Trends in residential electricity consumption

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1 REMODECE workshop Trends in residential electricity consumption Paul Waide Senior Policy Analyst Energy Efficiency & Environment Division International Energy Agency 19th September 2008, Brussels OECD/IEA, 2008

2 IEA energy efficiency policy analysis Sector/end-use analysis & implementation support Appliances/Equipment Buildings Transport Industry Indicators Standardisation International cooperation and outreach G8 Recommendations Progress reporting Cross-sectoral policy analysis Finance Barriers Energy efficiency strategies Evaluation & compliance Carbon constrained world Cities Utilities Energy scenarios Other Workshops/Facilitation Implementing Agreements Bi-lateral measures Non-member countries Country reviews

3 IEA publications on equipment energy efficiency OECD/IEA -2008

4 Most electricity is used in buildings Buildings Electricity Use 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Buildings Electricity as a Fraction of Total Electricity: Dependence on GDP-PPP/capita World Non-OECD U.S OECD U.S All data are for 2002 except U.S point. Areas of points: proportional to populations Thousands GDP-PPP/capita (1995 US Dollars) World Non-OECD Africa Latin America Asia exc. China China Former SU non-oecd Europe Middle East OECD Mexico Japan+Korea USA+Canada OECD Europe Australia+New Zealand USA (1976) Weighted Regression Fit (R^2 =.666) Buildings Electricity = 100% Commercial and Residential + 15% Industrial + 10% Agricultural Source: P. Waide, S. Chakravarty & R. Socolow OECD/IEA -2008

5 Global electricity consumption by user sector Electricity consumption (TWh) Industry Commercial & Services Other Residential

6 Electricity consumption in OECD Europe by user sector E lectricity consumption (TWh) Industry Commercial & Services Other Residential

7 E.g. Vattenfal/McKinsey abatement cost curve MID RANGE CASE Source: McKinsey Global Institute 2007 OECD/IEA, 2008

8 Policy is needed: the market doesn t deliver all cost-effective savings Missing or partial information on energy efficiency it is not visible to end users Low levels of awareness re cost-effective savings potentials Split incentives: Landlord-Tenant issue; division of capital acquisition vs. operation & maintenance budgets; energy capital lifespan often longer than ownership period, etc. Fragmented supply chains and shortage of necessary skills to deliver higher efficiency Energy budgets have low priority: EE is bundled-in with more important capital decision factors All result in emphasis on 1st not Life-cycle costs

9 Alternative Policy Scenario: Key Policies for CO 2 Reduction Reference Scenario Increased nuclear (10%) Increased renewables (12%) Power sector efficiency & fuel (13%) Electricity end-use efficiency (29%) Gt of CO 2 34 Fossil-fuel end-use efficiency (36%) 30 Alternative Policy Scenario INTERNATIONAL ENERGY AGENCY Improved end-use efficiency accounts for two-thirds of avoided emissions in 2030 in the APS OECD/IEA -2007

10 Difference in global electricity investment in the Alternative vs. Reference Scenario billion dollars (2000) Efficiency measures Additional demand-side investment Avoided supply-side investment Generation Transmission Distribution Difference Additional investments on the demand side are more than offset by lower investment on the supply side OECD/IEA -2008

11 But do efficiency policies work? Half of US states have utility EE progs 6000 Residential electricity consumption Average per capita residential electricity consumption (kwh/year) States without efficiency programs States with efficiency programs 31% lower

12 Labelling can produce major market transformation: e.g. refrigerators in EU st 3 months (GEA) Market share (%) A+ A B C D E F G OECD/IEA -2008

