National Energy Efficiency Action Plan 2010 REPUBLIC OF ARMENIA

Transcription

1 Natinal Energy Efficiency Actin Plan 2010 REPUBLIC OF ARMENIA Versin submitted by 13 September 2010

2 Executive Summary Energy Efficiency a Gvernment Pririty The Gvernment f Armenia priritizes energy efficiency as a means f increasing the cuntry s energy security, increasing ecnmic cmpetitiveness and reducing the negative impact n the envirnment. The Gvernment s cmmitment and principles t prmtin f energy efficiency are given in the Law n Renewable Energy and Energy Efficiency (2005) and the Natinal Prgram n Energy Saving and Renewable Energy (2007). Armenia has significant ptential fr energy efficiency and can recup sizable ecnmic benefits thrugh utilizatin f this ptential. Althugh its ecnmic activity is less energy intensive than cmpared t ther ecnmies in the regin, large ptential remains fr further efficiency imprvements (up t 5% f the cuntry s GDP, as was estimated in a Wrld Bank study in 2008). The highest ecnmic effectiveness is envisaged thrugh energy efficiency investments in the public sectr. Other dminant sectrs t be cnsidered are the residential sectr (buildings), industry, energy prductin, transprt and agricultural sectr. Creating an Enabling Envirnment fr Energy Efficiency The main issue t realise the significant energy saving ptential in the cuntry s ecnmy is the creatin f an enabling envirnment fr energy efficiency and financing f energy efficiency investments. This is mainly linked t a strng plicy and t regulatry measures that need t be implemented and enfrced. Beside that, there is great unawareness and lack f infrmatin in all sectrs (frm private husehlds t industrial enterprises) what t d in regard t reducing energy intensity and specific demand. The cuntry is lking fr the intrductin f apprpriate market-based incentives fr energy efficiency that are a necessary cnditin t diversify Armenia s energy supply and thus imprve ecnmic cmpetitiveness. This Natinal Energy Efficiency Actin Plan (NEEAP) is anther attempt fllwing different prgrammatic activities in the past years t making energy efficiency happen. Althugh the cuntry des have a Law n Energy Efficiency and Renewable Energy since 2005 and a Natinal Prgram n Energy Saving and Renewable Energy since 2007, basic measures frmulated in these tw dcuments have nt been implemented s far. The NEEAP is therefre cnslidating a set f measures fr all relevant ecnmic sectrs in the cuntry and specifying the need fr actin, especially n the plitical level. It shall prvide the Gvernment f Armenia with a bundle f activities t be realised with different pririties in the cnsidered perid 2010 t The NEEAP fcuses n five main ecnmic sectrs The NEEAP is prpsing a set f relevant measures t the Gvernment f Armenia fr imprving the current legal status and enfrcement f legislatin put in place, fr I

3 capacity-building (mainly in the public sectr) and institutinal setting, fr creating awareness acrss all sectrs and a general envirnment that is mre in favur f energy efficiency imprvement in the fllwing sectrs: residential buildings public and private service sectr industry & energy prductin transprt agriculture All in all, 31 relevant measures have been prpsed within the NEEAP, all f them described in chapters 4 (hrizntal and crss-sectral measures and 5 (sectral measures) The verall time frame fr implementatin f the actin plan is cnsidered t be a perid f ten years, frm 2010 until This is als in line with actin plans f ther cuntries. Indicatin f Ptential EE Targets Fr the purpse f the first NEEAP presented here, intermediate natinal energy savings targets have been prpsed. These intermediate targets shall prvide an indicatin f realistic savings as a percentage f the baseline demand t be achieved in the relevant target year, cnsistent with the verall natinal indicative energy savings target. Hwever, a mre detailed analysis f ptentials and crrespnding energy savings requires in all sectrs is necessary, t prvide a better data base and slidify the assumptins made regarding the EE ptentials. Lack f Basic Statistical Data One imprtant deficiency is the missing f a detailed annual energy supply and demand survey fr all main sectrs f ecnmy that prvides data n the annual final inland energy cnsumptin f all energy users fr the mst recent years, including data n: energy supply (imprt, prductin, inventry changes) energy transfrmatin (primary and secndary transfrmatin prcesses) final energy demand f all relevant sectrs useful energy demand accrding user categries (residential heating, industrial heat demand, statinary engines, lighting, air-cnditining, etc.) Due t the missing basic data and with the infrmatin made available frm different surces, it is at the mment nt pssible t draw a realistic baseline scenari that will prvide a sund base t estimate abslute savings t be achieved in the target year. Therefre, this first NEEAP prvides nly an indicatin f annual savings in relative terms (% p.a.) cmpared t the energy demand f the relevant sectr (t be defined) II

4 where the prpsed measures is part f. They are shwn in the fllwing table and further explained in the chapters 4 and 5. Table 1: Estimated energy savings cumulated fr each sectr until 2020 Energy saving target adpted in 2020: Residential/Husehlds Industry & Energy sectr Transprt Public and cmmercial services Water sectr Surce: wn calculatin in % 23,0% in % 23,3% in % 20,3% in % 14,6% in % 14,0% As sn as detailed energy balances will becme available, i.e. final energy demand per sectr (in abslute terms), the secnd NEEAP (2014) will have t update this infrmatin and prvide relevant data n the calculatin f the natinal energy saving target fr the year 2020 as well as intermediate targets fr the years 2013 and 2017, as prpsed in the template prvided in Annex 1. Evaluatin and Mnitring f Prgress Made One imprtant issue is t address regular mnitring and evaluatin f measures in line with the prpsed time frame, t assess if the intermediate energy savings targets are being achieved r if increased effrts are t be made t get back n the implementatin path. It is therefre freseen that the Ministry f Energy and Natural Resurces shall submit t the Gvernment updated NEEAPs: a secnd NEEAP nt later than 30 June 2014 (cnsidering implementatin status until end 2013), a third NEEAP nt later than 30 June 2018 (cnsidering implementatin status until end 2017), and a furth NEEAP nt later than 30 June 2021 (cnsidering implementatin status until end 2020). The 1st NEEAP High Pririty Measures until 2013 The measures prpsed in the Natinal Energy Efficiency Actin Plan have been categrised int high, medium and lw pririty. Main criterin fr the high priritisatin is the available energy saving ptential with pssible lw funding implicatins ( lw-hanging fruits ) r eventually already secured dnr funding. These measures are t be implemented within the first implementatin perid until A summary f all high-pririty measures prpsed in the first NEEAP is given in the fllwing table. III

5 N Title f the EEI measure Respnsibility Duratin I. Hrizntal Measures I.1 Implementatin f a regular natinal Energy Statistic (with annual updates) I.2 Implementatin f a Natinal Energy Agency fr Energy Efficiency and Renewable Energy I.3 Financial Supprt fr Energy Efficiency measures in all sectrs I.4 Infrmatin campaigns, training and educatin in the area f energy efficiency imprvements Ministry f Energy Natinal Statistics Office Ministry f Energy Ministry f Energy I.6 Assessment f the ecnmic ratinale f measures prpsed Ministry f Ecnmy in the NEEAP II. Building Sectr II.1 Natinal Building Cde cnsidering energy perfrmance f buildings Ministry f Energy (later: Natinal Energy Agency) I.5 General regulatry demand side measures Ministry f Energy, Public Service Regulatry Cmmissin Ministry f Energy, Ministry f Ecnmy, Ministry f Urban Develpment nging prcess II.2 Standards and calculatin methdlgy t assess energy perfrmance in buildings Ministry f Energy, Ministry f Ecnmy, Ministry f Urban Develpment II.3 II.4 III.1 IV.1 Institutinal capacity-building fr implementing and enfrcing new standards Establishing quality assurance/quality cntrl (QA/QC) standards that will supprt the certificatin f key building materials fr energy perfrmance. III. Public & Private Service Sectr III.2 IV.3 Infrmatin campaigns n several issues f energy efficiency t be applied in public and private service buildings Efficient energy services in public facilities - investive measures IV. Industry & Energy Sectr Cnsidering energy efficiency aspects fr the cnstructin f new industrial facilities IV.2 Implementatin f Energy Efficiency Financing Facility fr Industrial Enterprises Electricity savings thrugh imprvements f existing electricity netwrk, cmpensatin f reactive pwer and imprvement f transfrmers V. Transprt Sectr Ministry f Urban Develpment Ministry f Urban Develpment, Ministry f Ecnmy Ministry f Energy, Natinal Energy Agency Ministry f Energy Public and private service facilities' peratrs Ministry f Ecnmy, Ministry f Envirnment PSRC Ministry f Energy, (with supprt frm Eurpean Bank fr Recnstructin and Develpment) Ministry f Energy, Electric Netwrks f Armenia (cntinuus activity) V.1 Vehicle Inspectin and Maintenance (I&M) prgram Ministry f Transprt, Ministry f Ecnmy V.2 Traffic Demand Managmeent (TDM) scheme Ministry f Transprt, Ministry f Ecnmy V.3 Disseminatin f infrmatin n technlgies and appraches fr reducing energy cnsumptin effectively Ministry f Transprt V.4 Cntinuus exchange f mini buses by larger passenger buses perated by natural gas VI. Water Sectr VI.1 Utilizatin f gravity flw in irrigatin systems and mdernisatin f existing pumping statins and upgrading secndary and tertiary canals City f Yerevan Ministry f Agriculture, Ministry f Energy, Water Cmmittee (under Min. f Territrial Administratin) IV

6 Table f cntents Executive Summary 1 Intrductin Trends in Prmting Energy Efficiency Energy Efficiency the issue fr Armenia Scpe and Objectives f the NEEAP Relevant Activities and Prgrammes related t Energy Efficiency in Armenia 7 2 Defining Targets fr the Implementatin f the NEEAP Setting the path fr Energy Efficiency in Armenia until Baseline energy cnsumptin and calculatin f the natinal EE target 11 3 Addressing Barriers fr Energy Efficiency in Armenia 18 4 Hrizntal and crss-sectral measures Overview f hrizntal and crss-sectral EEI measures 19 5 Sectral presentatin and assessment f energy efficiency imprvement prgrammes, energy services, and ther measures t imprve energy efficiency Energy efficiency imprvement measures in the residential building sectr General intrductin n the building sectr Overview f sectr-specific measures Energy efficiency imprvement measures in the public and private service sectr General intrductin n the public and private service sectr Overview f sectr-specific measures Energy efficiency imprvement measures in industry sectrs (including energy prductin) General intrductin n the industry & energy sectrs Overview f sectr-specific measures Energy efficiency imprvement measures in the transprt sectr General intrductin n the transprt sectr Overview f sectr-specific measures Energy efficiency imprvement measures in the water sectr General intrductin n the water sectr Overview f sectr-specific measures References 57 Annex 1: Template fr the calculatin f the natinal energy saving target 58 Annex 2: Prjectins f greenhuse gas emissins fr Armenia frm 2005 t I V

7 Annex 3: List f relevant dnr prjects and prgrams nging and f past 60 List f charts and tables Chart 1: Electricity demand f main sectrs (prelim.) Chart 2: Natural gas demand f main sectrs (prelim.) Chart 3: Ttal electricity and gas demand (prelim.) Chart 4: MCA-Armenia Irrigated Agriculture Prject Chart 5: Prjectins f greenhuse gas emissins (Gg CO 2 equivalent, excl. LULUCF) Table 1: Estimated energy savings cumulated fr each sectr until III Table 2: Estimated annual savings per measures in % ( ) cmpared t final energy cnsumptin baseline Table 3: Estimated energy savings cumulated fr each sectr until Table 4: List f hrizntal and crss-sectral measures under the Armenian NEEAP. 20 Table 5: Estimated savings per measure in the residential building sectr frm Table 6: List f measures in the residential building sectr specified under the Armenian NEEAP Table 7: Estimated savings per measure in the public and private service sectr frm Table 8: List f measures in the public and private service sectr specified under the Armenian NEEAP Table 9: Estimated savings per measure in the industrial sectr frm Table 10: List f measures in the industrial sectr specified under the Armenian NEEAP Table 11: Estimated savings per measure in the transprt sectr frm Table 12: List f measures in the industrial sectr specified under the Armenian NEEAP Table 13: Estimated savings per measure in the agricultural sectr frm Table 14: List f measures in the agricultural sectr specified under the Armenian NEEAP VI

8 List f Abbreviatins AEAI AMD ArmSEFF BAU CEE CEEP CO 2 EBRD EE ENP ESCOs ESMAP EU GDP GEF Gg GHG IBRD IDA IEA IFI IMF KfW Kg kwh LULUCF MCA mt Advanced Engineering Assciates Internatinal Armenian Dram Armenian Sustainable Energy Financing Facility business as usual Central & Eastern Eurpe Cmmercializatin f Energy Efficiency Prject Carbn dixide Eurpean Bank fr Recnstructin and Develpment Energy Efficiency Eurpean Neighburhd Plicy Energy Service Cmpanies Energy Sectr Management Assistance Prgramme (f the Wrld Bank) Eurpean Unin Grss Dmestic Prduct Glbal Envirnment Fund Greenhuse gas Greenhuse gas Internatinal Bank fr Recnstructin and Develpment Internatinal Develpment Agency Internatinal Energy Agency Internatinal Financing Institutin Internatinal Mnetary Fund Kreditanstalt für Wiederaufbau Bankengruppe (grup f banks) kilgrams kil Watt hurs Land Use, Land-Use Change and Frestry Millennium Challenge Accunt millin tnnes VII

