Download Energy Efficiency

Bulgaria
Key Energy Challenges:
Energy Efficiency
Presentation at Kapital Energy Conference
Sofia, February 23, 2010
Peter Johansen
Senior Energy Specialist
World Bank
Key Energy Challenges
1. Tightening demand-supply balance
–
Economic crisis provided only temporary “relief” as
demand declined while supply surplus has eroded
2. Gas supply security concerns
–
Ukraine-Russia gas crises demonstrated the vulnerability
of the Bulgarian gas sector to external shocks
3. High energy intensity
–
Bulgaria is the most energy intensive country in the EU
and in the Balkans. This hurts competitiveness
4. Underdeveloped regional energy market
–
Low electricity prices encourage wasteful energy use and
discourage investments. Low gas penetration. Need for
regional cooperation in gas transport and power trade.
Bulgaria’s Energy Intensity – Decreasing
But not Fast Enough
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Energy Intensity Comparison
TPES/GDP
TPES/PPP GDP
Bulgaria
1.19
0.31
Czech Republic
0.64
0.23
France
0.19
0.16
Germany
0.17
0.15
Greece
0.19
0.12
Italy
0.16
0.12
Poland
0.46
0.20
Spain
0.20
0.14
United Kingdom
0.14
0.13
Source: IEA, 2006
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EE is Cost Effective CO2 Abatement
Source : MCKinsey
5
Energy Efficiency – The Silver Bullet?
• EE sounds easy:
– “Money lying on the ground”, “low hanging fruit”, “saves
on energy bills and often provides greater comfort”
• But in practice it is not that simple:
– Much of the energy efficiency potential remains
untapped due to various barriers
– “Money” continues to lie on the ground and “low hanging
fruit” continues to hang!
• Despite years of efforts the EE potential is
mostly untapped
– Estimates of EE potential keep increasing instead of
decreasing in many countries
– Even the EU15 continue to have significant EE
improvement potential (e.g., the EU 20% target)
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Negawatts versus Megawatts
• Negawatts (avoided or saved capacity,
whether in power, gas or district heating)
are more valuable than Megawatts:
– worldwide, 1 Euro invested in energy efficiency (NWs)
avoids >2 Euros in capacity investment
– they reduce local pollution and global greenhouse gas
emissions, create more jobs
• NWs are also much cheaper than MWs on
a life cycle cost basis, including investment
and operating cost
• But NWs are more complex than MWs
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Megawatts
Negawatts
• 1-2 stakeholders
(equipment supplier and
electric utility)
• Multiple stakeholders (equipment
supplier(s), electric utility, consumers,
intermediares like ESCOs, etc.)
• One decision maker
(generally the utility)
• Multiple decision makers (utility,
millions of consumers, etc.)
• Asset-based deal;
relatively simple.
Financing
straightforward
• Savings-based deal, hence requires
pre- assessment (audits),
measurement and verification,etc.
Financiers hesitant
• Mature market (tested
• Evolving market (standards may not
technologies, quality
exist, eg., CFLs, LEDs, product may
standards, etc. already in
not be available)
place for decades)
• Less sensitive to
(subsidized) consumer
tariffs
• Highly sensitive to (subsidized)
consumer tariffs
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EE in Bulgaria - Huge Investments Needed
EE Investment Potential
EUR million
2 500
2 000
1 500
Accesible volume
up to 2015
1 000
Estimated total
volume
500
0
Buildings State
and Municipal
Property
Industrial
Enterprises
Public
Transport
Enterprises
Apartments
Source: BEEF and EEA
9
Capitalization of Bulgarian EE Credit
Lines in the Period 2005-2009
Credit line
Financing
Beneficiaries
Million EURO
All sectors
BEEF
WB/GEF
11
Industry
Bulgaria EUEEFF
EBRD/PHARE
20
Industry
BEERECL
EBRD/KIDSF
160
Individuals
REECL
EBRD/KIDSF
EIB EERECL
EIB/KIDSF
KIDSF (direct funding)
KIDSF
Enemona EESF
Total
EBRD/Enemona
51
Public sector
Municipalities
Industry
Public sector
36
15.7
Municipalities
Industry
11.2
304.9
Source: BEEF
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Creating an Enabling Framework
• Gradually move all energy prices to full cost
recovery level, while protecting the vulnerable
groups
• Strengthening institutional framework for EE with
capacity to formulate and implement EE policy
• Improving energy data system (EE indicators and
benchmarking)
• Introducing long-term awareness campaigns and
training programs for architects, contractors,
equipment suppliers etc.
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Carrots and Sticks
• Creating long-term subsidy and tax incentive/
credit schemes for EE investments in residential
and SME sectors so consumers can count on it
and plan ahead
• Mandate efficiency and service improvements on
the side of the energy supply companies
• Setting and enforcing building codes and
standards for appliances, industrial equipment,
and vehicle fuel efficiency
• Mandate solar water heating in new public
buildings
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Leading by Example
• Public sector should be the first mover and
lead by example with a comprehensive EE
program, e.g.:
– Gradually target EE upgrade of all public buildings before
2020
– This will boost the market for energy auditors, suppliers,
and contractors (creates employment – green jobs)
– Investment needs would be in the order of EUR 150-200
million per year
– Green Investment Scheme revenues can be used to get
started
– Concessional funding (e.g. from EU) must be used
leveraged with commercial finance
– Gradually introduce market financing through energy
service companies
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Thank you!
[email protected]
www.worldbank.org
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