Colombia - Energy efficiency study for the residential, commercial and public sectors

Joint UNDP/World Bank Energy Sector Management Assistance Programme (ESW) ENERGY EFFICIENCY STUDY FOR THE RESIDENTIAL, COMMERCIAL AND PUBLIC SECTORS COLOMBIA November, 1993 This documact has d c t c d distribution and may be ustd by recipients oaly in the pedoxmance of their o E i duties, its contcnf~amy not ohmvise be disclosed without UNDP a World Bank adorid011  c (January 1992) Exchange rate used in this study: US$ 1 = $630 1 TOE = 1010 cal 1 BTU = 252 cal 1 B = 159 1t 1 CF = 0.028 m3 1 gal = 3.78 It 1 J = 0.24 cal Crude oil (equivalent) Crude oil (Colombian) Fuel oil Gasoline Diesel Kerosene Castilla crude LPG Coal Natural gas Electricity  ACRONYMS ACIEM Colombian Association of Electrical and Mechanical Engineers AND1 Asociaci6n Nacional de Industrides CARBOCOL Carbones de Colombia CIC Colombian Association of Civil Engineers CNE National Energy Commission COLGAS Companfa Colombiana de Gas CONPES Consejo de Politicas Econ6micas y Sociales CORELCA Corporaci6n Elktrica de la Costa Atlhtica cvc Corporaci6n Aut6noma del Valle del Cauca DANE Departamento Administrative Nacional de Estadistics DNP National Department of Planning ECOPETROL Empresa Colombiana de Petr6leo EEB Empresa de Energia de Bogotd EEC European Economic Community ELECTRANTA r a Atlhtico E l e ~ ~ c a d odel EMCALI Empress Municipales de Cali EPM Empresas H b l i c s de Medellin ESMAP Energy Sector Management Assistance Program FEN Financiera Energktica Nacional IAN Instituto de Asuntos Nucleares IBRD International Bank for Reconstruction and Development ICEL Instituto Colombiano de Electrificaci6n ICONTEC Instituto Colombiano de Normas Tknicas IDB Interamerican Development Bank ISA Interconecci6n Elktrica S.A. J-NT Junta Nacional de Tarifas de Servicios Mblicos MHCP Ministry of Fiance and Public Credit MIS Management Information System MME Ministry of Mines and Energy OLADE Latin American Energy Organization PESENCA Programa Especial de Energia de la Costa Atlhtica PROMIGAS Promotora de la Incorporaci6n de Gasoductos de la Costa Atlhtica SIC Superintendencia de Industria y Comercio SIE Energy Information System TERPEL Terminales de Distribuci6n de Derivados de Petr6leo Ltda UNDP United Nations Development Program usAID US Agency for International Development ABBREVIATIONS $ Colombian Pesos B Barrel B P ~ Barrels per day BTU British Thermal Unit cal calorie CF Cubic foot CFd Cubic feet per day CIF Cost, insurance and freight CNG Compressed natural gas DSM Demand side management gal US gallon GDP Gross domestic product GOC Government of Colombia GWh Gigawatt-hour (109 Wh) IRR Internal rate of return kW kilowatt J Joule LPG Liquid petroleum gas It liter MBTU Million BTU MCF Million cubic feet MUS$ Million US$ MW Megawatt (106w) NPV Net present value TJ TeraJoule (1012~) TOE Ton of oil equivalent  TABLE OF CONTENTS Page No. Executive Summary Foreword CHAPTER 1: BACKGROUND General Energy and the economy Energy sector overview Towards an end-use energy efficiency strategy General prospects for end-use energy efficiency in Colombia Objectives of the Study CHAPTER 2: PATTERNS OF ENERGY USE IN THE RESJDENTIAL COMMERCIAL AND PUBLIC SEmORS Introduction Energy demand in the residential sector Energy demand in the commercial and public sectors Supply of residential energy equipment Current practices for building energy-related design and use CHAPTER 3: COSTS AND PRICES OF ELECTRICITY, NATURAL GAS AND LPG Electricity Natural gas and LPG Considerations for pricing of xesidential energy sources CHAPTER 4: DEMAND SCENARIOS Base scenario Substitution scenario Conservation scenario Results C R - 5: FOSTERING GAS SUBSTITUTION FOR ELECTRIClTY General issues Specific issues for natural gas substitution Specific issues for LPG substitution Priority activities CHAPTER 6: FOSTERING ELECTRICITY RATIONAL USE Energy efficiency standards and guidelines for new buildings Enhancing energy efficiency in existing commerciaYpublic buildings Certification and labelling of equipment h s p e c t s for improved street lighting CHAFER 7: INSTITUTIONAL AND FINANCING ISSUES List of Tables List of Figures List of Boxes TABLES Table 1.1 Energy intensity by sector ................................................... Table 1.2 Find energy consumption by sector in 1989 ............................. Table 1.3 Natural gas consumption by sector ........................................ Table 2.1 Estimated final energy consumption by city .............................. Table 2.2 Income and energy expenditure in Bogota ................................ Table 2.3 Estimated distribution of electricity consumption in the residential sector by end-use and city .......................................... Table 2.4 Estimated distribution of hnal energy consumption in the commercial and public sectors ..................................... Table 2 .5 Estimated distribution of electricity consumption by end-use in the commercial and public sectors ................................. Table 2.6 Local production of residential energy end-use equipment .............. Table 2.7 State of the art of appliances in Colombia ................................. Table 2.8 Approximate market shares of local appliance manufachmrs .......... Table 3.1 Electricity cost structure by season and time of day ...................... Table 3.2 Electricity cost by subsector and city ...................................... Table 3.3 Subsidies on electricity by city. sector and stratum ...................... Table 3.4 Current and targeted electricity tariff by sector in 8 of LRAIC ........ Table 3.5 Targeted residential tariff by stratum and consumption range .......... Table 4.1 Electricity demand growth by city and sector in 4% ....................... Table 4.2 Economic indicators of gas substitution for electricity in the residential sector ..................................................... Table 6.1 Maximwn Potential Savings and Costs of Energy Conservation measures ............................................................. FIGURES Figure 1.1 Elemicity Demand Trend ................................................... Figure 1.3 Return on Assets of the Power Subsector ................................. Figure 1.4 Electricity Tariff vs Cost in the residential sector ......................... Figure 1.5 Debt and revenues of the power subsector ................................ F i b 1.6 Organization of the Power Sector .......................................... Figure 2.1 Residential electricity consumption by stratum and city in 1990 ....... Figure 3.1 Residential electricity tariff by city and stratum ........................... ~i-&re 3.2 Economic cost of useful energy for cooking .............................. Figure 3.3 LPG Prices and Costs by City .............................................. Figure 3.4 Compared Prices and Costs of Natural Gas by City and Stratum ...... Compared prices of useful energy for cooking by city (Strata 1 and 2) ...................................................... Figure 3.5 b Compared prices of useful energy (Strata 3 and 4) ...................... Figure 3 . 5 ~ Compared prices of useful energy (Strata 5 and 6) ...................... Figure 4.1 Electricity savings in the residential sector of the four cities in 2005 ............................................................... Figure 4.2 Residential electricity sales (high tariff scenario) ......................... Figure 4.3 Capacity savings in the residential sector of the four cities in 2005 ............................................................... Figure 4.4 Peak and installed power demand under base and efficient (high tariff) scenarios ............................................... Figure 6.1 Installed power of public lighting system ................................. BOXES Box 1 Standardization of gas equipment. design and installation .............. Box 2 Certification and labeling of gas products ................................. Box 3 Training of dismbution/installation technicians ........................... Box 4 Certification of installation technicians .................................... Box 5 Public information campaigns .............................................. Box 6 Study of options for streamliningLPG cylinder replacement system ................................................................ Box 7 Developing building energy efficiency standards and guidelines ....... Box 8 Designing and implementing pilot DSM programs in the four cities .............................................................  FOREWORD This report presents the results of a Study conducted in 1991-1992 by the World Bank/UNDP Energy Sector Management Assistance Program (ESMAP) and the National Energy Commision (CNE), with financing from the USAID, in close coordination with the National Department of Planning (DNP) and the Ministry of Mines and Energy (MME) and with the active participation of several other institutions, organizations and energy sector operators in Colombia. Since 1986, ESMAP has supported the process of reform in the energy sector of Colombia through several activities: developing energy strategy work in 1986 (Bases for the Formulation of an Energy Policy); designing a management information system for the power subsector (SINSE); restructuring program in the power subsector (Phases 1 and 2 in 1991), resulting in the first draft of the Electricity Law. In the near future, ESMAP work program in Colombia includes developing an energy strategy, continuing support to the power subsector restructuring and developing an energy sector environmental strategy. The purpose of this Study was to assist the Government of Colombia (GOC) in designing an integrated strategy to improve energy use in the residential, commercial and public sectorsl, which would be consistent with Government sector and macroeconomic policies and orientations. The strategy would include the definition of a comprehensive set of least-cost options and programs for interfuel substitution and demand-side management, as well as the recommendation of adequate pricing policies and institutional and regulatory framework to encourage private sector delivery of energy efficiency services. The study concentrated its activities on the four major cities of Colombia: Bogota, Medellin, Baranquilla and Cali; which represent about 60% of the total energy consumption of the three sectors. The Study put special emphasis on the conservation of electricity as well as on its substitution with natural gas and LPG. The Study was coordinated closely with ongoing related efforts, in particular the ESMAP-supported restructuring of the power subsector, GTZ and EEC-supported activities in energy efficiency, the preparation of a national energy plan by the MME, the definition of the power sector expansion plan and preparation work for possible multilateral (IBRD/IDB) lending in the energy sector. The objectives, scope and expected outputs of the Study were discussed with the GOC in April-August 1991 and presented in the Activity Initiation Brief (September 1991). Field work started in October 1991 and was conducted in two phases (separated by a workshop to discuss the results of the first phase in February 1992) by a team2 of national consultants and international consultants, under ESMAP guidance and CNE local supervision, and with participation from staff of electric utilities, equipment manufacturers and public institutions. 