by Peter du Pont, Vice-President, Government & Clean Energy Consulting, Nexant Inc. According to the Asian Development Bank, a total of $944 billion of investment will be needed in energy savings opportunities by 2020 in order for China, India, and Southeast Asian countries to meet their national targets for EE and greenhouse gas emission reductions. Yet only a fraction of this investment is currently being planned. This talk will address the proverbial $20 bill lying on the ground and describe why there are so few takers, and what is needed to “sex” up energy efficiency so that it becomes a more broadly bankable business opportunity. It will describe different business and regulatory models for stimulating investments in energy efficiency in buildings, factories, and the transport sector. Dr. Peter du Pont leads the clean energy initiatives at Nexant Asia and has more than 25 years of experience developing sustainable energy and efficiency programs in the U.S. and Asia.

1. Energy Efficiency:
A Sign of Personal Virtue or an
Untapped Business Opportunity?
Peter du Pont, Ph.D.
Vice-President, Government & Clean Energy Consulting
Nexant, Inc.
Presented at Net Impact Luncheon
Sasin Centre for Sustainability Management
Bangkok, 20 June 2013

2. Personal Virtue?
Conservation may be a sign of
personal virtue but it is not a
sufficient basis for a sound,
comprehensive energy policy.
-- Vice-President Dick Cheney
May 2001
2

3. Topics Covered
 The Funnies
 Introduction
 Background and Drivers for Clean Energy
Finance
 Energy Efficiency: The First Fuel
 Thailand’s 5 Conservation Power Plants
 How Can We Seize the Energy Efficiency
Investment Potential?
3

4. The Funnies
4

5. Fresh from the Laboratory
5

6. Technological Overkill?
6

7. The Concept of Multiple Benefits
7

8. Introduction
8

9. Profile of Nexant
• Global company
• consulting services and
solutions across the
entire energy sector
• 700 employees,
• 3,000+ energy industry
assignments in 100+
countries
San
Francisco
New York
Houston
Washington D.C.
Nexant Consulting Offices
Project Offices
Representative Office
London
Abuja
Cairo
Shanghai
Bahrain
Bangkok
Tokyo
Beijing
Kuala
Lumpur
Seoul
Cape
Town
Buenos
Aires
Energy and Chemical Consulting Capability
New Delhi
 Software and data
solutions
– iEnergy and Grid360 for
utilities
– Chem Systems Online
 Consulting services
– Electric power
– Oil and gas
– Energy technology
– Energy Efficiency and Carbon mgt
– Chemicals 9

10. The Challenge
 Why is that $20 bill still lying there?
10

11. Background and Drivers for Clean
Energy Finance
11

12. Population, GDP and Energy Trends:
New Locus of Energy Demand in Asia
Source: BP Energy Outlook (2010)
12

13. GDP per Capita Drives Energy
Demand
BUT … large differences at any income level
Source: IEA (2006) 13

14. Primary Energy Demand Per Capita,
by Country: 2008
Source: International Energy Agency 14

15. Is This Energy Security?
Source: USAID, Energy Trends in Developing Asia (2011)
15

16. In 2030, 38% of Global Energy
Demand Will Be in Developing Asia
Source: USAID, Energy Trends in Developing Asia (2011)
16

17. Overwhelming Momentum toward
Fossil Fuels:
New Demand in Developing Asia for 2008-2030 Will Come from
Coal and Oil
Source: USAID, Energy Trends in Developing Asia (2011)
17

18. What Nuclear Renaissance?
Source: World Nuclear Energy Status Report, 2012
18

19. Renewable is Getting More and
More Attention, and $$$
New Capacity Added Worldwide (2008-2009)
World Generating Capacity (2009)
World Electricity
Production (2009)
Source: Global Renewable
Energy Status Report 2010
19

20. Financial New Investment in Renewables:
Developed vs. Developing Countries,
2004-2010 ($bn)
15
31
55
80 82
67
70
4
12
21
32
51
55
72
2004 2005 2006 2007 2008 2009 2010
Developed Developing
3
15
10 4
14 46 2
101
18 162
61 223
VC Corp
RD&D
Total
investment
SDC*Asset
finance
Gov
R&D
Public
markets
new equity
M&A
/B-O
etc.
Total
transactions
Re-
invested
Total
company
investment
PE
Technology development
Equipment manufacturing/
scale-up
Projects
Asset and company
mergers, acquisitions,
refinancing, buy-outs etc.
Global Trends
in Sustainable
Energy
Investment
2010
Global Trends
in Renewable
Energy
Investment
2011
Source: Bloomberg New Energy Finance/UNEP 20