9 mte NEEAP NGO NOx PSRC QA/QC R2E2 SEFF SEI SMEs TJ TRACECA TWh UN UNDP UNFCCC USAID USD WB millin tnnes equivalent Natinal Energy Efficiency Actin Plan Nn-Gvernmental Organizatin Nitrgen xide Public Services Regulatry Cmmissin quality assurance / quality cntrl Armenian Renewable Resurces and Energy Efficiency Fund Sustainable Energy Financing Facility Sustainable Energy Initiative small and medium enterprises Terra Jule TRAnsprt Crridr Eurpe-Caucasus-Asia Terra Watt hurs United Natins United Natins Develpment Prgramme United Natins Framewrk Cnventin n Climate Change United States Agency fr Internatinal Develpment United States Dllar Wrld Bank VIII

10 1 Intrductin 1.1 Trends in Prmting Energy Efficiency In 2008 the Wrld Energy Cuncil published a paper abut Energy Efficiency Plicies arund the Wrld: Review and Evaluatin. In this study it is shwn that in mst wrld regins the amunt f energy used per unit GDP is decreasing steadily: 1.6% p.a. n average at the wrld level between 1990 and Since 2000, this trend has hwever slwed dwn significantly, t slightly less than 1% p.a. Industry is the main sectr driving energy intensity reductin in industrialized cuntries. In develping cuntries and ecnmies f transitin, n the ther hand, husehlds are very ften the main drivers. In China and the CIS, energy prductivity imprvements were almst equally driven by industry, energy cnversin and husehlds. There are a few significant questins t cnsider when planning abut EE imprvement: What is the imprtance f energy efficiency measures? What are the pririties? What are the trends? Hw t intrduce an adequate plicy level t fster implementatin f EE measures? And hw t stimulate energy efficiency innvatin cst effectively? The main factrs fr stimulating energy efficiency measures bserved are: Institutinal backgrund: Almst all cuntries have set up specific institutins dealing with energy efficiency, such as energy efficiency agencies, either at the natinal level, r at reginal levels r bth, and mre recently at lcal level. Althugh the legal status f these agencies is different frm ne cuntry t anther, their establishment almst everywhere clearly indicates that there is a need fr having a driving institutin taking the lead n EE activity. A prper regulatry framewrk, with a specific bundle f energy efficiency legislatin and/r natinal prgrammes taking int cnsideratin quantitative, measurable, targets fr energy efficiency imprvements, can prvide a lng lasting cntext fr energy efficiency plicies and avid the negative effect f stp and start actins: many cuntries have already set up quantitative targets, with annual mnitring requirements. Electrical appliances and buildings cntinue t be the main target fr regulatins and are spreading t a larger number f cuntries. In Eurpe, regulatins represent abut 40% f the measures implemented in the residential sectr. All Eurpean cuntries and mst ther OECD cuntries have energy efficiency standards fr all new buildings. Sme nn-oecd cuntries utside Eurpe have recently established standards fr service buildings. Altgether, abut 60% f the cuntries surveyed had mandatry r vluntary standards fr new nn-residential buildings. 1

11 The few evaluatins studies f the savings achieved with building cdes shw that the actual savings fr new buildings are lwer than the ptential theretical savings. This can be attributed t nn-cmpliance with standards and changes in behaviur. A mre recent trend is t extend regulatins t existing buildings (mainly stricter cdes referring t thermal quality standards and intrductin f energy efficiency certificatin f existing buildings). Labelling and standards apply t a grwing number f electrical appliances. Labelling prgrammes and efficiency standards are an effective methd f transfrming the market and slwing the electricity demand grwth. Labelling prgrammes intrduced in develping cuntries are based n the experience f OECD cuntries and use mdels that have already been prven: the Eurpean label has been used as a mdel in Brazil, Tunisia, China and Iran, while labels intrduced in Thailand and the Krean Republic are based n sme Australian mdel. Energy labels and standards are cmplementary tls. Labelling acts as an incentive fr manufacturers t differentiate themselves frm their cmpetitrs and stimulates the intrductin f new, mre efficient mdels. Standards remve frm the market the less efficient appliances. T be effective, labelling prgrammes and perfrmance standards must be regularly updated. Energy pricing is an imprtant cmpnent f EE plicies. Adequate pricing is a necessary cnditin fr prmting energy efficiency. One f the first steps f any energy efficiency plicy shuld be t adjust energy prices t mre real market levels in rder t give crrect signals t cnsumers, whilst maintaining incentives fr behaviur changes r t acquire energy efficient equipment and technlgies. Energy prducing cuntries ften maintain lw dmestic prices, which lead t intensive energy uses, as was seen previusly by the high and increasing energy intensities in these cuntries. A reductin in the subsidies culd lead t energy savings that culd be sld at a much higher price n the internatinal market and bring benefits t these ecnmies. Adequate pricing means establishing cnsumer energy prices that reflect the cst f energy supply, i.e. the lng-term marginal cst fr electricity, the lngterm price f il prducts n internatinal markets fr fssil fuels. Althugh mst energy planners agree with such bjectives, they ften face reluctance and ppsitin frm decisin-makers utside the energy sectr, wh fear public resistance and the impact f energy price crrectins n the cnsumer price index. Als, energy is a basic gd fr which a lw price is a cnditin fr lwincme husehlds access. This makes actual price adjustments slw r impssible in many develping cuntries, especially in the husehld sectr. Financial incentives rely mre and mre n tax incentives than n direct 2

12 subsidies. Nevertheless direct subsidies n energy efficiency investments remain ppular. As they have ften been cnsidered as cstly and questinable, they are nw better targeted. Subsidies are viewed as a temprary measure t mbilise cnsumers, t prepare fr new regulatins, r t prmte energy efficient technlgies by creating a larger market than wuld exist therwise, with the bjective f a cst reductin fr the subsidised energy efficient technlgies. Fiscal incentives, such as tax credits, tax reductins and accelerated depreciatin, are usually cnsidered cheaper than direct subsidies, especially t husehlds, as they have lwer transactin csts. They can wrk well if the tax cllectin rate is sufficiently high: such measures usually perfrm prly in an ecnmy in recessin r in transitin. They are mre adapted t well-develped cuntries: s far, mainly OECD cuntries have implemented such fiscal measures. Tax reductins n energy efficient equipment r investments have been intrduced in many cuntries and almst equally in all regins: they are used in abut 30% f the cuntries surveyed. One f the main barriers t energy efficiency is the lack f infrmatin t cnsumers abut what they can d. T address this issue, a large range f tls has t be designed: e.g. general infrmatin campaigns, labelling f appliances and even dwellings rating their energy perfrmance, audits, lcal infrmatin centres, educatin campaigns in schls and universities, case studies, and cmparative infrmatin. Audit schemes are a practical way f infrming cnsumers abut the pssible actins t imprve energy efficiency. They have been mainly develped in industry and in nn-residential buildings and are increasingly made mandatry. Energy audits usually are partially funded by public agencies r by utilities in Eurpean cuntries and are mre ften free fr cnsumers in the ther regins t encurage participatin. Mandatry audits like vluntary audits - assume a certain quality f the auditrs as well as f the staff respnsible fr energy management in the cmpanies (energy managers). This can be assured by the certificatin f the auditrs and by the training f energy managers. ESCOs (Energy Service Cmpanies) and EPC (Energy Perfrmance Cntracting) are a very attractive mechanism t capture cst-effective energyefficiency ptentials wrldwide, mainly because they d nt invlve either public expenditure r market interventin. EPC can prbably be cnsidered amng the mst effective mechanisms fr prmting energy efficiency in the public sectr and, especially in develping cuntries, in the industrial sectr. Several cuntries are intrducing green taxes either n purchase tax r annual tax dependent n the CO 2 emissins r energy efficiency f the cars. Fuel taxatin plays a key rle in prmting mre efficient vehicles and mre sensible 3

13 driving habits. Tax increases are nt always mtivated by energy efficiency nly. In sme cuntries, specific CO 2 /envirnmental taxes have been set up fr mtr fuels (e.g. Scandinavia and Germany). Green taxes are better accepted by the ppulatin, especially if part f the revenue is used t supprt energy/co 2 efficiency measures. Rad pricing indicates an efficient way t enhance the energy efficiency in transprt, such as; the cngestin charge in Lndn. Energy efficiency bligatins have been a success in the EU Member States. They have been shwn t wrk in bth mnply and fully liberalised envirnment, bth fr supply and distributin cmpanies. Energy efficiency bligatins are attractive als t gvernments, as they d nt have t supprt the cst f these bligatins. Energy efficiency bligatins culd be an imprtant plicy ptin fr develping cuntries t save electricity, as they ffer a way fr gvernments t tackle energy efficiency at a mdest increase n electricity custmers bills. Energy efficiency bligatins fr utilities are a prmising market-based instrument. Quality labels and technical standards are effective tls fr maintaining r imprving quality, prvided they are successfully enfrced (e.g. the Keymark certificatin scheme in Eurpe). The existence f independent certificatin centres is a key element t ensure that imprted prducts cmply with natinal standards. The existence f skilled installers and f apprpriate netwrk f after sales services is als essential fr stimulating further disseminatin f slar water heating. As a summary, the intrductin and/r strengthening f energy efficiency plicies are becming increasingly imprtant and a sustained effrt will be required ver the lng term. T be successful, energy efficiency prgrammes need t be based n apprpriate strategies, including fr example: The public sectr needs t cmmit itself t EE and lead by example. Need fr a favrable and stable institutinal framewrk. Energy efficiency plicies shuld address all areas with energy savings ptentials. T be efficient and cst-effective, regulatins need t be well planned, regularly strengthened and prperly enfrced. Adequate pricing: a cnditin fr successful energy efficiency plicies implementatin t reflect mre near-market cnditins. Public/private partnerships t reinfrce the effect f public plicies. Quality f energy efficiency services and equipment shuld be strengthened thrugh certificatin and testing facilities. 4

14 Innvative measures shuld be prmted based n suitable experiences elsewhere. Regular mnitring and evaluatin f implemented measures using indicatrs shuld be ensured. 1.2 Energy Efficiency the issue fr Armenia The Gvernment f Armenia priritizes energy efficiency as a means f increasing the cuntry s energy security, increasing ecnmic cmpetitiveness and reducing the negative impact n the envirnment. The Gvernment s cmmitment t prmtin f energy efficiency is mainly reflected in the Law n Renewable Energy and Energy Efficiency (2005) and the Natinal Prgram n Energy Saving and Renewable Energy (2007). The Law lays ut the principles f the gvernment s plicy and gvernance structure supprting energy efficiency, and prvides fr energy efficiency standards, audits and awareness raising. The Natinal Prgram n Renewable Energy and Energy Efficiency identifies the sectrs with the largest energy efficiency ptential and prvides an utline f technical measures/slutins t be taken t realize the identified technically viable ptential. Armenia has significant ptential fr energy efficiency and can recup sizable ecnmic benefits thrugh utilizatin f this ptential. While Armenia is ne f the less energy intensive ecnmies in the regin, largely due t the structural changes f the ecnmy, large ptential remains fr further efficiency imprvements. Based n the Natinal Prgram n Renewable Energy and Energy Efficiency, the Wrld Bank perfrmed a study in which identified significant ecnmically and financially viable energy efficiency ptential. The study fund that Armenia culd save abut 132 billin Armenian Drams (mre than US$360 millin) annually, equivalent t almst 5 percent f its GDP, thrugh energy efficiency investments. The abve study als identified a number f infrmatinal, legal, regulatry and financial barriers impeding energy efficiency investments. There is an estimatin that the ecnmic and financial returns f energy efficiency investments in public buildings have the highest return with paybacks f tw t eight years. Investments in energy efficiency f public buildings cannt nly free up the fiscal space, but als prime the market, by creating demand fr energy efficient equipment and services and send a strng signal t the private sectr and general public abut the Gvernment s cmmitment t energy efficiency. 1 The Other Renewable Resurce: The Ptential fr Imprving Energy Efficiency in Armenia. July,

15 T aid the implementatin f the Natinal Prgram, the Gvernment f Armenia requested the Wrld Bank t supprt with creatin f an enabling envirnment fr energy efficiency and financing f energy efficiency investments f public buildings. The prpsed lending and TA prject will cntribute t achieving the Gvernment s natinal pririties as it will help generate awareness f the benefits f energy efficiency investments, address ther infrmatin and data gaps related t energy efficiency, remve institutinal and regulatry barriers, address capacity weaknesses hindering the implementatin f energy efficiency measures, and prvide financing fr energy efficiency investments in the public sectr, drawing n the recmmendatins f the Natinal Prgram. Mrever, energy efficiency is a key refrm area fr the develpment plicy lending peratins f the Wrld Bank in Armenia. Under the develpment plicy peratin, the Gvernment cmmitted t adpt a time-bund Energy Efficiency Actin Plan (NEEAP). Fr the develpment f the actin plan, an internatinal cnsultant was hired by the Ministry f Energy and Natural Resurces in summer 2010, and the elabratin f measures prpsed in the fllwing reprt cnducted in a prcess f invlving stakehlders frm different ministries (Ministry f Energy and Natural Resurces, Ministry f Ecnmy, Ministry f Urban Develpment, Ministry f Natural Prtectin), the Public Services Regulatry Cmmissin, Armenian Renewable Resurces and Energy Efficiency Fund, the Energy Institute, utilities, the Wrld Bank, UNDP/GEF Armenia ffice, and gas and electricity cmpanies. 1.3 Scpe and Objectives f the NEEAP The main bjective f the actin plan is t cntribute t the frmulatin f the future energy plicy f Armenia and t define cncrete steps fr its implementatin. One f the main aims f the natinal plicy in the energy sectr is defined t imprve energy efficiency and t further develp the use f renewable energy surces. The mentined Law n Renewable Energy and Energy Efficiency and the Natinal Prgram n Renewable Energy Efficiency and Renewable Energy prvide general plicy measures and an assessment f energy saving ptentials, hwever they have nt been implemented s far. The Natinal Energy Efficiency Actin Plan is based n generalised past trends in energy cnsumptin and presumes a further rise in energy demand up t It takes int cnsideratin earlier ptential assessments made fr energy savings in different sectrs f the ecnmy and refers t past and current prjects/prgrammes dealing with energy efficiency issues and the main barriers t energy cnservatin. Hwever, it was nt the task during the NEEAP preparatin t investigate int the sectral ptentials r even verify existing data, neither regarding energy efficiency nr ecnmic ptentials. The actin plan is rather t be understd a plicy implementatin 6