1 It was agreed with the GOC that an energy efficiency strategy for the industry and transport se!ctonwould be developed separately with support from the European Economic Community (EEC). 2 National consultants included: Felix Betancourt (Director of studies), Luz Marla GonAez (energy prices and costs), Cesar Gondez (energy demand scenarios and surveys). Carlos Plaza (surveys). Humbeno Prieto (equipment standards and surveys), and Alvaro Santoyo (natural gas and LPG distribution). International consultants included: Joseph Deringer (building energy efficiency codes and guidelines), Bill Gould (DSM programs). Kevin Knight (equipment certification and labeling). Santiago Moreno (energy management in buildings), Ignacio Rodriguez (economic and institutional aspects) and Peter Rumsey (energy efficiency in commercial and public sectors). Oscar Gar& (CENERGIA), and Wilson Marques and Aurelio Monteiro (PROCEL) provided useful advice based on the Peruvian and Brazilian experiences in energy efficiency. Henri Beaussant (gas economist. ESMAP)supervised consultant work on natural gas and LPG issues. Philippe Durand (energy planner, ESMAP) was the study's Task Manager and Carlos Garda supervised the Study for the CNE. Field work was completed in June 1992 with the finalization of the consultant team report3 .(in Spanish). Annex 1 shows the list of individual consultant reports used in producing the consultant composite report, as well as main field activities that were conducted. This report? includes the following aspects for the definition of an energy efficiencyS strategy for the residential, commercial and public sectors in the four major cities of Colombia: (i) describing the economy and energy sector background and the patterns of energy use; (ii) identifying issues, opportunities and obstacles for improved energy efficiency; (iii) reviewing the economic costs of natural gas and electricity and defining demand scenarios for these two energy sources with various pricing and substitution assumptions; (iv) identifying the obstacles for electricity substitution with natural gas and LPG and the main options to lessen these obstacles; (v) defining least-cost priority measures for electricity (mainly) and gas conservation; (vi) defining options for an adequate institutional and implementation framework, as well as pricing and incentive policies and financing mechanisms, to encourage end-use energy efficiency; (vii) defining four programs for immediate implementation (in parallel with policy and institutional reform): (a) Standards, certification and labeling of electricity and gas end-use equipment in the residential sector; (b) Code and guidelines for energy efficiency in new and existing public and commercial buildings; (c) Pilot demand-side management programs by electric utilities; and, (d) Promotion and improvement of natural gas and LPG safe distribution - use in the residential and commercial sectors. 3 'Ihe consultant team report was published in Spanish by the GOC in January 1993: "Estudio de eficiencia enegetica em 10s sectores resi&ncial. comercial y oficial" (228 pages); "Anexos" (590 pages). It includes the detailed results of the Study, which are only summarized in this report. 4 This report was prepared by P. Durand based on F.Betancourt's composite report. It was discussed with the Govemment of Colombia in .......... Secretarial support w a s provided by C. Li Kwek Liit (ESMAP). 5 For practical purposes, "energy efficiency" will be used in this report in reference to Ute improvement of commercial energy end-use efficiency through conservation and/or substitution. In the power sector, this is equivalent to demand side management @SM). 1. The efficient performance of the energy sector is critical to sustaining the efforts undertaken since 1990 by the Government of Colombia (GOC) in the framework of the Economic Modernization Program (EMP) and to enable the government to focus on developing the infr;istructure and social sectors. Indeed, the energy sector is central to the Colombian economy: it accounts for close to 45% of public sector investment ad, through the oil sector, contributes sigmlk-mtly to export receipts and fiscal revenues. On the other hand, the power sector represents more than a third part of total public debt and was facing in 1991 a financial gap of about USSSOO million. External investment requkments of the power subsector over the next ten years have been estimated at USS2.2 billion. 