gcc clean energy: challenges & way...
TRANSCRIPT
GCCCleanEnergy:Challenges&
WayForward1stWGConsulta-onWorkshop
EUGCCCleanEnergyNetworkIIDr.NasserSaidi
24May2016
Agenda
• 3 GCC Clean Energy Challenges: – Water
– Energy Efficiency
– Subsidies
• Path to GCC Decarbonisation
• EU-GCC Cooperation
• About CEBC
• New Oil Normal implies downside risks for oil resources & prices
• New Oil Normal is a ‘perfect storm’ opportunity for radical policy reform to establish a new economic development model, with decarbonisation as an imperative
• GCC should develop a decarbonisation strategy and implementation policies
Implications of New Oil Normal
MENA‘heats’GlobalWaterHeatMaps
MENA has Lowest Available Renewable Freshwater Resources
AnnualRenewableFreshwaterResourcesperCapita(m3/person/year,2014)
0 5000 10000 15000 20000 25000
La-nAmerica&Caribbean
NorthAmerica
Europe&CentralAsia
EastAsia&Pacific
Sub-SaharanAfrica
SouthAsia
MiddleEast&NorthAfrica
Source:WorldDevelopmentIndicators2016,WorldBank
MENA/GCC has Highest Water Stress Levels
Source:WorldResourceIns>tute
• GCC facing a growing water crisis: growing population, urbanisation, incomes & subsidies
• Adjustment through Desalination expensive
• Policy adjustments:
– Removal & targeting of Subsidies
– Pricing Policy
– Sustainable Water Management
– GCC coordination: policy & water infrastructure
Key Policy Takeaways
Problem of MENA Energy In-Efficiency • Energy efficiency in OECD countries is 2x GCC & wider MENA region • Regional energy intensity has increased by 14% since the beginning of the 21st
century, outstripping GDP growth. Indeed, energy intensity has been declining in all regions except MENA
• GCC consumes more primary energy than the whole of Africa, though they have just one-twentieth of the population!
• GCC’s per capita annual electricity consumption: 9.650 terawatt-hours vs. global average of 2.782 TWh - an alarming consumption rate
• If the region continues on this high energy use path, it will require more than 3% of GDP for energy infrastructure investment by 2030 compared to just 1% for the rest of the world
• Untapped energy efficiency is likely the least expensive and most effective form of energy available today
• Targeted energy efficiency measures are MENA policymakers’ best bet for combating high energy intensity while curbing GHG emissions in the region
Energy Intensity in selected Arab, OECD, Non-OECD Countries (Energy used/GDP)
Source: World Development Indicators 2016, World Bank
0
50
100
150
200
250
300
Climate Change Performance Index: KSA ranks lowest
ClimateChangePerformance
Index ShareofGlobalGDP
Shareofworld
populaTon
ShareofGlobalCO2emissions
ShareofGlobalprimaryenergysupply 2016 2015
Denmark 4 4 0.21% 0.08% 0.12% 0.13%UK 5 6 2.58% 0.90% 1.39% 1.41%Sweden 6 5 0.40% 0.13% 0.12% 0.36%Morocco 10 11 0.24% 0.46% 0.16% 0.14%Egypt 30 24 0.91% 1.15% 0.57% 0.57%Iran 54 57 1.21% 1.09% 1.63% 1.69%KSA 61 61 1.55% 0.41% 1.47% 1.42%Nocountryisdoingenoughtopreventdangerousclimatechange.So,notop3posi9ons
ComponentsoftheIndex• Emissionslevel(30%)• Developmentofemissions(30%)• Renewableenergies(10%)• Efficiency(10%)• Climatepolicy(20%)
GCC Energy Policy Reforms &
Structural change
• Gradually reduce hydrocarbon subsidies and replace with incentives for RE industry, including production as well as R&D.
