IEEJ: 2006年3月掲載

East Asian Energy
Efficiency Cooperation:
Past and Future
Joint Research byCentral Research Institute of Electric Power Industry (CRIEPI), Tokyo
Fridtjof Nansen Institute (FNI), Oslo
Lawrence Berkeley National Laboratory (LBNL), Berkeley
University of San Francisco (USF), San Francisco
International Energy Agency (IEA), Paris
Energy Research Institute (ERI), Beijing
Tokyo, February 28th, 2006
NOTE: THIS PRESENTATION DOES NOT REPRESENT FORMALPOSITION OF ANY ORGANIZATION．注： 本報告における見解はこの国際共同研究チームによるものであり如何なる機関を代表するものでもありません。

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Goal of the Part II
The research team, with this distinguishedaudience, would like to :1. Share the findings of:a) the review of energy efficiency cooperation,b) stakeholder interviews in China and Japan.
2. Propose “Policy Development Fund” fordiscussion
3. Learn from candid opinions in the audience

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1. Introduction
Taishi Sugiyama

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About the Research Project• Goal: examine key issues and propose
ideas for further cooperation among East
Asian nations on energy efficiency• Targets: government, industry, NGOs, andresearchers of East Asian countries• Context:– Multiple benefits for potential parties– Joint research by CRIEPI, ERI, FNI, LBNL,
USF– Part of “post-Kyoto” but regime-neutral
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Timeline• Scoping Workshop– April 2005, Tokyo• Interviews– May-August 2005, multiple countries• Interim workshop– September 2005, Tokyo and Beijing– Discuss revised draft proposals with stakeholders• Formal workshop– February 2006, Tokyo– Public presentation of proposals for action• Final report and recommendations– March 2006
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About the researchers• Central Research Institute of Electric Power
Industry (CRIEPI)– Electric utility industry-funded research organization,
Tokyo, Japan• Energy Research Institute (ERI)– National research body, Beijing, China• Fridtjof Nansen Institute (FNI)– Independent research body, Oslo, Norway• Lawrence Berkeley National Laboratory (LBNL)– National research body, Berkeley, USA• University of San Francisco (USF)– Private university, San Francisco, USA
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National Priorities, Common Interests• For most countries, priorities are:> National security, including energy security> Economic development> Mitigation of local pollution> Prevention of climate change• For Japan, climate change is high priority, along withenergy security and a strong economy• For China, an efficient economy is high priority, followed
by energy and pollution concerns
Æ Cooperation on energy efficiency can contribute topriorities of both countries: improve energy security,
prevent climate change, and realize efficienteconomy.
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Proposal:
POLICY DEVELOPMENT FUND for
East-Asian Energy-Efficiency• Like-minded countries in East Asia join the
independent fund. Financial contributions arevoluntary. Expected initial scale $10 million
annually.
• Financially supports formulation and initial
implementation of energy efficiency policy inmember countries. Recipients commit
themselves to implementation.
• Recipients, not donors, retain discretion overtypes and stringency of policy measures.
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Proposal: POLICY DEVELOMPENT
FUND (continued)• CEO makes decisions, including project
selection, under guidance of Executive
Board. CEO is nominated by EB.
• Projects are selected by CEO using costeffectiveness as a key criteria. Cost
effectiveness = energy savings or CO2
reductions per amount of grant.
• Fund supports new projects and provides
co-financing for existing efforts.
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2. Review of East Asian
Energy Efficiency Cooperation
to DateStephanie OhshitaIEEJ: 2006年3月掲載

