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10 key recommendations to rapidly boost energy efficiency progress worldwide

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Higher ambition and faster action by governments to accelerate improvements in energy efficiency worldwide are both vital and achievable, according to 10 key recommendations published today by a group of national leaders, ministers, top business executives and prominent energy experts. The list of proposed actions will be a key part of discussions at a major IEA conference that takes place tomorrow.

With the support of the IEA, the members of the Global Commission for Urgent Action on Energy Efficiency have over the past year explored the most effective ways to achieve stronger global progress in energy efficiency, which brings major benefits such as lower energy bills, large numbers of new jobs and significant reductions in greenhouse gas emissions. Their 10 recommendations highlight the best approaches to designing and implementing policies to unlock the huge advantages that energy efficiency offers to economies and societies around the world.

The Global Commission’s work comes as many governments are increasingly focusing on plans to repair the social and economic damage caused by the Covid-19 crisis. The Commission’s recommendations focus on this new reality and highlight the strong role that energy efficiency can play in bringing about a sustainable recovery.

“At this critical time, the importance of energy efficiency has not faded. If anything, the case is stronger and more urgent than ever before,” said Prime Minister Leo Varadkar of Ireland, the Commission’s Honorary Chair, in an introduction to the recommendations. “We need transformative change. Therefore, we have developed this set of 10 recommendations that identify policies that can be implemented quickly to boost activity on energy efficiency globally.”

Established a year ago, the Global Commission is an independent body comprising 23 members from around the world spanning government, industry, research and civil society. Drawing on the IEA’s analysis showing the worrying slowdown of global efficiency progress in recent years, the Global Commission was tasked with examining how to reverse this trend through new and stronger policy action by governments across key sectors of the economy.

The work of the Global Commission complements a major IEA report released last week that outlines a Sustainable Recovery Plan designed to enable governments to simultaneously boost their economies, create millions of jobs and put global greenhouse gas emissions into structural decline. Based on an analysis conducted in collaboration with the International Monetary Fund, the new IEA report shows that energy efficiency is an essential element in achieving these results.

“The IEA sees energy efficiency as a crucial clean energy resource,” said Dr Fatih Birol, the IEA Executive Director. “It has enormous untapped potential to help put the world on a more secure and sustainable path if governments make it an integral part of their policies and programmes across key parts of the economy. This is why I invited the members of the Global Commission to come together to identify global best practices and make actionable recommendations to spur the faster progress that the world urgently needs. I thank all the Commission members for their extremely valuable contributions to this endeavour.”

The Global Commission’s recommendations will be discussed at the IEA’s Fifth Annual Global Conference on Energy Efficiency, which will take place online on 23 June. The conference will hear from 15 ministers from around the world, with a focus on policy actions that can deliver the multiple benefits of energy efficiency as governments respond to the Covid-19 crisis. High-level speakers will bring a range of perspectives from governments, companies and international organisations.

The role of energy efficiency in economic stimulus plans and clean energy transitions will be an important part of discussions at the IEA Clean Energy Transitions Summit on 9 July. The Summit, which will take place online, will bring together dozens of ministers from countries representing over 80% of global energy demand as well as energy industry CEOs, big investors and other key leaders from the public and private sectors around the world.

Actions proposed by Global Commission for Urgent Action on Energy Efficiency highlight benefits of efficiency for sustainable recovery plans and will be discussed at major IEA conference tomorrow

1. Prioritise cross-cutting energy efficiency action for its economic, social and environmental benefits

A stronger, all-of-government policy focus will enhance social and economic development, energy security and resilience, decarbonisation, and rapid job creation and economic stimulus

2. Act to unlock efficiency’s job creation potential

Energy efficiency can quickly deliver job growth and can become a long-term, sustainable employment sector

3. Create greater demand for energy efficiency solutions

Efficiency action will be most rapidly scaled up through a focus on increasing demand for efficient products and services and enabling greater levels of market activity

4. Focus on finance in the wider context of scaling up action

Mobilising finance is an essential element of efficiency action, and policies to do so will be most effective if they are part of a wide, coherent approach to driving market scale

5. Leverage digital innovation to enhance system-wide efficiency

Policymakers can take advantage of digital innovation’s potential to enable smart control, better energy management, and wider energy system optimisation

