Energy Efficiency Priorities: Ukraine. Short, Medium and Long-term Measures

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1 Energy Efficiency Priorities: Ukraine Short, Medium and Long-term Measures 25 March 2015

2 Energy Efficiency & Energy Security: Ukraine Ukraine identified 6,501 ktoe of energy savings in 2020 in its National Energy Efficiency Action Plan. Achieving these savings would be the equivalent of decreasing Ukraine s natural gas imports by around 40% (2014 numbers).

3 Morning Agenda Saving energy in a hurry: Information campaigns & technology replacements Exercise: create an energy-savings campaign Medium and long-term solutions Prioritising Energy Efficiency Policies given Ukranian context Exercise: create your list of priority energy efficiency policies for Ukraine

4 How to Prioritise Short-Term Measures 1. Understand energy use, including patterns of electricity and heat consumption 2. Evaluate potential energy savings measures Costs, benefits, social impacts 3. Put in place standby arrangements Identify lead agency Authority for rationing and other measures

5 Energy Consumption in Ukraine Residential buildings around 34% of TFC: Consume around 25% of the county s electricity Industry around 40% of TFC (before the war) Consumes around 50% of the country s electricity

6 Examine Electricity Load Curves

7 Daily Electricity Load Curve: Kiev

8 Detailed Electricity Load Curve: Sweden Source: Swedish Energy Agency. P Bennich & Anna 8 Johansson

9 Heating in Residential Buildings Account for around 40% of heat production Around 600,000 buildings in Ukraine, including 17.5 million households (avg. of 2.6 people) 10 million households live in housing blocks 3/4 th of Ukraine s building stock was built before % of the buildings built before 1970 need complete modernisation 20% of buildings have modern building-level heat meters (as of 2009) understand 30% of buildings in Kiev have such controls

10 What Short-Term Measures could Decrease Consumption? a. Price signals b. Information campaigns c. Technology replacement d. Rationing e. Market mechanisms

11 a. Price Signals Time-of-use (TOU) pricing, in which price varies according to a preset schedule, e.g. time of day, day of week and season. Real-time pricing (RTP), in which the end-user price is linked directly to hourly spot prices in a wholesale market. Critical-peak pricing (CPP), a hybrid of TOU and RTP in which a TOU rate is in effect all year except for a contracted number of peak days (exact dates unknown) during which electricity is charged at a higher price.

12 b. Information Campaigns Analyse what consumer behaviour to change Identify the target group Choose effective communications channels Convey urgency while keeping an upbeat tone

13 Residential Sector Energywise campaign Patt Murray isode-2/heat-loss-in-the-home Provides concrete advice Resonates in terms of things people care about (comfort, health) Really good website to find out more information Normalises energy-saving behaviour

14 Public Sector 7 minutes of stairs a day can... Decrease risk of heart attack by more than 60% Burn fat! Oh yeah...save energy results: decrease final energy consumption by 35%

15 What a little behaviour change can do

16 c. Technology replacements deploying energy-efficient lighting, especially compact fluorescent lamps (CFLs) and light-emitting diodes (LED); replacing old equipment (ranging from refrigerators to traffic signals) with new, more-efficient technology; retrofitting and/or adjusting existing equipment to make it more efficient; installing load-control devices on selected appliances and equipment.

17 Technologies to Reduce Heating Demand Install controls and temperature regulating valves Improve building envelope Air Sealing Insulation Windows Offer quick-install programme

18 d. Rationing and market instruments Block load shedding Consumption rationing via quotas or entitlements Market-based rationing (quota and trade) Incentive/reward schemes (e.g. California s 20/20 rebate programme)

19 Energy-Savings Information Campaigns Exercise: design an energy-savings information campaign Divide into groups of four Assign a note taker & presenter What is the target audience and why? Who is in charge of the campaign? Which measures are you asking people to take and why? How will you get out the messages? How will you evaluate the impact of the campaign?

