Overcoming barriers for the scaling up of ee appliances in nigeria

Overcoming barriers for the scaling up of EE appliances in Nigeria

Jason Yapp

Oct 2011

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Content1.Lessons learnt2.Energy Baseline scenarios3.Barriers analysis4.UNDP GEF EE Outcomes & outputs 5.Challenges

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Win-Win-Win Solutions

The Ghana Standard, GS362: 2001, label and test procedure for Room Air Conditioners was gazetted in December 2001

•Save Ghanaian consumers an average of $64 million annually in energy bills.•Average price increase 3%, 9% improved efficiency = Payback < 9 months•In 2003 compliance with the standard freed up 13 MW of generating capacity

• By 2013 will be saving the equivalent of a 150MW generating plant. • By 2020, this standard alone will be saving about 950GWh per year,

freeing up nearly 250MW of generating capacity that can be used for other productive purposes, and that number will increase through 2030, all at net negative cost to the economy (virtual power generation).

• In contrast, the 200MW Bui hydropower plant is being constructed at a cost of nearly US$600 million.

• Carbon dioxide emissions will be reduced by about 2.8 million tons over 30 years (104,890 tons per year).

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• Population - 150 million

• Well endowed with oil and natural gas

• Largest emitters of GHG in Africa – off-gas flaring

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Energy Supply Challenges

Current Electricity Demand estimated at over 15,000 MW (Peak), 10,000 MW during off peak.

Current Power Generation: 2,500 MW – 4,000 MW

PHCN 11 companies

Deficit 7,500-11,000 MW leading to frequent load shedding, poor access and energy poverty

Caused by inefficient generation, interruptions in gas supplies, high transmission & distribution losses and non technical losses (pilfering and clandestine connection)

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Supply Challenges

Heavy reliance on diesel generators – 60 million owners and cost USD 92 million per year

Dirty, noisy and smelly Could this UNDP GEF EE project provides some

solutions?

Electricity demand is increasing at about 7% annually Focus on supply side management at the expense of

demand side management

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Unreliable Infrastructure services

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Household income and electricity access

Lack of access to sustainable energy will impede economic growth and national

development and increase poverty

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World Energy Development Index 2010

Nigeria = 0.17

IEA’s Energy Development Index is an average of four indicators:

i) per capita commercial energy consumption (toe);

ii) per capita electricity consumption (toe); iii) % population share of modern fuels (e.g.

LPG, CFL, LED) and iv) % population share of access to electricity.

Malaysia= 0.83

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National Development Priorities Vision 2020/NEEDS/President 7 Points Agenda

Capacity Development and Resource MobilizationUNDAF and UNDP CPAP 2009-2012

Mitigation Adaptation

Energy Efficiency

Industrial Emissions

Reductions

Climate Resilient Human

Development

ODS Phase Out

Low Carbon, High Growth, Climate Resilient, Social

Equity & Sustainable Development

Adaptation Mainstreaming

Vulnerability and Adaptation Assessment

Diversified Livelihoods

Adaptive Habitat

Conservation

Low Carbon Path

Energy Access

Renewable Energy

Feed In Tariff

Decentralized/Off grid

Methane capture/solarHydropower

Energy efficient appliances and

building

NaturalResource

Management

Territorial Approach on Climate Change

Climate Change Governance

Overarching Climate Change Strategy

Danger Opportunity

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Myth and realityMyth: When an appliance is left on standby, it’s off.

Reality: Many people presume electrical products are off, when they are on standby. In this mode, they continue to consume power. Be especially wary of equipment that has a remote control: this is a tell tale sign that the equipment is on standby while waiting to receive the “on” signal from the remote. A red or green LED light is another tell tale sign.

Myth: It’s better to leave fluorescent lights on rather than turning them off when you leave a room.

Reality: This consumes unnecessary energy. A fluorescent tube uses over five hundred times more energy if left on for fifteen minutes than the energy needed to restart it.

