INCREASING URBAN ENERGY SUPPLY THROUGH ENERGY EFFICIENCY UN Symposium on Sustainable Cities.

INCREASING URBAN ENERGY SUPPLY THROUGH ENERGY EFFICIENCY

UN Symposium on Sustainable Cities

Cities need energy to grow

Cities economic growth is constrained by inadequate electricity supply

Brown outs and load shedding are a fact of life in many cities

Generators are ubiquitous New energy infrastructure

is expensive Urban poor are under-

served

Energy efficiency increasesenergy supply

Energy efficiency = boosting energy productivity Lowest cost source of energy; using energy more

efficiently, not wasting it Energy demand in developing countries growing at

3.4% annually Energy efficiency could cut energy demand in half to

1.4% per year Would reduce energy demand by 25% by 2025 Time is of the essence: 50% of capital stock (buildings)

will be constructed or refurbished in next 20 years Implementing optimal energy efficiency can lock in

energy savings for decades

Scope for urban energy efficiency

Energy efficient building codes to cover HVAC, lighting and thermal insulation

Street lighting, stop lights Sizing of pumps for water and sanitation Green procurement: only energy efficient

products Collaborate with private sector ESCOs in

energy performance contracts for government buildings

Promote energy efficient consumer behavior

Market barriers to energy efficiency

Capital costs for EE equipment (HVAC, refrigerators, air conditioners,…) are higher

Consumers and builders lack information to make right energy choices

Builders do not operate buildings, are concerned with lowering upfront building costs, no incentive to reduce operating costs

EE projects often small, need to be aggregated to attract investment

Due to energy subsidies, consumers are insulated from true price of energy

Tighter credit markets make financing more difficult

Pricing

In many countries, consumers pay less than the supply cost of energy

IEA argues to reduce fuel subsidies – $250 billion in annual subsidies in developing countries in 2005

Inhibits investment in new energy infrastructure Makes energy efficiency measures uneconomic Alternative – direct cash/credit payments to

urban poor for electricity use Case study from Baja California, Mexico

Baja California, Mexico: Credits to urban poor for electricity bills Income from a wind power

plant ($2.6 million) made available as credit against electricity bills and energy-efficient appliances for 35,000 impoverished families of Mexicali

Priority given to elderly, single mothers, low-income families with children and disabled

Save up to 40 percent off electricity bills during summer months

Provide monthly cards of credit $$ to urban poor for payment of electricity bills

Energy efficiency standards and labels

Energy efficiency standards are regulations that specify the minimum allowable energy performance for appliances, lighting, equipment, even buildings

Standards prevent inefficient products from entering the market

Provide information to consumers and builders so they can make informed choices

Green procurement: government is largest consumer; procurement of only EE products can transform market

Develop energy efficiency building codes

Require builders to use only highly efficient HVAC equipment, windows and lighting products

Mandate adequate building thermal insulation

Mandate optimization of new building energy performance

Can yield significant savings in operational costs in terms of energy and money

Locks in energy savings for decades

Energy labeling aids

Endorsement label: top 20%

Information label

Energy efficient refrigerators

LED street lighting

Decreasing costs, super high efficiency of LEDs driving new applications

Up to 88% savings in electricity costs

Delivers 30 lux from 4.5 meters using only 25 watts

60,000 hrs lifetime (5-10 X increase)

Uniform light distribution with minimal glare

Similar energy savings for LED stoplights

Engage the Private Sector

Energy Service Companies (ESCOs) are proliferating around the world

Identify potential energy savings Perform feasibility study Conceptualize a project Arrange financing Implement energy efficiency measures Measure energy savings over next few

years and guarantee savings under an energy performance contract

ESCO innovative finance

Finances energy efficiency projects from energy savings

Permits the realization of projects for which $$$ may not otherwise be available

Mobilizes private capital Ensures that savings will be realized in a

certain time frame World Bank, IFC, Econoler and Nexant

supporting ESCO development

Consumer awareness raising

Information campaigns can shape public behavior and values toward energy efficiency

Utilize the gamut of social media: TV, newspapers, bus stop posters, school posters, workplace guidelines, messages in electricity bills,…

California energy crisis in 2001Public information campaign

Energy crisis due to electricity market distortions Government launched FLEX YOUR POWER media

campaign Target audience: from CEOs to school children Within 10 months, reduced peak electricity load by

6300 MW of which 40% due to behavior change

Mohan PeckUN [email protected]

Thank you