1. 1 UNIDO – GEF Partnership Energy Efficiency in Industry CSP Sub-regional Workshop for GEF Focal Points in Europe/CIS 14-15 April 2010, Istanbul, Turkey Prepared by: Marco Matteini Industrial Energy Efficiency Unit Presented by: Yury Sorokin Refrigeration and Aerosols Unit

2. 2 Outline  About UNIDO  Context  UNIDO Industrial Energy Efficiency (IEE) Program  UNIDO - GEF Partnership and the IEE chapter  Challenges  Lessons learnt

3. 3 About UNIDO  UNIDO’s mandate is to promote sustainable industrial development.  UNIDO is the only specialized agency promoting the creation of wealth and tackling poverty alleviation through support to industry and manufacturing sector development  Three inter-related thematic priorities:  Poverty Reduction through Productive Activities  Trade Capacity-Building  Energy and Environment Technical Co-operation areas:  Industrial Governance and Statistics  Investment and Technology Promotion  Industrial Competitiveness and Trade  Private Sector Development  Agro-Industries  Sustainable Energy and Climate Change  Montreal Protocol  Environmental Management

4. 4 UNIDO - GEF Partnership and the IEE chapter  Until Dec 2006, only three GEF Implementing Agencies: UNDP, UNEP, World Bank  UNIDO mainly Executing Agency  access to GEF funds through them. Limited exception for POPs  Dec 2006, UNIDO gets Direct Access to GEF funds  UNIDO Comparative Advantage: Climate Change, International Waters, Biodiversity,Chemicals: POPs, ODS, mercury.  Dec 2009, cumulative approvals of UNIDO projects amounting to a total of US$ 257 million

5. 5 GEF4: UNIDO/IEE Projects Portfolio 15 countries: Cambodia Ecuador Egypt India Indonesia Iran Malaysia Moldova Philippines Russia Sri Lanka Thailand Turkey Viet Nam Ukraine GEF funded projects

6. 6 Context for Industrial Energy Efficiency Potential CO 2 emission reductions from different policy options Increased nuclear Increased Renewables Power sector efficiency & fuel Reference Scenario Electricity end-use efficiency Fossilfuels end-use efficiency Policy Scenario Alternative Source: IEA 29% 13%  Industrial energy use globally accounts for –40% of electricity use –77% of coal and derivatives use –37% of natural gas use  Industry has the potential to reduce its energy intensity and emissions up to 26–32%, providing a 8-12% reduction in total energy use and CO 2 emissions 2 1,2 Source: IEA, 2006 and 2007 and 1/3 of global CO 2 emissions 1

7. 7 Why Isn’t Industry More Energy Efficient?  Policy and regulatory frameworks, including energy pricing, are not supportive  The business of industry is not energy efficiency  Facility engineers typically do not become top managers  Data on energy use of systems is very limited  difficult to assess performance  Lack of capacity to identify and evaluate performance improvements  opportunities to become more energy efficient are overlooked  Disconnection between capital and operational budgets  Investment constraints and lack of suitable financing  Others …

8. 8 UNIDO Industrial Energy Efficiency Program Focus Areas  Energy management standards  Systems optimization (steam systems, pumps systems, compressed air, refrigeration, etc.) Why? Relevant and applicable over the entire industrial sector, no matter what the technological and production processes are (IPCC 4 th Assessment Report, IEA) Energy management prerequisite for continual improvement of energy efficiency and performance in industry

9. 9 Energy Management & System Optimization Energy management standard provides: –A framework for understanding significant energy use –Action Plans to continually improve energy performance –Documentation to sustain energy performance improvements System optimization provides: –A method of assessing systems to identify energy performance improvement opportunities –Actions that can provide significant energy savings with limited capital investments –More reliable operations Energy Management + Systems Optimization = Winning Strategy

10. 10 UNIDO Industrial Energy Efficiency Program Additional Thematic Areas – Country and sector specific  Promotion, demonstration, deployment and transfer of advanced low-carbon process technologies  Promotion, demonstration, deployment and transfer of renewable energy technologies for industrial applications (solar process heating and cooling, biomass, etc. )

11. 11 GEF4: UNIDO/IEE Projects Project objective To reduce GHG emissions through improved energy efficiency in industry and the transformation of the market for industrial energy efficiency products and services. Project components: Policy support Development and establishment of:  National Energy Management Standard compatible with ISO 50001  IEE Best-Practice Information, Dissemination and Recognition Program  National IEE Monitoring and Benchmarking Program  Fiscal incentives for IEE  Others … Capacity-building  Energy Management (EM) Systems Expert Training  System Optimization (SO) Expert Training (steam, pumps, compressed air,..)  Development and provision of tools to assist industry in developing and implementing energy management and system optimization projects  Training of industry managers and engineers Pilot IEE projects  Implementation of pilot projects in selected enterprises Financing for IEE  Development of IEE investment supporting schemes in partnership with international as well as national financing institutions Example of country project

12. 12 UNIDO/IEE Projects Energy Management and System Optimization Expert Training programs time Project duration Information, Awareness and Promotion EM/EE training of enterprise personnel Provision of EE technical services to industry Development of a Market for EM/EE services to industry Implementation of EE projects in industry Capacity building on Energy Management & System Optimization Creating market opportunities for energy efficiency Post project

13. 13 GEF4: UNIDO/IEE Projects - Challenges  Fine tuning of good and effective national institutional arrangements and implementation model for development  Co-financing represents significant challenge for governments and partners in many countries  Many countries have very limited capacity to prepare GEF funded IEE projects. Significant IA assistance is required for project design and preparation. UNIDO is continuing to examine how best to provide services to country clients in a cost-efficient manner  Capitalize the knowledge creation potential of the Portfolio and ensure regional/ global sharing of information and learning experiences

14. 14 GEF4: UNIDO IEE Projects – Lessons Learnt  Leverage on existing local entities as much as possible  Build strategic partnerships and maximize synergies with other country projects and programs  comprehensive IEE projects very often goes beyond core expertise of a single GEF IA  Involve key stakeholders groups as early as possible and provide details of envisaged implementation arrangements and expectations in advance of project launch (inception workshops, critical activities)  Securing co-financing to meet GEF requirements almost always the most difficult task in project preparation. Mobilization efforts should be initiated already at the project identification stage rather than postponed to project preparation: consider delays associated with programming of funds among potential co-financiers.

15. 15 Thank you for your attention! Dolf GIELEN Chief Industrial Energy Efficiency Unit Energy and Climate Change Branch UNIDO Vienna International Centre P.O. Box 300, A-1400 Vienna, Austria Tel: 0043 1 26026 3811 E-mail: D.Gielen@unido.orgD.Gielen@unido.org For more information Georgios ANESTIS Senior GEF Coordinator Programme Development and Technical Cooperation Division UNIDO Vienna International Centre P.O. Box 300, A-1400 Vienna, Austria Tel: 0043 1 26026 4565 E-mail: G.Anestis@unido.orgG.Anestis@unido.org