Climate change is a serious concern, its impacts are having consequences on people’s lives and disrupting economies. However, the affordable, scalable solutions to leapfrog to cleaner and more resilient economies are available now. Accelerating the shift to renewable energy sources and improving energy efficiency can play a crucial role.
The progress is there…
Since 2010, many countries from Southeast Europe, Eastern Europe and Central Asia (1) have made significant progress to promote Energy Efficiency (EE) and Renewable Energy (RE).
In the policy area, those countries progressed in the adoption of (and amendments to) the laws on EE and RE, energy development strategies, dedicated national action plans and promulgation of the secondary legislation. The member countries of the European Union transposed the EU Directives’ provisions into their national laws to ensure major energy savings for both consumers and industries. The member countries of the Energy Community (2) have made legally binding commitments to adopt EU energy legislation, which boosted the development of their policy and regulatory frameworks. The dedicated energy agencies have been established in many countries.
Progress was also made in the capacity building process to promote EE and RE investments. National and local authorities, project developers and owners as well as financial institutions gained knowledge on new technologies, new financial instruments and ways to attract investments in EE and RE. The capacities of public institutions and the private sector regarding financial assessment and bankability conditions were increased.
Furthermore, the countries from Southeast Europe, Eastern Europe and Central Asia developed and introduced best practices in policy, project development, best approaches to investments into EE and RE and innovative financing mechanisms.
However the progress is uneven
Energy intensity of those countries remain high. This indicator measures the energy inefficiency of a country’s economy and is calculated as units of energy per unit of GDP. Some reductions in energy intensity have been made in recent years. For example, in Southeast Europe, it declined from 5.0 to 4.6 MJ/USD of GDP from 2010 to 2014. However, it is significantly higher in Eastern Europe and Central Asia, reaching 7.2 MJ/USD with major differences between countries.
Those regions also have tremendous untapped renewable energy potential. So far, RE sources contributed to only 11% of the total final consumption in the UNECE region (3), with exclusion of large hydropower energy. The progress rate, however, significantly differs in the sub-regional context. For example, Southeast Europe reached 26% of RE share. In contrast, a much lower level is seen in other countries: 3.5% in the Russian Federation, 5.2% in Eastern Europe and 7.4% in Central Asia.
A series of gaps in the existing frameworks and environment still remain to further promote EE and RE investments. For example, energy subsidies persist in many countries of Southeast Europe, Eastern Europe and Central Asia. This discourages investment because energy tariffs remain below cost-recovery levels and do not provide investors with the opportunity to recoup their investment. Commercial financing still lacks incentives. In some countries, the investments are still mainly driven by international donors and development banks in the form of debt financing or grants.
The gaps persist in education and awareness raising to promote EE and RE projects. Countries still require additional capacity building activities, such as assistance in implementation of projects, preparation of project design documentation, assistance to participants in the energy management system, popularisation of EE and RE policies and opportunities for the general public.
Comprehensive policy, legislative and regulatory frameworks will help countries to promote EE and RE. Policy-makers should focus on development and subsequent enforcement of the secondary legislation. Dedicated governmental agencies are needed to ensure the implementation of energy policy, improvements in EE and increased uptake of RE.
Development and implementation of dedicated policies should be coordinated at the national, regional and local levels. Furthermore, participation of all stakeholders (policy-makers, business community, financial institutions, academia, and civil society) would be crucial in the formulation of EE and RE policies to achieve consensus and facilitate implementation of policies.
Further improvements in climate investment for EE and RE projects are required. The special efforts to attract investments should be a focus for governments together with introducing non-distorting incentive schemes (financial and non-financial) for such investments.
Energy subsidies discourage EE and RE investments, do not provide investors with expected returns on investment and thus need to be eliminated (while addressing energy poverty and ensuring that vulnerable segments of population have access to affordable and clean energy).
Awareness of EE and RE opportunities should be a priority for authorities to address obstacles.
Information exchange activities, trainings, public campaigns and implementation of pilot projects could increase public awareness of EE measures and use of RE.
- This article is based on a UNECE research “Progress in the Areas of Energy Efficiency and Renewable Energy in Selected countries of the UNECE Region”, covering the following countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, North Macedonia, Serbia, Belarus, Republic of Moldova, Russian Federation, Ukraine, and Kazakhstan.
- The Energy Community is an international organisation which brings together the European Union and its neighbours to create an integrated pan-European energy market.
- The UNECE region includes the countries of Europe, North America (Canada and United States), Central Asia and Western Asia (Israel).
NADEJDA KHAMRAKULOVA, DPP’15
Climate Change and Sustainable Development Consultant, United Nations