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Barriers to EE Investment

1. Policy and Regulatory

• Lack of appliance standards and labels• Highly subsidized electricity tariff – no incentive

to save • Lack of metering – no ‘feel’ of electricity usage

and opportunity cost is high• Procurement policies favour lowest cost• Import duties on EE equipment• Unclear or underdeveloped institutional

framework to support EE• Lack of credible testing centre• Poor enforcement (Custom and SON)

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2. Appliance suppliers (MIDR)

•Limited demand for EE goods and services•Fluctuating voltages and load shedding •Appropriate design (screw/pin, tubular – transport damage)•Affordability

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3. End user

•Lack of awareness of EE •Inferior imported EE products – lack of confidence – dumping ground•Concept of energy savings is ‘virtual’ – cannot ‘see’• Lack of incentives• Lack of credible data• Disempower to act and take informed decision• Media unfamiliar with EE concept

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ECOWAS Renewable Energy & Energy Efficiency Centre

ManufacturersImporters

DistributorsRetailers

Consumers

Enabling Environment-Market Drivers1.EE Policy & Legislation2. S & L supported by accredited testing centresAppliances:CFLStreet lightsRefrigeratorsAir-conditionersElectric motorsWater HeatersPumps

3. Capacity DevelopmentWho?- Public/private sectors- Policymakers- Lawmakers- Industry- Commerce- Consumers What and how?- Awareness- Publicity - Media- Co-benefits- Life cycle cost analysis- Monetary and Energy saving- Carbon mitigation

IncentivesFiscal

MicrofinanceCarbon

Well informed Low Carbon,

Climate Resilient and Sustainable

4. Pilot CFL

EE Governance for Market Transformation

Sensitized

EE Appliances

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4 years Annual Work Plan 2011-2012 2012-2013 2013-2014 2014-2015

Outcomes Outputs M J J A S O N D J F MAMJ J A S O N D J F MAMJ J A S O N D J F MAMJ J A S O N D J F MA

OUTCOME 1: Enhancing the

Capacities of all relevant

stakeholders at the national

level regarding the concept, nature and potential of

energy efficiency in the residential and public sector

Output 1.1: Energy & GHG savings potential for each main end-users in the residential and public

sector validated

Output 1.2: Develop an inventory for the monitoring and data collection system for end-use

sales, energy demand and energy consumption Output 1.3: Awareness of the political and policy

decision makers’ on end-use energy efficiency options and potentials for GHG reductions

enhanced

OUTCOME 2: DEVELOPMENT OF NEW

ENERGY EFFICIENCY

LEGAL REQUIREME

NTS FOR A SERIES OF END-USE

EQUIPMENT IN NIGERIA

Output 2.1: National testing centres and certification procedures for promoting energy

efficiency developed

Output 2.2: Pilot program launched to test and finalize appropriate energy efficiency schemes such

as energy labels

Output 2.3: National labelling content and format is designed, tested, validated and adopted

Output 2.4: A relevant multiyear timetable is set to assure a coherent implementation

Output 1.4: Energy efficiency policy and legislation drafted and approved by Parliament

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GfK Retail Panel Nigeria - Covered Channels 2010

GfK Panelmarket

Traditional Markets

Computer Village

GSM Village

Ikeja

Idumota

Agege

Alaba

Apapa

Oshodi

Victoria Island

Lagos

Abuja Kano

GSM Village

Neighbourhood

Emab Plaza

Wuze 2

Zone 3

Sharif Plaza

Nyanya

Maraba

Ibrahim Taiwo Road

Beirut Road

Ibadan

Aba Onitsha Kaduna Port Harc.

Benin

Dugbe

Sango

Iwo Road

Ogunpa

Challenge

Ekeoha Shopping Centre

Pound Road

Ariaria

St. Michael Road

300 Port Harcourt Road

Elector-mart

Iweka Road

Emeka Offor Plaza

Jerry O Plaza

Town

Ikwerre Road

Artillery/Aba Road

Olu Obasanjo

GSM Village

Ring Road

Mission Road

New Benin

Ahmadu Bello Way

Lagos Street

Examples

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Covered Product Groups

Mobile PhonesSmart phones CRT-TV/PTV (FLAT/Plasma)AHS DVD Refrigerators Airconditioners Washing Machines Deep Freezers Freestanding Cookers

SINCEJanuary 2007January 2007January 2008January 2009January 2009January 2009January 2009January 2010January 2010January 2010

Covered Cities

Lagos Abuja Kano

Expansion to Kaduna, Ibadan, Onitsha, Aba, Port Harcourt & Benin City

January 2007January 2007January 2008

January 2010

Audit Frequency

1.Monthly2.Weekly (By Request)

Coverage GSM 80%, CE 85%, MDA 85%

Nigeria – Panel Activities 2010

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Electrical Department Store in Lagos

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COOLING

Sales Ths. Units,Sales <LC> Mio.