16 prgramme t help vercming institutinal, regulatry and infrmatin barriers, t help the gvernment t fcusing n the mst relevant actins t be taken in a shrt, medium and lnger term perspective. The diverse prjects referred t in the previus paragraph are an imprtant inflw f funds and financial surces int the cuntry, especially in regard t technical assistance, rehabilitatin and new infrastructure investments and as well awareness and capacity-building measures. The NEEAP is building upn these prgrammes/prjects and prpses cncrete measures per sectr as well as hrizntal and crss-sectral measures tgether with quantitative targets (in %) that can be achieved by These targets need t be cmpared t a baseline energy demand that cnsiders the average demand fr the 3-years perid Hwever, the first stage f the Actin Plan presented here is nt able t take int cnsideratin actual figures regarding final energy demand acrss all relevant sectrs f Armenian ecnmy. The prblem lies mainly in the unavailability f reliable up t date statistical infrmatin n final energy demand in cnsidered sectrs. It is therefre been prpsed t the Ministry f Energy and Natural Resurces t define the baseline energy demand during the first NEEAP implementatin perid (until 2014, see 2.1) and prvide the necessary data backgrund tgether with a secnd NEEAP t be submitted by 2014, while ensuring this crucial measure, the elabratin f natinal energy statistic will be implemented as sn as pssible. 1.4 Relevant Activities and Prgrammes related t Energy Efficiency in Armenia T encurage energy efficiency, Armenia has s far taken several steps n the plitical and prgrammatic level: Started t create a legal framewrk fr energy efficiency. In 2005, the Gvernment passed a Law n Energy Savings and Renewable Energy, and has since signed the Intergvernmental standard draft building cdes (fr new buildings) which mandate energy efficiency but has nt adpted it yet. Develped a Natinal Prgram n Energy Savings and Renewable Energy with slid data n energy use and energy efficiency in Armenia. Has taken steps t imprve the ecnmic efficiency f energy use thrugh imprved regulatin f energy utilities. Several barriers t ecnmic efficiency which als affect the efficiency f energy resurce use fr example, highly subsidized energy tariffs, r the absence f electricity and gas metering have been largely remved in Armenia. Cntinued t wrk actively with develpment partners like the Wrld Bank, the UN Develpment Prgramme, the EBRD, USAID and ther dnrs n energy efficiency prgrams t imprve the energy supply infrastructure (electricity and heat prductin facilities, transmissin and distributin netwrks) and heat energy use in public and 7

17 residential buildings. Relevant prjects and prgrams nging and f past were mstly financed with supprt f the abve mentined IFIs that cntribute t the implementatin f an institutinal and plicy envirnment in favr f energy efficiency in Armenia: GEF Prgram: Armenia Imprving the Energy Efficiency f the Urban Heating and Ht Water Supply (UNDP) Armenia Energy Efficiency Prject (IBRD) LGGE Imprving Energy Efficiency in Buildings (UNDP) Wrld Bank: Urban Heating Prject Armenia Electricity Supply Reliability and Energy Efficiency Prject INOGATE Prgramme: Harmnizatin f gas and il technical standards and practices (E. Eurpe and Caucasus) Capacity-building fr Energy Regulatrs in Eastern Eurpe and Central Asia Capacity building fr Sustainable Energy Regulatin in Eastern Eurpe and Central Asia Harmnizatin f electricity standards EBRD: Armenian Sustainable Energy Financing Facility (ArmSEFF) USAID: Cmmercializatin f Energy Efficiency Prject (CEEP) Internatinal Finance Crpratin: Armenia Energy Efficiency Survey Prject Millennium Challenge Accunt Armenia (MCA Armenia): Irrigated Agriculture Prject A mre detailed list with a shrt descriptin f the mentined prjects is prvided in the Annex 3: List f relevant dnr prjects and prgrams nging and f past f this dcument. 8

18 2 Defining Targets fr the Implementatin f the NEEAP Armenia can save greatly by investing in energy efficiency. As mentined abve, previus studies made by the Wrld Bank estimate the realizable saving ptential t sme 5 percent f its GDP. This is equal t energy savings f apprximately 1.21 mte annually, r 1 TWh f electricity and 600 millin m 3 f natural gas (based n 2008 demand). Apart frm the generated energy and cst savings, energy efficiency is ne necessary cnditin t diversify Armenia s energy supply and thus imprve ecnmic cmpetitiveness. And this can be achieved at less cst than investing int new prductin capacities r energy imprts. Energy efficiency investments are in general ecnmically and financially viable, especially the public sectr investments prvide the highest return n investment verall. 2.1 Setting the path fr Energy Efficiency in Armenia until 2020 The actin plan is prpsing a set f relevant measures t the Gvernment f Armenia fr imprving the current legal status and enfrcement f legislatin put in place, fr capacity-building (mainly in the public sectr) and institutinal setting, fr creating awareness acrss all sectrs and a general envirnment that is mre in favur f energy efficiency imprvement in the fllwing sectrs: residential buildings public and private service sectr industry and energy sectr transprt water sectr The verall time frame fr implementatin f the actin plan is cnsidered t be a perid f ten years, frm 2010 until This is als in line with actin plans f ther cuntries. Due t the fact that several measures have a lnger duratin, e.g. cnsidering enfrcement perids r reactin time until market actrs are ready t implement energy saving measures in the mentined sectrs, the actin plan needs t distinguish shrt term, medium and lng term planning: Shrt term measures: referring t an implementatin path during a first implementatin perid f the actin plan frm They refer t immediate actin required in regard t plicy making, institutinal setting and awareness and cmmunicatin. These are typical measures with significant energy saving ptential with lw funding implicatins ( lw-hanging fruits ) and eventually already secured dnr funding, which are classified with a high 9

19 pririty in the actin plan. Medium term measures: the medium pririty measures are expected t be implemented within a 4 t 7 years perid equalling the secnd implementatin perid f the actin plan frm Lng term measures: the timeframe is cnsidered t cver a perid f mre than 7 years. The implementatin is mre cmplex and thus less easily t be adpted, r depending n the existence f an institutinal and plicy setting. Fr the cnsideratin in the actin plan, they are assigned a lw pririty and thus are cnsidered t be implemented nt befre the third implementatin perid f the actin plan between 2018 and Fr the purpse f the first NEEAP presented here, apart frm the list f measures, intermediate natinal energy savings targets fr the fllwing perids f implementatin have been prpsed. These intermediate targets shall define realistic savings as a percentage f the baseline demand t be achieved in the relevant target year, cnsistent with the verall natinal indicative energy savings target referred t in chapter 2.2. The targets set fr this first actin plan implementatin perid prvide an indicatin nly and have been determined based n experiences made (and published) in ther cuntries. A mre detailed analysis f ptentials and crrespnding energy savings requires an in-depth natinal review f ecnmic sectrs, t prvide a better data base and slidify the assumptins made regarding the EE ptentials. Regular mnitring and evaluatin f measures shall prvide the Gvernment and invlved stakehlders with a clear view if the implementatin is in line with the prpsed time frame, if the intermediate energy savings targets are being achieved r if increased effrts are t be made t get back n the implementatin path. It is therefre freseen that the Ministry f Energy and Natural Resurces shall submit t the Gvernment the fllwing updated NEEAPs: a secnd NEEAP nt later than 30 June 2014 (cnsidering implementatin status until end 2013), a third NEEAP nt later than 30 June 2018 (cnsidering implementatin status until end 2017), and a furth NEEAP nt later than 30 June 2021 (cnsidering implementatin status until end 2020). All NEEAPs shall describe the energy efficiency imprvement measures planned and realised t reach the targets set ut in chapter 2.2. The fllwing NEEAPs shall as well: include a thrugh analysis and evaluatin f the preceding NEEAP; 10

20 include the final results with regard t the fulfilment f the energy savings targets set ut in chapter 2.2; include plans fr and infrmatin n the anticipated effects f additinal measures which address any existing r expected shrtfall vis-à-vis the target; use and gradually increase the use f efficiency indicatrs and benchmarks, bth fr the evaluatin f past measures and estimated effects f planned future measures; be based n latest available data, supplemented with estimates. 2.2 Baseline energy cnsumptin and calculatin f the natinal EE target Armenia can meet nly rughly ne-third f its ttal demand f fuels, mainly natural gas and il, thrugh wn resurces, thus the cuntry is highly dependant n imprted energy surces. On the ther hand it currently benefits frm an electricity surplus prduced frm wn hydr pwer plants, ne nuclear pwer plant and several thermal pwer plants. Frm 2001 until 2008, the amunt f electricity cnsumed grew steadily at abut 6% p.a, which is less than the annual GDP grwth average f 9-10% p.a. Other fuels used fr residential heating, prcess heat, transprtatin and as fuel surce fr pwer plants have als steadily increased, in ttal abut 7% p.a. between 2001 and The main fuel type is natural gas. In 2009, the preliminary figures shw a decline due t general ecnmic crisis f electricity demand by abut 8% and f gas demand by almst 22%, cmpared t The fllwing charts prvide an verview f the electricity cnsumptin and gas cnsumptin in the last 5 years ( , 2009 preliminary figures) that accunt fr estimated 75% f the ttal energy demand 3. Fr the ther surces, n suitable data is available. 2 surce: Natinal Prgram n Energy Saving and Renewable Energy, Armenian Energy Institute 3 surce: 2005 data prvided in Natinal Prgram n Energy Efficiency and Renewable Energy 11

21 Chart 1: Electricity demand f main sectrs (prelim.) GWh Others Agriculture Transprt Industry Public services Residential (2009) Surce: Armenian Scientific Energy Institute Chart 2: Natural gas demand f main sectrs (prelim.) 2,000 1,800 1,600 1,400 mln m³ 1,200 1, Others (incl. transprtatin) Industry Pwer Sectr Ppulatin (2009) Surce: Armenian Scientific Energy Institute 12

22 Chart 3: Ttal electricity and gas demand (prelim.) 30,000 25,000 20,000 GWh 15,000 Natural Gas Electricity 10,000 5, (2009) Surce: Armenian Scientific Energy Institute In the Natinal Prgram n Energy Efficiency frm 2007, the Armenian Scientific Energy Institute and the Energy Design Insitute (Damare CJSC) prvided an assessment f sectral cnsumptin data fr the main user sectrs (fr ). Hwever, what is missing since 1989, the last year when the energy balance was prepared, is a detailed annual energy supply and demand survey fr all main sectrs f ecnmy that prvides data n the annual final inland energy cnsumptin f all energy users fr the mst recent years, including data n: energy supply (imprt, prductin, inventry changes) energy transfrmatin (primary and secndary transfrmatin prcesses) final energy demand f all relevant sectrs useful energy demand accrding user categries (residential heating, industrial heat demand, statinary engines, lighting, air-cnditining, etc.) Due t the missing basic data and with the infrmatin made available frm different surces, it is at the mment nt pssible t draw a realistic baseline scenari that will prvide a sund base t estimate abslute savings t be achieved in the target year. Therefre, this first NEEAP prvides nly an indicatin f annual savings in relative terms (% p.a.) cmpared t the energy demand f the relevant sectr (t be defined) where the prpsed measures is part f. As sn as detailed energy balances will becme available, i.e. final energy demand per sectr (in abslute terms), the secnd NEEAP (2014) will have t update this 13

23 infrmatin and prvide relevant data n the calculatin f the natinal energy saving target fr the year 2020 as well as intermediate targets fr the years 2013 and 2017, as prpsed in the template prvided in Annex 1. The table belw prvides a summary f estimated energy efficiency savings that shall be reached by the implementatin f measures prpsed in the chapters 4 and 5. As mentined abve, the savings reached by each year are indicative targets that are based n saving estimatins in the Natinal Prgram fr Renewable Energy and Energy Savings fr Armenia (mainly fr industry and energy sectr, transprtatin, water sectr) and supprted by reference t internatinal studies and experience (mainly fr building and service sectrs 4 ). 4 As fr building refurbishment and crrespnding energy saving ptentials cmpare e.g. with the Wrld Bank Study Status f Energy Efficiency in Western Balkans (2010). The study estimates the saving ptential in residential buildings t be between 10 and 35% and in service sectr 10 t 30%, and this fr ecnmies in transitin similar t Armenia (e.g. Albania, Ksv, Mntenegr). Average quantitative savings have been regarded as a technical ptential t be pssibly realised in Armenia as well. 14