Big Trends• Form of Cooperation: growing importance of
Policy Development Cooperation– beyond Policy Dialogue (and NOT conditionality)– supports host country in creating a top-down pushand incentives for energy efficiency– leverages other gov’t and private financing• Institutional Structure: growing role ofindependent, international networks• Sectors & Technologies: greater attention tomore distributed targets: appliances, buildings,
demand-side management
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Many Existing Activities . . .
• Form of Cooperation: from large Technology
Cooperation projects to small Policy
Development and Technical Assistance grants.
• Institutional Structure: 4 main types oforganizations: bilateral, multilateral (ADB, GEF),
regional (ASEAN, APEC), and international/
independent (REEEP, CLASP)• Sectors & Technologies: Most energy efficiency
cooperation activities have occurred in Industry
and Appliances, with newer efforts in Demand
Side Management (ESCOs), Buildings, andTransportation.
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Examples of Existing Energy Efficiency
Cooperation in East Asia, 1990s~present (1)• Industry (Steel, Chemicals, Cement,Boilers)– Japan-China-SE Asia: Green Aid Plan technology demonstration in steel,chemical, cement; energy manager training– US-China: industrial motor standards– GEF-World Bank-China: industrial boilers– Energy Foundation (CSEP): steel sector voluntary agreements– GEF-UNDP-China EUEEP– EU-China EEP• Appliances– CLASP-China: standards & labels(S&L) for air conditioners, washingmachines, TVs, computers, etc.
– CLASP-ASEAN-APEC: S&L coordination– GEF-UNDP-China: commercialization of efficient refrigerators•

Electric Power– Japan Green Aid Plan
– ADB-China– EC-ASEAN Co-gen
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Examples of Existing Energy Efficiency
Cooperation in East Asia, 1990s~present (2)•Demand-side Management (ESCOs/EMCs)– GEF-World Bank-China: EMCs
– ADB-Asia: ESCO Fund•

Buildings– Energy Foundation CSEP-China– EU-China EEP– REEEP-China•

Transportation– Energy Foundation CSEP-China– ASEAN-Australia•

Public Sector (Government)– PePs-China•

Financial Sector– Energy Foundation CSEP-China– REEEP- China
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IEEJ: 2006年3月掲載. . . But More Cooperation
Needed• Still a large potential for energy savings.
• Most development cooperation and Kyoto Mechanisms
do not sufficiently promote energy efficiency.
• Progress in appliance standards and labels can be
expanded with higher standards and more locations.
• More activity is needed in the fast-growing buildings
and transportation sectors.
• Still need innovative approaches to improve industrial
energy efficiency.
• More activity is needed to develop financial andregulatory incentives.

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Increasing Cooperation on
Policy Development• Large funders are using Policy Development to enhanceTechnology Cooperation. Examples:– GEF-UNDP-China: End-Use Energy Efficiency Programme(EUEEP)– ADB-China: Industrial Energy Efficiency & other projects– EU-China: Energy Efficiency Programme (EEP)• Smaller funders are focusing on Policy Development topromote technology diffusion and energy savings.
Examples:– Energy Foundation - China Sustainable Energy Program (CSEP):
Automobile Fuel Economy Standards and many others– CLASP - China/ASEAN/APEC: Appliance Efficiency Standards &LabelsEast Asian Energy Efficiency Cooperation

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International Networks Leverage
Needed Expertise• Growing involvement of independent,
international networks– CLASP: Collaborative Labeling and Standards Program– REEEP: Renewable Energy and Energy Efficiency Program– Energy Foundation CSEP: China Sustainable Energy Program• Newer form of cooperation that emphasizes
expertise, bringing together people from private
sector and research institutes as well as
government

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Policy Development Needs
Implementation Support• Cooperation on Policy Development can yieldlarge energy savings; e.g., appliance efficiency
standards in China would displace the need for
50 x 500 MW coal-fired power plants over a 20year period, if fully implemented.
• There is still a need for cooperation on
formulating the implementation details ofenergy efficiency policies (e.g., guidance, rules,
incentives). Sharing international experience canhelp the domestic effort.
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3. Stakeholder Views- Japan and China
Goerild Heggelund andTaishi Sugiyama

