Elements for a PDF B

This section presents the various elements that a S&L PDF B may contain:

Discussion on Barriers removal: Sample of Possible Barriers for S&L

A number of barriers exist that block the widespread introduction of more energy efficient appliances (not only in the residential and buildings sectors, but also in other sectors). This list is not exhaustive and should be shorten or expanded according to national or regional circumstances:

• Awareness barriers:
  
  • Lack of knowledge and understanding amongst consumers of energy consumption and energy efficiency improvement opportunities of appliances, making energy efficiency not a top-of-mind factor in their purchase purchase decision
  • Uncertainty about market demand of high-efficiency models, making manufacturers reluctant to tie up financial resources in more costly plant and equipment and making dealer/retailer reluctance to stock energy-efficient models
    
• Information and policy barriers:
  • Difficulty for policy makers to take informed decisions and make appropriate regulation, due to insufficiency of market data on appliance supply and stocks, on the energy consumption of most appliances and on the potential for improving the energy efficiency of appliances
  • Lack of appropriate regulation, allowing domestic production and imports of highly inefficient appliances
• Cost barrier:
  • The low unit price of coal and electricity in South Africa influences the mind-set of consumers and companies with the argument that the higher initial investment cost cannot be justified due to lengthy payback times
  • Low purchasing power of the majority of South African households.

Sample for an intervention strategy

Awareness creation and introduction of energy labels for electric appliances

Specification and launching of energy labels for domestic appliances Awareness creation and information campaigns

Conducive policy and policy instruments regarding energy efficiency

Baseline study and market survey - full analysis

• Market data about appliances in country and/or region
• Baseline energy use for appliances
• Energy efficiency improvement potential for selected appliances

Regulation and legislation
Incentives and financial issues

Capacity strengthening of main stakeholders \

Developing a testing capability
Enforcement of labels and standards
Capacity strengthening of main stakeholders
Performance management; monitoring and evaluation
Adaptive management

Minimum energy performance standards for electric appliances
Global and national environmental significance:
Elements for Replicability

Key elements of a replication plan that will be put in place are the following:

• A comprehensive monitoring and evaluation system will accompany the UNDP-GEF intervention. This will help to identify what works, what doesn't and why. Lessons will be extracted from that body of experience and through an aggressive communication and outreach plan disseminated both within the country and/or the region, as well as the international donor community.
• Stakeholders from industry, retailers and consumer organizations will be fully involved in the regulatory process
• A conformity assessment and enforcement system will be put in place to maintain the credibility of labels and standards

Implementation/Execution Arrangements

UNDP may serve as the Implementing Agency for the UNDP-GEF project, which will be nationally executed by a designed official (governmental) body. Depending on the outcome of the PDF activities, some components and activities in the full-sized project may be implemented by other agencies or institutions. In the PDF B phase, a Project Steering Committee will be set up, consisting of the Government Official body, United Nations Development Programme (UNDP-GEF implementing agency), and other relevant bodies

Possible PDF Activities
Strengthened capability of test houses

In time sequence, energy-performance testing is the first capability that must be in place, before starting a full labelling programme, let alone start a national minimum standards programme. Activities that will be undertaken are:

• Assessment of institutional skills of test laboratories, test protocols and certification and accreditation regimes. This will include an assessment of national testing facilities and capabilities to test energy consumption, performance and energy efficiency levels, equipment certification and accreditation requirements, existing test procedures and test result agreements and compliance regimes
• Technical assistance in developing energy performance testing capabilities, including visit to test facilities overseas and training workshops.
• Harmonization of testing standards (starting with refrigerators and air conditioners)
• Pilot energy performance testing (of at least 10 refrigerator models).

Baseline study and market survey - preliminary analysis

Various gaps in information exist, which need to be filled before the appliance labelling programme can be undertaken:

• Preliminary market survey of consumer preferences and market size of appliances: Gathering of information about market penetration of domestic appliances, consumer behavior, buying preferences, and role of the retailer are critical for a successful consumer awareness campaign.
• Baseline energy use study for appliances: The energy used by common appliances (refrigerators, air conditioners and geysers) is often not tested, but is needed to establish a baseline for program design and for evaluating the impact of the campaign in terms of energy savings and greenhouse gas reduction.
• Assessment of energy efficiency improvement potential for selected appliances: The cost-effectiveness of energy savings and CO2 reduction will be assessed, as measured by life-cycle costs and payback periods.

