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International Journal of Energy Science (IJES) Volume 4 Issue 1, February 2014 doi: 10.14355/ijes.2014.0401.08

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Energy Efficiency in Colombia: Trends and Challenges Clara Inés Pardo Martínez*1, William H. Alfonso Piña School of Administration University of Rosario Calle 12C No. 6-25, Bogotá Colombia Faculty of Science Policy and Government. Urban development and management – Ekística – Universidad del Rosario. Calle 12C No. 6-25, Bogotá Colombia *1

clara.pardo@urosario.edu.co; cipmusa@yahoo.com

Abstract Sustainable energy is important to achieve development and welfare of population because it is a key to analyse how the countries use their energy as an element that strengthens productive activities from environmental protection perspective. This study seeks to determine the progress in sustainable energy in Colombia for the last decade by analysing trends and challenges of energy efficiency through some indicators to establish results, achievements, gaps and barriers in the context of the institutional and policy framework. Results of this analysis demonstrated that Colombia has achieved significant advances in this field recognizing the need to increase energy efficiency especially in the power, industrial and transport sectors. Colombian government has formulated two regulations (Law 691/2001 and Decree 3683/2003) and PROURE program with Resolution 180919/2010 to implement various measures to promote energy efficiency. However, this country has to deal with several challenges in order to achieve a better use of energy that decreases environmental impacts whereas it strengthens economic growth and development. Keywords Sustainable Energy; Energy Efficiency; Energy Policy; Colombia

Introduction Energy is recognized as key factor to achieve sustainable development and poverty reduction because it affects all aspects of development (social, economic, and environmental) including access to water, agricultural and industrial productivity, health, population levels, education, and gender-related issues. To achieve the Millennium Development Goals (MDGs), it is necessary to improve the quality and quantity of energy services especially in developing countries (UNDP, 2013). United Nations, private and public sectors and civil society established a global initiative denominated Sustainable Energy for All that seeks to achieve three

objectives in 2030 as following: i. Energy access: Ensure universal access to modern energy services; ii. Energy efficiency: Double the global rate of improvement in energy efficiency; iii. Renewable energy: Double the share of renewable energy in the global energy mix, which contributes to economic growth, expansion equity and opportunity and environment protection for long-term welfare and prosperity (SEFA, 2013). This study analyses energy efficiency from Sustainable Energy for All initiative in the Colombian context taking intoa account that this country has achieved an strong and steady gross domestic product growth, the industrial sector has decreased energy intensity, mainly in the production of food, textiles, chemicals, parts and accessories for motor vehicles, iron and steel, and it is an environmental leader among countries with comparable incomes (WB, 2007, GTZ, 2003 and WEC, 2004), which allows defining and comparing key factors of energy performance and defining strategies to improve energy efficiency in the Latin American countries. Different researches have showed that the main strategy to decrease greenhouse gas emissions in the next twenty years is based on energy efficiency improvements (e.g., Vuurean et al., 2007, IPPC, 2007; Devezas et al., 2008), and after 2030, other strategies will be priority as fossil fuels are replaced with renewable energy (solar, wind) and bio-fuels for power generation and the projects of carbon capture and storage are underway. Furthermore, energy efficiency has become the first step to control and stabilise greenhouse gas concentrations at low levels because it is the most costeffective and fastest option. Hence, it slightly improves the energy system by reducing losses and overload; and it could reduce the investments in energy infrastructure; help mitigate energy price

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International Journal of Energy Science (IJES) Volume 4 Issue 1, February 2014

increases and volatility by easing short- and mediumterm imbalances between demand and supply; and it will also help reduce CO2 emissions and increase energy security. Additionally, energy efficiency offers non-energy benefits, such as reduction in operating costs; growth in productivity; improvements in product quality, capacity utilisation, and worker safety; waste reduction and pollution prevention (Boyd and Pan, 2000; UNF, 2007). With this background, this study seeks to determine energy efficiency trends and political strategies with the aim to evaluate the achievements in this field and taking into account Sustainable Energy for All initiative. This paper is organised as follows: Section 2 shows the energy and economic trends in Colombia; section 3 describes the main results of energy efficiency in Colombia; and the conclusions is presented in the last section. Energy and Economic Trends in Colombia Colombia’s primary energy mix shows that the main primary energy sources are the following: Coal (45%), Oil (37%) and Natural Gas (10%). In Colombia, the expected growth rates in renewable energy account for less than 1.6% annual (UPME, 2006) .

