I've blogged recently about energy efficiency initiatives in Europe and the U.S., and I think it is fair to say that Europe is doing more in this area as part of its 20-20-20 objectives than other major economies for several reasons, one of which is an agrressive mandate to reduce GHG emissions. Another is the goal of reducing its dependence on foreign energy. There are also member state-specific motivations, for example, Germany's decision to shut down all its nuclear facilities by 2022. But there is a lot happening in this area in Asia as well and in the future it is expected that Asia will become the largest market for energy efficieny.
Our demand for energy, especially electric power, is forecasted to continue to increase. The economies of the world where demand for energy is rising more rapidly than anywhere else is in what the International Energy Agency (IEA) refers to as non-OECD countries, including China, India, and Brazil. In its most recent International Energy Outlook 2011 the U.S. Energy Information Administration (EIA) projects that energy use in non-OECD nations will increase by 85 percent between now and 2035, compared with a projected increase of 18 percent for the OECD economies.
To help accommodate expanding demand while reducing emissions, renewable energy has become a worldwide initiative. Renewables energy sources include wind, solar, hydro and other sources of non-emitting power. For example, the Chief Minister of Gujarat recently dedicated the 300 MW Gujarat Solar Park, covering 3,000 acres of desert and one of the largest solar parks in Asia. But some economies are finding that energy conservation is the cheapest "alternative energy" source.
Smarter grid and smarter buildings
To improve the reliability of our electric power grids and simultaneously enable the integration of distributed intermittent renewable energy, utilities worldwide are working to make electric grids smarter. Smart grid technology involves empowering consumers; integrating distributed generation to support intermittent renewable energy; implementing bidirectional communications networks; replacing older equipment with intelligent devices, adding sensors such as synchrophasors, making electricity distribution networks self-healing, and automating distribution networks, including substations.
Increasingly utilities are not only looking to make the grid more intelligent but also to manage demand more intelligently. In the United States the top priorities for electric power utilities in 2012 identified by analysts not only include traditional smart grid related technologies such as distribution automation, analytics to manage big data, support for electric vehicles (EV), electric power storage, and solar PV, but also smart buildings.
Japan invested $100 billion in technology in the 1990's to improve the reliability of its transmisssion and distribution grid. Both Japan and South Korea have joint smart grid projects underway with U.S. Jurisdictions including New Mexico and Chicago. China plans to invest $490 billion in grid upgrades by 2020, including about $90 billion in smart grid technology.
India is projected to soon become the world's fifth largest economy, but to achieve this the IEA estimates that India will require 600-1200 GW of new capacity by 2050 (that's about the total power generation capacity of the U.S.). In addition to investing in nuclear pwer and renewables, the most immediate challenge is the up to 30% of India's power generation that is lost to "aggregate technical and commercial" (AT&C) losses. To address these challenges in May 2010 the Union Government created the India Smart Grid Task Force, chaired by Sam Pitroda, advisor to the Prime Minister. One of the five working groups created by the Smart Grid Task Force is focussed improving the efficiency of the Indian grid by reducing AT&C losses.
Smart buildings means buildings that not only use less power, but are able to manage peak load. Globally the International Energy Agency (IEA) estimates that residential, commercial, and public buildings account for one-third of the globe's total final energy consumption. In the U.S. in 2008 buildings accounted for 72 percent of U.S. electricity use. In the future the proportion of energy consumed by buildings is expected to increase as emerging economies develop, rising temperatures increases demand for cooling buildings, and rising personal wealth increases consumer demand for appliances. This has made improving the energy efficiency of buildings, both existing and new structures, a global priority. According to a recent study by Global Insight currently only 6% of worldwide construction activity incorporates green technology. Driven by regulation, owner and investor demands, resource cost, security concerns, and third party standards, it is projected that by 2020 this could increase to 75%.