24 Table 2: Estimated annual savings per measures in % ( ) cmpared t final energy cnsumptin baseline Baseline Estimated annual savings per measure in % f the Aggregated average annual/ savings per Sectr/Measure cumulated measure [in TJ] [in TJ] [in TJ] [in TJ] savings [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] in TJ I. Hrizntal measures 0,0% n/a I.1 Implementatin f a regular natinal Energy Statistic (with annual updates) 0,0% n/a I.2 Implementatin f a Natinal Energy Agency fr Energy Efficiency and Renewable Energy 0,0% n/a I.3 Financial Supprt fr Energy Efficiency measures in all sectrs 0,0% n/a I.4 Infrmatin campaigns, training and educatin in the area f energy efficiency imprvements n/a n/a n/a n/a n measurable effects n the energy savings (qualitative imprvements) - will effect savings cnsidered in the sectrs belw 0,0% n/a I.5 General regulatry demand side measures 0,0% n/a I.6 Assess the ecnmic ratinale f measures prpsed in the NEEAP 0,0% n/a I.7 Public Prcurement fr Energy Efficiency 0,0% n/a II. Building sectr annual 0,0% 0,5% 0,8% 1,4% 1,8% 2,5% 3,0% 3,7% 4,5% 5,0% cumulated 0,0% 0,5% 1,3% 2,7% 4,4% 6,9% 9,9% 13,5% 18,0% 23,0% 23,0% n/a II.1 Natinal Building Cde cnsidering energy perfrmance f buildings II.2 Standards and calculatin methdlgy t assess energy perfrmance in buildings II.3 Institutinal capacity-building fr implementing and enfrcing new standards 0,0% 0,1% 0,2% 0,3% 0,4% 0,5% 0,6% 0,7% 0,8% 0,9% 4,5% n/a II.4 II.5 II.6 II.7 II.8 Establishing quality assurance/quality cntrl (QA/QC) standards that will supprt the certificatin f key building materials fr energy perfrmance. Set up rad-test prcedures fr building certificatin and methdlgy fr assessment f energy perfrmance fr pilt buildings Training and educatin in crrespndance with the prmtin f integrated building design apprach and new energy perfrmance requirements in buildings Pilt Prject: Design cmpetitin and cnstructin f several best-practice buildings (e.g. schl r ther public building, and a multi-family huse) in Yerevan and anther larger city, using an integrated building design apprach within available budget and time schedule fr the cnstructin f a typical building. Develpment f an incentive scheme t prmte energy efficient cnstructin r recnstructin in residential and service buildings n/a n/a n/a n/a 0,0% 0,3% 0,4% 0,5% 0,6% 0,7% 0,7% 0,8% 1,0% 1,0% 6,0% 0,0% 0,1% 0,2% 0,3% 0,4% 0,5% 0,6% 0,7% 0,8% 0,8% 4,4% n/a 0,0% 0,0% 0,0% 0,1% 0,1% 0,2% 0,2% 0,3% 0,4% 0,4% 1,7% n/a 0,0% 0,0% 0,0% 0,1% 0,2% 0,3% 0,3% 0,4% 0,4% 0,5% 2,1% n/a 0,0% 0,0% 0,0% 0,1% 0,1% 0,1% 0,1% 0,1% 0,1% 0,1% 0,5% n/a 0,0% 0,0% 0,0% 0,0% 0,0% 0,3% 0,5% 0,7% 1,0% 1,3% 3,8% n/a n/a 15

25 Sectr/Measure III. Public & Private Service Sectr Baseline Estimated annual savings per measure in % f the Aggregated average annual/ savings per cumulated measure [in TJ] [in TJ] [in TJ] [in TJ] savings [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] in TJ annual 0,0% 0,2% 0,4% 1,1% 1,1% 1,5% 1,8% 2,3% 2,8% 3,4% cumulated 0,0% 0,2% 0,6% 1,7% 2,8% 4,3% 6,1% 8,4% 11,2% 14,6% 14,6% n/a III.1 Infrmatin campaigns n several issues f energy efficiency t be applied in public and private service buildings 0,0% 0,0% 0,0% 0,5% 0,5% 0,7% 0,9% 1,1% 1,3% 1,5% 6,5% n/a III.2 Efficient energy services in public facilities - investive measures n/a n/a n/a n/a 0,0% 0,2% 0,4% 0,6% 0,6% 0,7% 0,7% 0,8% 0,8% 1,0% 5,8% n/a III.3 Mnitring f energy cnsumptin and achieved savings in service buildings 0,0% 0,0% 0,0% 0,0% 0,0% 0,1% 0,2% 0,4% 0,7% 0,9% 2,3% n/a annual 0,3% 0,7% 1,1% 1,6% 2,0% 2,5% 3,1% 3,6% 4,0% 4,4% IV. Industry sectr cumulated 0,3% 1,0% 2,1% 3,7% 5,7% 8,2% 11,3% 14,9% 18,9% 23,3% 23,3% n/a IV.1 Cnsidering energy efficiency aspects fr the cnstructin f new industrial facilities 0,0% 0,1% 0,2% 0,3% 0,5% 0,5% 0,8% 0,8% 1,0% 1,0% 5,2% n/a IV.2 Implementatin f Energy Efficiency Financing Facility fr Industrial Enterprises n/a n/a n/a n/a 0,0% 0,2% 0,4% 0,6% 0,6% 0,8% 0,8% 1,0% 1,0% 1,2% 6,6% n/a Electricity savings thrugh imprvements f existing electricity netwrk, cmpensatin f reactive pwer and IV.3 imprvement f transfrmers 0,3% 0,4% 0,5% 0,7% 0,9% 1,2% 1,5% 1,8% 2,0% 2,2% 11,5% n/a V. Transprt sectr annual 0,2% 0,9% 1,2% 1,7% 2,0% 2,3% 2,6% 2,9% 3,2% 3,4% cumulated 0,2% 1,1% 2,3% 4,0% 5,9% 8,2% 10,8% 13,7% 16,9% 20,3% 20,3% n/a V.1 Vehicle Inspectin and Maintenance (I&M) prgram 0,0% 0,5% 0,5% 0,8% 0,8% 0,9% 0,9% 1,0% 1,0% 1,0% 7,3% n/a V.2 Traffic Demand Managmeent (TDM) scheme 0,0% 0,0% 0,1% 0,2% 0,3% 0,4% 0,5% 0,6% 0,7% 0,8% 3,6% n/a V.3 Disseminatin f infrmatin n technlgies and appraches fr reducing energy cnsumptin effectively n/a n/a n/a n/a 0,1% 0,2% 0,3% 0,4% 0,5% 0,6% 0,7% 0,8% 0,9% 1,0% 5,5% n/a V.4 Cntinuus exchange f mini buses by larger passenger buses perated by natural gas 0,1% 0,2% 0,3% 0,3% 0,4% 0,4% 0,5% 0,5% 0,6% 0,6% 3,9% n/a VI. Agricultural sectr annual 0,2% 0,2% 0,3% 0,4% 0,4% 0,9% 1,4% 2,4% 3,4% 4,4% cumulated 0,2% 0,4% 0,7% 1,1% 1,5% 2,4% 3,8% 6,2% 9,6% 14,0% 14,0% n/a Utilizatin f gravity flw in irrigatin systems and mdernisatin f existing pumping statins and upgrading VI.1 secndary and tertiare canals n/a n/a n/a n/a 0,2% 0,2% 0,3% 0,4% 0,4% 0,4% 0,4% 0,4% 0,4% 0,4% 3,5% n/a VI.2 Optimizatin f drinking water pumping statins n/a n/a n/a n/a 0,0% 0,0% 0,0% 0,0% 0,0% 0,5% 1,0% 2,0% 3,0% 4,0% 10,5% VII. Ttal n/a n/a n/a n/a n/a n/a 16

26 The prpsed sectral energy savings are based n ptential assessments referred t by the authr and have been adjusted t the target year. The summary effects t be pssibly realised by the target year 2020 are shwn in Table 3 and further explained in the fllwing chapters 4 and 5. Table 3: Estimated energy savings cumulated fr each sectr until 2020 Energy saving target adpted in 2020: Residential/Husehlds Industry & Energy sectr Transprt Public and cmmercial services Water sectr Surce: wn calculatin in % 23,0% in % 23,3% in % 20,3% in % 14,6% in % 14,0% The reprt n the Natinal Prgram n Energy Saving and Renewable Energy f Republic f Armenia just cmes up with ptential energy savings f the main fuel surces, arund 1,036 GWh fr electricity (ca. 23 % f 2008 demand) and 573,000,000 m³ fr natural gas (ca. 25% f 2008 demand). These savings are mainly dedicated t the industry and energy sectrs, as well as transprtatin and water sectr. References t the building sectr (residential and public/private services) are nt fund t be t specific there. 17

27 3 Addressing Barriers fr Energy Efficiency in Armenia Armenia has taken imprtant steps t encurage mre efficient use f energy, but many mre steps must still be taken. Hwever, the ptential is mainly untackled due t a number f reasns that can be summarized in a list f barriers t addressing energy efficiency: The legal framewrk needs t be implemented and enfrced. Especially in the building sectr the existing building cde needs binding prvisins regarding thermal quality f new and existing buildings and enfrced standards and methdlgies t assess energy perfrmance in buildings. Creating awareness abut energy efficiency needs a lt f infrmatin and knw-hw prvided t all energy cnsumers (private, business, service sectr, etc.). Yet, there is a weak institutinal setting in Armenia f cmmunicating energy efficiency with prfund capacity, e.g. thrugh a Natinal Agency r NGOs. Private cnsumers (i.e. husehlds) miss general and simple infrmatin n what can be dne t reduce energy demand in the daily life, such as in husing, use f electric appliances, transprtatin etc. Many plitical decisin-makers and private businesses still fail t see the value in energy efficiency investments, despite the successes f dnr-spnsred pilt prjects and prgrams, because f missing awareness, sufficient current energy supply and t a certain extent because they simply lack infrmatin n energy cnsumptin fr and energy ptentials in the main sectrs. The natural gas tariff encurages wasteful use by sme smaller custmers. There tariff structure des nt prvide an incentive fr cnsumers t use less energy. Furthermre, there are n ther financial incentives available that wuld encurage saving energy. The actin plan presented in the next chapters f this dcument will address these main barriers and prvide a set f selected instruments and actin t vercme the main legal, institutinal, decisin-making and infrmatin barriers. 18

28 4 Hrizntal and crss-sectral measures 4.1 Overview f hrizntal and crss-sectral EEI measures Target: Target grup: Prvide the necessary institutinal setting and capacity t implement the Armenian Energy Efficiency Actin Plan and ensure cntinuus evaluatin and mnitring f activities Ministries / Agencies Energy efficiency is nt merely a matter f a single sectr. Many measures are intertwined and mutually supprtive. Energy efficiency measures affecting several r all energy cnsumptin sectrs are reflected within the hrizntal activities. The main bjective is t build up the necessary institutinal capacities that will ensure an established structure fr the implementatin f the actin plan. The measures prpsed are t fcus n crss-sectral issues fr a wide range f user target grups: Legal aspects: integratin f the NEEAP int existing energy plicies (e.g. amending the Law n Energy Efficiency and Renewable Energy by taking the actin plan as ne main instrument fr implementatin int cnsideratin); and the necessary reinfrcement f the natinal energy statistic. The issue f public prcurement f energy efficient equipment is mainly t prvide public purchasers with technical specificatins and the necessary gd will t cnsider the acquisitin f energy efficient prducts and services by spending public mney. Institutinal setting: installatin f a Natinal Energy Agency. The main respnsibility fr taking plitical actin will stay with the Ministry f Energy and Natural Resurces (legislatin and plicy making), while the new Agency will implement, c-rdinate implementatin, evaluate and regularly reprt NEEAP and give als technical expertise t gvernment in develping plicies. The institutinal building will als require additinal persnnel capacities within the respnsible unit f the Ministry f Energy and Natural Resurces (Divisin f energy efficiency) and special training shuld be prvided fr new emplyees in internatinal energy efficiency practices and strategies (training financed by R2E2 and UNDP/GEF, emplyees salaries frm state budget). Awareness, infrmatin campaigns and technical assistance/training n energy tpics shall be enfrced. It is a measures which is very lng-lasting and needs t be reinfrced all the time (thrugh specific campaigns and built-up f prper material and media) The described hrizntal and crss-sectral measures will factually nt create any energy saving per se, but will be the main driver fr achieving savings under the fllwing sectral measures described in chapter 5. Hwever, relevant indicatrs fr mnitring the utcme are being defined with the measures presented in Table 4. 19

29 Table 4: List f hrizntal and crss-sectral measures under the Armenian NEEAP N Title f the EEI measure Descriptin f measures and specific actins Respnsibility Funding surce Duratin Pririty I.1 Implementatin f a regular Since 1989, there is n regular energy Ministry f Energy State budget High natinal Energy Statistic (with balance prduced fr Armenia. A gvernment Natinal Statistics EU-Ingate annual updates) decree was apprved in 2007 t prepare a Office natinal energy balance sheet, yet hwever, the decree has nt been implemented. Prgramme (Technical Assistance) Wrld Bank (GEF Grant) Necessary actins: Build-up f persnal capacities at the Natinal Statistics Office Technical assistance and training f dedicated staff t implement energy statistics accrding t internatinal standards and methds (e.g. cmpliance with IEA) Perfrmance f sectral surveys and analysis (husehlds, industry, service sectr, etc.), including survey f changes ver the years requirement f large cnsumers (e.g. industry) t submit regular data n energy cnsumptin Regular update (i.e. annually) and publicatin Elabratin f a energy balance baseline year (e.g. 2010) that will reflect the new methdlgy and prvide detailed energy supply and cnsumptin ectral data and will serve as a basis fr evaluating prgress f EEAP in the future 20

30 N Title f the EEI measure Descriptin f measures and specific actins Respnsibility Funding surce Duratin Pririty I.2 Implementatin f a Natinal It is necessary t embed the EEAP int a Ministry f Energy Wrld Bank (GEF High Energy Agency fr Energy institutinal setting fr c-rdinatin and Grant) Efficiency Energy and Renewable mnitring f prgress made. The gvernment is therefre t give a clear mandate, qualified staff and budgetary means t a natinal institutin r agency t cnduct the fllwing main tasks: C-rdinate and manage the activities t be implemented under the Armenian EEAP Regularly evaluate prgress f measures implemented under the EEAP against defined baseline cnsumptin Prepare regular reprts and mnitring f EEAP activities (e.g. every 2-3 years) Furthermre, it shall be ensured that the fllwing activities shall be c-rdinated by the new entity r ther respnsible gvernmental agency(ies): develping shrt-term and lng-term energy efficiency prgrams; crdinating the energy efficiency activities in different branches f ecnmy; cnducting infrmatin campaigns develping energy efficiency standards cnducting certificatin and labelling; certifying and/r licensing energy auditrs; 21

