Financing Energy Efficiency : Lessons from Brazil, China, India, and Beyond

by Taylor, Robert P.; Govindarajalu, Chandrasekar; Levin, Jeremy; Meyer, Anke S.; Ward, William A.

• ISBN13: 9780821373040
• ISBN10: 0821373048
• Format: Paperback
• Copyright: 2008-02-01
• Publisher: World Bank

Summary

"While energy efficiency projects could partly meet new energy demand more cheaply than new supplies, weak economic institutions in developing and transitional economies impede developing and financing energy efficiency retrofits. This book analyzes these difficulties, suggests a 3-part model for projectizing and financing energy efficiency retrofits, and presents thirteen case studies to illustrate the issues and principles involved."

Table of Contents

Foreword	p. xi
Acknowledgments	p. xiii
Acronyms and Abbreviations	p. xv
Overview	p. 1
Energy Efficiency Financing and the Three Country Energy Efficiency Project	p. 1
The Need for Energy Efficiency Investment Financing Interventions	p. 3
Delivery of Energy Efficiency Financing Is an Institutional Development Issue	p. 7
Delivering Investment Project Designs and Technical Appraisals	p. 8
Delivering Financing	p. 10
Making Integrated Mechanisms Work	p. 13
Moving Ahead	p. 17
Lessons from Energy Efficiency Financing Operations in China, India, and Brazil
Introduction	p. 23
Energy and Growth	p. 24
Why Energy Efficiency Is Important	p. 27
The Three Country Energy Efficiency Project	p. 30
Roadmap for this Book	p. 31
Summary of the Energy Efficiency Terrain	p. 35
Reclassifying the Energy Efficiency Terrain	p. 36
Improving Energy Efficiency in New Facilities	p. 36
Improving Energy Efficiency in Existing Facilities	p. 38
Conclusions	p. 42
The Focus of this Book: Standard Energy Efficiency Projects	p. 45
Orgins and Persistence of Energy Inefficiency	p. 49
The Importance of Institutional Environments for Energy Efficiency Investment	p. 51
Additional Challenges Posed by Institutional Frameworks in Developing Market Economies	p. 56
Production versus Efficiency Investment in Rapidly Growing Economies	p. 59
Models for Delivering Energy Efficiency Investments	p. 63
A General Model for Successful Delivery Programs for Energy Efficiency Investment	p. 65
Examples of Delivery Mechanisms for Energy Efficiency Investments	p. 71
Identifying and Developing Energy Efficiency Investment Projects	p. 79
Market Selection and Outreach	p. 80
Project Development: Identifying, Clarifying, and Allocating Risk	p. 84
Institutional Capacities for Energy Efficiency Project Development	p. 88
Making Choices about Outsourcing	p. 92
Some Options to Minimize Transaction Costs	p. 96
Delivery of Financing	p. 101
What Needs to be Delivered?	p. 101
The Institutional Environment for Financing: The Different Worlds of Bankers and Energy Efficiency Project Promoters	p. 102
Dealing with Banking Systems in Transition or under Development	p. 105
Institutional Options for Delivery of Financing	p. 107
Dealing with Repayment Issues in Energy Efficiency Projects and New Financing Product Development	p. 110
Making Investment Delivery Mechanisms Work	p. 117
Basic Principles	p. 118
Energy Efficiency Lending through Local Financial Institutions	p. 120
Energy Service Companies (ESCOs)	p. 131
Energy Utility Demand-Side Management (DSM)	p. 138
Conclusions and Recommendations	p. 141
Suggestions for Each of the Three Countries	p. 142
Suggested Roles for International Financial Institutions	p. 149
Operational Suggestions on Development of New Projects	p. 152
Energy Efficiency Finance Case Studies
Introduction to Part II	p. 157
China ESCO Loan Guarantee Program	p. 162
Hungary Energy Efficiency Guarantee Fund	p. 170
Romania Energy Efficiency Fund	p. 181
IREDA Energy Efficiency Loan Fund	p. 189
Energy Efficiency Cluster Lending for SMEs by Indian Banks	p. 194
Lithuania Energy Efficiency and Housing Pilot Project	p. 205
China's Full-Service ESCOs	p. 213
ESCO Development in the United States and Canada	p. 224
Brazil Public Benefit Wire-Charge Mechanism	p. 235
Sri Lanka DSM: Using the Utility Bill as a Loan Repayment Mechanism	p. 243
Dongying Shengdong EMC Waste Gas Power Projects	p. 246
Iqara Energy Services in Brazil	p. 250
India Capacitor Leasing	p. 257
Bibliography	p. 261
Glossary of Selected Terms in New Institutional Economics (NIE) That Relate to Energy Efficiency Finance	p. 265
Index	p. 273
Boxes
Energy Efficiency Investments Are Very Cost-Effective	p. 29
Why Distinguish Between "Restructuring Projects" and "Standard Energy Efficiency Projects?"	p. 39
Generalized Model for Developing New Energy Efficiency Investment Delivery Mechanisms in Developing Countries	p. 68
One Example of a Failed Project	p. 121
Summary of Some Ideas for Reform of Brazil's Wire-Charge	p. 241
Figures
Growth of Developing Countries' Energy Demand	p. 25
Energy-Related CO[subscript 2] Emissions Growth to 2030	p. 27
Shared Savings EPC Model	p. 132
Guaranteed Savings EPC Model	p. 133
Structural Overview of the EMC Loan Guarantee Program	p. 164
Hungary Energy Efficiency Co-financing Program Institutional Arrangements	p. 171
HEECP Results, 1997-2006	p. 174
FREE Institutional Arrangements and Funds Flow	p. 184
IREDA Institutional Arrangements	p. 190
Cluster Lending Approach Adopted in India	p. 197
Lithuania Energy Efficiency Project Institutional Arrangements	p. 206
China's Full-Service Shared Savings ESCO Model	p. 214
Types of Projects Implemented 1997-2006 by Three Chinese ESCOs	p. 219
Shared Savings Contracting Model	p. 227
Guaranteed Savings Contracting Model	p. 227
Breakdown of Brazilian Utilities' Energy Efficiency Investments by Sector (1998-2003)	p. 238
Total Utilities' Energy Efficiency Investments by Sector (1998-2003)	p. 238
Sri Lanka DSM Project: Institutional Arrangements	p. 244
Dongying Shengdong EMC Ownership and Business Arrangements	p. 247
Iqara's Business Model	p. 252
Institutional Arrangements in a Capacitor Leasing Project in India	p. 258
Tables
World Primary Energy Demand by Region, Mtoe (Reference Scenario)	p. 25
Energy Efficiency Interventions by Economic Sector	p. 37
Typical Policy and Regulatory Tools to Promote Energy Efficiency in New Facilities	p. 38
Contract Enforcement: Brazil, China, and India Compared to Canada and the United States	p. 57
Evolution of HEECP Parameters, 1997-2006	p. 173
Romania Financial Market Conditions	p. 182
Free Project Results	p. 183
Summary of Advantages and Disadvantages of FREE	p. 187
Pros and Cons of Supporting Energy Efficiency Investments through a Parastatal Entity	p. 192
Lithuania Energy Efficiency Project Results	p. 208
China ESCO EPC Project Investment 2005/2006	p. 217
Allocation of Wire-Charge Uses in Brazil, 1998-2007	p. 236
Total Investment in Regulated Utility Energy Efficiency Programs in Brazil	p. 237
ESCO Contracts with Brazilian Utilities in Energy Efficiency Regulated Programs	p. 239
Iqara Projects	p. 253
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