21. New Investment in RE by Technology,
2010 ($bn)
0.1
2
3
6
11
86
95
-44%
44%
-22%
-20%
-5%
52%
30%
Marine
Geothermal
Small hydro
Biofuels
Biomass & w-t-e
Solar
Wind
Growth:
*Small Distributed Capacity
15
10 4
14 46 2
101
18 162
Global Trends
in Sustainable
Energy
Investment
2010
Global Trends
in Renewable
Energy
Investment
2011
Source: Bloomberg New Energy Finance/UNEP
21

22. Energy Efficiency: The First Fuel
22

23. And NOW … Let’s Take a Look at the
dreaded Energy Efficiency Gap !!!
 Efficiency measures account for two-thirds of the 3.8 Gt of abatement in
2020, needed to meet the 450 ppm trajectory
 Currently Efficiency is only capturing a small percentage of reductions –
in the range of <1% to 10%
26
28
30
32
34
36
38
40
42
2007 2015 2020 2025 2030
Gt
2010
Efficiency 65 57
End-use 59 52
Power plants 6 5
Renewables 18 20
Biofuels 1 3
Nuclear 13 10
CCS 3 10
Share of abatement %
2020 2030
3.8 Gt
13.8 Gt
Reference Scenario
450 Scenario
23

24. Can Development Assistance Fill
the Gap?
Bilateral and Multilateral Support for Energy Sector Assistance, by Sector
Area: Comparison of Two Three-Year Periods (1997-1999 vs. 2003-2005)
24

25. US Experience : Policy Action on EE
Can Clearly Make a Difference
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
KWh
12,000
8,000
7,000
California
U.S.
kWh
Total Electricity Use, per capita, 1960 – 2001
25

26. Australia Example:
Domestic Refrigerators, 1980 - 2006
0
200
400
600
800
1000
1200
1400
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
MEPS
2005 full
impact
Initial MEPS
introduced in 1999
Labelling
introduced in 1986
kWh/year
Source: Australian Greenhouse Office
Refrigerator use has fallen by more than 60%
26

27. U.S. Refrigerator Energy Use vs. Time, with Real Price Changes.
U.S. Example:
Domestic Refrigerators, 1947 - 2004
Source: Goldstein, NRDC 2005
Refrigerator use has fallen by more than 2/3 since 1973,
while volume has increased and price has decreased
27

28. South Korea Example: Appliance
Standards and Labeling
28

29. Thailand’s 5 Conservation Power
Plants
29

30. Famous stars for
The public campaigns
 Achievement
• Successfully removed low efficient “fat tubes” from the market.
Manufacturers stopped producing the fat tube in September 1995
• Create massive popularity for thin tubes among consumers all over the
country.
• Energy savings of 1,958 GWh/yr and peak demand reduction of 402 MW and
1.47 million ton of CO2 reduction.
Market Transformation Programs
Switching from FAT to THIN Tubes
Source: Phumaraphand, EGAT (2011)
30

31. Thailand’s Famous #5 Label:
Focusing on the Residential Sector
31

32. 32
 Refrigerator (1994)
 Air conditioner (1995)
 Compact Fluorescent Lamp (1996)
 Electromagnetic Ballast (1998)
 Electric Fan (2001)
 Automatic Rice Cooker (2003)
 Lighting Luminare (2003)
 T5 (2009)
 Electronic Ballast (2009)
 Double-oscillating Fan (2009)
 T5 Luminare (2010)
 Exhaust Fan (2010)
 Standby 1 Watt – Television (2010)
Energy Labeling Programs by
EGAT
Source: Phumaraphand, EGAT (2011)

