Energy Efficiency in Arab World: Key Findings of Arab Future Energy Index 2017

energy-efficiency-uaeEnergy efficiency is the most cost effective means of reducing the energy intensity of the economy and promoting a low-carbon future in the Arab world. Energy efficiency further helps Arab states meet their SDGs on combating climate change and its impacts (SDG13), as it cuts down on GHG emissions resulting from excessive and inefficient consumption of energy.

Energy efficiency improvements can save governments, companies, and citizens billions of dollars in the Arab region from reduced energy bills, while at the same time quickly reducing carbon footprints – a win-win solution. Many countries in the region are now moving ahead with new laws, policies, and regulations to improve energy consumption but much more needs to be done to accelerate results and achieve SDG 7 on sustainable energy.

Arab Future Energy Index

The Arab Future Energy Index provides a detailed overview on the progress of 20 Arab countries in their transition toward an efficient energy market post recent plunges in oil prices and economic turmoil in the region. The 2017 AFEX report uses over 30 indicators to rank Arab countries on progress made to achieve energy efficiency targets based on regulatory and institutional structures, financial innovations, policy frameworks and public and private investments. AFEX rankings show important trends and emerging pathways to a low-carbon, sustainable energy future in the region.

AFEX Energy Efficiency Results 2017

Arab countries’ commitment to increase energy efficiency through their various adopted or planned energy efficiency strategies and National Energy Efficiency Action Plans (NEEAPs) demonstrate their commitment to the UN’s SDG on energy (SDG7) that calls for global affordable, sustainable, and reliable access to clean and modern energy sources.

The 2017 AFEX report monitors Arab countries’ progress in fostering energy efficiency initiatives and strategies in line with established UN SDGs. As of 2017, fifteen out of twenty Arab states studied in the AFEX have developed a national energy efficiency plan that articulates both short term and long term strategies to set state level policy goals for reducing energy consumption as well as to establish and implement effective EE initiatives and programs.

Several Arab countries have spelled out their energy efficiency policies in national plans, such as Saudi Arabia, Morocco, Kuwait, and Tunisia. Many other Arab countries, however, have developed National Energy Efficiency Action Plans (NEEAPs), based on the Arab Energy Efficiency Guideline issued by the Arab Ministerial Council for Electricity (AMCE).

RCREEE was mandated by the AMCE to monitor the qualitative progress and quantitative impact of NEEAPs and publish its findings in regular annual reports. Several Arab countries have evaluated their first NEEAP and are currently developing their second NEEAP, building on lessons learned from previous plans. Lebanon, taking a significant step forward, has evaluated its first NEEAP (2011– 2015) and in 2016 adopted its second NEEAP (2016–2020).

Energy Efficiency in Arab Region – Key Findings

In general, electricity and fuel prices in the Arab region remain well below the global average, as most Arab countries have spent significant portions of their GDPs on providing subsidies for electricity and fuel, resulting in a financial burden for these countries, namely after the 2014 drop in oil prices. These low prices of energy have greatly affected the level of energy consumption in the region leading to extremely high energy intensities and electricity consumption per capita.

Furthermore, the high level of energy subsidies implemented in the region, greatly hinders any incentive at the consumer side to reduce their energy consumption and invest in energy efficient technologies. Nonetheless, the recent drops in oil prices has, in part, encouraged Arab countries to undertake various reform actions and make progress in reducing their energy subsidies.

The region witnessed an unprecedented wave of energy subsidy reforms as multiple Arab countries namely, Bahrain, Egypt, Jordan, Kuwait, Oman, Sudan, Syria, Tunisia, and the UAE have enacted policies to reduce electricity subsidies and increase fuel prices. Although these reforms were more significant in some countries than others, electricity and fuel prices remain well below the global average in most Arab countries.

The region continues to witness progress in implementing policies to phase out inefficient lighting, which is exigent as lighting is responsible for nearly 34% of electricity consumption in the Arab region. Many countries’ energy efficiency plans have provided financial incentives for end users to switch to more efficient lighting, for example CFL or LED, or enacted bans on the sale of incandescent light bulbs.

Although various Arab countries have adopted legislation and energy efficiency measures relating to appliances’ energy standards and labeling namely for air conditioners and refrigerators, these standards and labels still lack adequate enforcement and diversification to include a wider range of appliances.

Arab country’s still need to further develop and implement energy efficiency regulation, initiatives, and programs to reduce energy consumption in the transportation sector as it is responsible for around 30% of final energy consumption in the region. Although various countries such as Algeria, Egypt, Jordan, Qatar, Saudi Arabia, Tunisia and the UAE have ongoing or planned programs to improve public transportation, the national energy strategies of most Arab countries do not include energy reduction targets or reforms for the transportation sector. For example, tax reductions on hybrid cars, the enforcement of vehicle emissions regulations, and the promotion of public transport are notably absent.

Implementing national energy efficiency strategies hinges on stable sources of financing and legislation, and many Arab countries could improve on energy efficiency funding and legislation. Most Arab countries lack a dedicated energy efficiency agency within governmental bodies to regulate and set energy policy.

In many Arab countries energy efficiency agencies are dispersed amongst different ministries and institutions, making it challenging to develop and enforce effective policies. Moreover, some Arab countries lack energy efficiency regulatory bodies all together. The increasing availability of funding for energy efficiency initiatives has seen a positive move in recent years to expand the EE market and develop EE projects in various sectors such as the Green Environment Financing Facility (GEFF) in Egypt, the Jordanian Renewable Energy and Energy Efficiency Fund (JREEEF), the Dubai Green Fund, and the National Energy Efficiency and Renewable Energy Action (NEEREA) in Lebanon.

Conclusion

By developing and enforcing more effective energy efficiency policies, providing stable sources of finance for initiatives that improve energy efficiency, and taking decisive measures to remove energy subsidies, Arab countries can significantly improve their energy efficiency, and reduce their energy intensities. Such measures will save Arab countries large portions of their GDP and will cut down their energy bills, as well as help the region fight climate change and maintain its commitment to the UN’s Sustainable Development Goals and their Nationally Determined Contributions.

Note: The complete AFEX 2017 report can be downloaded from this link

About Regional Center for Renewable Energy and Energy Efficiency (RCREEE)

The Regional Center for Renewable Energy and Energy Efficiency (RCREEE) is an intergovernmental organization with diplomatic status that aims to enable and increase the adoption of renewable energy and energy efficiency practices in the Arab region. RCREEE teams with regional governments and global organizations to initiate and lead clean energy policy dialogues, strategies, technologies and capacity development in order to increase Arab states’ share of tomorrow’s energy. Having today 17 Arab countries among its members, RCREEE strives to lead renewable energy and energy efficiency initiatives and expertise in all Arab states based on five core strategic impact areas: facts and figures, policies, people, institutions, and finance.
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