2. Colombia has a diverse and abundant energy endowment of liquid hydrocarborn, natural gas, coal and hydroelectric energy. Proven reserves of crude oil are about 2 billion barrels, which will last for 12 years at the present production rate; the field of Cusiana, discovered in 1991, is expected to increase proven reserves by a quantity of close to 1.5 billion barrels. Reserves of natural gas are about 4 Tcf, equivalent to about 670 million barrels of crude, with a reservesJproduction ratio near 29 years (without taking into account the reserves of associated gas in the Cusiana field). Colombia has the largest coal reserves in Latin America, with about 6.5 billion tons of proven reserves, 70 percent of which corresponds to thermal coal. The hydroelectric potential hovers at around 93,000 MW, 10% of which is currently exploited. Finally, Colombia has a large potential of biomass fuels (wood, bagasse and agro residues), which is partly exploited. 3. Final energy demand is fairly diversified: while petroleum products have the largest share (43% in 1990), coal and natural gas each have a significant and increasing share (11% and 5 % respectively). Characterized by a low end-use efficiency and a decreasing share, biomass fuels are dominant in the residential sector in rural areas. The trausport sector is the largest consumer (with 29% of final energy in 1989), but the residential and industry sector have'similar shares (28% and 27% respectively). Urban areas account for about two thirds of total energy consumption of the residential sector 4. Overall energy demand has more or less followed the pace of economic growth during the 1980s, with an average growth of 2.9% per year. However, electricity consumption growth has been notably higher, especially in the residential sector with an average 6.5% per year. Overall, electricity share of final energy demand increased from 5.4% in 1970 to 11% in 1989. The residential sector accounted for almost 50% of electricity sales in 1990, which is an atypically high share. In this sector, uneconomic use of electricity for cooking and water heating is caused by low electricity tariffs and by the restrictions in the supply of substitute fuels, such as natural gas and LPG. These aspects make the residential sector a priority target for demand side management actions and policies. 5. The power subsector is facing a major financial crisis, which has led to an increasing inability of the subsector to provide an economic and reliable supply and to service its debt, translating into a growing financial problem for the Government. This crisis is founded on two basic problems: (i) deep flaws in the institutional and regulatory framework of the subsector, in particular the lack of corporate autonomy and accountability of the utilities, leading to management inefficiencies (lack of welldefined and feasible objectives; high system losses, in particular non-technical losses; in some instances, disregard of economic choices; deficiencies in planning and execution of the expansion program; overbornwing); (ii) tariffs below cost recovery levels (overall average tariff reaching about 75% of LRMC). External factors that also played some role in the crisis include the devaluation that took place in 1985, the modifications of the terms of multilateral loans during the 80s, and the appreciation of hard currencies compared to the US dollar. 6. In view of the power subsector crisis and as part of the program of reform of the public sector, the Government has started designing since 1991 a comprehensive restructuring program that would increase efficiency and curb public disbursements in the subsector. Specific objectives of the program are: (a) to create the legal and institutional framework required to introduce competition and contestability in the sector; (b) to create a new regulatory system and develop regulatory capabilities; (c) to promote the participation of private investors in the ownership and operation of subsector assets, in particular at the level of generation; (d) to eliminate or substantially reduce the need for the Government to provide financial support to the subsector. 7. As part of the EMP, the government has the overall objective of improving the efficiency of the energy sector and ensuring that it contributes to the macroeconomic equilibrium. Improving the efficiency in resource allocation to the sector will be achieved by promoting competition and private sector involvement, and reforming the current pricing and taxation system, as well as the institutional and regulatory framework. Specific objectives include reducing the use of public resources in the energy sector, increasing oil and coal exports and achieving financial autonomy and equity diversification in the power subsector. The government also seeks to provide an economic and reliable supply of energy by diversifying energy sources, promoting operational and financial efficiency in sector companies, and fostering the rational and environmentally-sound use of energy. 8. Enhancing end-use energy ef3iciency fits well within the Government's objective of improving the &ciency of the energy sector. Costeffective measures are easy t o identify, that would lead to significant benefits for the customers and contribute to decrease the impacts of the enrgy sector on the environment. These measures must be tied to the implementation of adequate policies and institutional framework, which are part of the ongoing restructuring of the energy sector, price reform and modernization of the economy. 