Pilot introduction of refrigerator labels

• Presentation of norm and energy label
• Launching the label
• Consumer awareness campaign
• Training of manufacturers and retailers
• Monitoring of awareness progress

Design of a framework plan for the introduction of labels

• Design of consumer awareness campaign, which consist of the following sub-activities:
  • Assessment of stakeholders, i.e. a thorough examination of the various roles of market actors (manufacturers, distributors, retailers, consumers, utilities) in the technology implementation process
  • Analysis and design of consumer awareness campaigning o Design of training and information for manufacturers, distributors and retailers
• Assessment of institutional capacity and design of a capacity strengthening programme. This activity will focus on:
  • Strengthening of government agency responsible for developing, issuing and maintaining both labels and standards, by training of newly recruited staff on standards and labelling, through small courses and workshops.
  • Training of manufacturers, distributor and retailers, so that these crucial stakeholder will provide active support in the full-sized project phase
• Design of a plan for the introduction of labels and standards to be supported by the full-project sized project within the framework of implementation of national or regional Energy Efficiency Strategy, which will have the following elements:
  
• Definition of products, priorities and timing (launching of the label)
• General consumer awareness campaigns and campaigns accompanying the launch of labels of each appliance
• Manufacturer and retailer outreach and training
• Monitoring of awareness progress
• Estimate of staffing requirements and budget for programme development and administration

Design of innovative incentives programme

For the majority of households in UNDP-GEF eligible country, their low incomes will bias their purchase decision against appliances that may have lower life-cycle cost but higher purchase cost. Fiscal or tax incentives favour the purchase or import of high-efficiency appliances, e.g. reduction on duties for importation of higher-efficiency equipment of raising duties on poor-efficient appliances. Commercial establishment could benefit from accelerated depreciation for the purchase of high-efficient models. In some countries, household buy appliances in a credit scheme provided by the retailer. These schemes could be adapted to accommodate low-interest loan top-ups for appliances that are more efficient then standard-efficient equipment. Another option would be to link the programme with the DSM activities of electric utility companies e.g. by introducing equipment rebate schemes or 'pay-on-the-electricity-bill' credit schemes.

This activity will carry out a comprehensive analysis of the innovative financing and incentives options for the consumer, of the financial impact on the stakeholders involved (customer, retailer, financial or utility intermediary) and the economic impact of the nation as a whole. The activity will also look into providing incentives to the industry and retailers to produce, import and market energy-efficient products.

The recommended options can be included in the financial mechanisms component of the full-sized project. In fact, consumer financing schemes will be an important part of co-funding of the full-sized project.

Formulation of UNDP-GEF project proposal

The final output of the PDF-B phase will be a project proposal for a full-sized grant, to be submitted to UNDP-GEF. Such a proposal consist of an executive summary and a UNDP Project Document. Activities that will be carried out to achive this output include:

• Seek and arrange co-funding for UNDP-GEF full-sized programme
• Promote stakeholder consultations in the design of the UNDP-GEF full-sized project, by organising at least one inception workshop will be organised at the beginning of the PDF-B phase to sensitise stakeholders and one project formulation workshop will be organised at the end.
• Preparation of the final proposal, including a project logical, framework, incremental cost analysis and a monitoring and evaluation plan.

PDF Block B Outputs

The main output of the PDF B is the UNDP-GEF project proposal. The other outputs are related to basic information gathering, analysis of potential financial mechanism, strengthening of energy performance testing capability, and possibly a pilot introduction of labels for a given appliance (refrigerators is likely to be the best candidate) and the design of labelling master plan. These outputs will be produced through reports, workshops and a participatory project design process. The following reports and documents are expected to be generated in the course of the PDF B::

• The UNDP-GEF Executive Summary of the full-sized project;
• The UNDP Project Document
• Proceedings and other documentation of workshops and seminars;
• Report on testing capability and capacity strengthening;
• Basic information report, containing market survey data and analysis of energy use and energy efficiency improvement potential of refrigerators, air conditioners, geysers and selected other appliances
• Evaluation report of the pilot introduction of labels for refrigerators
• Framework plan for the introduction of labels for electric appliances

Examples of a PDF B Proposal:
Example 1(pdf 968kb)
Example 2(pdf 120kb)