Latin America and the Caribbean Energy Efficiency Program

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Latin America and the Caribbean Energy Efficiency Program.National Energy Efficiency Institution: A Proposal for Jamaica Fitzroy Vidal: Senior Director for Energy

Ministry of Energy and MiningKingston, Jamaica. Wednesday, August 3rd, 2011

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Objective for the PALCEE Program in Jamaica.

The central objective is the strengthening of the institutional framework in the region to facilitate the implementation and operation of energy efficiency policies that guarantee long term activities and permanent results.

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Ministry of Energy and Mining. The Ministry of Energy and Mining has the mandate to drive policy creation and

implementation, research and development in the energy and minerals sectors for sustainable national transformation.

The energy main subjects are the following: Development of Energy Resources Energy Policy Gas and Oil Light and Power Petroleum Refinery Haulage, Storage and Distribution Rural Electrification  

DEPARTMENTS/ENERGY Electricity Authority Petrojam/Ethanol Company Limited Petrojam Limited Petroleum Company of Jamaica Petroleum Corporation of Jamaica Rural Electrification Programme Wigton Windfarm Limited  

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Energy consumption. Jamaica’s extreme dependence on imported petroleum has significant economic

impacts, with 87% of the nation’s foreign exchange earned being used to buying imported oil.

Jamaica currently consumes about 60,000 barrels of oil per day to meet its diverse needs

This imposes a burden on the country’s economy and balance of payments, especially when the price of oil rises on the world market.

Outdated and degraded electricity generation facilities with a low efficiency output provide an opportunity for energy efficiency improvements.

High prices in oil and electricity may prove to be an opportunity to finance energy efficiency equipment at different levels.

Extensive campaigns aimed at behavior change (education of school children, for example) or market transformation (compact fluorescent lamps replacing incandescent light bulbs) may provide results in the short term.

Replacement of other residential equipment or industrial machinery may prove to provide rapid results as well.

Petroleum Consumption by Activity, 2008Source: Ministry of Energy and Mining

21%

14%

7%

0%23%

30%

0%

3%

1%1%

0%Road & Rail Transportation

Shipping

Aviation

Cement Manufacture

Electricity Generation

Bauxite/Alumina Processing

Sugar Manufacturing

Cooking and Lighting

Petroleum Refinery

Other Manufacturing

Other

Global Oil Price Trend and Projections, 1991 – 2030 Source: EIA Annual Energy Outlook 2010, DOE/EIA-0383 (2010)

projected

actual

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Energy policies. The Ministry of Energy and Mining of Jamaica issued, in October 2010, a document entitled: “National Energy Conservation and Efficiency Policy

2010-2030. Securing Jamaica’s Energy Future.” This Policy Paper aligns Energy Conservation and Efficiency with the Goals of the National Energy Policy. The Policy Paper also presents its own four goals for Energy Conservation and Efficiency and includes key actions and strategies. This document recognizes the importance of the various stakeholders and presents a list of programs and projects to be developed under this

policy. The document also presents a list of Members of the Policy Working Group.

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Energy Conservation and Efficiency Goals.Jamaica’s Energy Conservation and Efficiency Policy.

Energy Conservation and Efficiency GoalsGoal 1 Households and businesses aggressively and

continuously adopt energy conservation and efficiency practices towards reducing Jamaica’s carbon footprint

Goal 2 An enabling environment buttressed by dynamic legislation and regulations that facilitates the promotion of energy conservation and efficiency

Goal 3 The Government of Jamaica is the leader in energy conservation and efficiency and sets the standard for all other sectors

Goal 4 Jamaica has modern and efficient energy plants

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Basis for the Analysis of the Energy Efficienty Institutional Framework.

