Revolutionary Green: Innovation for Global Sustainability

Revolutionary Green: Innovation for Global Sustainability

Green BuildingInternational Conference

BostonNovember 20th 2008

Dr Marianne OsterkornREEEP CEO

1. Energy efficiency in buildings in a global context

2. Activities in the EU, India, China and the US

3. Barriers to energy efficiency in buildings

4. REEEP activities in energy efficiency

OVERVIEW

When asked what two things individuals can do to address climatechange, the reply from Sir Nicolas Stern:(Chief Economist of the World Bank from 2000-2003, holds I.G. Patel Chair at London School of Economics)

• Eat less red meat; and

• Insulate your home

March 30, 2007, UC Berkley

The impact of insulation is real and immediate

Source: IEA

Almost 40% of final energy is consumed by buildings

Building sector is also the driver of the world eco nomy - the sector accounts for 9% of GDP in China and the EU and for 7% in India

Source: BP Yearbook, IEA

The rise in energy demand may be slowed down by the current global economic crisis, but will continue nonetheless.

China accounts for 15% of world energy demand, with 19% of the world’s population. One half of the global cement productio n occurs in China as the country leads in new buildings and roads.

Source: IEA

In 2007 China surpassed the US as the world's large st CO2 emitter

However, China’s per capita emissions of 3.7 tons s till remain far below the US per capita figure of 19.7 tons.

Projected annual CO2 emissions in million metric to ns

Source:IEA

The US, OECD/Europe and Russia consume most of thei r energy in the building sector, with savings potential of over 50%

Energy demand by sector 2005

Due to the energy-intensive industrial production i n China, the building sector still accounts only for 19% of energy demand.

The greatest GHG savings potential can be achieved through end-use energy efficiency

Improved efficiency in the building sector and de-c arbonizing the power sector could bring emissions back to current levels by 2050.

Source: IEA

The lost finances could have nearly saved our plane t

The current financial crisis will

cost 2200 Billion USD

The current financial crisis will

cost 2200 Billion USD

� could have financed the reduction of 60% of the GHG emissions

� could finance the insulation of 60% of all EU private homes

� Wind capacity could be increased five times the installed capacity of China

� could have financed the reduction of 60% of the GHG emissions

� could finance the insulation of 60% of all EU private homes

� Wind capacity could be increased five times the installed capacity of China

Buildings offer emission reduction at negative cost s

Source: Vattenfall

Source: IEA

Market forces alone do not deliver cost effective s avings –Supporting policies / incentives are urgently neede d

Example Denmark: The result of energy certification of more than 200,000 buildings show that implementing building codes would still b ring further improvements.

Actual energy consumption in single family houses i n Denmark, relative to energy efficiency requirements in building codes

The EU aims for the 20/20/20 target by 2020:

40% of EU's energy is used in the building sector and accounts for 38% of its emissions with a savings potential of 55 %

Key element is the Energy Performance of Buildings Directive (EPBD)� Minimum energy performance standards for new and existing buildings that

undergo major renovation� Energy performance certificates for buildings� Regular inspections of boilers and air-conditioning systems� An integrated methodology to rate the energy performance in each country� Road map - for each member state for low /zero energy houses by 2015� National incentive systems have to be established

• 20 % CO2 reduction• 20 % share of renewables• 20 % energy efficiency improvements

In the EU approximately 16,000 passive houses have been built

PASSIVE HOUSEinitiative

75% reductionof energy use

PASSIVE HOUSEinitiative

75% reductionof energy use

� Voluntary standard

� Focus on building envelop

� regional, local and national incentives ( tax reductions, subsidies, special loans )

� nearly all EU countries have a passive house initiative

� 5-10% higher costs

� Voluntary standard

� Focus on building envelop

� regional, local and national incentives ( tax reductions, subsidies, special loans )

� nearly all EU countries have a passive house initiative

� 5-10% higher costs

Source: IEA

Zero energy buildings require both increased effici ency standards and the utilization of renewables

Some 60-70% of energy reduction will come from incr eased efficiency. Beyond that, use of renewables is what will tip the balance from a low-energy house to a zero-energy one.

