Building capacity for IEE services in developing and emerging economies



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UNIDO Industrial Energy Efficiency Programme Building capacity for IEE services in developing and emerging economies Presented by: Aimee McKane 1 and Marco Matteini 2 12-13 November 2009 Farmleigh House, Dublin, Ireland 1 Senior Program Manager, Lawrence Berkeley National Laboratory and UNIDO Expert 2 Consultant with UNIDO Energy Efficiency and Policy Unit 1

Context Outline Global and developing/emerging countries ISO 50001 and global trade Energy efficiency opportunity Building on prior experience UNIDO Industrial Energy Efficiency Programme Framework Scope Approach to building capacity Developing a baseline Strategies for addressing SMEs Way forward 2

Context - Global Industrial energy use globally accounts for 40% of electricity use 77% of coal and derivatives use 37% of natural gas use and 1/3 of global CO 2 emissions 1 Increased nuclear Increased Renewables Power sector efficiency i & fuel Reference Scenario Source: IEA Alternative Policy Scenario 13% 29% 29% Industry has the potential to reduce its energy intensity and emissions by up to 26 32%, providing a 8-12% reduction in total energy use and CO 2 emissions 2 Electricity end - use efficiency Fossil fuels end -use efficiency Potential CO 2 emission reductions from different policy options 1,2 Source: IEA, 2006 and 2007 3

Context Developing & Emerging Countries Industrial energy use can be up to 50% of the total use and can produce supply problems Despite the recent economic slowdown, developing and emerging countries still lead global growth of energy demand and CO 2 emissions Industrial sector growth requires many new facilities, rapidly built & expanded; including substantial growth in energy intensive sectors Building in energy efficiency the first time is much more cost- effective than retrofitting it later Once missed, energy efficiency opportunities may not reoccur Governments are increasingly gy aware, and concerned about, both energy security and climate change Assistance may be necessary to accelerate development of capacity to respond effectively 4

Global impact of ISO 9001 Total Nu umber of Certific cates 1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 Adoption of ISO 9001: 1994 ISO 9001:2000 Oceania Western Europe Southern Europe Northern Europe Eastern Europe Western Asia South-Eastern Asia Southern Asia Eastern Asia Central Asia South America Northern America Central America Caribbean Africa 0 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Source: McKane, A. and Olsen D., LBNL 2009 based on ISO Survey data 5

ISO 9001 and Export Markets 35000 ISO 9000 Certificates 180000 30000 160000 ast Asia) Total Ce ertificates (Southe 25000 20000 15000 10000 5000 140000 120000 100000 80000 60000 40000 20000 tes (Northern & Western Europe) Total Certificat 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 South-Eastern Asia Northern and Western Europe Source: McKane, A. and Olsen, D., LBNL 2009 6

ISO 50001 and Trade Uptake of ISO 9001 in the supply chain was driven largely by Northern & Western Europe and Japan For ISO 50001, the uptake will be more global- led by US, expanded EU, Japan, Korea, Brazil, China, Canada, probably India, and others) Use of ISO 50001 will be driven by companies seeking an internationally ti recognized response to: International climate agreements National cap and trade programs, carbon or energy taxes Corporate sustainability/responsibility programs Increasing market value of green manufacturing Carbon trading schemes Large global corporations will demand participation by their suppliersas is already happening for environmental and lean manufacturing (i.e.- Wal-Mart, Toyota) 7

Why Isn t Industry More Energy Efficient? The business of industry is not energy efficiency Facility engineers ee typically y do not become e top managers age Budgets are separate for equipment purchases and operating costs Data on energy use of systems is very limited Difficult to assess performance or evaluate performance improvements Opportunities to become more energy efficient are overlooked 8

Why System Energy Efficiency Matters 15 kw motor efficiency = 91% Courtesy of Don Casada, Diagnostic Solutions and US Department of Energy Combined motor & pump efficiency = 59% System efficiency = 13% 9