Dec 09 - Dec 10

Nigeria Panelmarket

© by GfK-RT, www.gfkrt.com PRJ 82721 - RG 2103381 - RP 10602662 - ID 279319731

Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10

Sales Ths. Units

Sales <LC> Mio.

Monthly Sales Development

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COOLING

Sales Units %

Jan-Dec09 - Dec10

Nigeria Panelmarket


Jan-

Dec09 Jan-Dec10 Jan-Dec09

Jan-

Dec10 Dec09 Jan10 Feb10 Mar10 Apr10 May10 Jun10 Jul10 Aug10 Sep10 Oct10 Nov10 Dec10

Sales Ths. UnitsSales Ths. Units

FS 1 DR

UPTO 80 CM

FS 1 DR 81 - 90 CM

FS 1 DR >90 CM

FS 2 DR FRZ. TOP

FS 2 DR FRZ. BTM

FS SIDE BY SIDE

FS <Others>

BI/BU 1 DR

81 - 90 CM

BI/BU 1 DR >90 CM

BI/BU 2 DR

FRZ. TOP

BI/BU 2 DR

FRZ. BTM

BI/BU <Others>

Cumulative and monthly Sales Share DevelopmentBy product segment

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COOLING

Sales Units %

Jan 09-Dec 09,Jan 10-Dec 10

Nigeria Panelmarket


Jan 09-Dec 09 Jan 10-Dec 10 Jan 09-Dec 09 Jan 10-Dec 10 Jan 09-Dec 09 Jan 10-Dec 10 Jan 09-Dec 09 Jan 10-Dec 10 Jan 09-Dec 09 Jan 10-Dec 10

Total FS 1 DR 81 - 90 CM FS 1 DR >90 CM FS 2 DR FRZ. TOP FS 2 DR FRZ. BTM

Sales Units %Sales Units %

Sales Ths. UnitsSales Ths. Units

A ++

A +

A

B

C

D

E

F

G

Others

Cumulative Sales Share DevelopmentBy product segment and European Energy Label (coded if available)

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Metering study

Study 1

10 high/middle +10 poor = 20 HHMonitor for 1 year – seasonal impact

Study 2

25 high/middle +25 poor in 6 geopolitical zones – monitormonthly = 300 HH

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Minimum Energy Performance Standard

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Labels

United States Source: US Federal Trade Commission 16CFR305Europe Source: European Commission Directives 2003/66/EC and 94/2/ECKorea Source: Korean Energy Management CorporationAustralia Source: Australian Department of Energy Efficiency and Climate change

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4 years Annual Work Plan 2011-2012 2012-2013 2013-2014 2014-2015

Outcomes Outputs M J J A S O N D J F MA M J J A S O N D J F M A M J J A S O N D J F MA M J J A S O N D J F MA

OUTCOME 3: TRAINING OF

PROFESSIONAL STAKEHOLDERS AND PUBLIC

OUTREACH ACTIVITIES &

ENFORCEMENT OF THE NEW

ENERGY EFFICIENCY

LEGISLATION

Output 3.1: Enforcement of the Energy Efficiency requirement (through Standards, Codes, Labels or a

combination of them) for market transformation

Output 3.2: The new regulations are understood and adopted by local manufacturers, importers, appliances

distributors and the retail chain

OUTCOME 4: TRANSFORM

THE LIGHTING MARKET:

PROMOTION OF ENERGY

SAVINGS LAMPS (USD 400,000)

Output 4.1: A large scale pilot project for ‘Campaign for Energy Efficiency Lamps’ completed. A minimum

of million CFLs disseminated in household, commercial and public services in partnership with Government of

Cuba and ECOWAS

Output 3.3: Energy efficiency becomes priority in the purchase of any equipment

Output 3.4: A system for the monitoring of the impact of the new energy efficiency requirement developed.