13 In 1997 ~22 countries with 16% of the world s population had standards and labelling M a n d a t o r y s t a n d a r d s V o l u n t a r y S t a n d a r d s C o m p a r a t i v e L a b e l E n d o r s e m e n t L a b e l A l g e r i a * E U A l g e r i a * A u s tr a lia A u s t r a l i a In d ia A r g e n t i n a * B r a z i l B a n g l a d e s h * I n d o n e s i a * A u s tr a lia C h i n a B u l g a r i a K o r e a B a n g l a d e s h * C h i n e s e T a i p e i B r a z i l * S w i t z e r l a n d B u l g a r i a E U C a n a d a B r a z i l J a p a n C h ile * C a n a d a K o r e a C h i n a C h i l e * S i n g a p o r e C o lu m b ia * C h i n a * S w i t z e r l a n d C z e c h R e p u b l i c C o lu m b ia * U K E g y p t * C z e c h R e p u b l i c U S A E s t o n i a E g y p t * E U E s t o n i a H u n g a r y E U I n d i a * H o n g K o n g Ira n H u n g a r y Isra el In d ia J a p a n I n d o n e s i a K o r e a Ira n L i t h u a n i a * Isra el M a l a y s i a J a p a n M a l d i v e s * K o r e a M e x i c o L i t h u a n i a * N e p a l * M a la y s ia * N e w Z e a l a n d M a l d i v e s * P e r u * M e x i c o P h i l i p p i n e s N e p a l * P o l a n d N e w Z e a l a n d OECD/IEA -2008

14 The new Chinese Room air- conditioner energy label OECD/IEA -2008

15 Today 61 countries with more than 80% of the world s population have standards & labelling M a n d a t o r y s t a n d a r d s V o l u n t a r y S t a n d a r d s C o m p a r a t i v e L a b e l E n d o r s e m e n t L a b e l A l g e r i a * E U A l g e r i a * A u s tr a lia A u s t r a l i a In d ia A r g e n t i n a * B r a z i l B a n g l a d e s h * I n d o n e s i a * A u s tr a lia C h i n a B u l g a r i a K o r e a B a n g l a d e s h * C h i n e s e T a i p e i B r a z i l * S w i t z e r l a n d B u l g a r i a E U C a n a d a B r a z i l J a p a n C h ile * C a n a d a K o r e a C h i n a C h i l e * S i n g a p o r e C o lu m b ia * C h i n a * S w i t z e r l a n d C z e c h R e p u b l i c C o lu m b ia * U K E g y p t * C z e c h R e p u b l i c U S A E s t o n i a E g y p t * E U E s t o n i a H u n g a r y E U In d ia * H o n g K o n g Ira n H u n g a r y Isra el In d ia J a p a n I n d o n e s i a K o r e a Ira n L i t h u a n i a * Is ra e l M a l a y s i a J a p a n M a l d i v e s * K o r e a M e x i c o L i t h u a n i a * N e p a l * M a la y s ia * N e w Z e a l a n d M a l d i v e s * P e r u * M e x i c o P h i l i p p i n e s N e p a l * P o l a n d N e w Z e a l a n d OECD/IEA -2008

16 Yet policy coverage as a share of residential electricity use is still incomplete 100% Coverage of policy measure 90% 80% 70% 60% 50% 40% 30% 20% 10% EU Eco-design Directive: 21 product standards pending, including proposed horizontal 1W standby limit EU AUS-NZ Japan USA-CAN China 0% MEPS VAs Comparison labels Endorsement Labels tandards and labels OECD/IEA -2008

17 And stringency can be increased e.g. Japanese Top Runner standards for reversible room air conditioners COP St andard EU Class A ANZ MEPS US MEPS Source: C. Murakoshi et al, Jyukankyo Research Institute kw OECD/IEA -2008

18 Cost/Price Example: 2-star 2 refrigerator (1 door) in Tunisia (useful volume ~220 litres, electricity consumption = 299 kwh/year) Purchase price Life IRR cycle cost =36% 0:Basecase model 0+ optimise capiliary tube and add +30mm Insolation round the niche 1+ add insolation: +12mm for the freezer and 6 mm for the refrigerator (vol constant) 2+ add insulation: +12mm for the freezer and 6 mm for the refrigerator (vol constant) 3+ compressor 16% more eff. (COP 1.18) 4+ substitution of a larger condenser 0.9m instead of 0.6 m 5+ add insulation: +16mm for the walls to 60cm x 60cm (vol constant) 6+ compressor VSD 32% more eff. (COP 1.56) but without energy subsidies = 117% Electricity savings (kwh/year) OECD/IEA -2008

19 Residential electrical electricity consumption scenarios in IEA countries Electricity consumption (TWh/year) % Base case Current policies LLCC from 2005 OECD/IEA -2008

