Why Energy Efficiency should be an important part of the Mekong region's energy future

Why Energy Efficiency should be an important part of the Mekong region’s energy future?

Ms. Napaporn PhumaraphandElectricity Generating Authority of Thailand

9 December 2011

Mekong Forum on Water, Food and Energy

Phnom Penh, Cambodia

Outline of the Presentation

I. World Energy Consumption and Efficiency and climate change : the need to go EE

II. Possible Drivers of and Barriers to EE

III. EGAT Experiences in Implementing EE

IV. What EGAT has learned after 15 years

V. Conclusion

2

I. World Energy Consumption and Efficiency and Climate Change : the need to go EE

3

During 2007-2030, 93% of the increase are from developing countries with 50% from China and India

During 2007-2030, 93% of the increase are from developing countries with 50% from China and India

Source : IEA World Energy Outlook 2009

World Energy Consumption; 2008 – 2030 increase by 43%

4

5

Drivers of Energy Demand

Rising IncomesAs incomes rise,

people use the increased disposable income to obtain consumer goods, which include energy-intensive appliances and equipment

Source : Energy Trends in Developing Asia: Priorities for a Low-Carbon Future , September 2011

Currently ~ 2 kWh per capita

per day

To be around 6 kWh per capita per day

To be around 4-6 kWh per capita per day

Source : IEA, 2006

Figure: How per capita income drives electricity demand

6

Drivers of Energy Demand

Source : Energy Trends in Developing Asia: Priorities for a Low-Carbon Future , September 2011

By 2030, it’s predicted that half of the world’s urban populations will live in Asian cities

While almost 75% of annual global office space construction is taking place in Asia

results in great increase in energy use and emission ,as buildings are associated with 40% of global energy use.

Urbanization & Energy Consumption

6

Change of World Energy Consumption during 2007-2030Source : IEA World Energy Outlook 2009

7

Trends in energy Demand and Green House Gas Emissions in Developing Asia

In the next 20 years, 90% of the growth in world energy demand will come from developing countries (share of primary energy demand from 28% to 38% in 2030)

Electricity generation will double by 2030 with production from coal increase by 77% while hydroelectric power will increase by 44%

Coal will continue to be the dominant fuel in power sector, though its share decrease from 69% to 59%

Source : Energy Trends in Developing Asia: Priorities for a Low-Carbon Future , September 2011

EE accounts for 64-84% of CO2 reduction during the year 2020-2030

EE accounts for 64-84% of CO2 reduction during the year 2020-2030

Source : IEA World Energy Outlook 2009

Potentially, during 2020-2030, ASEAN countries can reduce CO2 emission by 25%

Abatement Measures for CO2 Reduction in 450 ppm Scenario: ASEAN Countries

8

Asia’s Contribution to GHG Emissions

EE accounts for 57-65% of CO2

reductions 2020-2030 during

EE accounts for 57-65% of CO2

reductions 2020-2030 during

Source : IEA World Energy Outlook 2009

World’s Abatement Measures in Contribution to GHG Emissions

9

Abatement Measures for CO2 Reduction in 450 ppm Scenario: World Overview

Source : IEA Energy Balance, 2008

Energy Efficiency = Primary Energy Consumption

GDP

Japan

OECD U.

S.

Korea

Canada

Thailand

Middle-East

India

Indonesia

China

Russia

0

2

4

6

8

10

12

14

16

18

1.01.9 2.0

3.1 3.2

6.3 6.5

7.88.4 8.5

16.7

Comparison of Energy Efficiency in various countries

10

Source : IEA Energy Balance, 2008

Electricity Efficiency = Primary Electricity Consumption

GDP

Japan

OECD U.

S.