The Analysis of the Institutional Framework in Jamaica has been enhanced considering the opportunities for the establishment of an institutional framework. The analysis has been made considering different options for the creation of a National Energy Efficiency Authority and the programs that may be trusted to such an structure. The design of such entity must be based on the Energy Conservation and Efficiency Policy. The Legal and Institutional Framework must be designed so that this structure can promote and institutionalize Energy Efficiency at the level of different stakeholders in different sectors. The model of a Inter-Agency Commission that may be coordinated by the Ministry of Energy and Mining may be analyzed as an option for Jamaica. This would imply the participation of various

public and private partners in this effort.

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Institutional models.Distinct Institutional Model.

Advantages Limitations

Government agency focused on EE only – •Thailand: DEDE •Brazil: PROCEL

•There is opportunity to create a pro-EE agency culture. • It is easier to attract dedicated staff and dynamic management.• There is possible leveraging of other resources (e.g., GEF, donors).

•Narrower focus provides less clout. • Success is highly dependent on effective top management. • Agency may not be isolated from broader energy policy agenda. • Agency must compete for resources.

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Behavior change and market transformation. As it was previously discussed, industrial, commercial and residential sectors are energy consumers and the aim of the institutional framework is to create conditions for change in the actions of the society. Change of behavior can be as simple as remembering to turn off the lights when they are not in use or as complex as the decisions that may be taken in an engineering project. The aim is to provide elements and conditions that will help all members of society to take the path of energy conservation or energy efficiency as the opportunity arises. Market transformation is a key element since most energy consumers follow patterns that are based on their specific lifestyle. Energy efficient technologies can provide energy savings respecting (or even improving)

the expectations of comfort, safety and quality of the energy consumers. Transformation towards a market of energy efficient equipment and services will provide environmental and economic advantages.

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Three areas of activity. The internal organization of the Austrian Energy Agency may teach a lesson that could be followed for the design of Jamaica’s National Energy Efficiency Office. This basic concept for the internal organization is similar to that of several Energy Efficiency both in Europe and Latin America. A circle is created starting with data analysis and planning for energy efficiency projects and programs. A second element is the technical consulting that enhances the quality of the actions and provides details and specifications to the projects and programs. A third element is the implementation of energy efficiency actions. The circle brings us back to monitoring the performance and thus data analysis and planning.

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Energy Efficiency Structure: Internal organization based on three areas of activity.

Analysis and PlanningConsulting and Technical SupportImplementation

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Sectors with energy efficiency opportunities.

Energy Efficiency

Standards and Labels

(Mandatory)

Standards and Labels (Voluntary)

Heavy Industry (Bauxite/Alumina)

Small and Medium Size Industries

Energy Industry (Generation,

Transmission and Distribution)

Transportation (Road and Rail)

Government Buildings

Commercial Buildings (Offices,

Hotels, Stores)

Residential Sector

Public lighting and other services

Home builders

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Institutional Energy Efficiency Framework.

Organized Society

Functional Structure

Inter – Agency Committee

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National Energy Efficiency Office.

Technical and Consulting

Coordinator.Implementation Coordinator.

Administrative and Financial Coordinator.

Analysis and Planning

Coordinator.

Energy Efficiency

Coordinator

Energy Efficiency

Committees

Public – Private

Partnerships

Industry: Equipment

and Services Providers

Energy Efficiency

Loan Programs

and Financial Schemes

Board of Directors

BasicStructure

Agents of acceleration and implementation

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Board of Directors.

President of the Board. His

Excellency the Minister of Mines

and Energy

Ministry of Transport and Works

Ministry of Industry

Commerce and

Investment

Ministry of Finance and the Public

ServiceMinistry of

Planning and Development

Office of the Prime Minister (Environment

al Management

Division)Ministry of Education

Honorary President of the

Board. His Excellency the Prime Minister

Ministry of Water and Housing

Ministry of Mines and Energy.

Minerals Division (Bauxite)

Ministry of Mines and Energy.

Energy Division (Oil)

Ministry of Mines and Energy.