20 Cost and CO 2 impacts of LLCC from 2005 scenario compared with Current Policies Compared with Current Policies implementing the LLCC from 2005 scenario across the OECD would: reduce electricity demand by 26% in 2010 reduce electricity demand by 35% in 2020 avoid 344 Mt-CO 2 emissions in 2010 avoid 524 Mt-CO 2 emissions in 2020 The cost of avoided CO 2 in 2020 is projected to be: -$66/Tonne-CO 2 in OECD-North America -169 Euro/Tonne-CO 2 in OECD-Europe Europe OECD/IEA -2008

21 Consider use of CFLs in homes Incandescent CFL Initial cost of IRR bulb US$0.5 = 186% US$10 Efficacy 12lm/W 60 lm/w Lifespan For hours use Electricity cost Cost of lamps Total cost of ownership 1000 hours US$75 US$5 US$ hours US$15 US$10 US$25

22 Global lighting electricity demand: What can be saved cost-effectively? 6000 No Policies Lighting electricity consumptio Current Policies LLCC from TWh = 15% 1635 TWh = 38%

23 Cumulative benefits of the lighting LLCC from 2008 scenario (to 2030) Avoids TWh of electricity use (almost 6% of all global electricity demand over the same timeframe) Total costs of lighting are US$2.6 trillion (1000 billion) lower Avoids 16 Gt of CO 2 emissions Net cost of avoided CO 2 emissions are negative at: -US$161 per tonne of CO 2

24 Countries in process of phasing-out incandescent lamps Cuba (already done!) Australia + New Zealand (start 2008) US ( but also CA, NV) EU (fully by 2010/11 UK, Por, Bel, Ire, Fr) Canada (finalising regulation details) Switzerland (finalising details) Philippines, Mexico, Argentina, Tunisia

25 Projected additional potential TWh/year savings by electrical end-use for IEA- Europe Other uses Circulation pumps PCs Standby Television Dishwashing Clothes-drying Clothes-washing Refrigeration Lighting Cooking Water heating Space cooling Space heating OECD/IEA -2008

26 Principles behind IEA s efficiency policy recommendations for G8 A recommendation is justified when it: is likely to save a large amount of energy at low cost addresses existing market imperfections or barriers addresses a significant gap in existing policy is supported by IEA analysis there s a high degree of international consensus

27 IEA E.E. Recommendations to G8: appliances Standards and labels: All countries should adopt mandatory energy performance requirements and comparative energy labels. Adequate resources should be allocated to ensure that stringency is maintained and that the requirements are effectively enforced Standby power: adopt a common 1W limit for standby power but consider allowing negotiated exceptions when merited Set top boxes: adopt minimum efficiency standards for digital television adaptors Low power modes: adopt policies which require electronic devices to enter low power modes automatically after a reasonable period when not being used

28 IEA E.E. Recommendations to G8: lighting & utilities Comprehensive policy package for lighting: Countries should adopt a comprehensive policy package aimed at achieving best-practice in lighting energy efficiency across all lighting usage sectors Incandescent lamps: Governments should move to phase out the most inefficient incandescent bulbs as soon as commercially and economically viable Governments and utility regulators should consider implementing mechanisms that strengthen the incentives for utilities to deliver cost-effective energy savings among end-users such as: i) Establishing regulation which decouples utility revenue and profits from energy sales and allows energy savings delivery to compete on equal terms with energy sales; or ii) Placing energy efficiency obligations on energy utilities iii) Allowing energy efficiency measures to be bid into energy pools, on an equal basis to energy supply options; or iv) Other appropriate policy measures that encourage utilities to play an active part in funding and or delivering end-use efficiency improvements among their customer base

29 550 Estimated impact of full implementation of IEA G8 policy recommendations on world energy demand 1 * 2006 recs * 2007 recs 2030 low savings estimate 50 EJ 500 Lighting Buildings 450 WEO 2006 Projection Transport Equipment EXAJOULES moderate savings estimate 83 EJ provisional estimates for final energy OECD/IEA -2007

