ENERGY EFFICIENCY REVIEW AND POLICY RECOMMENDATIONS

Benjamin Ogbalor & Kunle Odeyemi EverlinkSourcing Ltd

10 Zambezi Crescent, Maitama - Abuja

BY

PRESENTATION OUTLINE

1. Introduction and Background

2. Energy Challenges in Nigeria

3. Defining Energy Efficiency

4. Energy Conservation and Energy Efficiency

5. Barriers to Promoting Energy Efficiency in Nigeria

6. Recommendations for Energy Efficiency Practice and Management in Nigeria

7. Nigeria Draft Energy Efficiency Policy (Excerpts)

INTRODUCTION/BACKGROUND

Global energy needs are likely to continue to grow steadily for at least the next two-and-a half decades. If governments stick with current policies – the underlying premise of the World Energy Outlook’s Reference Scenario – the world’s energy needs would be more than 50% higher in 2030 than today, an average annual growth rate of 1.6%.

• The developing countries including Nigeria have more than 80% of the world’s population but their energy consumption amounts to only 40% of the world total energy consumption. This signal the need for creative methods of improving and optimizing energy potential

The Response to such a need therefore is ENERGY EFFICIENCY

What is Energy Efficiency (EE)

• Energy Efficiency is the goal to reduce the amount of energy required to provide products and services.

• Energy efficiency is "using less energy to provide the same service“

ENERGY CHALLENGES IN NIGERIA

• Unstable and Inadequate Power Supply

The total installed capacity is 6,000 MW.

Hydroelectric dams contribute 40%

Thermal stations contribute 60%.

The total energy currently generated in Nigeria is far below 5,000 MW.

The Electric power transmission and distribution losses (% of output) in Nigeria was 5.87 in 2009, according to a World Bank report, published in 2010. Electric power transmission and distribution losses include losses in transmission between sources of supply and points of distribution and in the distribution to consumers, including pilferage.

Electric power transmission and distribution losses (% of output) in Nigeria

In 2012, Nigeria attained the target of generating 6,000 MW while the current grid network could only carry 4,000 to 4,500 MW and in the course of evacuating the entire MW generated, the entire system collapsed. This is an indication that if Nigeria generates up to 10,000 MW, evacuation will be a problem since the current grid network will not be able support the generated power to the end-users. It is therefore important that Nigeria invests in building its capacity to distribute with grid collapse – a feat EE can assist with

Energy Demand in Economic Sectors in Nigeria

Source: www.iisd.org

ENERGY CONSUMPTION – By Sector

Energy Production (kt of oil equivalent) in Nigeria The Energy Production (kt of oil equivalent) in Nigeria was 228721.61 in 2009, according to a World Bank report, published in 2010. Energy production refers to forms of primary energy--petroleum (crude oil, natural gas liquids, and oil from nonconventional sources), natural gas, solid fuels (coal, lignite, and other derived fuels) and combustible renewables and waste--and primary electricity, all converted into oil equivalents.

• Infrastructural Challenges

Nigeria lacks necessary energy support infrastructures, for example the wide variation noticed in power supply in figure1.1 above also resulted from difference between generation capacity and facility to transmit.

• Underutilization of Energy Resources

Vast deposits of energy resources especially renewable resources that could have been harnessed for their contribution to the total energy mix are grossly under-utilized.

Energy Efficiency in Context

When you replace an appliance, such as a light bulb, refrigerator or clothes washer, or office equipment, such as a computer or printer, with a more energy-efficient model, the new equipment provides the same service, but uses less energy. This saves you money on your energy bill, and reduces the amount of greenhouse gases going into the atmosphere.

ENERGY CONSERVATION AND EFFICIENCY

• While government is investing huge resources to build more power stations to meet up with energy demand, more energy could be saved and made available.

• Experts have asserted that the country could save up to 67% of the energy spent for lighting if we replace all the incandescent bulbs in Nigeria estimated at 150 million with energy saving bulbs.

• Huge potentials to save energy are also available for other appliances such as refrigerators, air conditioners, electric motors and heating equipment.

BARRIERS TO PROMOTING EE IN NIGERIA

• Policy Barrier

• Legal and Regulatory Barrier

• Information Barrier

• Technical Barrier

• Research and Development Barrier

• Cost Barrier

• Income Barrier

• Institutional Barrier

• Market Barrier

• Governance Barrier

• Funding Barrier

• Behavioural Barrier

• Technological Barrier

• Enforcement Barriers

Governance Framework The Bureau for Energy Efficiency

3

IMPLEMENTING AGENCIY (BUREAU FOR

ENERGY EFFICIENCY)

EE ENFORCEMENT AGENCIES(SON, CUSTOMS) EE DEVELOPMENT PARTNERS

Figure 3.1 EE Institutional Framework for Nigeria

ENERGY SERVICE COMPANIES (ESCOs) APPLIANCES END USERS/ ENERGY

CONSUMERSPARTNERS

•MANUFACTURERS•IMPORTERS•DISTRIBUTION COMPANIES (DISCOs)•ENERGY AUDITORS•ENERGY MANAGERS•STANDARD TESTING AND VERIFICATION LABORATORIES

•RESIDENTIAL•COMMERCIAL BUILDINGS•PUBLIC /GOVERNMENT BUILDINGS•INDUSTRY

•INTERATIONAL DONOR AGENCIES (UNDP,GEF,ESMAP, CLAPS)•NGOs•CIVIL SOCIETIES•RESEARCH ORGANIZATIONS•EDUCATIONAL INSTITUTIONS•TRADE ASSOCIATIONS•MEDIA

Before Bureau is Set Up

3

REGULATORY AGENCY (NERC)

IMPLEMENTING AGENCY (Fed Min of Power or ECN)

