Ukraine Energy Efficiency Kiev, 7 November 2013

How to Promote Energy Efficiency?

Kiev, 7 November 2013

Matteo MazzoniSenior Market Analyst, NE Nomisma Energia

The emerging energy efficiency marketEnergy efficiency: an important market that is gaining momentum

In 2011, the IEA estimates that for 11 IEA member countries, investments in energy efficiency resulted in cumulative avoided energy consumption of 570 Mtoe in the period 2005-2010. In monetary terms this is something like 320 billion at a price of 75 per barrel.

Energy efficiency - the hidden fuel

However, investment in energy efficiency is still less than two-thirds of the level of fossil fuel subsidies. Governments and istitutions still have to understand the full potential of energy efficiency.

The Energy TrilemmaHow to promote a market that can simultaneously achieve 3 different goals?Energy IndependenceTechnological InnovationSustainabilityLower demand for energy = Higher system reliance + Improved securityLower public expendituresLower private expendituresLower CO2 and other pollutantsImproved health and well-being

Competitive advantagesJobs creation

BarriersInstitutionalChanging regulatory frameworkLack of institutional capacity

CulturalLimited rationalityInformational failuresScarse perception of real discounted ratesIts always worked

EconomicAbsence of dynamic pricingHigh transaction costsRelatively high capital investmentNo guaranteesthough the main barrier The real problem with energy efficiency is that it does not generate a direct cash flow but it creates savings

How to overcome the cultural barrierThe message should change

-CO2 ECO2

It make sense economically and ecologically ..when we talk about energy efficiency we talk about: High level of energy servicesEconomic growthKeeping energy affordable and reducing carbon dioxide emissions

The Italian ExperienceItaly has undertaken a sectoral approach to promote and spur investments in energy efficiency:

SectorPolicyIndustryWhite CertificatesPublic Incentive SchemeHouseholdsTax ExemptionsTransports & appliancesTechnical StandardsItaly has decided to reach a 24% reduction in energy consumption by 2020, which means save around 20 Mtoe of primary energy per year.

NEs ReccomendationsDistrict Heating (CHP)

Integration between existing power plants and incoming renewables (SMART ENERGY)Street Ligthing (SMART CITY)

Thanks for your attention

Matteo MazzoniNE Nomisma Energiamatteo.mazzoni@omismaenergia.it

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