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Mitigation Enabling Energy Transition in the MEDiterranean region
ENERGY EFFICIENCY AND ENERGY PRICES: A PEACEFUL SOLUTION TO THE JIGSAW
Overview of the Challenges: A Perspective from the
Southern Shore of the Mediterranean
Dr. Maged K. Mahmoud, PhD. MSc. Eng. Senior Expert, Technical Director Regional Center for Renewable Energy and Energy Efficiency (RCREEE)
6th MEDENER International Conference on Energy
Transition in the Euro – Mediterranean Region
04 October 2018 - Amman, Jordan
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About RCREEE
Vision and Mission
“We the Regional Center for Renewable Energy and Energy Efficiency, are the strategic partner
for the Arab countries driving the energy transition for the prosperity of all our people.”
Knowledge Partnership Replicability Leadership
• Regional intergovernmental organization with diplomatic status
• 17 Arab member States
• In operation since 2008
• Headquartered in Cairo, Egypt
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• What are the realities; is there a dichotomy between energy prices
and energy efficiency policies and measures?
• Are we close to “Economic Decoupling”!
• How significant are the implied subsidies! Can we quantify?
• Addressing consumers choices and behavior: Prices as the inflexible attribute!
• Simply, what to do?
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Economical decoupling!!!
Economic decoupling is an indicator of resource productivity – the ability to “do more with less”. At the state level, it refers to an economy’s ability to grow (increase GDP) without generating an equivalent increase in the use of natural resources (such as energy, materials, water and land)
0%
20%
40%
60%
80%
100%
120%
140%
160%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GDP Growth
Electricity Consumption
Primary Energy Consumption
6.32 % annual growth
4.92 % annual growth
4.5 % annual growth
Source: AFEX 2017, RCREEE
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Electricity Consumption and Peak Demand, 2010-2015
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
0
50
100
150
200
250
300
350
MW
TW
h
Electricity consumption 2010 Electricity consumption 2016 Peak demand 2010 (MW) Peak demand 2016 (MW)
Source: AFEX 2017, RCREEE
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Per Capita Primary Energy Consumption, Electricity Consumption and GDP
Source: AFEX 2017, RCREEE
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Energy Pricing
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Residential Electricity Prices
Source: AFEX 2017, RCREEE
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Commercial Electricity Prices
Source: AFEX 2017, RCREEE
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Industrial Electricity Prices
Source: AFEX 2017, RCREEE
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Diesel Prices (USD/Liter)
Source: AFEX 2017, RCREEE
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Generation Efficiency
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Transmission and Distribution Losses
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Pre-tax Subsidies
$ 168 Billion
$ 92 Billion(28% World Subsidies)
2013 2015
32%
68%
Oil exporting countries
Oil importing countries
Source: AFEX 2017, RCREEE
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Energy Subsidy Reforms 2016
11 Countries in 20176 Countries in 2014
Source: AFEX 2017, RCREEE
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Trend in Electricity Prices in the Arab region between 2014 and 2017
Source: AFEX 2017, RCREEE
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“Sometimes the questions are complicated andthe answers are simple.”
Dr. Seuss Geisel
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"He who fails to PLAN is planning to fail"
Winston Churchill
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The simple answer is
A Plan!
A National Energy Efficiency Action Plan
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Regional and National RE&EE Policy Making Process in Partnership with LAS
Monitoring tools
Planning tools
Implementation tools
Master document
Pan-Arab Sustainable Energy Strategy
Arab EE Guideline
NEEAP
EE Reporting Guideline
Arab Renewable Energy Framework
NREAP
RE Reporting Guideline
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The Arab EE Guideline was approved by the Executive Bureau of the Arab Ministerial Council ofElectricity in 23 November 2010. The Guideline requests:
▪ Effective involvement of state/public sector in EE activities.
▪ Governance of EE sector should be established.
▪ Availability of incentives to encourage the implementation of energy efficiency improvementprojects.
▪ Ensure accuracy of energy savings calculations, based on clear methodology and robust data.