EE ENFORCEMENT AGENCIES (SON, CUSTOMS)

EE DEVELOPMENT PARTNERS

Proposed EE Institutional Framework for Nigeria

ENERGY SERVICE COMPANIES (ESCOs) APPLIANCES END USERS/ ENERGY

CONSUMERS PARTNERS

•MANUFACTURERS •IMPORTERS •DISTRIBUTION COMPANIES (DISCOs) •ENERGY AUDITORS •ENERGY MANAGERS •STANDARD TESTING AND VERIFICATION LABORATORIES

•RESIDENTIAL •COMMERCIAL BUILDINGS •PUBLIC /GOVERNMENT BUILDINGS •INDUSTRY

•INTERATIONAL DONOR AGENCIES (UNDP,GEF,ESMAP, CLAPS) •NGOs •CIVIL SOCIETIES •RESEARCH ORGANIZATIONS •EDUCATIONAL INSTITUTIONS •TRADE ASSOCIATIONS •MEDIA

Nigeria Bureau for Energy Efficiency Organogram

Governing Council

Director General

Directorate

of MEPsDirectorate of Enforcement

Directorate of Planning and

Statistics

Directorate of Mobilization/

Awareness

Directorate of Finance and

Administration

Technical Advisory Committee

The Bureau will be a statutory government agency with a mandate to perform regulatory, coordinating and monitoring functions in the implementation of Energy Efficiency Policy.

• The bureau shall provide appropriate guides to various stakeholders that would be involved in energy efficiency practice e.g. SON (SONCAP), ECN, UNDP etc.

• The bureau shall publish catalogue showing appliances that are under Standard and labelling (S&L) programme .

• (Except under special circumstances ) The Bureau SHALL ALWAYS aligned Nigerian EE S&L and MEPS with the ECOWAS EE framework.

• The bureau shall develop national energy efficiency practice and ethics manuals.

• The bureau shall develop appliances testing procedure manuals.

• The bureau shall develop any materials or tools that can provide useful information to the stakeholders.

• The bureau shall update her catalogues, manuals and other relevant publications at least 1 nos time every two years.

Justification

• The financial benefits/saving that accrue from Energy Efficiency makes it worthy of attention and investment.

• Cross Cutting nature of Energy Efficiency ,Effective Coordination,Optimisation ,Sustainability and Results (One Coordinating Agency with Autonomy).

• Commercialization potential of Bureau

• Countries with demographics similar to Nigeria have agencies charged solely with Energy Efficiency

COUNTRY IMPLEMENTING

AGENCY

ENABLING MECHANISM INSTITUTIONAL MODEL

Brazil PROCEL Presidential decree (1985) Public agency

focused on EE

China Energy

Research

Institute

Energy Conservation

Information

Center

Government order (1980)

Government order (1998)

Public energy

Agency

Public agency

focused on EE

Japan Energy Conservation

Center

Japan Natural

Resources and

Energy Agency

Energy Conservation Law

(1979)

Agency reorganization

(1980)

Public agency

focused on EE

Public energy

agency

South Africa

Energy Efficiency

Agency

Government order (2006)

Agency focused strictly

on EE

Thailand Dept. of Alternative

Energy Development

and Efficiency

Energy conservation and

promotion act (1992)

Public agency

focused on EE

United

Kingdom

Energy Saving Trust

National legislation (1993) NGO focused strictly

on EE

IMPLEMENTATION FRAMEWORK

• A monitoring, inspections and compliance regime

• Education, Awareness creation and Capacity Building

• IN LINE WITH ECOWAS

• Setting Minimum Energy Performance Standards (MEPS) for a range of end user equipment and appliances;

• Mandatory labelling for all energy appliances

• Guidelines for EE best practices (in-country)

THE ENERGY EFFICIENCY POLICY

Policy Goal

• To reduce Nigeria’s energy-related CO2 emissions by mitigating the demand for energy in Nigeria’s residential and public sectors .Amongst other measures including the introduction of Standards and Labels (S&Ls) and Minimum Energy Performance Standards (MEPS for new equipment and appliances.

STRATEGIC OBJECTIVES

• To ensure energy is efficiently utilized in order to save cost for the citizens and make available sufficient energy for the consuming public.

• Strategic Market transformation from sales of non-energy efficient products to massive sales of energy saving domestic and industrial electrical appliances in Nigeria.

• To cut carbon dioxide emission and GHG in order to combat climate change challenges

• To encourage efficient energy utilization and discourage wasteful use of energy among Nigerians.

• To promote energy efficient technologies for buildings, homes and industry.

• To create employment opportunities for the citizens through interconnected activities that will be involved in the implementation of the Energy Efficiency policy. (outcome)

• To enforce mandatory labelling of home and office electrical appliances(INCLUDING APPLIANCES AND SYSTEMS IN OTHER SECTORS);

• To promote mandatory energy audit for homes and commercial or public buildings

• Institutionalisation of Energy Efficiency management in the Country

TARGETS

• Produce Guidelines on all the key components of EE by 2015;

• Enact all relevant legislation required for policy implementation by 2015;

• Nigeria to attain 60% consumption of Energy efficient lighting, Fridge, Freezers and Air conditioners by 2016 and 100% by 2020.

• Attain replacement of 40% (by 2016) and 100 % (by 2020) of old non- energy efficient appliances in Nigeria with energy efficient appliances.

• Review and improve on the recommended EE practices by 2016.

• Sustain best EE practices beyond 2025.

Other Areas Covered in Policy

• Institutional Framework for the Policy

• Policy on the Key Areas of Energy Efficiency Practices

• Policy Implementation Strategies

• Roles and Responsibilities of Stakeholders

• Funding Mechanism

• Proposed Nigerian Minimum Energy Performance Standards for some end-user appliances

Thank You