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Japanese stakeholders
interview findingsInterviewee of Japanese government andindustries are:
• Generally favorable with the idea of EAEEC,• Understanding well that there are common
national interests in energy conservation.
• Of mixed views on past activities (GAP, CDMFS, JICA)• Not always familiar with the concept of policy
development assistance – or, worry if it isaccepted by China.
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Chinese stakeholders interview
findings (I)• Stakeholder interviews summer 2005
– Ministries, academics, donors• Stakeholders very positive to the proposed Fund
framework• Related the proposed Fund framework to China’s
national energy policy– NDRC’s energy-conservation plan, China Medium andLong Term Energy Conservation Plan (2004-2020)• Positive to focus on energy efficiency because of
the current political attention to energy
challenges• The Fund proposal very timely – policy mood isripe for cooperation in energy efficiency
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Chinese stakeholders interview
Stakeholder findings (II)findings (II)• Areas– Knowledge sharing– Capacity building/training– Policy studies and development, including
implementation plans, technical assistance and legal
assistance were stressed• Ex.: support to develop specific measures for achieving China’s
medium- and long-term goals for energy efficiency• Standards and labeling– linked to international cooperation/trade• Technology transfer– Japan and South Korea both have advanced technologythat could be useful for China
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Political: or bilateral?
Political: Multilateral• Multilateral is often more complex, but……
• …multilateral (international fund) may havemore leverage and stability– Bilateral easier way of cooperation• Suggestion from stakeholders in China:– start as bilateral or trilateral framework at first, thenmove to multilateral framework– Trilateral involves three governments: Japan China
and South Korea• Eventually invite ASEAN countries• Eventually extend to APEC or APEC + India.
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The Fund: Possible Models Discussedwith Chinese Stakeholders• Fund placed in an existing institution could be
more cost effective– ADB one option discussed– Established body of regulation and practice governing
how funds from ADB are used
– Subject to existing political environment & red tape

• BUT: Opportunity for new and independent fund
– Funding process needs to be dynamic - existing
multilateral banks often require long and many
paperworks given their own goals.
– Strong signal of political recognition for energy
efficiency
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Projects: Sectors and technologies• Industrial process technologies, especially for building
materials, steel, aluminium,and chemicals• Vehicle technologies for components and systems• Electrical equipment, e.g., motors, fans and motor
systems like pumps, lighting, home appliances• Coal-burning technologies, e.g., boilers and kilns• Electricity transmission will become more important as
dependence on distant hydropower grows• Natural gas & oil technologies, e.g., gasification(transport from Central Asia + Russia)• Renewables are important in strategic terms—but not
focus of proposed activity
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4. The “Policy Development
Fund”:A Proposal for Discussion
Taishi Sugiyama

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Requirements for a newframework• Meet national priorities of participating
countries• Aim for massive energy savings andsignificant emissions reductions throughmarket transformation and leverage ofprivate sector resources• Commit to concrete actions and support
policy mechanisms for such actions
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Three levels of the Funda. Political Agreement
b. Design of the Fundc. Projects

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a. Political Agreement• Start with multilateral agreement from theoutset, to avoid capture by narrow interests,
but…
• Emphasize areas of agreement, stability,alignment of interests and effective
management. And so…
• Keep number of initial participants small.
Conclusion: Begin from small number ofcountries and expand later.
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b. Design of the Fund
• There is a need for new and dedicated fundfor energy efficiency, given long and many
paper-works required for internationalorganization established for other purposes.
• Form independent, professional management
structure (CEO, board, staff) to insulate fromshort-term political changes• Restrict activities to region and to efficiency
only for alignment of interests and effective
management
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Proposal:
POLICY DEVELOPMENT FUND for
East-Asian Energy-Efficiency• Like-minded countries in East Asia join the
independent fund. Financial contributions arevoluntary. Expected initial scale $10 million
annually.
• Financially supports formulation and initial
implementation of energy efficiency policy inmember countries. Recipients commit
themselves to implementation.
• Recipients, not donors, retain discretion overtypes and stringency of policy measures.
East Asian Energy Efficiency Cooperation

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Proposal:
POLICY DEVELOMPENT FUND (cont.)• CEO makes decisions, including project
selection, under guidance of Executive
Board. CEO is nominated by EB.
• Projects are selected by CEO using costeffectiveness as a key criteria. Cost
effectiveness = energy savings or CO2
reductions per amount of grant.
• Fund supports new projects and provides
co-financing for existing efforts.
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4. Illustrative Project Examples:
Success Stories and Future
Opportunities
Steve Wiel, Alan Meier,
Taishi Sugiyama andJonathan Sinton

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Projects: Ripe Opportunities
Buildings Sector••••

Efficient technology: CFL Initiative (Lighting equipment)
Standby losses: Set-top boxes, TVs, external power supplies
Building energy codes
Applications of cross-cutting approaches, e.g.:– Appliance and equipment standards & labeling: CLASP– Tax and other incentives