20

21 25 EE Policy Recommendations Across 7 Priority Areas Cross-sectoral 1. Energy efficiency data collection and indicators 2. Strategies and action plans; 3. Competitive energy markets with appropriate regulation; 4. Private investment in energy efficiency 5. Monitoring, enforcement and evaluation of policies and measures. Buildings 6. Mandatory building energy codes and minimum energy performance requirements; 7. Aiming for net zero energy consumption in buildings; 8. Improving the energy efficiency of existing buildings; 9. Building energy labels or certificates; 10. Improved energy performance of building components and systems. Appliances and Equipment 11. Mandatory MEPS and labels for appliances and equipment; 12. Test standards and measurement protocols for appliances and equipment 13. Market transformation policies for appliances and equipment Lighting 14. Phase-out of inefficient lighting products and systems; 15. Energy efficient lighting systems Transport 16. Mandatory vehicle fuel efficiency standards; 17. Measure to improve vehicle fuel efficiency; 18. Fuel-efficient non-engine components 19. Improved vehicle operational efficiency through Eco-driving and other measures. 20. Transport system efficiency Industry 21. Energy Management in industry; 22. High efficiency industrial equipment and systems; 23. Energy efficiency services for small and medium enterprises; 24. Complementary policies to support industrial energy efficiency Energy utilities 25. Energy Utilities and end-use energy efficiency.

22 Energy Policy Challenges in Ukraine High energy intensity and poor efficiency Declining production of domestic natural gas resources Increasing energy prices Investment climate Institutional capacity (supply side focus)

23 Energy Efficiency Policy Recommendations

24 Energy Efficiency Data Collection and Indicators (#1) Why? Understand where energy is consumed and support decision-making To set targets and to monitor impacts To forecast energy use across sectors & end uses What? Energy Balances Energy consumption per sector Energy consumption per unit of activity IEA s Energy Efficiency Indicators Template (available online) How? Plan / Funding / Budget / Human Resources Surveys / Inter-Governmental & Private-Public Collaboration

25 Best practices: Strategies and Actions Plans (#2) Identify and remove barriers to cost-effective efficiency investments Assess opportunities for energy efficiency improvements and focus on most cost-effective Set clear objectives and timelines Ensure coherence with energy, environmental/climate and economic strategies Adoption of new and emerging technologies

26 Competitive energy markets (#3) Important to provide energy prices that reflect actual costs of supply Significant amount of public expenditure for energy subsidies could be used in other areas such as energy efficiency Challenge is to mobilise political and public support Need to be socially acceptable and sure energy companies become economically viable which could attract foreign investment

27 Monitoring, enforcement & evaluation (#5) Need to monitor, enforce, evaluate and periodically update policies and measures in all sectors Evaluation before and after implementation to determine effectiveness = use results to improve Baselines assessments and periodic review and reporting Non-compliances identified, reported and addressed Penalties to be clear and deter for non-compliance

28 Buildings

29 Buildings Energy Efficiency 100% 80% 60% 40% 20% Energy efficiency potential used by sector in IEA s World Energy Outlook 2013 New Policies Scenario Industry Transport Power generation Buildings Unrealised energy efficiency potential Realised energy efficiency potential

30

31 25 EE Policy Recommendations (#6) Buildings: Codes & Standards Mandatory building energy codes and minimum energy performance standards New buildings & buildings undergoing renovation Building envelope and equipment Energy codes and minimum energy performance standards (MEPS) Enforced and regularly strengthened To minimise life-cycle costs.

32 25 EE Policy Recommendations (#8) Buildings: Existing Buildings Improving the energy efficiency of existing buildings Significant improvements to building envelopes and systems during renovations. Policies should include: An ambitious timeline and renovation rate MEPS for building envelope and systems, to be met during renovations Energy audits, energy ratings and certification Incentives to encourage investments in long-lasting improvements Incentives to encourage increased market penetration of new high-efficiency products Training to improve building retrofit services Financing options Improvements to the efficiency of public-sector buildings

33 25 Policy Recommendations (#9) Buildings: Labels or Certificates Building energy labels or certificates Governments should require building energy performance labels or certificates To provide information to owners, buyers and renters. At sale or rental

34 25 Policy Recommendations (#10) Buildings: Components and Systems Performance Improved energy performance of building components and systems Improve the energy efficiency performance of building components to improve the energy performance of all buildings Windows and other glazed areas maximum share of glazed area MEPS for windows to minimise life-cycle costs A requirement for performance labelling Standard test protocols and certified product testing HVAC systems MEPS for HVAC systems to minimise life-cycle costs A requirement for energy efficiency labelling Information and training for building designers, owners and others HVAC systems size, installation, testing and maintenance Energy management and control systems Reduce energy consumption and target energy-savings

