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Energy Sector Management Assistance Programrie

MexicoEnergy Efficiency Management

Technical Assistance to theComision Nacional para el Ahorro de Energia (CONAE)

Report No. 180/96

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JOINT UNDP/WORLD BANKENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP)

PURPOSE

The Joint UNDP/World Bank Energy Sector Management Assistance Programme(ESMAP) is a special global technical assistance program run by the World Bank'sIndustry and Energy Department. ESMAP provides advice to governments onsustainable energy development. Established with the support of UNDP and 15 bilateralofficial donors in 1983, it focuses on policy and institutional reforms designed to promoteincreased private investment in energy and supply and end-use energy efficiency; naturalgas development; and renewable, rural, and household energy.

GOVERNANCE AND OPERATIONS

ESMAP is governed by a Consultative Group (ESMAP CG), composed of representativesof the UNDP and World Bank, the governments and other institutions providingfinancial support, and the recipients of ESMAP's assistance. The ESMAP CG is chairedby the World Bank's Vice President, Finance and Private Sector Development, andadvised by a Technical Advisory Group (TAG) of independent energy experts thatreviews the Programme's strategic agenda, its work program, and other issues. ESMAPis staffed by a cadre of engineers, energy planners, and economists from the Industry andEnergy Department of the World Bank. The Director of this Department is also theManager of ESMAP, responsible for administering the Programme.

FUNDING

ESMAP is a cooperative effort supported by the World Bank, UNDP and other UnitedNations agencies, the European Community, Organization of American States (OAS),Latin American Energy Organization (OLADE), and public and private donors fromcountries including Australia, Belgium, Canada, Denmark, Germany, Finland, France,Iceland, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Sweden,Switzerland, the United Kingdom, and the United States.

FURTHER INFORMATION

An up-to-date listing of completed ESMAP projects is appended to this report. Forfurther information or copies of completed ESMAP reports, contact:

ESMAPc/o Industry and Energy Department

The World Bank

1818 H Street N.W.

Washington, D.C. 20433U.S.A.

TABLE OF CONTENTS

PREFACE

I. EXEC UTIVE SUMMARY ................................................ 1IBackground ................................................. 1Objectives and Methodology ................................................. 1Implementation ................................................. 2Key Issues ................................................ 3Summary of Recommendations ................................................. 4

Institutional Reorganization ................................................. 4Funding ........................................................ 5Creation of Policy and Planning Unit ................................................. 5Development of Proposals for World Bank/IDB Loan .............. ............6

Next Steps ................................................. 7

II. CONSULTANTS REPORTSStrengthening Mexico's National Energy Efficiency Functionby John ArmstrongProgamme Planning, Targeting and Monitoringby Andrew Gilchrist

ANNEXESI. Executive Summary in SpanishII. Trip Report: Mexican Mission to Southeast AsiamII. ESMAP Activity Initiation Brief

Preface

This report records the outputs of a technical assistance project in Mexicoexecuted by the World Bank's Energy Sector Management Assistance Program (ESMAP)and financed by the German Goverrnent. The activity provided expert assistance to theComision Nacionalpara el Ahorro de Energia (CONAE), Mexico's principal agency forenergy conservation, in the specific areas of insitutional and policy analysis, and inprogram planning and evaluation. The specific issues arose from a previous World Bankreview of CONAE's organization and programs, as well as from the institutionaladjustments that had to be made in response to the recent economic crisis. It is consideredthat the most important outputs of the acitvity were the personal interactions of ESMAPexperts with CONAE officials and staff during the missions to Mexico, and not the writtenreports themselves. These reports by the main consultants are nevertheless included in thisdocument.

The ESMAP activity benefited immensely from the support of CONAE officials,particularly Femando Bueno, the former Technical Secretary, and Odon the Buen, who isnow Officer-in-Charge. The technical contributions of the staff, particularly Dr. ClaudiaSheinbaum, Guilermo Rodriguez, Ricardo Escobar, Agustin Acosta, Guillermo Ortega andothers too many to be named here are likewise well appreciated.

The World Bank/ESMAP staff who managed the activity are Ernesto Terrado andAnke Meyer. Support was provided by LA2IN through Luis Luzuriaga.

Executive Summary

Background

CONAE, the national energy conservation commission in Mexico, was set up in 1989as an interministerial agency, integrated by the Department of Energy, Mines andParastatal Industries (SEMIP)-now simply the Department of Energy-and theDepartments of Treasury (SHCP), Commerce and Industry (SECOFI), Communicationand Transportation (SCT), Social Development (SEDESOL) and Public Education (SEP),as well as the Mexico City government, the national petroleum company PEMEX and thenational electric utility CFE. The Secretary of Energy is CONAE's President while aTechnical Secretary acts as chief executive officer.

In June 1994, CONAE's management was replaced by an interim managementteam, headed by Fernando Bueno. The team assumed an active 't.aretaker" role, providingcontinuity to ongoing programs and implementing some limited measures to improve theadministrative and technical effectiveness of the institution prior to the appointment of thenew permanent management. In January 1995, after Presidential elections and theassumption of the new federal administration, the interim manager was formally appointedTechnical Secretary of CONAE. However, in December 1995, after completion of theESMAP main mission for the present technical assistance activity, Fernando Bueno wastransferred to the Department of the Interior. Mr. Odon de Buen was named actingTechnical Secretary and still has this position as of this writing.

These organizational changes were largely induced by the national financial andeconomic crisis of 1994/1995 that severely reduced budgetary support for ma,;y publicagencies and programs, including CONAE and its activities. During this period *'ON AE'stotal staff complement was reduced by about 30% as it reorganized *.self into a leaneragency. Among the major changes was the abolition of FONA: CONAE's technicalimplementing arm. Programs that required significant investments, such as cogeneration,have been generally put 'bn hold". However, some programs, such -;s that for transport,have even expanded because the higher prices of transport fuels caused by the crisis haveprovided added incentives for conservation. In a period of economic difficulties, energyconservation is increasingly seen as a key instrument for improving the competitiveness ofMexican industries. In sum, the economic downturn has not diminished the relevance ofenergy conservation efforts in Mexico but has underscored the need to make CONAE'sprograms more focused and sustainable. In turn, the need to put CONAE on a firmerinstitutional footing so that it can discharge its functions effectively has taken on someurgency.

Objectives and Methodology

The original objective of the ESMAP technical assistance activity was to helpCONAE address some of the key deficiencies identified in the 1994 World Bank review of its

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orgaizational setup and operations, particularly the need to delineate CONAEs institutionalidentity and strengthen its capability for strategic planning and internal evaluation of itsprograms. The advent of the economic crisis did not change these basic objectives. Some ofthese issues were already being examined by EEC experts in 1994/95 as part of a bilateralprogram and CONAE itself had already initiated some efforts in this direction, including thepreliminary examination of options for institutional reorganization and the drafting of anenergy efficiency law. It was thought that complementary international expertise provided bythe ESMAP activity would strengthen these ongoing efforts and thereby accelerate the process.The expertise to be provided would be in the specific areas of institutional and policy analysis,and energy monitoring and targeting. In addition, resources were to be provided for one to twoCONAE officials to undertake a study tour of energy efficiency institutions in Asia. In thecourse of the ESMAP activity, the possibility of inclusion of an energy efficiency component ina proposed WB/IDB energy sector loan emerged, with CONAE and FIDE as the potentialbeneficiaries. Consequently, the task of assisting CONAE to develop a preliminary package ofactivities for financing under the loan was added to the ESMAP activity.

Implementation

The above objectives were reaffirmed, with some revisions in scope and focus,during an ESMAP mission in May 1995. Specifically, it was agreed with CONAE thatfocus would be in:

• examination of options for reorganizing CONAE into a more sustainable intermediaryinstitution for energy efficiency;

- assistance in the creation of a planning unit within CONAE, including definition of itsspecific functions and initial program of work. It is in this context that assistance indeveloping an energy targeting and monitoring program would be examined;

- assistance in preparation of a package of investment and technical assistance proposalsfor possible inclusion in the forthcoming World Bank/IDB energy sector loan.

In September 1995, a two-week study tour to energy efficiency institutions inKorea, Thailand and the Philippines was conducted as part of the TA, with one CONAEofficial and one official from the Secretaria de Energia (SE) participating. In their tripreport, the officials acknowledged the usefulness of the experience and cited variouslessons learned in these countries that could be applied to the Mexican program. Theywere impressed by major achievements of the energy conservation programs in Korea andThailand that have surpassed the level of achievements in Mexico. Of particular interestwere the legal framework within which the energy efficiency institutions were created, aswell as the funding mechanisms for their programs. In the three countries visited, it wasnoted that improvements in energy efficiency were effectively used to further energypolicy goals as well as environmental, technology and economic goals. The full trip reportin Spanish is provided in Annex I, with a summary English translation.

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The main ESMAP mission was fielded from September 25 to October 6, 1995. Itconsisted of Emesto N. Terrado, Principal Energy Planner, World Bank (task manager),John Armstrong, Director, Hagler-Bailley Consulting, Inc. (policy and institutions),Andrew Gilchrist, Manager, Management, Transport and Training Section, U.K. EnergyTechnology Support Unit (energy monitoring and targeting) and George Courville,Associate Director, Energy Division, Oak Ridge National Laboratory (energyconservation in buildings). The participation of Dr. Courville was an additionality to theTA tasks and was limited to the topic of energy efficiency in buihlings. During themission, three seminars at CONAE were given by the ESMAP experts: evolution andperspectives of energy efficiency institutions, setting of energy efficiency targets andmonitoring of energy savings, and on passive solar building design.

The ESMAP experts interacted extensively with CONAE staff working in thevarious subsectors. Priority attention was paid to assisting CONAE staff engaged inpreparing initial documents for the draft energy efficiency law. Advice was provided byESMAP experts during these meetings; recommendations on issues requiring moreanalysis were later provided in written reports submitted to CONAE. These consultants'reports are provided in full in the second section of this document

Key Issues

The key issues previously identified and discussed during the main missionincluded the following:

CONAE has a weak legal foundation. Having been established by Presidentialdecree it has limited legal authority.

Funding for CONAE is unstable and subject to fiscal uncertainty. CONAE is abody within the Ministry of Energy and governed by an interministerial board. Its annualfunding is obtained by submitting requests to the governing board with each agency on theboard contributing to the total funding from their respective budgets. In the past, someagencies were able to commit funds to CONAE while others were unable to contribute.Often, CONAE did not know until well into the fiscal year how much funds would becommitted and disbursed. Furthermore, the budget appears inadequate, given CONAE'sbroad range of responsibilities for energy efficiency in all sectors.

CONAE has inadequate capability for planning and evaluation. CONAE'sprograms are not identified as a result of a systematic and comprehensive analysis of thecosts and benefits of a wide range of programmatic approaches and interventions. Theyare presently selected primarily on the basis of perceived need. The specific impacts of theprograms are also not rigorously evaluated. Moreover, the potential benefits and impactsof improved efficiency are not fully accounted for in the national planning process becauseCONAE is not able to produce credible estimates for all areas of potential efficiencyimprovements. To date, estimates which have been incorporated into the national energyplan have been limited to the impact of cogeneration, i.e., only 4-5% of total forecast

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energy savings up to the year 2000, whereas the potential for efficiency improvement inMexico is certainly much larger.

There is weak coordination between the various existing energy efficiency bodies.An example is FIDE, a non-governmental trust fund with responsibility to implementprograms to improve the efficiency in the use of electricity. There is potential overlap ofactivities with CONAE in a number of areas but there appears to be little coordination atboth central and regional levels.

There is potential conflict between CONAE's regulatory role and its promotion ofvoluntary conservation. CONAE has no legal authority to promulgate minimum energyefficiency standards but has managed to establish standards by utilizing a general lawgoverning the issuance of standards by any agency. Its role in testing and enforcement isless advanced but concern has been voiced over possible future conflicts betweenCONAE's role as enforcer of regulations and its efforts to promote voluntary energyconservation programs in commercial and industrial facilities.

Summary of Recommendations

The recommendations summarized below involve measures that need to beincorporated in the proposed energy efficiency law, as well as actions that need to betaken independent of the promulgation of that law.

Institutional Reorganization

To strengthen CONAE's current institutional structure and funding situation, thethree possible options are i) enhancement of the status quo, ii) creation of a non-decentralized agency and iii) creation of a decentralized agency.

The first option would not require any new legislation. It would require certainadministrative actions to strengthen program planning and evaluation capabilities, elevateCONAE's policy role within the Ministry of Energy, and address the need for stable andincreased funding bv setting up a line item for CONAE in the national budget. Both thesecond and third option would require legislation in the Mexican Congress. Under thenon-decentralized agency option (similar to CRE's new set-up), a politically andoperationally autonomous agency would be established, but with adniinistrativeattachment to the Ministry of Energy. Funding would be by direct apprcpriation fromCongress.

Under the third option, CONAE would be restructured as a parastatal nationalenergy conservation agency, similar to CFE and PEMEX. This would provide thenecessary autonomy on budgetary and other matters. As a parastatal, CONAE, forexample, could engage in consultancy work (e.g. energy audits) and retain the generatedrevenues.

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While the second and third options clearly provide for greater autonomy, visibilityand authority, they also appear to be less politically feasible than the first option.Enhancement of the status quo can significantly improve CONAE's delivery of itsprograms more effectively but on the other hand does not provide a permanent legalfoundation for the institution.

This issue requires further detailed study of the ramifications of eachorganizational approach and is best left as an exercise for CONAE to conduct. What isneeded is a systematic analysis of factors such as the degree of visibility and centralizationrequired; considerations of administrative efficiency, accountability and communications,and political feasibility. These factors should then be evaluated against weighted criteriathat include the option's ability to: address the funding stability problem, elevateCONAE's policy role, and improve program planning and implementation. Politicalfeasibility is clearly a major consideration and, compared to the ESMAP experts, CONAEhas a decided advantage in making a final judgment on this matter.

Funding

CONAE's current funding instability undermines the planning effort due to wastedtime in developing alternative financing scenarios, and undermines the effectiveness ofprograms when cutbacks are made midstream in implementation. The possible solutionsare inextricably linked to the institutional restructuring that CONAE is finally able to makeand are implicit in the discussions above. One issue needs to be pointed out: thedecentralized structure where CONAE is able to take in and retain revenues for servicesappears attractive but carries the risk of CONAE being placed in direct competition withprivate firms offering the same services. This undermines one of CONAE's basic goalswhich is to develop the market for energy conservation services. A possibility that meritsmore detailed exploration is the creation of an Energy Conservation Fund generated by asmall tax on, for example, petroleum sales. Such an approach has been successfullyimplemented in Brazil, Korea, Thailand and other developing countries. Aside fromfunding instability the issue of funding level must be addressed, as well. CONAE's currentbudget of about $7 million is clearly inadequate if Mexico desires to accelerate theimprovement of national energy (and economic) efficiency on par with emergingeconomies of its kind.

Creation of Policy and Planning Unit

The capability to develop effective energy efficiency policy is intimately linkedwith the capability to do energy efficiency planning as they both require sufficient dataand in-house analytic capability. While the responsibility of developing a national energyefficiency policy cannot be limited to CONAE, it should clearly have the lead. Currently,there are no mechanisms within CONAE for setting medium- and long-term targets forachieving energy savings; annual plans are based largely on activities undertaken duringthe previous year. No projections or strategies for energy end-use by sectors existalthough an energy end-use model is currently under development.

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The creation of a policy and planning unit in CONAE's structure could addressthese needs. The unit would:

(a) spearhead the development of policies related to energy efficiency technologiesand practices, end-use regulations, appliance, machinery and building energy regulationsand other specific matters;

(b) identify key energy efficiency target areas and coordinate an agency-wideplanning process leading to specific subsector programs based on common assumptionsand consistent methodologies;

(c) establish and maintain comprehensive sector databases through surveys andother means. While progress has been made in the industrial and transport sector, a gooddatabase on the building sector is still lacking; and

(d) coordinate the setting of overall savings targets, the economic evaluation ofplanned projects, and the assessment of operational effectiveness and savings achieved.This is the energy targeting and monitoring (EMT) task that should be a key operationalresponsibility of the policy and planning unit. The energy end-use model now beingdeveloped with the capability to make forecasts up to the year 2005 would be animportant initial tool for EMT. Another is the utilization of the U3Es to provide feedbackson the potential for energy savings in the regional markets. Later, integrated resourceplanning (IRP) based models can be used to prepare estimates of the total potential forenergy efficiency savings which could then be integrated into the national energy sectorplan. The EMT experience in the U.K. is described in some detail in Andrew Gilchrist'sreport (attached) and provides some lessons that could be useful to the development of aworkable EMIT program by CONAE.

Development of Proposals for IBRD/IDB Energy Loan

The mission was requested by IDB and the Bank's energy sector operatingdivision to assist CONAE in developing an energy efficiency investment /TA package thatcould be proposed as a component of the forthcoming energy sector loan. Since bothbroad and detailed criteria for this potential loan component are still being determined noguidelines from IBRD/IDB for the type and size of subprojects are available. What seemscertain is that FIDE will be requested to submit a proposal for DSM-type of activities andCONAE for energy efficiency activities in the other subsectors.

Two possible investment areas emerged from discussions with CONAE staff: (1)financing of combustion/steam efficiency improvements in industry, and (2) theestablishment of private sector operated testing centers. The combustion/steam efficiencyinvestment would involve horizontal technologies and therefore the size of the projectcould be adjusted to the size of available funds for the component. USAID has allocated$0.5 million for preparatory work on this topic and CONAE has been chosen to be the

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lead agency in implementing the task. The results of the USAID activity will clearly be amajor input to the final definition of the investment proposal for the IBRD/IDB project.The establishment of testing laboratories will considerably strengthen CONAE'sregulatory and enforcement roles regarding energy efficiency standards..

On the TA side, two high priority areas that could be proposed are (1)strengthening of CONAE's planning functions, and (2) strengthening of regional U3Eoperations. The first would include funding of important sector studies, including adeeper examination of barriers to energy efficiency investments by the private sector.Funding for the second activity would enable additional energy audits, training andpromotional activities to be carried out by U3E regional units that is clearly one af thestronger points in the current CONAE set-up.

Next Steps

Using the findings and recommendation of the present report CONAE wouldcontinue with the: (1) finalization of the draft efficiency law; (2) initiation of someimportant functions of the planning unit, and (3) finalization of the IBRD/IDB loancomponent package. Some additional expert assistance may be needed and could beprovided through the existing USAID work. ESMAP has agreed to provide furthersupport in reviewing the loan component package to be prepared by CONAE and ininterfacing with World Bank/IDB project officers.

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STRENGTHENING MEXICO'S NATIONAL

ENERGY EFFICIENCY FUNCTION

Prepared for:

Energy Sector Management Assistance Program

The World Bank

December, 1995

Prepared by:

John R. Armstrong

Director

Hagler Bailly Consulting, Inc.

Introduction

Technical Assistance Assignment

This report was prepared by Mr. John Armstrong as part of a technical assistance assignment to Mexico forthe Energy Sector Management Assistance Program (ESMAP) of the World Bank. Mr. Armstrong was partof a team of experts, including Emesto Terrado, Principal Energy Planner, World Bank, Dr. AndrewGilchrist, Manager, UK Energy Technology Support Unit, and Dr. George Courville, Oak Ridge NationalLaboratory, who conducted a technical assistance mission in Mexico during the period September25-October 5, 1995. Mr. Armstrong's terms of reference for this assignment were the following:

1. Provide technical and other inputs to CONAE's current efforts to prepare an energyefficiency law that, among others, seeks to define a more stable institutional basis forCONAE. Specific areas to be addressed include:

* need for stable funding* relationship to FIDE and other relevant agencies* role in policy development* role in program design and implementation* role in energy efficiency regulation* role of regional of fives

2. Provide advice on how best to set up a small planning unit within CONAE, including itsfunctions and responsibilities, position in the organization and staffing, and its workingrelationship with other units within CONAE. Suggest a program of activities for theplanning unit in the short term.

3. Prepare report of the mission and submit to the Bank.

Current Status

Mexico is currently experiencing a severe economic downturn, including a significant devaluation of thePeso, high interest rates and low to negative economic growth. This atmosphere has increased the sense ofurgency and importance of the need to improve energy efficiency and reduce waste. Government officialsare increasingly looking to CONAE (the National Commission for Saving Energy) to lead this effort toimprove efficiency, including the design and implementation of national programs, policyrecommendations and efficiency improvement estimates as inputs to the national energy planning process.

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However, CONAE faces a number of challenges in meeting these new expectations. These include:

* Funding for the agency is not stable or certain. CONAE was established by Presidential decreeas a body within the Ministry of Energy governed by an interministerial board. Annual fundingis obtained by submitting requests to the Board with each agency on the board contributing tothe total funding request from its own budget. Historically, some agencies are able to commitfunds to CONAE and others are not. Often, CONAE does not know until well into the fiscalyear how much its budget will turn out to be.

* CONAE has a weak legal foundation. Having been established by decree, it has limited legalauthority. A decree is also easily withdrawn and does not necessarily have the full support ofCongress behind it.

* There is inadequate capability for planning and evaluation. CONAE's programs are notidentified as the result of a comprehensive analysis of the costs and benefits of a wide range ofprogrammatic approaches and interventions. They are selected primarily on the basis ofperceived need. The specific impacts of the programs are also not rigorously evahdated, thusstatements regarding the agency's effectiveness can be subject to criticism. Equally important,the potential benefits and impacts of improved efficiency are no' fully accounted for inMexico's national planning process because CONAE is not able io produce credible estimatesfor all areas of potential efficiency improvements. To date, estimates which have beenincorporated into the national plan have been limited to the impact of cogeneration, i.e., only4-5%, whereas the potential for efficiency improvement in Mexico is undoubtedly much larger.

* Multiple agencies with responsibility for energy efficiency create increased demands forcoordination and possible diffusion of authority. These agencies include FIDE, anon-governmental trust fund with responsibility for saving electricity and with its own regionaloffices; IIE, a governmental entity with responsibility for research related to electricityefficiency; FUNTEC, a non governmental trust fund with responsibility for promotinginnovative technologies, some of which are related to energy efficiency; UCAE, the creditunion for energy saving; and the U3E's, regional offices reporting to CONAE - to mentionsome of the more important entities with which CONAE must coordinate and cooperate.

In spite of these handicaps, CONAE enjoys strong support from the highest levels of government, from theprivate sector and from multilateral and bilateral donor agencies. It's programs have also been perceived bymost as successful and effective. There is currently an impetus within the government to address theweaknesses in the structure and funding of CONAE in order to create a strong national institution whichcan adequately address the countries needs to improve efficiency in order to ameliorate the currenteconomic crisis, improve international competitiveness and reduce environmental impacts resulting fromenergy production and use. The discussion which follows analyzes the issues involved in strengtheningMexico's energy efficiency function and presents recommendations on possible actions where appropriate.

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Discussion of Key Issues

Funding for CONAE

The issue of funding for CONAE is multidimensional. First, there is the issue of the stability of the

funding. Second, there is the issue of the amount of funding. And third, there is the issue of the source offunding. These issues, in turn, are intertwined with other issues involving CONAE's institutional status, forexample, whether it becomes an independent parastatal such as CFE, and CONAE's basic activities andgoals, for example, whether CONAE provides energy conservation services itself and receivescompensation for these services as a source of revenue, risking possible competition with private firmsoffering the same services. These issues will be isolated to the extent possible and discussed below.

Funding Stability - The instability of CONAE's funding results in large part from its institutional structure.CONAE was created in 1989 by Presidential decree as an interdepartmental institution to promote andcoordinate energy conservation and efficiency in Mexico. In order to promote coordination andinvolvement among agencies in the national energy conservation effort, CONAE is governed by a Board ofDirectors consisting of vice-minister level representatives from nine key agencies: six federal ministries:Ministry of Energy (SE), Ministry of Commerce and Industry Development (SECOFI), Ministry of PublicEducation (SEP), and Ministry of Finance and Public Credit (SHCP), Ministry of Communications andTransport (SCT), and the Ministry of Environment, Natural Resources and Fisheries (SEMARNAP); andthree representatives from PEMEX, CFE and the Mexico City government (DDF). The Board is chaired bya representative of the Minister of Energy and CONAE is legally located within this ministry.

Funding for CONAE comes from the contributions of the agencies represented on its Board of Directors.The budgeting process involves the preparation and submittal of an annual plan and budget by CONAE tothe Board. The various agencies are then asked to contribute to the funding of the plan from their ownbudgets. As can be expected in difficult times such as the present, agencies are forced to decide betweeifunding internal activities versus contributing to the national energy conservation program. Some agencies,such as the Ministry of Energy, have consistently funded CONAE. Others have never given any of theirfunds to CONAE; and still others have given in the past but are now having difficulty allocating funds toCONAE. As a result of this uncertainty, CONAE must actually prepare three budgets, a high, medium andlow, in order to plan for the full range of budget uncertainty.

The funding instability has several negative consequences. It undermines the planning effort and wastestime and money in unnecessary planning. More significantly, it undermines the effectiveness of programsbecause they often need to be cut back in midstream due to unavailability of funds. It is also demoralizing

to staff, weakens the effectiveness of the agency and makes it more difficult to receive international donorfunds because of the inconstancy of matching funds and implementing staff.

Several alternatives are possible for improving funding stability. One alternative is to restructure CONAE

as an autonomous agency (or "decentralized" agency, in GOM parlance), similar to CFE or PEMEiE. This

would enable CONAE to take in and retain revenues for services provided, such as fees for energy audits.

This approach has the advantage of providing CONAE with its own funding source independent of

government budgetary constraints and also provides market feedback on the need for and effectiveness of

CONAE's services. The primary disadvantage of this approach is that it risks placing CONAE in direct

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competition with private firms offering these sane services, thereby undermining one of the basic purposesof CONAE, which is to help foster the establishment of a market driven capacity and demand for energyconservation services.

Much discussion took place among the technical assistance team and CONAE on the issue of adecentralized agency. Although there may be other reasons to establish a decentralized agency, it was thegeneral opinion of the technical assistance team that the advantages of having an outside source of revenueswere greatly outweighed by the inhibiting effect this would have on the development of Mexico's nascentenergy conservation service industry. Our recommendation, therefore, is that CONAE not use the sale ofservices as a primary means of funding its activities and that this capability not be included in the draft law.This is not to say, however, that all of CONAE's services should be provided for free. Experience withenergy conservation programs elsewhere has shown that often services that are provided for free are notvalued by the customer. Thus, it may be appropriate for CONAE to charge fees for some activities simplyas a matter of enhancing credibility and perceived value by its clients. As a matter of broad strategy andintent, however, CONAE should hire private firms to provide energy conservation services under its aegis,thereby supporting development of the energy conservation services industry rather than undermining it.

A second option to stabilize funding is to have CONAE funded solely by the Ministry of Energy but as adistinct line item in the Congressional budget. This option is made more compelling if CONAE isrestructured as what is termed a "nondecentralized" agency, similar to the recent restructuring of CRE.Currently, CONAE is considered part of the Ministry of Energy. As a nondecentralized agency, it would bepolitically and operationally autonomous but still receive its funding through the Ministry of Energy as aline item in the budget. This option is an improvement over the current situation in that it would giveCONAE direct budgetary authorization and appropriation from Congress rather than rely on the goodwillof its Board of Directors. CONAE still would be subject to the effects of economic downturns to the extentthat they affect the budget, but this alternative should give it increased stability and certainty.

A third option which relates indirectly to CONAE's annual operating budget is the creation of an EnergyConservation Fund. The idea of a fund is explored in more detail later. It's effect on the stability ofCONAE's operating budget is that the fund would be used pay for programs, procure equipment fordemonstration projects, provide incentives and similar non-operational items, leaving the funding forCONAE's day-to-day operations, e.g., salaries, rent, office equipment, up to direct appropriations byCongress. The amount for CONAE's operating budget should be relatively constant year to year, whereasthe amount of funds required for programs to help establish a strong market for energy efficiency will berelatively large in the near term and taper off as both the demand for energy efficiency services and thecapacity to deliver them are developed in the private sector and the need for government interventiondiminishes (see Figure 1).

The approach of separating the operating budget from the program budget has been taken by a number ofcountries when there was a perceived national need to greatly strengthen the energy conservation functionand to accelerate market development and transformation. This has been accomplished primarily by theestablishment of a separate fund or source of revenues for the programmatic component of the budget. Forexample, Brazil is using its RGR fund as a source of funding for expanding its demand-side management(DSM) programs under PROCEL. The RGR funds will provide PROCEL with $30-40 million per yearover the next several years to help establish a strong market for energy efficiency. These funds are in

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addition to their normal operating budget. Thailand, Korea and other countries have established nationalenergy conservation funds, often based on a small tax on fuels, which are administered by permanentagencies that are funded separately through ordinary government appropriations. In the case of CONAE,the establishment of a national energy conservation fund would enhance the funding stability of any of thevarious institutional options while greatly strengthening the countries efforts to improve energy efficiency.