31 N Title f the EEI measure Descriptin f measures and specific actins Respnsibility Funding surce Duratin Pririty I.3 Financial Supprt fr Energy Due t a primary lack f funding means Ministry f Energy Prvisin f credit High Efficiency measures in all prvided by the natinal budget, it is a key lines and grant sectrs task t prvide prperly adapted prgrammes frm cmplementary funding f energy efficiency measures thrugh prviding primarily (in the shrt term) dnr funding t financially supprt internatinal financing institutins (UN, the planning and realisatin f energy Wrld Bank, efficiency measures. This culd be dne EBRD, IMF, KfW, thrugh the fllwing mechanisms: etc.) and investing int energy efficiency measures in develpment public facilities (schls, kindergartens, assistance (e.g. hspitals, street lighting, etc.) EU, USAID, grants fr capacity-building/training bilateral activities fr public administratin t prgrammes) implement energy plicies and strategies On-lending prgrammes industry and SME, such as EBRD's Sustainable Energy Financing Facility. In the medium t lng-term, alternative surces (thers than dnr prgrammes), such as private spnsring r public-private partnerships are t be sught t: realise in particular flagship energy efficiency prjects in industry, public & private services r residential buildings. supprt the develpment f energy services cmpanies (e.g. ESCOs) - pilt activities and training prgrammes 22

32 N Title f the EEI measure Descriptin f measures and specific actins Respnsibility Funding surce Duratin Pririty I.4 Infrmatin campaigns, training Organising and running infrmatin Ministry f Energy State budget High and educatin in the area f campaigns and educatinal prjects n (later: Natinal Internatinal nging energy efficiency imprvements energy efficiency and financial supprt fr Energy Agency) dnrs (e.g. prcess actins relating t the prmtin f energy efficiency. The campaigns need t be timespecific UNDP/GEF, Wrld Bank) and targeted t different kind f Private energy cnsumers (residential, service sectr, spnsrship industry, etc.). Prper indicatrs fr measuring the effectiveness f awareness raising measures shall be develped when designing awareness campaigns. Use f energy efficient prducts. Campaigns will be targeted twards encuraging specific actins, e.g. residential buildings: ptimising new cnstructin (thermal requirements, integrated building design, use f ptimised equipment fr lighting, husehld appliances, heatingsystems incl. pumps etc.) r ways t imprve existing buildings cst-effectively Infrmatin and educatin actins aimed at changing cnsumer behaviur and increasing scial acceptance f slutins that imprve energy efficiency in husehlds, tertiary sectr and industry. Encurage prviders and cnsumers t pay mre attentin t energy efficiency labelling and t the energy cnsumptin f prducts bught and sld. Training fr sales staff as regards energy efficiency labelling and prduct life cycle csts. Creatin f a training system fr energy efficiency specialists within tertiary educatin, as part f varius disciplines. Intrductin f energy efficiency subjects int educatin prgrammes at all levels. 23

33 N Title f the EEI measure Descriptin f measures and specific actins I.5 General regulatry demand side measures I.6 Assessment f the ecnmic ratinale f measures prpsed in the NEEAP Prviding incentives t energy cnsumers t use energy mre efficiently and at real market csts. Intrduce lad management tls and revise gas and electricity tariff structure based n detailed cst-benefit analysis. Adpt a methdlgy fr assessment f ecnmic viability f prpsed energy efficiency prgrammes and measures Respnsibility Funding surce Duratin Pririty Ministry f Energy, Public Service Regulatry Cmmissin State budget, Wrld Bank/ ESMAP High Ministry f Ecnmy State budget High I.7 Public Prcurement fr Energy Efficiency Public prcurement cntracts must include energy efficiency aspects when buying prducts, services r wrks. Specific criteria fr public authrities and cntracting parties need t be prepared, such as technical specificatins and evaluatin criteria fr the purchase f public gds, wrks and services in all sectrs, e.g. in the fields f: Public Prcurement Agency (under Gvernment) Ministry f Energy, Ministry f Finance, Ministry f Urban Develpment Relies t purchase f gds, wrks and services made frm state/municipal budget Medium (re)cnstructin f buildings lighting ICT and ffice equipment air-cnditining and cling husehld appliances (e.g. refrigeratrs, washing-machines, cffee-machines) vehicles At the same time it shuld be ensured that the annual planning f public budgets - especially when taking int cnsideratin necessary investments int infrastructure - cnstructin, purchase f equipment, etc. - shuld cnsider energy efficiency aspects already in the budgeting phase. 24

34 5 Sectral presentatin and assessment f energy efficiency imprvement prgrammes, energy services, and ther measures t imprve energy efficiency 5.1 Energy efficiency imprvement measures in the residential building sectr 5 Overall Target: Target grup: Imprved use f energy fr heating and cling while ensuring thermal cmfrt, and reductin f specific energy cnsumptin in the preparatin f ht water; implementatin f the necessary legal and institutinal framewrk; prvisin f large-scale infrmatin and awareness raising campaigns amngst all stakehlders Owners, tenants and peratrs f private hmes (family huses, multi-family buildings), architects, planners, cnstructin cmpanies, legislative bdies General intrductin n the building sectr Almst all the Armenian husing stck has been cnstructed during Sviet perid sme years ag withut any regard t energy efficiency. Many f these buildings are nw in bslete cnditin and d nt prvide fr minimum hygienic and cmfrt living cnditins. Specific energy use per square meter is almst 3-5 times higher than in EU and varies between 320 and 690 kwh/m² per year. Nevertheless, in many husehlds, the amunt f space heated is limited t ne r tw rms, as tenants have limited available husehld budget t cver the high energy csts. Als, cnstructin wrks in Armenia are presently perfrmed mre r less accrding t frmer Sviet practices and nrms that almst d nt invlve buildings energy perfrmance and imprvement issues. Such designs and cnstructin wrks result in excessive energy cnsumptin and grwing amunt f GHG emissins. Currently, residential (and als public) buildings in the cuntry are f lw thermaltechnical perfrmance resulting in grwing demand fr and cnsumptin f thermal energy. Buildings lw thermal technical perfrmance reflects insufficient heat cnductin resistance f building envelpe and unnecessary expansin f glass cver. Besides, state supervisin f mandatry implementatin f current nrms is absent. Armenia has vted fr Intergvernmental cnstructin nrm MSN Thermal Insulatin f the Buildings, develped by Intergvernmental Nrmative- Technical Cmmissin n Standards and Certificatin in Building Sectr f CIS, hwever it has nt been adpted and applied in Armenia. 5 80% f the ttal building stck in Armenia is fr residential purpses. S there is a specific fcus t be given t the husing sectr, nevertheless several measures presented here als reflect the need t be cvered in ther building types, mainly frm the public and private service sectr 25

35 Accrding t preliminary research, via efficient thermal insulatin f residential and public buildings, it is pssible t reduce energy cnsumptin fr heating at least by 20-40% 6, taking int cnsideratin the lw heating level in residential buildings. Of curse, the technical ptential fr imprving the building sectr is much higher, and able t reach a minimum f 70% (and up t 90%). New husing stck is largely privately wned and ften built with limited financial means, leading t the use f inadequate building materials. It is therefre recmmended t put an emphasis n lw- and n-csts energy efficiency measures t vercme the lack f finance, while strengthening enfrcement f the new building regulatins. Used building materials are rarely certified r labelled fr thermal quality, while imprted materials and cmpnents lack labels r are labelled in an incnsistent manner. There is sme ptential fr develping dmestic materials, and a dmestic prductin f quality cnstructin materials culd be develped thrugh the use f licenses fr freign cmpnents. Hwever, this wuld require substantial investments in plants capacity, technlgy adaptatin, training and marketing that seem t be premature at this stage, given limited market size. Such investments wuld nly be viable when the standards enfrcement capacities are in place, and when a real demand is effective n the market. Since 2004, Armenia is invlved in the Eurpean Neighburhd Plicy (ENP). The implementatin f ENP actin plan was apprved in 2006 and is t cntribute t harmnizatin f Armenian legislatin, nrms and standards with EU criteria. In this regard, imprvement f energy efficiency f buildings and cnstructins als needs paying attentin t EU directives. Accrding t EU Directive n Energy Perfrmance f Buildings, cap values f energy cnsumptin in buildings, buildings efficiency rankings, specific cnsumptin f thermal energy fr heating etc. Shuld be identified upn discretin f each cuntry based n climatic cnditins, technical and demgraphic data. At the same time, imprvement f buildings energy efficiency level is reflected in certain prvisins f the Armenian Law n Energy Saving and Renewable Energy and f the Natinal Prgram n Energy Saving and Renewable Energy. In this cntext, the Ministry f Energy and Natural Resurces and Ministry f Urban Develpment in cperatin with the Armenia Imprving the Energy Efficiency f Municipal Heating and Ht Water Supply UNDP/GEF prject, initiated a harmnizatin prcess f standards relevant t the sectr. The Prject s wrk plan fr includes harmnizatin issues t internatinal and Eurpean standards. 6 Surces: Twards Energy Efficiency Buildings in Eurpe (2004) 26

36 5.1.2 Overview f sectr-specific measures Summarizing ne can say that apart frm climate, the energy cnsumptin in the building sectr is significantly affected by the thermal-technical prperties f buildings, the efficiency f heating and cling systems, their regular inspectin, maintenance and the behaviur f residents. This fact nt nly refers t residential buildings, but the same is true fr public and private service buildings. The main barriers in the building sectr can be therefre defined as fllws: lack f available energy statistics and qualitative data n energy demand in the sectr, apprpriate legislatin (cdes, standards, nrms) and its enfrcement t induce energy efficient (re)cnstructin, cherent strategy fr building sectr develpment and plans fr new cnstructins and renvatin f existing buildings, availability f funds t supprt EE investments (e.g. availability f a financing scheme t supprt recnstructin and/r refurbishment f residential buildings), as well as knwledge and willingness f huse wners, planners, architects and peratrs f buildings t imprve the quality f buildings and supprt residents in adpting energy efficiency user practices; Therefre, the main target fr the develping measures in the residential building sectr can be specified as fllws: upgrading existing legislatin and all by-laws (standards, nrms) t reflect the necessary effrts t be made in increasing the energy f buildings, setting up educatinal prgrammes (tertiary educatin, n-the-jb-training) t train students and emplyees f cmpanies in the planning/design and cnstructin sectr t cmply with new integrated design and building standards, establish necessary capacities n the enfrcement level, develp pilt prjects t demnstrate building best-practice (fr rehabilitatin and new buildings) and prvide further incentives t prmte energy efficient cnstructin at all levels, such as intrductin f energy passprts r building peratinal csts t be used fr advertising thse flats and huses fr sale/rent adhering t high energy efficiency standards (prvide incentives fr cnstructin cmpanies t enfrce EE cnstructin practices). A brad range f measures prpsed fr existing and new buildings will accunt fr apprx. 23% f ttal energy savings f the building sectr prjected under the Armenian NEEAP by The % savings attributed t each kind f measures is being demnstrated in Table 5. Marked red are the relevant intermediate energy saving target years, accrding t 27

37 which the fllwing energy savings are freseen: 2013: 1.3% 2017: 9.9% 2020: 23.0% Table 6 prvides a mre detailed descriptin f the measures f the building sectr. 28

38 Table 5: Estimated savings per measure in the residential building sectr frm Sectr/Measure II. Building sectr II.1 Natinal Building Cde cnsidering energy perfrmance f buildings II.2 Standards and calculatin methdlgy t assess energy perfrmance in buildings Baseline Estimated annual savings per measure in % f the Aggregated average annual/ savings per cumulated measure [in TJ] [in TJ] [in TJ] [in TJ] savings [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] in TJ annual 0,0% 0,5% 0,8% 1,4% 1,8% 2,5% 3,0% 3,7% 4,5% 5,0% cumulated 0,0% 0,5% 1,3% 2,7% 4,4% 6,9% 9,9% 13,5% 18,0% 23,0% 23,0% n/a II.3 Institutinal capacity-building fr implementing and enfrcing new standards 0,0% 0,1% 0,2% 0,3% 0,4% 0,5% 0,6% 0,7% 0,8% 0,9% 4,5% n/a II.4 II.5 II.6 II.7 II.8 Establishing quality assurance/quality cntrl (QA/QC) standards that will supprt the certificatin f key building materials fr energy perfrmance. Set up rad-test prcedures fr building certificatin and methdlgy fr assessment f energy perfrmance fr pilt buildings Training and educatin in crrespndance with the prmtin f integrated building design apprach and new energy perfrmance requirements in buildings Pilt Prject: Design cmpetitin and cnstructin f several best-practice buildings (e.g. schl r ther public building, and a multi-family huse) in Yerevan and anther larger city, using an integrated building design apprach within available budget and time schedule fr the cnstructin f a typical building. Develpment f an incentive scheme t prmte energy efficient cnstructin r recnstructin in residential and service buildings n/a n/a n/a n/a 0,0% 0,3% 0,4% 0,5% 0,6% 0,7% 0,7% 0,8% 1,0% 1,0% 6,0% 0,0% 0,1% 0,2% 0,3% 0,4% 0,5% 0,6% 0,7% 0,8% 0,8% 4,4% n/a 0,0% 0,0% 0,0% 0,1% 0,1% 0,2% 0,2% 0,3% 0,4% 0,4% 1,7% n/a 0,0% 0,0% 0,0% 0,1% 0,2% 0,3% 0,3% 0,4% 0,4% 0,5% 2,1% n/a 0,0% 0,0% 0,0% 0,1% 0,1% 0,1% 0,1% 0,1% 0,1% 0,1% 0,5% n/a 0,0% 0,0% 0,0% 0,0% 0,0% 0,3% 0,5% 0,7% 1,0% 1,3% 3,8% n/a n/a 29