30 Residential ICT and Consumer Electronics (CE) electricity usage Now estimated to account for 15% of household electricity consumption (700 TWh globally) Grew by 7% p.a. from 1990 to 2007 Draws 100GW of power demand Costs US$80 billion in electricity bills each year Numerous dynamics (sometimes opposite) produce this aggregate result Source: Appliances in a Digital Age

31 Projected global residential ICT & CE electricity consumption Source: Appliances in a Digital Age

32 Projected global residential ICT & CE electricity consumption Source: Appliances in a Digital Age

33 Estimated change in ICT & CE stocks and unit elec. consumption for non-oecd countries Note: The effect of structural changes, mainly the switch to flat screen technologies and laptop computers is evident in the reduction of UEC values prior to 2005 Source: Appliances in a Digital Age

34 Estimated global residential ICT & CE electricity consumption Source: Appliances in a Digital Age

35 Residential ICT and Consumer Electronics (CE) electricity usage Reaching BAT would reduce growth in electricity demand from 4.5% p.a. to 1% The majority of savings will be achieved through improved power management to ensure that energy is only used when, and to the extent that, it is needed This will save ~150GW of new power demand and US$130 billion in electricity bills each year by 2030 Reaching LLCC will save 30% of power demand, US$90 billion in bills and 85GW of new power demand Source: Appliances in a Digital Age

36 Factors influencing TV energy usage Ownership levels (up) Hours of use (up) Screen size (up) Screen technology type (CRT,PDP,LCD, Rear Projection) Digital or analogue (definition up) Additional functions (Pay TV, TV&Telecom, TV+Radio/PC etc.: up) Standby power (down) Source: Appliances in a Digital Age

37 Share of global TV sales by technology Source: Appliances in a Digital Age

38 Price of US TVs by technology Source: Appliances in a Digital Age

39 Estimated global electricity consumption of TVs Source: Appliances in a Digital Age

40 Variation of TV on-mode power consumption with screen size Source: Appliances in a Digital Age

41 TV standby power as a function of screen size (2007 data) Source: Appliances in a Digital Age

42 Distribution of TV standby power measurements Source: Appliances in a Digital Age

43 Projected global TV electricity consumption to 2030 Source: Appliances in a Digital Age

44 Estimated global TV electricity consumption Source: Appliances in a Digital Age

45 Source: Appliances in a Digital Age Status of international energy efficiency policies for TVs Country Programme Type Television category Mode Status Canada Endorsement Label All standby Current Japan Top Runner CRT, LCD, Plasma all modes Current China MEPS CRT all modes Current China Endorsement Label All standby Current US Star) (Energy Endorsement Label All all modes (revision) November 2008 Brazil Comparison Label standby Current Australasia MEPS & Comparison Label All all modes Under consideration Europe MEPS All all modes Under consideration India Endorsement Label All standby Under consideration

46 IEA E.E. Recommendations to G8: televisions Governments should implement energy efficiency policy measures for TVs and set-top boxes designed to: i) Promote the best performing current TV products and technologies; ii) Stimulate the market entry of new television technologies which aim to halve TV energy consumption compared to current performance levels; and iii) Minimise the energy used by TVSP customers in receiving TV services by ensuring that such requirements are included in relevant franchise or licensing agreements that allow TVSPs to operate.

47 Implementation issues Energy performance test procedures: repeatable, reproducible, representative Reliable performance declarations Certification, market-monitoring, compliance Communication and outreach Effective labels, awareness building, actions through the supply chain Timely implementation processes Structured design and policy setting process envisaging revision Evidence-based decision making Sound broadly-based analysis, proper process and impact evaluation Supporting measures Fiscal/financial incentives, procurement programmes, retailer/distributor engagement, R&DD, utility programmes, white certificates, etc..

48 Conclusions Energy efficiency presents a vast under-exploited and cost-effective GHG saving opportunity It merits being the single greatest focus of GHG abatement strategies in the near and medium-term A carefully designed, well implemented and soundly evaluated portfolio of measures is needed to address all barriers IEA recommendations support this and are being extended Regular detailed end-use metering is an essential element supporting policy and progamme design, implementation and impact evaluation

49 OECD/IEA, Thank you Paul Waide International Energy Agency