Funding Amount - CONAE's FY 95 budget is approximately $7 million. A detailed analysis of whether thisamount is adequate to fund CONAE's operational budget is beyond the scope of this assignment. However,it can be said with reasonable confidence that this amount is clearly inadequate if Mexico desires toaccelerate the improvement of national energy (and economic) efficiency on par with Brazil, Thai1 and,Korea and other rapidly developing nations. Thailand's Energy Rationalization fund receives approximately$40 million annually for financing demonstration projects and providing incentives, in addition tc thefunding of the Energy Conservation Center for Thailand and the Department of Energy Planning andDevelopment. Similarly, Brazil's PROCEL together with Sao Paulo's Agency for the Application of Energywill receive $40-55 million annually beginning in 1996. FIDE, a non-government commission and trustfund dedicated to improving the efficiency of electricity use iri Mexico, hias a FY 95 budget of $10-12million, and CFE has recently budget $80 million for the next five years for FIDE to implement DSMprograms. Given CONAE's broader range of responsibilities for energy efficiency in all sectors and fuels,by comparison its annual budget would seem to be low. Discussions in the fiuture need to focus not only onits operating budget, however, but also on the need for short term (5-10 years) increases in programmaticfunds to accelerate efficiency improvements at a pace similar to competing countries.

Funding Source - CONAE's funding currently comes from contributions from the agencies on its Board ofDirectors and periodic contributions, usually for specific purposes from multilateral and bilateral donoragencies. As discussed above, it is the funding mechanism, not the source, which causes CONAE's fundinginstability. It is, therefore, recommended that CONAE continue to receive federal funds but that thefunding mechanism be changed to provide stability. CONAE should not turn to providing its services on afee basis in order to generate revenues from a nonfederal source. On the other hand, CONAE would benefitgreatly from the availability of substantial programmatic funds generated from a special tax on energy, forexample, or from a direct appropriation from Congress if the former is not possible.

Institutional Structure

The degree of autonomy and authority given to CONAE depends on the relative importance the Mexicangovernment wishes to give to its national energy efficiency effort. Numerous discussions the technicalassistance teanm had with top government officials indicated virtually unanimr.us support for a muchstronger national energy conservation function. All those questioned agreed that CONAE was theappropriate agency to lead the national energy conservation effort but that it needed strengthening in orderto meet the new challenges. The areas in which it was felt by those questioned that CONAE should bestrengthened include:

* energy efficiency policy development* energy efficiency market development, including demonstration projects, inicentives, public

information and education, and development of a private energy conservation services industry

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* national energy efficiency planning including estimation of energy efficiency potential withinthe national economy as an input into the national energy sector plan

* energy efficiency regulation* energy efficiency financing.

In order to assess where CONAE needs to be strengthened, a systematic functional evaluation should beconducted. A methodology is suggested in Annex A which the CONAE staff could conduct themselves aspart of the process of developing the draft energy conservation law. In the absence of such an analysis,institutional options will be presented and analyzed based on the series of meetings conducted by thetechnical assistance team.

Three institutional options emerged from the discussions:

I1. Enhancing the status quo - This would not require any new legislation and wouldachieve the following measures through administrative action:

* Maintaining the current institutional structure of CONAE, i.e., a commission located withinthe Ministry of Energy with a multi ministerial Board of Directors

* Strengthening the planning function with the addition of at least two staff and thenecessary support resources sufficient to produce credible estimates of national energyefficiency potential for national energy sector planning purposes

* Strengthening the program planning and evaluation capabilities of CONAE

* Elevating the policy role of CONAE within the Ministry of Energy

* Addressing the need for stable and increased funding by setting up a line item in the nationalbudget for CONAE and eliminating the requirement that its funds be donated by agenciescomprising its board

2. Creation of a nondecentralized agency - This would require legislation that would accomplishthe following:

* Establish a politically and operationally autonomous agency. Several reporting options arepossible, such as the head of the agency reporting to a board appointed by the President andcomprised of both public and private representatives.

* Funding would be by direct appropriation from Congress but the agency would be fied to theMinistry of Energy and receive administrative services from the Ministry.

* Agency authorities and functions would be spelled out in law but at a minimum wouldinclude all current functions and responsibilities as well as the enhancements described in(I) above.

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3. Creation of a decentralized agency - This would require legislation that would accomplishthe following:

* Establish a completely autonomous parastatal entity similar to CFE or PEMEX

* Funding would come from direct appropriations from Congress but could include theability of the agency to generate its own revenues through the sale of services

* Agency authorities and functions would be spelled out in law similar to (2) above

The advantages and disadvantages of each of these options are discussed below:

Enhanced status quo - This option has the advantage of being the most politically feasible. It wouldpotentially strengthen some of the current weaknesses in CONAE and could be implemented quickly. Itsdisadvantages are that it does not provide a permanent legal foundation for CONAE and it does notincrease the agency's visibility, level of authority or autonomy. Policy authority would be subject to thestrength of the Technical Secretary of CONAE and would not be firmly established in law. Programscould still be very effective, however, and the planning and evaluation functions could be similarlystrong.

Nondecentralized agency - This option has the advantage of greater autonomy, visibility and authority.Although CONAE would be administratively attached to the Ministry of Energy, its authorities would beestablished in law and it would have independent policy-making authority. This type of structure wasrecently chosen to strengthen Mexico's CRE to give it independent regulatory authority over utilitytariffs and a transparent decision-making process. If political authority and accountability are important,the head of CONAE could report directly to the President. If a more politically independent agency isdesired with clear links to the private sector yet still performing a coordination function among publicsector agencies, the agency head could report to a board of directors comprised of both public andprivate sector representatives. One disadvantage of this option is that it requires the passage oflegislation. However, a nondecentralized agency might be more politically acceptable the creation of acompletely autonomous parastatal.

Decentralized agency - The creation of a completely decentralized agency would provide the greatestlevel of autonomy, visibility and authority (depending, of course, on those authorities given to it in law)for CONAE. It may very well be appropriate for Mexico at this time when, after years of neglect ofenergy efficiency compounded by the current economic problems, Mexico needs a very strong programto reduce waste, improve economic efficiency and international competitiveness. This structural optionwould potential provide the basis for broad powers and authority, including ability to generate its ownrevenues and engage in enforcement activities. The creation of such a strong and independent agency isgenerally not consistent with general trends in governance among developing nations. Most countriesare in the process of downsizing government, drastically reducing the degree of government interventionin the marketplace, privatizing parastatals and introducing competition into previously politicallyregulated sectors such as energy. The creation of a decentralized agency for energy conservation wouldgo against this trend but nonetheless be needed to counterbalance strong biases toward supply-sidesolutions to energy needs. If such an agency were established, a "sunset provision" might be included inthe enabling legislation to make passage more politically acceptable. Such a provision would call for the

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elimination of the agency after a period of time, such as 10 or 15 years, unless specifically reauthorizedby Congress. This would force the reexamination of the need for such a strong government role and anevaluation of the agency's past effectiveness.

Given the complexity of determining the best institutional structure for CONAE, no recommendation canbe made at this time. Nonetheless, criteria for evaluating the options are suggested which governmentofficials and lawmakers can use in making their determination. Such criteria would include thefollowing:

* Ability to solve funding problem - Both the nondecentralized and decentralized optionswould seem to offer the best hope for this.

* Ability to enhance policy role - This may be very dependent on how the legislation iswritten. It could be argued that the current structure or a nondecentralized agency attachedto the Ministry of Energy (SE) might have a stronger potential policy influence because ofits location within SE and daily access and support of SE officials. An agency completingremoved from SE could potentially be ignored in the national energy sector planningprocess. On the other hand, if given sufficient authority, a decentralized agency couldbecome an energy efficiency "czar", with broad powers and financial resources of its own.If CONAE responsibilities are expanded to cover renewable energy and pollutionprevention, the decentralized option could give Mexico a very substantial capability toimprove efficiency and reduce waste.

* Ability to improve program effectiveness - Improving program effectiveness iseffectiveness results from careful design, constant monitoring, and periodic evaluation ofprocesses and impacts. Nonetheless, institutional structure can influence overallperformance, first, by improving funding stability as discussed earlier, but also byimproving the visibility of the agency among the public and therefore the generalawareness of the need for energy efficiency. Certainly an agency with strong regulatoryauthority and enforcement capabilities, combined with programs to assist persolis affectedmeet the regulatory requirements, would command the attention of much of the privatesector. Also, to the extent a stronger agency has greater policy input, policies can beimplemented to support programs and vice versa.

Ability to improve national energy efficiency planning - Key factors in improving national energyefficiency planning include the authority to access or collect the necessary data, sufficiert resourceswithin CONAE to do the necessary analysis and modeling, and legal requirernmnts that national energysector plans include comprehensive estimates of the efficiency resource. These factors are notnecessarily tied to structure but a strong national energy conservation law (creating a more powerful andautonomous agency) is more likely to include them.

Other factors to consider when evaluating institutional options include the degree of centralizationdesired. A high degree of centralization usually produces a greater level of authority, whereas greaterdispersion of the function requires more coordination among those with energy efficiencyresponsibilities. Still other factors include the degree of visibility desired for the agency, administrative

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efficiency considerations, accountability, lines of communication, levels of authority in various areas,ability to adapt to changing circumstances, and, of course, politically feasibility. To conduct a moresystematic institutional analysis, all of these factors and criteria can be weighted and place in a matrixand each institutional option evaluated against the weighted criteria. This exercise is left for the CONAEstaff to conduct.

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Role of CONAE in Policy Development and Planning

CONAE has focused primarily on energy efficiency programs since its inception in i989. These havecovered all sectors, including transport, and have generally been viewed as quite successful althoughinsufficient data exists as to their actual impacts. Energy efficiency policy has been primarily the provinceof the Ministry of Energy and has been expressed in the creation of CONAE apd its "link units" (U3Es),the establishment of FIDE, the restructuring of CRE to create independent and transparent tariffregulation, passage of laws to promote cogeneration, and the restructuring of PEMEX. CONAE has hadlittle role in these policy developments and only recently has had input into the preparation of the nationalenergy sector plan.

The ability to analyze and develop policy are intimately linked with the ability to do energy efficiencyplanning because they both require sufficient data and the in-house analytic capability. If Mexico is tostrengthen its energy efficiency function, it must establish explicit responsibility for energy efficiencypolicy development in law and it must provide the resources necessary to carry our policy analysis andplanning. For policies related to energy efficiency technologies and practices, end use regulations,appliance, machinery and building energy regulations and other specific matters, it is appropriate to vestthese policy making responsibilities in CONAE. Broader efficiency policy matters, such as restructuringof the energy sector, may more appropriately reside with SE, with a role for review and comment on thepart of CONAE and other agencies.

The draft law, however, should not limit the energy efficiency policy responsibility to only CONAE,although CONAE should clearly have the lead. The statutes of other agencies should be reviewed todetermine whether they sufficiently address energy efficiency and if not, language should be drafted andincluded in the draft energy efficiency law such that the law is truly comprehensive in nature. To thedegree that energy efficiency responsibilities are included in the enabling statutes of other agencies, issuesof coordination need to be addressed as well. Mechanisms for policy coordination that might beconsidered in the draft law include using the Board of Directors if there is one, or establishing a separateEnergy Efficiency Policy Coordinating Board comprised of the relevant agencies as well as private sectorrepresentatives. Of course, the national planning process serves as a policy coordinating mechanism butfirst level plans are developed only every six years and second level sectoral plans for five years. Thus,there needs to be a mechanism for more frequent discussion and promulgation of policies. Creating such amechanism in law will give much more credence and importance to energy efficiency policydevelopment.

Regarding energy efficiency planning, CONAE should have the statutory responsibility to prepareestimates for energy efficiency potential which are then incorporated into the energy sector plan. Theenergy sector plan should thus aim at becoming an integrated resource plan (IRP), or because it includesall energy sources, become what has recently been termed a "meta ERP". Mexico would then possess thecapability to determine the extent to which energy efficiency and renewable energy can contribute tomeeting national energy needs, including the relative costs of these resources, and both the economic andenvironmental benefits to the nation of using these resources.

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Coordination of CONAE and FIDE Activities

The Fideicomiso de Apoyo al Programa de Ahorro de Energia del Sector Electrico (FIDE) is a private,nonprofit implementing organization for a dedicated trust fund. FIDE currently has 35 staff persons andanother 14 persons located in regional of fives.. FIDE's annual budget of $10-12 million is larger thanCONAE's. Its funds derive from the trust fund whose source of revenues is a voluntary contribution of0.2% of contract revenues from contractors working for CFE. CFE matches this amount from its ownrevenues.

Although FIDE's activities are restricted to improving the efficiency of electricity use, whereasCONAE's responsibilities cover all energy forms, there are nonetheless a number of areas of potentialoverlap with CONAE activities. For example, both FIDE and CONAE fund energy audits and FIDEauditors do not restrict their assessments to just electricity. Requests for energy audits are usuallyreceived by the regional offices. CONAE currently has 15 regional offices and FIDE has I 1. Discussionswith both FIDE and CONAE revealed that there is no coordination among the regional offices as far asaudit requests are concerned, or other activities, as far as could be determined. There is no sharing ofresults, coordination of who has received audits and who has not, or pooling of information for purposesof monitoring national progress.

In addition to energy audits, FIDE conducts demonstration projects, cogeneration feasibility studies,works on the development of efficiency standards and finances both energy audits and the procurementof energy efficient equipment by commercial and industrial firms. FIDE finances about 30 projectsannually. For the most part, energy audits are contracted out to private firms (all auditors are members ofthe Chamber of Industrial Consultants), although FIDE staff themselves do audits for a fee for residentialand small commercial customers.

FIDE is also the primary implementing organization for demand-side management (DSM) programs.Although these were relatively small several years ago, they have grown in recent years through theefforts of USAID and others. CFE recently budgeted $80 million for five years for DSM programs wl.ichwill be designed and implemented by FIDE. Thus FIDE is a major component of Mexico's overall energyefficiency program.

FIDE is governed by a Technical Committee which meets quarterly. The Technical Secretary of CONAEis a member of this 16 person committee. The presence of CONAE on the Technical Committee and theissuance of a quarterly report by FIDE appear to be the primary means of coordination between these twobodies.

Given the relatively scarce resources available for energy efficiency in Mexico, it would seem thatCONAE and FIDE should coordinate their activities wherever possible to avoid duplication orconflicting programs and policies. Based on discussions with both FIDE and CONAE, it did not appearas though any attempts are being made to coordinate programs at the staff level. The establishment of adhoc committees or groups at the staff level could help improve coordination, avoid duplication, andpossibly enhance the effectiveness of the programs of both agencies. Areas where such ad hoccoordinating committees could be considered include:

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* coordination of the activities of the regional of fives, including energy audits

* coordination of activities to develop energy efficiency standards

* coordination of public awareness campaigns and other information programs

* coordination of training activities

* sharing of information and pooling of results and data so that CONAE is better able to estimatenational efficiency progress and potential, as well as target new programs

There may be other areas that need coordination as well, but starting with just one or two of the above asa test might be an important beginning.

Role of CONAE in Energy Efficiency Regulation

CONAE has an active program in promoting the establishment of minimum energy efficiency standards.Currently, three standards are now in effect: refrigerators, room air conditioners and three phase electricmotors. These standards were published in the Gazette in 1994 and went into effect in 1995. Buildingenergy efficiency standards were published in the Gazette in 1995 but objections to certain aspects of thestandards by the building community has prevented them from going into effect and CONAE isconsidering alternative approaches. CONAE is also looking at CAFE standards for automobiles andstandards for agricultural pumps.

CONAE itself does not have legal authority to promulgate standards. It utilizes instead a general lawgoverning this issuances of standards by any agency. Under this law, a government agency submits aproposal for a standard to a special committee and it is reviewed. After review it is published in theofficial Gazette for public comment. The committee reviews the comments, incorporates them into theproposed standard if the standard is generally accepted and issues the standard with the force of law.

Discussions with CONAE elicited concern over possible conflict between its role in the development andpossible enforcement of energy efficiency regulations and its role in promoting voluntary energyconservation. It was felt, for example, that owners of industrial and commercial facilities might bereluctant to work voluntarily with CONAE to improve efficiency for fear of being cited fornoncompliance with some efficiency regulation. More generally, it was felt that the public perception ofCONAE as a regulatory agency might undermine its effectiveness with its many voluntary programs.

Although possible conflict between these two roles is a legitimate concern, the experience of many otherenergy conservation agencies is that regulatory and promotional roles need not be in conflict and, in fact,can be mutually reinforcing. For example, the former Minnesota Energy Agency issued the firstregulation in the United States requiring minimum efficiency standards for existing residential rentalhousing. Previously, all standards were only for new construction. The agency also enforced thisregulation. In order to gain the trust of the landlords to promote widespread voluntary compliance, andthereby obviate the need for a costly enforcement program, the Agency developed a vigorous program ofassistance to landlords to upgrade their facilities to the level of the standards. The program included bothtechnical and financial assistance, and as long as the landlord was making a good faith effort at

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compliance, penalties were not imposed. This approach was quite successful and this regulation wassubsequently copied in several other states.

In general, the negative reactions engendered through regulations and their enforcement can be overcomeand even turned into a positive force for change, if positive, supportive programs are offered to help thefirm come into compliance. This approach is effective in the case of retrofits because the investment inefficiency saves money in operations and eventually pays for itself. In the case of minimum efficiencystandards for new appliances and equipment, cooperation of the industry can be gained through targetedfinancial assistance, such as the Golden Carrot Award developed by the U.S. EPA, or supportivemarketing and incentive programs, as many utilities in the U.S. have implemented with manufacturersand retailers, so called "trade allies". Brazil's PROCEL has developed voluntary standards agreementswith refrigerator manufacturers and is achieving efficiency improvement without regulation, thusdemonstrating that supportive programs on the part of government, such as "market pull" programs, canprovide sufficient incentive for manufacturers to voluntarily improve the efficiency of their products.

Thus, giving CONAE the authority to issue and enforce efficiency standards in the draft law should notbe dismissed out of hand. If these powers are wielded in a cooperative spirit with industry, broad, largelyvoluntary improvements in efficiency can be achieved. CONAE could play a key role in both regulationand promotion.

Energv Efficiency Fund

The idea of an energy efficiency fund was not under consideration by the CONAE staff at the time of thevisit by the technical assistance team. The concept of a fund was suggested for their consideration as partof a general strategy strengthen the nation's energy efficiency effort, in concert with the drafting of theenergy efficiency law and the restructuring of CONAE. Energy efficiency funds have been successfullyused by other developing countries to rapidly expand both the demand for and capability to supplyenergy conservation services. Funds can be used to leverage private investment in efficiency, acceleratethe introduction of new technologies, support research and development of more efficient products andstimulate the formation or expansion of firms offering energy efficiency related services. As mentionedearlier, Thailand, Brazil, Korea and others have established funds or revenue sources to complementtheir programs and accelerate market development. These types of funds typically generate $4C-50million per year and are generated by a small tax on energy, often petroleum.

Energy efficiency funds do not need to be established in perpetuity. As illustrated in the figure below,they are necessary only to promote the establishmerit of a viable market for energy efficiency. As themarket develops and private firms emerge to sell products and services in the market, the types ofincentive programs financed by the fund can be withdrawn. Modest levels of funding may need to beretained for a longer period of time to support continued research, development and commercializationof new technologies.

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It is suggested that the Government of Mexico consider the establishment of an energy efficiency fund asan integral part of its strengthening of the nation's energy efficiency function. A small tax on petroleum

Figure 1Typical Energy Conservation Center Evolution

l K ~~~~~~~Funds from ANational Energy

/ Monitoring and E taluation Fund

o) 10 20 30

Time (yrs)

sales as a source of funds would have the policy advantage of providing a small price incentive to conserveone of Mexico's most precious resources while using the funds generated to further conserve oil and otherenergy resources. The tax should be established to produce around $40 million annually in revenues.CONAE should be expected to achieve a leverage ratio of five to one with these funds, so that $40 millionrevenue would stimulate $200 million annual investment in efficiency improvement.

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Discussions with government of finials indicated that it is a firm policy of the Ministry of Finance not toestablish segregated funds based on dedicated taxes. The rationale is that once this policy door is opened, awhole host of special interests will put on pressure to have their own special funds. This, in fact, is agenerally adopted tax policy the world over. Nonetheless, there are areas of critical national interest wheresuch segregated funds are justified and a number of nations in a position similar to Mexico have determinedthat the need for such a fund for energy efficiency outweighs its potential disruption of tax policy. A limitedamount of research on the part of the CONAE staff revealed some precedents in Mexican law for suchsegregated funds. Both legal and policy impediments to such a fund should be investigated further, anddiscussion of the fund woven into the overall discussion of strengthening Mexico's energy efficiencyfunction.

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Annex A

Functional Evaluation Method for CONAE

In order to arrive at an appropriate institutional structure for energy efficiency in Mexico, it would bemost desirable to conduct a systematic evaluation of critical energy efficiency functions. Criticalfunctions can be derived in large measure from the process required to implement energy efficiencyimprovements, often referred to as the "total energy management" process (see Annex B). A criticalenergy management function is defined as a component of national energy management without which thenation cannot adequately and economically meet the nation's energy needs. Critical energy managementfunctions related to efficiency include:

Energy emergency preparednessData acquisition and managementEnergy demand forecasting and efficiency potential estimationPolicy analysis and developmentNational energy efficiency planningTechnical assistance (i.e., program planning and implementation)Energy efficiency regulationCoordinationTechnology assessmentsTechnology development and commercializationInformation dissemination, training and educationFinancingEvaluation, including impact and process evaluation for programs and evaluationof macroeconomic impacts

Each of these functions can, in turn, be evaluated based on various management criteria to assess theircurrent effectiveness. Six typical criteria are:

1. Statutory authority - the degree to which an agency has the legal authority to direct andmanage a particular function

2. Staffing - the adequacy of existing staffing levels3. Technical capability - the adequacy of in-house knowledge and experience4. Funding - the adequacy and stability of the level of funding5. Management - the effectiveness of internal management and direction, such as the establishment

of strategic objectives and expected results6. Results - the ability to complete an activity and the effectiveness of the results

If a scoring system is used to evaluate each function against each criterion using, for example, a range ofI to 5 where I means the function is non-existent, 3 means it needs strengthening and 5 means fullyfunctioning, then a functional evaluation matrix can be developed which maps the functional adequacy ofthe current organization and pinpoints areas needing strengthening. An example of such a matrix isillustrated below.

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Functions Statutory Staffing Technical Funding Management Results Average

Authority Capability Score

Energy emergency preparedness

Data acquisition and management

Energy demand forecasting andefficiency potential estimation

Policy analysis and development

National energy efficiencyplanning

Technical assistance

Energy efficiency regulation

Coordination

Technology assessments

Technology development andcommercialization

Information dissemination,training and education

Financing

Evaluation

Average Score

KEY

1= Non-existent

2= Inadequate

3= Adequate

CONAE is encouraged to use a system such as this both to help strengthen the management of the currentorganization as well as to aid in drafting the national energy conservation law.

2-s

Annex B

The Total Energy Management Process

Awareness of Potential Savings

Top Management Commitment

Technical Assistance and Training

Institution Building

IInformation Dissemination

l~~~~~~i Energy and Engineering Audits and

Feasibility Study

Financing

IEquipment Procurement

Project Construction

Monitoring and Evaluation

Source: Hagler Bailly Consulting, Inc.

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LIST OF CONTENTS

Page NoSUMMARY

1 INTRODUCTION 1

2 ACTIVITIES UNDERTAKEN DURING THE MISSION 3

3 ISSUES AND FINDINGS 5

3.1 Ministry of Energy 53.2 CONAE 6

3.2.1 Head of CONAE 63.2.2 Planning Unit 63.2.3 Energy Efficiency Law 73.2.4 Standards 73.2.5 Industry 83.2.6 Buildings and Public Lighting 93.2.7 Cogeneration and Renewable Energy 93.2.8 Transport 103.2.9 U3Es 10

3.3 Consultants 113.4 Industrial End-Users 113.5 FIDE 123.6 Aid Agencies 12

4 RECOMMENDATIONS FOR CONAE'S PLANNING,TARGETING AND MONITORING 13

4.1 Roles within CONAE 154.1.1 Sector Experts 154.1.2 U3Es 164.1.3 Planning Unit 17

4.2 The Planning Process 184.2.1 Long-Term Planning 184.2.2 Programme Planning and Target Setting 194.2.3 Annual Planning and Effectiveness Monitoring 19

5. Appendix

Appendix 1 Energy Efficiency Programme Targeting and MonitoringAppendix 2 Details of EU Projects with CONAE

LIST OF CONTENTS (CONTINUED)

Appendix 1 Energy Efficiency Programme Targeting and Monitoring

Appendix 2 Details of EU Projects with CONAE

ABBREVIATIONS AND ACRONYMS

CFE Comision Federal de ElectricidadCRE Comision Reguladora de EnergiaCONAE Comision Nacional para el Ahorro de EnergiaEC European CommunityESCO Energy Service CompanyESMAP Energy Sector Management Assistance ProgramETSU Energy echnology Support Unit of the UKEU European UnionFIDE Fideicomiso de Apoyo al Programa de Ahorro de Energia del Sector ElectricoFONAE Fondo para la Diversificacion y Ahorro de EnergiaNAFIN Nacional FinancieraNAFTA North American Free Trade AgreementPAESE Programa de Ahorro de Energia del Sector ElectricoPEMEX Petroleos MexicanosSEMIP Secretaria de Energia, Minas y Industrias ParaestatalesSME Small and Medium EnterpriseUSAID US Agency for International DevelopmentU3E Unidad de Enlace para la Eficiencia Energetica

SUMMARY

This report forms part of ESMAP's Technical Assistance (TA) to CONAE, TA that follows aWorld Bank review of the Mexican Energy Efficiency Programme being administered byCONAE. A four man mission travelled to Mexico on September 23 and held backgroundbriefings with all parties involved in CONAE's work.

Based on these meetings, this report initially examines the current infrastructure and systems thatCONAE is using for programme planning, programme target setting and the monitoringprogramme effectiveness and energy savings achieved. Key issues are highlighted in the report,though it is recognised that, as the meetings were not comprehensive, there might be otheraspects of CONAE's work that already addresses the points raised.

The second part of this report proposes methodologies, for discussion, for overall programmeenergy saving target setting and assessments and proposes roles and methods of working for thenew planning unit of CONAE. This includes tackling the issues of planning at all levels inCONAE and how overall planning activities can be co-ordinated. The focus of this report is onthe industrial sector.

The experiences of the UK are detailed. In particular, the methodologies that have beendeveloped for programme planning (long and medium term), annual planning and effectivenessand saving recording are discussed.

CONAE: PROGRAMME PLANNING, TARGETING AND hIONITORING

1 INTRODUCTION

This report forms part of ESMAP's Technical Assistance (TA) to CONAE, TA that follows aWorld Bank review of the Mexican Energy Efficiency Programme being administered byCONAE. The TA activity has the specific objectives of:

1. Assisting CONAE examine its future organisational options.

2. Assisting CONAE set up a policy research and planning unit, and

3. Assisting CONAE put in place a systematic method for setting energy efficiency targetsand monitoring achievements against these targets.

The starting point for the TA activity was the findings of the World Bank review. A four-manmission travelled to Mexico on September 23, the mission consisting of:

Ernesto N Terrado - Principal Energy Planner (IENDP), Mission Leader.

John Armstrong - Expert on Policy in Institutions.

Andy Gilchrist - Expert on Programme Targeting and Monitoring.

George Courville - Expert on Buildings Efficiency.

George Courville left Mexico City on Friday 29 September, with Ernie Terrado and JohnArmstrong leaving on Friday 6 October. Andy Gilchrist left on 7 October. During the mission,background briefings were held with all parties involved in CONAE's work. During this work, itbecame apparent that the initial Terms of Reference for this report would need to be changed, toreflect the more immediate needs of CONAE. The Terms of Reference for this report are thus:

1. To examine the current infrastructure and systems that CONAE is using for programmetargeting and monitoring energy savings.

2. To propose methodologies for overall programme energy saving target setting andassessments.

3. To propose roles and methods of working for the new planning unit of CONAE. Thiswould include tackling the issues of planning at all levels in CONAE and how overallplanning activities can be co-ordinated. The focus of this activity would be on theindustrial sector, with a discussion on the proposed operational structures for industrialwork.

1

The above work should include a description of experiences from running UK energyprogrammes, focusing in particular on how planning is undertaken and on how targets are set andenergy savings proven.

Chapter 2 details the activities undertaken during the mission. As the majority of the meetingswere with all members of the mission, details are not given. However, where individualmeetings were held, appropriate visit notes are contained in appendices. As part of the mission,on Tuesday 3 October, a seminar was given on the 'setting of energy efficiency targets andmonitoring of energy savings'. This reflected experiences from the UK, and also stimulateddiscussions amongst CONAE officers. A paper expanding the topics discussed in the talk isgiven in Appendix 1.

Chapter 3 outlines the main activities undertaken by CONAE in each of the areas investigatedduring the mission. It also details the outstanding issues related to this report's Terms ofReference. This chapter is based solely on what was learnt during the mission, and so does notattempt to detail all of CONAE's activities.

Chapter 4 discusses key recommendations arising out of this part of the mission's work. Itdiscusses how planning roles could be allocated within CONAE, together with methods ofrunning programmes. It also discusses methodologies for setting targets and proposesalternatives for assessing energy savings.

This report does not tackle the work CONAE is undertaking under the Energy Efficiency Law,nor its related institutional position. This is covered in a parallel report to be submitted by JohnArmstrong.

