John O’BrienUNDP Regional Technical Advisor, Climate Change Mitigation

Europe & CIS, Istanbul Regional Hub, Turkey(email: john.obrien@undp.org)

19 October 2016

UNDP + GEFWORKSHOP

Energy Challenges

and Opportunities in Transition

Countries

Seventh International Forum : Energy for Sustainable Development

PRESENTATION OUTLINE

I - Global and Regional Overview of UNDPPortfolio on Sustainable Energy

II - Barriers to Energy Efficiency & LessonsLearned from UNDP/GEF Projects

III - UNDP Publications incl. De-RiskingApproach

IV – The Importance of a Pro-ActiveApproach

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UNDP is a key partner and Implementing Agency of the Global Environment Facility (GEF) and has a portfolio globally of approx. $560 million USD for ongoing TA projects onSustainable Energy …

Africa24%

Arab States 9%

Asia and Pacific28%

Europe and CIS24%

Latin America and the Caribbean

14%

Global1%

Fig 1: Geographic Distribution of UNDP Sustainable Energy Portfolio (2016)

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Energy-Efficiency Renewable Energy Sustainable Transport

GEF – Approx $128M –All Areas

European Union - $26M -Biomass

Green Climate Fund -$20M – Energy Efficiency

UNDP works in three main areas with three main partners …UNDP and Sustainable Energy in the Europe & CIS Region:

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100

90

80

70

60

50

40

30

20

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40 sustainable energy proj. under Implementation$148 million in GEF or GCF financing

24 projects dealing with energy-efficiency andApprox. $100 million USD

60% of all proj. deal with energy-efficiencyApprox 70% of the grant resources available

24 projects

8 projects 8 projects

Energy-Efficiency Renewable Energy Transport

Energy-Efficiency is the largest area of UNDPsupport in the field of Sustainable Energy inEurope & CIS

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Supporting energy-efficiency is consistent with the Sustainable Development Goals … in Particular SDG-7.

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Why does UNDP choose to focus on energy-efficiency in the Europe & CIS Region? Why focus on buildings?

Four Key Reasons

1. ECIS countries are among the most energy-intensive in the world(4 of the top 10 most energy intensive economies in the world in this region!)

2. Energy-Efficiency offers low cost ‘win-win’ opportunities, especially in the buildings sector that are not capital intensive

3. Working on Energy Efficiency helps address issues of fuel poverty which isclose to UNDP’s core mandate;

4. UNDP has huge experience in the area of energy-efficiency (in buildings) and there are many different projects that can be designed and implemented

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• Residential Buildings – largest category #1• Public Buildings – largest category #2• Energy-Efficient Lighting• Energy Efficiency Standards & Labels• Energy Service Companies (ESCOs)• New projects related to energy-efficiency in tourism & oil & gas sectors (e.g –

Green Ports project in Azerbaijan)

In some countries, we have two or more projects …(e.g – Russia we working with lighting, standards and appliances and buildings)

Types of EE Projects being Implemented by UNDP in ECIS Region

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Barriers to Energy Efficiency – the UNDP experience

Awareness & Information Barriers

- Public Awareness Campaigns- Stakeholder Workshops- Demonstration Projects

Legal & Regulatory Barriers

- New legislation to promote Energy-Savings- New building codes for Energy-Efficiency

Institutional Barriers

- No public institution with clear mandate and responsibility- No responsibility for data collection, monitoring & reporting (e.g – EMIS)- No incentive for state sector organizations to invest in EE (as less budget next year)

Financing Barriers

- Demo Projects (25% grant and blended finance)

- Support for Sustainable Financial Mechanisms (e.g – EE investment fund, revolving fund,

- ESCOs

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Lessons Learned – Efficiency in Buildings(PART I)

Energy Efficiency is about people and motivating people.

Appoint Energy Managers and provide the right incentives.

- No point of a Government Agency receives less money the following yearfor reducing energy consumption- No point if homeowner associations cannot borrow

People need to be given responsibility and empowered.

ESCOs and Energy Management Information Systems (EMIS) are twoKey tools which can really promote EE in buildings (e.g – Ukraine)

Finally, grants on their own do not and will not work. We also need debt finance.

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What are all the key factors and lessons learned;

Effectively addressing legal, regulatory, and policy barriers is key to achieve transformational changes;

Sucessful projects deliver sustainable outcomes (e.g – EMIS being implementedat the end of the project, not just we replicated some software and built a database)

Ability to Undertake Adaptive Management while project is underway is absolutely essential (e.g. – Croatia Energy Efficiency Project);

Lessons Learned – Efficiency in Buildings(PART II)

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UNDP Publications including De-Risking

Available at www.undp.org/DREI

1) Transforming on Grid Renewable Energy Markets(published in 2012)

2) De-risking Renewable Energy Investment(published in 2015)

3) De-risking Investment in Energy Efficiency(expected 2017)

Policy De-Risking + Financial De-Risking

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Public Policy Instruments Available for De-Risking RE inv

Select Cornerstone Instrument

Select Financial Derisking Instruments

Select Policy Derisking Instruments

DirectFinancial Incentive

(If positive incremental cost)

Feed-in tariff

Long-term RE targets

Streamlined licensing

Project development facility

Partial risk guarantees

Political risk insuranceFiT Price Premium

Examples: Examples:

Examples:

Examples:

PPA-based bidding process

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Source: UNDP, Derisking Renewable Energy Investment (2015). See Annex A of the report for full assumptions. All assumptions (technology costs, capital structure etc.) except for financing costs are kept constant between the developed and developing country.Operating costs appear as a lower contribution to LCOE in developing countries due to discounting effects from higher financing costs.

UNDP Publications including De-Risking – Explaining the Approach

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Recent UNDP Publications on Energy-Efficiency & Renewable Energy

http://www.eurasia.undp.org/content/rbec/en/home/library/environment_energy.html

Selected UNDP publications - Sustainable energy & energy efficiency in Europe & CIS region

ECIS Region ECIS Region Kazakhstan Uzbekistan

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1. Improve Insulation2. Replace your windows3. Install efficient lighting - CFLs

or LEDs4. Shop for efficient household

appliances5. Don’t over use householder

appliances (e.g –heating, air conditioning)

6. Consider solar panels for your rooff

7. Undertake an energy audit8. Consider to plant shady

landscaping (e.g – trees)9. Install programmable

thermostadt10.Switch off gadgets when not in

use11.Set waster heater setting to

‘warm’

Specific Steps you can take to improveEnergy-efficiency in your home

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