1. Role ofEnergy Efficiency in Asia
Amit Bando, Executive Director, IPEEC
June 2013

2. 1.
What is IPEEC?
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3. 2

4. IPEEC is an
Autonomous Entity
Members account for over 80% of world GDP and energy
use.
EU
United
Kingdom
France
Germany
Italy
Russia
Canada
USA
Japan
Mexico
Republic of
Korea
China
Brazil
India
South
Africa
Australia
Established in 2009 at the G8 summit in Italy; Reports to G20, Clean
Energy Ministerial & others
Facilitates Rapid Deployment of Clean Technologies Worldwide
The IPEEC Secretariatis located in Paris, France
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5. 2
Context
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6. More Than Just Energy
Savings
Government Action to Promote Energy Efficiency
Sustainable
Development:
Enhanced Energy
Access
Climate Change
Mitigation:
Reduced GHG
Emissions
Energy
Security:
Reducing
Energy Use
Low Carbon Economy
•Improved air quality
• Jobs created
• Lower energy cost
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7. Global additional investment
by end-use sector
Billion dollars (2011)
The Efficient World Scenario relative to the New Policies Scenario
1 200
Services
Residential
Transport
Industry
1 000
800
600
400
200
0
2015
2020
2025
2030
2035
Additional investments required in end-use efficiency are $11.8 trillion over
2012-2035; saving consumers $17.5 trillion in energy expenditures in this period
(Source: IEA)

8. The Efficient World Scenario
Delays Carbon Lock-in
2017
2022
Gt 35
30
Other
2 °C trajectory
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Transport
Lock-in of infrastructure
Room to manoeuvre
in New Policies Scenario
Efficient World Scenario
in 2017
2022
20
15
Industry
10
Lock-in of existing
infrastructure
5
Power generation
2011
2015
2020
2025
2030
2035
Energy efficiency can delay “lock-in” of CO2 emissions permitted under a 2°C
trajectory – which is set to happen in 2017 – until 2022, buying five extra years

10. Barriers to Energy Efficiency
Barrier
Examples
Market
Market organisation and price distortions prevent customers from appraising
the true value of energy efficiency.
The principal agent problem, in which the investor does not reap the rewards
of improved efficiency (the classic case being the landlord-tenant situation).
Transaction costs (project costs are high relative to energy savings).
Financial
Up-front costs and dispersed benefits discourage investors.
Perception of EE investments as complicated& risky - high transaction costs.
Lack of awareness of financial benefits on the part of financial institutions.
Information and
awareness
Lack of sufficient information and understanding, on the part of consumers,
to make rational consumption and investment decisions.
Regulatory and
institutional
Energy tariffs that discourage EE investment (such as declining block prices
and fuel subsidies).
Incentive structures encourage energy providers to sell energy rather than
invest in cost-effective energy efficiency.
Institutional bias towards supply-side investments.
Technical
Lack of affordable energy efficiency technologies suitable to local conditions.
Insufficient local capacities to identify,develop, implement and maintain
energy efficiency investments.

11. 3
Key Trends in
Asia Pacific
Region
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12. Urbanization
 Between 2005-2010, urban
population overtook the rural
population
 rising from 49% to 51%
Urban population, Asia-Pacific subregions,
1990 and 2010
 By 2030, a majority or 2.7 billion
people will live in cities and towns
 equivalent to adding a new
town of 137,000 people every
day for next 21 years!
 In the last two decades the Asia-
Pacific urban proportion has risen
by 29%
 more than any other region
Source: Statistical Yearbook for Asia and the Pacific 2011, UNESCA
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13. Energy Intensity
 Today, Asia covers the lion’s
share of the world’s primary
energy consumption
 Between 2007 and 2030, the
region is projected to
account for 45-50% of the
increase in world primary
energy demand
Global Primary Energy Intensity (2009)
 Non-OECD Asian nations will
lead industrial energy demand
by an average of 2.3 to 2.6%
per year
 projected annual growth in
OECD nations of 0.5% / year
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14. Energy Intensity Trends
 Global energy intensity has decreased by 1.4% p.a. since 1990
 Largest reductions found in the regions with the highest energy intensities
(China, CIS and India)

Industry and power generation accounted for almost ½ of that reduction
(about 30% and 15%, respectively)
 Per capita energy consumption to 2030 is likely to grow at about the same
rate as in 1970 - 90 (0.7% p.a.)
 Energy per unit of GDP – continues to improve globally, and at an
accelerating rate
This acceleration is important as restrains the overall growth of primary
energy.
Ex: During the 11th Five Year Plan in China, through various EE initiatives,
energy consumption grew at an annual average of 6.6% compared to
average annual growth rate of 11.2% for the national economy


15. Energy Efficiency
Financing Trends
Asia Pacific deals by sector
Source: Final Renewables Deals 2012 Review, PwC.
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16. Energy Service
Companies (ESCOs)
 The ESCO industry in Asia Pacific is poised to grow
From $3.0 billion in annual revenue in 2009 to $18.5
billion by 2016
 421% increase from 2010 levels

Example: Despite not even being operational until 1998,
annual revenues for China’s ESCO industry to reach $17
billion by 2015, increasing its share of the APAC regional
market to over 90% (Source: Pike Research).

17. 4
Overcoming
First Cost
Barriers to
Financing
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18. IPEEC Clears Roadblocks to
Successful EE Financing
 Critical financial and market roadblocks that need to be addressed:

Fixed cost of lending incentivizes banks to focus on large corporate
loans.

Information asymmetry between banks and borrowers:


Adverse selection: Average pricing will attract risky borrowers and turn away
attractive borrowers;
Moral Hazard: Risky behavior as borrower knows that bank has imperfect
oversight.

Lack of credit bureaus & clear credit history increases risk-assessment costs.

Inadequate knowledge and experience with the product .

Inefficient price signals – consumption disconnected from cost.

Network of contractors & suppliers unavailable or inexperienced.

19. IPEEC is your partner.
Thank you!
 Any questions? Please contact:
Amit.Bando@ipeec.org
contact@ipeec.org
9 rue de la Fédération
75739 Paris
France
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