Industrial Sector•••

Voluntary agreements with industry
Energy management systems for system and process design
assistance
Applications of cross-cutting approaches, e.g.:– Industrial equipment standards– Tax and other incentives
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Projects: Ripe Opportunities(cont’d)
Transportation Sector•

Applications of cross-cutting approaches, e.g.:–––

Efficiency labels for tires
Vehicle fuel economy standards & labels
Tax and other incentives

Crosscutting
•
•
•
•
•

Standards & labeling: CLASP
Public-sector efficiency programs, including procurement: PEPS
Utility-based programs: demand-side management (DSM)
Energy service companies (ESCOs)
Incentives
–
–
–

•

Credits for R&D, manufacturing, purchasing
Equipment (catalog) and systems (design)
Tax reductions, accelerated depreciation, incentive payments, rebates

Heat island mitigation
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Example 1: CLASP
Steve WielIEEJ: 2006年3月掲載

Cross-Cutting Example:
Standards and Labeling
S&L = Energy Efficiency Standards and Labels•

Energy Efficiency Standards:
are regulations that prescribe the energy
performance of manufactured products,
often prohibiting the sale of products lessenergy-efficient than the minimum
standard.

•

Energy Efficiency Labels:
are informative labels affixed to
manufactured products that indicate a
product’s energy performance andprovide purchasers with the informationnecessary to make an informed
purchase-decision.

QuickTime™ and a
TIFF (LZW) decompressor
are needed to see this picture.

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Standards Can Improve
Energy Efficiency DramaticallyAverage Energy Consumption of New Refrigerators in the U.S.

a
T
Q

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Investment in S&L Is Better Than
Investment in Power Production
Cost of Electricity from Various New Sources
7

Annualized Cose in 1999
(cents per KWh)

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East Asian Energy Efficiency Cooperation

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Immediate Opportunities inStandards and Labeling• Benchmarking (comparison of performance
specifications, test procedures, standard levels,
and/or compliance)– CFLs (The CFL Initiative)– efficient tires– external power supplies– (dozens more)• Harmonization of product specifications, test
procedures, and/or standard levels• Cross-border training (e.g., Vietnam by China)
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CLASP Provides Infrastructure(Framework and Assistance)
Collaborative Labeling and Appliance Standards Program<www.CLASPonline.org>

CLASP Mission:
CLASP serves as the world’s primary international voice and resourcefor energy efficiency standards and labeling (S&L) worldwide.

CLASP Organization:
Established in 1999 with sole mission to promote S&L
Non-Profit Corporation with 12 Directors from 8 Countries
Registered as UN Sustainable Development PartnershipCo-sponsor of APEC S&L website <www.apec-esis.org>
Provider of assistance to ASEAN labeling program
Provider of assistance to China on all aspects of S&L
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Example 2: CFL
Alan MeierIEEJ: 2006年3月掲載

Projects: Buildings & Equipment• Energy standards & labels for buildings
and appliances– Energy codes for buildings– Standby power in Chinese TVs– Compact Fluorescent Lights (CFLs)– Set-top boxes– External power supplies• Government procurement policies
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Example of Standards andLabels Project: The CFL Initiative– Large electricity savings possible through use of
CFLs• CFLs use about ¼ of the electricity of incandescentlights• CFL sales are low because consumers are suspiciousof quality, reliability, and power savings• How to raise consumer confidence in CFLs?

– Solution: "Community of Practice“• Group of interested countries and NGOs
• Organized by Australia• Other Communities of Practice have been proposed
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Results: CFL Community ofPractice– Created 5 Working Groups to addressconfidence issues• Testing methodology, Performance specifications, Test
facilities, Compliance mechanisms, Informing
stakeholders– Participants• policy makers• manufacturers• practitioners• researchers & academics– First product: uniform testing method, covering
performanceEastfeaturesofself-ballasted
CFLs
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Example 3: Tire
Alan MeierIEEJ: 2006年3月掲載

Projects: Transport• Fuel economy standards for automobiles
and other types of vehicles• Efficiency labels for tires and other vehicle
components