6. The public sector should lead by example

Governments should lead through investment in public sector efficiency and driving innovation and higer standards throughout its reach

7. Engage all parts of society

Implementation of efficiency action can happen at all levels of society, with cities, businesses, and local communities all playing a particularly important role in its success

8. Leverage behavioural insights for more effective policy

People are at the centre of energy efficiency action, and insights from behavioural science can help design smarter policies

9. Strengthen international collaboration

International collaboration and exchange of best practice allow countries to learn from each other and to harmonise approaches and standards where appropriate

10. Raise global energy efficiency ambition

Governments should be significantly more ambitious in both the short- and long-term when setting their efficiency targets, policies and actions

The Global Commission’s 10 Recommendations

Honorary Chair: H.E. Mr. Leo VARADKAR, Prime Minister of Ireland H.E. Dr. Amani ABOU-ZEID, Commissioner for Infrastructure and Energy, African Union Commission, Ethiopia H.E. Mr. Richard BRUTON, Minister of Communications, Climate Action and Environment, Ireland Mr. Nick BUTLER, Visiting Professor, King’s College London, United Kingdom H.E. Mr. Alfonso CUSI, Secretary, Department of Energy, Philippines Ms. Lisa DAVIS, CEO, Gas and Power, Siemens, United States Ms. Connie HEDEGAARD, Chair, KR Foundation, Denmark Mr. Michael LIEBREICH, Chairman and CEO, Liebreich Associates, United Kingdom Dr. Ajay MATHUR, Director General, The Energy and Resources Institute, India Ms. Lisa MURKOWSKI, US Senator, Chairman of the Senate Energy and Natural Resources Committee, United States (honorary member) Mr. Gil C. QUINIONES, President and CEO, New York Power Authority, United States H.E. Mr. Aziz RABBAH, Minister of Energy, Mines and Sustainable Development, Morocco H.E. Ms. Teresa RIBERA RODRIGUEZ, Deputy Prime Minister and Minister for the Ecological Transition, Spain Mr. Adam SIEMINSKI, President, King Abdullah Petroleum Studies and Research Center, Saudi Arabia H.E. Ms. María Fernanda SUÁREZ LONDOÑO, Minister of Mines and Energy, Colombia Mr. Masakazu TOYODA, Chairman and CEO, Institute of Energy Economics, Japan Mr. Jürgen TRITTIN, Member of the German Parliament, Germany H.E. Mr. Claude TURMES, Minister for Energy and Minister for Spatial Planning, Luxembourg Mr. Ben van BEURDEN, CEO, Royal Dutch Shell, the Netherlands H.E. Dr. WAN Gang, Chairman, Science and Technology Association of China H.E. Dr. Megan WOODS, Minister of Energy and Resources, New Zealand Dr. Kandeh YUMKELLA, Former UN Under-Secretary-General, CEO & Special Representative of the Secretary-General, Sustainable Energy for All, Sierra Leone H.E. Ms. Salomé ZOURABICHVILI, President of Georgia

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UN chief calls for ‘urgent transition’ from fossil fuels to renewable energy

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Building a global coalition for carbon neutrality by mid-century will be the UN’s “central objective”, the world body’s top official told a conference on climate action on Monday. 

“All countries need credible mid-term goals and plans that are aligned with this objective”, Secretary-General António Guterres said, addressing the virtual COP26 Roundtable on Clean Power Transition. “To achieve net zero emissions by 2050, we need an urgent transition from fossil fuels to renewable energy”. 

Energy for Africa 

Painting a picture of some 789 million people across the developing world without access to electricity – three-quarters of whom live in sub-Saharan Africa – the top UN official called it “both an injustice and an impediment to sustainable development”. 

He signaled “inclusivity and sustainability” as key to support African countries, while underscoring that all nations need to be able to provide access to clean and renewable energy that prevents “the dangerous heating of our planet”. 

Mr. Guterres asked for a “strong commitment from all governments” to end fossil fuel subsidies, put a price on carbon, shift taxation from people to pollution, and end the construction of coal-fired power plants. 

“And we need to see adequate international support so African economies and other developing countries’ economies can leapfrog polluting development and transition to a clean, sustainable energy pathway”, he added. 

