Helping Cities Improve Services, Enhance Competitiveness, Achieve Cost Savings, and Reduce Environmental Impacts through Energy Efficiency
Urbanization is a cornerstone of sustainable development. Currently, more than half of all people live in an urban area. By 2050, the share of the world’s urban population will increase to 64 percent, with 94 percent of that increase occurring in developing countries.
Rapid urbanization, however, has led to massive demand for energy to power economic activity, expand basic infrastructure, and deliver municipal services. Cities now consume about two-thirds of the world’s energy, and are responsible for about 70 percent of the world’s GHG emissions. Energy efficiency can play a key role in helping meet growing energy demand in cities; it can offer practical, cost-effective solutions to expand and improve urban services, while contributing to cities’ efforts to be more competitive and address climate change.
Additionally, much of the growing population of developing country cities is poor—nearly one-quarter of the urban population lived on less than US$1.90 a day in 2012. Energy efficiency can also free up resources to improve services to the urban poor.
In 2014, the World Bank launched the City Energy Efficiency Transformation Initiative (CEETI) - a technical assistance program with an initial budget of US$9 million. Led by the World Bank’s Energy Sector Management Assistance Program (ESMAP), the initiative provides support to help identify, develop, and mobilize financing for transformational investment programs in urban energy efficiency. Its activities include: (i) financial and technical support; (ii) capacity building and e-learning; and (iii) knowledge creation and exchange.
The initiative builds on ESMAP’s extensive work on urban energy efficiency, including support towards city energy diagnostics conducted with ESMAP’s Tool for Rapid Assessment of City Energy (TRACE) in nearly 70 cities to help quickly identify potential energy efficiency improvements, target underperforming sectors, and prioritize interventions. Other efforts include knowledge products on various urban energy efficiency topics and issues, as well as technical assistance on improvements in water systems (Uruguay), city energy diagnostics and pre-feasibility studies in buildings and public lighting (Rio de Janeiro), financing of energy efficiency recommendations (Gaziantep), building retrofits (Shanghai), and landfill gas recovery (Tianjin).
Under the initiative, cross-sectoral teams from across the World Bank Group work hand-in-hand with local and national governments to provide:
- Diagnostics and assessments of city energy use and energy efficiency potential
- Advice on policy, regulatory, and institutional reforms
- Training and capacity building to enhance understanding of urban energy efficiency and its delivery
- Knowledge exchanges to share and disseminate experiences and good practices
- Development of energy efficiency investment programs and support for project preparation
To further broaden CEETI’s reach, a public e-learning course is being finalized, featuring different municipal sectors where energy plays an important role (e.g., public lighting, water supply). In addition, an Energy Efficiency Project Resource Center has been developed, in cooperation with Energypedia, to provide practitioners from around the world with documents not widely available or easily accessible (e.g., sample terms of reference, contracts, surveys, and questionnaires; examples of economic and financial analysis; training material; methodologies and protocols; case studies). Additional knowledge products range from Mayoral Guidance Notes on urban energy efficiency, to lessons learned from city energy diagnostics, and to insights from public lighting project experiences.
Through grant allocations, CEETI is supporting technical assistance work in nearly 35 cities in Brazil, China, Egypt, Indonesia, Jamaica, Kyrgyz Republic, Macedonia, Mexico, Morocco, South Africa, Turkey, Ukraine and Uzbekistan. These programs cover a broad spectrum of urban sectors including: public lighting, water and wastewater, buildings, power and heat, waste management, industry, and transportation. Together, these programs will contribute to transformational impacts in cities’ energy use and to their sustainable development.
- BRAZIL. ESMAP support began with energy efficiency prioritization in Belo Horizonte and Rio de Janeiro, resulting in focused efforts on the public lighting and buildings sectors. In the public lighting sector, pre-feasibility studies encouraged both cities to structure LED lighting programs. Belo Horizonte is in the process of implementing a public-private partnership to replace all 178,000 lighting points with LEDs, and Rio de Janeiro has included the LED lighting project in its 2017 plans after the Olympics. Efficient public lighting is now being expanded to 300 other cities in Brazil. In the buildings sector, ESMAP support is focused on 2,000 schools in Rio de Janeiro and Belo Horizonte where pre-feasibility studies are examining rooftop solar panels combined with energy efficiency measures inside schools.
- MEXICO. ESMAP supported city energy diagnostics in Puebla and Leon, which has been expanded to 30 other municipalities across Mexico. With this foundation, the Energy Ministry (SENER), with help from the Bank, is putting in place the first national program financing the design and implementation of municipal energy efficiency investments in Mexican cities (with USD100 million World Bank loan). ESMAP now supports detailed energy audits in the three energy-using municipal sectors targeted by the program (street lighting; municipal buildings; and water and wastewater) in six municipalities.
- IFC’s EDGE Green Building Market Transformation Program (www.edgebuildings.com). ESMAP supports EDGE’s global knowledge infrastructure (i.e., certification and governance protocols, software design tool, training materials, a global IT platform), and implementation of a voluntary green building certification system in South Africa. The EDGE Program is expected to achieve within seven years: GHG reductions of 14 million tCO2e per year; US$150 billion green investment catalyzed; and annual energy savings of 21,400 GWh and water savings of 129 million m3.
- UKRAINE. ESMAP performed city-level energy diagnostics (with TRACE) to develop investment priorities in Kiev, Ternopil, Kamianets-Podilskyi and Zaporizhia. Public buildings were prioritized for pre-feasibility studies and financial analyses in these cities. As a follow-up measure, the Association of Energy Efficient Cities of Ukraine agreed to train 50 to 60 city representatives in deploying TRACE. Additionally, the World Bank supported the City of Ternopil in establishing a local ESCO and a revolving energy efficiency fund following recent legislative changes.
- Kyrgyz Republic. Energy efficiency assessments were performed in four cities to inform municipal energy savings plans and development of a USD 14 m investment for seismic and energy efficient retrofit of schools, street lighting, water pumps and waste collection equipment. In the framework of the project capacity of local construction companies was increased to perform energy efficiency retrofits.
Building on its first 3-years of experience, CEETI enters a new phase and is being re-structured to better respond to current and emerging needs and priorities. CEETI will be constituted of 2 complementary pillars:
- Energy Efficient Services Project Preparation Facility will provide grants and technical support for client engagement, project identification, project preparation and implementation support
- Efficient and Sustainable Buildings Program will target a growing sector that is responsible for 1/3 of global energy use and GHG emissions and provide support to upstream and downstream activities enabling the integration of sustainable energy components into how buildings are designed and constructed, how they are retrofitted, how they use energy and where they are located. It will (i) provide grants for technical assistance for client dialogues, pipeline development, as well as just-in-time policy advice and analysis; and (ii) develop knowledge products and facilitate knowledge exchange.
About the World Bank Group and Sustainable Urban Development
ESMAP's City Energy Efficiency Transformation Initiative is part of a broader World Bank Group effort to support cities plan and finance sustainable urban development, which also includes the Low Carbon and Livable Cities (LC2) initiative. LC2 offers a comprehensive package of support that targets climate-smart urban development, and can help cities tap their full emissions reduction potential. Working together, the Bank programs offer a full range of solutions for cities. For example, in the Rio de Janeiro Low Carbon City Development Program, ESMAP’s TRACE was used to identify two potential energy efficiency investments: efficient street lighting using LEDs and energy efficiency retrofits to municipal buildings, such as schools and hospitals. Going forward, ESMAP’s City Energy Efficiency Transformation Initiative will provide technical assistance for the implementation of the energy efficiency portfolio under Rio’s Low-Carbon City Development Program.