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The energy sector in KSA faces many challenges to do with energy efficiency; NEEP has addressed some of the most pressing, including:

• Summer peak demand
• Energy efficiency awareness
• National energy efficiency policies
• International cooperation
• Private sector participation
• Economic development

Perhaps the biggest problem facing the energy sector is the large seasonal variation in electricity consumption. In the hot summer season, increasing demands on energy for air conditioning are being made, but the available generation reserve margin is low.

One solution is to reduce per capita consumption of electricity generally, and peak power demand specifically. To help with this, NEEP has helped formulate energy efficiency residential building codes, and an ‘Energy Star’ labelling system for residential air conditioners, refrigerators, and washing machines.

To make sustainable reductions in energy use, consumers must see clear financial benefits: Subsidized energy prices mean consumers have little incentive to save energy.

The recent Government decision to abolish electricity price subsidies should provide the impetus to change from a culture of energy wastefulness to one of energy efficiency. For this to happen, consumers must become aware of energy saving opportunities and the benefits of specific energy efficiency technologies and practices. To this end, NEEP is developing an Energy Efficiency Information & Awareness Centre, to make information about energy management and energy efficiency available at the individual, corporate, and national level.

There is no central institution responsible for energy efficiency at a national level; consequently, there are no explicit end-user policies. Many national organisations deal with limited aspects of energy efficiency; they have sophisticated skill sets, but because work is often duplicated and activities are not coordinated, strategies and policies have limited scope.

To overcome this, NEEP solicited the active involvement of relevant institutions, and coordinated their activities to establish the ‘Energy Efficiency Council’ responsible for drawing up national energy efficiency policies consistent with national development objectives. The objectives of the policies are to affect a widespread uptake of energy efficient techniques and technologies, and to embed energy efficiency policies in relevant ministries and agencies.

Perhaps because of its unique position as a major oil and gas producer, and its resultant low domestic energy prices, KSA lags behind many other developing nations in implementing energy efficiency strategies. However, advantage can be taken of this situation by drawing upon international experience when designing its programmes and formulating policies.

NEEP has established links with the United Nations Development Programme (UNDP), with the United Nations Department of Economic and Social Affairs (UN/DESA), and is establishing links with other international institutions. These links will provide a forum for energy efficiency policy dialogue, and within which experience with other energy efficiency projects and activities can be exchanged.

Financial institutions in KSA have minimal investments in energy efficiency projects. They may be averse to taking risks in investing in new technologies; and consequently, reluctant to commit capital to such projects, even though payback periods are between two and three years.

NEEP is actively encouraging the private sector, including banks, consultants, equipment manufacturers, suppliers, and importers, to become involved in energy efficiency projects. It has run awareness seminars and training courses, and acts as a focal point for energy specialist, technology suppliers, financial experts, and other parties interested in starting energy service companies.

Nationally, there is a shortage of managers, engineers and technicians with skills in the various fields and disciplines of energy efficiency.

To counter this, NEEP initiated a series of training programmes covering many aspects of energy efficiency. These were attended by experts and officials from local institutions and businesses and addressed energy efficiency issues, implementation measures, and specific actions to curb energy waste. NEEP also arranged overseas training, study tours, and technology transfer from developed countries. A core of skilled professionals now exists, both in government and supporting institutions, with the necessary skills to foster energy efficiency initiatives and policies in KSA.

The direct and indirect medium- and long-term economic gains of energy efficiency are often overlooked in favour of the short-term capital-cost savings available with cheaper equipment and work practices.

NEEP’s awareness activities show how increased productivity arises from adopting energy efficient practices, and how these practices help create jobs, help exporters compete globally, and stimulate the market for energy-efficient goods and services.

They also show how economic benefits extend beyond the market place to help preserve the nation’s oil and gas reserves and help reduce the enormous costs of expanding the electricity generation, transmission, and distribution systems. These secondary benefits are because each kWh of energy saved by end users is worth more than a kWh of energy generated because transmission and distribution losses can be as high as 20%.