Effective energy efficiency policy implementation targeting "new Modern Energy CONsumers" in the Greater Mekong Sub-region (MECON)

Lead Research Organisation: University College London
Department Name: Bartlett Sch of Env, Energy & Resources

Abstract

Energy efficiency improvements offer multiple benefits, such as reduced household energy expenditure and improved productivity, thus contributing to economic growth. Getting more from existing resources due to increased energy efficiency (EE) also results in reduction in greenhouse gas (GHG) emissions and enhanced energy security. For developing countries, EE could make modern energy services available at a faster pace and at lower costs to those who currently lack access to electricity. This research will investigate EE amongst "New Modern Energy Consumers" in the Greater Mekong Sub-region (also known as GMS: Cambodia, Laos, Myanmar, Thailand, and Vietnam) in order to improve policy design and implementation of EE measures. New modern energy consumers, i.e. those who are connected to the electricity grid with daily incomes of US$ 2 to 5, are expected to account for a large share of the expected increase in energy demand and thus GHG emissions. However, this target group does not exist in OECD countries and there are therefore few examples of EE policies that can be replicated and/ or adapted to the GMS, yet this target group will be essential to economic development in the region over the coming decades. Furthermore, effective implementation of energy policies remains a key challenge in GMS and other countries of the developing world.
MECON aims to improve our understanding of the opportunities and barriers to increasing EE amongst new modern energy consumers in the GMS. The research will establish a robust evidence base on energy use, EE technologies and policies in the region and will focus on the energy resources and technologies that are used by new modern energy consumers, including household electricity use for lighting, heating, cooling, and appliances, as well as fuels for cooking and personal transport, such as motorbikes. The research will contribute to knowledge on the design and implementation of EE policy by looking at the opportunities and barriers from technological, socio-economic and institutional perspectives. In so doing, MECON will contribute to higher income levels for new modern energy consumers, since reduced household expenditures on energy through enhanced EE will enable these consumers to focus on other needs.
An equally important objective of the research programme will be the enhancement of research capacity in GMS countries in the area of energy, EE and climate change. This will include the development of research links and networks at the international, regional and national level. The participation and dissemination of the research results to a range of stakeholders from government, the private sector, NGOs and academia will therefore be a critical component of MECON.
The research is timely since energy demand is expected to increase rapidly over the coming decades, particularly in Asia and in large part as a result of energy consumption from new modern energy consumers. Targeting this important consumer group will have positive development outcomes on household economies, national energy demand and on GHG emissions. This research will also assist the countries of the GMS - Cambodia, Laos, Myanmar, Thailand and Vietnam - to realise sustainable energy access for all rapidly and cost effectively, whilst reducing the environmental impacts of this increased demand.
Project partners:
Dr. Milou Beerepoot (Scientific lead), Joint graduate School of Energy and Environment (JGSEE), Thailand
Dr. Pham Hoang Luong, Hanoi University of Science and Technology (HUST), Vietnam
Dr. Sok Kunthy, Royal University of Agriculture (RUA), Cambodia
Mr. Aung Thet Paing, Myanmar Engineering Society (MES), Myanmar
Dr. Khamphone Nanthavong, National University Of Laos (NUOL), Laos

