Environment & Poverty Times
06 2009 The launch of the Programme. Macarena Mellado.
Energy for a sustainable future
Access to energy and financial savings through a subsidy for efficient light bulbs
By Nicola Borregaard and Pamela Mellado
Subsidizing water, electricity or waste col- lection bills for the poorer population is a common policy tool in social ministries and programmes in developing countries, espe- cially in Latin America. With social objectives certainly paramount to these subsidies, they almost always present important conflicts with environmental objectives. Experience of progressive payments, associated with consumption that also promotes rational use, is definitely scarce. In Chile subsidies are provided for the consumption of water, electricity and waste collection. Special subsidies in the form of lump sum pay- ments are provided to vulnerable population groups each time electricity prices rise by more than 5%.
lump sum subsidy for electricity bills was being prepared, the idea came up to do something different and combine social, environmental and long-term economic objectives.
The objective of the National Light Bulb Replacement Programme (NLBRP), imple- mented by PPEE during 2008, was to pro- vide a new type of subsidy in the form of incentives for improved energy use in the country’s most vulnerable households by giving each home two compact fluorescent light bulbs (CFLs) to replace two incandes- cent bulbs.
With the creation of the National Energy Efficiency Program (PPEE) in 2006, the government identified different “low-hang- ing fruits” in the area of energy efficiency, flagging among others the topic of efficient lighting. At a time when another special
Even though other Latin American countries – such as Venezuela, Costa Rica, El Salvador, Panama, Honduras, Guatemala and Nicara- gua – have developed programmes appar- ently similar to this one, some characteristics of the Chilean experience show how a public policy can lead to a win-win-win relationship for environment, poverty and the economy. The programme targets the most vulner- able 40% of the population, identifiable according to a Ministry of Planning register containing up to 1.5 million households, with the following aims: Reduce residential electricity bills by about 10% for the programme target group. Develop public awareness about efficient use of energy through general as well as specific information campaigns regarding energy efficiency, specifically promoting technological change at the domestic level, with the example of the light bulb. Contribute to sustainable development and mitigation of the effects of climate change through the reduction of green- house gas (GHG) emissions. Evaluate and implement the sale of carbon credits obtainable through the energy sav- ings at the level of each household. Guarantee good environmental steward- ship of the programme, including for
• •
•
• •
•
example the collection and proper disposal of the old incandescent light bulbs. Take advantage of the newly introduced national labelling for energy efficient products of which efficient light bulbs were the first labelled product together with refrigerators.
Rationale
In Chile electricity is the second most com- monly used energy source at household level, preceded only by liquefied gas, with expenditure of about $30 a month on aver- age. Lighting accounts for about 27% of this electricity consumption. In 2005 80% of Chilean households used traditional incandescent light bulbs as the preferred lighting technology, with an average of 7.6 light bulbs per household. Only 20% of households were found to use at least one CFL, and there was an important positive correlation between income and CFL use. In fact, whereas in households with less than $400 average monthly income only 12% owned CFLs, this number increased to over 50% for households with more than $2,000 average income.
The NLBRP was thus directed specifically at the lowest income groups given that, on the basis of the previously mentioned data, the relatively high investment costs were con- sidered a barrier for these income groups. The programme consisted in providing two efficient light bulbs to the 40% of the population that is most vulnerable, identifi- able according to a register of the Ministry of Planning. With this subsidy an average 8% of savings in the electricity bills for the beneficiaries could be expected.
The cost of the NLBRP for the government amounted to about $4.5 million. On the benefit side, considering 500,000 ben- eficiary households, approximately 92.16 GWh will be saved a year, implying annual
economic savings of nearly $20 million per year (for electricity at $112 per kWh), and $100 million over the bulbs’ expected five- year service life.
Implementation Information campaign With the creation of PPEE in 2006 the gov- ernment provided a significant impetus for energy efficiency, the technologies implied and the related markets, promoting energy efficiency throughout the economy. As part of the PPEE different information campaigns were implemented, directed at promoting energy efficiency amongst the general public. Efficient light bulbs were one of the emblem- atic technologies referred to permanently throughout these campaigns. Additionally, the NLBRP conducted its own complemen- tary information campaign regarding the proper use of the efficient light bulbs.
Environmental stewardship PPEE, in collaboration with Sodimac (the company awarded the contract to supply the light bulbs) and the National Associa- tion of Electricity Companies, developed a distribution and replacement plan for the CFL at the points of delivery to end-users. Each beneficiary household received a coupon authenticating them, which they subsequently handed in at the point of distribution, a procedure that also enabled the National Energy Efficiency Programme to keep track of the number of efficient light bulbs delivered. The programme also considered a plan for the collection and safe disposal of the replaced incandescent light bulbs, developed in collaboration with and financially supported by Hidronor, a waste disposal company specializing in hazard- ous waste. The programme certified the replacement of the two incandescent light bulbs, which are disposed of in specially designed containers, located in the retail offices of electricity utilities.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36