Barriers to Industrial Energy Efficiency in Singapore Report from - - PowerPoint PPT Presentation

Barriers to Industrial Energy Efficiency in Singapore –

Report from the Fifth Fuel Project

Chai Kah-Hin, Catrina Yeo

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What stands in the way for energy efficiency?

Energy efficiency gap

• “paradox of gradual diffusion of apparently

cost-effective energy efficient technologies” [Jaffe and Stavins 1994]

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Barriers

• “postulated mechanisms that inhibit

investment in technologies that are both energy efficiency and economically efficient” [Sorrell 2000, page 27]

What are the barriers preventing Singapore’s industrial companies from implementing energy efficiency?

• Consumes > 50% of

final energy consumption

• Emits > 50% of

energy-related CO2 emissions

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Final energy consumption by sector 2007 (Source: IEA 2008)

Methodology

Confidential

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Literature Review

• Journals &

conference papers

• Trade &

industry reports Data Collection & Analysis

• Interviews

with companies

• Case study of

GWM Singapore Conceptual Framework Development

• Systems

thinking

• Hypotheses

development Survey

• Dillman's

design method Data Analysis

• Partial least

squares path modeling

• Hierarchical
• rdinary

least squares regression Conclusion

• Managerial

and policy implications

• Contribution

to research

Key Barriers A B C D E F G H I J K L M N O P Fear of technical risks/ cost of production loss

• Perceived high cost of energy investments
• Other capital investments are more important
• Uncertainty of future energy prices
• Lack of experience in technology
• Lack of information in EE and energy saving

technology

• Lack of staff awareness / trained manpower
• Lack of (accurate) measurement
• ESCOs lacking in specialized knowledge
• Limited access to capital / budget
• Lack of government incentives
• Weak policies & legislations
• Bureaucratic procedures to get governmental

financial support

• Too many government stakeholders
• Resistance to change
• Legacy System (Efficiency levels may currently be

structurally based, or merely be an artefact of initial installation and construction specifications)

• Space Constraint
• Barriers faced by selected companies

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Framework for Energy Efficiency - MCIR

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ENERGY EFFICIENCY OUTCOMES

• How many projects

devoted to energy efficiency are there in the companies?

• How satisfied were the

companies with the returns on their energy efficiency investments?

MOTIVATION (M)

Why should companies be interested in energy efficiency?

CAPABILITY (C)

Do companies have the technical and financial capabilities to implement energy efficiency? IMPLEMENTATION (I) Are there any internal resistance? Are roles and responsibilities clearly defined? RESULTS (R) Was it worth the effort? Can companies demonstrate the returns?

Response Rate

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143 replies from companies in 5 sectors, a response rate 6.1%

Manufacture of food products Manufacture of chemicals and chemical product Manufacture of basic metals and fabricated metal products Manufacture of computer, electronic and optical products Manufacture of machinery and equipment

Respondent Profile – Non energy-intensive

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* to annual operating cost (excluding manpower costs)

* 84% spent 10%

• r less

27.0% 15.6% 9.9% 22.0% 6.4% 6.4% 12.8% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"We have done many projects in the past three years"

EE Outcome: Limited energy efficiency implementation, and only 1/3 are satisfied with the returns

9 14.3% 9.5% 9.5% 38.9% 13.5% 8.7% 5.6% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"Overall we are satisfied with the returns

• f our energy efficiency projects”

52% disagree

28% agree

Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree

Motivation: Largely driven by cost, and not so much by customer.

10 4.9% 6.3% 4.9% 27.5% 25.4% 13.4% 17.6% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"My company implements energy efficiency practices and technologies so as to reduce energy costs"

7.0% 12.7% 16.9% 42.3% 10.6% 6.3% 4.2% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"Our customers demand us to be more energy efficient than our current level."

56% agree 21.6% agree

Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree

11 0.7% 3.5% 2.8% 23.2% 26.1% 21.8% 22.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"My company's top management views environmental issues seriously."

0.7% 1.4% 2.1% 15.5% 26.1% 31.0% 23.2% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"My company is concerned and cares about the environment."

Motivation: Companies are concerned about environment, even at the absence of strong legal framework

11.2% 11.2% 14.0% 49.7% 8.4% 4.2% 1.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"There is a strong penalty by national regulators if we do not adhere to rules and regulations of energy consumptions

14% agree 70% agree 80% agree

Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree

12 4.2% 3.5% 8.4% 24.5% 18.9% 28.7% 11.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"My company is aware of the opportunities improvement for energy efficiency."

8.5% 9.9% 10.6% 30.3% 21.8% 11.3% 7.7% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"The engineers and technicians in my company have the

technical knowledge to implement energy efficiency practices and adopt energy efficient technologies"

9.1% 6.3% 18.9% 32.2% 14.0% 13.3% 6.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"My company has the financial resources to invest in energy efficiency improvement projects”

Capabilities: Companies are aware of opportunities, and have some technical (internal and external) and financial abilities

7.0% 8.5% 9.2% 29.6% 21.8% 14.1% 10.6% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"My company can easily access external experts who can help us in conducting energy audits and implementing energy efficiency improvements.”

59% agree 46% agree 33.6% agree 41% agree

Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree

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Implementation: Minimum internal resistance but lack of clear line of responsibility on energy efficiency improvement

8.5% 7.0% 16.2% 35.9% 9.9% 16.2% 6.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"In my company, the responsibility of energy efficiency

matters is clearly assigned to one or several staff who is/are competent in energy efficiency matters."

12.0% 14.8% 16.9% 37.3% 7.0% 8.5% 2.8% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"My company's production department resists energy efficiency improvement projects for fear of disruption to production and delivery schedule."

12% agree 32% agree

Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree

14.1% 11.3% 10.6% 26.1% 14.8% 12.0% 12.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"In my company, we are NOT able to report

energy savings from energy efficiency projects with quantitative figures”

Results Demonstration: Lack of quantitative measures

• n energy efficiency investment

14 18.3% 16.9% 10.6% 26.8% 12.0% 12.7% 3.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"In my company, energy savings from energy efficiency projects can be verified objectively"

26.1% 16.2% 12.0% 23.9% 9.2% 6.3% 6.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3 4 5 6 7

"My company uses an automated metering & control system (real-time) to track energy consumption."

22% agree 28% agree 39% agree

Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree Strongly disagree Neutral Strongly agree

Summary

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MOTIVATION (M) CAPABILITY (C) IMPLEMENTATION (I) RESULTS (R) ENERGY EFFICIENCY OUTCOMES (EE)

Limited energy efficiency implementation, and

• nly 1/3 are satisfied

with the returns

• Largely driven by cost, and not so much by

customer

• Companies are concerned about environment,

even at the absence of strong legal framework

• Companies are aware of opportunities, and

have some technical (internal and external) and financial abilities

• Minimum internal resistance but lack of clear

line of responsibility on energy efficiency initiative

• Lack of quantitative measures on energy

efficiency investment

Further Statistical Analysis

• Statistical analysis suggests the following factors are correlated

to energy efficiency outcome: – Results Demonstration – Cost – Implementation

• Factors which have little correlation:

– Corporate Social Responsibility, even though is rated highly in this survey – Financial capability

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Conclusions

• Plenty of scope for improvement in many areas
• Results demonstration (energy metering,

quantitative measurement etc) has the greatest effect on energy efficiency, yet our survey shows companies do not fare very well in this aspect

• Need to emphasize and invest in results

demonstration (i.e. metering, verification of returns etc) thru technology and also management practice (e.g ISO 50001)

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Thank you

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