Planned Impact

Energy efficiency (EE) has long been highlighted as critical to help meet substantial growth in energy demand. EE offers a number of benefits including: reduced household expenditure on energy; reduced energy demand; greenhouse gas emission reductions; and reduced dependence on imported fossil fuels and thus enhanced energy security at the national level. By drawing together existing research and data on energy efficiency in the Greater Mekong Sub-region (GMS), MECON will identify and seek to fill existing gaps in the knowledge. Building upon this sound evidence base, MECON will develop locally-appropriate energy efficiency policies, specifically aimed at new modern energy consumers.
Several stakeholder groups will benefit both directly and indirectly, from the results of the research. First and foremost, governments of the GMS will gain new insights into the ways in which EE may be realised. MECON will adopt a holistic, multi-disciplinary approach that will combine several perspectives and data sources, including existing energy data, available EE technologies, socio-economic conditions and institutional arrangements. This holistic approach will be translated into recommendations for locally-appropriate policy design and implementation for promoting EE particularly amongst new modern energy consumers in the GMS. Policy-relevant insights will address both the policies required to address a range of technical and non-technical barriers, as well as the institutional challenges.
Secondly, new modern energy consumers i.e. those who are connected to the electricity grid, but who have low daily incomes (US$2-5) will benefit from more targeted policies to promote EE. For example, the introduction of specific investment incentives for new modern energy consumers, which may include greater access to finance through micro-finance energy service companies (ESCOs) or loans and/ or specific tools to addressing "energy literacy", such as guidance in reading energy labels, will enable these energy consumers to make more informed decisions about energy use and EE. Reduced expenditure on household energy needs will free up income for other needs, such as education and income generating activities.
Thirdly, companies involved in the supply chain for household EE technologies, as well as service providers, such as ESCOs and banks, will benefit from the research. The establishment of a robust evidence base on household energy use, behaviours, opportunities and barriers to acceptance of EE technologies will enable these actors to develop more targeted interventions. In addition, this evidence base will be of use for the future creation of an internal ASEAN market (the ASEAN Economic Community/AEC), particularly the commercial sector in EE technologies.
Finally, this project will strengthen existing capacity amongst the project team. It will also promote research links, networks and knowledge transfer amongst project partners, and other researchers in the UK and GMS countries - Myanmar, Thailand, Vietnam, Cambodia and Laos. Being a project funded by the EPSRC, DECC and DFID will facilitate knowledge transfer and dissemination of the project outcomes, while the knowledge generated by MECON will provide a valuable resource for UK and GMS researchers. MECON is a multi-disciplinary project, drawing on a range of disciplines (e.g. science and technology studies, energy policy, innovation studies, economics, energy for development, engineering etc.) whose members have substantial expertise in energy research in the GMS. This research will also contribute to the career and skills development of all named researchers, and associated PhD researchers at UCL, JGSEE, NUOL, MES, HUST and RUA.
 
Description The MECON research project investigated how to increase energy efficiency amongst "New Modern Energy CONsumers (MECON households)". The MECON households are currently low-income but are on the verge of becoming middle income, with the resulting increase in household energy consumption. By influencing the MECON households with information on energy efficiency and possibly with financial incentives, these households will be likely to buy more energy efficient equipment at the moment they start to have higher incomes which is the common trend in the GMS region.

Key findings
The uptake of EE technologies amongst the MECON households can be increased by raising more awareness for the (Thai) "Energy Label 5", e.g. by means of communication campaigns but also by additional information on the label itself (e.g. with QR codes?).
The provision of alternative, low cost access to finance may provide a potential solution to the financial barriers faced by (low income) households for higher costs of EE investments, e.g. by means of innovative financial models such as "on-bill finance" (via utility bill) or "microfinance" models.
As small appliances can consume more electricity than large appliances (due to longer hours, more items), policy makers should not neglect small appliances for energy efficiency policy development. One possibility is to focus on one or a few appliances responsible for large share of energy consumption.
Support for phasing out of less efficient forms of lighting presents a good opportunity for policymakers to drive energy efficiency in households.
Given the flow of household appliances between the GMS countries, this presents an opportunity for international collaboration, which would establish regional energy efficiency standards and labeling programs.
Retailers may need more education on energy efficiency in general and energy efficient household products in particular. Training and education could be offered by producers or by parties distributing energy labels.
More dialogue between producers, wholesalers and retailers could ease the bottlenecks in availability of energy efficient appliances in small retail shops, especially in rural and remote areas.
The national stakeholder consultation workshops revealed that the GMS countries to a large extent face similar barriers to encouraging energy efficiency among low-income households: lack of awareness, financial barriers and lack of minimum energy standards.
Although the GMS countries have many barriers and possible policy solutions in common, country specific barriers were found in Myanmar, where sometimes lump sum electricity pricing is the impediment toward energy efficient behaviour, and where voltage volatility reduces appliances' lifetime and increases financial risk, and in Laos, where Thailand's Energy Label 5 seems widely spread, but a part of these were found to be fake labels.
Possible policy solutions discussed in the national stakeholder consultation workshops concentrated on the one hand on awareness raising by means of energy labels, information campaigns and education packages, the latter both for consumers as well as for retailers. On the other hand, financial aid by means of direct subsidy, possibly distributed via the retailer, was mentioned. Mandatory approaches discussed consisted of Minimum Energy Performance Standards (MEPS) for appliances.



