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Analysis of National Case Studies on Policy Reforms to Promote Energy Efficiency Investments

In line with the Sustainable Energy for All (SE4All) initiative of the United Nations Secretary-General, UNECE is working to help member States secure access to affordable, reliable, sustainable and modern energy.

As mentioned by the Secretary-General, “Energy is the golden thread that connects economic growth, social equity and a healthy environment.” Improving energy efficiency is the best way to get more out of existing resources, supporting economic growth and reducing energy costs.

However, improving energy efficiency requires coordinated action by a multitude of actors, including governments, public and private sector companies, financial institutions, civil society, and other stakeholders. Only actions taken simultaneously on the institutional, legal, regulatory, economic, financial and socio-political levels can create and promote a favourable environment for policy reforms that would allow national and international financial institutions to make investing in energy efficiency business-as-usual.

In order to identify existing barriers to energy efficiency policy implementation and to provide recommendations to policy makers on how to overcome them, UNECE joined forces with the other UN Regional Commissions, the UNDP Regional Centre for Europe and the Commonwealth of Independent States.  The findings of this collective effort are presented in the publication Analysis of National Case Studies on Policy Reforms to Promote Energy Efficiency Investments.

Many of the countries reviewed in the study (Armenia, Azerbaijan, Belarus, Brazil, China, Croatia, Egypt, Georgia, Kuwait, Montenegro, Morocco, South Africa, Tajikistan, Thailand, Tunisia, Uruguay and  Zambia) have achieved significant progress in promoting energy efficiency.

For example, in Belarus the energy intensity of GDP has dropped by 65% since 1995. During this period the country’s energy savings were growing from 1.5 to 2.5 million tons of coal equivalent per year, which corresponds to 5-6 % of primary energy consumption. Almost five-fold carbon intensity reduction was achieved whilst the share of the renewable energy sources doubled. To a large extent, this is the result of developing and implementing comprehensive energy efficiency-related policies and plans of action. New institutional structures have been facilitating the implementation of programmes and projects aimed at the reduction of energy intensity and the improvement of energy efficiency of the supply and demand side.

Croatia has made significant efforts in raising awareness and changing attitude towards energy efficiency in large parts of society through information campaigns, outreach activities and especially free energy efficiency advisory services, targeting primarily the residential sector. More than 5,500 public authority officers, energy experts, including energy auditors, were trained to implement energy efficiency policy measures. A UNDP and Global Environment Facility (GEF) led project implemented in 2005-2011 addressed inefficient energy use in public sector buildings. It resulted in about USD 18 million savings and sustainably cut annual greenhouse gas emissions by 63,000 tons of CO2 equivalent. Additionally, the project influenced the perception and business-as-usual practices regarding energy efficiency in the public sector.

Implementation of the Energy Conservation Promotion Fund (ENCON) programme in Thailand since 1995 not only triggered progress on the way towards approaching the benchmark of renewable energy use but also helped to identify the main challenges and hints for future implementation of energy efficiency policies. The most striking findings have shown that:

  • Encouraging consumers to buy or use energy efficient equipment/appliances with energy efficiency labels is effective;
  • Establishing and enforcing energy standards for appliances, e.g. minimum energy performance standards, reduced circulation and use of products with low energy efficiency;
  • Energy Service Companies reduce credit and performance risk for energy efficiency improvement projects and, therefore, boost lenders’ confidence;
  • Professional training of so-called energy managers in the field of energy conservation is necessary for the promotion and implementation of energy efficiency measures.

In 2012, Tunisia’s energy deficit, the gap between consumption and production, reached 1.6 million tonnes of oil equivalent, which represents 20% of primary energy demand. Heavy reliance on imported energy sources makes the country’s economy vulnerable to fluctuations in oil prices. These effects have been alleviated to some extent due to energy conservation policies adopted since the 1980s in combination with economic strategies focused on the expansion of the service sector and the development of high value added industries. The primary energy intensity has been falling over the last two decades, with an overall decrease by 27% between 1990 and 2011. In order to expand its energy efficiency market, the Government of Tunisia adopted an ambitious strategy. For instance, energy efficiency programmes targeting the industrial sector contributed to about 42% of total energy savings. Thus, achievements in this sector are essential for Tunisia’s general energy conservation strategy. The country’s current Energy Efficiency Action Plan aims at reducing primary energy consumption by 17% in 2020 and 34% in 2030.

The study develops a benchmark that should serve as a reference point for policy makers and energy experts working in the field of energy efficiency. This benchmark is a synthesis of policy incentives that should be in place in order to stimulate and ensure successful energy efficiency policy outcomes. The desired policies are divided into three groups: 1) legal, institutional and regulatory; 2) economic and financial; and 3) socio-political. A set of these policies in place at a sufficient degree is a basis for successful formulation and implementation of energy efficiency policies and related projects.

This study may become a useful tool for national governments, the business community, experts, project developers and other stakeholders in monitoring the progress of undertaking energy efficiency measures in various countries and remaining at the cutting edge in terms of applying and distributing best practices of energy efficiency improvements.

The study was prepared in the framework of the United Nations Development Account project “Promoting Energy Efficiency Investments for Climate Change Mitigation and Sustainable Development”, which was implemented jointly by all five UN Regional Commissions with UNECE as the lead agency.