S&L are eligible to the UNDP-GEF

Energy Efficiency S&L are part of UNDP-GEF's Operational Program 5: Removal of Barriers to Energy Efficiency and Energy Conservation

Promoting energy-efficient appliances and end-use technologies is one of the three areas of focus of UNDP-GEF Operational Program 5 because appliances consume a significant amount of energy, especially electrical energy in any economy and present a large potential for achieving cost-effective energy savings. Promoting the energy efficient appliances contribute to the economic development and well-being of the local people. UNDP-GEF intervention comprises policy support, information, business models, financing, and knowledge of and availability of the various technologies.

The range of barriers to be removed for market transformation typically involves policy, finance, management, information, and technology. An effective barrier removal framework will thus require an enabling policy environment, access to adequate financing, sound business models and enterprise management, widespread availability of information and knowledge, and eventually deployment and diffusion of energy-efficient technologies.

Overall Objective

The overall objective of S&L in OP5 is to promote the wide-spread adoption of energy-efficient appliances and equipment in the residential, commercial, and industrial sectors by removing barriers to the large-scale application, implementation, and dissemination of cost-effective, energy-efficient technologies and practices that will result in the reduction of greenhouse gas emissions. The intervention strategy for barrier removal aims at developing, expanding, and transforming the markets for energy-efficient technologies.

Scope: This operational area covers a wide range of energy-consuming appliances and equipment, such as lighting systems, refrigerators, air-conditioners, cook-stoves, motors, pumps, and boilers that are used by residential, commercial, and industrial sectors to provide energy services.

Approach: The "classical" approach to market transformation-embodied in programs promoting standards, labels and consumer education-has been used most commonly and successfully in removing barriers to the widespread adoption of energy-efficient appliances. It has also provided an extremely cost-effective way to improving the future efficiency of energy use. Competitive market forces should be leveraged whenever possible. To effect market transformation, public-private partnerships are essential and should involve all key players, including equipment manufacturers, distributors, retailers, and in some cases utilities.

UNDP-GEF interventions in this operational area will normally emphasize building an enabling policy environment for the development and enforcement of national standards and labels through a national consultation process bringing together the relevant stakeholders. Such consultations must involve public and private sectors as well as civil society at large and will typically constitute a major component of these projects.

Projects seeking to improve appliance efficiency may require financial support or incentives to consumers or manufacturers in order to expedite the market transformation process. Nevertheless, the bulk of the projects addressing the objectives of this operational area is not expected to place heavy emphasis on finance, and the incremental costs of the investments will be expected to be covered by the capitalized energy savings over the life-cycle of the equipment being produced. Incentives and subsidies should be used judiciously to stimulate the market, and they should be phased out when the market matures.

Information is a critical component of projects designed to transform the market for efficient appliances. The efforts will emphasize education of consumers so that they understand the labels and life-cycle costs of using the appliances. Labeling only works if this is effective. Marketing and public education programs should be suitable for local conditions.

Technology normally plays a limited but important role in these projects. Technical assistance to local manufacturers may be required to facilitate technology transfer and to enhance the manufacturers' capabilities to produce more efficient, better-quality products, thereby expediting the process of market transformation.