Energy Division (Electricity)

Energy Efficiency

Coordinator.Not a Board

Member

Ministry of Foreign

Affairs and Foreign Trade

Ministry of Agriculture

and Fisheries

EconomicDevelopmentCommittee

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Energy Efficiency Coordinator.

Candidate presented by the Minister of Mining and Energy and ratified by the Members of the Board of Directors. The Energy Efficiency Coordinator is not a Board Member. He reports to the Board. His function in the Committee is to inform, make proposals and take the necessary actions to fulfill the agreements taken by the Board. He is the Head of the National Energy Efficiency Office. He is the general coordinator of energy efficiency actions. He represents the Office in funds, partnerships and budget meetings. He is the spokesman for energy efficiency in Jamaica.

- Equipment replacement programs.- Support for energy efficiency committees at various sectors.- Implementation of energy efficiency actions in various sectors.

National Energy Efficiency Office.

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- Energy efficiency labels and standards.- Consulting and technical support on energy efficiency programs for various sectors.- Technical information to support programs.

Technical and Consulting

Coordinator.Implementation

Coordinator.-All administrative functions required for the operation.- Legal support.- Support for financial schemes and programs- Operation of public private partnerships.- International resources

Administrative and Financial Coordinator.

- Data analysis- Performance review and monitoring- Information reports- Planning- Design of new initiatives.- Relation with other GoJ initiatives.

Analysis and Planning

Coordinator.

- Establishment of partnerships and collaboration with various stakeholders-Relation with Ministries and Members of the Board of Directors- Promotion of energy efficiency awareness- Represents the National Office in trust funds, loans, budget and other initiatives. - General coordination- Spokesman for Energy Efficiency

Energy Efficiency

Coordinator

-The Energy Efficiency Coordinator is responsible for fulfilling the Agreements of the Board of Directors.-In the initial phases, the Coordinator will have to assume the functions of one or more of the coordinators. As the Office provides results, it will grow into a robust agency.- The compact structure will support the deployment of Energy Efficiency in various sectors.

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Agents of acceleration and implementation. Finally, the key to the success of the energy efficiency efforts: the involvement of society. Various schemes can be used to promote the participation of stakeholders in energy efficiency.

Energy efficiency sub-committees that report to the Board of Directors. These sub-committees could be Presided by the Energy Efficiency Coordinator and provide a space for the discussion and exchange of ideas in various sector. Examples: The Public Buildings Sub-Committee, or the Hospitals Sub-Committee.

Specific committee could be organized for institutions: “The Energy Efficiency Committee for the University of the West Indies Hospital.” The National Office would generate information so that such committees could operate. Public private partnerships in which the Government participates with private entities in order to accelerate the implementation of energy efficiency actions. Example: Schemes similar to the exchange of Energy Efficiency Domestic Appliances in Mexico. The participation of industry with energy efficient equipment and services.

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Energy Efficiency Loan Programs. Successful experiences can be found using micro loans programs for energy efficiency. The concept is similar to that of an Energy Savings Company: A small loan is provided to an energy consumers. As savings are produced, the cash flow for repayment is created. Low cost equipment with a high energy consumption are better for such an scheme, as the repayment time is shorter. Partnerships, investment and agreements with financial institutions cab be developed in order to accelerate an equipment replacement program. Lighting equipment, refrigeration, cooking and other similar equipments may be in the range of such a program. Using this kind of schemes for the residential sector also brings advantages in lifestyle to the population. Specific programs can be designed for small and medium size companies.

January 2011M.E.M. - Energy Division

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Priority “Next Steps” Projects Implementation

Establishment of Energy Efficiency Office Energy Security and Efficiency Enhancement Project Public Sector Energy Efficiency Technical Assistance Public Sector Energy Efficiency Investment Project Low Carbon Road Map and Carbon Mobilization Hotel Energy Efficiency (CHENACT – 2) Capacity Building Programmes

Ongoing Review of Policy and Regulatory Framework

Comprehensive Communicationand Public Education Programme