▪ Utility sector is responsible for providing data and operates according to good practices toachieve energy efficiency in their systems.
▪ Professional training and capacity building.
The Arabian Approach!
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NEEAPS: A Replicable Model
2011 2012 2013 2014 2015 2016 2017 2018
26
1113
16 16 17 17
1 1 1 11
No. Countries Prepared and Adopted NEEAP
NEEAP 1 NEEAP2 NEEAP3
From 1 Success
Story to 100
From 1 Country to
17
From 1 Region to All
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Key Regional Developments
• 12 National Targets
Jordan, Bahrain, Egypt, Tunisia, Sudan, Syria, Iraq, Palestine, Lebanon, Libya, Qatar, Kuwait,
• 17 National Assigned Entities for EE
Jordan, Bahrain, Algeria, Egypt, Tunisia, Sudan, Syria, Iraq, KSA, Palestine, Lebanon, Libya,
Qatar, Kuwait, Morocco, Djibouti, Yemen
• 18 NEEAPs in different stages
Jordan, Bahrain, Algeria, Egypt, Tunisia, Sudan, Syria, Iraq, KSA, Palestine, Lebanon, Libya,
Qatar, Kuwait, Morocco, Djibouti, Mauritania, Yemen
• 11 Courtiers used the NEEAP template
Jordan, Bahrain, Algeria, Egypt, Sudan, Syria, Iraq, Palestine, Lebanon, Libya, Qatar.
Common measures
Setting indicative targets for
EEEE
legislations in buildings, industry and
transport sectors
Spreading Solar Water
Heaters
Labels, standards &
indicators for minimum
energy performance
Banning importation of inefficient lamps and equipment
EE Funds, fiscal and financial
incentives
Common measures in Arab Countries NEEAPs
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“Capture EE multiple benefits; reach a stable
energy security; to keep a leading role in the
region”
Vision
Objective
Target
Policy Packages
• To develop a demand of EE;
• To improve the offer of EE
products and systems;
• To support the creation of a
market of EE products and
services.
Economic
SectorMtoe %
Industry 6.8 -18%
Buildings 8.6 -16%
Transport 4.6 -23%
Total 20.0 -18%
Sector Policy Package (PP)
Institution 1. Institutional development for EE
Industry
2. Programmes in the largest energy-consuming industrial sectors
3. Programmes in cross-cutting technologies
4. Transforming the EE market for industry
Buildings
5. Replacement of existing electric appliances with EE ones.
6. Interventions on new buildings envelope & systems
7. Energy refurbishment of existing buildings envelope & systems
Tourism 8. Moving towards green tourism
Street lighting 9. Efficient street lighting
Transport
10. Energy efficient road vehicle stock
11. EE practices for the general public and the professionals
12. Fostering the use of EE modes for passenger transport
13. Fostering EE in freight transport and logistics
Example:
Egypt 2nd NEEAP 2018
• Mandating the transmission and distribution companies to
purchase the energy from cogeneration and energy recovered
from secondary sources, which has a capacity less than 50
MW and do necessary expansion to accommodate this
supplied energy
• Each facility with a contracted capacity equal or above 500
kW shall have a energy manager as well as energy register
• Both EETC and distributors has the right to issue demand side
management bids
• The government is required to set polices and programs for the
following:
– Expand the energy labels for energy equipment and
appliances
– Phase out inefficient equipment and appliances
– Support energy efficiency activities in industrial and
commercial systems
EE Measures as per the
Electricity Law
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EE Measures in Arab NDCs
Mentioned and with specified target
Not mentioned because already undertaken
Mentioned and no specified target
Not mentioned at all
NDC country
INDC country
Source: Comprehensive Analysis on the Energy Sector for Arab Countries ,
RCREEE
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EDF
FNMEERC
FTENEEREA
JREEEF
Revolving
Fund
GEFF
DGF
Addressing the ChallengesFinancial Resources/Instruments
Examples of
Sustainable
Energy Public
Funds
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Addressing the ChallengesFinancial Resources/Instruments
RCREEE Experience with
Banks and Funds Operations National Determined Contribution Study
• Provides finance and advisory sevicesfor private sector businesses
• Supports Egypt’s green economy transition with €140 million of financing for energy efficiency and small-scale renewable energy investments
• Technical support to develop a green investment project
• Businesses receive a partial grant
• Provides capacity building to the Banque du Caire on energy assessment procedures and classifications
• Provides energy assessments to industries
• Provides help-desk support to interested parties
• Setting up the fund
• Actively engage in identifying interested project proponents
• Administering the procedures for project finance
• Monitoring, measurement and verification of energy savings
Green Economy Financing Facility
Energy Management Services
Support for the establishment of Industrial Energy Efficiency (IEE) Fund
1. Provision of (free) technical support
to banks and clients through different
initiatives
2. Using web-based tools to support
decision making process
- “Eligible”/”Qualified” solutions
- Supplier’s info
- Service providers
- Financial tracks (fast-normal!)