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2 ACTIVITIES UNDERTAKEN DURING THE MISSION

This chapter outlines the meetings held during the mission. Individual meetings held (ie whereno othet mission members were present) are indicated by an asterisks. The meetings were asfollows:

Monday 25 SeptemberMission briefingMeeting with Ricardo Escobar - International Co-operation Director

Tuesday 26 SeptemberIntroduction meeting with Fernando Bueno, Technical Secretary of CONAEGuillermo Rodriguez y Rodriguez, covering the Energy Efficiency LawAgustin Acosta, covering CONAE's standards workGuillermo Ortega, overview of technical co-ordination areaHugo Flores, covering industrial sector workRuben Avila, covering buildings and public lightingFederico Hungler, covering cogeneration and renewable energyFrancisco Arenas, covering transport.

Wednesday 27 SeptemberBuilding Energy Efficiency Seminar led by Mr George Courville.Cuitlahuac Rangel, covering the U3Es*Claudia Sheinbaum, covering introduction to energy modelling

Thursday 28 SeptemberVisit to Puebla, including:Meeting at U3E withJorge Zarate - President of Chambers of Commerceand Jose Pedraza, Head of U3E in Puebla.Visit to Yeso Panamericano, a small building materials manufacturer.Visit to Chiclets Adams, a sweets and chewing gum manufacturer

Friday 29 SeptemberEvaluation meeting with Mr Fernando Bueno.Meeting with Jorge Landa, Agency for International Development in MexicoMeeting with FIDE with Jesus Zadagamis*Meeting with Claudia Sheinbaum to discuss programme planning and target setting.

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Monday 2 OctoberMeeting with three energy efficiency consultancy frmns:High Tech ServicesEnergytec de MexicoAlesco Consultants*Meeting with Claudia Sheinbaum and Hugo Flores on the industry section's work*Meeting with Od6n de Buen on CONAE's planning function

Tuesday 3 OctoberSeminar given by John Armstrong on 'Perspectives of Energy Efficiency and ConservationInstitutions'Seminar given by Andy Gilchrist on the 'Setting of Energy Efficiency Targets and Monitoring ofEnergy Savings'

Wednesday 4 OctoberMeeting with Vincente Solano - Department of EnergyMeeting with Raul Monteforte - Department of EnergyMeeting with Mauricio Toussaint - Director General of Energy Policy, Department of EnergyMeeting with Jorge Zarate, Secretary of Policy and Demonstration, Department of Energy

Thursday 5 October*Meeting at British CouncilWrap up meeting with CONAE

Friday 6 October*Meeting with Joseph Ordoqui on the two EU projects with CONAE*Wrap up meeting with Claudia Sheinbaum

The details reported in Chapter 3 have come from the above meetings. Where all missionmembers were present at the meetings, individual reports have not been written. In addition, theindividual meetings with Claudia Sheinbaum and Od6n de Buen and Hugo Flores developedideas put forward during the seminar and further developed in this report. They are thus notreported on. Appendix 2 contains details of the EU projects as obtained in the meeting withJoseph Ordoqui.

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3 ISSUES AND FINDINGS

This chapter details knowledge gained from meetings with CONAE personnel and other bodiesworking in the Mexican energy efficiency field. It is not a comprehensive coverage of allactivities, as this was not the intention of the mission meetings. There are thus, probably, aspectsof CONAE's work that are not covered below, but which might address some of the outstandingpoints raised.

3.1 Ministry of Energy

Since December 1992, there has been a Regulatory Framework for the power sector that shouldhave allowed the entrance of Independent Power Producers and cogenerators. However, this newregulatory framework has not allowed new entrants into the market beyond a few schemes whereend-users are generating for their own self consumption. Part of the reason is that CFE sets atariff on average costs rather than long run marginal costs. Thus cogenerators cannot compete.These problems are being tackled by a new Energy Regulatory Commission Law, that iscurrently before Congress.

The Ministry is co-ordinating energy policy plans for the next ten years. During this period, 70%of CFE's oil fired plants will be shifted to gas. PEMEX will improve its overall efficiency,through the use of its new benchmarking simulation process.

In the energy planning, 4 or 5% of additional predicted demand to the year 2000 is covered byenergy saving programmes. It is envisaged that this energy saving will principally be throughincreases in efficiency in CFE and through the use of cogeneration. CONAE's role in the supplyside will, in the long term, be brought into this planning process.

The three main points that the Ministry sees for the future are that:

* There is a need for a stronger CONAE, which has legal basis, for operation in both thedemand and supply side.

* There is a need for an energy efficiency law, part of which will give CONAE a legalbasis.

* There is a need for a series of energy saving programmes aimed at the demand side.

There is also recognition in the Department of Energy that the institutional and funding ofCONAE are urgent problems that need to be tackled. In particular, it is recognised that inpractice Government departments do not always pay CONAE moneys that they promised to pay,partly because this funding is usually promised from general, unallocated budgets rather than aspecific departmental budget allocation for CONAE. CONAE's funding is thus not secure.Whilst opinions varied, it was generally thought that it would be very difficult to fund CONAEthrough a tax on fuel, the preferred option being a separate line in the Department of Energy'sbudget.

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CONAE's role in policy formulation is currently unclear, which in part relates to uncertainties inits position. Again opinions varied, but the preferred option appeared to be keeping CONAEwithin the Department of Energy, implementing programmes and providing policy advice. It isnot envisaged that CONAE has a policing function.

Key Issues: There is strong support for CONAE and its work at all levels within theMinistry of Energy.

Energy efficiency is seen as a fundamental part of energy policy.The funding of CONAE's work needs to be sorted outCONAE's institutionalposition needs to be defined

3.2 CONAE

3.2.1 Head of CONAE

Fernando Bueno is shortly to leave CONAE. His successor had not been appointed by the end ofOctober, which was causing some concern. However, the Ministry sees the post as an importantone and are looking for the right person.

Key Issue: There will be uncertainty until Fernando Bueno 's successor is appointed.

3.2.2 Planning Unit

The Planning Unit has recently been created, and consists of two members, both of whom arecurrently university lecturers. The functions of the Planning Unit are currently being established.Possible roles are put forward in Chapter 4.

CONAE currently has no long-term energy saving objective or target and there is no rigorousattempt at long-termn planning. Annual business planning is generally based on the level ofactivity in each sector undertaken in the previous year.

Within each individual sector, there are elements of medium-term planning, in that projectsfunded by the World Bank and by the European Commission are of, typically, two to three year'sduration. Thus, these programmes have some overall plan. However, it is believed that most ofthis planning is on an activity basis. It also appears that there is little work in the field ofmonitoring operational effectiveness, nor of assessing energy savings achieved as a result ofprogrammes. This latter topic, has started to be addressed as is detailed in Section 3.2.9.

An energy model is being developed at the university. Details of this are included in Appendix3. It is currently a fairly aggregated model, split upon five sector lines. In some of the sectors,particularly industry, there is further desegregation, but only at the sub sector level. The level ofaggregation is currently based on Mexican energy statistics. These statistics allow specificenergy consumptions, by various sectors and subsectors, to be calculated over the last 10 years.A general decrease in specific energy consumption is shown over this period (Appendices 4 &

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5). Within the next two months, the model should produce results under two macro-economicscenarios, with assumed increases in energy efficiency in each sector or sub sector.

Future work on the programme will extend the time horizon to the year 2025 and, over thecoming year, it is hoped to desegregate individual sub sectors by process and technologies.Thus, in the long term, the programme will be able to give a useful guide as to the long-terrnimportance of various sectors and technologies.

Key Issues The Planning Unit's role is currently being defined.In the past, energy saving targets have not been set.In the past, annual business plans have been based on previous

years activitiesIn the past, there appears to have been little work in the field of monitoring

operations effectiveness or of assessing energy savings achieved.An energy model is being developed, that in the medium to long-term will help

highlight areas of work

3.2.3 Energy Efficiency Law

CONAE reported on progress in drawing up an energy efficiency law. Currently laws from overnine countries have been studied and opinions of CONAE experts are being sought.

It is intended to put forward the first draft of the law by cutting and pasting laws from othercountries. The next stage will involve consulting CONAE members, followed by a public sectorconsultation involving ministries, research institutions, federal districts and fuel suppliers. Thiswill be followed by a public consultation, before it is submitted to the President who will send itCongress.

The law will cover the status of CONAE, ministerial responsibilities, how government agenciescan be co-ordinated and the various tools that can be used to foster energy efficiency. The statusof the law and future activity is reviewed in the companion mission report.

3.2.4 Standards

Three standards are already in effect: those for domestic refrigerators, room air conditioners andthree phase electric motors. An additional standard for non-residential lighting is in place andwill come into effect in 1995. Also during 1995, it is targeted to gazette standards for domesticwashing machines, centrifugal pumps, single phase motors and perhaps thermal insulation.

Standards propose a minimum efficiency level and a label for those that exceed this minimumstandard. Enforcement is currently by only five inspectors, who have to cover all standardsthroughout Mexico. There are also currently very few laboratories in Mexico that are able to testproducts, though under NAFTA, all products need to be tested within the host country.

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Key Issues: Standard setting work appears to be progressing well.The testing infrastructure within Mexico is currently inadequate.The enforcement infrastructure within Mexico is inadequate.

3.2.5 Industry

The industry section is split into two parts; private industry and the energy sector. Work underthe private industry part consists of two components; an environmental and energy efficiencyprogramme that is assisting the National Ecological Institute in emission studies and the potentialfor CO2 savings, and an information systems part that is assisting the U3Es in databasedevelopment. The energy sector work also covers two areas; that of assessment, where CONAEworks with CFE and PEMEX in defining technical areas that have the potential for energyefficiency, and a project management area, which manages the studies within CFE and PEMEX.It appears that, following FONAE's closure, the technology overview and sector-specific

specialist knowledge is not contained within CONAE's umbrella.

Work in the private sector has included promoting the use of new high-efficiency burners,improving current systems and encouraging fuel switching from fuel oil to liquid fuel in brickovens and furnaces, automatic demand control throughout industry, and preliminary work in aprogramme involving the exchange of burners in hospitals. A key area of work is seen asdeveloping markets for consultants, work done- in conjunction with the EU (Appendix 2).

CONAE has been involved in over 320 audits, focusing on the generation and distribution ofsteam, cogeneration (from heat recovery), refrigeration, compressed air, motors and drives,energy management systems and instrumentation and control. CONAE also notes that SMEsaccount for over 98% of industrial companies in Mexico. They have particular problems in overcapacity, increased competition, obsolescence of their equipment, very high credit costs,increasing specific energy consumptions and the fact that they have an adverse impact on theenvironment.

Additional programmes include instrumentation and control of boilers and burners and thepromotion of energy management systems, including monitoring and targeting. CONAE's workis moving from an audit based approach into finding suitable demonstration projects forindependent auditing.

Work in the energy sector includes strengthening the relationship with PEMEX and undertakingstudies for heat recovery in rigs and platforms and the use of turbo compressors at terminalstations. There have also been studies undertaken to assess potential for water saving inrefineries.

CONAE has undertaken cogeneration feasibility studies for PEMEX, but PEMEX appear not tobe interested in taking these any further. At present the reason for this is not clear.

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Key Issues: CONAE has undertaken many audits, which when analysed could provideuseful strategic information.

At present the industrv sector's work appears to be geared towards meetingoperational targets, rather than looking long-term.

There are only a small number of large plants in Mexico, and vast numbersof smallfirms: this has implications for the industry section strategy,as the consultancy market will thus be limited.

Given the large number of smallfirms, it will be important to pick out cross-sectoral technology/management improvements which have shortpaybacks.

To build up momentum amongst end-users, initiatives will need to build uponeach other, requiring medium-term planning.

3.2.6 Buildings and Public Lighting

CONAE's initial work on buildings covered the public sector, though there are now studieswithin the private residential sector to find out how energy is used.

Over 70 first level audits have been undertaken and this is being followed up by activity aimed atfinancing measures. The work on public lighting is undertaken directly with states and counties.

There is currently no-one capable of building research within the country. In terms of buildingregulations, safety inspections are carried out at state level, but energy efficiency standards are offederal standards. There is thus an institutional problem in implementing building standards.

Key Issues: There is no facility within Mexico for undertaking buildings research.There are institutional problems in policing buildings standards.

3.2.7 Cogeneration and Renewable Energy

Work on the cogeneration has defined a maximum potential for the country. Current CONAEstudies are also assessing the potential of micro-cogeneration for hotels and hospitals. CONAEis currently looking for demonstration projects (between 4 to 7 in different sectors). Three ofthese demonstration projects are currently under development, of which one is in construction.This latter system is for self supply. Currently there are major barriers to the implementation ofdemonstration cogeneration systems, in particular the very high interest rates, the regulatoryframework for grid connection and the low cost of electricity supplied by CFE. In addition, allequipment needs to be imported, though the EU project has identified Mexican companies thatcould enter into joint ventures.

In addition to the potential studies and the demonstration case study work, CONAE has beeninvolved in promoting cogeneration through seminars and in the educational sector.

The area of renewable energy sources is a new activity for CONAE. This area is covered by themission leader's report.

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Key Issues: The regulatory barriers are being tackled through the new Regulatory Law.Barriers to cogeneration are not technical, but regulatory and financial.Financial barriers could be tackled by ESCOs or through World Bank loans.

3.2.8 Transport

Past work in the transport sector has included audits of leading companies to look for thepotential of energy savings. These typically show a 10 to 15% saving through driver training,fuel management, improved maintenance and the correct choice of vehicle.

Formal driver training programmes are in place, together with formal education programmes forconsultants (there is a diploma course on transport).

There have also been 66 audits done in the private sector. These showed that 8% of vehicleswere so bad they shouldn't be being driven and 88% of vehicles needed some form ofmaintenance.

Key Issues: A driver training infrastructure has been set up, though the long-termeffectiveness of initiatives has not yet been measured.

At present, the driver training initiatives appear to be isolated; it would bemore powerful if they were run in parallel with programmes for themanagement of transport companies.

3.2.9 U3Es

The aim of the U3Es is to implement all CONAE's programmes in their geographic areas. Thereare currently 15 operating U3Es, all established in co-operation with the main Chamber ofCommerce in their area. Units work through a technical committee, which includesrepresentatives of the Chamber of Commerce. Each unit is generally staffed by three CONAEemployees.

Each unit has a commitment to visit 200 companies and to build up local consultants in theirarea. A database system has been developed by CONAE which will enable the link units to keepbasic data on companies in their area. This basic data is intended to include energyconsumptions, typical equipment used in the company, measures that could be taken to saveenergy and actions taken.

Key Issues: The co-operation between U3Es and the local Chambers of Commerce give apowerful delivery mechanism in their geographical area.

Targets for U3Es appear to be based on operational targets, there being nolong-term aims.

The database infrastructure recently set up will provide a powerful trackingmechanism.

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The U3Es are potentially a very powerful mechanism for undertaking marketresearch.

A lot of the U3Es work will need to be co-ordinated centrally, given therelatively small number of large companies in each U3E area

Central co-ordination will allow the U3Es to be used as a route for assessingenergy savings achieved.

3.3 Consultants

It is recognised by CONAE that the consultancy market is in its infancy. The three companiesmet by the mission appeared dedicated and keen to succeed in the new market. It was noted thatnone of them were interested in working with FIDE, as FIDE were setting ceilings for audit costs(in the expectation that a consultant could make up what they lost on an audit in animplementation measure).

Experience from audits undertaken, shows that 10% savings can be made from no-cost measures.It was noted that some audits were of poor quality, so the consultants were very keen on a formalquality certificate to screen out poor quality operators. In addition, they would like to see formalenergy management training and qualifications for energy managers.

The consultants would like to see a serious and co-ordinated national policy, with programmes,on energy efficiency. They feel that this does not currently exist. However, they were generallysupportive of CONAE's efforts and appeared to request a strengthening of CONAE'sinformation role in order to stimulate their market. One of the consultants had a contract fromCONAE to develop a document, on targeting measures at industry, from 150 CONAE audits.

The consultants noted that 95% of companies are micro/family businesses. Financing energyefficiency improvements within these companies is a bit problem. It was noted that any WorldBank resources would normally come through NAFIN, which caused bureaucratic delays andalso meant that rates were generally not competitive enough.

Key Issues: Co-ordination ofprogrammes aimed at stimulating the consultancy marketneeds to be improved

Reputable consultants wouldfind it valuable for a formal quality system to beout in place, to ensure some level of screening.

Consultants in the market would like to see a co-ordinated national policy,which would allow them to plan within a more predictablemedium-term market.

The consultants met by the mission appeared to be keen and dynamic.

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3.4 Industrial End-Users

Two end-users were visited in Puebla, both of which had American ownership. They are thuspossibly not representative of Mexican industry in general.

The first company was interested in energy efficiency before CONAE's involvement. Thereforefollowing an audit, they now monitor more regularly and have a broader focus on energyefficiency. They claim to have imrplemented no-cost measures, resulting in 4% gas consumptionsaving, and are shortly to implement some capital measures highlighted by the audit. Firnance forenergy efficiency measures is not a problem provided the measure is financially attractiveenough in competition with other projects being put forward to the US parent.

The second company have been interested in energy efficiency since 1993, when some of theirengineers were trained by CONAE and FIDE. Also during this time a CONAE study revealedthe potential for cogeneration at the plant. In 1995, an audit undertaken in conjunction withFIDE revealed several capital measures that could be taken to improve energy efficiency. Thesemeasures will, again, be financed provided they can compete with other projects being putforward to the US parent. The cogeneration project is also being investigated, with a possibilityof a shared savings agreement with the equipment supplier.

Key Issues: Both companies visited mentioned that finance was not a problem, thoughboth were American ownedBoth companies visited appeared very satisfied with CONAE's work.

3.5 FIDE

PAESE is CFE's energy efficiency body. It undertakes strategic research and co-ordinatesenergy efficiency improvements in CFE's generation and distribution activities. FIDE isPAESE's implementation agency for the demand side. The director of CFE sits on the board ofboth PAESE and CONAE, receiving quarter reports from both. This appears to be the onlydirect co-ordination between FIDE's and CONAE's programmes.

FIDE has a relatively secure avenue of funding. They have, in the past, subsidised industrialaudits, though FIDE claim that they are currently offering interest free loans over two years foran industrial audit and the implementation of measures. The maximum loan is 200,000 pesos percompany. There are about 30 projects of this type a year.

FIDE see CONAE as a policy setting body. FIDE's offices regionally co-ordinate residential andsmall business audits. Large audits are co-ordinated from FIDE's central offices. There appearto be no links between FIDE's regional offices and the U3Es, nor between, at the working level,FIDE's central offices and CONAE's central offices.

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Key Issues: There appears to be no working level co-ordination between FIDE 's andCONAE's programmes.

FIDE appear to see CONAE as a policy body, and not as a programmeimplementing body.

3.6 Aid Agencies

There are many potential projects that might be funded by US aid or Inter-America andDevelopment Bank in the near future. Proposals cover transport, industry, renewable energy,public lighting, links between US and Mexican laboratories. In particular a pilot project oncombustion and steam systems involving 35 audits is proposed, a project on rewinding motors,an energy environmental network, a sustainable cities project (Monterey), and a PV and windsystems for irrigation, water pumping and eco-tourism have been proposed.

Key Issue: It is important that all aid agencies co-ordinate their activities to ensure thatprojects are complementary.

4 RECOMMENDATIONS FOR CONAE'S PLANNING, TARGETING ANDMONITORING

CONAE has recently set up a planning unit. Its roles are currently being defined, but it will helptackle the deficiencies in CONAE's current planning processes. It will be important thatplanning is done by all parts of CONAE, and not just delegated to the planning unit. Planning isimportant over three different time horizons:

Long-term planning will enable CONAE to establish areas of operation that will lead tosignificant national energy savings.

Medium-term planning will enable each individual sector and programme to have clear ideas ofhow activities will develop within the programme, such that they build upon one another andlead to real proven energy savings.

Short-term planning, usually on an annual basis, will allow the full co-ordination of CONAE'sactivities in the different sectors and ensure that they are optimised for greatest energy saving,given a finite budget that CONAE will be operating in for the year.

As part of planning, long-term energy saving targets need to be set. These long-term energysaving targets act as a goal and allow questions to be asked about how proposed activities willactually help the process towards that goal. In addition, progress towards the energy savingtarget needs to be measured and the effectiveness of individual activities needs to be assessed.As with the planning process, all parts of CONAE will need to be involved in this process.

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The planning process is important for several reasons. These include:

CONAE's funders need to be clear that CONAE's resources are leading towards energysavings, and need to know that the most cost-effective channels are being used. Without this,their long-term commitments cannot be assured.

The CONAE staff, who will require motivation that their efforts are actually achieving energysavings. By showing that CONAE's efforts do lead to established consultancy and equipmentsupply markets, CONAE staff will be motivated to further achieve.

For end-users, it will be important that CONAE builds up a trusted position. It should beremembered that end-users will very rarely regard energy usage as important, and individualswithin companies will only sporadically have time for energy efficiency projects. They needreassurance that, when they do have their moments, there is a backup service within the countrythat will enable them to achieve energy savings in those short periods of time that they can payattention to it.

For consultants and equipment suppliers, who require reassurance that markets will not swingwildly as CONAE's activities progress. There is a danger, if CONAE's actions are based onshort-term needs only, that a market will be stimulated in the short-term and then collapse in themedium-term. This makes planning for consultancy businesses and equipment suppliersimpossible, even if they do gain business in the short-term. The result of this causes aninstability in the supply market, which will mean that any energy savings achieved in the short-term will not last.

All CONAE's efforts should be geared to a steady build up of consultancy and energy efficiencyequipment markets, markets that need to be stable in the medium and long-term for energyefficiency saving measures to last. This chapter discusses possible functions for the various partsof CONAE in the planning process, based on CONAE's current structure.

Within this structure, CONAE currently has a functional group of sector experts, who areknowledgeable about individual sectors and technologies. These feed out the informationthrough a second functional group, the regional U3Es, who are CONAE's main contact with themarket place. These two functional groups will be involved in the planning process, which willbe co-ordinated by the third functional group of the planning unit.

The discussion below suggests possible roles, in the planning process, the energy savingassessment and operations effectiveness measurements, for the three functional groups ofCONAE. Section 4.1 discusses roles in the planning, energy saving assessment and operationaleffectiveness processes. Section 4.2 discusses how the different parts of CONAE could worktogether in the planning, targeting and monitoring process.

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4.1 Roles within CONAE

4.1.1 Sector Experts

The sector experts gain an understanding of their sector through many routes. These includecommissioning market research (covering technical and marketing issues), by speaking torepresentatives from all areas in their sector (eg end-users, research and trade bodies, equipmentsuppliers, consultants and other specialists), and by building on knowledge gained from theirprevious activities. This latter activity includes, for instance, the analysing of past energy auditsin order to develop knowledge of where common energy savings can be made. Through thiswork, the sector specialists have knowledge of the following:

* Overall status of the sector, together with the sector's real short-term and medium-termproblems.

* The current technologies used by their sector, together with how they are used.

3 The potential new technologies and techniques that could be introduced.

3 The market barriers to improxing energy efficiency.

3 The energy use and energy saving potential from the use of specific technologies.

3 The costs to the end-user of implementing new technologies and techniques.

3 The influencing channels through which end-users could be influenced, ranging fromevents, magazines and journals, and third parties (eg trade associations).

This knowledge of the sector specialists has several functions in CONAE's work. These include:

The generation of data for CONAE's medium and long-term planning processes. Thiswould include supplying information on technologies and techniques to the energy modelto allow the further desegregation of sectors and the incorporation of individualtechnologies within subsectors.

* It will allow an assessment of barriers to energy efficiency to be collated, such thatcommon barriers across sectors can be identified.

* The sector specialists will also be able to develop new programmes for their sectors,programmes that address their needs of energy efficiency, have appropriate deliverymechanisms and ensure some long-term sustainability.

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* With existing programmes, the sector specialists can, from market feedback, ensure thatshorter term activities are run such that they optimise the creation of new markets andenergy savings achieved in the long-term.

4.1.2 M3Es

U3Es are CONAE's main day to day contact with end-users. Given the relatively small numberof large companies within each U3E area, it is possible for the U3Es to visit each large companyon an annual basis. If properly co-ordinated, this will enable good market data on largecompanies to be collected, data ranging from energy use through problems in implementingenergy efficiency measures to assessment of energy savings. Given the very large number ofsmaller companies in each U3E area, it will be impossible for each company to be visited. Thusthe U3Es will need to augment personal visits with other forms of contact (such as newsletter,direct post and surveys) in order to obtain a reasonable coverage in terms of numbers ofcompanies. Through this work, the U3Es will have knowledge of the following:

* The overall status of energy efficiency within their geographical area, focusing inparticular on short and medium-term problems.

* The energy use of companies in their area.

* The receptivity of companies in their area to CONAE's material and seminars, both interms of understandability and in terms of whether or not its leads to energy savingmeasures being taken.

* Problems of the implementation of energy efficiency measures within individualcompanies, knowledge gained both from companies and from consultants and equipmentsuppliers in their area.

This knowledge of the geographical market place has several functions in CONAE's work.These include:

* It can allow feedback on individual measures undertaken by CONAE, feedback that canbe used to adjust that activity to improve its effectiveness.

* The generation of data for CONAE's short and medium-term planning processes, datafocusing in particular on problems involved in implementing energy efficiency measures.

Using their database, the U3Es have a powerful mechanism by which energy savings datacan be registered. This will need to be co-ordinated centrally, such that, for instance,adequate proof of additionality are made and that all U3Es use a similar methodology intheir approach to energy savings.

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* Feedback on delivery mechanisms for CONAE's material, in particular focusing on thosethat are highly successful, not worth pursuing further and in identifying new deliverymechanisms.

4.1.3 Planning Unit

Through its interaction with all parts of CONAE, the planning unit gains an understanding of thesuccesses and problems encountered by all parts of CONAE's work. Thus the planning unit canhave a useful cross-fertilisation role all the way through from individual activities to the long-term planning process. Through these interactions, and the modelling work, the planning unithas knowledge of the following:

* Similarities and differences between activities undertaken by CONAE, together with aknowledge of their relative successes.

* A measure of the benefit cost ratio of activities undertaken through individual sectorinitiatives.

* A knowledge of theoretical long-term energy scenarios, together with the importance ofvarious technologies and sectors.

. A knowledge of other energy efficiency programmes underway within Mexico andabroad.

This knowledge has several functions within CONAE's work. These include:

* The identification of Mexico's long-term energy problems, these being identified throughthe model and through subsequent discussions with sector experts.

* The co-ordination, is in data from U3Es and sector experts, of information on barriers toenergy efficiency. This information, for instance, might highlight needs for commonapproaches amongst different sectors, or indeed for different approaches.

The co-ordination of work on energy saving assessments, operational effectivenessand benefit to cost ratios of individual activities. This will ensure commonmethodologies are used, such that individual efforts can realistically be compared.

* The co-ordination and targeting of resources in the short-term, particularly in the drawingup of annual business plans that target CONAE's finite resources in the most cost-effective directions, given medium and long-term needs of the market place.

* The co-ordination of CONAE's work with other energy efficiency activities beingundertaken in Mexico, and perhaps the world. It will be particularly important thatworking level contacts are established with FIDE, and with its overview of CONAE'swork, the planning unit would be the best place for this working level co-ordination.

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4.2 The Planning Process

This section discusses how different parts of CONAE can be involved in the planning process,together with how they could be used in operational and energy saving effectivenessassessments. It should be noted that CONAE's infrastructure is not complete for the followingsection to be implemented; the roles are thus put forward for discussion as ones that CONAEshould be aiming for in the medium-term.

The section is illustrated through the use of a potential programme, that of a boiler tune-upprogramme. It is used to help illustrate roles only, and not to highlight a boiler tune-upprogramme itself. This section is divided into long-term, programme planning and target setting,and annual planning, effectiveness monitoring and savings assessments.

4.2.1 Long-Term Planning

This section should be read in conjunction with sections 3.2 and 4 of Appendix 1. It is assumedthat CONAE already has in place a modelling function and a co-ordinated planning function.These have already identified Mexico 's energy used and savings potential, such that CONAE isdirecting its resources in a planned and appropriate manor. This section discusses how a newarea for activity might be identified

The industry section has data from several energy audits that indicates a 5% improvement ispossible on most boilers, tihrough a boiler tune-up programme. This data is fed to the energymodel. Modelling has also shown that, under several different economic scenarios, that growthin industry and the commercial sector, implies that the energy use by boilers will growsignificantly in the long-term.

Thus, between the industry section and the model, boilers is seen as a large potential area forsavings. From their knowledge, the industry section can confirm that current boilers will not bereplaced due to financial constraints on companies, and that knowledge within end-usercompanies about their boiler performance is very low.

Plans are drawn up for a boiler tune-up programme. These plans include discussions as to thecost of the programme, a potential realistic energy saving target for the programme (and fromthat a benefit to cost ratio) and the various delivery mechanisms with the programme. Thought isalso given as to how CONAE could manage such a problem. It is decided, that such aprogramme has sufficient benefit to cost potentials to warrant the development of a firm plan,and an individual within the industry section is appointed as the boiler tune-up co-ordinator.

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4.2.2 Programme Planning and Target Setting

This section should be read in conjunction with sections 3.2, 3.3, and 4 of Appendix 1.

An outline, medium-term, programme plan is drawn up by the industry specialist, in consultationwith several parties including external consultants, end-users and the U3Es. This plans out a fouryear potential programme; in the first year, a training syllabus will be developed and surveysundertaken to enable targeting of the programme, in the second year training of operators in thesetting up of adequate calibration laboratories is planned, in the third and fourth years,information support is given by CONAE to the new consultant in order to stimulate their market.