39 Table 6: List f measures in the residential building sectr specified under the Armenian NEEAP N Title f the EEI measure Descriptin f measures and specific actins II.1 Natinal Building Cde cnsidering energy perfrmance f buildings II.2 Standards and calculatin methdlgy t assess energy perfrmance in buildings Adptin f a Natinal Building cde cnsidering energy perfrmance f buildings (cmpatible with internatinal best practices, such as the Eurpean Energy Perfrmance Building Directive) with regular revisins f the building cde (e.g. all 3 years). The new cde will cnsider the ttal building energy perfrmance (including heating, ht water, air cnditining and ventilatin) and set specific targets cncerning the maximum energy demand f buildings. Cnstructin permits are t be issued taking int cnsideratin that all requirements Elabrate and adpt natinal calculatin methdlgy t determine building energy cnsumptin based n standardized use and establish minimal requirements fr thermal prperties f a building, heating and air-cnditining systems, applicatin f renewable energy surces and relevant design aspects f buildings (e.g. inclusin f passive slar elements). Respnsibility Funding surce Duratin Pririty Ministry f Energy, UNDP/GEF High Ministry f Ecnmy, Ministry f Urban Develpment Ministry f Energy, Ministry f Ecnmy, Ministry f Urban Develpment UNDP/GEF High 30

40 N Title f the EEI measure Descriptin f measures and specific actins Respnsibility Funding surce Duratin Pririty II.3 Institutinal capacity-building fr Develp respnsibilities and clear Ministry f Urban UNDP/GEF High implementing and enfrcing new prcedures within the respnsible Ministry f Develpment standards Urban Develpment t address the enfrcement f the new building energy efficiency cdes and standards. Train staff t ensure cmpliance with the new cde thrughut design, cnstructin and maintenance phases, thrugh capacity building in energy audits: Define prcedures and methdlgy fr issuance f building energy passprts and the types f buildings fr which the passprts will becme cmpulsry. II.4 Establishing quality Establish a mandatry testing system fr the Ministry f Urban UNDP/GEF High assurance/quality cntrl cnfrmity f cnstructin materials with Develpment, Ministry (QA/QC) standards that will building energy perfrmance accrding t f Ecnmy supprt the certificatin f key natinal standards. Establish perfrmance building materials fr energy requirements fr materials prduced lcally perfrmance. r imprted, which will allw builders and designers t make better infrmed decisins abut the perfrmance f the cnstructin materials used in new buildings. Intrduce a vluntary certificatin and labelling scheme fr cnstructin materials (e.g. windws, insulatin, bilers, etc.) t prvide incentives fr high-quality materials t enter the Armenian market. Furthermre, natinal nrms fr QA/QC shall be established in manufacturing facilities and assistance fr suppliers t cmply with energy-efficiency related natinal standards 31

41 N Title f the EEI measure Descriptin f measures and specific actins Respnsibility Funding surce Duratin Pririty II.5 Set up rad-test prcedures fr Set up rad-test prcedures fr building Ministry f Urban UNDP/GEF Medium building certificatin and certificatin and methdlgy fr Develpment methdlgy fr assessment f assessment f energy perfrmance fr energy perfrmance fr pilt several pilt buildings (e.g. schls, buildings residential buildings) t be cnstructed fllwing integrated building design apprach. Use experiences and utcmes frm relevant prjects, such as UNDP/GEF Prject n "Imprving the Energy Efficiency f Municipal Heating and Ht Water Supply (UNDP/GEF/ ) 32

42 N Title f the EEI measure Descriptin f measures and specific actins II.6 Training and educatin in crrespndance with the prmtin f integrated building design apprach and new energy perfrmance requirements in buildings Prmtin f best energy design and cnstructin practices in the cnstructin sectr: (1) Develp and intrduce mdule n energy efficient building design in the curricula f University fr Architecture and Cnstructin and prvide training assistance and ther supprt materials (Teachers Guide) fr teaching staff; (2) Design and deliver training curses fr staff in the field f building energy perfrmance, slar architecture and applicatins fr renewable energy surces in buildings; (3) Prvide training curses fr practicing architects and engineers cncerning the applicatin f the new cdes and calculatin methdlgies; (4) Raise awareness f building cnstructrs n ecnmic, envirnment and scial benefits f integrated building design and n lcally available and tested technlgies, materials and ther EE applicatins in buildings (e.g. thugh public events at majr cnstructin events); (5) Organize infrmatin campaign fr the general public prmting benefits f the new building cde and the Energy Passprt; (6) prmte results f pilt buildings and integrated building design regularly thrugh the natinal media; Respnsibility Funding surce Duratin Pririty Ministry f Educatin and Science State budget Intl. dnrs Medium 33

43 N Title f the EEI measure Descriptin f measures and specific actins Respnsibility Funding surce Duratin Pririty II.7 Pilt Prject: Design cmpetitin Pilt prject shuld cver the fllwing: (1) Ministry f Urban UNDP/GEF Medium and cnstructin f several best-lwpractice r n-cst measures; (2) mnitr Develpment, Ministry buildings (e.g. schl energy perfrmance f pilt buildings; (3) f Educatin, Ministry r ther public building, and a Adpt a new standard design fr newly f Finance, Technical multi-family huse) in Yerevan cnstructed buildings (e.g. schls) based Assistance frm Dnrs and anther larger city, using an n the nes applied in the pilt buildings; (5) integrated building design apprach within available budget and time schedule fr the cnstructin f a typical intrduce integrated energy efficient design methdlgy in all planned public cnstructin (technical specificatins fr public prcurement); building. II.8 Develpment f an incentive Develpment f an incentive scheme fr Ministry f Energy, State budget scheme t prmte energy energy efficient cnstructin r Ministry f Finance, Intl. dnrs efficient cnstructin r recnstructin. Prvide apprpriate and with internatinal recnstructin in residential and financially sund supprt mechanisms that dnrs and natinal service buildings wuld allw the building wners t cmply banks with enhanced standards and simultaneusly accept the pprtunity t invest int cst-effective energy efficiency measures by realising visible benefits (e.g. small scale subsidy and financing schemes, supprt fr energy passprt) Lw 34

44 5.2 Energy efficiency imprvement measures in the public and private service sectr Target: Target grup: Reductin, r minimisatin f energy cnsumptin in public and private service sectr fcusing n a varius range f applicatins in buildings and public space (e.g. street-lighting, use f ffice equipment, air-cnditining) Public administratin (ministries, twns/municipalities), public lighting peratrs, private ffice wners and tenants, emplyees in these cmpanies General intrductin n the public and private service sectr The Armenian ecnmy is agricultural-industrial riented, with a develping service sectr. The structure f 2004 GDP in Armenia is: 40% in industrial sectr, 35% in service sectr (including cnstructin and transprtatin), and 25% in agriculture. The share f service sectr is times lwer than in develped cuntries (50-70%). The energy intensity index in the service sectr f Armenia, 90.4 kg e/$1,000 USD is clse t that f many develped and develping cuntries: Estnia, 91 kg e/$1,000 USD, Latvia, 99.7 kg e/$1,000 USD, Czech Republic, kg e/$1,000 USD (see Figure 1). Accrding t the Natinal Prgram n Energy Saving and Renewable Energy f Republic f Armenia paper (2007), the service sectr in Armenia is experiencing the same issues f energy efficiency as in develped cuntries and in general des nt represent a high abslute energy saving ptential. Figure 1: Energy intensity f ecnmy in a number f cuntries in 2003, kg e/thus.usd Surce: Scientific Research Institute f Energy fr the Alliance t Save Energy/USAID: Natinal Prgram n Energy Saving and Renewable Energy f Republic f Armenia ; Yerevan 2007 as by Key Wrld Energy Statistics frm IEA: htpp:/ 35

45 Nevertheless, the rle f the public administratin in prviding gd practice and thus being a shining example fr the ther sectrs is evident. Public spending is a significant cntributr t the cuntries GDP. The state administratin, all reginal and lcal authrities and ther public institutins (e.g. health sectr, schls) regularly purchase energy cnsuming devices, such as ffice equipment, lighting, diverse husehld appliances (fridges, dishwashers, washing-machines, etc.) and ther equipment used fr air-cnditining, ventilatin, etc. It is therefre f imprtance t prvide the public sectr with a clear strategy, i.e. t demand energy efficient applicatins and equipment and directing public spending twards higher-quality prducts. Energy efficient public prcurement will prvide csteffective means t imprve the energy intensity f the sectr as slightly higher purchasing csts will pay back within a cuple f years. On the ther hand the availability f energy efficient prducts n the market will steadily increase, if the demand is rising. Pretty the same issues are t be addressed t the private service sectr, althugh it is generally a very inhmgeneus market segment which usually is nt subject t direct influence by the gvernment. The issue fr this sectr is therefre t increase the awareness f the prtagnists in this area business wners, service cmpanies, peratrs f ffice space and cmmercial trading, etc. and prvide them with a scpe f measures that wuld fster cncrete actin twards energy efficiency. Althugh mst f the energy used in service buildings is spent fr heating and ht water (measures already cvered in chapter 5.1), the grwing demand fr ventilatin and cling in these buildings is a serius issue t be addressed in the cuntries energy plicy Overview f sectr-specific measures The peratin f public buildings is a relevant cst factr in the public sectr due t the share f energy csts in the ttal budget. Apart frm lighting, heating and cling f buildings and use f varius equipment (ICT, ffice equipment, husehld appliances used in ffices etc.) are the mst significant cnsumers in service buildings. Tgether with the imprvement f the energy efficiency f mentined equipment, efficient user behaviur cnstitutes fr a large saving ptential (frm 20% t 60%, depending n the baseline cnsumptin) in this area. The general energy efficiency measures cvering the building envelpe are already specified in chapter 5.1 (als valid fr service buildings). In additin t the energy cnsumptin in public buildings, peratin f lighting in public buildings and public street-lighting in twns and municipalities make a relevant cntributin t the final energy cnsumptin in the public sectr. Street-lighting prjects are usually financed ut f municipal budgets. The current practice is that in case f efficiency measures implemented (leading t savings in peratinal csts cvered by the municipal budget) the lcal authrity is nt able t dispse f the energy cst 36

46 savings, as peratinal budgets in this case will be usually cut by the central gvernment. S there is n real incentive t realise efficiency measures. Finding ways t change this situatin (e.g. financing schemes, such as energy perfrmance cntracting) will definitely increase the interest in becming mre energy cnscius. As fr street-lighting, the largest cnsumer in this area is the City f Yerevan, in ther twns and municipalities the issue f street-lighting is f less imprtance, mainly due t absence f fully perated lighting-systems. Lighting is, t a large extend, being cnsumed inefficiently, which results frm the use f bslete light surces, unreliable regulatin (switching, declining pwer supply vltage) and wrng psitining and lcatin f light surces. Upgrading f public lighting will fcus n the installatin f mdern highly efficient light surces fr public lighting as well and reliable and efficient regulatin and management f peratin. The three measures prpsed fr the service sectr can save up t apprx. 15% f ttal energy savings f sectr by Hwever, as shwn belw, the effects are lw in the shrt-term and will grw steadily with increasing the penetratin f efficiency measures in the service sectr. The % savings attributed t each kind f measures is being demnstrated in Table 7. The relevant intermediate energy saving target years, accrding t which the fllwing energy savings are freseen, are: 2013: 0.6% 2017: 6.1% 2020: 14.6% Table 8 prvides a mre detailed descriptin f the measures f the building sectr. 37

47 Table 7: Estimated savings per measure in the public and private service sectr frm Sectr/Measure III. Public & Private Service Sectr Baseline Estimated annual savings per measure in % f the Aggregated average annual/ savings per cumulated measure [in TJ] [in TJ] [in TJ] [in TJ] savings [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] in TJ annual 0,0% 0,2% 0,4% 1,1% 1,1% 1,5% 1,8% 2,3% 2,8% 3,4% cumulated 0,0% 0,2% 0,6% 1,7% 2,8% 4,3% 6,1% 8,4% 11,2% 14,6% 14,6% n/a III.1 Infrmatin campaigns n several issues f energy efficiency t be applied in public and private service buildings 0,0% 0,0% 0,0% 0,5% 0,5% 0,7% 0,9% 1,1% 1,3% 1,5% 6,5% n/a III.2 Efficient energy services in public facilities - investive measures n/a n/a n/a n/a 0,0% 0,2% 0,4% 0,6% 0,6% 0,7% 0,7% 0,8% 0,8% 1,0% 5,8% n/a III.3 Mnitring f energy cnsumptin and achieved savings in service buildings 0,0% 0,0% 0,0% 0,0% 0,0% 0,1% 0,2% 0,4% 0,7% 0,9% 2,3% n/a 38

48 Table 8: List f measures in the public and private service sectr specified under the Armenian NEEAP N Title f the EEI measure Descriptin f measures and specific actins Respnsibility Funding surce Duratin Pririty III.1 Infrmatin campaigns n several Office equipment and rm ventilatin Ministry f Energy, W rld Bank / GEF High issues f energy efficiency t be and cnditining systems used in service Natinal Energy (cntinuus applied in public and private buildings prvide usually a great Agency activity) service buildings ptential fr energy efficiency thrugh changing f user behaviur and ptimising existing systems thrugh energy efficient peratin. The result are significant savings n the peratin csts and higher user cmfrt. The advantages and types f measures t be adpted t ptimise existing facilities and systems shall be transmitted thrugh public infrmatin campaigns specifically adressing the fllwing issues: - perating lighting in ffices efficiently - use f ffice equipment (cmputers, printers, cpiers, servers, etc.) - air-cnditining and ventilatin - ther husehld appliances used in ffices (e.g. refrigeratrs, ckers, etc.) - availability f energy efficiency labels and hw they can be used fr purchasing decisins - evaluatin f the ptential f behaviur change impact and prvisin f crrespnding recmmendatins t the public building administratin 39