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Transport Example: EnergyEfficient Tires—Background
Background• Rolling resistance of tires is responsible for 20% of fuelconsumption– More if tires are under-inflated• Low-resistance tires save ~5% in auto fuel consumption– 10% for trucks– Applies to both new and replacement tires• Several test procedures exist– No international test procedure to measure rolling resistance– Tire manufacturers do not release test results• Auto manufacturers in USA, Europe, Japan alreadycarefully minimize tire rolling resistance in order toachieve lowest official fuel consumption values
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Tires: The Fund Pays To…
• Establish a program to label tire efficiency– Select measurement procedure– Establish testing laboratory– Measure rolling resistance of today’s tires– Establish label– Monitor compliance– Help governments consider establishing aminimum standard
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Example 4: Automobile Fuel
Economy Standard
Taishi Sugiyama

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Automobile Fuel Economy
Standards• Policy Development: the Energy
Foundation supported the development offuel economy standards• Technical support by manufacturers• Results: minimum efficiency standards for
cars– In general, weaker than Japanese Top
Runner, but stricter than USA CAFÉ– Strictest of the world for SUVs
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Source: China Automotive Technology and Research Center (2003)
Research on Chinese Auto Fuel Economy Standards, Regulation and Policy

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Example 5: Voluntary
Agreement of Industries
Jonathan Sinton

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Projects: Industry• Voluntary agreements with industry• Energy management systems– System and process design assistance• Applications of cross-cutting approaches:– Industrial equipment standards– Tax and other incentives

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Industry: Voluntary Agreements• Large potential payoff• Current activity is gradually gaining attention– Existing pilots with 2 steel plants (Shandong)– Several cities signed agreements of varied nature– UNDP/GEF End-Use Energy Efficiency Project– UK Assistance for Enterprise Covenants• Room for significant additional effort to broaden andaccelerate implementation– Supporting policies: fiscal and tax measures, technicalassistance, investment– Institution building: monitoring and assessment• Baselines from VAs could potentially be used for
calculating emission reduction credits
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Industry: UNDP/GEF End-Use
Energy Efficiency Project• UNDP’s ad hoc project-based approach wastransformed into 12-year program—this is the result• $17 M GEF grant for Phase 1 (2005-2008)• $31.4 M from Chinese government• $32 M from Chinese private sector• Executing Agency: National Development Reform
Commission (NDRC)– with Ministry of Construction, Energy Research Institute• $1.5 M for industry voluntary agreements– 12 enterprises in steel, cement and chemicals– policy and institutional development
More information on EUEEP: http://www.undp.org.cn/

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Industry: UK Assistance forplanned industrial program• Input to inform China’s planned Top 1,000 Energy-Using
Enterprises initiative—monitoring and regulation ofnation’s largest energy users (48% of industrial energy)• Regulatory program will be joint effort of:– NDRC– Office of the National Energy Leading Group– State Owned Assets Supervision and Administration Commission– National Bureau of Statistics• UK is advising China based on its experience with Climate
Change Agreements and Climate Change Levy
• Additional Support from US-based Energy Foundation• Other input is being sought for this complex program
More information on UK programs: http://www.defra.gov.uk/Environment/ccl/
More information on Energy Foundation programs: http://www.efchina.org/

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5. Conclusion
Taishi Sugiyama

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Conclusion
Policy development assistance, with the
POLICY DEVELOPMENT FUND
dedicated for energy efficiency is thepromising mode for further international
cooperation in East Asia.

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Rationale for the Policy
Development Fund Proposal
1. Changing national circumstances in Asia
(More market-economy activities, economic
development, less ODA, more FDI/ trade)
2. Fit well with national priorities (economic
efficiency, energy security)
3. Cooperative, not coercive (cf. CO2 emission
cap, oil/gas access)4. Sector-wide coverage, cost & environmental
effectiveness (cf. CDM not cover sector policy)
5. Taking advantage of existing activities
6. Well-designed incentive structure
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Contact Us
Please continue sharing your ideas onenergy efficiency cooperation with us.
Contact: Mr. Takahiro Ueno of CRIEPI
at: t-ueno@criepi.denken.or.jp
Thank You!
お問合せ先: report@tky.ieej.or.jp
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