Adaptation ‘ a moral imperative’ 

Against this backdrop, Mr. Guterres repeated his appeal to developed nations to fulfill their annual pledge for $100 billion dollars to support mitigation and adaptation in developing countries. 

Pointing to vulnerabilities faced by Africa – from prolonged droughts in the Sahel and Horn of Africa to devastating floods in the continent’s south – he underscored “the vital importance of adaptation” as “a moral imperative”. 

The UN chief said that while only 20 per cent of climate finance is earmarked for it, adaptation requires “equal attention and investment”. 

“The forthcoming climate adaptation summit on 25 January is an opportunity to generate momentum in this much neglected area”, he added. 

Reversing a dangerous trend 

Despite huge amounts of money that have been reserved for COVID-19 recovery and stimulus measures, the Secretary-General noted that “sustainable investments are still not being prioritized”. 

He outlined the need for an annual six per cent decrease in energy production from fossil fuels through renewables, transition programmes, economic diversification plans, green bonds and other instruments to advance sustainability. 

He reiterated the need to limit the global temperature rise to 1.5 degrees Celsius above pre-industrial levels, stating emissions needed to fall by 7.6 per cent every year between now and 2030. 

However, he noted that “some countries are still going in the opposite direction. “We need to reverse this trend”, he said. 

Aligning with Paris 

He said all public and private financing should support the Paris Agreement and the 2030 Agenda for Sustainable Development with training, reskilling and providing new opportunities that  are “just and inclusive”. 

He noted that a sustainable economy means better infrastructure, a resilient future and millions of new jobs – especially for women and young people, maintaining that “we have the opportunity to transform our world”. 

“But to achieve this we need global solidarity, just as we need it for a successful recovery from COVID-19”, the Secretary-General said, reminding everyone that “in a global crisis we protect ourselves best when we protect all”. 

“We have the tools. Let us unlock them with political will”, concluded the UN chief.

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‘Growing momentum’ to make 2021 the global action year for sustainable energy

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In a bid of optimism for the new year, the UN Development Programme (UNDP) expressed confidence that clean energy would grow in 2021. 

Despite that the world is not on track to meet climate objectives and achieve Sustainable Development Goal 7 (SDG7) for universal access to clean, affordable and reliable energy, Marcel Alers, UNDP Head of Energy, said that “clean energy solutions exist that can get us there”. 

“There is growing momentum to make them political and investment priorities”, he added. 

Smart investment 

Fossil fuels used to be less expensive than clean energy but that is changing, according to Mr. Alers. 

Renewables are becoming more affordable every year, and “some options are now cheaper than fossil fuels”, he said, pointing out that since 2010, the price of solar had decreased by 89 per cent.  

“It is now cheaper to go solar than to build new coal power plants in most countries, and solar is now the cheapest electricity in history”, the UNDP official said.  

Moreover, amidst an exceptionally challenging year, and despite suffering setbacks, the renewables sector has shown resilience. 

“This fall in price, coupled with technological progress and the introduction of innovative business models, means we are now at a tipping point”, he said, urging for a large-scale clean energy investments from the public and private sectors. 

Translating pledges to action 

Throughout 2020, countries have pledged to build back better, greener and fairer.  

“With support from UNDP’s Climate Promise, 115 countries committed to submitting enhanced Nationally Determined Contributions”, Mr. Alers said. 

Among other things, he noted that high-emitting economies, such as China, Japan, South Korea, the United Kingdom and the European Union, had made net-zero commitments and that United States President-elect Joe Biden had vowed to rejoin the Paris Agreement.  

“These pledges now need to be translated into action”, said the UNDP official. “Ambitious commitments are a strong signal and a necessary first step towards reaching net-zero emissions. We now need to build on them”. 

Green recovery 

Clean energy is also a win-win solution to recover from COVID-19 as it can improve healthcare for the world’s poorest while providing a reliable electricity supply – imperative for health centres to function.  

“As COVID-19 vaccines – some needing to be stored at -70°C – get rolled out, powering a sustainable and reliable cold chain will be critical”, Mr. Alers reminded. 

Furthermore, investing in renewables could create nearly three times as many jobs as investing in fossil fuels. 

“As the world is rapidly urbanizing, energy efficiency in buildings, sustainable cooling and heating, smart urban planning and sustainable transport options…are key for the future of cities”, he maintained. 