9. In Colombia, several factors and aspects combine to make the formulation of an end-use energy efficiency strategy a justified and timely effort. These factors include principally: (a) the ongoing restructuring of the power subsector, which will lead to a more competitive environment, better quality of service and financially healthy utilities; as a consequence, distribution utilities will be able to engage in demand-side-management programs to deliver energy services rather than electricity per se, which in turn will decrease the cost of supply and therefore the cost of service to the customers; (b) the ongoing reform of the structure and level of electricity and natural gas tariffs to closer reflect economic costs of supply, which will be a prime incentive for consumers to use energy efficiently and to switch fuels when financially justified; (c) the government efforts for modernizing and opening the economy, which will increase the supply of more advanced and efficient energy equipment; (d) the government program to develop the supply of natural gas and extend coverage of urban markets, which will increase the prospects for economic substitution of electricity; (e) the major constraints on available energy financing, especially in the power subsector, in particular in view of the sustained pace of energy demand growth and the crisis of the power subsector, which will make supply investment deferral particularly attractive; (9 the government strong commitment to develop an integrated strategy for the development of the energy sector, including the promotion of energy efficiency improvements and natural gas development; (g) the large potential for increasing end-use energy efficiency in a cost-effective manner in all sectors of the economy. 10. Restructuring the energy sector, refonning energy prices, modernizing the economy and developing natural gas supply are essential ongoing actions, which by themselves will bring significant improvements in the efficiency of energy use in Colombia. Indeed, more competition, flexibility and diversification are needed to improve supply efficiency. Also, ongoing price reforms should boost the supply of efficient equipment in the medium term and they will give the customers immediate and strong incentives for saving or substituting energy sources. However, these reforms need to be accompanied by actions to lessen the market failures or distortions that are likely to remain after reform implementation, especially for the sectors or customers that could be the most affected by the reforms in the short term (e.g. low- income households). 11. Market barriers to enhanced energy efficiency include mainly: (i) the imperfect information of customers about the benefits, costs and ways of implementing energy efficiency measures; (ii) the limited immediate availability of affordable, efficient energy equipment; (iii) high transaction costs (e.g. for household connection and additional equipment to use natural gas); (iv) customers-' high implicit discount rates for energy efficiency investments (especially for low-income households); (v) the lag in consumers' response to price changes, when energy represents a small proportion of total costs or due to the limited availability of efficient equipment as well as of electricity substitutes in some cities (e.g. Medellln and Cali); (vi) institutional barriers (i.e. the lack of intermediation structures to promote energy efficiency); (vii) structural disincentives (for example the different interests of on one hand, designers, builders and landlords and on the other hand, managers, home buyers and tenants, with respect to energy efficiency in buildings); (viii) the limited interest of the private sector in energy efficiency services delivery, due to the incomplete appropriation of efficient energy technologies and the perceived limited size of the market for those products. 12. Actions to lessen the above mentioned market imperfections should combine policy reforms (n particular pricing reform) and technical measures and should include a combination i of information dissemination, technical capacity development, minimum efficiency standards and codes, appliance labeling, technology intermediation and, in some cases, financing mechanisms. Market mechanisms should be encouraged for the identification and delivery of energy efficiency services and for increasing the supply of substitutes of electricity (mainly natural gas and LPG), while autonomous centers, based on government and private enterprise joint involvement, could be used for providing customer information, technology intermediation and action coordination. Adequate incentives are needed to encourage private sector involvement in the supply of substitution energy sources (such as natural gas and LPG distribution), which will help diminish the need for Government investment and decentralize and improve energy supply. 13. In sum, the actions that were considered in this report for enhanced energy conservation and substitution can be divided in three main categories: (a) economic instruments, including pricing policies and financial incentives; (b) customer information; and (c) regulatory instruments, in particular for energy equipment and building standards. The report also examined the organizational framework and the intermediation structures that are required for proper definition and delivery of the above instruments and actions. in the r a w . commercial and ~ublic sector 14. Although electricity is the main energy source used in the residential sector of the four cities considered in this study, its share of final energy consumption is considerably higher in Medellin (almost 100%) and Cali (96%) than in Bogota and Barranquilla (about 52% in both cases), since there is no natural gas supply and only limited quantities of LPG in the