Outline operational targets for the programme are drawn up and a firm overall energy savingtarget is developed for the programme. This target has two components, firstly an energy savingtarget to be achieved by the end of the fourth year and secondly an energy saving target for tenyears after the programme has started. The methodology by which the savings are to be assessedis also considered.. Costs for the programme are drawn up and the benefit to cost ratios aresufficient to ensure that CONAE gives this programme high enough priority for funding bydonors.

The programme is put forward to donors who then provide funding. As part of the programmeplan, its integration with CONAE's other activities is clearly included, together with a clearindication of how individual activities will build upon each other to achieve a long-termsustained market for boiler tune-ups.

4.2.3 Annual Planning, Effectiveness Monitoring and Savings Assessments

77Tis section should be read in conjunction with sections 2.3, 3.4, and 4 of Appendix 1.

The programme will involve the U3Es promoting boiler tune-ups within their regional areas,probably specifically to the small and medium sized firms. The sector specialists within CONAEwill co-ordinate the training of consultants, the setting up of appropriate infrastructure (forinstance for calibrations and equipment supply) and co-ordinate the overall programme.

This plan might, for instance, include in the second year a promotion through CONAEnewsletters and Chambers of Commerce. This might be targeted at the small and medium firms,highlighting the benefits to be gained from a boiler tune-up, in terms of efficiency gains andfinancial savings to the company. The effectiveness of this promotional campaign could befollowed up through U3E contacts and surveys of small and medium companies in their area, andby CONAE's sector specialist through feedback from the trained consultants. It might be thatthis feedback shows the promotional campaign has not been effective, and so an alternativecampaign needs to be quickly thought out such that the programme's targets can still be met.Thus, the plan for the third year might include attaching a boiler efficiency talk to seminars thatmedium and small companies are holding with Chambers of Commerce on competitiveness.Again, the U3E could follow up the first few of these talks and, feedback which highlights that

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the first two talks are pitched at the wrong level; this feedback is fed back to CONAE centrallywho then re-adjust the talk.

It is possible that, through its co-ordination role with FIDE, the planning unit learns that FIDE isgoing to run a programme on variable speed drives for feedpumps to boilers and for the controlof dampers. This co-ordination, might highlight that a joint promotional campaign could be run,one of benefit to both programmes.

During the programme planning process, a methodology for assessing energy savings achievedby the programme was drawn up. It could be that surveys in the second and fourth years are tobe undertaken. The surveys could be by telephone and written questionnaire, the contacts beinggathered with the co-operation of energy consultants active in the programme. The names oftheir clients are collated by CONAE (or perhaps the contacts are gathered from the Chambers ofCommerce, or people who attended CONAE's events and/or recipients of CONAE's writtenmaterial).

The survey is run by the planning unit, who ensure that it is co-ordinated with other surveysbeing carried out by CONAE (the aim is to minimise disturbance to industry). The questionnaireis drawn up with the input of the industry section, their input ensuring that the questions arepossible to answer easily and that the answers will give enough detail for sustained energysavings achieved by the programmes to be calculated. The questionnaire is piloted by aspecialist market research subcontractor, managed by the planning unit, and amended asnecessary with the input of the industry section. The main survey is undertaken.

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Appendix 1

Energy Efficiency Programme Targeting and Monitoring

UK Experiences and Methodologies

APPENDIX 1

ENERGY EFFICIENCY PROGRAMME TARGETING AND MONITORING

This paper was presented to CONAE representatives on 3 October 1995. It presents an overview ofhow energy efficiency programme targets were set in the UK, together with methods used formonitoring energy savings made as a result of the programme.

The paper is divided into four sections: an overview of national UK energy efficiency bodies, adescription of savings assessments made under the Energy Efficiency Demonstration Scheme whichran during the 1980s, the setting of a programme target and monitoring energy savings made as aresult of the Best Practice programme (the current flagship UK programme), an overview of thelessons learnt in targeting and monitoring energy savings from programmes. A fifth section, on howsome of the lessons learnt in the UK could be applied to CONAE, is contained within the mainreport.

1 OVERVIEW OF NATIONAL UK BODIES

1.1 Main Government Bodies

The main government body responsible for energy efficiency in the UK is the Energy EfficiencyOffice. It is currently part of the Department of Environment and consists of three divisions. Thefirst division (EEO1) is responsible for domestic initiatives, including a subsidy scheme for homeinsulation for low income households. It also covers training and transport initiatives. The seconddivision (EEO2) formulates government policies for energy efficiency, and is also charged withpromoting cogeneration. The third division (EEO3) is responsible for research and demonstrationand has overall management responsibility for the Best Practice programme.

The Energy Efficiency Office has ten Regional Energy Efficiency Offices. These are theresponsibility of EEO1, each being staffed usually by two civil servants supported by some part-timeassistants. Increasingly the Regional Energy Efficiency Officers are also becoming involved inenvironmental matters. Their function is to act as a local contact for industry and commerce and tosignpost them to relevant government programmes and information.

The current flagship programme for industry and commerce (and more recently transport) is the BestPractice programme. This is essentially an information programme, as well as a vehicle forproviding financial support for research. EEO3 contracts the managing of this programme out totwo units, ETSU and BRECSU. ETSU undertakes work in the industrial and commercial sectorsand BRECSU undertakes buildings related work. This programme is described in detail in Section 3of this paper.

In addition to the government bodies for energy efficiency, there is a healthy energy consultancysector and a strong equipment supply sector. These have grown up during the fifteen years of UKgovernment programmes.

1.2 ETSU

In 1974, in response to the oil shocks from the Middle East, the UK Government set up a four-manpolicy advice unit. This started off as a project, based at a government nuclear research laboratory.This four-man unit was the origin of ETSU.

The initial policy studies were aimed at giving the government advice as to ways of reducing UK;dependence on oil. These studies led to the setting up of UK programmes to promote energyefficiency in industry and a research programme to support the development of renewable energytechnologies. These programmes have been run by ETSU since 1978, each programme being rununder different contracts and managed by different Government departments.

During the 1980s, ETSU steadily grew as the work it was asked to do was expanded. There werethree core divisions: energy efficiency, renewable energy, and strategic energy studies. In 1989, inagreement with government, ETSU broadened its activities. In addition to the three core areas,ETSU now runs clean coal programmes, fuel cells programmes, a programme promotingenvironment technologies within industry and also undertakes a wide range of studies and projectsfor UK Govermment, and for governments and quasi-governments overseas, including the EuropeanCommission, Asian Development Bank, and the World Bank. In addition, the work of the StrategicStudies Unit has developed along three lines, those of energy in the environment studies, energymodelling, and transport studies and programme management.

2 THE ENERGY EFFICIENCY DEMONSTRATION SCHEME (EEDS)

2.1 Overview

This scheme was the first UK Government long-term energy efficiency programme. It ran from1978 to 1989 and was managed by ETSU and BRECSU.

Its aim was to encourage the use of innovative technologies for the more efficient use of energy. Itsmain components consisted of a grant to an organisation that was the first user of a noveltechnology, and a promotional campaign that tried to persuade end-users to replicate the originaldemonstration using their own resources. As such, the demonstration hosts received financialbenefit to offset the risk involved in being the first user of a technology. The independentmonitoring of the project, which was then promoted to potential replicators, then tackled theinformation barriers found amongst potential replicators. In addition to the grant for innovation andthe financing of dissemination elements, government grants were available to undertake research,which had the aim of stimulating the equipment supply sector.

The programme was set three main targets to be achieved during its ten year lifespan. These werethat:

* Energy savings of £5 per year for every £1 of government spend had to be proved.

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* Total energy savings of 4.5Mtce*** Mtce - million tons of coal equivalent per year through replication were to be proved.* The above two targets were to be achieved for £70M in 1977 money.

The actual energy savings claimed by the programme are 5.lMtce* per year throughreplication and these energy savings amounted to £11 for every £1 of government spend(1990 money and a 5% disccant rate). These savings were achieved for £43M in 1977money. Thus, the overall programme energy saving targets were exceeded, and wereachieved at a higher benefit to cost ratio, and for a lower overall government spend, than wasoriginally envisaged and targeted.

It should be noted that the energy saving target and the benefit to cost ratio target were set as longterm targets. It was ETSU's responsibility to make sure that these targets were hit irrespective ofany external influences, in particular irrespective of macro-economic conditions. Thus, despite thefact that shortly after the EEDS programme started the UK entered into a prolonged and deeprecession, ETSU still had to retain flexibility and imagination in its activities to ensure that theoverall prograinme targets were met. ETSU also had to show that activities under EEDS andsavings claimed were genuine savings and not savings caused as a rcsult of the large scalerestructuring that UK industry underwent during the early 1980s. The following section explainshow the energy savings were proved.

2.2 Proving Energy Savings Under EEDS

In 1983, ETSU made the decision that no attempt would be made to quantify the additionality ofenergy savings achieved during data gathering of energy savings. (Additionality is the causal linkbetween the promotion of a technology and its take up). Instead, the task of monitoring energysavings directly achieved by the programme would be split into two components. These were:

* An exercise to establish what investments occurred after the new technology had beendemonstrated, ie a purely factual exercise.

* An assessment as to the influence that EEDS had on the energy savings achieved, to bereviewed at formal milestones over the life of the programme.

Since any new technology which has been demonstrated to be economically and technically viablewould sooner or later establish itself in the market place, EEDS was essentially concerned withadvancing energy savings that would have been made. Whilst the extent to which energy savingsare advanced is inevitably a subjective judgement, a guiding principle during ETSU's assessment ofenergy savings was that any figures should be capable of audit by an independent assessor.

The standard practice in the innovation literature is to assume that the market place penetration ofany new product or technique follows a logistic or S-curve, as shown in Figure 1. The effect of ademonstration project and its dissemination could therefore be to:

Mtce-million tons of coal equivalent3

* Bring forward the energy savings by a fixed period in time.* Increase the market penetration rate.* Raise the market saturation level to a higher value.

There is no ready empirical method for distinguishing between the different shapes of the marketpenetration curves arising from the effect of EEDS, and it was assumed that all such variations maybe adequately described by adopting a model in which the net effect of the EEDS was to advance theobserved replication curve by a number of years. Thus, in Figure 1, the with-EEDS curve wouldrepresent the actual replication recorded or projected by ETSU, while a curve without EEDS wouldrepresent the degree of adoption which it is assumed would have occurred without the interventionof EEDS: the area between the curves represents the advancement of energy savings due to EEDS.An advantage for making such an assumption is that it allows ease of computation and only oneparameter is required, ie the average time by which the replication is advanced.

This had implications for the way in which ETSU claimed energy savings, as each recording had tobe verifiable. This meant that the energy savings achieved were probably under-claimed, because:

* Only investments for which there was a direct evidence were counted, contrary to normalprocedure in market research surveys where, if 50% of an industry has been surveyed, theresults would be grossed up statistically to derive an industry total.

3 Savings were only counted from direct copies of the demonstration projects, despite the factthat equipment suppliers confirmed that EEDS had wider benefits, in particular in easingtheir sales of equipment not directly demonstrated by EEDS.

Figure 2 shows how the recorded energy savings in four selected sectors increased over theprogramme. The curves represent annual energy savings being made as a result of direct copies ofthe demonstration projects (ie 'replication'). Data was gathered from contacting equipmentsuppliers, consultants and end-users. Equipment suppliers and consultants could confirm sales ofequipment, together with its size and intended application. Industrial end-users could confirm thatthe technology had been purchased and could give details about applications and working patternson their site. Any sale of equipment could then be scaled to that of the original demonstrationproject, and a scaled energy saving could be determined for the replication.

Figure 2 thus shows a rising S-curve, as expected by the penetration of a novel technology into amarket place. It shows, for instance, the cumulative annual energy savings being made by the totalsales of recuperative burners into the steel industry at any year. It does not, however, show how farthe energy savings have been advanced in time over what would have happened without EEDS.This advancement in time was assessed in different ways in different sectors, but the techniques areillustrated by two case studies detailed below:

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Case Study 1: The Steel Sector

The steel sector was an industry where energy consumption had long been an importantconsideration, so good historical evidence of energy use per unit output was available. Furthermore,reheating/heat treatment furnaces, where EEDS was particularly active, had been used in much thesame way over time: they essentially heated similar quality/sizes of steel billet, and so lower energyuse could be identified with improved energy efficiency rather than any other changes, such aschanges in product mix.

Figure 3 shows a plot of the average specific energy consumption in the steel industry over time.The data points for 1975 and 1980 represent the average values for the UK steel industry. It shouldbe noted that there is of course a considerable spread round these average values. EEDS focusedheavily, within the steel industry, on promoting recuperative burners. For 1985, the figure of 2.8GJper tonne represents the average figure for plants which had not incorporated recuperative burners intheir furnaces. The figure of 2.4GJ per tonne is representative of the average energy used in 1985 bythose plants which had installed such devices. It can thus be seen that, between 1980 and 1985,significant energy savings had been made by firms who had not installed recuperative burners, iethese savings were not achieved by any EEDS activity. However, those firms that had copied thedemonstration projects had made significant additional energy savings over those that had not,something that could clearly be linked to EEDS.

Figure 3 also extrapolates data from 1985 onwards. This is for illustrative purposes only, showingthat even firms that had not been influenced by EEDS would, in the long term, improve theirefficiency to a level similar to those who had been influenced by EEDS (assuming that from 1985there was no further govermnent programme). The energy savings directly attributable to EEDS arethus shown by the shaded area.

As of 1985, firms that had been influenced by EEDS were averaging an energy consumption of2.4GJ per tonne. Extrapolating the line of specific energy consumption of firms not influenced byEEDS would indicate that such firms would achieve a specific energy consumption of 2.4GJ pertonne around the year 1991. Thus as of 1985, it could be argued that the energy saving recorded hadbeen advanced by six years. However, this advancement period varies with time (and fromtechnology to technology); the average advancement period shown by the shaded area (in the finalanalysis of the EEDS scheme in 1989) showed that the average advancement period was three years.It was thus this figure that was used by ETSU in calculating energy savings achieved in the steelindustry.

Case Study 2: Building Energy Management Systems (BEMS)

Building Energy Management Systems were a new technology that developed quickly, along withthe development in the electronics industry, during the 1980s. A major part of the EEDSprogramme was to help develop systems and demonstrate them. It would have been, in theory,possible for ETSU to claim that all of energy savings achieved by BEMS systems in the UK couldbe attributed to EEDS, as all innovations were supported as demonstration projects. However,

5

ETSU felt this would not be justifiable, as some of the BEMS development would have happenedeven without EEDS. Thus, the question was, how much extra energy saving (in terms of increasedmarket penetration and advancement) were achieved in any year by EEDS in BEMS?

The graph for BEMS shown in Figure 2 was obtained in a similar manner to that of the steel sector(ie through counting equipment sales and calibrating energy savings achieved against thedemonstration projects). However, only half the energy savings were claimed, as this was the ETSUestimate of, at any given time, the extra savings achieved by EEDS. This estimate, that EEDSeffectively doubled the market at any given time, came from several different sources. Theseincluded:

1. Discussions with equipment suppliers revealed that they estimated that between 50% and 75% oftheir sales of equipment which had been demonstrated within EEDS were due to the EEDSprogramme (ie they wouldn't have happened at that time without EEDS). They also claimed thattheir total sales (ie including BEMS equipment not directly demonstrated by EEDS and thereforenot included within the ETl SU energy saving figures) had also benefited by being associated withsimilar equipment being demonstrated. Indeed, they estimated that between 30% and 40% oftheir total sales (ie equipment not demonstrated within EEDS and demonstrated equipment) weredue to an association with EEDS.

2. Another indication of how EEDS had a positive influence on the early introduction of BEMS intothe UK market place was obtained by comparisons of the BEMS market within the UK andoverseas. Infolmation from an independent market research organisation is shown in Table 1below.

TABLE 1 BEMS SALES IN WESTERN EUROPECOUNTRY TOTAL COMMERCIAL & SALES* PER RETROFIT*

1985 PUBLIC SERVICE Mtoe++ SALES PERSALES ENERGY SERVICE Mtoe++($M) (Mtoe++) ENERGY

F R GERMANY 54 25.15 0.76 0.54

UK 51 18.06 1.00 1.00

FRANCE 34 28.27 0.43 0.34

NETHERLANDS 16.5 6.12 0.96 0.58

BELGIUM 8 2.88 0.98 0.59

* Normalised relative to UK++ Million tons of oil equivalent

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The total market sales are not immediately relevant since they do not take into account either thesize or the climate of the country. Since more than 75% of BEMS sales are associated with thecommercial or public service areas, a crude normalisation was attempted using the energyconsumed in these sectors as given by 'the energy balances of OECD countries', published by theIEA.

This comparison shows total 1985 sales figures per Mtoe in the UK were in the forefront, alongwith the Netherlands and Belgium. However, this could mask different new build rates in thesecountries, especially as during the early 80s the UK was in a prolonged and deep recession. Thus,the final column of Table 1 shows the retrofit sales per Mtoe, and shows that, in 1985, the UKhad an impressive lead over other countries in terms of BEMS sales.

3. Another way of comparing BEMS sales figures is to compare the BEMS sales relative to the floorarea for the commercial and public sectors. The assumption here is that the service industries aresimilar in all countries and that similar levels of comfort and illumination exist in all countries.Lee Schipper detailed this comparison in an issue of Energy Policy in June 1986. Table 2 below,shows this comparison for several countries within the OECD, and once again the UK comes outin a favourable and leading role.

TABLE 2 BEMS SALES IN OECD COUNTRIESCOUNTRY TOTAL COMMERCIAL & 1982/3 SALES/*FLOOR

1985 PUBLIC SERVICE FLOOR AREASALES ENERGY AREA

($M) (Mtoe ++) (kM2)

USA & CANADA 210 170 5,240 0.53

UK 51 18.06 670 1.00

F R GERMANY 54 25.15 905 0.79

FRANCE 34 28.27 689 0.64

* Normalised relative to UK4+ Million tons of oil equivalent

From these international comparisons and the evidence of equipment suppliers, ETSU made theconservative assumption that at any given year only half the market had been directly influenced byEEDS. Thus, the BEMS curve in Figure 2 only shows half the market. In addition to only claiminghalf the market, ETSU also concluded, conservatively, that this half of the market had only beenadvanced by two years (as opposed to the three for instance in the steel industry).

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The two case studies above show how ETSU assessed the effect of EEDS in two differing sectors.Similar principles were applied in all sectors EEDS operated in. In a strictly scientific sense, it isimpossible to deduce a measure of the additionality which is entirely free of subjective judgement.Nevertheless, it was felt that the evidence from historical trends in energy consumption, judgementsby ETSU sector experts and from information presented from equipment suppliers and internationalcomparisons were reasonably consistent. It was felt that the biggest uncertainty was in theadvancement period selected for the energy savings, as the record of sales and resultant energysavings were essentially free of subjective judgements. Sensitivity analyses on assumedadvancement periods were undertaken and reported. However, as ETSU had made robustassumptions in the claims for advancement periods, the advancement periods claimed were widelyaccepted.

2.3 Overview of EEDS Savings Methodology

The EEDS activities covered many technologies and sectors. The methodology developed forenergy savings contained the following elements:

* Energy savings within each sector, or if appropriate each technology, were assessedindividually on a bottom-up basis. This applied to both investment stimulated and toassessments of the advancement of energy savings.

a The first stage of any sectorial or technology assessment was to assess the level of sales byyear. Only sales of equipment directly related to demonstrated technologies were included inthis. Sources of data sales included manufacturers, consultants, market research studies andend-users.

• The next stage was to 'calibrate' the energy savings achieved by the recorded sales. Thiswas done by essentially scaling each investment decision against the demonstration project.There was confidence that the demonstration project was a typical application because thiswas a key feature in the selection process of demonstrations. (If a demonstration is atypical,end-users will not replicate it, so great care was taken to ensure demonstrations were intypical applications and were such that any investment replicators would need to make wouldbe within their accepted financial criteria). If there was any doubt about the calibrationprocess, a conservative assumption was made.

* An assessment was made of the level of sales that would have happened without EEDS. Inthe case of the steel sector example above, it was assessed that EEDS brought forward allinvestments by a similar amount. However, in the case of BEMS above, it was estimatedthat half the market would have happened at the time it did even without EEDS. Thisassessment was based on sectorial knowledge of project officers, international comparisonsand evidence from equipment suppliers.

* Finally, it was recognised that, for the sales of equipment influenced by EEDS, EEDS hadonly brought forward the investment by a number of years. Thus an assessment of the

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advancement period in each sector was made. This was the most subjective part of theenergy saving calculations, and was subjected to sensitivity analyses. Evidence was againtaken from international comparisons, from sectorial knowledge of ETSU sector experts andfrom end-users and equipment suppliers. Again, conservative assumptions were made whereappropriate.

The procedures developed above gave confidence that the energy savings assessments were robustand perhaps conservative. However, as indicated in Section 2.1, original targets were exceeded. Itis ETSU's belief that a clear setting and exceeding of targets was one of the main reasons why theprogramme was funded for its full ten year period, such long term programmes being rare in the UK.

In 1989 the decision was made to close the EEDS programme, not because of a failure to meetenergy savings targets, but because it was becoming increasingly difficult to meet short-termoperational targets. In particular, there was a target to generate between 25 and 30 new projectsevery year. As the scheme had succeeded in stimulating the UK to catch up its deficit in introducingtechnologies already demonstrated in other countries, the scheme was now introducing newtechnologies only as they came out of the research laboratories. This rate of innovation was tooslow to meet the programme targets; ie the programme had achieved its main aim in terms ofensuring that UK industry had caught up with the rest of the world in terms of the use of noveltechnologies. It was at this stage, that the EEDS programme was closed and the Best Practiceprogramme was introduced.

3 THE BEST PRACTICE PROGRAMME

3.1 Overview

This section describes the Best Practice programme elements and the organisations who areresponsible for running it. Section 3.2 describes how the overall targets for the programme were setand Section 3.3 describes how, operationally, the programme is run at ETSU. Section 3.4 discussesenergy savings assessment methodologies for the Best Practice programme.

The aim of the Best Practice programme is to encourage the use of technologies and techniques for amore efficient use of energy. It widened the scope of EEDS in two respects: firstly, it promoted theuse of technologies already in the market place (rather than just novel technologies); and secondly, itincorporated the use of management techniques and training for energy efficiency (ie broadening thescope away from technology alone). It is aimed at industry, commerce, the public section and, since1994, the transport sector.

The programme contains several information elements. These include benchmarking activities (interms of specific energy consumption), the production of independently audited case studies ofindividual measures, the production of Good Practice Guides that cover a range of technologiesand/or techniques, and the production of independently audited demonstration projects of noveltechniques and technologies. The programme also contains financial support for research.

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The dissemination elements include a wide range of products. These include seminars, interactiveworkshops, site visits to individual projects, audio tapes, videos, software for self-assessment andother advanced computer assessment techniques (eg expert systems). The several report formats arealso available via an enquiries bureau. The Energy Efficiency Office contract ETSU to run theprogramme in industry, commerce and transport and BRECSU for the building-related projects.

3.2 Programme Target Setting

The overall long-term energy saving target for the programme was set through both top down andbottom up analyses. Figure 4 shows various breakdowns of the UK energy consuming sectors, as of1992. These breakdowns are similar to those found in the late 1980s, ie those used during theformulation of the Best Practice programme targets.

The following points were used in developing top down aims for the energy saving target of the BestPractice programme:

3 During the 1980s, there was a subsidised audit scheme for industry and commerce. Theseaudits invariably showed that 20% savings could be made using measures that wereeconomic even if funded totally by the end-user (ie they met the end-user's own financialcriteria, this usually being a pay-back of less than two years).

* For political considerations, as the tax-payer was funding the programme, the programmehad to make a significant impact upon UK energy consumption, ie it had to be somethingthat could be noticeable on a macro scale.

The considerations that went into the bottom up approach of setting a programme target included useof knowledge gained during the 1980s under the EEDS programme. In particular, individualindustrial sectors were assessed for their own energy saving potential using the followinginformation:

Information from the sectorial specialist at ETSU, who's knowledge had been built upduring the EEDS programme.

* Consultations with consultants who specialised in individual industrial sectors.

* Consultations with industry specialists such as trade and research associations.

* The results of modelling energy supply and demand under different scenarios.

During the process of gaining political approval and finance for the Best Practice programme,matching the top down and bottom up overall target was an ongoing process. The eventual targetreached was that the programme should, over a ten year lifespan, save an additional 5% energyconsumption over what would have happened without any programme. This gives a figure that isnoticeable on the macro scale, and thus politically acceptable, and yet is thought to be achievable

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from the bottom up approach. It should be remembered that, whilst 20% savings were achievable intheory, industry would do some of this without the Best Practice programme and it would not bepossible to persuade everyone to do everything. Thus the 5% additional energy savings target wasarrived at as a balance between the bottom up achievable target and the top down politicalmotivational requirements.

Whilst the 5% additional energy savings target was the overall programme target, ETSU has brokenthis target down by subsector for operational reasons. ETSU also has to meet various operationaltargets on an annual basis. The process by which ETSU allocates energy saving targets to individualsectors and plans operationally, is described in the following section.

3.3 Programme Planning

The Best Practice programme has been set long-term energy saving targets, and is a programmeenvisaged to run ten years. However, the budgets for the programme for any given year areuncertain as they form part of annual public expenditure which is subject to market and politicalforces. Thus, ETSU needs to respond to both uncertain short-term budgets and changing macro-economic conditions (there was another prolonged recession during the early 1990s), such that theactivities undertaken under the Best Practice programme still achieve the long-term energy savingtargets. To achieve this, ETSU plans at three different levels: long-term planning, medium-termplanning and annual business plans. This section describes the planning process.

3.3.1 Long-Term Planning

To meet the long-term energy saving targets, ETSU has to ensure that it is working in the mostappropriate industrial subsectors. The bottom up energy saving potentials of these sectors mustalways be such that they can meet the overall long-term energy saving target. This requires long-term decisions, as energy saving within a sector or subsector cannot be achieved overnight: there isusually at least a two year delay between the initiation of energy saving activities and the start ofsignificant replication (ie savings), because the only tools of the programme are information andresearch. Whilst information is the quickest method of influencing people, it takes over a year to puttogether initial published information, with dissemination the following year and processreplications starting in the third. Research, of course, usually takes even longer to achieve energysavings.

Given this inertia between initiation of activities and energy savings replication, long-term planningis required to ensure that work is being undertaken early enough in the most appropriate sectors.The decision of which sectors to be focusing on is made from a variety of sources, including:

* Top down analysis of potential savings within a sector, such as shown in Figure 4.

* An assessment of what technologies and techniques are required to achieve this energysaving within the sector, together with typical costs and paybacks: a significant saving fromlow cost methods is easier to achieve than promoting high cost, long payback measures.

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* Assessment of the number of people that need to be influenced and how responsive theywould be to influence: it is easier to operate in a sector of a relatively small number o.fcompanies who are technically orientated than in, for instance, the many hundreds ofthousands of three or four-man businesses in the UK.

* Assessment of the receptiveness and co-operation of a sector; if a sector is totallypreoccupied or has no effective delivery mechanisms (eg trade bodies), it is harder toinfluence.

* Long-term modelling of end-user energy consumption under different economic scenarios:this reveals the likely effects of long-term macro changes, which could influence the use ofindividual technologies or the developments of individual sectors.

* Strategic and political issues are also assessed, to ensure, for instance, that appropriate longterm measures (eg Cogen, training, general attitude change) are promoted alongside shortand medium term savings (eg no-cost methods).

The detail of this long-term planning is further refined in the medium-term planning, as discussedbelow.

3.3.2 Medium-Term Planning

The long-term planning highlights whether individual sectors, subsectors, cross-sector technologiesor cross-sector techniques have the potential to contribute to long-term energy savings targets. Anindividual ETSU sector expert is then allocated, as part of their activities, to draw up a medium-termplan or strategy for that area. This is essentially a two to three year plan of what activities might beundertaken, both from a technical and a marketing point of view, by the Best Practice programme.This strategy is developed through commissioning, market research (covering technical andmarketing issues), and by speaking to representatives from all related areas (eg end-users, researchand trade bodies, equipment suppliers, consultants and other specialists). The strategy covers thefollowing topics:

* Overall status of the area, together with short-term and long-term problems andopportunities.

* The current level of technology and techniques being used.

* The potential technologies and techniques that could be used.

* The energy use and energy savings potential and related costs to the end user ofimplementation.

* The market barriers to energy efficiency.

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* Influencing channels, ranging from events, magazines and journaIs, third parties who couldbe used as conduits for messages, etc.

* Energy saving targets for the area, in terms of what proposed activities over the next two orthree years could achieve in terms of contribution to the long-term energy savings target.

Once this strategy is approved by an independent committee, the project officer then implements itsprogramme over two years, subject to constraints imposed by the annual business plan which isdescribed below. As the sector expert implements individual projects (eg a demonstration project ora research project), long-term energy saving targets are set for that activity. This again is fed backinto the long-term planning process, to ensure that the result of individual activities still keeps ontrack to meet overall energy saving targets.