The European Union (EU) has taken a leading role in improving the energy efficiency of buildings. The EU has mandatory carbon emission reduction standards, referred to as the 20-20-20 standard, which among other things requires the EU to improve energy efficiency by 20% by 2020. Another important objective is reducing its dependence on imported energy, which currently accounts for half of EU energy usage. In 2002 the European Commission promulgated the Energy Performance of Buildings Directive (EPBD) which requires all EU member states to upgrade their building regulations and to introduce energy certification schemes for buildings. About a year ago the European Commission (EC) proposed a new Energy Efficiency Directive (EED) , also known as the EPBD recast, which imposes a legal obligation for all member states to establish energy saving schemes, with the public sector leading by example.
Energy efficiency is especially critical for Germany which not only needs to comply with the 20-20-20 standard, but also to find energy sources to replace its (non-emitting) nuclear power plants that are scheduled to be closed by 2022. In Germany buildings currently account for 40 percent of power consumption and a third of CO2 emissions. The German 40 year master plan calls for aggressive energy efficiency policies including new insulation standards and for all buildings in Germany to be refurbished in line with the new insulation standards by 2050, reducing energy requirements for heating by 20 percent by 2020 and by 80 percent by 2050, and providing tax relief on energy taxes to companies contributing to energy savings.
Japan‘s announced mid-term emission reduction target is to cut Japan's GHG emissions by 25% by 2020 compared with 1990, subject to international negotiations. But Japan has said that it plans to revise this target in light of the Fukushima accident and presumably in light of the recent decison to shut down its nuclear power plants by 2040. According to an analysis by the Ministry of Economy, Trade and Industry (METI), the largest reduction will need to be realized in commercial sector, by about 27%. Residential/commercial-sector accounts for 30% or more of final energy consumption and has increased remarkably compared to the industrial and transportation sectors. Energy saving measures for commercial buildings are urgently required, since the commercial sector including office buildings consumes more than half of total energy consumption in the residential/commercial sector. Moreover its growth has been more striking than that of the residential sector.
The Chinese government has recenty announced a goal of having green buildings account for 30 percent of new construction projects by 2020. The joint released by the Ministry of Finance and the Ministry of Housing and Urban-Rural Development is the first time that China has a goal for the development of green buildings and underlines China's intent to speed up the development of energy-efficient construction to bring China's building energy consumption ratio closer to that of developed countries by 2020..
The government intends to speed up green construction by increasing policy incentives and improving industry standards, as well as promoting technological progress and the development of related industries. The Ministry of Construction (MOC) is responsible for the development of a national energy efficient design standard for public buildings which was adopted by the MOC in 2005. It sets a target of 50% energy reductions compared to pre-existing buildings for commercial and residential buildings.
According to a recent report by the Building Services Research and Information Association (BSRIA), the Asian smart building market will grow from the current size of US$ 427 billion to US$ 1,036 billion in 2020.
A major area of focus in the EU is “nearly zero energy” buildings. A nearly zero energy building on average over a year generates as much energy from renewable energy sources as it consumes. For new buildings, the EPBD recast fixes 2020/2021 as the deadline for all new buildings to be designed to be nearly zero energy. For public buildings the deadline is even sooner, by 2018/2019.
The Government of Japan put forward its "zero emissions buildings" target in April, 2009. It defines a zero emssions building (ZEB) as one that has net zero CO2 emissions on an annual basis through energy efficiency and renewable energy generation on-site. The announced objective ia that all new public buildings will be zero emissions by 2030. This is a similar timeframe to that mandated by the U.S. Energy Independence and Security Act of 2007 (EISA 2007) that requires that by 2030 all new Federal facilities must be “net zero energy” buildings.
Pike Research has projected that as a result of the recast EU EPBD Directive and similar legislation in other parts of the world, such as Japan, worldwide revenue from nearly zero energy building construction will grow at an annual rate of 43% over the next two decades, reaching $690 billion by 2020 and $1.3 trillion by 2035, with much of the growth occurring in the EU.
The International Energy Agency (IEA) has announced the Building Energy Efficiency Policies (BEEP) database. The BEEP database collects information on buildings energy codes including minimum energy performance requirements that focus on achieving zero energy buildings, buildings energy labels which increase awareness about energy consumption of buildings, and incentives schemes for capacity building, technical assistance and raising awareness. The database includes information from all IEA member countries as well as China, India, Tunisia, South Africa and Russia.