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MEPS and LabelingMEPS Comparative Labeling
9 10
4 9
7 9
2 3
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EE Policies
8 Arab countries have adopted policies to ban or
discourage the use of incandescent lightbulbs
5 Arab countries have adopted industrial EE policies
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Institutional Capacities: EE Agencies and Units
Planning and Studies Office
Energy Efficiency and climate change unit
Sustainable Energy Unit
Conservation and Energy Efficiency Department
EE Department at the Ministry of Energy and Mineral Resources
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• Addressed through concrete marketing and
awareness components
• Technical support for the banking sector to
understand client interest language
• Technical assistant and capacity building for
beneficiaries and ESCOs on technical and
financial assessment of EE and RE solutions,
energy management systems and others
Lack of awareness
Addressing the Challenges Reduction of
operating costs
Conservation of natural resources
Reduction of needed
utility expansion
Improvement of production
and productivity
Pollution reduction
Business opportunity
The Selling Propositions of Importance to Industry
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Energy Intensive, Glass Manufacturer
Developed by: Part icipat ing Bank: Implemented by:
Process Machine Replacement Glass Manufact ur er
Investment Type: Energy Efficiency
Industry Type: Glass Manufacturing
Product Type: Process Machine Replacement
Investment Amount: $1.2 mio
EgyptSEFF Financing Amount: $1.2 mio
Capacity Increase: 1.3
Energy Savings: 148,660 MMbtu/year (43,601.6 MWh)
Reduced Carbon Emissions: 8,723 tCO2eq/year
One of the leading Glass manufacturers in Egypt. Aspiring to competitively meet their demand, the
Client replaced their old furnace with a newer systems that saves 67% of the required energy for
operation, which also lead to an overall savings of the factory energy by around 43.5%.
• Glass.
• Poultry.
• Packing.
• Food.
• Chemical.
• Fertilizers.
• Households Appliances.
• Pharmaceutical.
Showcasing replicable success storiese.g. in industries;
Lack of motivation/low priority
Addressing the Challenges
Introducing a transparent subsidy reform plan
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AFEX Energy Efficiency 2017 Results
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• Overall, almost every Arab state improved theirefficient use of energy, compared to the rankingspresented in the 2015 EE AFEX.
• As of 2017, 15 out of 20 Arab states developed NEEAPS
• Many Arab countries to undertake various reform actionsand make progress in reducing their energy subsidies.The region witnessed an unprecedented wave of energysubsidy reforms
• Arab country’s still need to further develop and implementenergy efficiency regulation, initiatives, and programs for thetransportation sector as it is responsible for around 30%of final energy consumption in the region
• The future will be based on smart solutions incorporating Energy+IT+Communication technologies, are we ready?
Final Remarks:
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"Speed is irrelevant if you are going in the wrong direction."
Mahatma Gandhi
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Thank You
Dr. Maged K. Mahmoud
Technical Director
Regional Center for Renewable Energy and Energy Efficiency
(RCREEE)
Hydro Power Building (7th Floor)
Block 11 - Piece 15, Melsa District
Ard El Golf, Nasr City, Cairo, Egypt
www.rcreee.org