Selected key findings of the MECON project
• There are potential to reduce electricity consumptions by energy efficiency improvements in all countries. In 2030, energy efficiency can reduce modern energy consumers' energy consumptions by 17% (Laos) and 38% (Myanmar) in high energy efficiency scenarios compared to that of BAU scenario
• Light bulbs are the low-hanging fruits.
• As small appliances can consume more electricity than large appliances (due to longer hours, more items), policy makers should not neglect small appliances for energy efficiency policy development.
• Support for phasing out of less efficient forms of lighting presents a good opportunity for policymakers to drive energy efficiency in households.
• Given the flow of household appliances between the GMS countries, this presents an opportunity for international collaboration, which would establish regional energy efficiency standards and labeling programs.
The national stakeholder consultation workshops revealed that the GMS countries to a large extent face similar barriers to encouraging energy efficiency among low-income households: lack of awareness, financial barriers and lack of minimum energy standards.
• country specific barriers were found in Myanmar, where sometimes lump sum electricity pricing is the impediment toward energy efficient behavior, and where voltage volatility reduces appliances' lifetime and increases financial risk, and in Laos, where Thailand's Energy Label 5 seems widely spread, but a part of these were found to be fake labels.
• Possible policy solutions discussed in the national stakeholder consultation workshops concentrated on the one hand on awareness raising by means of energy labels, information campaigns and education packages, the latter both for consumers as well as for retailers.
• On the other hand, financial aid by means of direct subsidy, possibly distributed via the retailer, was mentioned.
• Mandatory approaches discussed consisted of Minimum Energy Performance Standards (MEPS) for appliances.
• The provision of alternative, low cost access to finance may provide a potential solution to the financial barriers faced by (low income) households for higher costs of EE investments, e.g. by means of innovative financial models such as "on-bill finance" (via utility bill) or "microfinance" models.
Exploitation Route The key findings were presented at the final international dissemination workshop in Bangkok. Policy makers, academics and other stakeholders from all five participating countries in the Greater Mekong Region were invited to the workshop. Delegates from international organisation such as UNDP, UNESCAP, ASEAN Energy Centre were also invited to the workshop. policy briefings were also presented and distributed at the workshop. The project findings might be used by policy makers in the GMS countries to design energy policies in addition to the use of findings in further research by academics in the region.
Recently (May 2019), the key findings were used to conduct a rapid policy responsive workshop in Myanmar and also to prepare policy brief titled "Developing a set of policy recommendations to assist the promotion of residential energy efficiency programmes in Myanmar" prepared for the Energy Efficiency and Conservation Division (EE&CD) of the Myanmar Government Ministry of Industry.
Sectors Energy

URL http://meconproject.com
 
Description Leapfrogging Myanmar's Market to High Efficiency Lighting and Appliances. This is a program supported by GEF and the implementing agency in Myanmar is the Ministry of Industry, Energy Efficiency and Conservation Division (EECD). In 2017, MECON project findings were provided to this initiative. This project explicitly focused on energy efficient lighting. One of the MECON findings and recommendations is that lighting are the low hanging fruits. Laos: Results of MECON have had some influences on National policy for Energy efficiency and Energy Conservation, as well as recently drafted Prime Minister's Decree on EE&C, National road maps for ASEAN integration of Air conditioning standards (under ASEAN SHINE program), where residential sector with its appliances were considered among the designated sectors.
First Year Of Impact 2017
Sector Energy
 
Description Membership of UNIDO steering committee: Aung Thet Paing
Geographic Reach National 
Policy Influence Type Participation in a advisory committee
 
Title Task 1. LEAP modelling 
Description Under Task 1. each of the project partners have developed a LEAP model to assess the current energy situation and project the effect on energy demand of the new modern energy consumers in their country 
Type Of Material Computer model/algorithm 
Provided To Others? No  
Impact Building modelling capacity of the project partners 
 
Title Task 2: Technological survey 
Description Under Task 2 each of the project partners carried out a market survey with retailers and distributors of electrical applicances. 
Type Of Material Database/Collection of data 
Provided To Others? No  
Impact Ongoing 
 
Title Task 3: Household survey 
Description Under Task 3, each of the project partners carried out a socio-economic survey. The survey was carried out with 1,600 households in the GMS and has obtained data on household energy consumption and energy efficiency amongst new modern energy consumers 
Type Of Material Database/Collection of data 
Provided To Others? No  
Impact Ongoing 
 
Description International Dissemination Workshop 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact A dissemination workshop was held in Bangkok on 17 September 2015 to share the project results with relevant stakeholders. Around 80 participants from across South East Asia and the UK attended. For each partner country (Cambodia, Myanmar, Lao PDR, Thailand and Vietnam) representatives from the government ministry responsible for energy efficiency attended, as well as representatives of international organizations such as the ASEAN Centre for Energy.
Year(s) Of Engagement Activity 2015
 
