3. Prior activities of FEWE Under the bilateral and multilateral co-operation, several projects to support the rational energy use in different sectors have been supported. The projects have focused on the coal to gas conversion, methane utilisation and improving the energy efficiency of the heat and hot water supply. Two projects promoting energy-efficient lighting have been successfully completed: GEF project (PELP) of the total amount of 5 million USD resulted in selling of 1.28 million energy saving light bulbs; the second project conducted by WWF (total amount of 150 thousand DM) resulted in energy consumption reduction (20- 40%) in selected schools. Concerning the energy efficient motors, the USAID provided support in 1992- 93 to undertake a national assessment of the potential of demand-side management in Poland. A part of this analysis was to estimate the energy saving potential of energy efficient motors and variable speed drives. The PCPC S.A. has provided support to FEWE, and this support has facilitated, e.g., the development of specific software for cost-efficiency analysis of energy efficient motors (EFEmotor).

4. Project’s Background Power production in Poland relies on hard coal and brown coal. 95 per cent of electric energy is generated in coal-fired power plants as well as in coal-fired heat and power stations. As a result, the share of overall carbon dioxide emission of electricity generation in the overall country’s carbon dioxide emission is high at 53 %.

5. Project’s Background Electric motor systems consume 40 to 50 per cent of Poland’s overall electric energy consumption. The share differs in the different end-use sectors: from 40-90 per cent in production sector to 20-40 per cent in the tertiary sector (i.e. in households, public services area, etc.). Manufacturing activities (35.1 per cent), electric energy, gas, heat and water supply (16.9 per cent) and households (16.6 per cent) constitute the biggest share of Poland’s total electricity consumption (which is 122,8 TWh/year).

6. Project’s Background The largest application (i.e. 60 per cent of electric energy consumption of electric motor systems) is for raising pressure and for pumping liquids and gases (pumps, fans, compressors, etc.) in the three industrial sectors: the manufacturing sector, energy, gas, heat and water supply, and in the mining industry. The technical potential for electricity savings of electric motor systems in these applications in these sectors is 3.9 TWh/year. The remaining 40 per cent of electricity consumption by electric motor systems is used for freight and person transport and for material processing. The total technical potential is estimated at 6.3 TWh/year.

7. Project’s Background The economic potential for electricity savings of electric motor systems is 5.6 TWh/year for a payback period of less than 10 years or 3.1 TWh/year for a payback period of less than 6 years. The payback period within the economic potential takes account only of electric energy cost savings, and does not consider additional costs and benefits, e.g. the reduction of water consumption, air, gases loss as well as automation and processes management, etc. Electricity savings of 6.3 TWh/year will result in a reduction of greenhouse gases (carbon dioxide) in Poland of 6.8 million ton of carbon dioxide yearly. This corresponds to 1.6 % of Poland’s total GHG emission in 1997.

8. The conclusions from this analysis are the following: The technical potential for energy efficiency improvement of electric motor systems in Poland is large in both absolute and relative terms. Energy efficiency increase could substantially reduce domestic GHG emissions in Poland, therewith supporting the compliance of the Polish commitments in the Kyoto Protocol. There is a large economic potential for energy efficiency improvements with low payback periods that meet the usual investor’s criteria. No energy efficient motors have been sold recently in Poland. Therefore, these investment face substantial barriers. In addition, a large economic potential exists with higher pay-pack period, which could be exploited by financial incentives lowering the pay-back period. The manufacturing industry, the energy and water sector, and the mining industry are key sectors, because they show the largest economic potential for efficiency improvements.

9. The objective of the PEMP To reduce domestic GHG emissions in Poland by overcoming existing barriers for increased market penetration of energy efficient motors and related efficiency improvements in the electric motor system (including variable speed drives), particularly, but not exclusively, in the manufacturing industry, the energy sector (district heating), the utility industry (water supply and sewage treatment) and mining.

10. The four programme components of PEMP Information Centre and Clearing house ‘PEMP Centre’ Demonstration projects Rebate programme Energy efficiency policy in industry

11. ‘PEMP Centre’ - description of activity Providing information Technical assistance Training Project development Development of financing schemes and mechanism Develop and monitor the rebate programme Monitor and disseminate information on the demonstration projects Support and advice the Government on policy development

12. ‘PEMP Centre’ - objectives Increase institutional and human capacity Increase awareness and provide information by creating a Centre of expertise Create a strong promoter /advocacy for energy efficient motor system

13. ‘PEMP Centre’ - barriers Lack of awareness and information Lack of financing mechanism and sources Lack of project development capacity Lack of focussed energy efficiency policy Lack of strong interest groups/advocacy of energy efficient motor systems No consideration of additional benefits of energy efficient motor systems

14. Demonstration projects Description of activity: Implementation of demonstration projects for energy efficient motor systems in different key sectors Objectives: Increase awareness and provide information Prove costeffectiveness of investments Prove technical benefits

15. Demonstration projects - barriers Lack of awareness and information High incremental investment costs for energy efficient motor systems No consideration of additional benefits Lack of monitored best practise technologies

16. Rebate programme Description of activity: Providing rebates to manufacturers of energy efficient motors in Poland Objectives: Increase costeffectiveness of investments in energy efficient motor system Increase sales and open the market Increase awareness

17. Rebate programme - Barriers Lack of financing mechanism and sources High incremental investment costs for energy efficient motors Lack of awareness

18. Energy efficiency policy in industry Description of activity: Developing industrial energy efficiency policy, particularly in the field of energy efficient motor systems Objectives: Improve policy framework Secure involvement of policy makers

19. Energy efficiency policy in industry - barriers Lack of a policy framework Lack of policy instruments Low priority of energy efficiency

20. CO 2 emission reduction and specific reduction costs of the PEMP programme