3.3.3 Annual Business Plans

Individual sector, technology and technique strategies propose activities for each sector. However,annual budgets are limited, and are not completely predictable even in the short-term. Thus abalance has to be achieved between the budget available and the bottom up competing demands forresource from each individual area of activity. This is drawn together in the annual business plan.This plan has many functions, including

* Ensuring resources aimed at medium-term strategy formulation, and individual projectrecruitment are optimised.

* Ensures that individual sector marketing initiatives are co-ordinated, and where appropriatecombined.

* Ensures that the demands on end-users made by market research activities are minimised(end-users do not want to spend all their time filling in market research forms).

* Ensures that overall energy saving data collection exercises are co-ordinated.

Choices have to be made between individual activities, as the bottom up demands from individualsalways exceed the annual budgetary resource. The choice between activities is driven largely by thepotential benefit to cost ratios of individual activities, but political considerations are also taken intoaccount, eg a government policy to increase the competitiveness of SMEs.

3.4 Energy Saving Assessments

The techniques for energy saving assessment that were developed under EEDS (and are detailed inSection 2.2) have been incorporated into the process of proving energy savings stimulated by theBest Practice programme. The EEDS methods were essentially developed for showing how noveltechnologies were introduced into a market place. They comprised two components, firstly showing

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how the market was penetrated from a zero base, and secondly showing how EEDS brought forwardthe development of that market.

The Best Practice programme requires additional methodologies for proving energy savings. This isbecause the Best Practice programme is active in a broader range of technologies and techniquesthan EEDS was. This broadening is, in particular, in two areas. The first is in a support of pre-competitive research, where groups of companies come together and undertake research with the aimof turning these into products after the Best Practice programme involvement is finished. Thesecond area is in stimulating measures widespread take up of measures which have already achievedsome market penetration, ie the Best Practice programme is looking to steepen the marketpenetration curve over what is already happening. This is further complicated by the fact that theBest Practice programme does not concentrate solely on technologies, but also encompasses areassuch as management techniques and training. These latter areas of activities are more difficult totrack.

This broadening of the Best Practice programme over EEDS required the development of moretechniques for energy saving assessments. These are best illustrated by the two case studies detailedbelow, the first covering the research area and the second covering methods by which savings oftechnologies already in the market place and management techniques are assessed.

Case Study 1: Higher Efficiency Motors

ETSU has a full-time motors and drives sector expert in view of the energy use and potential savingsavailable through the use of higher efficiency motors, variable speed drives and automatic switch-offsystems. During the first years of the Best Practice programme, high efficiency motors werepromoted to end-users. Despite this, market penetration of higher efficiency motors was generallyless than 5%.

The 1991 strategy on motors and drives recognised that the main barrier to these higher efficiencymotors was that very few motors were sold directly by motor manufacturers to end-users. The vastmajority were sold either through original equipment manufacturers (ie pump, fan etcmanufacturers) and through stockists. Their one over-riding driving force is lowest first cost. Thusthe market penetration for higher efficiency motors (which then cost 30% more than standardmotors) was very difficult. Despite the higher cost, it was still possible to achieve paybacks of onlya few months. However, the strategy recognised that, given the market, it would be very difficult toincrease the penetration of higher efficiency motors. Instead, the strategy proposed researchactivities to reduce the cost of higher efficiency motors.

At the same time, the major motor manufacturer in the UK recognised that their range of motors wasreaching the end of their life, and that a new range needed to be developed. There was discussionwithin the company as to whether this new range should be developed along the traditional lines ofreducing the capital cost of motors (at the expense of efficiency) or whether a new range could bedeveloped such that there were improvements in efficiency, together with further additional features

14

which could be built into the motors, without requiring an increase in manufacturing costs over thecurrent ranges of standard motors available in the UK.

ETSU worked with the company in developing a research project to enable the development ofhigher efficiency motors at the standard motor cost. This turned out to be a very large project, andthus a major risk for ETSU. The research required a significant proportion of the overall BestPractice programme budget, though the potential energy savings were large. In view of the demandon the budget, strategic decisions had to be made within ETSU as to how to accommodate thisproject.

There were also risks to the end-user company, in that it marked departure from traditionaldevelopments in motor manufacturing. However at the end of a four-year project, the results havebeen successful and the company is now starting to develop and market new ranges of motor thatcost the same as current UK standard motors, that have efficiencies equivalent to the best higherefficiency motors available.

In terms of energy saving assessment, ETSU will be counting the sales of the companies' motors,and, with knowledge already built up over the years about motor usage patterns, make an estimationof the energy savings achieved. There is clear evidence that, without the Best Practice programme'sinvolvement in the research, this market transformation would not have happened. This evidenceincludes the fact that high level board discussions took place within the company both before andduring the project, discussions which showed great reservations about the marketing implications ofthe research directions.

In addition to transforming the products of the major UK supplier of energy efficient motors, theproject has also had the effect in terms of stimulating the competition. ETSU will again assess thesales of higher efficiency motors of other manufacturers, which will enable energy savingassessments to be made.

Over the coming years, it is likely that higher efficiency motors will gain market shares of the orderof 80 or 90% in the UK. Before the project, market penetrations were stagnant at around 5%. Thedifference can thus clearly be assigned to the research project and the Best Practice programmeinvolvement. Thus, the counting of sales makes a suitable method of assessing energy savingsachieved as a result of the Best Practice programme in this area.

Case Study 2: Management Techniques and the Use of Surveys

Under the Best Practice programme, ETSU is promoting various management techniques aimed atincreasing the efficient use of energy wvithin end-users. These techniques cover a range of subjects,including the gaining of senior management commitment, the development of long-term energysaving strategies and structures for companies, the monitoring and targeting of energy savings,proper financial accounting of energy, the linking of energy into traditional company controllingsystems (such as statistical process control, total quality management, environmental programmes,

15

etc), the motivating of staff for energy saving and proper financial appraisal of energy efficiencyprojects (including ensuring that engineers have enough financial skills to talk to accountants).

This work involves influencing a wide range of people within companies, from board level membersthrough senior management and engineers right down to the shop floor, where motivation plays animportant part. This area of work poses large problems for energy saving assessments. Theseproblems include the fact that:

* The work covers several different projects and marketing activities.

* The work is aimed at several different levels within a company.

* There are few products or markets to track, so a relatively few equipment suppliers cannot berelied upon to give a good picture as to the market.

Any actions taken by companies can also involve the use of technology, so double countingwith technology energy savings must also be avoided. Given the large number of projectsand end-users involved, the only realistic method of assessing energy savings is through asurvey of end-users. ETSU undertakes three types of survey. These are:

. Process benchmarking surveys, where end users provide details on the specific energyconsumption of their process. These are published by ETSU in a confidential manner so thatcompanies can compare themselves with competitors. The surveys are repeated at intervalsand give an indication of the change of performance of the sector.

* Attitudinal surveys, which test a range of attitudes of the target group to energy efficiency.

* Energy saving surveys, which aim to measure energy savings achieved by the programme.

Only the third of these survey techniques are used to quantify energy savings. The first two areuseful motivational and operational tools, but are not rigorous in assessing savings or in linkingthem to Best Practice programme activity. Thus the discussion below focuses on a third survey, theenergy saving assessment survey.

It is important that this survey is constructed so as to avoid double counting and also such that itproves the additionality of the programme's activities over what would have happened without theBest Practice programme. ETSU has developed a six stage process for the survey, in particular totackle the double counting and additionality problems. The steps involve the following:

Contacts database: ETSU keeps a contacts database of everyone who has attended events and whohas requested and received literature. Beyond this, there are people who will have been influencedthrough articles in trade journals and through the general movement of individuals betweencompanies. ETSU has accepted that these latter two influencing methodologies are impossible totrack, and so discounts the programme's effect in energy saving assessments.

16

Selecting a sample: For each individual survey, the total population of contacts from the contactsdatabase can be established. The population for, say, a management techniques energy savingsassessment survey is selected only from those contacts who have been to specified managementtechniques events or have received specific management techniques publications. Of thispopulation, a representative sample is chosen (for example 500 people from a population of 5,000).This sample is then surveyed with a questionnaire (often using both telephone and writtenquestionnaires). It is recognised that not everyone in the sample will respond (for instance only 100responses might be achieved).

Establish linkage: The first stage of a survey is to establish some form of linkage between the BestPractice programme and the person being surveyed. This will range from simple questions such as"Do you remember receiving the publication or attending the event?", through questions such as"How did you use the information?", to more subjective ones such as "Did you use it to helpinfluence decisions made within the company?". Of course, if the recipient denies any knowledge ofthe event they attended, or fails to remember receiving a publication, it cannot be said that the BestPractice programme had any influence and any energy savings they have achieved cannot beascribed to be Best Practice programme.

Establish action/investment: The questions on the survey are written such that the respondent candetail what investment and/or action has been made. The questions are asked such that ETSU canmake some assessment of the energy savings that might have been achieved. In termns ofmanagement techniques, questions establishing action are asked, for instance "Have you run amotivation campaign, if so how wide was it?".

Estimate savings: The respondent is invited to estimate the energy savings achieved as a result oftheir actions. ETSU also makes its own calculations from the data on investments made and/oractions taken. There are times when the two methods of estimation derive different answers. Thiscould be for many reasons. However, ETSU has judged that it is not cost effective to go into thereasons at an individual site, and so accepts the lower of the two energy saving estimates. In theETSU calculations, investments are 'calibrated' against known case studies and assumed paybackcriterias. For the management techniques area, they are again 'calibrated' against the known casestudies. The case studies have been chosen such they are typical examples and have beenindependently audited to verify energy savings achieved.

Grossing up: The energy savings achieved by the respondents to the sample population aretotalled. The sample then needs to be grossed up to the total population. As only a fraction of thesample will have responded to the survey, care needs to be taken to ensure that this fraction isrepresentative of the total population. If the respondents are biased in any way, individualrespondents can be removed before the grossing up exercise (for instance, respondents under amotors survey included two water companies who had made major investments in variable speeddrives. This distorted the energy savings achieved by the respondent sample. There were also fewwater companies outside the sample population selected. Thus, these two water companies were notincluded in the average savings made by the sample population). The average savings achieved bythe respondents is calculated, the respondents being only a certain percentage of the sample. This

17

average saving is then assumed to have been achieved by a similar percentage of companies amongstthe total population. (In the example given above, and assuming the respondents were arepresentative sample of the population, the savings achieved by the 100 companies would bemultiplied by 10, and this would be assumed to be the savings of the total population). Thus noenergy savings are claimed for non-respondents, nor for their equivalents in the total population.

This method of surveying gives ETSU confidence that there has been some linkage between the BestPractice programme and the energy savings achieved, in that only direct contacts have beensurveyed and only actions taken after the time of contact will be counted. It underestimates theenergy savings achieved by the Best Practice programme, in that not all those that have beeninfluenced have been assessed. The survey techniques are inevitably less rigorous than countingequipment sales, though ETSU believes that the conservatism prevalent in all stages of the surveytechnique ensure that the energy savings claimed are robust.

18

4 GUIDING PRINCIPLES OF PLANNING AND SAVINGS ASSESSMENTS

During the seventeen years of running energy efficiency programmes, ETSU has developed severalguiding principles for its work. In terms of planning and energy savings assessment methodologies,these are detailed below.

4.1 Overview of Players

The running of energy efficiency programmes involves the bringing together and stimulating ofmany different players. These include:

* End-users, covering several different levels within end-user organisations. These levelsrange right from boardroom level down to shopfloor level.

* Equipment suppliers, who develop new products and market existing products.

* Consultants, who can provide background market research and audit demonstration projectsand who's market programmes are trying to stimulate.

' Trade/research bodies, who can give good feedback on industrial sectors and provide goodpromotional avenues for material.

* Other third parties, who can be very effective marketing channels for information.

Energy efficiency programmes need to work with all these types of organisations in a co-ordinatedmanner. They also require feedback from all bodies such that programmes can be continuallyimproved.

4.2 Overview of Planning

Programme planning is required. Planning over several different timescales is an essentialcomponent of ensuring that an overall programme has overall direction and effectiveness. Thisplanning should be done at several different levels, including:

* Long-term: this covers an overall energy savings goal. This is typically over a five or tenyear time horizon. This goal enables a long-term focus, with shorter term planning thenrequired to work out how this overall goal can be achieved within the prevailing macro-economic climates.

Medium-term planning: this tackles issues at the individual programme, sub-programme andindividual project level. It is planning over a two or three year time horizon and details howimmediate problems that are going to be tackled by activity in that programme. Planning atthis level includes setting specific energy saving sub targets and assessing the costeffectiveness of activities.

19

* Short-term planning: this involves annual planning for activities in each area, and tackles theissues of how all activities can be co-ordinated.

Planning is required at all levels within an agency, it is not a task of one individual or a small group.Both the short-term and medium-term planning is initiated by all individuals (ie is a bottom upfunction) which is then co-ordinated and (usually) trimmed by management to meet budgetsavailable. ETSU probably devotes 10% of its time to planning, in order to ensure full co-ordinationand the optimising of the use of resources.

4.3 Energy Saving Assessment and Operational Effectiveness Overview

Sections 2.2 and 3.4 detail several methods for undertaking energy saving assessments where theyare directly related to a programme. They essentially fall into two categories, counting of equipmentsales and the use of surveys. Both techniques need to be very carefully used to ensure that resultsare believable and that additionality of the programme can be shown. It is recognised that there isno rigorous method which can guarantee direct energy savings shown by an energy efficiencyprogramme, but the two methods detailed do give robust figures for energy savings achieved, at abearable cost to the programme.

ETSU recognises that there are some areas where it is not sensible to track energy savings. Onesuch area is the area of tertiary education (ie promoting energy efficiency to undergraduate students).Whilst it might be possible to track individual energy efficiency components to general engineeringcourses, there are many practical difficulties in tracking the individual students, which makes theprocess cost-ineffective. This is because lecturers generally do not wish to give lists of students, andeven if they did, the students are so mobile that it becomes impossible to maintain direct contactwith them. ETSU thus recognises that this is an area that has to be carried as an overhead activity,as costs will be incurred by the programme but energy savings cannot be linked directly to activity.This has to be recognised in the medium and long-term planning that ETSU undertakes.

It is also difficult and perhaps cost ineffective, to track energy savings achieved by crossfertilisation, for instance by individuals moving companies or through individuals unknown toETSU who read articles in the technical press. This is an area, however, in which ETSU arecurrently investigating measurement options.

The monitoring of a programme's effectiveness covers two different areas: firstly, the energysavings achieved as a result of the programme, and secondly, operational effectiveness. The formeris the reason for the programme existing in the first place and has to be undertaken such that time isgiven, following a programme activity, for actions to be implemented by end-users. The latter needsto be undertaken close to individual programme activities, in order to establish whether or not theinformation is understandable, what the end-user needs and/or what additional tools the end-userneeds. This then continuously helps steer the programme.

20

Some of the guiding principles that ETSU uses for monitoring include:

* Minimising the disturbance to industry. End-users, equipment suppliers and consultants donot want to spend large amounts of time showing what they have done in terms of energysaving: they have many other more pressing priorities.

* Pragmatic, but robust approach to programme energy savings assessments. ETSU does notattempt to exactly quantify all the energy savings achieved by the programme, as this wouldinvolve prohibitive costs. Thus in any programme energy savings assessment, where achoice is possible, a conservative option is always taken.

* Operational monitoring is mainly through activity surveys. Thus, for instance, after aworkshop, delegates will be asked whether the material was pitched at the correct level,whether the coverage was sufficient and to rate individual speakers and the venue. All thismaterial helps focus an activity such that end users gain the maximum from the activity.

* Keep monitoring costs to 2% of programme costs. This budget covers both the energysavings assessment work and the operational monitoring work. It is important that there is aclearly defined budget for this activity, to ensure that it takes place. However, the budget isnot large as it does not directly contribute to energy saving measures, though the operationalmonitoring will improve delivery mechanisms.

* Co-ordination is required. Any energy efficiency programme has a large range of activities.Many of these will be aimed at the same end-user. Co-ordination of both energy savingassessments and operational monitoring activities is required to both minimise thedisturbance to industry and avoid any double counting of energy savings.

21

Olbse rvedco |re lication

- {NY%-/ faire

LUw

Time

Figy 1 EEDS Additionality Model

jbclargl244

Fig 2 EEDS Replication by Individual Sector as a Function of Time

500 Steel

400 / ; g~~~~~~~~ 1/2)400

__300

CD

Waste

200-

Food & Drink100

1980 1982 1984 1986 1988

Year23

3.5__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Historic Trend (without EEDS)3 Application of EEDS conceDts

3

2.5

2

1975 1980 1985 1990 1995 2000

YEAR

Fig 3 UK Steel Industry Energy Consumption

Fig 4 UK Energy Statistics for the Year 1992

5". x Steel

l

. (x 1/2)*EMS

3M I '

I I ,''~~x/

_ x ~~~~~~~~~~~~~~~~I !

I ¢ X Waste

: X//

' /!

'1 Fesd ADrink

logo 1982 1984 1986 198

Year25

Other MetalsEngineering F@i3% 13% 10% ~~Textiles

Chemicals 3%19%

*~~~~~~ither16%

Mineral Products per12% Iron & Steel 6%

18%

Fig 4a Industrial Energy Use by SectorHeat Supplied Basis (1992)

Refrigerati.n High Temp. Processes2% 21% Lighting

Low Temp. Processes 3%26% _Electrochemical

3%Other _ Space Heating

4% ~~~~~~13%

Feedstec _ Power Generation4% Motive Power 3%

21%

Fig 4b UK Industrial Energy Cost by Technology

LightingProcess Ohango %

23% Retrofit37%

Boilers5%

Space Heating15% Motors Good Housekeeping

5% 14%

Fig 4c Relative Contributions of Measures/Techniquesto Total Energy Saving Potential by 2020

26

Appendix 2

Details of EU Projects with CONAE

APPENDIX 2 - DETAILS OF EU PROJECTS WITH CONAE

MEETING REPORT

Friday 6 October at CONAE Offices

Present: Joseph Ordoqui - BCEOMRicardo Escobar - CONAEAndy Gilchrist - ETSU

History of EU involvementThe EU had some studies made of transport intersections in Mexico City during the mid-80s.This has obviously led to some good implementation, as traffic throughout Mexico City flowsincredibly well despite its volume. This study also suggested the setting up of CONAE,modelled on generally French lines, though there is also Spanish influence.

The first co-operation agreement between CONAE and the EC ran from 1990 to 1993 andincluded Spanish actions on technology transfer in industry, including first and second levelenergy audits. The French were involved in transport audits and driver training. At the sametime the World Bank was supporting cogeneration studies and standards work.

Current ProjectsThere are two current EC projects underway, both started January 1994 and are scheduled tofinish December 1995. These are ENERMEX and CUESTAENER. Details on these areprovided below.

ENERMEXThis started off as a potential project in 1990 using Kraft and Largen (from Germany) and Idomof Spain. However they didn't take the contract and BCEOM and CADEM took over, startingJanuary 1994. The objective was to promote transfer of technology between the EU and Mexicoand also within Mexico. It has three components:

1 CogenerationIdentification of Mexican firms who could manufacture components for cogenerationsystems. Fifty companies were identified and a report written and disseminated in Europe.There are perhaps five or six Mexican companies capable of putting in cogenerationsystems and about ten or twenty could be associated with systems. This component of theproject also envisaged a medium-sized cogeneration demonstration (5-20MW) butinstitutional problems have prevented its implementation. Instead, the project was divertedinto a study on biomass cogeneration systems, principally using rice, wood and sugar.

1

2 TransportationThis component has defined a diploma course content, prepared the course and put on thefirst course between April and July of this year. It is a weekend course, covering about 13consecutive weekends. Fifty people attended the course, which covers audits, drivertraining, mechanical training, logistics, use of information within companies, and themanagement of transport companies. CONAE are now revising the course content and willdo the second course using their own resources.

3 Institutional supportThis should have covered the basis for a long-term strategy for CONAE, includingdiscussions on the legal status of CONAE, its organisation, databases, how it shouldparticipate in national energy planning, financing, etc. A first draft of a report has beenwritten, but things have changed since this draft report was written, and Ordoqui is in theprocess of revising it.

CUESTAENERAgain this is BCEOM and CADEM, and its main aim was to strengthen the use of the U3Es,which are the regional offices of CONAE. This project has four components:

i Information systems and databases. A database for the U3Es was defined and set up. Itis meant to contain data from end-users, including the equipment it has, results from auditsand some energy saving follow-ups (ie what implementation has been done). It appears thedatabase is more or less up and running, though it is questionable whether there is any realdata in it.

2 Training for U3E personnel. A course was defined, covering energy efficiency andaudits, with the aim of making the U3E personnel understand what they are promoting.Each U3E has of the order of three personnel.

Seven or eight subjects were covered during the course, mainly using Mexican expertsfrom consulting companies created by CONAE's work. The course lasted two weeks andcovered how to do both first and second level audits, environment links, introduction intotechnologies and water savings. Two EU experts also gave one-week courses each on howto evaluate an energy efficiency project from a financial and feasibility point of view, andon project management.

3 Energy auditsDetailed energy audits were meant to be undertaken in the agro industry, the steel industry,cement and ceramics, and in the chemicals industry. Audits were 80% paid for by industryand 20% from the EU. Fourteen audits were done, though apparently only half are anygood. The aim of the audits was to both train Mexican consultants and get some realinformation about the sectors.

2

4 Sectorial studiesIn the four sectors mentioned above, macro-economic studies were performed and statisticswere reviewed. This gave a profile of energy consumption and the sectors' output. It gavea recommendation for a strategy to reduce specific energy consumption from, (a) no-costmeasures, (b) small investment measures (less than a two-year payback), and (c)technology changes, both process and cogeneration.

Apparently CONAE are now taking this sectoral study methodology further, using Mexicansalone. It is unclear which sectors they are involved in, but it could be textiles, paper andglass.

3

ANNEXES

Annex I

RESUMEN EJECUTIVODEL REPORTE

M6xico: Asistencia Tecnica para la Administraci6n de la EficienciaEnergetica a la Comisi6n Nacional para el Ahorro de Energia (CONAE).

TBE WORLD BANKEnergy Sector Management Assistance Program

Realizado por la Unidad de Planeaci6n Estrat6gica de la CONAE

Febrero 1996

CONTENIDO

1. PRESENTACI6N 3

2. OBJETIVOS DE LA MSION 3

3. CONCLUSIONES SOBRE LA PROBLEMATICA ACTUAL 4

4. RECOMNIDACIONES 5

4.1 Sobre el contexto institucional 5

4.2 Alternativas de estructura y ubicaci6n en el Gobierno Federal 5

4.3 Sobre la funcion de la CONAE en el desarrollo de politicas

energ6ticas.

7

4.4 Respecto de la coordinaci6n con otras entidades 7

4.5 Acerca del fortalecimiento interno 8

4.5.1 En las areas tecnicas 8

4.5.2 En las Unidades de Enlace de Eficiencia Energetica

(U3E)

9

4.5.3 En la Unidad de Planeaci6n 10

2

1. Presentaci6n

Del 25 de septiembre al 6 de octubre de 1995, el "Programa de Asistencia para laAdministraci6n del Sector Energetico" (Energy Sector Management Assistence Program-ESMAP) del Banco Mundial condujo una Mision de Asistencia Tecnica para la Comisi6nNacional para el Ahorro de Energia (CONAE). En esta misi6n participaron, por parte delBanco Mundial, el Sr. Emesto Terrado (Principal Energy Planner), el Dr. AndrewGilchrist (Manager, UK Energy Technology Support Unit), el Sr. John Amstrong(Director, Hagler Bally) y el Dr. George Courville (Oak Ridge National Laboratory).

Como producto de la mision se prepar6 un documento del cual este es un resumenejecutivo.

2. Objetivos de la Misi6n

Los objetivos fundamentales de la misi6n del Banco Mundial fueron:

A- Evaluaci6n de la situaci6n actual de la CONAE y de sus principales fortalezas ydebilidades.

B. Asistencia en los esfuerzos de la CONAE en la preparaci6n de un proyecto de Ley deEficiencia Energetica.

C. Asesoria en la constituci6n de una unidad de planeaci6n de CONAE, considerandouna tematica relacionada con las funciones, responsabilidades, posici6n en laorganizaci6n, personal y relaci6n con otras unidades de la CONAE de esta unidad deplaneaci6n.

D. Asistencia en la definici6n del futuro organizativo de la Comisi6n.

E. Asesoria en la elaboraci6n de una politica de planeacion a corto, mediano y largoplazo incluyendo la preparaci6n de una metodologia que permita definir objetivos deeficiencia y monitoreo.

Para realizar la evaluaci6n y liegar a las conclusiones que se refieren mas adelante, losexpertos del Banco Mundial participaron en reuniones con las diversas areas y directivosde la CONAE, se entrevistaron con funcionarios de alto nivel de la Secretaria de Energia,tuvieron comunicaci6n con representantes de empresas de consultoria y trabajaronconjuntamente con funcionarios y asesores de la CONAE con relaci6n al proyecto de Leyde Eficiencia Energetica y respecto a las actividades de planeaci6n.

3

3. Conclusiones sobre la problemitica actual

A. No existe seguridad para la determinaci6n clara y precisa del monto del presupuestodisponible para soportar las acciones de la CONAE.

B. La CONAE tiene una base legal debil que conileva a un margen limitado de autoridad.

C. Hasta el momento existe en la CONAE una limitada capacidad de planeaci6n yevaluaci6n de sus actividades, lo que se refleja de varias maneras:

O Los programas de la CONAE no estan identificados como resultado de unanalisis comprensivo de los costos y beneficios de un conjunto amplio dealternativas.

0 Los programas anuales son seleccionados sobre la base de las necesidadesinmediatas.

0 Los impactos especificos de los programas no son evaluados rigurosamente.

0 Los objetivos de eficiencia energ6tica a largo plazo no son claros.

[1 Los planes anuales se basan mas en las actividades operacionales que enobjetivos de eficiencia.

0 Se realiza poco trabajo de monitoreo de los impactos.

D. Existe poca coordinaci6n con las diversas agencias encargadas de la eficienciaenerg6tica en Mexico.

4. Recomendaciones

4.1 Sobre el contexto institucional

Las actividades que deben reafizarse para fortalecer a la CONAE son:

A. Desarrollo de politicas nacionales de eficiencia energetica.

B. Desarrollo de mercados de eficiencia energ6tica, incluyendo proyectosdemostrativos, incentivos, informaci6n y educaci6n y el desarrollo de una industriade servicio de conservaci6n energetica.

4

C. Planeaci6n nacional, incluyendo la estimacion del potencial de eficiencia energ6ticapara el pals para ser incluido en la planeaci6n del sector energetico nacional.

D. Regulaci6n sobre la eficiencia energetica.

E. Financiamiento de la eficiencia energetica.

4.2 Alternativas de estructura y ubicaci6n en el Gobierno Federal

Dada la complejidad para determinar el mejor futuro institucional de la CONAE, sepresentan las siguientes opciones:

A. Reforzar la situaci6n actual.

Esto no requeriria nueva legislacion y se cumplirian a traves de las siguientes medidasinstitucionales:

o Fortalecimiento de las finciones de planeaci6n con la adici6n de nuevo personal yrecursos necesarios para producir estimaciones creibles del potencial de eficienciaenerg6tica del pais.

o Robustecimniento de la programaci6n y el monitoreo de las actividades de laCONAE.

0 Evaluaci6n del papel institucional de la CONAE dentro de la Secretaria deEnergia.

D Disposici6n de un presupuesto mayor.

Las ventajas de esta opcion son su factibilidad politica y su rapidez para Ilevarse a cabo.

B. Creaci6n de un 6rgano desconcentrado.

Esto requeriria un acuerdo del Ejecutivo Federal, con el objetivo del establecitniento de un6rgano politica y operacionalmente autonomo, cuyo director podria ser nombradodirectamente por el Ejecutivo Federal. Esta altemativa implicaria que:

O El presupuesto fuera otorgado directamente a dicho 6rgano a traves de su liga conla Secretaria de Energia.

0 Las autoridades del 6rgano y sus funciones quedaran definidas por disposici6nreglamentaria o por acuerdo expreso del Ejecutivo Federal.

5

Las ventajas de esta opci6n son una mayor autonomia e independencia para laCONAE.

C. Establecimiento de un organismo completamente aut6nomo.

Esto requeriria de un acuerdo del Ejecutivo Federal con el objetivo del establecimiento deun organismo politica y operacionalmente aut6nomo, cuyo director podria ser nombradodirectamente por el Ejecutivo Federal. Esta alternativa implicaria que:

o El presupuesto provenga directamente del gobiemo, pero la CONAE tendria laposibilidad de generar sus propios recursos.

0 La estructura del organismo y sus funciones quedarian establecidas por ley.

Las ventajas de esta opcion son, sobre todo, de tipo presupuestal. Sin embargo, el riesgode que la CONAE cobre por sus servicios puede poner a la Comisi6n en competencia conservicios privados, limitando tanto el desarrollo de mercado de consultoria como el flujode informaci6n proveniente de las propios usuarios finales para el ejercicio de planeaci6n.

Las alternativas presupuestales para la CONAE provienen de la definici6n de su estructurainstitucional. Adicionalmente y de manera complementaria a todas las opciones, sepresenta la posibilidad de la creaci6n de un Fondo para la Eficiencia Energetica, comoei desarrollado en otros paises, y que brindaria la posibilidad de financiar la introducci6nde nuevas tecnologias, apoyar a la investigaci6n y desarrollo para el area y para estimularei mercado de eficiencia energetica.