Lessons Learned from UNIDO China Motor Systems Energy Conservation Program (2000-2005) 2005) Management engagement is essential for EE project implementation System optimization skills can be transferred through a concentrated training program Cultural context is an important factor in successful knowledge transfer Energy savings potential is large - 40 million kwh identified in the first 38 system assessments Trained individuals are highly sought after and take their skills with them To be sustainable, energy efficiency needs to be integrated into management practices 10

Industrial Standards Framework Policy Objective i Policy Policy Response Response Market Market Response Response Establishing National Goals for GHG Reduction Capacity Building Voluntary or Target-setting Agreements; Tax incentives Energy Management & System Optimization Training of plant engineers/consultants/ suppliers Companies commit to energy intensity reduction targets Trained experts implement EM plans, conduct system assessments, sell services Integrating Energy Efficient Practices Identifying Energy Saving Opportunities Implementing Energy Efficiency Projects Documenting for Sustainability Market Recognition Energy Management Standard, Guidance, Training Trained EM & System Experts Standardized Assessments Financial incentives, loan guarantees & subsidies, energy efficiency credits, ESCOs Energy Management Plan System Optimization Library Measurement & Verification Recognition Programs, Energy Efficiency Credits, Certification Plants actively manage energy like other resources Plant managers use trained experts (internal & external) to identify EE opportunities Plants implement more projects, buy system services, accrue credits Energy savings continue through project lifetime & are recognized by third parties Companies/financial institutions value energy efficiency 11

UNIDO Industrial Energy Efficiency Program 1. Energy management Focus Areas 2. Systems optimization (steam system, pumps, compressed air, refrigeration, etc.) Why? Relevant and applicable over the entire industrial sector, no matter what the technological and production processes are (IPCC 4 th Assessment Report, IEA) Energy management prerequisite for sustainable and continual improvement of energy efficiency and performance in industry 12

UNIDO Industrial Energy Efficiency Program Partnerships IEE demo projects System Optimization Energy Management Standard IEE Policy support Capacity building Industry, institutions and market paye players 13

UNIDO IEE Projects Portfolio 15 countries currently covered: Russia, Moldova, Turkey, South Africa, Egypt, Iran, Indonesia, Malaysia, Philippines, Thailand, Viet Nam, India, China, Brazil, Ecuador Overall portfolio budget over the period 2010-2014 Total GEF Co-financing Co-financing (,000 USD) Cash (,000 USD) In-kind (,000 USD) 48,500 20,000 30,000 60,000 70,000 SMEs are explicitly in the focus of UNIDO projects in Turkey, Thailand, Malaysia, Moldova, India and Ecuador 14

Energy Management System Standards Energy management standards provide best-practices based, structured and comprehensive guidance on how to integrate energy efficiency into daily management practices using the well-known plan-do-check-act approach (ISO 9000, 14000, 22000) by: Developing energy efficiency goals Planning and prioritizing energy efficiency measures & investments Monitoring and documenting savings for internal and external use (e.g. emission credits) Ensuring continuity and constant improvement of energy performance 15

Energy Management & System Optimization Energy management standard provides: A framework for understanding significant energy use Action Plans to continually improve energy performance Documentation to sustain energy performance improvements System optimization provides: A method of assessing systems to identify energy performance improvement opportunities Actions that can provide significant energy savings with limited capital investments More reliable operations Energy Management + Systems Optimization = Winning Strategy 16

UNIDO IEE Projects Taking a Comprehensive Approach Goal: Integrate EE projects into enterprises existing management structures for continual improvement Elements: 1. Energy management system (standard) 2. Capacity building on energy management and system optimization Create cadre of local experts to develop projects and provide services to industry 3. Access to tools to identify EE opportunities and document compliance 4. Information, dissemination, promotion and recognition national programs 5. Agreements with industrial sectors that establish plant-specific energy efficiency targets 17

UNIDO Approach to Building Capacity 1. Cross-cutting approach, not specific to particular sectors or industrial processes, but applicable across all industrial sectors 2. Focus is on the transfer of knowledge and skills through training. Technical skill is required to identify opportunities and improvements- a one-size-fits-all approach misses most of the savings 3. Goal : developing the capability to analyze EE opportunities rather than offering ready-made made solutions Energy management can help build the demand for system optimization 18

