Energy Efficiency Indicators

Best practice and potential use in

policy making in developing
countries

Dian Phylipsen, ESMAP consultant

World Bank Round Table, June 3-4 2010, Washington DC P
Objective of the review
• Inform about the state of the art in development
and application of energy efficiency metrics;
• Review critical issues in using such metrics to
assess and benchmark country and sector-level
energy efficiency performance;
• Delineate implications of using such metrics to
formulate and evaluate progress of EE policies
in developing countries.
Focal areas
1. State of EE Indicators development and
application and lessons learned
2. Use of EE Indicators for design and evaluation
of programmes and projects
3. Needs Assessment for Developing Countries to
establish capacity to effectively apply EE
Indicators
4. Next steps and role of International
(Development) Agencies
1. Energy Efficiency Indicator Initiatives

• IEA Indicator project

▫ IEA Indicator database
(& publications)
▫ Plus Five Countries project
(with World Bank)
▫ (APEC project on Indicator
capacity building)
• WEC – ADEME project on
Energy Efficiency Indicators
and Policies
• Application of indicators in
World Bank‟s country reports
on energy efficiency
• (ODYSSEE project)
World Bank EE country reports
• Shows potential role indicators 0.50
toe/tcs
0.816

in policy discussions in 0.45

countries in varying stages of

SP: 1,097 toe/yr
0.40

development
SP: 1,425 toe/yr SP: 2,283 toe/yr
0.35
SP: 261 toe/yr

• Indicators used to put national

0.30
SP: 206 toe/yr
0.25

circumstances in international 0.20

SP: 891 toe/yr

context and prioritise policy 0.15

30%

attention 0.10 SP: 1,124 toe/yr

• Starting point for further 0.05

analyses of improvement
0.00

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potential, implementation
o n
Ir

Turkey _Electricity intensity Turkey Fuel intensity

Best Practice _Electricity intensity Best Practice _Fuel intensity

bariers and policy

recommendations
Lessons learned - indicators
Key observations Lessons learned
• Sufficient knowledge, • Setting up and maintaining
methodologies, tools and indicator systems in
materials for indicator developing countries will
development are available require significant time, effort
internationally and resources to strengthen
capacity, starting from data
• Developing countries mostly gathering & validation and
lack energy end use and energy balance development
activity data, limiting • International organisations
indicators to top(2) level in can play a role in this given
indicator pyramid their knowledge, local
presence and resources
Some resource indications (ADEME)
ODYSSEE resources (EU27+2) ADEME bilateral activities
• 1 Meuro/yr from European • Tunisia
Commission (for last 15 years) ▫ 7yrs cooperation with energy
• 25-30% by national energy efficiency agency
agencies ▫ 1 dedicated person
• Set of ~200 indicators, also ▫ 60 indicators, produce own
source for IEA data for EU report interpreting indicators
• Some new Member States • Algeria
capacity comparable to ▫ 2 dedicated people
developing countries • 7 Mediteranean countries
• Takes about 4 yrs to get up to (non-EU)
speed (to deliver half of the ▫ 200kEuro
indicators) ▫ 2yr project
2. Lessons learned - policies
Key observations Lessons learned
• Indicators are mostly used for • Cross-country comparisons of
focussing policy attention and success factors in policy
monitoring high-level trends, making would increase
less for policy design understanding and help
countries implement effective
• Successful policy making policy design &
requires more than the implementation frameworks
availability of good energy • Capacity strengthening on
efficiency indicators, „success interpreting indicators and
factors‟ for effective policy how to use in policy making is
making can be identified also needed
 Example of using
EEIs in policy design
& monitoring

Monitoring

Target-setting

Benchmarking
agreement in the
Netherlands
WEC – policies Regions with an energy agency

• Survey and case studies of

energy efficiency policies
• Identification of policy
indicators and success factors

