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UNIDO – GEF Partnership Energy Efficiency in Industry CSP Sub-regional Workshop for GEF Focal Points in Europe/CIS 14-15 April 2010, Istanbul, Turkey Prepared by: Marco Matteini Industrial Energy Efficiency Unit Presented by: Yury Sorokin Refrigeration and Aerosols Unit 1 Outline About UNIDO Context UNIDO Industrial Energy Efficiency (IEE) Program UNIDO - GEF Partnership and the IEE chapter Challenges Lessons learnt 2 About UNIDO UNIDO’s mandate is to promote sustainable industrial development. Technical Co-operation areas: Industrial Governance and Statistics UNIDO is the only specialized agency promoting the creation of wealth and tackling poverty alleviation through support to industry and manufacturing sector development Investment and Technology Promotion Three inter-related thematic priorities: Sustainable Energy and Climate Change Poverty Reduction through Productive Activities Trade Capacity-Building Industrial Competitiveness and Trade Private Sector Development Agro-Industries Montreal Protocol Environmental Management Energy and Environment 3 UNIDO - GEF Partnership and the IEE chapter Until Dec 2006, only three GEF Implementing Agencies: UNDP, UNEP, World Bank UNIDO mainly Executing Agency access to GEF funds through them. Limited exception for POPs Dec 2006, UNIDO gets Direct Access to GEF funds UNIDO Comparative Advantage: Climate Change, International Waters, Biodiversity,Chemicals: POPs, ODS, mercury. Dec 2009, cumulative approvals of UNIDO projects amounting to a total of US$ 257 million 4 GEF4: UNIDO/IEE Projects Portfolio 15 countries: Cambodia Ecuador Egypt India Indonesia Iran Malaysia Moldova Philippines Russia Sri Lanka Thailand Turkey Viet Nam Ukraine GEF funded projects 5 Context for Industrial Energy Efficiency Source: IEA Industrial energy use globally accounts for – 40% of electricity use – 77% of coal and derivatives use – 37% of natural gas use Increased nuclear Increased Renewables 29% Reference Scenario and 1/3 of global CO2 emissions1 Industry has the potential to reduce its energy intensity and emissions up to 26–32%, providing a 8-12% reduction in total energy use and CO2 emissions2 13% Power sector efficiency & fuel 29% Alternative Policy Scenario Electricity end - use efficiency Fossil fuels end -use efficiency Potential CO2 emission reductions from different policy options 1,2 Source: IEA, 2006 and 2007 6 Why Isn’t Industry More Energy Efficient? Policy and regulatory frameworks, including energy pricing, are not supportive The business of industry is not energy efficiency Facility engineers typically do not become top managers Data on energy use of systems is very limited difficult to assess performance Lack of capacity to identify and evaluate performance improvements opportunities to become more energy efficient are overlooked Disconnection between capital and operational budgets Investment constraints and lack of suitable financing Others … 7 UNIDO Industrial Energy Efficiency Program Focus Areas Energy management standards Systems optimization (steam systems, pumps systems, compressed air, refrigeration, etc.) Why? • Relevant and applicable over the entire industrial sector, no matter what the technological and production processes are (IPCC 4th Assessment Report, IEA) • Energy management prerequisite for continual improvement of energy efficiency and performance in industry 8 Energy Management & System Optimization Energy management standard provides: – A framework for understanding significant energy use – Action Plans to continually improve energy performance – Documentation to sustain energy performance improvements System optimization provides: – A method of assessing systems to identify energy performance improvement opportunities – Actions that can provide significant energy savings with limited capital investments – More reliable operations Energy Management + Systems Optimization = Winning Strategy 9 UNIDO Industrial Energy Efficiency Program Additional Thematic Areas – Country and sector specific Promotion, demonstration, deployment and transfer of advanced low-carbon process technologies Promotion, demonstration, deployment and transfer of renewable energy technologies for industrial applications (solar process heating and cooling, biomass, etc. ) 10 GEF4: UNIDO/IEE Projects Example of country project Project objective To reduce GHG emissions through improved energy efficiency in industry and the transformation of the market for industrial energy efficiency products and services. Project components: Policy support Development and establishment of: National Energy Management Standard compatible with ISO 50001 IEE Best-Practice Information, Dissemination and Recognition Program National IEE Monitoring and Benchmarking Program Fiscal incentives for IEE Others … Capacity-building Energy Management (EM) Systems Expert Training System Optimization (SO) Expert Training (steam, pumps, compressed air, ..) Development and provision of tools to assist industry in developing and implementing energy management and system optimization projects Training of industry managers and engineers Pilot IEE projects Implementation of pilot projects in selected enterprises Financing for IEE Development of IEE investment supporting schemes in partnership with international as well as national financing institutions 11 UNIDO/IEE Projects Capacity building on Energy Management & System Optimization Creating market opportunities for energy efficiency Information, Awareness and Promotion Energy Management and System Optimization Expert Training programs EM/EE training of enterprise personnel Development of a Market for EM/EE services to industry Provision of EE technical services to industry Implementation of EE projects in industry Project duration Post project time 12 GEF4: UNIDO/IEE Projects - Challenges Fine tuning of good and effective national institutional arrangements and implementation model for development Co-financing represents significant challenge for governments and partners in many countries Many countries have very limited capacity to prepare GEF funded IEE projects. Significant IA assistance is required for project design and preparation. UNIDO is continuing to examine how best to provide services to country clients in a cost-efficient manner Capitalize the knowledge creation potential of the Portfolio and ensure regional/ global sharing of information and learning experiences 13 GEF4: UNIDO IEE Projects – Lessons Learnt Leverage on existing local entities as much as possible Build strategic partnerships and maximize synergies with other country projects and programs comprehensive IEE projects very often goes beyond core expertise of a single GEF IA Involve key stakeholders groups as early as possible and provide details of envisaged implementation arrangements and expectations in advance of project launch (inception workshops, critical activities) Securing co-financing to meet GEF requirements almost always the most difficult task in project preparation. Mobilization efforts should be initiated already at the project identification stage rather than postponed to project preparation: consider delays associated with programming of funds among potential co-financiers. 14 Thank you for your attention! For more information Dolf GIELEN Chief Industrial Energy Efficiency Unit Energy and Climate Change Branch UNIDO Vienna International Centre P.O. Box 300, A-1400 Vienna, Austria Tel: 0043 1 26026 3811 E-mail: [email protected] Georgios ANESTIS Senior GEF Coordinator Programme Development and Technical Cooperation Division UNIDO Vienna International Centre P.O. Box 300, A-1400 Vienna, Austria Tel: 0043 1 26026 4565 E-mail: [email protected] 15