Korea

Canada

Thailand

Middle-East

India

Indonesia

China

Russia

0

2

4

6

8

10

12

1.001.66 1.77

2.873.27

3.943.56

3.92

2.72

6.26

10.66

Comparison of Electricity Efficiency in various countries

11

II. Possible Drivers of and Barriers to EE

12

Source : IEA Energy Efficiency Governance, 2010

65% Lack of consumer awareness

65% Lack of consumer awareness

46% Low or subsidised energy prices

46% Low or subsidised energy prices

Frequency of energy efficiency barriers cited by 120 respondents from 27 countries

46% Accessing affordable financing

46% Accessing affordable financing

46% Policy and implementation capacity

46% Policy and implementation capacity

13

Energy Efficiency

Source : IEA Energy Efficiency Governance, 2010

Barriers

× Market organization and price distortions

× Financing

× Information and awareness

× Regulatory and Institutional

× Technical

Drivers VS. Barriers to promote EEDrivers VS. Barriers to promote EE

Drivers

Energy Security

Economic Development and Competitiveness

Climate Change

Public Health

14

III. EGAT Experiences in Implementing EE

15

a) By cabinet resolutions (1992)

b) Cost-effectiveness; Avoided costs of electricity supply exceed EE program costs

c) Environmental Benefits

d) Corporate Images

EGAT rationales to implement EE programs

16

4 Electricity Generating Authority of Thailand

Same or better customers’ benefit on electricity use but less consumption

Efficiency increase with affordable prices & standard quality

Voluntary cooperation of manufacturers & importers

Win – Win Solution <Manufacturers/Customers/Nation>

EGAT’s DSM Philosophy

17

DSM Strategies implemented by EGAT

# 1. Market Transformation

- Thin Tube Program, - Appliance Efficiency Labeling Program

# 2. Customer-Oriented Program Design- Flexibility to Accommodate Customer Needs- The Green Building Program

# 3. Public-Private Sector Partnership- Energy Services Company (ESCO)

# 4. Attitude Creation- Green Learning Rooms & Use of Mass Media

Implementation Strategies

18

Standard & Labeling program Energy efficiency labeling, rating scale 1-5

(worst-best) 13 kinds of appliance to date

Market transformation Thin tube program

DSM Initiatives – Focusing Residential SectorDSM Initiatives – Focusing Residential Sector

19

Refrigerator (1994) Air conditioner (1995) Compact Fluorescent Lamp (1996) Electromagnetic Ballast (1998) Electric Fan (2001) Automatic Rice Cooker (2003) Lighting Luminare (2003) T5 (2009) Electronic Ballast (2009) Double-oscillating Fan (2009) T5 Luminare (2010) Exhaust Fan (2010) Standby 1 Watt – Television (2010)

Energy Labeling by EGATEnergy Labeling by EGAT

20

Example of campaign and advertisement

21

“Together in conservation”

22

23

DSM program impacts (as of October 2011)DSM program impacts (as of October 2011)

Share of Peak Demand saving by program

Share of CO2 reduction by program

Air Conditioner

44.7%

Refrigerator21.3%

Lighting31.4%

Fan1.8%

Rice cooker0.7%

Other0.1%

Air Conditioner

44.1%

Refrigerator24.4%

Lighting28.7%

Fan2.5%

Rice cooker0.1%

Other0.1%

23

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Baht/kWCost per kW Saved

The cost to produce electricity

Marginal Capacity Cost 5,053.20 Baht/kW/yr.

Marginal Energy Cost 1.2451 Baht /kWh

Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(Oct.)Cost/kW 2,748 2,590 2,992 3,323 3,277 3,174 2,961 2,727 2,492 2,451 2,468 2,364 2,290 2,088 1,897Cost/kWh 0.49 0.47 0.54 0.60 0.58 0.56 0.53 0.49 0.46 0.44 0.43 0.41 0.39 0.35 0.32

Accumulated DSM Expenditure per Unit Saved by year

Baht per Unit

DSM program Costs (as of October 2011)DSM program Costs (as of October 2011)

24

DSM Master Plan 2010-2015

CO2

ReductionMW % GWh % (Thousand Ton)