Regular updates of the legislation in order to tighten the energy efficiency requirement

Output 4.2: Financial incentives provided to pro-active local importers and traders to sale EE products

Output 4.3: Provision for the recycling of compact fluorescent lamps with the recovery of mercury

according to international best practices

OUTCOME 5: PROJECT

MANAGEMENT (USD 227,273)

Output 5.1: Project management and implementation support

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Some facts

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Challenges

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Challenges

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Challenges

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ECN - Cuban CFL project

Type of light

bulbs

Quantity

(million)

ILB CFLSavings

ILB usage (MW)

CFL usag

e (MW)

Difference

(MW)

IBL Monthly energy consum

ption (MWh)

CFL monthly energy consum

ption (MWh)

Monthly energy saved (MWh)

60>14 W

0.8 60 14 46

15.8

3.7

12.1

3,421

798

2,623

40>8 W 0.1

40 8 32

1.3 0.3

1.1 285

57

228

100>18 W

0.05 100 18 82

1.7

0.3

1.4

356

64

292

20>5 W

0.05 20 5 15

0.3 0.1

0.2

71

18

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Total 1.0

19.1 4.3

14.8

4,134 937

3,197

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ECN - Cuban CFL project

2. Estimated expenditures Naira USD i. Cost of 1 million CFLs (@ USD1.50 each) 224,717,850 1,498,119 ii. Spot survey 3,000,000 20,000 iii. Shipment and insurance 10,560,589 70,404 iv. Clearing and transportation 12,500,000 83,333 v. Publicity and Sensitization 2,500,000 16,667

vi. Distribution and installations 5,000,000 33,333 vii. Cuban experts 22,500,000 150,000

viii. Monitoring and evaluation 3,000,000 20,000 Total expenditure 283,778,439 1,891,856

3. Payback Total monthly saving 101,181,455 674,543 Investment Payback (months) 2.8 2.8

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Co-benefits of CFL project

Million of CFLs installed 1 10 30Carbon savings (tCO2e) 233,400 2,334,000 7,002,000 1. Customers benefits and cost

Annual cost of electricity saved 1,534,500 15,345,000 46,035,000 Incandescent cost avoided (USD) 1,000,000 10,000,000 300,000,000 Total 2,534,500 25,345,000 346,035,000

2. Utility benefits and costs Total MW avoided from 1 million CFLs 38.9 389 1167Cost of power station development avoided (USD) 38,900,000 389,000,000 1,167,000,000

Annual fuel cost avoided (USD) 31,600,000 316,000,000 948,000,000 Total 70,500,000 705,000,000 2,115,000,000

3. National benefits and costs Avoided capacity cost (USD) 38,900,000 389,000,000 1,167,000,000 Avoided fuel cost (USD) 31,600,000 316,000,000 948,000,000 CDM revenue (USD) 2,334,000 23,340,000 70,020,000 Total 72,834,000 728,340,000 2,185,020,000

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EnerCap

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Reducing Peak Load

Whilst the adoption of energy efficiency technologies in the west is a matter of luxury, scaling up EE in Nigeria is a matter of survival. The

opportunity cost is far too high to ignore!

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Mercury in CFLEnergy experts estimate that lighting makes up approximately 14 % of the average household's electricity account. As much as 80 % of that can be saved by replacing ordinary incandescent light bulbs with energy efficient compact fluorescent lamps (CFLs). Mercury, however, is an essential, irreplaceable element in compact fluorescent light bulbs (CFLs); it's what allows the bulb to be such an efficient light source.

This, however, raises a question about how safe and environmentally sound the use of CFLs is.

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Myth and reality

Myth: Screen savers save energy.

Myth: Turning a computer on and off frequently uses more power and damages the hard drive.

Reality: They are not designed to save energy. They help maximise your screen’s useful life. Some screen savers actually increase energy consumption.

Reality: The belief that frequent shut-downs are harmful persists from the days when hard drives did not automatically park their heads when shut off. Modern hard drives are not significantly affected by frequent shut-downs.