4.3 Sobre la funci6n de la CONAE en el desarrollo de politicasenergeticas.

La CONAE debe contar con la responsabilidad de preparar estimaciones del potencial deahorro de energia para ser incorporadas en el programa del sector energetico. Esta es lauinica forma en que Mexico tendra la capacidad de determinar la funci6n de la eficiencia ylos recursos renovables en el cumplimiento de las necesidades energeticas nacionales,incluyendo el costo relativo de dichos recursos, asi como los beneficios econ6micos yambientales de utilizar dichos recursos.

4.4 Respecto de la coordinaci6n con otras entidades

Fundamentalmente entre el Fideicomiso de Apoyo al Programa de Ahorro de Energia enel Sector Electrico (FIDE) y la CONAE, debe promoverse la coordinaci6n en auditoriasenergeticas y en el desarrollo de normas de eficiencia energetica, programas deinfornaci6n, capacitaci6n y obtenci6n de informaci6n.

6

4.5 Acerca del fortalecimiento interno

4.5.1 En las Areas t&cnicas

0 Los encargados de las direcciones de la CONAE deben ser expertos en los sectores deuso final de la energia y deben tener conocimiento de:

V Situaci6n general del sector, incluyendo los problemas a corto y medianoplazo.

V Las tecnologias actuales utilizadas por el sector, asi como los usos de lasmismas.

V Las tecnologias y tecnicas nuevas que pueden ser introducidasi Las barreras del mercado para el mejoramiento de la eficiencia energetica.V Los costos de los usuarios finales para implantar nuevas tecnologias y

tecnicas.i Los canales de influencia para que los usuarios finales, tales como eventos,

revistas, asociaciones comerciales, etc.

0 En las direcciones se requiere de especialistas cuyas funciones deben ser:

V La generaci6n de informaci6n y datos para la planeaci6n a corto y medianoplazo de la CONAE. Esto incluye el suministro de informaci6n al actualmodelo energetico de la CONAE, con el fin de tener una mayordesagregaci6n, hasta poder llegar a nivel de tecnologias por sector.

V Determinaci6n de las barreras para la eficiencia energetica.i Elaboraci6n de nuevos programas para el sector.i Asegurar las actividades de corto plazo.

7

4.5.2 En las Unidades de Enlace de Eficiencia Energ6tica (U3E)

Estas unidades son el contacto directo con los usuarios finales. Estas unidades permiten laretroalimentaci6n peri6dica entre la CONAE y los usuarios finales de los estados de laRepiiblica.

Sus objetivos deben ser:

o Detectar y establecer la situaci6n general de la eficiencia energetica en su areageogrifica.

O Proveer la informaci6n del uso de la energia de las industrias localizadas dentro de suArea geogrifica.

o Conover la receptividad de los usuarios finales sobre la eficiencia energetica, en suirea geografica.

o Reconocer los problemas y barreras para implantar programas en su irea.

8

4.5.3 En la Unidad de Planeaci6n

Es imprescindible el fortalecimiento de la unidad de planeaci6n. Sus principales objetivosdeben ser:

o Conocer las similitudes y diferencias de las diversas actividades de la CONAE,conjuntamente con los exitos y problemas.

0 Desarrollar una medida de la raz6n del beneficic de las diversas actividades sectoriales.O Desarrollar escenarios de largo plazo, incluyendo la imnportancia de los sectores y

tecnologias.o Conocer sobre otros programas de eficiencia en desarrollo en Mexico y en el

extranjero.0 Coordinar la informacion generada por las U3E y los sectores.o Coordinar y desarrollar de objetivos a corto plazo para el desarrollo de programnas

basados en efectividad de costos y desarrollo del mercado.

9

Annex II

Mexican Mission to Southeast Asia for Exchange of Experiences in Energy Efficiency

by Odon de Buen, Dr. RaulMonteforte, Jose Antonio Urtiaga and Francisco Ornelas

Summary Translation of Trip Report

The first part of the trip report describes key elements of the economic and energy developmenrt of the threecountries visited: Korea, Thailand and Philippines. Accelerated growth, rapid industrialization andintensive urbanization as well as dependence on imported energy led to energy policies based ondiversification of energy sources and energy conservation. Emphasized is the problematic growth of thetransport sector which might cancel out advances in energy efficiency in other sectors.

Te second part details the thematic areas of major relevance for the Mexican Delegation. The first area isthe legal framework for energy conservation. In Korea and Thailand energy conservation laws exist since1979 and 1992, respectively. The Korean law created Korea Energy Management Corporation (KEMCO)as the national agency in charge of implementing policies and programs. KEMCO also administers theFund for the Rationalization of Energy Use (FERU). The Thai law instituted the Program for EnergyConservation (ENCON) which comprises the following initiatives: obligatory energy savings in designatedinsallations, creation of the Fund for Energy Conservation with a small surcharge on petroleum productsales as its source, fiscal and financial incentives for projects in energy efficiency and renewable energy,development of energy efficiency standards, etc.

The second area is theinsitutional arrangment for energy conservation. In Korea, the institution in charge isKEMCO (see above), while several institutions share responsibility in Thailand: The Departnent of EnergyDevelopment and Promotion (DEDP) in the Ministry of Science, Technology and Environment; the EnergyConservation Center of Thailand (ECCT) which was founded jointly by the National EnergyAdministration and the Federation of Thai Industry; the Electric Generation Authority of Thailand (EGAT)which is developing DSM programs. Also in the Philippines, a variety of authorities is in charge of energyconservation: the Energy Development and Utilization Foundation (EDUFI); the Philippine EnergyConservation Center (PECCI); the Energy Administration Association of the Philippines (ENMAP);Manila Electric Company (MERALCO).

The third area covers programs and financing: In Korea, KEMCO administers programs for industrialinstallations of the biggest energy consumers, for commercial installations, for cogeneration and districtheating and for research and development. In Thailand, the main initiatives are a joint program of EGATand five manufacturers for the substitution of fluorescent bulbs; a progran for the certification of electricalappliances; and the fund for energy efficiency. In the Philippines, "Power Patrol" is a joint committee ofpublic and private sector organizations which promotes energy efficiency and conducts informationcampaigns.

Part three summarizes areas of special interest to the Mexican delegation:* The Fund for Energy Efficiency in Thailand which currently counts with US$300 million;* EGAT's DSM program;* The energy efficiency seal for electric appliances in Thailand which is already in place for refrigerators

and is being developed for air conditioners;

* The certification of electric appliances in the Philippines: Since 1991, a laboratory for testing ofpetroleum products and electrodomestic appliances exists;

* The reduction of transmission and distribution losses in the Korean power sector from almost 30% in1961 to barely 6% in 1994. This compares to currently 14% in Mexico.

In the final conclusions and recommendations, the report emphasizes that Korea and Thailand haveachieved major improvements in energy conservation which surpass the level achieved in Mexico,especially with respect to the legal framework, financing and funding mechanisms, and extnt and structureof programs. In the three countries visited improvements in energy efficiency were used to further energypolicy goals as well as environmental, technology and economic goals.

The key success factors are summarized as follows:* the establishment of funds and financing mechanisms which provide incentives to proceed with enery

efficiency investments, and of fiscal policies with penalize inefficiency and reward energy savings;* the evolution of national and regional norms and standards for energy efficiency, including the

introduction of certification and of installations and mechanisms for testing and certification;* the leadership of the government in the promotion of energy efficiency activities;* the promotion of market mechanisms to adopt and disseminate energy efficiency;* the establishment of rational pricing policies for energy, reflecting the long-run marginal costs, and, if

required, providing transparent subsidies for consumers in the lowest income groups.

MISI6N MEXICANA AL SUDESTE ASIATICO

PARA INTERCAMBIO Y ESTUDIO DE EXPERIENCIAS EN

AHORRO Y USO EFICIENTE DE LA ENERGIA

(16 a 30 de septiembre de 1995)

REPORTE PARA EL BANCO MUNDIAL

M. en C. Od6n de Buen R., Comisi6n Nacional para el Ahorro de Energia

Dr. Raul Monteforte S., Secretaria de Energia

Lic. Jose Antonio Urteaga D., Fideicorniso de Apoyo al Programa de AholTo de

Energia del Sector Electrico

Ing. Francisco J. Ornelas, Luz y Fuerza del Centro

INTRODUCCION

Bajo los auspicios del Banco Mundial, bajo la coordinaci6n de la Secretaria de Energia ya traves de la Comisi6n Nacional para el Ahorro de Energia (CONAE), durante las dostiltimas semanas del mes de septiembre de 1995, una misi6n tecnica mexicana - queincluy6 a representantes del Fideicomiso de Apoyo al Programa de Ahorro de Energiadel Sector El&ctrico y de Luz y Fuerza del Centro - realiz6 una gira por tres paises delsudeste de Asia (Corea, Tailandia y Filipinas) para conocer e intercambiar experienciascon expertos de esos paises y de agencias internacionales en temas relacionados con elahorro y uso eficiente de energia.

En esta gira se realiz6 un conjunto de visitas a instalaciones, se llevaron a caboreuniones con funcionarios y expertos locales y de agencias internacionalesinvolucradas en el tema y se particip6 en una reuni6n internacional sobre promoci6n dela manufactura nacional de equipos eficientes en energia.

El presente informe integra y resume la informaci6n, las observaciones y lasconclusiones mas relevantes relacionadas con esta misi6n.

2

1. ENTORNO ECONOMICO Y ENERGETICO DE COREA, TAILANDIA Y

FILIPINAS'

1.1. ECONOMIA

La regi6n visitada por la Misi6n Mexicana es eje de una profunda transformaci6n que

impactara la historia econ6mica mundial. Conforme los paises asiaticos de la Cuenca

del Pacifico continuian y afianzan su explosivo crecimiento por tercera d&cada

consecutiva, el centro del comercio y de la industria mundiales tiende a desplazarse

cada vez mas del Atlfntico a esta area. En su concepto mfs amplio (es decir, incluyendo

a China), esta regi6n esta compuesta por mas de 1,600 millones de personas y tiene una

economia global con un valor de cuatro billones de d6lares.

La potencia econ6mica de la regi6n se manifiesta de muchas maneras. Jap6n y Corea

producen una tercera parte del total de los vehiculos automotores en el planeta. En los

pr6ximos anios, se estima que estos dos paises produciran mfs de la mitad de los

autom6viles en el mundo y que, ademas, los paises del sureste asiatico se integrarfn

crecientemente a esa producci6n a traves de cientos de fabricas y plantas

ensambladoras. Mas aun, un cuarto de la producci6n mundial de acero se realiza en el

noreste de Asia; la producci6n textil, asi como de una amplia gama de manufacturas,

tiende a concentrarse tambien en los paises del Pacifico asiitico; la producci6n japonesa

de maquinas herramienta domina el mercado mundial desde hace una decada; la

industria naviera se mud6 al este de Asia hace varios anios; y, por uiltimo, ahora

sobreviene un enorme crecimiento en las llamadas "industrias del siglo XXI", como

computadoras, aparatos electr6nicos, microprocesadores y videojuegos - ademas de los

avances en tecnologia ambiental y en muchas otras tecnologias de frontera en Jap6n -,

los cuales serfn desarrolladas en la region.

De manera particular, la visita de la Misi6n Mexicana se enfoc6 a tres casos que

manifiestan de distintas maneras el fen6meno asiatico: Corea, Tailandia y Filipinas. En

primer lugar, Corea constituye el segundo centro de producci6n industrial del area, el

tercero en comercio y es el que dedica la proporci6n mas alta de su PIB a la inversi6n

1Todos los datos econ6micos fueron obtenidos de The World Bank, World Development Report 1993.Otras referencias complementarias son: J. Abeggler, Sea Change. Pacific Asia as the New World Industrial

Center, The Free Press, 1994; Energy Statistics Yearbook 1993, ONU; y World Energy Outlook 1995, IEA.

3

(40%). Por su parte, Tailandia lha sido uno de los principales focos de inversi6n

extranjera directa en el 4rea (recibiendo alrededor de US$ 20 mil millones entre 1986 y

1992) y es una de las economias exportadoras mAs din.micas del grupo de la

Asociaci6n de Paises del Sureste Asiatico (ASEAN), con un crecimiento en

exportaciones de 20% anual en terminos reales durante los udltimos cuatro afios.

Finalmente, Filipinas continua siendo uno de los paises mas debiles dentro del Asia

Pacifico, con crecimiento demografico elevado, politicamente inestable, con niveles

altos de pobreza y diferencias sociales; cuenta, sin embargo, con abundante mano de

obra barata y entrenada, ubicaci6n estrategica y politicas de promoci6n a la inversi6n

privada que atraen a los paises ricos de la zona (Jap6n, Taiwan, Singapur y Corea) con

inversiones en manufacturas, agroindustrias, terminales maritimas y turismo, lo que

convierte a Filipinas en el tercer receptor de ayuda financiera en el firea.

INDICADORES ECONOMICOS DE LOS PAiSES DE ASIA-PACIFICO 1993

POBLACIO PIB PIB per capita

N (mil millones de (US $)

(mi_ones) US$)jap6n 124 3362 26930

Hong Kong 6 68 13430

Singapur 3 40 14210

Taiwan 20 179 8788

Corea 43 283 6330

Malasia 18 47 2520

Tailandia 57 93 1570

Filipinas 63 45 730

Indonesia 181 116 610

China 1150 370 370

TOTAL 1665 4603 2765

World Development Report 1993

1.2. ENERGiA

La dinamica energetica de los tres paises visitados refleja su acelerado crecimiento

econ6mico, su rapida industrializaci6n y su intensa urbanizaci6n en las (iltimas dos

decadas. Los tres paises son importadores netos de energia, lo que ha representado una

4

carga significativa y permanente para sus cuentas externas, especialmente en el periodo

de 1973 a 1981. La combinaci6n de estas fuerzas di6 forma a politicas energeticas

basadas en la diversificaci6n de fuentes y en el ahorro de energia. Estas politicas hanlogrado un avance importante en Corea y en Tailandia, y en algunos aspectos tambien

en Filipinas. Sin embargo, una observaci6n importante es que en los tres paises el

transporte se presenta sumamente problematico y podria erosionar rapidamente los

avances en eficiencia energetica en los demas sectores.

1.2.1. COREA

En Corea, el consumo de energia se ha incrementado a un ritmo de 10% anual desde

principios de los ochenta, lo que significa un periodo de duplicaci6n de siete a-nos y

medio, mientras que el consumo de electricidad lo ha hecho a raz6n de 14.7% anual.

Las fuentes de energia primaria son: petr6leo con 62%, carb6n con 20%, nuclear con11.5%, gas licuado con 4.5%, hidraulica con 3% y otros 0.3%. El perfil del consumo final

es: industria 53.5%, edificaciones comerciales y residenciales 24%, transporte 20.3% yservicios 2.2%. Este pais es ahora mas dependiente de las importaciones de energia(90%), que en la mitad de la decada de los setentas (83%), pero result6 particularmentedafiado durante las crisis petroleras de esa d&cada. Corea logr6 revertir los efectos mAsnegativos adoptando una estrategia de seguridad energetica basada en la sustituci6n defuentes y el ahorro de energia: de 1978 a 1994 construy6 9 unidades nucleares para un

total de 7 616 MW (26.5% de la capacidad total instalada); construy6 6 820 MW de

plantas carboelectricas (23.7% de la capacidad total instalada); y sustituy6 plantas de

petr6leo por plantas de ciclo combinado a base de gas licuado, las que representan el

17.3% (4 961 MW) del parque de generaci6n.

Por otra parte, se promovi6 intensamente el ahorro y uso eficiente de la energia entodos los sectores, incluyendo la difusi6n de la cogeneraci6n industrial y de calor

distrital en los llamados "Mass Energy Centers". Cabe destacar el acelerado desarrollo

tecnol6gico en el aprovechamiento de residuos s6lidos, principalmente para los

esquemas de cogeneraci6n urbana, el impulso a la fabricaci6n e instalaci6n de sistemas

solares de calentamiento de agua y el desarrollo de la tecnologia fotovoltaica (Corea

fabricarA en breve fotoceldas). En el sector de transporte, pese a diversos programas

(uso de unidades compartidas, mejoras en eficiencia, entrenamiento y, desde luego,

ampliaci6n sustancial del metro), los problemas van en aumento, combinados con elacelerado crecimiento del parque vehicular privado (4 000 000 de unidades en 1993).

Finalmente, cabe destacar los siguientes elementos de la politica energefica en materiade ahorro de energia:

* Entre 1974 y 1979 se promulgaron leyes para el uso racional de la energia y elmejoramiento tecnico en equipos termicos: estA vigente vigente la Ley para laRacionalizaci6n de la Utilizaci6n de la Energia; y, bajo esta misma ley, se cre6 elKorea Energy Management Corporation (KEMCO).

* En 1983 se inici6 el programa de desarrollo de cogeneraci6n distrital, que seconvertiria en 1993 en el programa de "Mass Energy Supply", al que seincorporaran varias unidades de incineraci6n de residuos s61idos que estAn enen construcci6n, con mas de 2 000 MW. Los "centros de energia masiva" estanproduciendo vapor de proceso para la industria, calor residencial y energiaelectrica y se les considera como una alternativa de importancia fundamentalpara ahorrar energia (gas licuado principalmente), proveer diversos serviciosenerg6ticos con una s6la fuente y reducir emisiones (las plantas incorporan uncontrol triple: desulfurador, precipitador electrostAtico y desnitricador o lavadorde gases)

* En 1987 se promulga la Ley para el Fomento de las Nuevas Fuentes Renovablesde Energia y se establece el Centro de Desarrollo correspondiente. En 1992 estecentro se convierte en el Centro de Investigaci6n y Gesti6n de Energia yRecursos (RACER), en el que se concentra el desarrollo de las tecnologiasbasadas en fuentes nuevas y renovables y las de eficiencia energetica.

1.2.2. TAILANDIA

En 1993, la producci6n de energia primaria en Tailandia se ubic6 en 34,132 miles detoneladas de petr6leo crudo equivalente (MTPCE), la cual se complement6 conimportaciones de 25,893 MTPCE. La oferta intema se integr6 por un 45% de petr6leocrudo y 13.9% de productos petroliferos (total 58.9%), 9.2% de carb6n, 1.4% hidrdulicay 30% de biomasa. La diferencia corresponde a importaciones de electricidad, variaci6nde inventarios y exportaciones.

El consumo de energia de Tailandia ha crecido a un ritmo de 9.4% anual y el deelectricidad a 13% anual entre 1984 y 1993. En este afio, el primero alcanz6 los 39,328MTPCE, con un incremento del 12% respecto al afno anterior. La capacidad de

6

generaci6n descansa en un 44% a base de gas, 28% en combust6leo, 20% en carb6n y 5%

de hidroelectricas.

El consumo final de energia de Tailandia en 1993 se integr6 de la siguiente forma:

SECrOR PorcentajeTransporte 37.1%Manufacturero yextractivo 29.8%Residencial y comercial 28.5%Agricultura 4.1%Construccion 0.5%

El peso especifico del transporte en el consumo energftico refleja el severo problema

que este representa en Tailandia, especialmente en la capital. Se considera que el

congestionamiento en Bangkok -en cuya zona metropolitana se concentra el 40% de la

flota vehicular del pais es el peor en la regi6n Asia Pacifico. Algunos cAlculos indican

que cada autom6vil permanece atrapado 44 dias al afno en los congestionamientos de la

capital, que la velocidad promedio en horas pico es menor a 10 Kmh y que el consumo

adicional de combustible debido a esta causa implica una erogaci6n de 1.4 millones de

d6lares diarios. Se estima que, por esta causa, las perdidas en costos de. operaci6n,

consumo de gasolina, emisiones, tiempo de trabajo, accidentes, etc., ascienden a un

tercio del producto bruto potencial en Bangkok.

En este marco, la seguridad energetica y el ahorro de energia han sido considerados

prioridad maxima. Diversos programas y disposiciones legales han sido formulados y

existe una Ley para la Promoci6n de la Conservaci6n de la Energia. Se considera que es

una ley energica y que posee un enfoque integral, incluyendo medidas referentes a

precios, normas y estAndares, reestructuraci6n y fortalecimiento institucional,

mecanismos financieros basados en impuesto sobre ventas de energia y subsidios y

recompensas al ahorro, auditorias energ6ticas, capacitaci6n y penas, entre otros temas.

Por otra parte, EGAT (la compaMfa estatal de generaci6n electrica), con apoyo

financiero del Banco Mundial, ha ampliado su plan maestro de administracion de la

demanda (Demand Side Management), con el objetivo de reducir la demanda pico en

311 MW y ahorrar 1 826 Gwh. Se considera que este es un programa ejemplar por su

s6lida estructura, excelente manejo y eficacia.

7

1.2.3. FILIPINAS

Filipinas presenta un balance de energia caracterizado por el predominio del petr6leo y

sus derivados con alrededor del 60% del total, un 31% de biomasa (lenia y residuos

agricolas), 4% de hidraulica, 3% de carb6n, y 2% de geotermia. El crecimiento del

consumo ha sido inferior al promedio en esta regi6n del mundo, debido a recesiones y

a otros problemas, aunque ha comenzado a crecer en los filtimos dos anios.

En los anos ochentas, Filipiias estuvo a punto de construir su primera central nuclear.

Sin embargo, este y muchos otros proyectos de infraestructura fueron cancelados

debido a crisis econ6micas y politicas. Asi, el pais sufri6 un agudo deficit de generaci6n

que caus6 racionamientos y apagones de seis y hasta doce horas al dia. En 1994 la

capacidad instalada fue de 9 000 MW y el deficit de apenas 4%, lo que se considera un

gran progreso comparado con la situaci6n anterior. Se estima que la capacidad crecera

hasta liegar a 22 000 MW en el a*to 2004. Mas ain, Filipinas tiene un recurso geot6rmico

abundante (888 MW instalados actualmente) y recientemente ha descubierto reservas

de gas calificadas como "significativas".

Este pais se caracteriza por un desarrollo creciente de la generaci6n privada

ndependiente. Se anticipa la privatizaci6n de la compafifa de electricidad

(NAPACOR), con lo que se profundizarAi la reestructuraci6n del sector el6ctrico. Se

estima que los productores privados independientes tendrdn mfs de 10 000 MW de

capacidad instalada hacia el inicio del siglo XXI.

Filipinas continua promoviendo activamente la eficiencia energetica, los programas de

DSM y el ahorro a traves de diversos mecanismos y programas, con lo que se espera

lograr una reducci6n en la demanda anual de energia de 8 a 16% entre 1993 y el afio

2000. Destaca el programa de estAndares y etiquetaci6n de equipos de aire

acondicionado, cuyo ahorro se estima en 80 MW para el afio 2000.

8

2. AREAS TEMATICAS DE MAYOR RELEVANCIA EN LOS PAiSES VISITADOS

2.1. MARCO LEGAL DE LAS ACrIVIDADES DE AHORRO DE ENERGIA

En los tres paises visitados estAn vigentes ordenamientos legales relativos al ahorro y

uso eficiente de la energia.

2.1.1. CCREA

En Corea, la Ley para la Racionaiizaci6n de la Utilizaci6n de la Energia fue promulgada

en 1979 y constituye la base legal para la observancia de la politica gubernamental en

esta materia. Se considera que es un instrumento poderoso, efectivo y de amplio

alcance.

La Ley obliga al gobierno coreano a cumplir y hacer cumplir medidas integrales de

politica relativas al ahorro y uso eficiente de la energia en todos los sectores de la

economia y establece los mecanismos financieros y los incentivos fiscales para inducir

las inversiones en ahorro energetico por parte del sector privado. Por otra parte, la Ley

dio origen al Korea Energy Management Corporation (KEMCO), como el organismo

ejecutante de dicha ley y encargado de implementar las politicas y los programas de

ahorro y uso eficiente de la energia. KEMCO estA, ademis, a cargo de la administraci6n

y el manejo tecnico del Fondo para la Racionalizaci6n de la Utilizaci6n de la Energia,

asi como del sistema de deducciones y excepciones fiscales y de un fondo de reserva

especial para investigaci6n y proyectos demostrativos, creados por la misma Ley. Las

fuentes de todos estos fondos no estan referidas especffica y directamente a un

elemento unico (por ejemplo, a los impuestos existentes sobre el consumo de petr6leo),

sino que derivan del manejo integral del presupuesto gubernamental y, en medida

poco importante, de ingresos propios de KEMCO y de las multas por incumplimiento

de la ley.

2.1.2. TAILANDIA

En Tailandia, la Ley para la Conservaci6n de la Energia de 1992 fortalece y amplia los

ordenamientos que le precedieron. En ella se define al Consejo Nacional de Politica

Energetica como el responsable de formular la politica sobre la materia y de vigilar la

9

administraci6n y aplicaci6n de los recursos destinados a los programas de ahorro. La

Ley instituye al Programa para la Conservaci6n de la Energia (ENCON), como su

componente operativo, el cual comprende las siguientes iniciativas:

* Ahorro de energia obligatorio en instalaciones designadas (fabricas y edificioscon un consumo energetico superior a un nivel establecido);

* Creaci6n del Fondo para la Conservaci6n de la Energia, como el instrumentofinanciero del Programa, el cual resulta de un peque-no impuesto especial sobrelas ventas internas de derivados del petr6leo;

* Establecimiento de incentivos financieros y fiscales para proyectos de eficienciaenergetica y de energia renovable, investigaci6n y desarrollo, promocion ydifusi6n de tecnologias eficientes;

* Desarrollo de estandares de eficiencia energetica;

* Desarrollo institucional, relaciones puiblicas y programas de entrenamiento.

2.1.3. FILIPINAS

Finalmente, en Filipinas el gobierno ha promulgado diversas leyes y disposiciones que

atafien al desarrollo sustentable de la energia. Las principales estan contenidas en el

Plan Nacional de Energia vigente e incluyen: campaiias de informaci6n masiva sobre

eficiencia energetica, promoci6n de los servicios de gesti6n eficiente ace la energia,

expansi6n de los programas de normas y etiquetado, introduccion de normas de

eficiencia energetica en edificios, promoci6n y apoyo a la transferencia tecnol6gica,

programas de reducci6n de perdidas en sistemas electricos y de mejoramiento de

procesos termicos, desarrollo de la cogeneraci6n, fortalecimiento institucional e

investigaci6n de mercados de productos y tecnologias de eficiencia energetica. Se preve

que en breve sera promulgada una ley que privatizara a la compaflia estatal de

electricidad (NAPACOR) y establecera diversas regulaciones para la reestructuraci6n

del sector electrico en ese pais.

10

2.2. INSTITUCIONES INVOLUCRADAS EN ACrIVIDADES DE AHORRO Y USO

EFICIENTE DE LA ENERGiA

2.2.1. COREA

Korea Energv Management Corporation (KEMCO)

El Korea Energy Management Corporation es una organizaci6n no gubernamental que

fue creada en 1980 a partir de la Ley de Uso Racional de la Energia (Rational Energy

Utlization Act). El mandato de KEMCO es el de instrumentar politicas

gubernamentales relacionadas con el ahorro de energia.

Las principales funciones de KEMCO son:

* Promoci6n del uso racional de la energia;

* Promoci6n de proyectos de cogeneraci6n y de calefacci6n distrital;

* Administraci6n para el mejoramiento de equipos y sistemas de uso final;

* Inspecci6n de equipos usuarios de calor y materiales;

* Administraci6n de la investigaci6n y desarrollo relacionados con energia yrecursos; y

* Recomendaciones de apoyo financiero para inversiones en el ahorro de energia.

2.2.2. TAILANDIA

El Departamento de Desarrollo y Promocion Ener&etica (DEDP por sus siglas en ingles)

El DEDP es parte del Ministerio de Ciencia, Tecnologia y Medio Ambiente y esta a

cargo del seguimiento del cumplimiento de la Ley de Conservaci6n de Energia (Energy

Conservation Act) de Tailandia, la cual incluye el manejo del Fondo para la Eficiencia

Energ6tica.

11

El Cento de Conservaci6n de Energia de Tailandia (ECCT por sus siglas en ingles).

El ECCT es un centro que inici6 operaci6nes en 1987 bajo la supervisi6n conjunta de la

Administracion Nacional de Energia (NEA por sus siglas en ingles) y de la Federaci6n

Tailandesa de Industria. El programa inici6 con un presupuesto de 40 millones de

Baths2 que les entreg6 el gobierno tailand6s. El ECCT ha recibido asistencia tecnica de

varias agencias nacionales e internacionales para el desarrollo.

Los objetivos de EECT son:

* Actuar en sintonia con la politica nacional de conservaci6nL de energia;

. Diseminar, promover y proveer informaci6n tecnica y servicios de consultoriarelacionados a la administraci6n de la energia y conservaci6n de energia a lossectores publico y privado;

* Crear una conciencia publica sobre la conservaci6n de la energia; y

* Coordinar a los organismos de los sectores puiblico y privado relacionados conlas actividades de conservaci6n de energia.

La Autoridad de Generaci6n El6ctrica de Tailandia (EGAT por sus siglas en ingles).

Originada hace veintiseis afios a partir de la uni6n de tres empresas estatales, EGAT es

la empresa generadora de electricidad de Tailandia y entrega la electricidad que genera

a dos empresas distribuidoras de energia, una para la zona urbana de Bangkok y otra

para el resto del pais.

