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The Race To Slash Energy Consumption

With rising levels of energy consumption and forecasts of an increase in peak electricit y demand by 12% for 2012, energ y reduction is the top priorit y in the UAE. But it is no longer merely a matter of a political debate , but poses a challenge to the entire energy circle, argues Hans Altmann.

| | Jul 30, 2010 | 3:10 pm
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With rising levels of energy consumption and forecasts of an increase in peak electricit y demand by 12% for 2012, energ y reduction is the top priorit y in the UAE. But it is no longer merely a matter of a political debate , but poses a challenge to the entire energy circle, argues Hans Altmann .

The energy industry in the UAE has deployed a number of measures to cut down energy consumption at various levels. It has assumed the position of top priority in the capital. Government initiatives have called for a reduction in the current peak demand by 622 megawatts, thereby achieving capital expenditure savings worth Dh500 million. The plan is to achieve this through a series of policies directed at businesses as well as end-consumers. Businesses, specifically developers, will be asked to follow certain energy efficiency standards for constructing buildings as well as for using specified cooling equipment and energy appliances. Endconsumers are expected to benefit considerably from these measures over the long term. While the Emirates has proposed to help boost energy efficiency at these diverse levels, residents and businesses would want to consider the current approaches carefully.

CURRENT ENERGY CONSUMPTION – FACTS AND FIGURES

Given that a country’s energy consumption is correlated to its gross national product (GNP) and its climate, there are apparent differences between developed and developing countries, in terms of their respective energy use. Energy consumption is the highest in the United States, with a yearly average of 11.4kW (Kilowatt) per person, compared to Japan and Germany, with 6kW. Developing countries with a tropical climate, such as India have an energy use of 0.7kW per person.

In the UAE, statistics covering all the emirates has not yet been published. The numbers for Abu Dhabi, however, show that a typical resident consumes on an average 41kW of electricity per year. Considering the different standard of living, such as size of the house and property (Arab houses and properties being bigger than those of the Americans), and the number of members in a household (Arab families are typically larger than American families, and also include domestic staff), the difference should be great. Yet, the variation doesn’t seem huge and might imply a case of over-consumption in the Emirate – typical of a high-income developing economy, as classified by the International Monetary Fund (IMF).

A recent guide on international energy outlook by the Energy Information Administration (EIA) states that developed regions, such as North America, Europe, parts of Asia (Japan and South Korea), Australia and New Zealand account for the largest share of current world energy consumption. However, the situation is expected to change, with a rapidly growing energy demand in emerging economies, such as in Asia, Africa, the Middle East and Central and South America.

In 2006, 51% of world energy was consumed in developed economies, but in 2030 their share is expected to fall to 41%. Developing countries, however, will require more energy. The EIA guide confirms that energy consumption for the Middle East is growing, and is expected to increase by 36% from 2010 to 2030.

The use of electricity, specifically, is projected to account for an increasing share of the world’s total energy demand, and is considered the fastest growing form of enduse energy worldwide in the mid-term.

Since 1990, growth in net electricity generation has outpaced the growth in total energy consumption, with 2.9 per cent per year for electricity and 1.9 per cent per year for energy. Thus, it is evident that the growth in demand for electricity continues to outpace growth in total energy use.

The developing countries consumed 45% of the world’s total electricity supply in 2006, and their share of world consumption is expected to increase. In 2030, the estimate allocates 58% of world electricity use to developing countries with an increase in the Middle East, due to strong economic growth, which translates into growing demand for electricity.

FEDERAL MEASURES

Currently, various means are being pursued for introducing energy-efficient measures, including ways of reducing CO2 emissions, the introduction of green building standards, the opening of IRENA and awareness campaigns targeted at end-consumers.

Reducing CO2 emission:

The UAE is known to have one of the highest per capita emission rates in the world, with CO2 emissions having increased from 60,809,000 tonnes in 1990 to 94,163,000 tonnes in 2002. A recent development project on behalf of the Abu Dhabi Water & Electricity Authority (ADWEA) indicates that steps are being taken towards reducing the carbon dioxide emission rates. For example, due to implementation of advanced technology and transition to the use of natural gas in power plants, emission of CO2 per capita has decreased. In 1990, the UAE emitted 32.6 tonnes of CO2 per person per year, making the UAE the fourth on the top emitter per capita global ranking list.

Among the various measures that are being implemented by ADWEA to reduce emission rates is, monitoring of carbon emissions, air quality in the vicinity of power plants, natural gas fuel consumption, plant efficiency and system upgrading. In addition, a multi-phased approach to technology selection has been adopted in order to encourage and support renewable energy companies to produce five to seven per cent of the required power capacity.

