ISSUE 05 AUGUST 2013 IMPACT this issue Implementing the CFL Toolkit KEY ACHIEVEMENTS 45 million CFLs ESMAP Lighting Toolkit Helps Mexico Achieve distributed to 8.1 million households Record-Breaking Feat 1,100 'Points of When Mexico’s Trust Fund for Electricity documentation from programs that had Exchange' set up in low- Energy Savings introduced the Luz distributed more than 50 million CFLs around to medium-income urban Sustentable (Sustainable Light) program the world since the mid-1990s. areas in mid-2011, its primary aims were to promote a more efficient use of electrici- CFLs offer significant opportunities for devel- Avoided emissions of ty, develop a vibrant market for energy oping countries to reduce energy consump- 680,000 tons of CO2 efficient technologies, and contribute to tion in the residential sector, thereby provid- (Jan 2010—Sep 2012) global climate change mitigation efforts. ing a range of major benefits to consumers, utilities, governments and the environment. Energy Savings of One year and 22.9 million compact fluores- But despite these outcomes, the implementa- 1,274 GWh cent lamps (CFLs) later, Mexico had not only tion of energy efficient lighting initiatives has (Jan 2010—Sep 2012) accomplished both goals but achieved anoth- often been slow. Among the reasons for this er, unanticipated, accolade: A place in the have been the high cost of CFLs as Price of CFLs declined Guinness Book of World Records. compared with incandescent bulbs, negative from US$ 3-4 to $2.03 perceptions about CFL life span and light ESMAP helped make Mexico’s record- quality, and a lack of public awareness about breaking feat possible by producing the CFL the environmental benefits of CFLs. Toolkit used by planners in the design phase of the Sustainable Light program. Mr. Ashok Sarkar, a Senior Energy Specialist with the World Bank involved in designing the The development of the CFL Toolkit began in CFL Toolkit, said ESMAP saw great potential 2008 when ESMAP concluded there was a value in producing a toolkit that distilled what critical mass of operational experience and “We used the toolkit in order to benefit from other countries’ experiences...Knowing the de- sign and cost of CFL programs in other countries helped us determine the appropriate scale for our own.” “CFL programs had Reina Velázquez had their share of Director General of Energy Efficiency successes and diffi- Mexico Ministry of Energy (SENER) culties in the past...We felt a had worked—and failed—in rolling out large-scale CFL campaigns in the past. toolkit could synthesize these “CFL programs had had their share of successes and difficulties over the years, and these provided a experiences and substantial storehouse of implementation experience,” Mr. Sarkar said. “We felt a toolkit could synthe- size these experiences and help developing countries improve the design and implementation of help developing energy efficient lighting programs in the future.” countries improve the structure of ESMAP set about assessing the structure, financing, and implementation elements of CFL programs their energy effi- carried out by the World Bank and other organizations over the previous two decades. cient lighting pro- The result was a user-friendly, web-based toolkit that provided a wide range of easily adaptable opera- grams.” tional documents. These included procurement guidelines, technical specifications, supply contracts, consumer surveys, lists of suppliers and products, awareness-raising material, and environmental and Ashok Sarkar safety information. The toolkit also provided advice on how CFL programs could be made eligible for Senior Energy Specialist The World Bank funding from the Clean Technology Fund (CTF), the Global Environment Facility (GEF), and other sources of climate financing. The toolkit was completed in 2009 and soon came to the attention of the Mexican government, which at the time was embarking on an aggressive energy efficiency program as part of its newly launched Special Climate Change Program (Programa Especial de Cambio Climático, or PECC). Mexico is the second largest emitter of greenhouse gases (GHGs) in Latin America and ranks 12th in the world in terms of total GHG emissions. The PECC identified a range of climate change interven- tions, quantifying the potential impact and cost of each in terms of policy, regulation, and technology adoption. The program also set the target of a 50 percent reduction from 2000 GHG emission levels by 2050. Energy consumption in Mexico’s residential sector had been growing faster than GDP in recent years, and with households accounting for an estimated 27 percent of total electricity use—and with more than 80 percent of homes still using incandescent bulbs—the PECC saw a nation-wide CFL exchange program as an ideal means of achieving significant GHG emission reductions. IMAGES Page 3 Simone McCourtie / © The World Bank Mr. Sarkar recalls presenting ESMAP’s CFL Toolkit to planners at Mexico’s Ministry of Energy Page 4a ©stock xchange (SENER). All other images from ©Luz Sustentable. “The SENER planners took a look at the toolkit and said, ‘The World Bank has already done all this? Then we can rely on you to help us design our own CFL program!’” Ms. Reina Velázquez, the Director General of Energy Efficiency at exchange.” SENER who was responsible for the oversight of the Luz Sustenta- ble Program, said the toolkit was used in order to benefit from The integrated supply contract was used in the Efficient Lighting other countries’ experiences. and Appliances Project launched by the