former two cities. Bogota accounts for almost half of national LPG consumption (mainly in middle income households) and for most of the consumption of cocinol (a product close to gasoline used in lower-income households). Natural gas distribution in this city started in 1989 but it is developing at a fast pace, mainly in middle and lower income strata. In Barranquilla, natural gas has been available for several years and is widely used, especially in middle to upper- income strata; LPG and kerosene is limited to lower-income households. In the four cities, electricity consumption per household increases with the socioeconomic category. Total energy consumption per capita is higher in Bogota (significant use of water heating, as well as of petroleum products that are used less efficiently than electricity) and Barranquilla (large use of air conditioning) than in Medellin or Cali (with moderate use of water heating or air conditioning). 15. In terms of electricity end-uses, inm, cooking is the largest consuming end-use, but water heating, refrigeration and lighting also have important shares; the share of water heating increases sharply in higher-income strata, while, on the contrary, the share of lighting is higher for lower-income strata. In Medellfq, the high share of cooking in total consumption is noteworthy (about SO%), especially in the case of lower-income strata. Refrigeration is the second-largest consumer and, as for lighting, its share remains almost constant along socioeconomic strata. Water heating is used almost only in higher-income strata. In m, almost 40% of total consumption is accounted for by cooking (with an almost constant share along the strata), but refrigeration has also a significant share, while lighting and air conditioning each represent only about 10% of total consumption. Water heating contribution is extremely small and limited to higher income strata. The shares of lighting, refrigeration , and, to a lesser extent, cooking are rather constant along strata. In - due to natural gas availability, the overall share of cooking is reduced to only 15%;large variations are noted along strata, which have different rates of gas penetration. Major end-uses are refrigeration and air conditioning, with increasing shares in higher-income strata. 16. Several factors influence the purchase and pattern of use of end-use energy equipment in households, including income and socioeconomic levels, the availability of energy sources and equipment and their absolute and relative prices, household size and activities, socio- cultural aspects and weather conditions. Equipment such as cookers, lamps, televisions and radios are present in all economic strata, but their quantity and unit capacity increase for higher income households, for which the use of some equipment can be minimal. Higher strata have access to more sophisticated equipment, which use energy much more efficiently than traditional equipment (such as microwave' ovens and pressure cookers), or which increase electricity consumption and capacity demand significantly (such as air conditioning units, water heaters, electric cookers and cloth washers and dryers)' The intensity of use of energy equipment is higher in low-income strata, which own less equipment than higher income households. In low-income households, some practices lead to energy savings, either by choice (e.g. connecting water heaters only for a few hours, when hot water is needed) or by socioeconomic pattern (e.g. meal preparation requiring less energy per capita than in higher income households). On the other hand, in these households, there is a larger proportion of old, outdated and poorly maintained equipment, which have a lower energy efficiency than equipment used in higher income households. 17. Customers' opinions on electricity savings are important to assess the prospects for energy efficiency actions in the residential sector. Key aspects evidenced through a household survey conducted in Bogota include the following: (a) an often wrong perception about which equipment are the main contributors to electricity consumption, especially in lower strata households; (b) customers strongly associate the concept of electricity savings to the improved use of electric equipment rather than to the substitution of electricity by natural gas or LPG, or to the purchase of more efficient equipment; (c) customers believe that further energy savings can be achieved; however, as pointed out above, the "believers" generally do not have the right perception of what are economic and/or high-impact energy efficiency measures, nor the sufficient incentives to implement these; (d) a large proportion of households are satisfied with the current configuration of energy equipment installed in their homes; quality and capacity seem to be the driving factors for equipment replacement, which is often hindered by front costs, while energy performance is hardly mentioned as a factor. 18. Major electricity end-uses identified through a survey of non-representative sample in the commercial/public sector include: for retail establishments, refrigeration and lighting (especially in Bogota), as well as air conditioning (in Barranquilla and Medellin); for hotels and restaurants, refrigeration, cooking and lighting, as well as water heating in Medellin and air conditioning in Barranquilla and Medellin; for public sector buildings, lighting in Bogota, air conditioning in Barranquilla and Medellin, and water heating in Medellfn. 