Green building standards:

The Abu Dhabi Urban Planning Council has adopted a policy geared towards the long-awaited green building standards. According to the Plan Abu Dhabi 2030 (Urban Structure Framework Plan), developers should pursue green building standards for design and construction that responds to the local climate, and is based on sustainable building practices (for example, solar orientation, xeriscaping, life cycle materials), and create an Abu Dhabi Green Building Council to this end, in cooperation with the Environmental Agency. With this initiative, the Urban Planning Council has introduced the country’s first efficiency standards on buildings, which will later target appliances and air conditioning to abolish devices that are not energy inefficient, within a few years.

BREEAM and LEED

For the uninitiated, BREEAM stands for the BRE Environmental Assessment Method, and was invented by the Building Research Establishment (BRE), a building research organisation funded mainly by the government. Based in the UK, this organisation seeks to provide relevant research and information to the building industry about what kind of methods would best support environmental protection and sustainable development. BREEAM assesses the performance of buildings in: overall management policy, operational energy and carbon dioxide issues, and air and water pollution issues.

LEED was set up in the US and is run by the US Green Building Council (USGBC). According to the USGBC, LEED is responsible for the following activities: defining green building by establishing a common standard of measurement, promoting integrated, whole-building design practices, recognising environmental leadership in the building industry, stimulating green competition, raising consumer awareness of green building benefits, and transforming the building market.

The two methods differ mainly in the process of certification. With the BREEAM method, companies have to go via a trained assessor, who evaluates the credit criteria and issues the certificate afterwards. LEED does not require training, but there is a credit available if an accredited professional is used, who advises the client on the assessment of the certificate. Both schemes share common components. Early involvement of the assessor or accredited professional at the design stage is beneficial to the project and the final rating. Both methods drive the market to improve building design and their judging criteria, and also keep pace with legislative developments and current best practice.

IRENA

Abu Dhabi has invested considerable resources to be chosen as the interim headquarters of IRENA, the International Renewable Energy Agency. Since June 2009, Abu Dhabi has become home to this internationally recognised entity, that aims to promote widespread and increased adoption and sustainable use of all forms of renewable energy. With this, Abu Dhabi has acquired the credibility to act as a global voice for renewable energies, to facilitate access to all relevant information and to share experience on best practices related to policy frameworks and energy efficiency measures.

With the presence of this global organisation, the emirate sets measurable milestones on finding other sources of energy against the backdrop of increasing levels of energy consumption.

Targeting the residential sector

The residential sector consumes the most amount of energy, with 70% of electricity used for cooling homes, and thereby represents the greatest opportunity for energy savings. Making residential houses more energy efficient and educating residents about more energy-conscious practices can help savings up to 25%. With smart metering devices and subsequently, consumptionbased billing, consumers can measure their cooling energy consumption clearly. Studies on and measuring of energy consumption in various European countries have led to the same result: over time, consumers understand where and how much they actually consume energy and act accordingly.

A recent study by McKinsey states that the incremental investment to make 129 million US homes (with appliances, devices and upgrades) more energy efficient would be $229 billion, which would lead to savings of $395 billion. For this, an initial investment is required, and a typical retrofit would cost $1,500 absorbing 30% of annual discretionary spending.

Here, the question is not how much to invest and how much we can save, but who bears these costs and implements these measures. There are, indeed, challenges that might discourage the endconsumer and the developer, but clear measures at the federal level will outweigh the costs. A series of measures should be implemented to realise savings on both the consumer’s wallet and the globe’s energy resources.

These views, I must add, are in line with McKinsey’s study, recommending countries to introduce a comprehensive energy policy that is directed at various levels: the residential sector, to implement energy-efficient devices and appliances and to educate consumers to become more energy-conscious; the commercial sector, to make buildings and office devices more energy efficient; and the industrial sector, to optimise energy-consuming support systems, such as motors, buildings, and steam systems. It is more likely that the implementation of these series of measures will make consumers and businesses more aware of the importance and profitability of changing their energy consumption patterns.

BARRIERS

The options available to reduce the UAE’s energy consumption confuse both policymakers and management alike. Reducing CO2 emissions is a timeconsuming process, and often presents business risks with associated new technology that requires large capital investments. At the same time, the introduction of various green building standards necessitates the close cooperation of various companies, which might have the same goal in mind, yet with different approaches, which makes the alignment difficult. Meanwhile, the prospect of reducing energy demand raises anxiety that the end-consumer’s convenience and comfort would be compromised, an unfavourable trade-off for consumers.

When you apply a holistic approach when introducing an energy policy, it becomes obvious that the proposition needs to be comprehensive and cover all areas of concern – information targeted at consumers, financially attractive incentives to motivate energy savings, a solid financing infrastructure to support retrofitting and energy-efficient renovations and a series of demand-side energy policies for businesses. These opportunities make the possibility of reducing energy consumption and pursuing positive returns towards energy efficiency, particularly alluring for all parties involved in the energy circle – policy makers, businesses and end-consumers.

The writer is Regional Manager, Techem for the MENA region. He can be contacted at hans.altmann@techem.de


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