UNIDO Approach to Building Capacity Target all IEE market players Energy efficiency experts and consulting companies Management system experts (ISO 14001, 9001) Equipment manufacturers and service providers Government sponsored energy centres Enterprises personnel Financial institutions Public institutions (i.e. Regulators, University, NGOs, etc.) 19

UNIDO Approach to Building Capacity Step 1 Typical system optimization expert training Preparation for capacity building - selection of trainees, training sites, equipment, classroom logistics Step 2 1 st training period int l experts provide classroom + measurement training at industrial sites; group exercises to test assessment skills Step 3 Application of knowledge, skills and tools provided to identify and develop system optimization projects (with int. experts coaching) Step 4 2 nd training period int l experts observe application of trainee skills in plants and training of factory personnel, provide advanced training Step 5 Step 6 Implementation of system optimization projects developed by trainees and reviewed by international experts (with int l experts coaching) Reporting of energy savings and development of case studies 20

UNIDO Approach to Building Capacity Market opportunities for energy efficiency and management Information, Awareness and Promotion Energy Management and System Optimization Expert Training programs EM/EE training of enterprise personnel Provision i of EE technical services to industry Development of a Market for EM/EE services to industry Implementation of EE projects in industry Project duration After project 21 time

Strategies for addressing SMEs Light industry (SMEs) consumes about 30% of industrial energy use but has a disproportionally high level of energy savings potential (IEA 2008 for G8 Meeting in Hokkaido) Learn from past experience ISO 9001 and ISO 14001, but drivers for implementation of ISO 50001 will be different and differently weighted bottom line Critical to develop relevant national best practices & success stories Search for new approaches UNIDO IEE Project in India looking at clusters experience More information on SMEs energy practices and performance in developing and emerging countries is needed d UNIDO Survey 22

UNIDO-GEF Survey on EE practices in Industry Rationale Inform the formulation of the UNIDO-GEF projects as well as national policy-makers, standards authorities and industry associations in the design of their IEE programs, development policies i and business plans Determine current practice baseline to allow evaluation and verification of program impacts 23

UNIDO-GEF Survey on EE practices in Industry Scope of the Survey A. Energy management practices 1. Energy planning and management responsibility 2. Energy and equipment procurement 3. Energy measurement and process control 4. Performance review B. Energy Efficiency and Process Improvements C. Readiness to invest in energy efficiency D. Barriers to improved energy management and energy efficiency 24

UNIDO-GEF Survey on EE practices in Industry Scope of the Survey - cont F. How to best support energy efficiency in your enterprise G. Energy consumption 1. Purchased electricity and heat 2. Self-generated electricity 3. Self-generated heat 4. Fuel used for other purposes 5. Total fuels and energy consumption of the Company H. Technology in use I. Production trends 25

UNIDO-GEF Survey on EE practices in Industry Countries where the UNIDO GEF Survey is ongoing Moldova Vietnam Thailand The Philippines Countries where the UNIDO GEF Survey is planned Malaysia Indonesia Egypt 26

Way forward Information and awareness prerequisite for enterprises and industry engagement and investment in EE Availability of qualified national IEE professionals and adequate technical capacity at enterprise level remain central to deliver energy, cost and CO 2 savings Policies and programs to support adoption and implementation will be needed in most developing and emerging g countries Monitoring, verification and certification is anticipated to become increasingly gyimportant and in need of attention SMEs will continue to represent a special case for ISO 50001 need to develop and test special solutions, provide targeted guidance 27

Thank you for your attention! For more information Aimee T. McKane Lawrence Berkeley National Laboratory P.O. Box 790 Latham, NY 12110 USA Tel: 001 518 782 7002 E-mail: atmckane@lbl.gov Marco Matteini Energy Efficiency and Policy Unit UNIDO Vienna International ti Centre P.O. Box 300, A-1400 Vienna, Austria Tel: 0043 1 26026 4583 E-mail: MM M.Matteini@unido.org i@ id 28