Weeding Out Waste

The traditional response to such problems is expanding electrical supply to meet demand. But for much of the developing world, this is not feasible. It is far too costly and usually means adding to an already burgeoning debt. Utility borrowing in many developing countries already accounts for over one-third of total foreign debt. To meet its energy needs, the developing world will have to re-evaluate its energy options.

Principles of Wise Energy Management

Two concepts regarding energy planning are of critical importance to the developing world's energy dilemma: "end use" and "least cost." An end-use approach to energy planning focuses on the energy services that are needed and then analyzes the most efficient means of delivering the desired service. This differs from traditional supply-oriented thinking which focuses on how much electricity, for example, we can produce and how to make it perform all end-uses, regardless of whether it is optimally matched to that use.

"Least-cost" refers to a method of energy planning that incorporates an end-use analysis to ascertain the least expensive means of meeting energy needs, considering all options, on both the demand and supply sides. Thus, where it is cheaper to save electricity than to produce it, or where it is cheaper to invest in indigenous renewables than buy imported oil, those options are chosen. The goal of this planning method is to provide the desired services at the lowest possible cost. Under least cost, total costs of an energy option, like environmental and social costs, that are difficult to quantify, can be factored in.

The Energy Efficiency Option

The preceding principles of energy planning suggest an underestimated "source" for increasing energy services-- efficiency. Often referred to as "conservation," efficiency differs from conservation in an important way. Efficiency involves extracting the same or improved services from less energy through the use of advanced technologies, better matching of fuel to end-use and less wasteful practices. Conservation, on the other hand, implies a lower quality and quantity of services, such as being too cold in winter, or doing with lower levels of lighting than are needed. The efficiency discussed here is clearly of the first type, and is a cost-effective path to improving energy services in the developing world.

The Tata Study

A report of the Tata Energy Research Institute in India provides an example of efficiency's potential to improve energy services in the developing world. Currently, India's power system is unable to meet the peak demand for electricity. Load restrictions range from 10 to 50 percent and come into effect between 5 and 10 p.m. The Tata study was undertaken to explore strategies for dealing with this problem. The report looked at two options: adding new capacity, or managing demand by substitution and improved efficiency. "The addition of new capacity has always fallen short of targets over the different five-year plans, and shortfalls are also expected in the seventh five-year plan," notes the report. But in improving energy efficiency, there is much potential.

At peak demand, the report found, there was a sharp increase in the use of electric lighting in the residential and commercial sectors. The Tata research team then estimated the contribution of lighting to the peak load and identified options to reduce this contribution. They found that in a representative sample area lighting accounted for 37 percent of the load at the peak of demand. That figure, they estimated, could be reduced significantly by improving efficiency. If all incandescents were replaced with higher efficiency fluorescents, 10,000 MW of installed capacity could be saved, as well as large amounts of money in generation costs. And the annual return on expenditure for lamp substitution in electricity could save more than 50 percent.

Competitek Findings

The Tata Institute's findings are backed up by similar studies by the Rocky Mountain Institute's COMPETITEK (see box - omitted here; unscannable) team of energy researchers, whose work involves documenting advances in the rapidly changing field of energy-efficiency technology. In the United States it is technically possible, using commercially available and cost- effective technologies, to save 92 percent of all electricity used for lighting at a cost far below that of generating electricity in existing power plants, notes a COMPETITEK report. In fact, COMPETITEK's findings reveal that these savings can be acquired at what is referred to as a "negative net societal cost"--society actually saves more money than it invests in the efficient technologies, through reduced energy consumption and avoided replacement and maintenance costs. Since lighting accounts for about 25 percent of electricity used in the United States, and 25 to 40 percent of peak demand, such levels of savings could have enormous ramifications.

Preliminary research reveals that the technical potential for savings in other end-use areas is also substantial. In the area of appliances, which account for about half of U.S. residential consumption and a fifth of total electricity used, there is the potential to save 65 to 80 percent (13 to 17 percent of all electricity used). In space cooling, which consumes about 15 percent of all U.S. electricity, and 44 percent of summer peak loads, 80-90 percent could be saved (12 to 14 percent of all electricity used). Water heating (other than for industrial processes) accounts for 14 percent of residential use and 5 percent of total use, with savings of 65 to 85 percent possible, or 3 to 5 percent of total use. Preliminary research in the area of drivepower (including motors and their controls) shows similar potential for electricity savings with short paybacks.

Thailand, Kuwait, and Brazil

While this U.S. data is not directly transferable to developing countries, the implications are clear--there is a huge technical potential for saving energy without sacrificing quality of service, and with positive economic and environmental results. And increasingly, this is confirmed by studies in the developing world. For example, energy audits of 71 companies in Thailand suggest that total industrial electricity use (which accounts for 63 percent of the country's total consumption) could be cut by 7.7 percent through process improvements, 3.2 percent through equipment replacement, and 2.4 percent through simple housekeeping measures. All 13.3 percent of this savings potential is highly cost-effective and, if implemented along with similar oil conservation measures, could accelerate economic growth in Thailand.

COMPETITEK's findings in the area of space cooling are especially applicable to developing countries in warmer climates. In Kuwait, for example, air conditioning accounted for approximately 45 percent of total power consumption in 1983, and the fraction has been increasing. The 1986 preliminary COMPETITEK report on space cooling estimates a gross technical potential for savings in the order of 80-90 percent. Methods by which these savings can be accrued include reducing external heat gain using shading and spectrally selecting glazings; improving refrigerative systems; and using load management measures such as thermal energy storage systems.