49 N Title f the EEI measure Descriptin f measures and specific actins III.2 Efficient energy services in public facilities - investive measures Defining minimum requirements fr prvisin f energy efficient services in public facilities, and implementatin f crrelating investive measures reducing the energy demand f public (and private) service buildings (heating, aircnditining, use f ffice equipment) and ptimisatin f public lighting systems (e.g. learning frm experiences made in City f Yerevan); Prvide examples f financing such prjects thrugh ESCOs. Respnsibility Funding surce Duratin Pririty Ministry f Energy W rld Bank High Public and private service facilities' peratrs III.3 Mnitring f energy cnsumptin "Energy accunting" r regular Natinal and achieved savings in service mnitring f energy cnsumptin in Agency buildings public buildings is an imprtant aspect t imprve the cnsciusness regarding energy use. Many building peratrs hwever d nt knw abut their building energy cnsumptin and energy csts accrued. The idea is t supprt the intrductin f building energy accunting t mnitr energy cnsumptin and savings in case f rehabilitatins. Energy Building wners Lw 40

50 5.3 Energy efficiency imprvement measures in industry sectrs (including energy prductin) Target: Target grup: Reductin f energy intensity with respect t value-added prductin in the industry and the energy sectr (energy prductin, transmissin and distributin cmpanies); ptimisatin f energy supply in the cuntry s pwer plants and distributin netwrk Stakehlders in industrial prductin and energy utilities General intrductin n the industry & energy sectrs Industrial activities: The 40% share f industry in the GDP (2004) f Armenia is clse t the ne in develped cuntries (30-40%). The industry sectr f Armenia has, as cmpared t ther sectrs, als a lw energy intensity characteristic, kg e/$1,000 USD, cmpared t the ne fr Uzbekistan, 2616 kg e/$1,000 USD, Estnia, 569 kg e/$1,000 USD, Mldva, 1264 kg e/$1,000 USD, and Gergia, 304 kg e/$1,000 USD (see Figure 1). This means that the spectrum f the energy intensive prductin in the cuntry is very lw (e.g. Nairit factry, Plyvinylacetate factry use mainly electricity, and cement, re and mining industry is mainly depending n il and natural gas), and that the share f prductin using mdern energy efficient technlgies is fairly high (fd prductin, nn-energy intensive prductin). Nevertheless, it is necessary t make use f energy efficient technlgies and prductin methds which make it pssible t reduce energy intensity f the prductin in the main energy cnsuming industrial sectrs (such as chemical industry, metallurgy), but als within the larger sectr smaller and medium-sized cmpanies. Energy prductin: Armenia has n il and natural gas reserves, and imprts all its fssil fuel demand. Electricity is prvided by: A nuclear pwer plant which prvides 30-40%; Hydrelectric plants satisfy 20-35% f the cuntry s needs. Besides, the hydrpwer generatin is declining due t limitatins assciated with irrigatin purpses f the hydr plants; The remaining electricity demand is satisfied by thermal pwer plants which can burn either il r natural gas. The share f the thermal plants in the generatin mix f the cuntry is n average 30-35%. In the heating sectr, due t the cnsequences f the ecnmic and 41

51 energy crisis that fllwed the separatin f Armenia and its neighbring cuntries frm the frmer Sviet Unin in 1990, the municipal heat and ht water supply systems in all Armenian cities essentially cllapsed. While in sme cities the peratins f the frmer, centralized district heating (DH) system have been partially restred, the vast majrity f the urban ppulatin still lacks rganized heat and ht water supply services. Nwadays, in larger public and private service buildings there is ften a centralised biler huse existing, while in residential buildings lcal heating systems prevail. Many f these centralised biler huses are perated inefficiently r are generally ld. They wuld need a fcus within the Actin Plan t underg majr refurbishment r recnstructin Overview f sectr-specific measures The measures t imprve energy efficiency in the industry sectr must be particularly targeted at energy demand, mnitring and management in the individual technlgical prcesses, intrductin f innvative appraches primarily aimed at reducing the energy intensity f industrial prductin, and investments in energy efficiency in the selected industrial branches. Generally, there is a lack f awareness and knwledge n ptential EE measures as well as incentives t implement them. In rder fr these measures t be effective, a change must ccur in peple s mentalities and behaviur. The Natinal Prgram n Energy Saving and Renewable Energy has assessed a series f measures thrughut the specific sectrs, which need t be tackled. Reference is therefre made t the existing ptential analyses and studies, ne f which was als prepared by the Internatinal Finance C-peratin (IFC), that is helping Armenian financial institutins develp sustainable energy finance prducts, thereby increasing renewable energy generatin and lwering electricity waste and greenhuse-gas emissins. Anther f these sustainable energy financing institutins ( ArmSEFF prgramme, see Annex 3: List f relevant dnr prjects and prgrams nging and f past) is being develped by the EBRD (envisaged start: autumn 2010). A fcus is als t be given t the pwer and gas sectr. Obslete and ld infrastructure, a high share f prductin and transmissin lsses are putting a pressure n the utilities t maintain their systems reliable and make them fit fr the future which is shwing sharp increases f energy demand (up t 10% p.a. until 2020, nce the ecnmic crisis is ver). Althugh there are several prgrams running with supprt frm e.g. the Wrld Bank, cntinuus imprvement and maintenance f existing energy prductin and distributin facilities remains a high pririty fr ensuring a sustainable and reliable energy system. Tgether with the imprvement f the infrastructure, measures t ensure the affrdability f gas and electricity tariffs (as described as an imprvement measure in chapter 4) have t be enfrced. A summary f the critical measures prpsed can be fund in 42

52 Table 10. The table is split int demand side measures n the ne hand (i.e. efficiency measures at industrial users) and n the ther hand n measures fcussing n the supply side (lking fr imprvements in the supply and distributin f heat and electricity thrugh utilities). The targeted savings t be reached by 2020 are significant and culd reach apprx. 42% f ttal energy savings f the industry (and energy prductin) sectr. The % savings are als given in Table 9. The relevant intermediate energy saving targets are as fllws: 2013: 2.1% 2017: 11.3% 2020: 23.3% 43

53 Table 9: Estimated savings per measure in the industrial sectr frm Sectr/Measure IV. Industry sectr Baseline Estimated annual savings per measure in % f the Aggregated average annual/ savings per cumulated measure [in TJ] [in TJ] [in TJ] [in TJ] savings [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] in TJ annual 0,3% 0,7% 1,1% 1,6% 2,0% 2,5% 3,1% 3,6% 4,0% 4,4% cumulated 0,3% 1,0% 2,1% 3,7% 5,7% 8,2% 11,3% 14,9% 18,9% 23,3% 23,3% n/a IV.1 Cnsidering energy efficiency aspects fr the cnstructin f new industrial facilities 0,0% 0,1% 0,2% 0,3% 0,5% 0,5% 0,8% 0,8% 1,0% 1,0% 5,2% n/a IV.2 Implementatin f Energy Efficiency Financing Facility fr Industrial Enterprises n/a n/a n/a n/a 0,0% 0,2% 0,4% 0,6% 0,6% 0,8% 0,8% 1,0% 1,0% 1,2% 6,6% n/a IV.3 Electricity savings thrugh imprvements f existing electricity netwrk, cmpensatin f reactive pwer and imprvement f transfrmers 0,3% 0,4% 0,5% 0,7% 0,9% 1,2% 1,5% 1,8% 2,0% 2,2% 11,5% n/a 44

54 Table 10: List f measures in the industrial sectr specified under the Armenian NEEAP N Title f the EEI measure Descriptin f measures and specific actins Demand side measures IV.1 Cnsidering energy efficiency Emphasizing awareness raising Ministry f aspects fr the cnstructin f new measures in industrial enterprises and at Ecnmy, industrial facilities technical and management level Ministry f regarding the intrductin f energy Envirnment efficient technlgies fr new PSRC installatins; r fr rehabilitatins ensuring the imprvement f the energy efficiency f the existing system. Respnsibility Funding Surce Duratin Pririty State budget High 45

55 46 Natinal Energy Efficiency Actin Plan fr RA Armenia 2010

56 N Title f the EEI measure Descriptin f measures and specific actins Supply side measures Respnsibility Funding surce Duratin Pririty IV.3 Electricity savings thrugh Electricity transmissin lsses are Ministry f Energy, Wrld Bank imprvements f existing electricity cnsiderably higher than the internatinal Electric Netwrks f netwrk, cmpensatin f reactive standard f 6-7 percent, at rughly 15 Armenia pwer and imprvement f percent. Investments int the netwrk are transfrmers necessary t reduce high amunt f lsses and thus cntribute t safer supply f energy Technical lsses in the transfrmers and transfrmer substatins as well as distributin lines are t be tackled, especially n the medium and lw vltage systems High 47

57 5.4 Energy efficiency imprvement measures in the transprt sectr Target: Target grup: Reductin and minimisatin f energy cnsumptin in freight and passenger transprt; increasing pprtunities fr public transprt Traffic participants, transprt rute wners and peratrs, wners and peratrs f means f transprt, state administratin, lcal and reginal gvernments General intrductin n the transprt sectr The prvisin f transprt linkages and transit carriages has a key rle fr the develpment f trade-ecnmic relatins between cuntries. Fr all develping cuntries, especially thse which are landlcked as Armenia, it is crucial t implement transit carriages in the light f the tariffs in use and t spur infrastructure develpment, mdernizatin f available transprt stck, etc. The transprt plicy f Armenia is cnducted nwards the creatin f integrated Eur-Asian transprt netwrk, elabratin f mechanisms fr unificatin f legislative acts and ther regulatins. Currently, Armenia is implementing the necessary internal state prcedures fr jining t the existing agreements and cnventins in the field f transprt, which have been signed in the framewrk f UN Ecnmic Cmmissin fr Eurpe. The Republic f Armenia, which has a quite develped netwrk f rads and railways, taking int cnsideratin the specific gegraphical situatin f the cuntry, extends majr attentin t the mdernizatin f transprt infrastructures and fr attracting investments in the said sectr, especially fr the recnstructin f artificial facilities bridges and tunnels. In regard with its effectiveness, high pririty is given t the implementatin f cmbined cntainer carriages and mdernizatin f cntainer terminals. The majr issue, hwever, remain the quite underdevelped means f public transprtatin means acrss the cuntry (e.g. under-utilised railway system) and especially within its largest city, Yerevan. Individual means f transprtatin are a huge traffic prblem within the city (e.g. there a ten times mre minibuses perated than regular larger buses), causing cngestin and high emissins frm this sectr. Mrever, the electrified transprt means, such as railway, trlley buses r metr (ne line in Yerevan) are playing a very limited rle in transprt means f the cuntry. The share f different public transprtatin means in Yerevan (2008) are: trlley buses ca. 3%, metr 4%, large and medium buses 8% and micr buses ca. 85%. The big challenge is increase the share f public transprtatin systems (large and trlley buses, metr) cmpared t the high number f micr buses and individual private cars Overview f sectr-specific measures The energy saving measures fr the transprt sectr include the develpment f 48

58 specific emissin nrms fr vehicles in cmbinatin with sme incentives t reduce the emissin level, further the ptimizatin f vehicles and rutes, especially when it cmes t the intrductin f new energy efficient public transprtatin t frce the replacement f ld vehicles with newer, efficient nes, but still maintain the quite unique large share f gas driven cars in the wrld. The wrst plluters are hwever the large trucks, they are usually least efficient and increasingly cngesting rads. Regular inspectin prgrams shall be fcussing n the vehicles causing the mst pllutin, and expanded t ther cars like mini buses, taxis and the majrity f secnd-hand car wnership in the cuntry. One imprtant aspect is related t the creatin f awareness amng drivers t drive cars efficiently and cnsider pprtunities t reduce the amunt f annual mileage. These measures shall be supprted by the implementatin f traffic demand management schemes which can include a wide range f ptins (such as parking restrictins r fees, tlls, restrictins by plate numbers) t help ease cngestin in bttleneck crridrs while prmting public transprt. The prpsed measures in the transprt sectr will accunt fr apprx. 20% f ttal energy savings prjected under the Armenian NEEAP. The annual % savings including the intermediate energy saving targets up t 2020 are given in Table 11 as fllws: 2013: 2.3% 2017: 10.8% 2020: 20.3% 49

59 Table 11: Estimated savings per measure in the transprt sectr frm Baseline Estimated annual savings per measure in % f the Aggregated Sectr/Measure average annual/ savings per cumulated measure [in TJ] [in TJ] [in TJ] [in TJ] savings [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] in TJ V. Transprt sectr annual 0,2% 0,9% 1,2% 1,7% 2,0% 2,3% 2,6% 2,9% 3,2% 3,4% cumulated 0,2% 1,1% 2,3% 4,0% 5,9% 8,2% 10,8% 13,7% 16,9% 20,3% 20,3% n/a V.1 Vehicle Inspectin and Maintenance (I&M) prgram 0,0% 0,5% 0,5% 0,8% 0,8% 0,9% 0,9% 1,0% 1,0% 1,0% 7,3% n/a V.2 Traffic Demand Managmeent (TDM) scheme 0,0% 0,0% 0,1% 0,2% 0,3% 0,4% 0,5% 0,6% 0,7% 0,8% 3,6% n/a Disseminatin f infrmatin n technlgies and appraches fr reducing energy V.3 cnsumptin effectively n/a n/a n/a n/a 0,1% 0,2% 0,3% 0,4% 0,5% 0,6% 0,7% 0,8% 0,9% 1,0% 5,5% n/a V.4 Cntinuus exchange f mini buses by larger passenger buses perated by natural gas 0,1% 0,2% 0,3% 0,3% 0,4% 0,4% 0,5% 0,5% 0,6% 0,6% 3,9% n/a 50