A partir de diciembre de 1991, EGAT ha desarrollado actividades de Gesti6n de la

Demanda Electrica (DSM) que han consistido en lo siguiente:

. Transformaci6n de la manufactura local de lamparas fluorescentes para laeliminar la fabricaci6n de las del tipo T12 y que solo se fabriquen las de tipo T8;

y

. Etiquetado de refrigeradores para indicar niveles de eficiencia energftica.

2 25 Baths por D6oar Americano (aproximadamente).

12

EGAT planea desarrollar un conjunto de programas que incluyen:

. Etiquetado de equipos de aire acondicionado del tipo "split";

. Iniciativa de "Edificios Verdes", la cual consiste en la mejora de la eficiencia en eluso de energia en centros comerciales y primordialmente concentrada a lailuminaci6n y a la instalaci6n de sistemas de soporte para poder tener cargasinterrumpibles;

. Reemplazo de lamparas incandescentes con lamparas compactas fluorescentesen zonas rurales;

. Reemplazo de balastros por equipos con bajas perdidas; y

* Proyecto piloto de almacenamiento termico en edificios.

23. FILIPINAS

En Filipinas el marco institucional para el ahorro de energia ha variado a lo largo de los

filtimos veinte antos y actualmente la actividad se realiza en varias instituciones.

Energy Development and Utilization Foundation, Inc. (EDUFI)

EDUFI es una organizaci6n no lucrativa que fue registrada formalmente en mayo de1991. Su principales prop6sitos son los de promover y sostener el bienestar econ6mico

de Filipinas a traves de la diseminaci6n de informaci6n; la consulta, investigaci6n y

desarrollo; y la demostraci6n de tecnologias apropiadas en el desarrollo, uso,

administraci6n y conservaci6n de la energia. En la actualidad EDUFI participa

activamente en el programa "Patrulla Energetica" (Energy Patrol) y en las consultas

para el desarrollo del Plan de Energia de Filipinas; tambien participa en el programa

EC-ASEAN en cogeneraci6n y asiste en la promoci6n de la cooperaci6n entre la Uni6n

Europea y Filipinas.

The Philippine Energy Conservation Center, Inc. (PECCI)

PECCI es una organizaci6n no lucrativa que tiene el prop6sito de mejorar la

rentabilidad y la competitividad de empresas comerciales e industriales a trav6s de

mejorar la productividad energetica y la eficiencia mediante una aplicaci6n amplia de

13

las tecnologias de ahorro y administraci6n de la energia. PECCI es la organizaci6n

coordinacora del Taller Regional en la Promoci6n de Inversiones en la Manufactura de

Productos de Eficiencia Energ6tica (Regional Workshop on Investment Promotion in

the Domestic Manufactrure of Energy Efficiency Products) en el cual particip6 la

Misi6n Mexicana.

La Asociaci6n de Administraci6n de Enerzia de Filipinas (ENMAP por sus siglas en

ingles)

ENMAP es una organizaci6n nacional, no lucrativa, de administradores de energia,

ingenieros en energia y consultores. Desde 1979, ENMAP ha apoyado talleres,

seminarios, asesorias y otras actividades diseniadas para meiorar la practica de

administracion y conservaci6n de la energia en coordinaci6n con el gobierno, sector

publico y grupos internacionales. ENMAP tiene una publicaci6n mensual gratuita -

"The Energy Manager" a traves de la cual se difunde informaci6n sobre desarrolios en

los temas relacionados a la administraci6n de la energia.

Manila Electric Company (MERALCO)

MERALCO es la mayor empresa electrica de distribuci6n en Filipinas y sirve al area de

Luz6n. Actualmente tiene planes para desarrollar un amplio programa de actividades

de DSM.

2.3.4. ORGANIZACIONES INTERNACIONALES

Comisi6n Socio-Econ6mica para Asia v el Pacffico (ESCAP por sus siglas en inmgls)

La Comisi6n Socio-Econ6mica para Asia y el Pacifico (ESCAP, por sus siglas en ingles)

constituye el programa de cooperaci6n regional de la ONU para el desarrollo de esta

zona del mundo. Este programa consiste, a su vez, en seis subprogramas:

* Cooperaci6n econ6mica regional;

* Medio ambiente y desarrollo sustentable;

* Alivio a la pobreza via crecimiento econ6mico y desarrollo social;

14

• Comunicaciones y transportes;* Estadisticas;

* Naciones con menor desarrollo; y

* Naciones sin acceso al mar y naciones-islas en desarrollo.

A traves de su divisi6n de Medio Ambiente y Recursos Naturales (ENRM), la ESCAP

proporciona asistencia a sus miembros asociados de la regi6n, para que obtengan los

mayores beneficios de sus recursos naturales, incluyendo los recursos energeticos,

mediante la promoci6n de la investigaci6n interdisciplinaria y el apoyo a la

cooperaci6n tecnica entre los paises en desarrollo, enfatizando el impacto ambiental del

uso de dichos recursos.

Uno de los temas mas importantes dentro del subprograma de medio ambiente y

desarrollo sustentable de la ESCAP, es el de Desarrollo y Administraci6n de la Energia.

El equipo multidisciplinario de la Secci6n Recursos Energeticos, trabaja actualmente en

las siguientes areas:

* Mejoramiento de las t&cnicas de administracion de la energia; por ejemplo,

estudios sobre demanda sectorial, optimizaci6n de precios y administraci6n de

la demanda;* Conservaci6n y eficiencia energetica;

* Promoci6n de estilos de vida en base a la eficiencia energdtica;

* Sustituci6n de combustibles f6siles;

* Promoci6n y difusi6n de fuentes de energia nuevas y renovables;

* Utilizaci6n 6ptima de la electricidad; e

* Impactos ambientales (lluvia acida, contaminaci6n del aire en zonas urbanas,

localizaci6n de grandes presas).

En la decada de los ochenta, la ESCAP fue la principal agencia ejecutiva dentro del

programa regional mas importante en el campo de la energia, denominado Programa

Regional de Desarrollo Energetico, financiado por el Programa de Desarrollo de la ONU,

enfocado principalmente a: planeaci6n y administraci6n energftica; creaci6n de

modelos energeticos; conservaci6n energftica en el campo de la electricidad, el carb6n y

el gas; y, sobre nuevas y renovables fuentes de energia. Actualmente, ESCAP desarrolla

dos nuevos programas de gran alcance y con vistas al siglo XXI el Programme for Asian

Cooperation on Energy and Environment y el Asia Energy Efficiency 21.

15

2.3. PROGRAMAS Y FINANCIAMIENTO

2.3.1. COREA

Programa para Instalaciones Industriales

Supervisi6n directa de los 164 usuarios con consumos anuales de 20,000 Toneladas

Equivalentes Petr6leo. Esta actividad se realiza en cumplimiento de la Ley de

Eficiencia Energetica de Corea y en funci6n del Plan de Consumo de Energia planteadopor la empresa y que tiene una vigencia de cinco ainos. Para esta actividad se debe

nombrar un administrador de energia por planta que se encargue de la administracion

de los planes de consumo de energia.

Auditorias Energeticas. De manera directa y con su propio personal, KEMCO realiza

auditorias energeticas generales en pequefias y medianas industrias y auditorias

detaliadas en grandes empresas. Para este prop6sito, KEMCO cuenta con equipos de

medici6n y vehiculos especialmente acondicionados.

Asistencia Tecnica. Esta la realiza KEMCO para la realizaci6n de los planes de

consumo as! como para la aplicaci6n de los programas especificos.

Programas para Instalaciones Comerciales

Supervisi6n de Grandes Edificios. Se brinda asesorfa a duefios de edificios con

grandes consumos a traves del otorgamiento de guias para el diseiio de programas deahorro; tambien se presta asistencia para el disefio y construcci6n de edificios.

Reducci6n de Tarifas a Edificios Eficientes. Con el fin de estimular el disefio y

construcci6n de edificios eficientes en energia se reducen las tarifas a los usuarios cuyas

instalaciones tengan caracteristicas que aseguren un uso 6ptimo de la energia.

Centros de Servicio. Se tienen instalados en Corea un conjunto de centros de atenci6n a

usuarios para brindarles orientaci6n sobre como ahorrar energia en sus instalaciones.

16

Programa de Cogeneraci6n y Calentamiento por Distritos.

Este programa se fundamenta en la eficiencia que se tiene en el aprovechamiento

integral de la energia calorifica de los combustibles, a traves de la generaci6n de

electricidad y del uso del calor de desecho para calentar agua que es usada como tal y

para calefacci6n. En la actualidad se tienen dos proyectos de este tipo en los cuales se

produce calor para 150,000 hogares y se tiene una capacidad instalada de 52 MWe. Se

tienen planes para que en el anio 2001 se tengan 33 complejos industriales (26% del total

nacional) y 1,800,000 hogares (15%) integrados en este tipo de sistemas.

Investigaci6n y Desarrollo Tecnol6gico

KEMCO proporciona financiamiento para la realizaci6n de proyectos de investigaci6n

y desarrollo tecnol6gico en 5 areas fundamentales: (1) generacion de energia el6ctrica y

calor, (2) ahorro de energia en la industria, (3) aislamiento termico para edificios, (4)

aire acondicionado e (5) investigaci6n en general.

2.3.2. TAILANDIA

Programa de sustituci6n de L5mparas Fluorescentes.

En septiembre de 1993 se firmaron convenios entre EGAT y los cinco fabricantes

principales de lamparas fluorescentes en Tailandia para que estos filtimos dejaran de

producir lamparas del tipo T12 y reemplazaran esta producci6n con lamparas de tipo

T8. Como resultado de este convenio, a partir del principio de este a-no ya no se

producen lamparas T12 en Tailandia. Se estima que con este programa se evite la

instalaci6n de 104 MW de capacidad y la generaci6n de 473 GWh por anoo.

Prog ma de Etiquetado de Electrodomesticos (Ver secci6n mas adelante)

El Fondo para la Eficiencia Energetica (Ver secci6n mas adelante)

17

2.3.3. FILiPINAS

El Programa "Power Patrol"

Power Patrol es el nombre que se utiliza para reconocer al Comite para la Conservaci6n

de la Electricidad y Administraci6n de la Demanda y que esta integrado por

representantes de organizaciones publicas y privadas. Este comite tiene el mandato de:

(1) asegurar una oferta de energfa que sea continua, adecuada y econ6mica y que

permita independencia, y (2) promover y adoptar el ahorro y el uso eficiente de la

energia. El programa incluye campafias masivas e innovadoras de informaci6n que

incluyen a la televisi6n, radio y prensa escrita y que van dirigidos a (1) los hogares y

villas, (2) los sectores comercial e industrial y (3) las escuelas y el sector institucional.

Este programa se arranc6 precisamente con una presentaci6n de! Presidente de

Filipinas en uno de los programas mas populares de la television local.

Power Patrol ha incluido varias actividades. Una consisti6 en dar incentivos a usuarios

industriales para que operaran sus sistemas de respaldo por ocho horas diarias durante

los anios en los que la capacidad de generaci6n fue insuficiente. Otro ha sido el realizar

seminarios para propietaiios de grandes centros comerciales, operadores de hoteles,

administradores de edificios, gerentes de energia y companias de servicios de energia.

Un tercer programa consisti6 en la formulaci6n de una guia para el disenlo de edificios

y sistemas asociados eficientes en el uso de la energia, el cual se convirti6 en el punto

de partida para la norma respectiva que se hizo vigente al inicio de 1994 en todo el pais.

Un cuarto programa ha consistido en visitas a industrias y comercios medianos y

pequefios para darles orientaci6n en el uso eficiente de energia.

El programa ha sido financiado principalmente por el gobierno de Filipinas, con el

sector privado participando con fondos administrados por EDT FL

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3. TEMAS LDE INTERES ESPECIAL

3.1. EL FONDO PARA LA EFICIENCIA ENERGETICA DE TAILANDIA.

El Septimo Plan Nacional de Desarrollo Econ6mico y Social de Tailandia (1992-1996)

estableci6 la meta de reducir la tasa de crecimiento de consumo de energia de un

estimado de 13% a un 10%. Con este fin el gobierno tailandds ha establecido el

programa ENCON (Energy Conservation Program) en el contexto del Acta de

Promoci6n y Ahorro de Energia (Energy Conservation and Promotion Act) de 1992.

Dentro de los componentes principales de esta Acta (ratificada y ampliada en 1995) se

incluye la creaci6n de un "Fondo para la Eficiencia Energetica", el cual se crea a partir

de un impuesto al consumo de combustibles cuyo origen es el petr6leo.

El Fondo fue iniciado con una contribuci6n proveniente del Fondo para la

Estabilizaci6n del Precio de Petr6leo. En la actualidad el Fondo cuenta con poco mas de

300 millones de d6lares amnericanos, lo que, segun el propio gobierno de Tailandia, lo

convierte en el mayor del mundo fuera del contexto de la OCED

En seguimien'to a lo establecido por el Acta de Promoci6n y Ahorro de Energia, se cre6

un Comite del Fondo, el cual es presidido por el Primer Ministro e incluye a todos

Secretarios Permanentes de todos los ministerios relacionados a la energia, a

representantes de la industria de Tailandia, del Instituto de Normas de Tailandia y de

otros grupos e instituciones relacionadas al tema. La autoridad del Comit6 y sus

principales actividades estan orientadas a proponer lineamientos para la entrega de

fondos, ubicar porciones del Fondo para su uso como subsidio, proponer los

gravamenes a los productos del petr6leo y definir las penas econ6micas a quienes no

cumplan con lo establecido en el Acta. Cualquier regla que se proponga en el contexto

del Comite requiere, sin embargo, de la aprobaci6n del Consejo de Politica Energetica

(Energy Policy Council).

El Fondo es manejado por el Ministerio de Finanzas y consiste de capital y

propiedades. Aparte del dinero recibido del impuesto a los productos del petr6leo, el

Fondo recibe participaciones de los cargos hechos a quienes no cumplan con las

condiciones del Acta, de subsidios del gobierno, de dinero recibido del sector privado o

de dinero recibido de gobiernos extranjeros de manera directa o traves de organismos

internacionales, y de los intereses que recibe el Fondo como dep6sito bancario.

19

El Fondo puede ser utilizado como:

(A) Capital de trabajo, donaciones o subsidios para invertir en u operar programas de

ahorro de energia o para resolver problemas ambientales resultado de actividades

relacionadas a los programas de ahorro de energia Ilevados a cabo por agencias y/o

empresas del gobiemo;

(B) Capital de trabajo, donaciones o subsidios para que el sector privado invierta u

opere programas de ahorro d e energia o para resolver problemas ambientales resultado

de actividades relacionadas a los programas de ahorro de energia del propio sector;

(C) Como donaciones o subsidios a agencias gubernamentales, empresas paraestatales,

instituciones educativas y/o organizaciones privadas para ser usadas para los

siguientes prop6sitos:

. Programas de ahorro de energia o protecci6n ambiental;

* Estudios o proyectos de investigaci6n relacionados al desarrollo, promoci6n yahorro de energia o de protecci6n ambiental;

* Proyectos piloto o de demostraci6n en ahorro de energia o protecci6n ambiental;

* Educaci6n, entrenamiento y/o conferencias relacionados al tema de la energia; y

• Promoci6n, diseminaci6n de informaci6n y/o trabajo de relaciones piublicasrelacionados con el desarrollo y difusi6n del ahorro de energia o de la protecci6nambiental.

(D) Costos administrativos del trabajo de promoci6n del ahorro de energia de acuerdo

a lo establecido por el Acta.

3.2. EL PROGRAMA DSM DE EGAT EN TAILANDIA

En la actualidad EGAT realiza actividades de Gesti6n de la Demanda Electrica (DSM) a

traves de una unidad creada especificamente para este prop6sito. Estas actividades se

realizan con fundamento en dos principios (que se consideran tipicamente "Thai"): (a)

que las medidas de DSM deben ser aceptadas de manera voluntaria y (b) que la

20

satisfacci6n de los usuarios debe tener el mismo nivel que el de antes de iniciar elI

programa.

La Unidad de DSM fue creada en 1991 a partir de un trabajo realizado en Tailandia por

el International Institute for Energy Efficiency (IEC). La Unidad tiene un presupuesto

de 189 millones de d6lares para ser utilizados en el periodo 1993-1997. En este periodo

se pretende que las actividades de la Unidad eviten la generaci6n de 1,427 GWh y la

instalaci6n de 238 MW. Entre las actividades de esta unidad estAn el programa de

sustituci6n de lamparas fluorescentes (descrito arriba) y el programa de etiquetado de

electrodomesticos (descrito a continuaci6n). Esta unidad tiene planeado tambien un

programa de sustituci6n de motores en el sector industrial, el cual esta actualmente bajo

analisis.

3.3. ETIQUETADO DE ELECTRODOMESTICOS EN TAILANDIA.

Este es un programa que comenz6 en 1994 y que ha consistido, en un prirncipio, en la

incorporaci6n de etiquetas que muestran el nivel de eficiencia de los refrigeradores

nuevos produucidos en Tailandia. Estas etiquetas son proveidas por EGAT a los

fabricantes para ser colocadas durante el ensamble de los equipos. El programa va

orientado a los refrigeradores con capacidades de 5 a 6 pies cuibicos. Las etiquetas

indican un nivel de eficiencia y de consumo y un estimado del costo de operaci6n. Los

refrigeradores son evaluados por el Instituto de Estindares Industriales de Tailandia.

Las etiquetas muestran un valor de "3" para los refrigeradores con nivel de consumo

promedio, de "4" para eficiencias 10% mayores y de "5" para eficiencias 25% mayores al

promedio. Como resultado del programa de etiquetado, las ventas de los refrigeradores

con calificaci6n de "3" bajaron del 43 al 6% de las ventas totales, las de calificaci6n de

"4" se incrementaron de 50 al 81% y las de calificaci6n "5" tambien aumentaron del 7 al

13%. Las ventas anuales de refrigeradores en Tailandia son de un mill6n de unidades al

anio. Se estima que con este programa se evitaran 27 MW de demanda maxima.

Como segunda etapa en este programa de etiquetado, se esta trabajando para extender

la etiquetaci6n a equipos de aire acondicionado tipo ventana. Con un mercado anual

que Ilega a las 400 mil unidades, se trabaja para que, a partir del primer dia de 1996, 30

a 40 modelos de los 200 que existen en el pals salgan de las fabricas con etiquetas que

21

informen sobre su nivel relativo de eficiencia energetica. En este sentido ya ha habidoreumones con los fabricantes para hacer posible esta medida y se ha planteado ia

entrega de un incentivo - pagado en principio por EGAT y recuperado despues a travesde la cuenta el&trica de los usuarios involucrados - para la promoci6n de los modelosmas eficientes, los cuales corresponden a valores de 9.6 y 10.6 BTU/Watt (los cualeslievarian los numeros "4" y "5", respectivamente).

3.4. CERTIFICACION DE ELECTRODOMESTICOS EN FILPINAS

En 1983, el Programa para el Desarrollo de la Organizaci6n de las Naciones Unidas(UNDP por sus siglas en ingles) otorg6 al gobierno de Filipinas una donaci6n para eldesarrollo del Proyecto para la Asesoria en la Administraci6n de Energia en laIndustria. Bajo este proyecto, y en colaboraci6n con la Organizaci6n de las NacionesUnidas para el Desarrollo Industrial (UNIDO por sus siglas en ingles) se estableci6 unlaboratorio de pruebas para combustibles y equipos electrodomesticos. Como parte delproyecto se envi6 personal especializado a los Estados Unidos, al Reino Unido, Jap6n,Singapur y Suecia para entrenamiento especifico en el tema y para la adquisici6n delequipo apropiado para el laboratorio.

El primer edificio de este laboratorio fue terminado en 1986 y fue construido confondos del propio gobierno de Filipinas. En 1991 se inaugur6 formalmente ellaboratorio, el cual es operado y administrado por el Departamento de Energia deFilipinas.

En la actualidad el Laboratorio de Pruebas de Combustibles y Electrodomesticos(FATL por sus siglas en ingles) tiene actividades de pruebas de combustibles y agua, decalibraci6n de instrumentos de uso industrial y de pruebas a equiposelectrodomesticos. En el area de pruebas a electrodom6sticos, FATL es responsable deldesarrollo e implantaci6n del programa de etiquetado de eficiencia energetica paraelectrodomesticos. FATL recomienda normas de eficiencia energetica y lleva a caboinvestigaci6n y pruebas de electrodomesticos, equipos y otros dispositivos usuarios deenergia.

En particular, el FATL lleva a cabo actualmente pruebas de eficiencia energftica derefrigeradores, unidades de aire acondicionado y lamparas compactas fluorescentes.

22

Para las lAmparas compactas fluorescentes realiza tambien pruebas de longitud de vida

bajo distintas condiciones de encendido-apagado y niveles de voltaje.

3.5. DISMINUCION DE PERDIDAS DE TRANSMISION Y DISTRIBUCION EN EL

SECTOR ELECTRICO DE COREA

Corea, a traves de la empresa Korea Electric Power Company (KEPCO), es el pais que

ha Ilevado a cabo las acciones mAs completas para la disminucion de perdidas de

transmisi6n y distribuci6n en su sector eletrico, obteniendo una reducci6n de estas

p6rdidas de 29.4% en 1961 a un 5.6% en 1994. Esto ha dado lugar a que el caso coreano

sea un ejemplo a seguir por todos los paises que estan en proceso de desarrollo.

Como comparaci6n respecto de la situaci6n en Mexico, en 1992 la capacidad instalada

de KEPCO era de 28,750 MW y su generaci6n fue de 164,933 GWH, mientras que para

Mexico estos valores fueron de 31,649 MW y de 137,522 GWh, respectivamente.

Respecto a p6rdidas de transmisi6n y distribuci6n las perdidas en Corea fueron de

5.6% mientras que en Mexico llegaron a 14.4% de la generaci6n total de electricidad.

Las acciones que ha Ilevado a cabo KEPCO para reducir sus perdidas han sido las

siguientes:

(A) Formar un comite para el estudio y prevenci6n de perdidas;

(B) Hacer un analisis completo e instalar los medidores requeridos para identificar las

magnitudes, lugares y motivos de las perdidas en los procesos de generacion,

transmisi6n, transformacion, distribuci6n y comercializacion, determinando las

perdidas tcnicas en los elementos del sistema elktrico asi como las perdidas no

tcnicas entre las que se incluyen los usos ilicitos, fallas de medici6n, reducci6n

intencional de lecturas, errores de calculo y otras fuentes de pErdidas.

(C) Instrumentar un programa de perdidas no tecnicas, que en 1961 eran las de mayor

magnitud. Dentro de las acciones que se tomaron dentro de este plan se incluyen las

siguientes:

* Formar un grupo de expertos en combate de usos ilicitos;

23

* Establecer campanias informativas anti usos ilicitos por medio de platicas,panfletos, posters, radio, TV y otros medios;

* Establecer un periodo de regularizaci6n voluntaria;

* Reconocimiento oficial e incentivos econ6micos a los empleados o grupos detrabajo segiun los logros en la reducci6n de usos ilicitos;

* Penalizar a los infractores y demandar a los reincidentes;

* Castigos ejempiares a empleados de KEMCO involucrados en usos ilicitos;

• Ubicaci6n de todos los medidores en la parte externa de las casas; y

* Verificaci6n en campo de los equipos de medici6n.

(D) Llevar a cabo los siguientes cambios en la infraestructura electrica:

* Substituci6n de equipos obsoletos e ineficientes por otros de alta eficiencia;

* Normalizaci6n de la red de transmisi6n de 345 KV y 154 KV y eliminar las lineasde transmisi6n de 66 kV y 22 kV;

• Construcci6n de plantas de generaci6n y subestaciones lo mas pr6ximos a loscentros de carga y reducir la longitud de los alimentadores;

* Reemplazar las lineas de distribuci6n obsoletas de alta y baja tensi6n y convertirlineas monofasicas a trifAsicas. En 1970 se incluy6 el cambio de acometidas decalibre bajo;

* Controlar potencia reactiva mediante la instalaci6n de capacitores estaticos yreactores en paralelo;

* Sustituci6n de transformadores de distribuci6n de n(icleo laminado portransformadores de ndcleo enrollado con menores perdidas;

* Normalizaci6n de tensiones de alimentadores a 22.9 kV y eliminar los de 11.4, 5.7y 3.3 k;

* Utilizar conductores con calibres mayores; y

• Corregir desbalances de cargas.

24

(E) Aplicar estrategias de la administracion de la demanda (DSM), tales como:

. Tarifas horarias;

. Cargas interrumpibles;

. Cogeneraci6n;

. Promoci6n de motores, equipos y aparatos electricos, asi como de lAmparas yluminarias de alta eficiencia energ6tica; y

. Control remoto de carga.

(F) Planeaci6n y construcci6n de nuevas plantas y subestaciones en forma oportuna y

con equipos eficientes.

Con estas medidas y otras complementarias KEPCO redujo las p6rdidas como se indica

a continuaci6n:

Afo 191 1966 1971 1976 1981 1986 1994Perdidas 29.4 18.1 11.4 10.5 6.7 5.9 5.6

Como referencia, a continuacion de muestran los valores de las perdidas en trasnmision

y distribuci6n de los sistemas electricos de diversos paises

Pais "/oPirdidas

Irlanda 9EspaAia 9Austria 7Inglaterra 8Finlandia 5Itaha 7Holanda 4Francia 6USA 8Japon 4Tailandia 10Filipinas 13Chile 11Mcxko 14.4

25

4. CONCLUSIONES Y RECOMENDACIONESI

La Misi6n Mexicana deriva de este viaje una experiencia sustancial muy positiva

relacionada con el tema en cuesti6n. Se observa que los tres paises han logrado avances

importantes en el ahorro y uso eficiente de la energia y que, al menos Corea yTailandia, han sobrepasado el nivel de Mexico, especialmente en el marco legal, en losmecanismos financieros en operaci6n y en los recursos destinados al efecto, asi como en

la cobertura y estructura de los programas. Los tres paises visitados ban seleccionado,

en forma decisiva, el mejoramiento de la eficiencia energetica como una de las

alternativas mis efectivas para lograr objetivos integrales de politica energetica,

ambiental, tecnol6gica y econ6mica. A traves de ello, estAn reduciendo sus

requerimientos energeticos evitando o diferenciando recursos para reforzar otras Areas,

principalmente para modernizar su planta productiva, ahorrar costos y camplir con

requisitos ambientales.

A manera de conclusion, cabe observar que la clave de exito de estos programas estriba

en:

a) El establecimiento de fondos y mecanismos financieros que incentiven y

apoyen el ahorro y uso eficiente de la energia, asi como de politicas fiscales que

penalicen la ineficiencia y premien el ahorro;

b) La evoluci6n de normas y estandares nacionales y regionales sobre eficiencia

energe tica, incluyendo la introducci6n de etiquetado y de instalaciones y

mecanismos de prueba y certificaci6n;

c) El liderazgo del Estado en la promoci6n de actividades de ahorro de energia

d) El fomento de los mecanismos de mercado para la adopci6n y diseminaci6n de

las tecnicas de ahorro y uso eficiente de la energia; y

e) El establecimiento de politicas racionales de precios de la energia que reflejen

costos marginales de largo plazo, al tiempo que, en donde sea necesario, semantiene la administraci6n transparente de unos precios subsidiados s6lo paralos consumidores de mas bajos recursos.

26

5. ANEXOS

ANEXO 1. PROGRAMA DE ACrIVIDADES

Sept 16 TRASLADO A SEUL, COREASept 17 LLEGADA A SEUL, COREASept 18 SEUL

- Visita a Energy Pabillion.

Sept 19 SEUL- Visita a exposici6n Green Energy- Visita a planta de cogeneraci6n de Samsung-Corning- Visita a oficinas de Korean Electric Power Company

Sept 20 SEUL- Asistencia a la sesi6n matutina del Curso '95 Traeinng Course forEnergy Efficiency of Conservation- Visita a planta de cogeneraci6n con producci6n de calor para usoresidencial.

Sept 21 TRASLADO A BANGKOK, TAILANDIA

Sept 22 BANGKOK- Reuni6n en el Energy Efficiency Center of ThaiJand- Reuni6n en el Department for Energy Development and Promotion- Reuni6n en la Comisi6n Socio-Econsmica para Asia y el Pacifico(ESCAP).- Reuni6n en el International Institute for Energy Efficiency

Sept 23 DIA LIBRE

Sept 24 DIA LIBRE

Sept 25 BANGKOK- Reuni6n en el Energy Generating Authority of Thailand- Visita al Asian Institute of Technology

Sept 26 BANGKOK- Visita a la planta de Sanyo Universal

27

TRASLADO A MANILA FILIPINAS

Sept 27 - Participacion en el Regional Workshop on Investement Promotion inthe Domestic Manufacturing of Energy Efficient Products

Sept 27 - Participaci6n en el Regional Workshop on Investement Promotion inthe Domestic Manufacturing of Energy Efficient Products

Sept 29 - Visita al Fuels and Appliance Testing Laboratory.

-Participacion en el Regional Workshop on Investemrent Promotion inthe Domestic Manufacturing of Energy Efficient Products

Sept. 30 REGRESO A MEXICO

28

ANEXO 2. DOCUMENTACION RECABADAt

COREA

- KEPCO 95, Reporte Anual de la Korea Electric Power Corporation.

- KEMCO, The Korea Energy Management Corporation. Folleto.

