
Standa rd
And stringency can be increased e.g. And stringency can be increased e.g. Japanese Japanese ““Top RunnerTop Runner”” standards standards for reversible room air conditionersfor reversible room air conditioners
Source: C. Murakoshi et al, Jyukankyo Research Institute
EU Class A
ANZ MEPS
US MEPS
LIGHT’SLABOUR’S
LOSTPolicies for
Energy-efficient Lighting
INTERNATIONALENERGY AGENCY
© OECD/IEA - 2007
Countries in process of phasing-out incandescent lamps
Cuba (already done!)Australia + New Zealand (start 2008)US (2012-14 but also CA, NV) EU (from 2009 but fully by 2010/11 for UK, Por, Bel, Ire, Fr)Canada (finalising regulation details)Switzerland (finalising details)Philippines, Mexico, Argentina, Tunisia China (considering) + other non-OECD IEA made recommendations to G8 (2006 & 2007)Up to 500Mt CO2 saved by 2012
© OECD/IEA, 2008
Transport Energy Efficiency
© OECD/IEA, 2008Year
International Vehicle Fuel Efficiency Standards 2008 - 2020
C
The EU EPBD DirectiveThe EU EPBD Directive
Common method to calculate the energy performance of buildings. Method to include all factors that impact on energy consumption and can be adapted to building types (homes, offices, schools, etc.)
Set minimum energy performance standards to new buildings and large existing buildings being refurbished
Certification schemes for all buildings (new, sold, rented)
Display of certificates in public buildings
Inspection & assessment of boilers/heating and cooling installations
The measures
Source: DG-TREN
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Labelling can also be used for buildings
B
All EU member states and accession countries are introducing mandatory energy certification of buildings
FD
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Labelling can also be used for buildings
B
All EU member states and accession countries are introducing mandatory energy certification of buildings
FD
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Labelling can also be used for buildings
B
All EU member states and accession countries are introducing mandatory energy certification of buildings
FD
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Progression in UK building code requirements for new homes
0%
20%
40%
60%
80%
100%
120%
2002 2004 2006 2008 2010 2012 2014 2016
Sh
are
of
per
mit
ted
200
2 en
erg
y (c
arb
on
em
issi
on
) lim
its
Actual Proposed
Source: UK Energy Efficiency Action Plan 2007
Gas condensing boilersLow E double glazing
Whole building provisionsWith prescriptive underpin Based on carbonCodes for retrofit
Mandatory certification of homesBoiler + AC inspections
Zero net carbon homes(exempt from stamp duty)
It is estimated that 30% of UK’s projected 2050 building stock is yet to be built
2002 codes up to 70% more stringent than in 1990
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Policy driven growth of low-E double glazing in Europe
0%
20%
40%
60%
80%
100%
1985 1990 1995 2000 2005 2010
Switzerland
Germany
France
UKImplementation of thermal regulation(building code)
Increasing share of triple glazing
(Label Minergie)
Announcement
Source: Saint-Gobain, FranceCEPE, ETH Zurich
Mar
ket s
hare
of c
oate
d gl
azin
g
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
Germany: building efficiency policies
0
500
1000
1500
2000
2500
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
PJ Electricity
WoodDistrict heatGasOil productsCoal
Structure of space heating energy demand of residential buildings in Germany
ImpactsEnergy demand of existing buildings reduced by up to 30% (total of autonomous technical progress and policy measures)At least 15% EE improvement of building stock attributable to policies since late 1970s
© OECD/IEA - 2008
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
France: fiscal incentives for buildings
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
1974
1976
1978
1980
1982
1984
1986
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1990
1992
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1996
1998
2000
2002
2004
2006
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Energy conservation, energy efficiencyLarge (retrofit) worksMaintenance (plastering)Large building equipement Normal rate large retrofitRate maintenance (plastering)Increased rate large retrofit (recently acquired buildings)
Deductions from taxable income
Upper limits of tax incentive (Euro 2004) Rate
Tax credits Reduced VAT rate
Tax reductions
Energy not
includ.
Owners and tenants (O&T) Only owners (large retrofit
O&T Only owners
Income tax reduction, tax credits, VAT specific only during early 1980s & 2004+
Development from deductions from income (1980s) to tax credits (1999+)
Tax credits preferable over taxable (socially, effectiveness)
Currently:
Tax credits: 15% to 50% of costs
Incentives related to efficiency requirements
© OECD/IEA - 2008
European Commission, Directorate-General for Energy and Transport n° 331.02.2006
EU 2006 EnergyEU 2006 Energy Services Services DirectiveDirective
1. Member States to achieve 9% energy savings target by the 9th year of the Directive’s implementation (2008 to 2016) for all sectors except EU ETS
2. MS to submit national energy efficiency action plans for review to the European Commission by June 2007, a second by mid 2011 and 3rd by June 2014 describing measures to achieve the national savings targets
3. Obligation placed on energy distribution, DSOs and/or retail energy sales companies: - to deliver energy services, energy audits and energy efficiency measures or contribute to an energy efficiency fund
5. All measures must be verifiable and measurable or estimable
6. Public sector required to do two of: audits, performance contracting & public procurement
Source: DG-TREN
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
UK EEAP measures aims to save 18% by 2016 & 25% by 2020
© OECD/IEA - 2008
© OECD/IEA - 2008
Growing no. of utility efficiency obligation schemes
Source: www.EuroWhiteCert.org
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIEINTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE
e.g. UK Energy Efficiency Commitment savings over 2 years
BCR = 5.2
© OECD/IEA - 2008
© OECD/IEA, 2008© OECD/IEA, 2007
Thank you
© OECD/IEA, 2008
Paul Waide
International Energy Agency
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