In 2011, Colombia’s GDP was $331.7 billion (current US$). The contribution of the mining and energy sector to GDP has increased in the last years on average in the last decade of 7% and it has been established as a stabilizer of internal and external income. Energy sector contributed to 22% of income tax in 2009; and 20% of total government revenue. Colombia has a system of subsidies for energy consumption for population groups of low-income households. In 2008, subsidies, contributions and contributions of the national general budget were around US$ 1,500,000 (UPME, 2010). Energy Efficiency in Colombia Colombian

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government

has

promulgated

two

In 2010, total primary energy supply was 1,587,100 TJ (UPME, 2010). Total GDP (current US$) in the same year was US$ 288,764 million (WB, 2013); corresponding to US$181,945 of GDP per TJ in 2010. The trends in GDP and energy consumption show a relative decoupling, although their trends are similar in the Colombian case. Fig. 1. shows energy consumption and GDP in Colombia. 10

10

8

8

6

6

4

4

2

2

0

0

-2

-2

-4

-4

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-6

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1975

Energy consumption growth rates

Since the 90s, the Colombian Government has modified its role as a main actor, in charge of resources administration, investor and almost absolute owner of the electric sector, toward a clear separation of the roles between investors and Government, in which the latter is responsible for policy making, regulating and exercising control, surveillance and to carry out the electric sector planning, regulatory for the transmission expansion and indicative for generation expansion (UPME, 2006) .

regulations (Law 691/2001 and Decree 3683/2003) and a program (PROURE) with Resolution 180919/2010 related with rational use of energy, energy efficiency and non- conventional energy sources. The main objectives of the PROURE program are the following: i. Decrease energy intensity, ii. Increase and improve energy efficiency in all sectors, and iii. To promote the use of non-conventional energy sources. These objectives are in function of identification of potentials and definition of energy-saving goals and participation of non-conventional sources and technologies in energy basket of the country. The main purpose of this program is to increase energy security according to demand, increasimg industrial productive especially in the energy intensive sectors, improvement of quality of life and decreasing greenhouse gas emissions. Moreover, the PROURE program includes sectorial subprograms for industry, households, transport and services (MEM, 2012).

GDP growth rates

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1981

1987

GDP

1993

1999

2005

2011

Energy consumption

FIG. 1 TRENDS OF ENERGY CONSUMPTION AND GDP IN COLOMBIA (Source: Based onDANE and UPME)

The industrial sector in Colombia consumed 159,901 TJ in 2010, which represented 33 percent of total electricity demand. The commercial sector in 2010 consumed 12,875 TJ, and accounted for 42 percent of total electricity demand (UPME, 2010). Based on PROURE, industrial sector has the following subprograms: optimization of electricity use for the driving force; optimization of boiler use; efficiency in illumination; energy integral management in the industry with an emphasis on cleaner production; cogeneration and auto-generation; rational use and


International Journal of Energy Science (IJES) Volume 4 Issue 1, February 2014

energy efficiency in small and medium enterprises (SMEs); optimization of combustion process; and optimization of the cold chain (MEM, 2012). According to Resolution 0186, for 2015 the energy saving goals for industrial sector are the following: electricity 3.43% and other energy sources 0.25%. For commercial and service sectors, PROURE program determined the following subprograms: diffusion, promotion and application of technologies and good practices in illumination systems, refrigeration and air-conditioning; design, construction, energy reconversion, and efficient and sustainable use of building; characterization, indicators management and technical assistance; and updating or technological conversion of public lighting (MEM, 2012). Households consumed 41 percent of electricity in Colombia in 2010; equal to a total consumption of 70,747 TJ in that year (UPME, 2011). PROURE program established the following sub-programs for this sector: substitution of incandescent light bulbs, energy efficiency in refrigeration equipment, airconditioning, and other electrical appliance; application of fuel-efficient stoves especially in rural zones; design, construction and efficient and sustainable use of households; and application of GLP in rural sector and marginal zones (MEM, 2012). The Colombian government through PROURE program and Resolution 180919/2010 established in Article 1 the goals of energy saving and efficiency for the industrial and transport sectors. Table 1 shows the goals of energy saving and efficiency (UPME, 2011). TABLE 1 THE GOALS OF ENERGY SAVING AND EFFICIENCY