On-going Programs

1 Refrigerator 192 26.5 524 15.0 2882 Air Conditioner 77 10.6 631 18.0 3473 Electric Rice Cooker 0 0.0 2 0.1 14 Electric Fan 51 7.0 114 3.3 63

(all types of 12 & 16-inch blade ) 0 05 CFL 209 28.8 1,356 38.7 7466 T5 Fluorescent Lamp 175 24.1 805 23.0 4437 Low Loss Ballast -8 Electronic Ballast for T5 -9 Luminaire -

704.0 97.1 3,433 98.0 1,888New Programs

10 Standby Power іњє N/A N/A 54 1.6 30Television N/A N/A 47 1.4 26Computer Monitor N/A N/A 0 0.0 0Air Conditioner N/A N/A 6 0.2 4

11 Electric Water Boiler 1 0.1 4 0.1 212 Freezer 0 0.1 3 0.1 213 Transformer 1 0.1 6 0.2 314 Load Control project 19 2.6 0 0.0 015 Washing Machine 0 0.0 2 0.0 116 Air Conditioner (rescaling)17 Refrigerator (rescaling)18 Electric Fan (rescaling) 19 T5 Luminaire 20 Electric Water Heater21 Television22 Electric Motor23 LED24 Chiller25 Microwave Oven26 Pump27 Air Conditioner (Invertor, Hybrid)

21 2.9 70 2.0 38

725 100 3,502 100 1,926

Total

Total

Grand Total

Appliance/Equipment

Year 2010-2015Estimated Saving

Peak Demand Reduction Energy Saving

No saving claimed due to its replacement by electronic ballast-T5 setAlready claim saving in T5 setNo saving claimed

Feasibility studyingFeasibility studying

Standard rescaling in 2011 and saving potential is already calculatedNo saving claimed

Item

Standard rescaling in 2011 and the saving potential is already calculated in the on-going program

Feasibility studyingFeasibility studyingFeasibility studyingFeasibility studying

Feasibility studyingFeasibility studying

at Generation Level

Continuation and expansion of Label NO. 5

Market-based Standard Adjustment

Load control project

(Demand Response)

25

IV. What EGAT has learned after 15 years

26

1. Credit of EGAT as a government-owned utility or energy provider always gains public trusts in EE implementation. e.g. Labeling No.5 has been widely accepted by consumers.

2. Program monitoring and evaluation is as critical to the success as program delivery/implementation. Because it is important that the achieved no. of energy saving to be integrated into power planning as a supply option should be reliable.

27

Lessons Learned

3. Supportive government and utility policies on key issues are necessary.

3.1 For program sustainability. It is obvious that utility or energy provider like EGAT only performs voluntary programs which will not last in longer term. While EE measures could be permanently achieved through mandatory/compulsory programs that needs strong policy direction e.g. Voluntary Labeling VS. MEPS

28

Lessons Learned

3.2 Financial resources and mechanism are critical to the scale of energy efficiency program delivery and its sustainability.

Policies and regulations to encourage utility to promote energy efficiency programs could be developed such as rewarding mechanism with comparable level of earnings for energy efficiency investments as well as earnings from energy sales.

29

Lessons Learned

V. Conclusion

30

4 Electricity Generating Authority of Thailand

Energy Demand still growing especially in the developing world.

Other than RE, we need EE to protect our environment. RE alone is not sufficient.

New supply of power does not deserve to be developed if it is feeding wasteful use.

Power utility is appropriate for implementing EE / DSM programs like EGAT does.

EE / DSM is always a win-win solution to all stakeholders.

31

Conclusion

3232

Thank you for your attention

Ms. Napaporn Phumaraphand

Director, Demand- Side Management & Planning DivisionElectricity Generating Authority of ThailandBang Kruai, Nonthaburi 11130, THAILAND

E-mail: [email protected]. +66 2436 8100Fax.+66 2436 8190

Electricity Generating Authority of Thailand