60 Table 12: List f measures in the industrial sectr specified under the Armenian NEEAP N Title f the EEI measure Descriptin f measures and specific actins V.1 Vehicle Inspectin and Maintenance (I&M) prgram Trucks are ften the wrst plluters, least efficient and n the rad mst frequently. Therefre the I&M prgram shuld fcus n trucks in the beginning ( ). - In a secnd step, the I&M prgram culd be expanded t minibusses and taxis ( ). - In a third step the prgram can than be expanded t all vehicles ( ). Respnsibility Funding surce Duratin Pririty Ministry f State Budget High Transprt, Ministry f Ecnmy V.2 Traffic Demand Managmeent (TDM) scheme (1) T vercme bttleneck crridrs, the city f Ministry f State Budget High Yerevan shall prepare a TDM scheme. This Transprt, culd including parking fees, parking Ministry f Ecnmy restrictins, tlls, restrictins by plate number,... (2) At the same time it is imprtant t prmte public transprtatin (use f metr, buses instead f individual transprt). Restrictins fr individual transprt mentined under (1) culd help t create a shift in the transprt mdal split twards public transprtatin means. (3) Optimisatin f public transprt rutes and traffic light management t reduce fuel intensity f vehicles. V.3 Disseminatin f infrmatin n Disseminatin f infrmatin t users regarding Ministry f technlgies and appraches fr updated legislatin and n ways f ecnmising Transprt reducing energy cnsumptin petrl (e.g. change in air pressure in passenger effectively car tyres, driving skills and thers). Especially in the area f heavy traffic (trucks, buses) training f drivers fr fuel efficiency shall be encuraged. State budget Internatinal dnrs High 51

61 N Title f the EEI measure Descriptin f measures and specific actins V.4 Cntinuus exchange f mini In ttal, there are abut 2,800 mini-buses (10-12 City f Yerevan buses by larger passenger buses seats) running n Yerevan's public bus rutes, perated by natural gas nly abut 300 larger buses (with seats). They are perated by private cmpanies that mstly use gas (90%) fr driving them due t cheaper running csts. Hwever, mini-buses are ne reasn fr increasing traffic cngestin in twn which is becming an envirnmental prblem. The City's plan is t replace in the lngterm 2 mini-buses by a large bus (als being perated by natural gas, currently at abut 50%). This will bring fuel savings at higher capacity and cntribute t reducing cngestin. Estimated fuel savings is 20-25% per passengerkilmeter. The necessary measure is t adapt public tenders fr perating bus rutes, which are renewed every 4 years, and include large buses as cmpulsry vehicles. Fuel types have nt been specfied s far, but as gas is much cheaper than regular diesel r gasline, the peratrs will prefer t run gas-perated buses anyway. Respnsibility Funding surce Duratin Pririty Private cmpanies (applying fr cncessins t perate bus lines) High 52

62 5.5 Energy efficiency imprvement measures in the water sectr Target: Target grup: Structural refrms in water sectr, especially reductin f energy intensity in irrigatin systems and fr drinking water pumping statins Owners and peratrs f agricultural businesses / water supply General intrductin n the water sectr Armenia has 2.1 millin hectares f agricultural land, 72% f the cuntry s land area. Mst f this, hwever, are muntain pastures, and cultivable land is 480,000 hectares (452,900 hectares arable land, 27,300 hectares in rchards and vineyards), r 16% f the cuntry s area. In 2006, 46% f the wrk frce was emplyed in agriculture (up frm 26% in 1991), and agriculture cntributed abut 21% f the cuntry s GDP. Back in 1991, Armenia imprted still abut 65 percent f its fd. Agriculture is carried ut mainly in the valleys and muntainsides f Armenia s uneven terrain, with the highest muntain pastures used fr livestck grazing. Fertile vlcanic sil allws cultivatin f wheat and barley as well as pasturage fr cws, sheep, gats, and hrses. The principal agricultural prducts are grains (mstly wheat and barley), ptates, vegetables, grapes and fruits (e.g. apricts). Agriculture prvides a significant share in the cuntry s energy demand, mainly thrugh intensive irrigatin. Almst 80% f agricultural prducts are cming frm irrigated lands, which generally use electric pumping rather than free-flwing gravity schemes. In frmer Sviet era, there were abut 400 pumping statins in the cuntry, and as electricity always used t be very cheap, nbdy cared abut the additinal irrigatin csts. This has changed ver the last years, especially due t an initiative started in 2006 by the Millennium Challenge Accunt-Armenia (MCA-Armenia), a State Nn Cmmercial Organizatin established by the Gvernment f Armenia and supprted by the Gvernment f U.S. thrugh the creatin f a fundatin. One main fcus f MCA- Armenia is t imprve current irrigatin schemes by cnverting frm pump t gravityfed irrigatin, reducing water lsses and imprving drainage and thus cntribute t a significant energy saving in the agricultural sectr. Anther issue is the majr energy cnsumptin in the drinking water sectr. Supprt has been given fr prjects mainly financed by Wrld Bank and USAID t emphasize water sectr refrm t develp an efficient and sustainable integrated water resurces management system. Despite recent imprvements in perfrmance f water cmpanies and regulatry institutins, much remains t be dne, particularly imprvement f water netwrks in the rural areas. One issue is the rehabilitatin and ptimizatin f drinking water pumping statins acrss the cuntry. 53

63 5.5.2 Overview f sectr-specific measures The main measures regarding the water sectr addressed in the actin plan is fllwing the activities cnducted by the MCA Armenia prgram t rehabilitate existing drainage and pumping systems, rebuild existing secndary and tertiary canals and intrduce several new gravity irrigatin schemes that will reduce the demand fr electrical pumping. This measure des nt refer t the agricultural sectr nly, but ptimisatin f pumping statins is als a big issue in the drinking water sectr and shall fcus n water utilities. Chart 4: MCA-Armenia Irrigated Agriculture Prject MC5 GS1 PS12 PS5 MC1 Main Canals 1. Artashat 2. Lwer -Hrazdan 3. Armavir 4. Talin 5. Arzni -Shamiram 6. Shirak GS3 Ararat Valley Drainage System MC4 PS14 PS15 MC5 GS4 MC3 MC2 PS04 PS03 PS05 Yerevan PS16 PS17 GS5 PS01 Pump Statins 1-2. Mkhchian I, II 3-4. Ranchpar I, II 5. Achajur 1 6. Armash 7. Khr-Virap 8. Avshar-Aygevan 9. Nyakert 10. Baghramyan 11. Burastan 12. Nyemberyan 13. Vrtan Saralanj 15. Dashtadem 16. Martuni 17. Zlakar GS1 PS02 PS01 GS2 PS10 PS11 MC1 PS07 PS08 PS09 PS06 Gravity Schemes 1. Spitak 2. Aigezard 3. Mantash 4. Shenik 5. Vardenis PS13 GS3 4 Surce: MCA-Armenia The effect f this measure is de fact a decrease f the energy intensity (by abut 15% in average), nevertheless the ttal energy cnsumptin in the irrigatin sectr is ging t increase due t the fact that in mst f the prjects mentined in the chart belw are als dedicated t increase the amunt f irrigated land. As fr drinking water pumping statins, it is estimated that a cuntry-wide prgramme t be implemented culd reach a significant saving f up t 10% by The ttal effect n the energy cnsumptin is thus estimated t be rughly minus 14% until The annual % savings including the intermediate energy saving targets up t 2020 are given in Table 13 as fllws: 2013: 0.7% 2017: 3.8% 2020: 14.0% 54

64 Table 13: Estimated savings per measure in the agricultural sectr frm Baseline Estimated annual savings per measure in % f the Aggregated Sectr/Measure average annual/ savings per cumulated measure [in TJ] [in TJ] [in TJ] [in TJ] savings [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] [in%] in TJ VI. Agricultural sectr annual 0,2% 0,2% 0,3% 0,4% 0,4% 0,9% 1,4% 2,4% 3,4% 4,4% cumulated 0,2% 0,4% 0,7% 1,1% 1,5% 2,4% 3,8% 6,2% 9,6% 14,0% 14,0% n/a Utilizatin f gravity flw in irrigatin systems and mdernisatin f existing pumping VI.1 statins and upgrading secndary and tertiare canals n/a n/a n/a n/a 0,2% 0,2% 0,3% 0,4% 0,4% 0,4% 0,4% 0,4% 0,4% 0,4% 3,5% n/a VI.2 Optimizatin f drinking water pumping statins n/a n/a n/a n/a 0,0% 0,0% 0,0% 0,0% 0,0% 0,5% 1,0% 2,0% 3,0% 4,0% 10,5% 55

65 Table 14: List f measures in the agricultural sectr specified under the Armenian NEEAP N Title f the EEI measure Descriptin f measures and specific actins VI.1 Utilizatin f gravity flw in irrigatin systems and mdernisatin f existing pumping statins and upgrading secndary and tertiare canals The MCA prgramme activities frsee the fllwing measures: (1) Installatin f 5 gravity schemes (Spitak, Aygezard, Mantas h, Shenik, Vardenis) which will rehabilitate in ttal mre than 30 km f existing canals and prvide highly imprved irrigatin. At the same time the pssible arable land area will be enlarged; (2) Installatin f energy efficient pumping statins: sme pumping statins will be rehabilitated and sme renewed with efficient pumps, in ttal 17 pumping statins will be rehabilitated. (3) Rehabilitatin f 6 main canals, 250 km f tertiary canals and f Ararat valley drainage system Similar activities are als been supprted by the Wrld Bank. Respnsibility Funding surce Duratin Pririty Ministry f Agriculture, Ministry f Energy, W ater Cmmittee (under Min. f Territrial Administratin) Millenium Challenge Accunt - Armenia The Wrld Bank High VI.2 Optimizatin f drinking water pumping statins (1) Elabrate ptential assessment fr rehabilitatin f pumping statins (2) Develp plan fr ptimisatin f mst relevant pumping statins acrss the cuntry Ministry f Drinking water Agriculture, cmpanies Ministry f Energy, W ater Cmmittee (under Min. f Territrial Administratin) Medium 56

66 6 References 1 Law n Energy Saving and Renewable Energy, The Republic f Armenia (2005) 2 Natinal Prgram n Energy Saving and Renewable Energy f Republic f Armenia, USAID (2007) 3 TORs f the UNDP/GEF prject Armenia - Imprving the Energy Efficiency f Municipal Heating and Ht Water Supply ; UNDP/GEF/ Scientific Research Institute f Energy fr the Allicance t Save Energy/USAID: Natinal Prgram n Energy Saving and Renewable Energy f Republic f Armenia ; Yerevan Glbal Envirnment Facility - GEF: ( ) 6 The Other Renewable Surce: The Ptential fr Imprving Energy Efficiency in Armenia, Reprt t the Wrld Bank (2008) 7 Secnd Cmmunicatin f the Republic f Armenia t the United Natins Framewrk Cnventin n Climate Change, UNDP/GEF (2009) 8 UNDP/GEF Prject Dcument Imprving Energy Efficiency in Buildings, UNDP/GEF (2009) 9 Wrld Energy Cuncil : Energy Efficiency Plicies arund the Wrld: Review and Evaluatin : ( ) 10 Twards Energy Efficient Buildings in Eurpe (2004), The Eurpean Alliance f Cmpanies fr Energy Efficiency in Buildings 11 Status f Energy Efficiency in the Western Balkans (2010), The Wrld Bank 57

67 Annex 1: Template fr the calculatin f the natinal energy saving target Final inland energy cnsumptin within the scpe f the EEAP Residential/Husehlds Industry Energy prductin Transprt Public and cmmercial services Agriculture Nn-energy use Ttal final energy cnsumptin Armenia Unit [TJ] Average final cnsumptin ver 5-year perid: Energy saving target adpted in 2020: Residential/Husehlds Industry & Energy sectr Transprt Public and cmmercial services Water sectr Nn-energy use Ttal savings (fr all sectrs) Intermediate energy saving targets in the years (ttal): [in TJ] in % 23,0% in % 23,3% in % 20,3% in % 14,6% in % 14,0% in % n/a in TJ

68 Annex 2: Prjectins f greenhuse gas emissins fr Armenia frm 2005 t 2020 The GHG prjectins are taken frm the Secnd Cmmunicatin f the Republic f Armenia t the United Natins Framewrk Cnventin n Climate Change. They prvide and indicatin f the develpment f greenhuse gases that are indirectly als a result f energy use in the cuntry. The data are based n a 6.0% average annual ecnmic grwth and expected vlumes f activities in varius sectrs f ecnmy. Tw scenaris f greenhuse gas emissins are being cnsidered business-as-usual, which assumes the cntinuatin f the existing practices and relatinships at natinal level, but als includes certain mdernizatin prcesses crrespnding t internatinal trends, and rapid stabilizatin, which includes measures cntributing t the reductin f greenhuse gas emissins planned by natinal and sectral develpment prgrams. As a result f the implemented measures, by 2020, greenhuse gas emissins will amunt t 61% f their level in 1990 (92% in the case f business-as-usual scenari), but hwever will almst duble in the BAU scenari between 2010 and 2020 (+52% in the stabilizatin scenari). And the largest share f emissins (73%) will cntinue t fall n the energy sectr. Chart 5: Prjectins f greenhuse gas emissins (Gg CO 2 equivalent, excl. LULUCF) Surce: Secnd Natinal Cmmunicatin f Armenia t the UNFCCC (2009) 59