Looking to September 

In September, for the first time in 40 years, the UN will host a High Level Dialogue on Energy for countries, businesses, civil society and international institutions to step up action on sustainable energy.  

UN-Energy and UNDP Administrator Achim Steiner recently called for a reinforcement of global energy governance, saying “we know clean energy can both deliver universal energy access and contribute to tackling the climate crisis”. 

Although phasing out fossil fuels and transitioning to green economies is a monumental task, Mr. Alers assured that “we are ready to rise to the challenge”.  

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Pioneering Solar Power Plant to Take off in Uzbekistan with World Bank Support

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The World Bank Group, Abu Dhabi Future Energy Company PJSC (Masdar), Asian Development Bank (ADB) and the Government of Uzbekistan signed today loan and guarantee agreements to finance the first 100-megawatt solar photovoltaic power plant in the country, in support of its efforts to produce clean energy, strengthen the security of supply and combat climate change.  

The International Finance Corporation (IFC) and ADB are providing up to $60 million in the financing of the project which will be the first large-scale, privately developed and operated renewable energy facility in Uzbekistan. The European Bank for Reconstruction and Development (EBRD) is providing an equity bridge loan to Masdar to fund the equity needs of the project. Meanwhile, the World Bank is providing a $5.1 million payment guarantee for the Government of Uzbekistan to backstop the payment obligations under the project along with its upstream support to create an enabling environment for renewable energy deployment in Uzbeki​stan.

The plant’s 300,000 photovoltaic panels occupying a 268-hectare plot of land 35 kilometers east of the city of Navoi are expected to start feeding power directly to the national electric network in 2021. It will produce 270 gigawatt hours per year of electricity from solar energy resources, enough to power more than 31,000 households, and prevent the release of 156,000 metric tons of greenhouse gases annually.  

Thanks to the project, Uzbekistan, which generates 85 percent of its electricity in thermal power plants, will be able to reduce its dependency on natural gas and coal. The project will also help ramp up the use of renewable energy and contribute to electricity production that is projected to increase from 65,000 Gigawatt hours (GWh) in 2019 to 103,000 GWh by 2030 to meet rapidly growing demand across the country.

“The project will have an enormous effect, serving as a best practice example in Uzbekistan, opening new markets for private investment and helping accomplish the country’s goal of increasing the use of renewable energy,” said Wiebke Schloemer, IFC Director for Europe and Central Asia. “It will also help reduce the burden on public finances, which could be deployed into other critical sectors of Uzbekistan’s economy to support its recovery from the COVID-19 pandemic.” 

The financing package to implement the project includes up to $20 million in senior loans from IFC’s own account, up to $20 million from the Canada-IFC Blended Climate Finance Program, plus up to $20 million from the ADB. IFC will also provide of up to $1 million in interest rate swaps. And the World Bank will issue a $5.1 million payment guarantee. It will be used to ensure that the National Electric Grid of Uzbekistan (NES) is capable of performing its obligations arising out of a power purchase agreement signed with Masdar and cover the risk of nonpayment for supplied electricity.

“I am pleased that the World Bank, together with IFC, is supporting Uzbekistan in greening its electricity generation through the first competitively-tendered public-private partnership in the country,” noted Lilia Burunciuc, World Bank Regional Director for Central Asia. “Our technical assistance, financing and guarantees will help the Government to grow the share of renewable energy generation from currently less than 0.2 percent to 25 percent by 2030 and attract private investments into the renewable energy sector. They will also facilitate the Government efforts in the energy sector reform, the integration of renewable energies into the grid, and the global climate change mitigation.”

The plant will be constructed and operated by the “Nur Navoi Solar” Foreign Enterprise, a limited liability company (the project company) owned by Masdar, a renewable energy company of the United Arab Emirates. In October 2019, Masdar won Uzbekistan’s first competitively-tendered solar power public-private partnership, which was structured with IFC’s advisory support under the WBG Scaling Solar Program, a one-stop shop that helps governments rapidly bring online privately funded solar projects at competitive tariffs. Uzbekistan was the first state outside of Africa to join the Program.

Masdar committed to supplying power for 25 years at just 2.679 US cents per kilowatt hour – the lowest tariff for solar energy in Central Asia to date. The project company will sell electricity to the NES at this fixed price until 2046.

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