- 95 Training Course for Energy Efficiency of Conservation. The Korea EnergyManagement Corporation (KEMCO), Seul, Corea, 18-30 Septiembre, 1995.

- Mass Energy. Mass Energy Supply Headquarters, The Korea Energy ManagementCorporation (Folleto).

TAILANDIA

- The Energy Conservation Center of Thailand (Folleto).

- Thailand Energy Situation 1993. Department of Energy Development and Promotion,Ministry of Science, Technology and Environment, Thailand.

- Oil and Thailand 1993. Department of Energy Development and Promotion, Ministryof Science, Technology and Environemnt, Thailand.

- Electric Power in Thailand 1993. Departnent of Energy Development and Promotion,Ministry of Science, Technology and Environemnt, Thailand.

- Annual Report 1994, Electricity Generating Authority of Thailand.

- Experience and Perspective of Demand Side Management in Thailand, DemandSide Management Office, The Electricity Generating Authority of Thailand, Agosto de1995.

- National Energy Policy Office. Inter-Agency Manual for the Operation andManagement of the Energy Conservation Program of Thailand. Bangkok, Diciembrede 1994.

- Energy Conservation Promotion Act. Bureau of Energy Regulation and Conservation,Department of Energy Development and Promotion, Bangkok, Thailand, Abril de 1995.

FILIPINAS

- Memorias del "Regional Workshop on Investement Promotion in the DomesticManufacturing of Energy Efficient Products", Sept. 27-291995, Manila, Filipinas.

29

- Reportev sobre actividades de ahorro de energia en la Refineria BATAAN de laempresa PETRON de Filipinas (Fotocopias).

- Katrina V. Ignacio. Privtate Sector Initiatives Towards Energy Efficiency,Management and Conservation. Reporte. Manila, Filipinas, Septiembre de 1995.

- Fuels and Appliance Testing Laboratory. Department of Energy, Republic of thePhilippines (Folleto).

ESMAP

- Energy Efficiency, Directory of Energy Consultants, Service Companies,Manufacturers, and Distributors of Enery Efficient Equipment and Appliances inAsia. Economic and Social Commission for Asia and the Pacific, United Nations.Bangkok, Tailandia, 1995.

ASIAN INSTITUTE OF TECHNOLOGY

- Annual Report on Research 1993, Asian Institue of Technology, Bangkok, Tailandia.

30

Annex ml

ESMAP

Mexico: Energy Efficiency Management Technical Assistance to theComision Nacional para el Ahorro de Energia (CONAE)

Activity Initiation Brief

Background

CONAE, the national energy conservation commission in Mexico, was founded in1989 to coordinate efforts to improve energy efficiency in various sectors Mexico. Since then ithas built up an infrastructure of technical, regional/promotional, educational and financial units.Through these units, it has started to implement a range of sectoral programs that aim todetermine the energy savings potential in the various sectors, identify barriers to energyefficiency efforts, raise awareness by energy consumers and accelerate the uptake of energyefficiency investments by the private sector. In June 1994, CONAE's management wasreplaced by an interim management team. The new management has assumed an active"caretaker" role that seeks not only to provide continuity to ongoing programs but also toimplement some limited measures to improve the administrative and technical effectiveness ofthe institution prior to the coming in of a new permanent management in January 1995.

Recent World Bank Activities

The 1989 Hydroelectric Development Project (Loan 3083-ME) provided $3 million offunding for CONAE to execute three major energy conservation studies -- in mid and smallsize industries, in the transport sector and on norms and standards for electrical appUances -- aswell as two studies on cogeneration. The results of the studies and the process of theirexecution undoubtedly contributed to advancing the young Mexican program.

The completion of the World Bank financed studies in 1993/94 provided a nmilestone

for examining the overall progress of the program and its future directions. The Bank reviewthat was completed in April 1994 concluded that CONAE is off to a good beginning indeveloping a sustainable national energy conservation program. It has succeeded in attractinghighly qualified and motivated staff The institutional structure that it has organized and thepriorities it has defined are consistent with those that have characterized successfiul programs inother countries. But the review also identified deficiencies in some areas which might hamperCONAE's effectiveness in the mid to long term.

X Revised October 31, 1994.2 The Mexican Energy Conservation Program: A Review of the Experience and Prospects for the

Future. Industry and Energy Department,The World Bank, April 15, 1994.

On program implementation, it was recommended that CONAE devote more attentionto: (a) conducting market research, starting with following up on the results of its past energyaudits and other promotional work, and in identifying the remaining obstacles to investmentdecisions by private companies; (b) setting formal targets and defining in greater detail its long-term goals; and (c) putting in place a workable system for tracking and monitoring theachievements of the program. This last item is particularly im'portant to build CONAE'scredibility and eventually formalize the inclusion of its programs into the medium- to long-termenergy sector planning exercises. The process is more developed on the electricity side ofCONAE's work but lags on the hydrocarbon side.

Of greater concern are certain institutional issues. As an interministerial body, CONASmay be considered well-situated in terms of support in principle from all parts of government. Onthe other hand, its reliance on yearly budget contributions from the various ministries is a source ofperennial insecurity and hampers the institution's ability to retain its highly specialized staff in thelong term. Its present position in the government structure, while sufficient for jump-starting theenergy conservation program, does not provide full authority to coordinate all aspects of thenational effort. An example cited in the report is the case of FIDE that is presentlyimplementing CFE's demand side management (DSM) program without any mandatorycoordination with or reporting of data and progress to CONAE. While functional overlapswith FIDE may not be a problem at the moment, it is likely to become a significant issue in thefuture and should be addressed at the official level at the earliest opportunity.

Recognizing the vital role of efficiency efforts in the energy sector, the World Bank isinterested to continue its support of Mexico's energy conservation program, including thepossible inclusion of a package of technical assistance and demonstration projects for energyconservation in a future energy loan. In preparation for such an investment possibility, thereport recommended that a small technical assistance support be immediately provided toCONAE to enable it to address some of the priority issues identified in the evaluation and tohelp prepare a focussed proposal for Bank consideration.

Objectives

The main purpose of the technical assistance is to help CONAE address some of thekey deficiencies identified in the World Bank review, particularly the need to delineateCONAE's institutional identity and to establish its credibility by putting in place a workablemonitoring program. Along with results of ongoing work by EEC experts, the outputs of theESMAP assistance are expected to provide the incoming administrations of both CONAE andthe energy ministry with a sound blueprint for the next phase of the national energyconservation program.

2

Scope of Work

This technical assistance activity will have three major components:

Task 1. Investigation of various options for reorganizing CONAE into an effectiveprogramming and coordinating body with full authority and appropriate resources to developand implement a national energy conservation program. The work will build upon efforts bythe interim CONAE management to examine different legislative approaches towards ensuringa strong institutional future for CONAE. ESMAP and international management experts thatwil be later identified will assist in the task. At the conclusion of this task, a workshop will beorganized to discuss the recommendations arrived at by the CONAE/ESMAP experts teamand to formally consult with all stakeholders in both government and private sectors.

Task 2. Development of a workable program for energy monitoring and targeting(EMT). EMT is an essential component of any sustainable energy conservation program but sofar has not been paid sufficient attention in the CONAE program. An EMT system in placewill enable quantitative determination of accomplishments, improve CONAE's credibility withits public and private sector clients and eventually formalize the inclusion of its prograrn intothe medium and long-term energy sector planning exercises. ESMAP and experiencedintemational consultants will work with CONAE in the design of this program.

Task 3. Assistance in the preparation of a focussed proposal for possible World Bankfinancing, building on the preliminary list of projects already proposed by the previous CONAEmanagement, as well as additional ideas that may be developed in the interim.

Organization of Work and Output

ESMAP will first review ongoing -nd completed work under the CONAE/EECcooperative program to ensure non-duplication of tasks and to determine wihat available dataand information can be used to prepare the TA plan. Working with CONAE management andresident EEC experts, the detailed terms of reference for the three component tasks of the TAwill be drawn up by ESMAP. Suitable international experts will be identified to assist inimplementing the tasks. At the completion of the tasks, a seminar will be organized to discussthe findings and to formally consult with all relevant sectors. For ESMAP, the final output ofthe activity will be a Project Completion Report summarizing the essential results of thetechnical assistance provided, and enclosing the individual experts reports and the results of theconsultation workshop.

Timetable and Budget

As agreed with the interim CONAE managment, implementation of the project willcommence around March 1994, when the permanent CONAE managers have assumed theirpositions. Starting from that date, the TA will be carried out over approximately 10-12months. The total cost to ESMAP is about US$ 150,000, of which $100,000 will be providedfor direct costs and $50,000 as in-kind ESMAP resources.

3

Joint UNDP/World BankENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP)

LIST OF REPORTS ON COMPLETED ACTIVITIES

Region/Country Activity/Report Title Date Number

SUB-SAHARAN AFRICA (AFR)

Africa Regional Anglophone Africa Household Energy Workshop (English) 07/88 085/88Regional Power Seminar on Reducing Electric Power System

Losses in Africa (English) 08/88 087/88Institutional Evaluation of EGL (English) 02/89 098/89Biomass Mapping Regional Workshops (English) 05/89--Francophone Household Energy Workshop (French) 08/89 103/89Interafrican Electrical Engineering College: Proposals for Short-

and Long-Term Development (English) 03/90 112/90Biomass Assessment and Mapping (English) 03/90 --

Angola Energy Assessment (English and Portuguese) 05/89 4708-ANGPower Rehabilitation and Technical Assistance (English) 10/91 142/91

Benin Energy Assessment (English and French) 06/85 5222-BENBotswana Energy Assessment (English) 09/84 4998-BT

Pump Electrification Prefeasibility Study (English) 01/86 047/86Review of Electricity Service Connection Policy (English) 07/87 071/87Tuli Block Farms Electrification Study (English) 07/87 072/87Household Energy Issues Study (English) 02/88 --Urban Household Energy Strategy Study (English) 05/91 132/91

Burkina Faso Energy Assessment (English and French) 01/86 5730-BURTechnical Assistance Program (English) 03/86 052/86Urban Household Energy Strategy Study (English and French) 06/91 134/91

Burundi Energy Assessment (English) 06/82 3778-BUPetroleum Supply Management (English) 01/84 012/84Status Report (English and French) 02/84 011/84Presentation of Energy Projects for the Fourth Five-Year Plan(1983-1987) (English and French) 05/85 036/85

Improved Charcoal Cookstove Strategy (English and French) 09/85 042/85Peat Utilization Project (English) 11/85 046/85Energy Assessment (English and French) 01/92 92 i 5-.BU

Cape Verde Energy Assessment (English and Portuguese) 08/84 50-73-CVHousehold Energy Strategy Study (English) 02/90 110/90

Central AfricanRepublic Energy Assessement (French) 08/92 9898-CAR

Chad Elements of Strategy for Urban Household EnergyThe Case of N'djamena (French) 12/93 160/94

Comoros Energy Assessment (English and French) 01/88 7104-COMCongo Energy Assessment (English) 01/88 6420-COB

Power Development Plan (English and French) 03/90 106/90C6te d'Ivoire Energy Assessment (English and French) 04/85 5250-IVC

Improved Biomass Utilization (English and French) 04/87 069/87Power System Efficiency Study (English) 12/87 --Power Sector Efficiency Study (French) 02/92 140/91Project of Eniergy Efficiency in Buildings 09/95 175/95

Ethiopia Energy Assessment (English) 07/84 474 1-ET

- 2 -

Region/Country Activity/Report Title Date Number

Ethiopia Power System Efficiency Study (English) 10/85 045/85Agricultural Residue Briquetting Pilot Project (English) 12/86 062/86Bagasse Study (English) 12/86 063/86Cooking Efficiency Project (English) 12/87 --Energy Assessment 02/96 179/96

Gabon Energy Assessment (English) 07/88 6915-GAThe Gambia Energy Assessment (English) 11/83 4743-GM

Solar Water Heating Retrofit Project (English) 02/85 030/85Solar Photovoltaic Applications (English) 03/85 032/85Petroleum Supply Management Assistance (English) 04/85 035/85

Ghana Energy Assessment (English) 11/86 6234-GHEnergy Rationalization in the Industrial Sector (English) 06/88 084/88Sawmill Residues Utilization Study (English) 11/88 074/87Industrial Energy Efficiency (English) 11/92 148/92

Guinea Energy Assessment (English) 11/86 6137-GUIHousehold Energy Strategy (English and French) 01/94 163/94

Guinea-Bissau Energy Assessment (English and Portuguese) 08/84 5083-GUBRecommended Technical Assistance Projects (English &Portuguese) 04/85 033/85

Management Options for the Electric Power and Water SupplySubsectors (English) 02/90 100/90

Power and Water Institutional Restructuring (French) 04/91 118/91Kenya Energy Assessment (English) 05/82 3800-KE

Power System Efficiency Study (English) 03/84 014/84Status Report (English) 05/84 016/84Coal Conversion Action Plan (English) 02/87 --Solar Water Heating Study (English) 02/87 066/87Peri-Urban Woodfuel Development (English) 10/87 076/87Power Master Plan (English) 11/87 --

Lesotho Energy Assessment (English) 01/84 4676-LSOLiberia Energy Assessment (English) 12/84 5279-LBR

Recommended Technical Assistance Projects (English) 06/85 038/85Power System Efficiency Study (English) 12/87 081/87

Madagascar Energy Assessment (English) 01/87 5700-MAGPower System Efficiency Study (English and French) 12/87 075/87Environmental Impact of Woodfuels (French) 10/95 176/95

Malawi Energy Assessment (English) 08/82 3903-MALTechnical Assistance to Improve the Efficiency of FuelwoodUse in the Tobacco Industry (English) 11/83 009/83

Status Report (English) 01/84 013/84Mali Energy Assessment (English and French) 11/91 8423-MLI

Household Energy Strategy (English and French) 03/92 147/92Islamic Republicof Mauritania Energy Assessment (English and French) 04/85 5224-MAU

Household Energy Strategy Study (English and French) 07/90 123/90Mauritius Energy Assessment (English) 12/81 3510-MAS

Status Report (English) 10/83 008/83Power System Efficiency Audit (English) 05/87 070/87Bagasse Power Potential (English) 10/87 077/87Energy Sector Review (English) 12/94 3643-MAS

Morocco Energy Sector Institutional Development Study (English andFrench) 07/95 173/95

-3 -

RegionwCountry Activity/Report Title Date Number

Mozambique Energy Assessment (English) 01/87 6128-MOZHousehold Electricity Utilization Study (English) 03/90 113/90

Namibia Energy Assessment (English) 03/93 11320-NAMNiger Energy Assessment (French) 05/84 4642-NIR

Status Report (English and French) 02/86 051/86Improved Stoves Project (English and French) 12/87 080/87Household Energy Conservation and Substitution (Englishand French) 01/88 082/88

Nigeria Energy Assessment (English) 08/83 4440-UNIEnergy Assessment (English) 07/93 11672-UNI

Republic ofSouth Africa Options for the Structure and Regulation of Natural Gas

Industry (English) 05/95 172/95Rwanda Energy Assessment (English) G6/82 3779-RW

Energy Assessment (English and French) 07/91 8017-RWStatus Report (English and French) 05/84 017/84Improved Charcoal Cookstove Strategy (English and French) 08/86 059/86Improved Charcoal Production Techniques (English and French) 02/87 065/87Commercialization of Improved Charcoal Stoves and CarbonizationTechniques Mid-Term Progress Report (English and French) 12191 141/91

SADC SADC Regional Power Interconnection Study, Vol. I-IV (English) 12/93 --

SADCC SADCC Regional Sector: Regional Capacity-Building Programfor Energy Surveys and Policy Analysis (English) 11/91 --

Sao Tomeand Principe Energy Assessment (English) 10/85 5803-STP

Senegal Energy Assessment (English) 07/83 4182-SEStatus Report (English and French) 10/84 025/84Industrial Energy Conservation Study (English) 05/85 037/85Preparatory Assistance for Donor Meeting (English and French) 04/86 056/86Urban Household Energy Strategy (English) 02/89 096/89Industrial Energy Conservation Program 05/94 165/94

Seychelles Energy Assessment (English) 01/84 4693-SEYElectric Power System Efficiency Study (English) 08/84 021/84

Sierra Leone Energy Assessment (English) 10/87 6597-SLSomalia Energy Assessment (English) 12/85 5796-SORepublic of Options for the Structure and Regulation of NaturalSouth Afiica Gas Industry (English) 05/95 172/95

Sudan Management Assistance to the Ministry of Energy and Mining 05/83 003/83Energy Assessment (English) 07/83 4511-SUPower System Efficiency Study (English) 06/84 018/84Status Report (English) 11/84 026/84Wood Energy/Forestry Feasibility (English) 07/87 073/87

Swaziland Energy Assessment (English) 02/87 6262-SWTanzania Energy Assessment (English) 11/84 4969-TA

Peri-Urban Woodfuels Feasibility Study (English) 08/88 086/88Tobacco Curing Efficiency Study (English) 05/89 102/89Remote Sensing and Mapping of Woodlands (English) 06/90 --Industrial Energy Efficiency Technical Assistance (English) 08/90 122/90

Togo Energy Assessment (English) 06/85 5221 -TOWood Recovery in the Nangbeto Lake (English and French) 04/86 055/86Power Efficiency Improvement (English and French) 12/87 078/87

RegionWCounhwy Activity/Report Title Date Number

Uganda Energy Assessment (English) 07/83 4453-UGStatus Report (English) 08/84 020/84Institutional Review of the Energy Sector (English) 01/85 029/85Energy Efficiency in Tobacco Curing Industry (English) 02/86 049/86Fuelwood/Forestry Feasibility Study (English) 03/86 053/86Power System Efficiency Study (English) 12/88 092/88Energy Efficiency Improvement in the Brick andTile Industry (English) 02/89 097/89

Tobacco Curing Pilot Project (English) 03/89 UNDP TerminalReport

Zaire Energy Assessment (English) 05/86 5837-ZRZambia Energy Assessment (English) 01/83 4110-ZA

Status Report (English) 08/85 039/85Energy Sector Institutional Review (English) 11/86 0o0186

Zambia Power Subsector Efficiency Study (Entglish) 02/89 093/88Energy Strategy Study (English) 02/89 094/88Urban Household Energy Strategy Study (English) 08/90 121/90

Zimbabwe Energy Assessment (English) 06/82 3765-ZIMPower System Efficiency Study (English) 06/83 005/83Status Report (English) 08/84 019/84Power Sector Management Assistance Project (English) 04/85 034/85Petroleum Management Assistance (English) 12/89 109/89Power Sector Management Institution Building (English) 09/89 --

Charcoal Utilization Prefeasibility Study (English) 06/90 119/90Integrated Energy Strategy Evaluation (English) 01/92 8768-ZIMEnergy Efficiency Technical Assistance Project:Strategic Framework for a National Energy EfficiencyImprovement Program (English) 04/94 --

Capacity Building for the National Energy EfficiencyImprovement Programme (NEEIP) 12/94 --

EAST ASIA AN]D PACIFIC (EAP)

Asia Regional Pacific Household and Rural Energy Seminar (English) 11/90 --

China County-Level Rural Energy Assessments (English) 05/89 101/89Fuelwood Forestry Preinvestment Study (English) 12/89 105/89Strategic Options for Power Sector Reform in China (English) 07/93 156/93Energy Efficiency and Pollution Control in Township andVillage Enterprises (TVE) Industry (English) 11/94 168/94

Fiji Energy Assessment (English) 06/83 4462-FIJIndonesia Energy Assessment (English) 11/81 3543-IND

Status Report (English) 09/84 022/84Power Generation Efficiency Study (English) 02/86 050/86Energy Efficiency in the Brick, Tile andLime Industries (English) 04/87 067/87

Diesel Generating Plant Efficiency Study (English) 12/88 095/88Urban Household Energy Strategy Study (English) 02/90 107/90Biomass Gasifier Preinvestment Study Vols. I & II (English) 12/90 124/90Prospects for Biomass Power Generation with Emphasis on

Palm Oil, Sugar, Rubberwood and Plywood Residues (English) 11/94 167/94

- 5 -

RegioWCountry Activity/Report Title Date Number

Lao PDR Urban Electricity Demand Assessment Study (English) 03/93 154/93Malaysia Sabah Power System Efficiency Study (English) 03/87 068/87

Gas Utilization Study (English) 09/91 9645-MAMyanmar Energy Assessment (English) 06/85 5416-BAPapua New

Guinea Energy Assessment (English) 06/82 3882-PNGStatus Report (English) 07/83 006/83Energy Strategy Paper (English)Institutional Review in the Fnergy Sector (English) 10/84 023/84Power Tariff Study (English) 10/84 024/84

Philippines Commercial Potential for Power Production fromAgricultural Residues (English) 12/93 157/93Energy Conservation Study (English) 08/94 --

Solomon Islands Energy Assessment (English) 06/83 4404-SOLEnergy Assessment (English) 01/92 979/SOL

South Pacific Petroleum Transport in the South Pacific (English) 05/86 --Thailand Energy Assessment (English) 09/85 5793-TH

Rural Energy Issues and Options (English) 09/85 044/85Accelerated Dissemination of Improved Stoves andCharcoal Kilns (English) 09/87 079/87

Northeast Region Village Forestry and WoodfuelsPreinvestment Study (English) 02/88 083/88

Impact of Lower Oil Prices (English) 08/88 --Coal Development and Utilization Study (English) 10/89 --

Tonga Energy Assessment (English) 06/85 5498-TONVanuatu Energy Assessment (English) 06/85 5577-VAVietnam Rural and Household Energy-Issues and Options (English) 01/94 161/94

Power Sector Reform and Restructuring in Vietnam: Final Reportto the Steering Committee (English and Vietnamese) 09/95 174/95Household Energy Technical Assistance: Improved CoalBriquetting and Commercialized Dissemination of HigherEfficiency Biomass and Coal Stoves (English) 01/96 178/96

Western Samoa Energy Assessment (English) 06/85 5497-WSO

SOUTH ASIA (SAS)

Bangladesh Energy Assessment (English) 10/82 3873-BDPriority Investment Program (English) 05/83 002/83Status Report (English) 04/84 015/84Power System Efficiency Study (English) 02/85 031/85Small Scale Uses of Gas Prefeasibility Study (English) 12/88

India Opportunities for Commercialization of NonconventionalEnergy Systems (English) 11/88 091/88

Maharashtra Bagasse Energy Efficiency Project (English) 07/90 120/90Mini-Hydro Development on Irrigation Dams andCanal Drops Vols. I, II and III (English) 07/91 139/91

WindFarm Pre-Investment Study (English) 12/92 150/92Power Sector Reform Seminar (English) 04/94 166/94

Nepal Energy Assessment (English) 08/83 4474-NEPStatus Report (English) 01/85 028/84

-6-

Regoa/County Activity/Report Title Date Number

Nepal Energy Efficiency & Fuel Substitution in Industries (English) 06/93 158/93Pakistan Household Energy Assessment (English) 05/88 --

Assessment of Photovoltaic Programs, Applications, andMarkets (English) 10/89 103/89

National Household Energy Survey and Strategy FomulationStudy: Project Terminal Report (English) 03/94 --

Managing the Energy Transition (English) 10/94Lighting Efficiency Improvement ProgramPhase 1: Commercial Buildings Five Year Plan (English) 10/94 --

Sri Lanka Energy Assessment (English) 05/82 3792-CEPower System Loss Reduction Study (English) 07/83 007/83Status Report (English) 01/84 010/84Industrial Energy Conservation Study (English) 03/86 054/86

EUROPE AND CENTRAL ASIA (ECA)

Eastem Europe The Future of Natural Gas in Eastern Europe (English) 08'92 149/92Poland Energy Sector Restructuring Program Vols. I-V (English) 01/93 151!93Portugal Energy Assessment (English) 04/84 4824-POTurkey Energy Assessment (English) 03/83 3877-TU

MIDDLE EAST AND NORTH AFRICA (MNA)

Morocco Energy Assessment (English and French) 03/84 4157-MORStatus Report (English and French) 01/86 048/86Energy Sector Institutional Development Study (English and French) 05/95 173/95

Syria Energy Assessment (English) 05/86 5822-SYRElectric Power Efficiency Study (English) 09/88 089/88Energy Efficiency Improvement in the Cement Sector (English) 04/89 099/89Energy Efficiency Improvement in the Fertilizer Sector(English) 06/90 115/90

Tunisia Fuel Substitution (English and French) 03/90 --Power Efficiency Study (English and French) 02/92 136/91Energy Management Strategy in the Residential andTertiary Sectors (English) 04/92 146/92

Yemen Energy Assessment (English) 12/84 4892-YAREnergy Investment Priorities (English) 02/87 6376-YARHousehold Energy Strategy Study Phase I (English) 03/91 126/91

LATIN AMERICA AND THE CARIBBEAN (LAC)

LAC Regional Regional Seminar on Electric Power System Loss Reductionin the Caribbean (English) 07/89 --

Bolivia Energy Assessment (English) 04/83 4213-BONational Energy Plan (English) 12/87 --National Energy Plan (Spanish) 08/91 131/91La Paz Private Power Technical Assistance (English) 11/90 111/90Natural Gas Distribution: Economics and Regulation (English) 03/92 125/92

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Region/Country Activity/Report Title Date Number

Peru Study of Energy Taxation and Liberalizationof the Hydrocarbons Sector (English and Spanish) 120/93 159/93

Saint Lucia Energy Assessment (English) 09/84 5111-SLUSt. Vincent andthe Grenadines Energy Assessment (English) 09/84 5103-STV

Trinidad andTobago Energy Assessment (English) 12/85 5930-TR

GLOBAL

Energy End Use Efficiency: Research and Strategy (English) 11/89Guidelines for Utility Customer Management andMetering (English and Spanish) 07/91 --

Women and Energy--A Resource GuideThe International Network: Policies and Experience (English) 04/90 --

Assessment of Personal Computer Models for EnergyPlanning in Developing Countries (English) 10/91

Long-Term Gas Contracts Principles and Applications (English) 02/93 152/93Comparative Behavior of Firms Under Public and PrivateOwnership (English) 05/93 155/93

Development of Regional Electric Power Networks (English) 10/94 --

Roundtable on Energy Efficiency (English) 02/95 171/95Assessing Pollution Abatement Policies with a Case Study of Ankara 11/95 177/95

05/8/96

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Region/Country Activity/Report Title Date Number

Bolivia Prefeasibility Evaluation Rural Electrification and DemandAssessment (English and Spanish) 04/91 129/91

Private Power Generation and Transmission (English) 01/92 137/91Household Rural Energy Strategy (English and Spanish) 01/94 162/94Natural Gas Sector Policies and Issues (English and Spanish) 12/93 164/93

Brazil Energy Efficiency & Conservation: Strategic Partnership forEnergy Efficiency in Brazil (English) 01/95 170/95

Chile Energy Sector Review (English) 08/88 7129-CHColombia Energy Strategy Paper (English) 12/86 --

Power Sector Restructuring (English) 11/94 169/94Costa Rica Energy Assessment (English and Spanish) 01/84 4655-CR

Recommended Technical Assistance Projects (English) 11/84 027/84Forest Residues Utilization Study (English and Spanish) 02/90 108/90

DominicanRepublic Energy Assessment (English) 05/91 8234-DO

Ecuador Energy Assessment (Spanish) 12/85 5865-ECEnergy Strategy Phase I (Spanish) 07/88 --

Energy Strategy (English) 04/91 --

Private Minihydropower Development Study (English) 11/92 --

Energy Pricing Subsidies and Interfuel Substitution (English) 08/94 11798-ECEnergy Pricing, Poverty and Social Mitigation (English) 08/94 12831-EC

Guatemala Issues and Options in the Energy Sector (English) 09/93 12160-GUHaiti Energy Assessment (English and French) 06/82 3672-HA

Status Report (English and French) 08/85 041/85Household Energy Strategy (English and French) i2/91 143/91

Honduras Energy Assessment (English) 08/87 6476-HOPetroleum Supply Management (English) 03/91 128/91

Jamaica Energy Assessment (English) 04/85 5466-JtPetroleum Procurement, Refining, andDistribution Study (English) 11/86 061/86

Energy Efficiency Building Code Phase I (English) 03/88 --Energy Efficiency Standards andLabels Phase I (English ) 03/88 --

Management Information System Phase I (English) 03/88 --

Charcoal Production Project (English) 09/88 090/88FIDCO Sawmill Residues Utilization Study (English) 09/88 088/88Energy Sector Strategy and Investment Planning Study (English) 07/92 135/92

Mexico Improved Charcoal Production Within Forest Management for 08/91 138/91the State of Veracruz (English and Spanish)

Energy Efficiency Management Technical Assistance to theComision Nacional para el Ahorro de Energia (CONAE) (English) 04/96 180/96

Panama Power System Efficiency Study (English) 06/83 004/83Paraguay Energy Assessment (English) 10/84 5145-PA

Recommended Technical Assistance Projects (English) 09/85 --

Status Report (English and Spanish) 09/85 043/85Peru Energy Assessment (English) 01/84 4677-PE

Status Report (English) 08/85 040/85Proposal for a Stove Dissemination Program inthe Sierra (English and Spanish) 02/87 064/87

Energy Strategy (English and Spanish) 12/90 --

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ESMAPc/o Industry and Energy DepartmentThe World Bank1818 H Street, N. W.Washington, D. C. 20433U. S. A.