energy efficiency market outlook for...
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Energy Efficiency Market
Outlook for Bangladesh
Approximately 40% of the GHG emission reductions required by 2050 to limit global temperature increase to less
than 2 degrees centigrade would potentially come from energy efficiency alone. It is the key for cost effective
energy transition and the one hidden energy resource that all countries, including Bangladesh possess in
abundance. Stronger policy development and implementation focusing on technology leapfrogging, demand
aggregation, new financing mechanisms and innovative business models is essential if the current level of
efficiency gains is to be maintained or accelerated. Manufacturing, commercial buildings and appliances are the
major markets for energy efficiency investments with tremendous potential for energy savings, industrial
productivity, and multiple other economic and social benefits for the foreseeable future.
7
The primary energy intensity in Bangladesh has been
improving at a rate over 11% since 2005 and this is on par
with the global energy intensity trend. This means, energy
use and economic development have been decoupling
with gross domestic product (GDP) growing at a faster
pace than primary energy use.
Recognising the need for strong energy efficiency policy to
realise national energy goals, the government has set
targets and laid out a clear roadmap for market
transformation. The EE&C master plan aims to achieve
global best energy intensity in manufacturing and building
sectors by 2025 and accelerated penetration of high efficient
and super efficient appliances in the residential sector by
2030.
Policy driven actions and innovation will be key to unlock the potential for energy efficiency. Streamlined implementation and enforcement can further boost the progress and accelerate market transformation.
Source: IEA
0.23 0.22 0.2 0.2 0.2 0.18 0.180.15 0.15 0.14 0.13 0.12 0.11 0.11
0.470.43
0.38 0.370.33
0.3 0.290.3 0.3 0.28 0.27 0.26 0.24 0.24
1990 1995 2000 2005 2010 2015 2016
Total Primary Energy Supply (TPES)/GDP (toe/thousand 2010 USD)
World OECD Non-OECD Bangladesh
2019 2021-25 2016-302020
Primary Energy
Consumption /
GDP
EE&C
implementation
and investments
Industry /
Manufacturing
Services /
Buildings
Residential
15% improvement by
2021
20% improvement by
2030
Policy driven programs Market driven and PPP
Achieve global best energy intensity
by 2025
Achieve global best energy intensity
by 2025
Penetration of high
efficient appliances
Penetration of super efficient
appliances
EE&C Roadmap for 2030Source: SREDA
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A range of direct and indirect economic benefits can flow from improving energy efficiency, including for
employment, productivity, and the incomes of individuals and businesses. Increased energy efficiency can also improve
access to energy. Particularly in Bangladesh, where large parts of the population continue to lack access to energy
services, efficiency can help increase energy access by ensuring a greater level of energy service per unit of energy
consumed. Integrating energy efficiency with energy access interventions can optimise energy system capacity, defer
capital expenditure and bring significant economic benefits.
2 billion USD investment opportunity in Manufacturing sector alone. Enabling investment at scale is critical to deliver on the promise of energy efficiency.
Source: SREDA
Industry / Manufacturing
48%Residential31%
Transport11%
Agriculture5%
Commercial5%
Primary energy use in Bangladesh
50%
30%
30%
36%
NA
Agriculture
High efficiency
pumps, motors,
solar PV pumps,
varable speed
drives etc.
Commercial
buildings /
Services
Building retrofits,
High COP Air
Conditioning,
LED lighting,
occupancy &
daylight sensor
etc.
Residential
LED lighting, high
efficiency water
pumps, motors for
fans, variable
speed compressor
for refrigerators
and ACs, heat
pumps, solar water
heaters, LED back
light TVs,
Transport
Fuel economy
standards for ICE
vehicles, public
transport systems,
electric mobility,
etc.
Industry /
Manufacturing
High efficiency
machines, motors,
air compressors,
once-through
boilers,
regenerative,
burners, variable
speed drives,
waste heat
recovery, CHP,
combustion
controls etc.
There is huge potential for end use energy efficiency gains in the
manufacturing, residential appliances and commercial buildings.
EE&C measures deployed at scale could deliver peak shaving,
complement load shedding and minimize negative impact on the
economy. Energy savings from efficiency improvements can reduce
the burden of energy subsidies and improve fiscal deficit scenario.