Some examples of policy

indicators that help further
understanding of trends in EEIs

Regions with building standards

3. Needs assessment DCs
Experience so far suggest strengthening the capacity to set
develop and use energy efficiency indicators requires:
• Dedicated EE agency with dedicated staff
• Capacity building for staticians, analysts, policy makers and
local consultants
• Funding for capacity building and data gathering (at least in
the beginning)
• Political commitment
• Flexibility in how to participate and which type of indicators
to develop/use to accomodate political sensitivities
• Longer term perspective (several years)
• Follow-up/accompany indicator development by development
of policy & implementation framework
 Steps needed in developing countries
Development/strengthening of
• End-use data gathering procedures
E/$
• Full energy balance
Country A Sectoral • Identification of available activity
intensity data, surveys for additional data
Country B • Capacity and tools for data
Sub-sectoral
validation and filling data gaps
intensity
• Understanding of policy messages
Country
conveyed by indicators
C e.g. End-use intensity
• Framework for selecting the most
effective policy instrument
e.g. Unit energy consumption • Policy implementation framework
(success factors or policy metrics)
4. Role international organisations
• Support capacity strengthening technically and
financially
• Support capacity strengthening technically for
development of energy balances (IEA), indicator
development (IEA, ADEME, IDAs) and application
(World Bank, WEC, IDAs)
• Coordinate harmonised indicator development and
application and development of instutional set-up
• Develop a „two-directional road map‟ for indicator and
policy instrument selection
• Create synergy with other activities of international
(donor) organisations and funding
• Increase political support among governments
Potential institutional set-up and roles
Experience so far suggests a central organisation coordinating
combined with domestic participation might work best
• Central organisation could e.g. by IEA (and/or ADEME), supported
by regional groups (ADEME, APEC, OLADE, etc)
• IEA: capacity strengthening energy statistics, energy balances
• IEA, ADEME, regional organisations to support capacity
strengthening on indicator development (training)
• World Bank, WEC to support development of stronger linking of
indicators to policies and selection of indicators and policy
instruments (e.g. road map for indicator & policy selection)
• IDAs to support capacity building financially and technically, and
incorporate indicators in its operating procedures
▫ Develop institutions, systems for indicator development (w IEA)
▫ Follow-up on policy design & implementation framework
▫ Follow-up with investment support
 For further information:

P
Phylipsen Climate Change Consulting
Dian Phylipsen
Phylipsen Climate Change Consulting
Phone: +31 308 775 601
Mobile: +31 6 5580 4619
E-mail: D.Phylipsen@PhylipsenConsulting.com

Senior Associate SQ Consult

www.SQConsult.com
Energy Efficiency Indicator Pyramid
Energy efficiency Indicator use
• Historical trend analysis
• Benchmarking
▫ Cross-country comparisons
▫ Comparison with best practice
• As input to economic and technological models

• To focus policy attention and effort

• To design policy and monitor progress overtime
Crucial:
Means must match end!

