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Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania

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Title: Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania


1
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Energy Efficiency
  • and
  • Low-Income Customers

Mark Velody UNDP/GEF Energy Efficiency Financing
Team Tel. 0722 280 461, energie_at_undp.ro USAID/USEA
Plenty Event Bucharest, September 9th 2005
UNOPS Project Office Str. Washington
nr.45 Bucuresti, Romania www.energie.undp.ro
2
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • I will wear three hats today

3
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • I will wear three hats today
  • 1. My new UNDP/GEF hat 2004-2005
  • - Leading the UNDP/GEF Energy Efficiency
    Financing Team in
  • Romania

4
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • I will wear three hats today
  • 1. My new UNDP/GEF hat 2004-2005
  • - Leading the UNDP/GEF Energy Efficiency
    Financing Team in
  • Romania
  • 2. My old USAID hat 2002-2003
  • - Leading the USAID Regional Review of
    Social Safety Net
  • Approaches in support of Energy Sector
    Reform

5
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • I will wear three hats today
  • 1. My new UNDP/GEF hat 2004-2005
  • - Leading the UNDP/GEF Energy Efficiency
    Financing Team in
  • Romania
  • 2. My old USAID hat 2002-2003
  • - Leading the USAID Regional Review of
    Social Safety Net
  • Approaches in support of Energy Sector
    Reform
  • 3. My own hat
  • - Ideas for debate the need to
    overcome the financing barrier, and
  • an innovative way of leveraging
    financing for rehabilitation of
  • apartment buildings.

6
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • So lets begin
  • 1. My new UNDP/GEF hat 2004-2005
  • - Leading the UNDP/GEF Energy Efficiency
    Financing Team in
  • Romania

7
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • UNDP/GEF helps turn energy efficiency ideas into
    investments
  • Technical Assistance (T.A.)
  • - Technical, financial advice and deal-building
  • - Feasibiltity Studies by specialist consultants
  • - Help with finding a commercial
    financier
  • Direct Contributions (D.C.)
  • - Grants of up to 20 of an investment (closing)
  • - Beneficiaries selected together
    with Governmental partner ARCE

T.A. is available for both Private Sector
and Public Sector applicants D.C. was for
Public Sector projects only, up to a limit of
50,000. This facility now is almost fully
subscribed.
8
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • How does UNDP/GEF select projects to help?
  • Here is the basic deal
  • If -
  • UNDP/GEF funds a Feasibility Study
  • (and if the results of the study are
    positive)
  • Then -
  • Project Developer will carry out the
    EE project
  • Financier will make investment funds
    available

9
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • We have helped leverage over 10 million of
    investments so far
  • Public Sector Main financing source
  • Panaci/kindergarten 21,000 Governmental
    financing
  • Tg Jiu/controls 132,143 Grant financing
  • Radauti/meters 170,000 Bank financing
    (BCR)
  • Cluj/controls 187,000 Municipal financing
  • Tarnaveni/buildings 400,000 Bank financing
    (BCR)
  • Sighisoara/schools 300,000 Municipal
    financing
  • Alba Iulia/schools 620,000 Municipal
    financing
  • Iasi/district heating 1,300,000 FREE (World
    Bank/GEF)
  • Vatra Dornei/Water (250,000)
    3,200,000 EIB, EU PHARE, Government
  • Private sector
  • Nord Simex/wood 100,000 Bank Financing
    (BRD)
  • Ulerom/sunflower 600,000 FREE (World
    Bank/GEF)
  • Iridex/waste 1,377,500 Leasing (Piraeus)
  • Sicomed/CHP 2,000,000 RAEF/RIEEC/SE-GES

10
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • and work-in-progress could leverage another 21
    million
  • Bucharest Sicomed Pharmaceuticals CHP (TA)
  • Bucharest Isovolta - improve steam generation
    system (TA)
  • Barlad CHP for Rulmenti bearings factory (TA)
  • Orastie Public lighting modernisation -
    feasibility study (TA, DC)
  • VictoriaImplementing EE measures at City Hall
    (TA, DC)
  • Victoria, Brasov Secondary steam to power for
    Viromet (TA)
  • Tulcea Replacement of pumps for a district
    heating system (TA, DC)
  • Satu Mare Heating systems at two schools (TA,
    DC)
  • Ploiesti Timken - CHP for bearings plant (TA)
  • Adjud CHP or steam turbine Vrancart (TA)
  • Valea lui Mihai public lighting (TA, DC)
  • Salonta public lighting (TA, DC)
  • Matex compressors and steam generation at a
    textiles factory

11
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Some of our work involves low-income households
    and social institutions
  • Panaci DC for windows and doors for the
    kindergarten
  • Targu Jiu - DC for HCA/TRV bundles for social
    apartments
  • Cluj - DC for HCA/TRV bundles for all
    low-income households in Mansadur
  • - (The District Heating Utility financed
    the other households)
  • Tarnaveni, Sighisoara and Alba Iulia
  • - all involved TA (Feasibility Studies) and
    DC for energy efficiency investments
  • in schools
  • But the main focus of our project is to lower
    greenhouse gas emissions we are an
    environmental project, not a social project.

12
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Key Message from UNDP/GEF
  • If your energy efficiency investment idea is
  • Technically robust and
  • Financially viable
  • We can help to make it happen!