19. Most residential appliances are currently manufactured in Colombia and four large manufacturers account for most of the market, although the ongoing opening of the economy will increase the stock not only of efficient, high-consumption North Arnerican/Japanese appliances but also of smaller and less efficient equipment from neighbouring countries. Locally manufactured or assembled appliances are far behind the state of the art in North American countries and equipment performance could be improved significantly (by 10 to 40% depending on the appliance). Colombian appliance norms do not concern equipment performance but relate to quality and safety aspects as well as techniql specifications. Improving customer practices in appliance usage can have an even higher impact than enhancing equipment efficiency at production level. 20. Audits of 11 buildings and discussions with engineers, building managers and utility representatives provided a picture of current practices for building design and energy use. - Building design is mostly based on f i s t cost and aesthetics considerations without much concern for energy efficiency. Construction practices often diverge from the initial plans by substituting materials and undersiziig electric and mechanical installations. Lighting practices are fairly efficient. Cooling practices on the whole are poor, although this is somewhat offset by the fact that most cooling systems are undersized. 21. Integrated energy pricing reform should be the cornerstone of the energy efficiency strategy in the residential, commercial and public sectors in Colombia. The government has embarked on the gradual ajustment of electricity prices to economic costs, as well on examining additional electricity pricing measures that are necessary to accompany the power sector restructuring program, and it is also reviewing natural gas and LPG pricing options. The following are the Study's recommendations to strengthen and develop integrated pricing policies for residential and commercial energy sources in urban areas dong the main lines of reform already chosen by the Government: Electricity (a) Firming up Resolution 90 by bringing all tariff to economic costs by the year 2000, with a gradually decreasing subsidy for strata 1 and 2 that would be paid directly to utilities from public funds and made transparent in electricity bills to improve customers ' information; (b) Applying timeof-use rates: seasonal rates for all customers and timeofday rates for commercial and large residential customers; (c) Simplifying and improving the use of the socioeconomic strata and consumption block system for tariff application during the adjustment period: regrouping strata in three groups (only the f m t one would be temporarily subsidized); only consumption lower than 200-300 kwh would be temporarily subsidized; subsidies would only apply to lower consumption and not universally to lower consumption block of all customers; (d) Connection charges reflecting full economic costs; (e) Progressive elimination of lump sum tariff practices for customers without consumption metering (through the installation of meters) and achieving a lower proportion of illegal connections to the grid; (0 Review and improvement of customers classification by sector to identify actual commercial users currently classified in the industrial or residential sectors; (g) Introducing financial incentives for energy-efficient equipment installation at large residential and commercial customers, depending on the results of a pilot program to test the relevance and impacts of these incentives. (g) Bringing prices to economic costs by 1995 without subsidies on fixed or variable charges (prefered to a gradual increases, since prices are already not too far from costs, meaning acceptable increases even for low-income households); @) Fixed charges only reflecting fixed costs .and not used to artificially decrease I variable (consumption) charges, for instance in lower-income households, which would result in inefficient gas use; (i) Offering financial incentives to lower strata households for gas substitution for electricity for cooking and (if applicable) water heating, through partial subsidizing of or credit facilities for the costs of connection, internal installation and equipment purchaselretrofit. LPG (j) Setting the sale price by ECOPETROL to distributors at opportunity cost (based on the prevailing supply system: dominant importation or dominant local production at Cusiana) (k) Eliminating the quota system (used for restraining supply and resulting in speculating practices and uneconomic use of electricity in supply-limited urban areas); (l )Freeing retail prices to final customers (possible because of the relatively large number of distributors partly serving the same areas), after a transition period with a price cap system that will require a detailed study of distribution margins (including adequate provisions for expansion of storage capacity and for cylinder maintenancelreplacement. 