Description Stakeholder engagement: Cambodia 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Two stakeholder workshops were held in Cambodia over the duration of the MECON project. A range of stakeholders from relevant government ministries, and the private sector were invited to participate. In the first of these one day workshops, the challenges and opportunities for EE in Cambodia were discussed, and 57 participants attended from government, academia and the private sector. The second workshop was held in September 2015 and aimed to disseminate the outcomes of the project; 37 participants attended. The workshop was broadcast on national TV.
Year(s) Of Engagement Activity 2014,2015
 
Description Stakeholder engagement: Lao PDR 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact The first Lao stakeholder workshop was jointly organized with the Institute of Renewable Energy Promotion (Ministry of Energy and Mines) and Faculty of Engineering (National University of Laos), 08 August 2014, Donechanh Palace Hotel, Vientiane, Lao PDR. MECON NUOL project team provided full funding support. 36 participants attended: 17- Government agencies, 5- Private sector, 5-households, 4-NUOL, 4-MECON NUOL project team and 1- representative of MECON project management (JGSEE).
At the second stakeholder workshop was jointly organized by the Faculty of Engineering (National University of Laos) and the Institute of Renewable Energy Promotion (Ministry of Energy and Mines), 25 September 2015, Sokpaluang campus, Faculty of Engineering (NUOL), Vientiane, Lao PDR. MECON NUOL project team provided full funding support. There were a total of 42 participants: 13- Government agencies, 3- Private sector, 21-NUOL, 4-MECON NUOL project team and 1- representative of MECON project management (JGSEE)
Year(s) Of Engagement Activity 2014,2015
 
Description Stakeholder engagement: Myanmar 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Two stakeholder workshops were held. The first was held in October 2014 and had 37 participants from across government, the private and NGO sector. This workshop focused on disseminating and getting feedback on the outputs of the first 18 months of the project. The second workshop was held in October 2015, and had 28 participants including from the Ministry of Industry, Ministry of Science and Technology, Ministry of Environmental Conservation and Forestry, Yangon Technological University, Myanmar Engineering Society, Renewable Energy Association Myanmar, United Nations Industrial Development Organization (UNIDO), Electrical and Electronic Appliance retailers, Households personnel and MECON researchers
Year(s) Of Engagement Activity 2014,2015
 
Description Stakeholder engagement: Thailand 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact A first stakeholder workshop was held on 16 September 2014. This meeting invited 30 local stakeholders in Thailand from government agencies, private sector, universities, research institutes, and NGOs to discuss on the project's intermediate results.
Year(s) Of Engagement Activity 2014,2015
 
Description Stakeholder engagement: Vietnam 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Type Of Presentation workshop facilitator
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Within the MECON project, HUST organised two stakeholder workshops in Hanoi. The first one was in November 2013 to have a discussion with policy-makers, energy researchers, energy technology producers and end-users about Vietnam's current energy situation and energy policies. The last session of this workshop was for LEAP model training and Vietnam's team acted as a facilitator. The second workshop was in September 2015 to disseminate the MECON project results and MEKONG region's experiences in implementing energy efficiency policies towards low-income households. Many policy-makers from Energy Saving Department, Ministry of Industry and Trade (MOIT) and Strategic and Policy Institute for Science and Technology, Ministry of Science and Technology (MOST), researchers from HUST, University of Electricity and NGOs, energy technology producers, such as Bach Khoa Holdings and Ralaco participated in the event to share their views on how to realise what has gained from the MECON project.

1. Raising awareness of the need for the appropriate energy efficiency (EE) policies and measures among stakeholders, especially policy-makers.
2. Identifying the importance of the capacity building for local EE product retailers and producers
3. Emphasising the importance of the social parties, for example, NGOs, ESCOs, Women's Union, etc., in implementing the EE policy measures
4. Laying the stress on the need for integrating EE programs with others, such as, program for hunger elimination
Year(s) Of Engagement Activity 2013,2015
 
Description Training on Energy Efficiency and Renewable Energy 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Organized by Institute of Renewable Energy Promotion (MEM) with funding support by the World Bank, held between 27-29 July, 2015 at Thavisouk Hotel, Vangvieng, Lao PDR. Dr. Khamphone Nanthavong participated the workshop with presentation "Changing Trend of final energy consumption in Lao PDR (1990-2013) and Projection up to 2030".
Year(s) Of Engagement Activity 2015