Sector Industrial Transport

Goals of energy saving - 2015 Electricity 3.43% Other fuels 0.25% Other fuels 0.33% EFFICIENCY

Sub-program

Lines action Industrial Sector Optimization of electricity To promote the substitution of motors by high energy efficiency motors use for the driving force To promote the advantage of the Optimization of residual heat generated in the combustion process combustion process Transport Sector To promote the use of electric and Technology re-conversion hybrid vehicles in the mass transport of vehicle fleet system To mass the use of train Modes of transport To mass clean transportation systems

Government

intends

to

achieve

this

implementing sub-programs and lines action with the PROURE program according to Resolution 180919/ 2010 (see table 2). The rational use of energy is a matter of social, public and national interest, as pointed out by Law 697 of 2001-URE and Indicative Action Plan 2010-2015 to develop a program of Rational and Efficient Use of Energy and other forms of non-conventional energy– PROURE (GC, 2011). Conclusions Colombia Government has promulgated two regulations (Law 691/2001 and Decree 3683/2003) and a program (PROURE) with Resolution 180919/2010 related with rational use of energy, energy efficiency and non-conventional energy sources with the aim to implement measures and strategies for increasing the uptake of economically and commercially viable energy efficiency and technologies that improve welfare of population. The main barriers to apply and invest in energy efficiency are the following: i. Information and awareness. Lack of sufficient information on cost and benefits of sustainable energy technologies and projects. For example, business owners seek to improve productivity and reduce production costs and if the project is not cost effective, this will be the main barrier; ii. Regulatory and institutional. The regulations of energy prices are formulated into short-term, which impedes the investors to develop projects related with fuel substitution and energy efficiency. Further, the instability of regulations also limits the investments in energy projects. ACKNOWLEDGMENT

TABLE 2 THE SUB-PROGRAMS AND LINES ACTION FOR ENERGY

The

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The author is grateful for the support provided by University of Rosario. Any remaining errors are the responsibility of the author. REFERENCES

Boyd G., Pan J. Estimating the linkage between energy efficiency and productivity. Energy policy 28 (2000): 289296. Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ). “Relationship between energy efficiency and economic development”. Report 2003. Devezas T., LePoire D., Matias J., Silva A. Energy scenarios: Toward a new energy paradigm. Futures 40 (2008): 1–16.

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International Journal of Energy Science (IJES) Volume 4 Issue 1, February 2014

Government of Colombia (GB). “Policy elements for application of ”. 2011. p. 10. Intergovernmental

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sources.worldbank.org/DATASTATISTICS/Resources/lac _wdi.pdf World Bank (WB). World Bank Data. Accessed January, 30, 2013. World Energy Council (WEC). “Energy Efficiency: A Worldwide Report. Indicators, Policies, Evaluation”.

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Accessed April, 27, 2012. www.worldenergy.com Clara Pardo has 12 years professional experience working as professor in several Colombian Universities, as consultant of different private and public sectors in topics related to HSEQ management systems with the International standards ISO 9001, ISO 14001 and OHSAS 18001, energy management systems ISO 50001 and cleaner production (this includes the design, development, implementation and audit of the management system, development of training in management systems) and as researcher in the Wuppertal Institute (whit research focus on energy efficiency in the manufacturing industries using econometric analysis with the following software Eviews, Stata, SPSS and EMS). She has several publications and is also a referee for different international journals. She is Environmental and Sanitary Engineering, M.A. in Administration, PhD in Economics, University of Wuppertal, Germany and Post-doctoral researcher in KTH, Sweden on energy policies in industrial sector William Alfonso is Architect, graduated from the Universidad Nacional de Colombia, with intensification of Architectural Design and Environmental Aspects, Master in Architectural Theory at the university, obtained meritorious research theses Urban Environmental Management Specialist, UPC. The professional performance experience has been oriented toward the management and research in land use, environment, public space and heritage as well as in the coordination and development of urban and environmental studies. The research and teaching activities in urban planning, environmental aspects, Theory and history of architecture, have focused on issues related to the processes of development and urban planning, sustainable development, city theory, urban culture, semiotics, research techniques, architectural and artistic styles, among others.


Energy Efficiency in Colombia: Trends and Challenges