13
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Please visit
  • www.energie.undp.ro
  • to apply for support for your energy efficiency
    investment idea
  • (or pick up a brochure from me today)

14
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • I will wear three hats today
  • 1. My new UNDP/GEF hat 2004-2005
  • - Leading the UNDP/GEF Energy Efficiency
    Financing Team in
  • Romania
  • 2. My old USAID hat 2002-2003
  • - Leading the USAID Regional Review of
    Social Safety Net
  • Approaches in support of Energy Sector
    Reform

15
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • The USAID Regional Review of Social Safety Net
    Approaches in Support of Energy Sector Reform
    studied five countries and generated six reports
  • Energy Reform and Social Protection in Romania
    (Velody)
  • .. .. ..
    .. .. Armenia (Velody)
  • .. .. ..
    .. .. Kazakhstan (Velody)
  • .. .. ..
    .. .. Bulgaria (Philips)
  • .. .. ..
    .. .. Hungary (Cain)
  • Synthesis report (Velody/Cain/Philips)
  • These reports are far too detailed to present
    today

16
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • So, to provide a flavour of the content of the
    USAID reports, here is a digest of the
    Recommendations for Romania on
  • Subsidies and Assistance Payments
  • Energy Efficiency and
  • Tariffs
  • The front cover of all the reports note that
    the findings, conclusions and recommendations are
    those of its authors and do not necessarily
    reflect USAIDs views and/or policies.

17
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Subsidies and Assistance Payments
    Recommendations
  • Consider
  • reimbursing the cost of operating social
    tariffs to Electrica and Distrigaz
  • raising natural gas prices to market levels
  • defining Heat Assistance by expenditure where
    heating is not controllable
  • making payment of íntretenere a condition
    of receiving Heat Assistance
  • removing the option to receive Heating
    Assistance payments in cash
  • avoid creating new can but wont pay
    customers
  • remove microwave oven ownership from social
    assistance eligibility rules

18
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Energy Efficiency Recommendations
  • Consider
  • creating a formal government policy on
    low-income energy issues
  • energy efficiency/weatherization programme
    for social institutions
  • a national low-income metering and
    weatherization programme.
  • a weatherization programme for rural
    households
  • metering heat and hot water for buildings and
    individual apartments
  • fundamental reform of district heating
  • - Phase 1 re-establish the payment
    culture
  • - Phase 2 raise prices
  • - Phase 3 grow

19
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Tariffs Recommendations
  • Consider
  • win-win day-night electricity tariffs
  • removing vacation/weekend homes from the
    social tariff for electricity
  • offering payment collection contracts to
    Owners Associations
  • relocating electricity meters outside the
    apartments
  • making independent regulatory authorities
    more independent
  • an independent review of energy regulation
    (as there are five regulators)
  • raising the unit price of district heating
  • regulating district heating tariff mechanisms
    centrally
  • strengthening regulatory data collection,
    analysis and publication

20
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • To download the USAID reports, please visit
  • www.dec.org
  • and search for Velody

21
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • I will wear three hats today
  • 1. My new UNDP/GEF hat 2004-2005
  • - Leading the UNDP/GEF Energy Efficiency
    Financing Team in
  • Romania
  • 2. My old USAID hat 2002-2003
  • - Leading the USAID Regional Review of
    Social Safety Net
  • Approaches in support of Energy Sector
    Reform
  • 3. My own hat
  • - Ideas for debate the need to
    overcome the financing barrier, and
  • an innovative way of leveraging
    financing for rehabilitation of
  • apartment buildings.

22
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Successful low-income energy assistance
    programmes require two key elements
  • Collecting money effectively
  • - Political commitment to the programme
  • - Empowered institutions
  • Spending money wisely
  • - Talented, well-informed programme designers
  • - Experienced, empowered administrators
  • I will look at these issues in reverse order

23
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Spending money wisely Romania is good at this!
  • Talented, well-informed programme designers?
  • - Talented certainly!
  • - Well-informed yes! This event is one of
    several international activities to transfer
    know-how in the fields of low-income energy
    consumers and energy efficiency.
  • Experienced, empowered administrators?
  • - Experienced yes! - cupoane and other
    successful, well managed
  • programmes.
  • - Empowered partially! If programme rules are
    set centrally (e.g. by government decision),
    municipalities often do not have flexibility to
    adapt programmes to suit local conditions.

24
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Collecting money effectively the most difficult
    part for Romania!
  • Romania does not enjoy a large range of funding
    sources, such as those that AJ described when
    presenting US sources of funding.
  • - Central government limited funds, uncertain
    political commitment
  • - Local government very limited funds
  • - Churches/charities no tradition of
    this type of funding in Romania
  • - Utility mergers privatization too
    recent, no experience of squeezing - Utility
    regulators do not get involved in low-income
    issues (yet)
  • - Utility goodwill very limited
    tradition of voluntary programmes
  • - Utility fund yes (social tariff is a
    residential cross-subsidy) but
  • - Utility fund the Special Fund for
    Energy Sector was closed down
  • - Other funds Environment Fund
    difficult to access

25
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Idea make low-income households energy
    efficiency champions
  • The problem
  • Low-income households stop communal
    investment initiatives
  • Proposed solution
  • A targeted low-income subsidy to pay
    the low-income households share of
  • communal investments. The subsidy is
    only paid if investments take place.
  • Why this could work
  • Rather than preventing investment,
    low-income households could become
  • champions of energy efficiency
    persuading the neighbours to invest, as all
  • share the benefits, but low-income
    households avoid the costs.
  • Impact for the Government
  • An intelligent subsidy as every 1
    invested by Government in low-income
  • households leverages several of
    investment by wealthier households.
  • QUESTION FOR DEBATE WOULD THIS IDEA WORK IN
    ROMANIA?

26
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
  • Energy Efficiency
  • and
  • Low-Income Customers

Mark Velody UNDP/GEF Energy Efficiency Financing
Team Tel. 0722 280 461, energie_at_undp.ro USAID/USEA
Plenty Event Bucharest, September 9th 2005
UNOPS Project Office Str. Washington
nr.45 Bucuresti, Romania www.energie.undp.ro
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