• Renewables-based desalination should become a clear policy priority for addressing water scarcity in the MENA region
• Implement policies to increase energy efficiency to reverse large increase in energy intensity (Energy/GDP) over past 20 years
• Increase awareness by informing consumers & conducting wide based energy audits of productive sectors
• Develop and implement RE strategy and policy frameworks: including legal & regulatory framework to enable PPP and liberalization of public utilities to allow for private investment and production and a GCC power market
• Coordinate EE and RE policies across GCC countries and integrate water systems and energy infrastructure, including power grids, to benefit from economies of scale
De-Carbonisation: many factors at play
‘Kayaiden-ty”
• Removal of Fossil Fuel & Water Subsidies
• Pricing of public utilities
• Energy Efficiency Investments
• Carbon Tax
MENA Financial Road to Decarbonisation
Establishing a Green Climate Fund GCC should set-up Green Climate Funds to decarbonise + for urban transformation => paradigm shift towards low-emissions & climate-resilient development Proceeds from a carbon tax => Climate Fund
Carbon tax on Gasoline ($ per litre)
Carbon Local air
pollution Congestion Accidents Total
Bahrain 0.08 0.01 0.15 0.07 0.31Kuwait 0.08 0.05 0.42 0.11 0.67Oman 0.08 0.02 0.05 0.38 0.53Qatar 0.08 0.04 #N/A #N/A #N/ASaudiArabia 0.08 0.03 0.14 0.28 0.52UAE 0.08 0.02 #N/A #N/A #N/A
Source:“GeAngEnergyPricesRight”,IMF
EU-GCC RE, EE Cooperation • EU can provide technical assistance & learning from relevant
experience (e.g. ELENA): ü Review and Rationalize Fossil fuel, Water and Energy Pricing: Tariff Reforms ü Taxation: carbon taxes & price incentives for Energy Efficiency & RE
ü Quantitative: product standards, building codes, plan urbanisation and urban design, transportation and logistics
ü Design efficient financing mechanisms for energy efficiency based on ‘tried and tested’ mechanisms
• Joint R&D in RE
• Cooperation in promoting RE and climate change investments in MENA
• Cooperation in set-up of GCC, MENA Climate Funds
Clean Energy Business Council • What Is CEBC? Clean Energy Business Council (CEBC) is a non-profit, non-
governmental membership association that brings together leading local and
international organizations in the MENA clean energy sector from both the private
and public spheres
• Our Purpose: CEBC seeks to become the leading regional forum for local,
international corporations and government entities focused on the development and
deployment of clean energy in the MENA region
• Our Focus Areas
ü Energy & Water Efficiency
ü Renewable Energy Generation
ü Implementation of Clean Energy – Financing, Legal, and Structural
Mechanisms
ü Social Impacts of Clean Energy Development
• Advocacy – Endorse adoption of clean energy policies by public authorities
• Research – Conduct and partner on research efforts to drive clean energy solutions
• Leadership Series – Provide forum events for dialogue between policy makers and industry leaders
• Women In Clean Energy (WICE)
• Green Sukuk Working Group – Channel market expertise to develop best practices and promote issuance of Sukuk to finance climate change projects
• SCHOOLSENVIRONMENTPROTECTIONPROGRAM
• Maintain geographic database of 100+ renewable energy projects from throughout MENA
• Country Missions – Initiate discourse on clean energy policy with government stakeholders in MENA countries
• Outreach events – Host workshops and seminars throughout the year on a range of clean energy topics, including Annual Event
lean Energy Business Council CEBC: Current Activities
• Chatham House (2013): “Saving Oil and Gas in the Gulf”, August • Climate Change Performance Index 2016: available at
https://germanwatch.org/en/11390 • IEA (2015): Market Trends and Medium-Term Prospects, Energy
Efficiency Market Report 2015 • IMF (2015): “Is the Glass Half Empty or Half Full? Issues in Managing
Water Challenges and Policy Instruments”, Working Paper, June • IMF (2015): “How Large Are Global Energy Subsidies?”, Working
Paper, May • IMF (2014): “Getting Energy Prices Right : From Principle to Practice” • McKinsey (2010): “Energy Efficiency: A compelling global resource” • World Bank (2016): World Development Indicators 2016 • World Resource Institute: http://www.wri.org/our-work/topics/water
References