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Industrial Sector

Action needed from industry

Electricity usage optimisation needs to be driven by top management• Participate in a voluntary 10% energy reduction programme – some SA companies have already reduced by 10%

Identify opportunities for improved energy utilisation• Process optimisation• Technology improvements• Shift usage to off-peak periods

Participate in Eskom’s demand saving programme• Incentives available for energy savings projects• Approval lead times improved considerably

Participation in Demand Market Participation Programme• Incentives for hourly load reduction when tight system conditions prevail

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UNDP Support

Nigeria GEF Focal Point (GEF FP),Federal Ministry of Environment (FME)

Implementing Agency and Secretariat of the EESCEnergy Efficiency Unit lead by a Project Coordinator

To be domiciled at ECN

EE Steering Committee (EESC) to be Co-Chaired by FME (GEF FP) and UNDP

ECN – NERC – PTFP – NCEEC – SON – MAN – EDAN – CPC – FOTE

Terms of reference and meet at least twice a year

Policy makers and Lawmakers

Adaptive Project Management

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S & L in AfricaCountry Equipment Type

Establishment Date Type of ProgramLabeling MEPS Labeling MEPS

Ghana Room air conditioner & Compact Fluorescent Lamps

June 2005 2002 - Voluntary June 2005

- Mandatory June 2006

Mandatory

Domestic refrigeration appliances

Nov 2009 Nov 2009 - Voluntary Nov 2009


- Voluntary Nov 2009


Banning of manufacturing and importation of incandescent lamps, used refrigerator, freezers & AC

Nov 2009 Nov 2009 - Voluntary Nov 2009


- Voluntary Nov 2009


South Africa CFLs 2003 - Voluntary -Clothes Dryers - - Under consideration -Clothes Washers 2005 - Voluntary -Cooktops and Ranges/Ovens

- -Under consideration

-

Freezers 2005 - Voluntary -Refrigerators 2005 - Voluntary -Refrigerator-freezers 2005 - Voluntary -

Tunisia Refrigerators 2004 (2007) MandatoryEgypt Clothes Washers 2003 2003 Mandatory Mandatory

Freezers 2003 2003 Mandatory MandatoryRoom Air Conditioners 2003 2003 Mandatory MandatoryRefrigerators 2003 2003 Mandatory Mandatory

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Challenges

• This is a timely and strategic interventions but how to ensure continuity beyond the GEF EE project?

• Will the CFL programme in Nigeria help to reduce the peak demand and allow more citizen to gain access to electricity?

• How to empower the citizens to own the project and generate strong buy in to adopt a EE lifestyle?

• How will voltage fluctuation affect the success of the programme?

• What is the potential to replicate this programme across Nigeria and the ECOWAS region?

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Challenges

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Challenges

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Challenges

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Residential sectorAction needed from households

“If you’re not using it, switch it off.”

• Hot water heater: Switch off geysers between 06:00 and 22:00, reduce thermostat to 60degrees, insulate geyser and water pipes and replace geysers with solar waterheaters using Eskom’s rebate programme• Lighting: Replace incandescent light bulbs with energy savers, and switch off lightsin unoccupied rooms• Bathing: Shower rather than bath as less hot water is used, and install an energyefficient shower head• Climate control:• Minimise use of air conditioners by first opening windows to allow cool air tocirculate• When using an air-conditioner keep the temperature setting between 18 – 22degrees C• Insulate ceilings to keep home cool in summer and warm in winter• Pool pumps: Reduce the operating time to limit water circulation to twice a day andset the pool pump to operate between 24:00 and 05:00• Vampire appliance usage - Don’t leave appliances in standby mode. Unplug cellphone charger• Participate in the Power Alert programme on national TV (SABC and etv)

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Challenges

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Challenges

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Challenges

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Challenges

• Economic incentives: phasing out subsidies, tax credits or feed-in tariffs for renewable power

• Target economic/fiscal measures: landfill, CO2 or fuel taxes• Regulation and standards: energy efficiency standards, bio-fuel

standards and electricity market regulation• Market-based measures: green certificates and emissions trading• Research and Development (R&D) for low-carbon technologies and

demonstration projects

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Challenges

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Challenges

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Challenges

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Challenges

Overcoming barriers for the scaling up of ee appliances in nigeria

Technology

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