Acting on energy efficiency: Technology meets political will

Olivia O.C. Gippner, intern at UNESCAP in Bangkok

“Even as we are changing the ways we are producing energy, we are also changing the ways we use energy. In fact, one of the fastest, easiest, and cheapest ways to make our economy stronger and cleaner is to make our economy more energy efficient.”
- U.S. President Barack Obama and Energy Secretary Steven Chu, 29 June 2009

Energy is lost during the painful process of using steam to work turbines, the antiquated means of energy storage, the faulty distribution through old and unintelligent electricity grids, and finally, during the inefficient use of home appliances that often continue using electricity even when switched off. It is this chain of energy loss, which creates a multiplier effect that artificially inflates our growing energy demand. Depending on the country, due to all these losses, one kWh saved by a consumer translates into two or more kWh saved at the point of production – additional energy supporting a country’s energy security.

While political resistance to seemingly rational arguments like these used to be popular in times of excess and cheap energy supply, it was only recently that governments around the globe started committing themselves to a demand-side approach on energy security. An inflation of catastrophes around the world, increased awareness of climate change, depleting oil resources, and the first agreements on climate change targets have now led most countries to an implementation stage: making energy efficiency compulsory is one of the cheapest ways to save costly energy. It is only in the 21st century that a true acceptance of this concept has taken place, and first results from forerunner countries like Sweden and the U.S. have encouraged other governments to follow suit: there is a proliferation of action plans, energy efficiency agencies, and energy labelling strategies created on a daily basis. These mainly focus on building codes and energy efficiency labelling for green buildings and appliances, such as the Energy Star and LEED. Other plans place emphasis on fiscal stimuli that help overcome the initial financial barriers imposed by the often costly installation of energy-efficient technology. Through subsidies and taxation, as well as awareness-raising, investors and consumers are encouraged to consider more energy-efficient alternatives.

Studies in the European Union have demonstrated that the highest levels of efficiency come from the use of market-based policy tools such as a Tradable White Certificate Scheme, which has already been implemented in the UK, France and Italy. Under this scheme energy suppliers are obliged to hold a number of white certificates, which correspond to energy savings achieved through energy-efficient installations. By opening the possibility to trade these certificates, investments in energy efficiency are more likely to take place in locations where improvements can be achieved most cost-effectively.

Another promising trend lies in Energy Performance Contracting, in which energy service companies are paid through future energy savings incurred by a project. The main problems remaining for this policy center on how to measure, monitor, and evaluate energy savings in order to achieve globally comparative data. Within the EU, the Commission is now working on a methodological “toolkit” to facilitate common procedures.

While traditional actors like the European Union and the United States have been among the first to implement energy efficiency measures on a larger scale, there is yet a lack of understanding of the strong link between energy efficiency and energy security. It is China that actually plans to go the furthest: The eco-city of Dongtan near Shanghai, which has been developing since 2005, was planned not only to provide all of its energy supply through renewable energy, including the city’s recycled waste, but also intelligent hydrogen-fuelled public transport. Although, the project has been stalled in its initial phase, a number of similar cities are buying into the concept of offering energy efficient buildings and “a green lifestyle experience”, like in the planned eco-city Dalian Tiandi. With new energy efficiency projects under construction, a coal-dependent China can set an important example and has considerable leverage in strengthening this long-overdue global change in direction: the political will that carries through from the highest policy level to final implementation, however, remains the most vital ingredient. ■


Further reading

Action Plan for Energy Efficiency: Realising the Potential
China-US Energy Efficiency Alliance
P. Ford, “The World's First Carbon Positive City Will Be...in China?”, 16.8.2009.
ENERGY STAR
EPC Watch - watching the worlds of energy performance contracting
COM 2002/91/EC: Directive on the Energy Performance of Buildings
Euro WhiteCert Project
L. Mundacac, “Markets for energy efficiency: Exploring the implications of an EU-wide ‘Tradable White Certificate’ scheme”. Energy Economics, 6 (30 (2008)): 3016-3043.
National Action Plan for Energy Efficiency
F. Pierce, “Greenwash: The dream of the first eco-city was built on a fiction”, The Guardian, London, 23.4.2009.
“South Korea unveils $84 billion green action plan”, Energy Efficiency News, 8.7.2009.
D. Stremikiene & G. Sivickas, “The EU sustainable energy policy indicators framework”, Environmental International 34 (2008): 1233.
U.S. Green Building Council (USGBC), LEED, “Dongtan - the world's first eco-city”, 21.7.2006
Z. Yan & H. Girarder (ed.). Dongtan, An Eco-City. Arup & SIIC (2006).