A 1986 study of electric efficiency potential in Brazil in six end-use areas indicates possible savings of 20 percent for industrial motors, 50 percent for domestic refrigerators, 50 percent for domestic lighting, 20 percent for commercial motors, 60 percent for commercial lighting and 40 percent for street lighting. When these savings are aggregated, they equal almost 20 percent of Brazil's total electricity use. All of these savings could be provided through cost-effective technologies that are already avail-able (some even manufactured) in Brazil. Furthermore, as COMPETITEK documents, the state-of-the-art in energy-efficient technologies is advancing so rapidly that many of the best current technologies were not even on the market two years ago when this study was conducted.

As significant as the enormous technical potential of efficiency is for all nations, the implications are especially profound for the developing world, where in many cases, as in the example of India, demand is not fully met. Even if a fraction of the technical potential in some of these end-use areas was exploited, it might make the difference between meeting peak demand and not meeting it at all. The Wider Benefits of the Efficiency Option

The benefits of pursuing efficiency in the developing world extend far beyond meeting electrical demand and saving money. Capital that would have been spent building additional power plants could be used to increase the scope of electrification, either by grid extension or investments in stand-alone renewable energy systems for remote villages. Because investing in efficiency is less costly than increasing supply, less debt would be added to the already heavy debt burden. Scarce resources could be channelled into essential health, education, welfare, and economic development activities. And the lower energy costs that result from increased efficiency could help to fuel economic growth.

Energy efficiency can also lead to increased employment. A recent study in the state of Kamataka in India showed that the industrial sector used 74 percent of the state's electricity, and that 18 electricity-intensive industries consumed two-thirds of that power, but provided only 7.8 percent of the jobs; the remaining 1,200 industries used just one-third of the power but provided 92.2 per-cent of the jobs. Thus, by choosing less energy-intensive industries, developing nations can direct the energy they use to creating more jobs.

Finally, opting for increased efficiency in lieu of sup-ply expansion has beneficial environmental effects. Fewer hydroelectric developments will reduce the social and environmental havoc caused by large dams. Burning less fossil fuels will result in lower emissions of sulphur dioxide and nitrogen oxides. Using fuels more appropriately and efficiently will reduce the rate of deforestation and desertification. And the combined effects of reducing carbon dioxide-emitting fossil fuel use and reducing the rate of deforestation could help to alleviate the growing threat of global warming.

Implementation

Much of the funding and technical assistance for energy development projects comes from international lending and development institutions, such as the World Bank. These bodies have traditionally encouraged and funded supply expansion. Large-scale implementation of efficiency in developing countries will require these institutions to reevaluate their policies and begin to support energy efficiency improvements financially, technically and politically. In his 1986 study of end-use electrical efficiency for the World Bank, Howard Geller of the American Council for an Energy-Efficient Economy (ACEEE) details a strategy for implementing this change. A new report from ACEEE makes specific proposals for reforming international lending and development policies to reflect an emphasis on least-cost energy planning.

Lastly, the lack of a well defined energy infrastructure in much of the developing world makes the case for implementing energy efficiency stronger still. Since developing countries have less evolved infrastructures than those of the developed world, and therefore have not already installed the inefficient stock of electrical devices that are present in the United States and other developed countries, there is a tremendous potential to implement energy efficiency from the outset, driving economic growth and providing the important wider benefits mentioned above. Passing up the chance to influence these developing infrastructures positively would be a significant lost opportunity.

Competitek Rocky Mountain Institute launched its COMPETITEK update service in January of 1988 to disseminate the breadth of information on new and advanced technologies and techniques for electric end-use efficiency. COMPETITEK's service is provided on an annual subscription basis to electric utilities, policy analysts, major end-users, etc. To date, COMPETITEK has over 50 subscribers in 12 countries, including major U.S. utilities such as Pacific Gas & Electric and South California Edison, major trade associations including the Electric Power Research Institute, and end-users including the Compaq Computer Corporation. Charter members also include such foreign organizations as the USSR Academy of Sciences; Energy, Mines and Resources Canada; the Italian Atomic and Alternative Energy Agency; the Tata Energy Institute of India; the Ministry of Energy, Mines and Re-sources in San Jose, Costa Rica; and several Swedish energy authorities. While marketing efforts have thus far focused on U.S. and European organizations, COMPETITEK's analysts believe that the potential for efficiency in the developing world is great and that their findings are clearly applicable there. For an annual fee of $9,000, COMPETITEK provides subscribers with four components: (1) The State of the Art Series, including reports on Lighting, Drivepower, Appliances, Water Heating, Space Cooling, and Space Heating; (2) their Quarterly Updates; (3) The Implementation Series, topical papers on means of financing energy efficiency information and marketing programs, etc.; and (4) two-delegate participation in an annual COMPETITEK Forum held in Snowmass Village, Colorado. For more information contact COMPETITEK, c/o Rocky Mountain Institute, 1739 Snowmass Creek Road, Snowmass, CO 81654-9199 (FAX: (303) 927-4178). � T.F. & S.H.

Ted Flanigan is Director of the energy program of the Rocky Mountain Institute in Snowmass, Colorado. Susan Hassol is Associate Editor of IRT: Issues Review & Tracking, a weekly energy newsbrief.