RMG Textile Cement GlassSteelRe-
rolling
Pulp andPaper
Chemicals
Plastics
EE&C invetsment Potential (BDT Million) 88,534 46,540 24,050 4,350 3,773 1,503 1,075 928
Energy Savings Potential 32% 32% 23% 24% 41% 24% 24% 24%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0102030405060708090
100
EE
&C
Investm
ent
Thousands
EE&C Potential in Manufacturing sub-sectors of Bangladesh
Energy saving potential from EE&C Interventions
Source: SREDA 2015
Source: IFC 2012; SREDA 2015
7
1.6 Billion USD investment opportunity in RMG & textile sub-sector alone. Energy efficiency is indispensable to improve productivity, gain competitive edge and better the working environment.
Spinning
Carding machines
Roving frames with pneuma-less waste
Ring spinning frames with PM motor
Autoconer with balloon controller
Air jet spinning machines
Weaving / Knitting
Air-jet loom with adjustable air
consumption and pressure.
Warper & sizer with inverter
control and IE2 / IE3 motor
Circular knitting machine with
less air consumption
Jacquard knitting machine with
less air consumption
Dyeing, printing and finishing
Dyeing machine and stenter with
built-in waste heat recovery
Stenter controlled by inverter and
adjustable air volume, nozzle width
Washing machine using indirect
steam and built in heat recovery
Steam dryer with built in waste
heat recovery
Sewing & cutting
Machines with direct drive
servo motors
IE2 / IE3 motors
Pressing
Automatic vacuum iron
table
Production floor
Enhanced productivity Superior product quality and value Competitive edge
Lower production costs (energy,
labour raw material etc.)Enhanced asset value Increased disposable income
Operation and maintenance
Extended life-time for plant &
machineryReduced process / plant downtime
Deferred capital costs towards
replacing plant and machinery
Working environment
Improved thermal comfort and
lighting
Increased worker safety and well-
beingRetain and attract skilled staff
Reduced health insurance costs
and medical expensesImproved labour productivity Reduced noise levels
Environmental
Reduced compliance costs, fines
etc.
Reduced hazardous waste, dust
etc.
Reduced CO, CO2, NOx, SOx
emissions
Other economic
Decreased liability/risksRe-investment of
savings/disposable income
New income streams; increased
production capacity
250-300
333
Average SEC of textileindustry (International
Best Practice)
Average SEC inBangladesh
TO
E p
er
mill
ion u
nits
pro
duced
Source: ADB, 2014
EE&C
Interventions
in RMG &
Textile
Industrial
Sub sector
National Energy
Consumption
(thousand toe)
National EE&C
potential
(thousand toe)
EE&C
saving
(%)
Textile and
garment3740 1159 31%
Utility
Once through boiler
Screw compressor with
inverter control
Cogeneration with gas
engine generator
Source: SREDA, 2015
Business case for industrial energy efficiency: the multiple benefits
7
SREDA has notified the draft regulations for appliance standards
& labelling in 2018. Soon after, these regulations take effect, the
voluntary phase for complying with minimum energy performance
standards and labelling will commence for ceiling fans, LED
lamps, room air conditioners and refrigerators. Together these four
appliance categories account for 75% (approx.) of electricity
consumption in the residential sector.
In the commercial building space, the Building Energy &
Environment Rating for Design and Construction of Buildings
(Draft) was published in 2018. Further, Bangladesh’s Ministry of
Housing and Public Works is currently developing Green Buildings
Guidelines. These standards along with existing independent
green building rating mechanisms (e.g. LEED) will go a long way
in unlocking the potential for energy efficiency in buildings.
Technology leapfrogging is vital to accelerate energy efficiency in buildings and appliances. Building codes and appliance standards are key policy measures for driving adoption. Demand aggregation can help achieve economies of scale and improve cost effectiveness of adopting super efficient technologies.