35 Appliances & Equipment

36

37 25 Policy Recommendations (#11) Appliances and Equipment: Standards and Labels Mandatory MEPS and labels for appliances and equipment Adopt and regularly update MEPS and labels Across the full spectrum of appliances and equipment. Prioritise appliance and equipment types that are likely to result in the largest energy, economic and environmental benefits taking into account likely future sales of new and replacement units, the introduction of new technologies, and emerging issues such as network-connected appliances and equipment. Monitor compliance and verify accuracy of claimed performance

38 Standards and Labels The benefits of registration systems for MEPS and Labels Online registration systems for suppliers of equipment covered by your programme: Ensure that suppliers actively declare that their products meet the required criteria Allow regulators to track the products on the market Simplify market monitoring, verification and enforcement Enable information that is always up to date for consumers to be generated automatically

39 Standards and Labels

40 25 Policy Recommendations (#12) Appliances and Equipment: Test and Measurement Test standards and measurement protocols for appliances and equipment Ensure that product test standards and measurement protocols are regularly updated. Align national policies with test standards and measurement protocols Reduce industry compliance costs

41 25 Policy Recommendations (#13) Appliances and Equipment: Market Transformation Market transformation policies for appliances and equipment Accelerate the transformation of the appliance and equipment market through incentives and other measures Support new technologies and high-efficiency appliances and equipment. Develop financial, procurement and endorsement policies Engage in international collaboration to establish coordinated policies to increase the demand and trade

42 Lighting

43

44 25 Policy Recommendations (#14) Lighting: Phase-out the Inefficient Phase-out of inefficient lighting products and systems Phase-out inefficient lighting products including inefficient ballast, lamp, lamp housing, fixture and lighting controls Adopt lighting quality, reliability and MEPS for new and existing lighting products. Support the development, use and regular updating of international test standards and measurement protocols Reduce industry compliance costs Overall efficiency of an incandescent lamp = 2%

45 25 Policy Recommendations (#15) Lighting: Phase-in the Energy Efficient Energy-efficient lighting systems Require and promote improved lighting systems design and management. Ensure that building codes include: The use of natural light MEPS for lighting systems bulbs, fixtures, controls Train architects, builders, owners and managers

46 Lighting Energy Efficiency Faster than expected uptake of LED technology SOURCE: ECEEE

47 Industry

48 Global energy efficiency potentials 100% 80% 60% 40% 20% Industry Transport Power generation Buildings Unrealised energy efficiency potential Realised energy efficiency potential further opportunities can be found in e.g. managing production consumption systems, closed loop systems, industrial symbiosis Two-thirds of the economic potential to improve energy efficiency remains untapped in the period to 2035

49 What is blocking investments in industrial energy efficiency? Energy efficiency is not a strategic priority Payback periods are too long Payback calculations do not consider non-energy benefits Unattractive to investors Companies lack technical capacity Banks lack technical capacity Insufficient methods for measurement and verification Unattractive to secondary markets

50 Energy efficiency in the industrial sector: from savings to value creation Competitiveness Production Operations and maintenance Working environment ability to enter new markets, reduced production costs etc. capacity utilisation, improved product quality etc. improved operation, reduced need for maintenance etc. site environmental quality, worker health and safety etc. Environment ncy/energyefficiencyiea/multiplebenefit sofenergyefficiency/ air pollution, solid waste, wastewater, reduced input materials etc.

51

52 Why energy management? (#21) Energy savings & co-benefits company level / government / wider Role of energy management systems - Enable continuous energy performance improvement (- 30% + annual reductions of 2%) Role of energy management programmes - Overcome barriers and provide guidance and support for the implementation process

53 MEPs for motors (#22) Theoretical potential savings of EMDS is around 30% of electricity used, which can reduce 10% of total global electricity demand

54 Crittenden Presentation 27 November 2014 Slide 54 Small and Medium Enterprises (#23) Make it easy for SMEs to access assistance Build stakeholder partnerships Combine measures Accelerating energy efficiency in industrial SMEs Provide direct, tailored and targeted information Focus on multiple benefits Leverage existing policies & programs

55 Promote investments in energy efficiency Complementary measures (#24) Energy pricing Financial incentives Financing mechanisms Don t forget: Data collection Monitoring and evaluation Leveraging private sector investment

56 Group Exercise The IEA Energy Efficiency Policy Recommendations Which exist in Ukraine? Which do not exist but are priorities for future policy development? Should any be modified for the Ukrainian context? Which policies are missing? Rank the policies from most important to least important

57

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