Governmental Goal in 11th -5 year plan (2005-2010)

� reduce energy consumption per unit of GDP by 20%

� reduce Building Energy Consumption by 50%

� improve energy efficiency of government institutions - save 10% energy per unit construction area and per capita

� reduce electricity consumption of appliances by 29 billion KWh

� increase industrial energy efficiency

� enhance efficiency monitoring and auditing

� Top 1000 Industrial Energy Conservation Programme

Building sector is China's 4th largest industry, ma king up 8.9% GDP

� ECBC - Energy Conservation Building Codes

� All buildings having a connected load of 500KW

� Mandatory for commercial buildings

� Applies for new construction only

� Includes all building components

� Energy efficiency programme in buildings - 500 public buildings

� Energy Audits

� Performance contracting

� ESCO promotion

� Additional innovative finance facilities

The construction sector accounts for 7% of India's GDP with a savings potential up to 40%

� Target of making America the most energy-efficient country in the world (currently ranked 22nd)

� Setting national building efficiency goals� Make all new buildings carbon neutral or zero emissions by 2030

� Improving new construction efficiency by 50%, existing building efficiency by 25%

� Make the U.S. federal government (the world’s largest single consumer of energy) a leader in green building

� Retrofits to achieve a 40% increase in efficiency of federal buildings within 5 years

� All new federal buildings zero emissions by 2025

� Weatherize one million low-income homes annually

� More energy-efficient land use and development patterns

In the US, construction is the second largest indus try accounting for 8% of GDP. The Obama campaign’s ambitious “New Ener gy for America” plan includes:

Sector related issues� Many decision makers (millions of homeowners)

� Lack of financing mechanisms

� To much emphasis on construction costs and too little on ongoing running costs.� Short occupancy (< 20 years)

� Split incentives (owner/renter, different budgets in public buildings)

� Lack of knowledge by owners, by constructors, advisers and banks� Need for front-loaded efforts – the day after sale or refurbishment is too late!

Factors hampering energy efficiency improvements in buildings:

Inertia and lifestyle issues� Energy use is invisible (“Only fix what you can touch ...”)

� Savings might indicate low status (“I can afford to be inefficient …”)� Belief that all new buildings are efficient (“Building must be good, mandated by law ”)

Need to address all barriers at the same time – poli cy package

1. REEEP is a global private public partnership launched by the UK government at the WSSD in Johannesburg in 2002

2. REEEP aims to accelerate the market development in both renewables and energy efficiency systems, with emphasis on transition and developing countries

3. REEEP acts as a grant organization for two types of projectsthat support market acceleration:

1. Policy/regulation formulation and improvement2. Innovative finance mechanisms

4. REEEP is funded by 11 governments and has an annual budget of around € 5 million.

REEEP – Renewable Energy and Energy Efficiency Partn ership

REEEP comprises 270 partners + 3000 friends of REEE P

Currently more than 270 partners:

• 42 Governments

• International organizations, NGOs and companies

REEEP currently undertakes 52 projects in 29 countr ies

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Financing energy-efficient street lighting in India

� Innovative financing mechanism in effort to reduce energy consumption (by 30-40%) in the street lighting network in the cities of Madhya Pradesh

� Establishment of an ESCO to work with municipal entities

� Supervision of the project implementation and link to CDM

� Expansion of this project solution in Madhya Pradesh to a further 100 cities in India

� Project partner: Econoler International

Establishing an ESCO in Brazilian commercial and in dustrial sectors

� Reduce energy intensity of big energy industrial and commercial customers of PETROBAS by up to 10%

� Undertake a business analysis of customer consumption data and establish a feasibility of an ESCO operation

� Establish a independent ESCO and a business plan to capitalize the identified market (attracting equity and debt financing of approx €5 million)

� Establishing a model for major energy utilities to diversify into the sustainable sector (not core business up to now)

� Project partner: Econoler International

Establishing energy-efficient building codes in Rus sia and Kazakhstan

� Increased energy efficiency in new and renovated buildings has reduced CO2 emissions by 9.5 million t to date

� Development of improved building codes and compliance manuals

� Training of leading building officials on best practices in code enforcement as well as efficient building technologies

� Project partner: IMT

REEEP International SecretariatVienna International Centre

Room D1732Vienna, [email protected]

+43 1 26026 3677

www.reeep.org