Water pumps
25% energy savings
from high efficiency
pumps and motors
4
5
6
7
3
2
1
Air conditioner
50% energy savings from
High COP with large heat
exchanging coil and variable
speed compressor
Refrigerator / freezer
55% energy savings from
variable speed compressor,
high performance heat
insulation
Fans
50% energy savings
from electronically
commuted high
efficiency motors
(brushless DC motors)
Lighting
50% energy savings
from LED technology
Television
25% energy savings
from LCD with LED back
light
Water heater
60% energy savings
from heat pumps
Lighting15%
Fan29%
Refrigerator18%
Air conditioner
12%
Television12%
Water pumping
6%Others
8%
Residential electricity consumption in Bangladesh
EE&C potential
in appliances
7
New financing mechanisms (e.g. ESCOs, green banks and
green bonds) are essential to further accelerate market
transformation. The policy should focus on creating public
sector institutional capacity to lead initial investments,
aggregate demand and demonstrate proof of concept.
For accelerating private sector participation, it is crucial to
establish trust and confidence in the capabilities and
capacity among private players. Innovation in establishing
robust payment security mechanisms and established
structures for adopting legal recourse of payment defaults
can further go a long way in creating self sustaining markets
for these alternate financing mechanisms.
New financing mechanisms and innovative business models are vital to delivering the investment opportunity in energy efficiency. Enabling policies should focus on creating self sustaining markets for these alternative mechanisms such as energy service companies (ESCOs), green banks, green bonds etc.
Project financing (ESCOs)
Vendor credit, leasing
Commercial financing, bonds
Partial risk (first loss) guarantees
Credit line with commercial bank
Credit line with development bank
Public ESCOs
Revolving funds from budgetary support
Utility “on-bill” financing
Grants / subsidies from budgetary support
Market maturity Commercial financing
Public financing
Energy Efficiency Financing Ladder
Typical design of energy efficiency credit line
Preferential lending from local financial institutions
supported by low cost credit lines from international
development finance institutions is the dominant
mechanism for energy efficiency financing in the currently
scenario. JICA, World Bank, ADB, KfW, AfD and many
other development finance institutions are actively
operating / designing such credit lines to accelerate
investment in niche energy efficiency markets. The
Energy Efficiency and Conservation Promotion Financing
Project (EECPF) is a 100 Mn USD JICA credit line
administered by SREDA and IDCOL is one of the
participating financial institutions for further on-lending this
fund at preferential rates to eligible projects based on a
predefined criteria.
Source: World Bank
DonorInternational
Development
Finance
Institution
Public
agencyGovernment
Local
Financial
InstitutionLender
BorrowerIndustry / End
user
External financing –
foreign currency
Repayment
Low interest rate
Credit line
Repayment
Credit line / Co-financing
with own funds
Repayment
Concessional rate
Low interest rate
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About IDCOL
Infrastructure Development Company Limited
(IDCOL) was established on 14 May 1997 by the
Government of Bangladesh. Since its inception,
IDCOL is playing a major role in developing and
financing infrastructure, renewable energy and
energy efficiency projects in Bangladesh. Today the
company stands as the market leader in private
sector energy and infrastructure financing in
Bangladesh.
What IDCOL offers:
• Long Term Local and Foreign Currency
Loan for Infrastructure Projects
• Agency services
• Debt and Equity Arrangements
• Corporate Advisory Services
• Training and Capacity Building Services
• Soft Loan and Grant for Renewable Energy
Projects
46 Electric mobility in India: Leveraging collaboration and nascency
Somesh Kumar
EY India Power and Utilities Leader
Tel: +91 11 6671 8270
E-mail: [email protected]
Sanjoy K Gupta
EY Bangladesh Managing Partner
Tel: +88 028835513
E-mail: [email protected]
Ashish Kulkarni
Executive Director – Power & Utilities, India
Tel: +91 124 464 4000
E-mail: [email protected]
Mohammad Saif
Director, Power and Utilities,
India Tel: +91 124 46 18134
E-mail: [email protected]
Kanv Garg
Director, Renewables & Electric Mobility,
India Tel: +91 124 671 4000
Email: [email protected]
Rahul S Agnihotri
Senior Manager, Power and Utilities
India Tel: +91 9867334415
Email: [email protected]
Shuboday Ganta
Manager, Power and Utilities
Bangladesh Tel: +88 1904667282
Email: [email protected]
Shikhar Gupta
Assistant Director, Knowledge - Power & Utility
Tel: +91 124 470 1233
E-mail: [email protected]
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