Indicators must match

policy objectives and
drivers

Monitoring must match

objectives and drivers
IEA Indicator Project - development

• Data available at
disaggregated level for E/$
residential and
transport sector, Sectoral Services
intensity
increasingly for industry
• Lower aggregation level Sub-sectoral
achievable for less Industry intensity
countries
Transport
• Lower aggregation levels e.g. End-use intensity
depends more on
surveys, dedicated
Residential
analyses, not on e.g. Unit energy consumption
regular statistics
IEA Indicator project - application
• Indicators used for:
▫ Historical trend analyses
▫ Benchmarking across countries
and compared to best practice
(industry)
• No tracking of the effect of
individual policies, but overall
trends combining effects of sets of
policies and socio-economic trends
• Areas where further indicators and
data gathering are needed are
indicated
• Indicators “important to analyse
link economy – energy use –
emissions”, “particularly relevant
for targeting and evaluating energy
efficiency policies”
IEA and developing countries
Plus Five Countries Project APEC capacity building
• Gleneagles G8+5 countries: • Training workshop Sept ‟07
Brazil, China, India, Mexico, • Endorsement of IEA template
South Africa (with adjustments)
• Aim to develop a common set • 8 APEC economies have
of energy efficiency indicators energy balances, can provide
for Plus Five countries comprehensive set indicators
• Development of methodology • Proposal of priority indicators
booklet and data gathering (mostly energy, not energy
template, assessment of data efficiency indicators)
availability (started) • Development of indicators was
• Stopped because of political not feasible due to lack of
and data issues consistent data
WEC – ADEME - development
• Indicators at regional level (incl • Link to e.g. energy prices
regions China, India) • Survey and case studies of energy
• Indicators at high aggregation level efficiency policies
because of limited data availability • Benchmarking of policy indicators
for non-IEA countries and success factors
Annual taxes on cars
WEC – ADEME application
• Indicators used for trend
analyses and cross-
regional comparisons
• Energy efficiency
indicators are not linked
to policies because of
high aggregation level
• Lessons learned from
best practice policies are
identified
World bank – application
• Shows potential role indicators
in policy discussions in
countries in varying stages of
development
• Indicators used to put national
circumstances in international
context and prioritise policy
attention
• Starting point for further
analyses of improvement
potential, implementation
bariers and policy
recommendations
Lessons learned - indicators
• Energy efficiency indicator initiatives are expanding both in
geographical scope and level of detail
• Much is available in terms of experience, information,
methodologies and tools
• The more disaggregated the indicator, the more insight into
underlying drivers, allowing closing in on energy efficiency
• In developing countries, data often only available at higher
aggregation levels, limiting conclusions on energy efficiency
• WEC-ADEME shows what is achievable in developing
countries on the basis of (international) statistics
• Further disaggregation requires more dedicated surveys,
analyses and involvement of local stakeholders
• Setting up and maintaining indicator systems requires
substantial and sustained effort
Lessons learned - policies
• Use of indicators in policy mostly to focus policy attention or to
track high level (combination of) trends
• Indicators more difficult to use for policy design and monitoring
effects of individual policies (causal effect)
• All indicators can convey a policy message, effective policies require
matching indicator with appropriate message, policy objective
• High level indicators are not suitable for designing or monitoring
effects of policies that operate at lower aggregation levels
• Using indicators for energy efficiency policy design and monitoring
is easier in certain areas (industry, energy) than others
• In addition to availability of indicators, many other institutional-
regulatory criteria must be met for successfull policy
implementation
Lessons learned – developing countries
• Interest in indicators driven by different interests (self
sufficiency, efficiency, emissions), which should be
accomodated
• Data availability limits the extent to which indicators can
currently be used for energy efficiency policy design or
monitoring in developing countries
• Energy balance is main starting point for indicators, requires
further work in many developing countries
• Energy end use data and activity data are mostly lacking
• Benchmarking (and therefore harmonised indicators) are
politically sensitive, use for monitoring national trends less so
• Many international organisations are active in developing
countries, offering opportunities for synergy (support
establishing institutions, indicator systems, policy
development, investment support)
2. Indicators, programmes and projects

Indicators can be used in policy making for:

• Prioritizing and focusing of policy efforts
• Designing policy instruments, identifying the
most appropriate instrument and target-setting
• Monitoring trends and the progress towards
identified policy targets
• Monitoring the impact and efficiency of policies

Trend or causal relation?

Ideal policy cycle
• Formulation of policy objective
• Selection of most appropriate indicator to
monitor progress
• Selection of most appropriate policy instrument
• Establishment of success factors for policy
implementation (implementation infrastructure)
• Monitor indicator to assess progress to target
• Reiterate policy cycle if necessary

See discussion Road map

Policy design and implementation
infrastructure assessment
National
Currently indicators are of limited use target
for designing policies and assessing E/$
implementation infrastructure
Sectoral
intensity
Policy objectives should be SMART:
• S: Specified, as concrete as possible Sub-sectoral
intensity
• M: Measurable
• A: Acceptable
e.g. End-use intensity
• R: Realistic but ambitious
• T: Timed
e.g. Unit energy consumption
Indicator and policy should have
corresponding aggregation level