33. Energy
Conservation Fund
Revolving Fund
ESCO Fund
Utility Fund
Established in 1992 under Energy Conservation Act
Collecting a small levy (~1 US cent/litre) from the sell of
gasoline, diesel, fuel oil and kerosene
Supporting EE/RE promotion activities
Soft loan program
Co-investment program
Demand Side Management programs in residential, commercial and
industrial sector
Focusing Standard & Labeling for electrical equipments
MEA PEA
EGAT
Limited activities in energy efficiency
Public Fund
Financing of Energy Efficiency
Programs in Thailand
33

34.  Demand-Side
Management (DSM)
results:
– 2,600 peak MW peak
demand reduction
– 15,700 GWh of energy
savings
– About 5% of current
electricity is supplied by
Negawatts
Thailand has Avoided Construction
of five (5) Power Plants
34

35. Cost Comparison of Energy Options
in Thailand
$0
$50,000
$100,000
$150,000
$200,000
$250,000
The
30%
Subsidy
Program
EE
R
evolving
Fund
D
SM
B
iogas
Electricity
G
eneration
M
ixed
C
onventionalE
nergy
(70%
N
G
)
M
ini-hydro,200
kW
-6
M
W
B
iom
ass
C
ondensing,20
M
W
W
ind
Farm
,20,000
kW
M
S
W
Incineration,3,000
kW
Solar
PV,large
scale,460
kW
CapitalCost(Baht/kW)
฿0
฿2
฿4
฿6
฿8
฿10
฿12
฿14
GeneratingCost(Baht/kWh)
Cost of
Delivered
Electricity
Capital Cost
Demand
Side
Measures
Supply Side
Measures
35

36. How Can We Seize the Energy
Efficiency Investment Potential?
36

37. Most Countries in the Region Have
Set Energy Savings Targets
Country Energy Efficiency Strategy/Action Plan
Required
Investment ($m)
Brunei Darussalam Attain 25% reduction of energy intensity from 2005 level by 2030 48
Cambodia Reduce final energy consumption by 10% in all sectors 126
Indonesia
Decrease energy intensity by 1% annually and decrease energy-GDP elasticity to
below 1% by 2025
6,019
Lao PDR Reduce final energy consumption by 10% in all sectors 29
Malaysia
Reduce final energy consumption in industrial, commercial, and residential
sectors by 10% from 2011 to 2030, and reduce final energy consumption of the
transportation sector by 1.39 ktoe in 2030
901
Myanmar
Reduce primary energy consumption by 5% in 2020 and 8% by 2030 compared
to BAU, and improve EE in all end-use by 16% by 2030
165
Philippines Reduce final energy consumption by 10% in all sectors from 2007 to 2014 601
Singapore
Reduce energy intensity by 20% by 2020 and by 35% by 2030 from 2005 level,
and cap CO2 emissions from fuel combustion at 63 Mt-CO2 in 2020
97
Thailand Reduce the energy intensity of GDP 25% by 2030 relative to BAU 2,006
Vietnam Reduce energy consumption by 3%-5% by 2010 and 5%-8% by 2010-2015 649
Source: 3rd ASEAN Energy Outlook, February 2011 and Nexant calculations
37

38. A Total of $944 billion is Needed to
Meet National Targets by 2020
($2 billion for Thailand alone!)
Investment Required by 2020 to Reach EE Targets ($m)
 92% of investment in China, 7% in India,
1% in Southeast Asia
 Largest investment in Southeast Asia
countries required by
- Indonesia (57%)
- Thailand (19%)
- Malaysia (8%)* Analysis covers SE Asia, China, and India
 To meet government EE targets by 2020, need
- ~$11 billion in Southeast Asia
- ~$944 billion in China, India, and Southeast
Asia combined
 To meet government EE targets by 2030, need
an additional $15 billion in Southeast Asia
38

39. How Will We Pick Up the $20 Bill?
(or the $2 billion prize in the case of Thailand)
 Drivers and Policies
– Cost of oil imports
– Competitiveness and ASEAN open
market
– Climate change
– Energy Efficiency as a Resource
– Feed-in Tariff for energy efficiency
 Business Mechanisms
– Energy service companies (ESCOs)
– EE insurance products
– Performance guarantees
– Innovative financing mechanisms
39

40. Thank you!
Peter du Pont, Vice-President
Government & Clean Energy Consulting
Nexant, Inc.
Tel: +66 2 793 464
pdupont@nexant.com
40