Www.perspectives.cc · [email protected] NAMA Design Concept for Energy-Efficiency Measures in the Mexican Residential Building Sector Presentation at

www.perspectives.cc · [email protected]

NAMA Design Concept for Energy-Efficiency Measures in

the Mexican Residential Building Sector

Presentation at UNEP-WB-UNFCCC Workshop

14 March 2011

Sonja Butzengeiger

Perspectives GmbH

*a project of Thomson Reuters

Point Carbon Global Advisory


Our clients

The Ministry of Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales, SEMARNAT)

The National Housing Commission (Comisión Nacional De Vivienda, CONAVI)

Project team: Stefan Wehner, Matthias Krey, Axel Michaelowa, Fernanda Gusmao (PCA), Nelson Sam (PCA)


Objectives

Aim of the assignment

- Develop a supported NAMA concept for EE in residential housing in Mexico

that can enhance the impact of Mexican CC Programme (PECC)

- that takes into account Mexican development priorities

- that is attractive for donors to support further

- Present at the UNFCCC level as a pilot NAMA

Scope NAMA

- Up-scale existing support programmes in housing sector

- Supportive actions

Mexican ambition: Implementation and operation of NAMA from 1st half 2012 onwards


Approximately 50 million Mexicans live in poverty…


…of which 80% have no access to sufficient funds to build appropriate homes and houses


Mexico has a considerable challenge to address

Mexico’s population growth and demography creates pressure to expand housing construction rapidly - Population will increase from 103.1 million in 2005 to 127.2 million in 2030

and 129.6 million in 2050.

- 0.5-0.6 million new houses to be constructed annually until 2020/30

- 70% expected to live in urban areas

Mexico committed to reduce its greenhouse gas (GHG) emissions by 50.65 MtCO2e until 2012 under the Mexican Programa Especial de Cambio Climático 2009-2012 (PECC)

Additional emission reduction of 30% reduction with respect to BAU until 2020 are committed conditional to support

5.53 Mt reduction by 2012 are attributed to the residential, commercial and municipal sectors


Status and trends current programmes

„Ésta es tu casa“ Programme- Subsidiy programme by

CONAVI - Minimum EE requirements =>

subsidy for house owner (<4 mw)

- Goal: 95,000 households annually until 2030

Green Mortgage (Hipoteca Verde)- Use of CONAVI requirements - Goals: 6% of existing housing stock

by 2020- 2 million new houses by 2020

(= 10% increase per year)- Extension plan:

- Extension to higher income classes

- Minimum energy cost saving goal depending on wage class

- Model for technology choices depending on cost saving goal in preparation

Impact: 0.96 t CO2/house/year (based on INFONAVIT* survey)

*Instituto del Fondo Nacional de la Vivienda para los Trabajadores (Infonavit)


NAMA could enhance GHG impact

The NAMA aims to enhance GHG emissions reductions through the “Green Mortgage” and "Ésta es tu casa" .

Following steps define the incremental enhancement through NAMA:- increased penetration (more houses covered during the same

time) and/or- technology up-scaling (more ambitious efficiency standards

and/or inclusion of technologies that are currently not covered).


Scaling-up options from 2012-2020 under NAMA

Scenario 1 – increased penetration 2020- Broader participation with 100% saturation in 2020 with Green Mortgage

Scenario 2 – increased penetration 2013- Rapid broader participation with 100% saturation in 2013 with Green

Mortgage

Scenario 3 - Technology up-scaling- Potential contribution of technology options (individual and in total)

– Refrigeration, AC/insulation and PV

Scenario 4- Combination of Scenarios 1 and 3: 100% saturation by 2020 and

technology up-scaling


Technology options for scaling up I

Solar water heating (SWH)

- Already required in CONAVI’s minimum requirements

- Limited potential for up-scaling

EE water use appliances

- Already required in CONAVI’s minimum requirements

- Limited potential for up-scaling (covered by SWH)

Lighting

- Compact fluorescent light (CFL) already required in CONAVI’s minimum requirements

- Limited potential for up-scaling (LED not market ready world wide)


Technology options for scaling up II

Refrigeration- Currently NOT covered under CONAVI’s minimum requirements

- ER potential on (i) electricity use (ii) HFC-134a refrigerant replacement

- ER potential can be determined based on INFONAVIT survey and own calculation

- Electricity use: 0.2 tCO2/house/year

- HFC-134a replacement: 0.04 tCO2/house/year

Air-Conditioning- Currently NOT covered under CONAVI’s minimum requirements

- ER potential on energy use/interdependent with thermal insulation for reduction of cooling demand

- ER potential can be determined based on recent INFONAVIT survey and own calculation

- Electricity use: 0.26 tCO2/house/year

- HCFC-22 to HC refrigerant change: 0.05 tCO2/house/year


Technology options for scaling up III

Photovoltaic (PV)

- Currently NOT covered under CONAVI’s minimum requirements

- ER potential through own power generation (deemed as savings through

net metering)