World Bank in 2011. The project, supported by a US$ 250 million World Bank loan along “Knowing the design and cost of CFL programs implemented with financing from the CTF and GEF, aimed to help Mexico elsewhere helped us determine the appropriate scale of our own,” promote the efficient use of energy and mitigate climate change by she said. increasing the use of energy efficient technologies at the residen- tial level. ESMAP also helped SENER develop an “integrated” supply and distribution contract to overcome the supply chain problems that The Efficient Lighting and Appliances Project had three compo- often hindered implementation of CFL programs. Instead of nents, the first of which was the program to replace incandescent contracting with numerous partners along a supply chain, the inte- bulbs with CFLs. The second component launched a nationwide grated contract mandated that a single service provider be respon- scheme to help households replace inefficient air conditioners and sible for the acquisition and distribution of CFLs, the exchange of refrigerators with energy efficient alternatives, and the third was an CFLs for incandescent bulbs, the awareness campaign that would initiative to strengthen SENER´s capacity to design and implement accompany the program, and the collection and appropriate energy efficiency activities, which included information and aware- disposal of old incandescent bulbs. ness campaigns, studies, and training. With this approach, the winning bidder of the Sustainable Light For the launch of the Sustainable Light program, more than 1,100 distribution contract had the option to design its own supply and “points of exchange” were set up in low- to medium-income urban delivery scheme and, therefore, avail of the opportunity to cut costs areas throughout the country. In order to obtain four new CFL by capturing economies of scale from a bundled process. bulbs, eligible participants needed only to bring a recent electricity bill, a form of identification, and four incandescent bulbs to be Ms. Velazquez said the integrated contract also allowed SENER to disposed of following approved regulatory procedures. ensure that the CFL’s reaching Mexican households were of the highest quality and available at the most competitive price. The According to SENER estimates, the 22.9 million CFL’s distributed bidding process for the CFL contract included high quality technical during the first phase of the Sustainable Light program had an specifications. In addition, the private sector Trust Fund for Elec- immediate impact on more than 5.5 million Mexican families. On a tricity Energy Savings was tasked with ensuring technical verifica- national level, the net decline in energy consumption translated tion and supervising the distribution process, sending regular into lower quantities of fuel needed to generate electricity, and, updates to SENER. thus, lower GHG emissions. SENER estimated that the replace- ment of incandescent bulbs resulted in energy savings of 1,274 “We established a high standard for our CFLs because we had GWh and avoided emissions of 680,000 tons of CO2 between only one chance to demonstrate how well they actually worked,” January 2010 and September 2012. Ms. Velasquez said. “The integrated approach enabled us to monitor our CFLs from the place of manufacture to the point of Ms. Velazquez said the feedback from CFL recipients had been largely positive. “People have been responsive to the lower cost of CFLs and pleasantly surprised by their quality,” she said. Thanks to the integrated supply chain, the total cost of the Sustainable Light CFLs was equivalent to US$ 2.03 per lamp, less than half the price of similar CFLs for sale in the Mexico City area. Since its inception, the Sustainable Light program in Mexico has expanded and gone on to distribute a total of 45 million CFLs, reaching more than 8.1 million households across the country. ESMAP’s CFL Toolkit has subsequently informed World Bank projects in Armenia, Bangladesh, Burundi, China, India, Mali, and Thailand, and has been used by external ESMAP partners such as the UK Department for International Development. MISSI ON Mr. Sarkar said the toolkit’s adaptability has enabled the design of larger projects that The Energy Sector Manage- planners can implement with less preparation time. “The toolkit has been beneficial in ment Assistance Program helping planners use existing technical specifications and distribution agreements (ESMAP) is a global instead of having to produce new ones,” he said. knowledge and technical as- sistance program adminis- In 2011, the toolkit designers at ESMAP received the World Bank’s Sustainable Devel- tered by the World Bank. It opment Network (SDN) team award. In announcing the decision, the SDN cited the provides analytical and advi- toolkit’s “transformational impact” in implementing large-scale, energy efficient lighting sory services to low- and programs, which in turn led to “quick and significant energy efficiency gains, changed middle-income countries to consumers’ behavior, and a reduction in GHG emissions” around the world. increase their know-how and institutional capacity to achieve environmentally sus- tainable energy solutions for poverty reduction and eco- nomic growth. ESMAP is funded by Australia, Austria, Denmark, Finland, France, Germany, Iceland, Lithuania, the Netherlands, Norway, Sweden, and the United King- dom, as well as the World Bank. IMPACT Issue 05 August 2013 The World Bank 1818 H Street, NW Washington, DC, 20433 USA www.esmpa.org esmap@worldbank.org