G20 Prioritizes Energy Efficiency Plan in Its 2016 Agenda

Adopted in November 2014, the G20 Energy Efficiency Action Plan has been successfully implemented for its first year in 2015.  It is a voluntary collaboration among G20 countries.

The plan has six individual work streams that will share best practices and technical resources. The streams are called Finance, Network Devices, Vehicles, Buildings, Industrial Management, and Electricity Generation.

To achieve the two-degree climate goal discussed by international negotiators and gain multiple benefits, the world needs to multiply energy-efficiency investments by a factor of five to eight between now and 2030. Financial support from both government and private investors is essential.

“Collaboration at the international level is only for the layer of energy-efficiency advocacy,” said Benoit Lebot, executive director of IPEEC Secretariat. “Energy efficiency, above all, is very domestic - and sometimes very local.”

China has proposed to expand and prioritize energy efficiency on the 2016 G20 agenda under its presidency.

Coordinated by International Partnership for Energy Efficiency Cooperation (IPEEC), the working group will consolidate the plan based on six existing work streams. It may also include a focus on data collection and validation.

As COP21 has set new targets for low-carbon development, more efforts from international stakeholders are needed. Because the G20 nations include the 20 largest economies in the world, which are collectively responsible for over 75 percent of global energy consumption, the collaboration can significantly influence the world’s economic development.

“Energy efficiency is a result of design, thinking, behavior, technology and management,” Lebot said. “We have to mainstream energy efficiency in many decisions.”

In 2015, G20 has made significant achievements in promoting energy efficiency internationally within the six work streams.  For example, in the Network Devices area, G20 launched Connected Devices Alliance to connect the energy efficiency industry and governments together for discussion.

For Vehicles, Buildings, and Electricity Generation, collaborators prepared conferences, workshops and reports to share the best practices of national standards and enable information exchange. G20 also worked with local governments to build Heavy Duty Vehicles roadmaps and Building Energy Performance metrics.

How can the G20 assist energy-efficiency finance?

One of the key finance achievements of the 2015 action plan was to propose a series of energy-efficiency investment principles.

Public funding from governments can encourage the development of additional policies.

“As long as I don’t see financial commitment from public budgets to build the capacity to deliver energy efficiency, I know that we haven’t addressed energy efficiency at the level of what is needed,” Lebot said.

On the other hand, there is a need to scale up private investments in energy efficiency. While many governments have set attractive and stable policy for renewable-energy investments, similar incentives for energy efficiency are still rare.

The action plan’s finance stream is intended to build dialogues between the energy-efficiency community and the finance community while streamlining financial decisions.

The G20 Energy Efficiency Investment Principles encourage member economies to mainstream energy efficiency; increase investment opportunities from the supply and demand sides; and enhance monitoring, reporting and verification. G20 will work closely with governments and investors to promote the implementation of the principles in 2016.

By implementing the voluntary principles, “financial institutions could incorporate energy efficiency in investments,” Lebot said, “and energy efficiency community could hear what extra capacities the financial institutions need for implementation.”

G20 Energy Efficiency Investment Principles

1. Recognize the importance of energy efficiency as an economic and development priority

2. Encourage countries to consider both supply- and demand-side investments in a balanced way

3. Carry out a country-level review of measures and policies that stimulate demand for energy-efficiency investments

4. Collaborate to unlock barriers that prevent the supply of finance for energy-efficiency investments

5. Build capacity within public and private financial institutions for energy-efficiency investments

Source: Report on the G20 Energy Efficiency Action Plan: Voluntary Collaboration on Energy Efficiency

What will the 2016 action plan yield?

After Turkey, China holds the G20 rotating presidency in 2016. The Chinese government is fully aware of the importance of energy efficiency and has made it a priority for 2016.

“We are going to work this year to build on the plan – to expand it, consolidate it, and make it more sustainable,” Lebot said.

Beside reinforcing the existing six work streams, the task group will also expand the work to new areas.

“For instance, we are likely to have a new group on data,” Lebot said.

Accessing to data is crucial for energy-efficiency implementations. Public supports are necessary in the process of collecting and sharing energy data.

“Understanding the data and setting up the baseline could enable us to come up with options to decrease energy consumption,” Lebot said. “Only after we know the volume of the industry, the size of the building sector, and the baseline of the transportation can we work towards smart energy-efficiency policies.”

Transparency and data disclosure can also increase private investors’ confidence in energy-efficiency investments.

“If we want to mobilize the finance sector, the financial institutions also require data to be more comfortable and invest in energy efficiency,” Lebot said.