- ER potential can be determined based on own model

- 0.23 tCO2/house/year assuming 200 W installed capacity per house

- = +25% ER compared to current 0.96 tCO2/house/year


Abatement costs for technology scale-up options

-40

-20

0

20

40

60

80

100

120

PVRefrigerator

with refrigerant change without refrigerant change

AC

€/tCO2

99 €/tCO2

Abatement costs estimation based on current costs

-13/-15 €/tCO2-22/-26 €/tCO2

Incremental investment costs, O&M, 8% interest rate


Marginal cost curve and NAMA elements

Mitigation

cost

Credit price

UnilateralNAMAs

SupportedNAMAs

SupportedNAMAs

CreditedNAMAs

Mitigation

volume

AC, refrigerators

PV

NAMA crediting alone may not be sufficient for financing PV


All scenarios show substantial emission reduction benefits over time

0

5

10

15

20

25

30

Scenario 1 Scenario 2 Scenario 3 Scenario 4

MtCO2 Emission reduction potential until 2020

8 MtCO2

27 MtCO2

5.5 MtCO2

16 MtCO2

Graph shows ER that are additional to baseline roll-out (11.7 Mt CO2 until 2020)


Comparison of ER to the baseline under each scenario

Scenario 2 - increased penetration100% saturation rate by 2013

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

MtCO2/a

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Cumulative

MtCO2/a

Scale up (million tCO2/a)

Baseline (million tCO2/a)

Cumulative reduction (million tCO2/a)

Scenario 1 - increased penetration100% saturation rate by 2020

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

MtCO2/a

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Cumulative

MtCO2/a

Scale up (million tCO2/a)

Baseline (million tCO2/a)

Cumulative reduction (million tCO2/a)

Scenario 4 - Technology up scaling and increased penetration (100% saturation 2020)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

MtCO2/a

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Cumulative

MtCO2/a

Baseline Scenario 1 up scale (million tCO2/a))

Photovoltaic (PV) Air conditioning (energy efficient and HCFC free)

Refrigerators (energy efficient and HFC free) Cumulative reduction (million tCO2/a)

Scenario 3 - Technology up scaling

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

MtCO2/a

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Cumulative

MtCO2/a

Refrigerators (energy efficient and HFC free) Air conditioning (energy efficient and HCFC free) Photovoltaic (PV) Baseline (million tCO2/a)Cumulative reduction (million tCO2/a)


Supportive and administrative actions

Supportive actions

- Buildings codes: Promotion of adoption and enforcement; pilot

with a state

- Capacity Building

- Marketing campaign

- Linking the urban planning programme “DUIS” and subsidy progr.

“Ésta es tu casa” and Green mortgage requirements in order to

achieve a more holistic approach

- Institutional design


Financial requirements I

Scenario 1 would require a cumulative incremental subsidy volume for the Green Mortgage of USD$ 3.1 billion until 2020.

Scenario 2 would require US$ 7.4 billion until 2020

Scenario 1 - Increased penetration100% saturation rate by 2020

0

2,000

4,000

6,000

8,000

10,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Inve

stm

ent

nee

ds

(mill

ion

pes

os)

05,00010,00015,00020,00025,00030,00035,00040,000

Scale up green mortgages Cumulative

Scenario 2 - Increased penetration100% saturation rate by 2013

0

2,000

4,000

6,000

8,000

10,000

12,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Inve

stm

ent

nee

ds

(mill

ion

p

eso

s)

0

20,000

40,000

60,000

80,000

100,000

Scale up green mortgages Cumulative


Financial requirements II

For Scenario 3, the total incremental financial requirement is in total US$ 2 billion until 2020

Scenario 4 would require cumulative investment needs until 2020 of US$ 6.7 billion

-40% would be necessary for PV and about 47% for the broader participation

Scenario 3 - Technology up scaling

0

500

1,000

1,500

2,000

2,500

3,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Inve

stm

ent

nee

ds

(mill

ion

pes

os

per

yea

r)

0

5,000

10,000

15,000

20,000

25,000

30,000

Cu

mu

lati

ve

(mill

ion

pes

os)

Refrigerators (energy efficient and HFC free)

Air conditioning (energy efficient and HCFC free)

Photovoltaic (PV)

Total Scanario 3 cumulative

Scenario 4 - Technology up scaling and 100% saturation by 2020

02,000

4,0006,0008,000

10,00012,00014,000

16,00018,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Inve

stm

ent

nee

d

(mill

ion

pes

os

per

ye

ar)

010,000

20,00030,00040,000

50,00060,00070,000

80,00090,000

Cu

mu

lati

ve

(mill

ion

pes

os)

Refrigerators (energy efficient and HFC free)

Air conditioning (energy efficient and HCFC free)

Photovoltaic (PV)

Scenario 1 up scale

Total cumulative costs for Scenario 4


Associated monetary benefits and investments estimations under scenarios 3 & 4

Long term savings possible Monetary benefits on two levels:

(i) the house owner (electricity costs, assumed net-metering), and

(ii) the Mexican government (saved subsidies on electricity tariffs)

Current price/cost ratio for household electricity tariffs in Mexico approximately 0.41, i.e. government subsidises roughly 60% of electricity costs

Monetary benefits under the NAMA concept could be shared differently and used to finance the investments

Overall - Scenario 3

-4,000

-2,000

0

2,000

4,000

6,000

8,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mil

lio

n P

eso

s

Total subsidies saved Total savings households

Total investment Net costs/benefits

Overall - Scenario 4

-10,000

-5,000

0

5,000

10,000

15,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Mil

lio

n P

eso

s

Total subsidies saved Total savings households

Total investment Net costs/benefits


Financing opportunities

Multilateral financing of the NAMA concept rather unlikely in the short term due to the time-requirements for finalizing NAMA rules on UN-level

Finance through bilateral cooperation for the next steps of NAMA implementation should be sought

- Due to the ambitious timeline for NAMA implementation and operation (start 1st half 2012)

- As long as uncertainty prevails on the multilateral level

Several financing mechanisms and actors involved with different interests

Creation of a NAMA fund which will centralize all the financial resources

from donors, the private sector and the Mexican government


Overview of the proposed NAMA fund

Cred

its/

inte

rest

rate

s

Loans (& subsidies)

Housing Developers

House Owners

Public -Private Fund

Investment Board

MRV data

Mexican Government

Private Sector

International donors/IC Governments

Investment decisions

“Esta es tu casa”subsidy ($)

($)

NAMA support ($)

House project

($) ($) ($) ($) ($) ($)

Credits

Energy savings

Carbon market

IC Governments

($)

Credits

Banks

Loan

($)

Institutional investors

Coordinating Entity

inte

rest

rate

s

Mor

tgag

e pa

ymen

ts/

inte

rest

rate

s

i.a. Donors,

CONAVI, institutions


Monitoring, reporting and verifying (MRV)

MRV framework for the NAMA should be based on direct GHG emissions monitoring- introduction of energy performance benchmarks and/or

minimum appliance standards based on whole-building energy performance

- boundary should be the houses through the whole building approach

- whole building approach would also allow inclusion of renewable energy technologies (e.g. SWH and PV)

- benchmarking is the most appropriate approach to the whole-building


Key data requirements for the Mexican NAMA

Data to monitor Type of monitoring

Electricity consumption Direct and continuous metering of electricity consumption (including generation from PV). If available, utility billing records can be used.

Emission factor of the grid electricity As per CDM Tool to calculate emission factor for an electricity system[1], or use published data.

Transmission & distribution loss Data from utility or an official government body.

Fuel consumption Direct and continuous metering of fuel consumption. If available, utility billing records or fuel purchase invoices can be used.

Net calorific value of the fuel Values provided by the fuel supplier in invoices, own measurement, or regional or national default value.

CO2 emission factor of the fuel Values provided by the fuel supplier in invoices, own measurement, or regional or national default value.

Refrigerant leakage from refrigerators and air-conditioners

IPCC default value or manufacturer specifications.

Gross floor area of a building unit Building plan, or onsite measurement.[1] http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-07-v2.pdf.


Possible MRV indicators for supportive actions

Supportive Action MRV Indicator

1: Institutional set-up and NAMA administration

- Development of data collection system for MRV (database)- Establishment of inspection and supervision system of new houses built under the NAMA- Survey of house of realised GHG emission reductions (annually)

2: Enforcement of mandatory building codes

- Number of federal states adapting and enforcing mandatory building codes- Performance of the Verification Units (VUs)

3: Transformation of Green Mortgage programme into a country-wide holistic urban planning and building code framework

- Number of developments and updates of norms and standards for enhanced building codes by CONAVI (including urban planning process integration in building codes/programme requirements)- Number of supportive dialogues towards a policy for sustainable housing for Mexico

4: Capacity building - Number of certified architects, engineers, constructors and installers for sustainable housing design and technology- University Curriculum: Number of professors, Number of studies and reports, Number of graduated students (Master and PhD)- Development of technology database for the housing sector and updates

5: Marketing & Advertisement

- Implementation and operation of webpage- Number of TV spots, radio spots and newspaper advertisements


Next steps

“Phase 2”: 2011-2012- NAMA concept and the underlying GHG reduction programme

will need be further detailed, refined and developed into a full and implementable programme

- encompassing final legislative, institutional, financial and GHG accounting frameworks

- Programme Office for implementation needs to be dedicated - NAMA implementation and operation, possibly before the end

of 2012.

Mexico will require further support from donors to enter into “Phase 2” of the NAMA development.


Thank you!

Sonja Butzengeiger

Perspectives GmbH

[email protected]

+49 179 457 36 16

www.perspectives.cc

Documents

Www.perspectives.cc · [email protected] NAMA Design Concept for Energy-Efficiency Measures in the Mexican Residential Building Sector Presentation at