22. The Study assessed the impacts of various conservation and substitution measures and policies on electricity demand in the residential, commercial and public sectors of the four cities. Projections of energy and capacity demand were prepared for the period 1990-2010 and compared to the base trend. The base scenario is the one prepared by ISA for the indicative power sector expansion plan. Measures and policies that were considered include the following: (a) natural gas and LPG substitution for electricity (see Chapter S), under two pricing scenarios: (i) economic pricing of electricity, natural and LPG; (ii) intermediate pricing (electricity subsidy remaining after 1994 for the lower three strata); (b) electricity conservation measures, concerning both technology and information aspects, under economic pricing assumptions. 23. The "efficiency scenario", i.e. the combination of economic tariffs, substitution measures and conservation measures, yields the following results in terms of electricity and peak demand savings. Overall total electricity sales at national level would increase at 3.8% per year over the 1991-2000 period, instead of 4.7% per year in the base scenario. Over the period 2000-2010, the growth rate would be 4.4% per year, compared with 4.8% per year in the base scenario. The relative impact of the efficiencyscenario would be larger in Bogota and Medellin (because of the scope of the substitution program) than in Barranquilla (substitution already partially achieved) or in Cali (little water heating). Estimated capacity savings in the residential sector would amount to 738 MW in 2005, equivalent to about 6.5% of projected capacity demand in this year. Savings in the commercial and public sectors would amount respectively to 22 M W and 19 MW in 2005, i.e. only a combined 5%of total capacity savings. The efficiency scenario results in proportionally less capacity saved than energy, since part of the savings are achieved off peak hours. Total installed capacity (taking into account losses and reserve capacity) would be reduced by 1472 M W in 2005. This is equivalent to the total capacity of the following projects (that are part of the power expansion plan): Urra 1, Miel 2, Porce 2 and 60% of Nechi. Tfre efficiency scenario would result in postponing the implementation of these projects by a period of 1 to 2 years, with the same reserve factor as in the base scenario. Pioritv actions to foster W t u t i o n for electricity 24. In addition to pricing and organization reforms required in the gas sector/industry, the priority - actions to foster gas substitution for electricity that are presented in this report concern the proper application of standards for quality and safety aspects, the strengthening of technical capabilities at distribution/iitallation level and customer information, in particular the following: (i) standards preparation and implementation; (ii) equipment certification and labeling;  (iii) training of technicians for distribution, installation and maintenance; (iv) certification of technicians; (v) public information and education campaigns; and, (vi) study of options for streamlining LPG cylinder replacement system. Fostering electricitv rational use 25. Based on economic pricing of gas and electricity as a policy prerequisite, electricity conservation in Colombia should be enhanced in the short term through a six-prong approach: (i) development of standards and guidelines for new buildings in the commercial and public sector; (ii) enhanced energy efficiency in existing buildings in the commercial and public sectors; (iii) development of certification and labeling of residential energy equipment, together with public information and education campaigns; (iv) load management, through tariff incentives and ripple control; (v) implementation of pilot programs of Demand Side Management by the utilities; (vi) improved street lighting. Economic benefits 26. Economic benefits of the substitution program were estimated as the difference between the economic costs of substituted electricity and the total levelized costs of electricity substitutes (including energy, opeartion, connection, installation and equipment), after accounting for the effect of tariff reform. The program is more attractive in Bogota than in the other three cities, in terms of both rate of return and total benefits. Electricity substitution in Cali is marginally attractive. Substitution costs vary between 3.1 and 5.3 cents of US$ per kwh, which compare favorably to average incremental marginal costs of 6.3 to 7.5 cents of US$ per kwh depending on the sector. 27. The impact of electricity conservation programs on electricity demand was estimated after accounting first for the effect of price reforms as well as for the effect of natural gasLPG substitution for electricity (with economic pricing in both cases). The following programs were considered: * Lighting in all cities (services and public sectors) * Cooking in all cities (residential sector) * Air conditioning in MedellWCali (serviceslpublic sectors) and Barranquilla (all sectors)  Refrigeration in all cities (services and public sectors) Water heating in Bogota and Medellin (all sectors) Refrigeration is the most attractive program, both in terms of economic viability and overall electricity savings. Cooking and water heating programs are economically very attractive but could yield relatively limited savings due to the impact of gas substitution on these two applications and because water heating is limited to Bogota and Medellfn. Improved lighting is economically marginally attractive and yields average savings. Bogota and Medellfn account for almost two thirds of estimated potential savings. Conservation costs of major programs vary between 1.6 and 5.3 cents of US$ per saved k wh,with even lower costs in the case of public education campaigns targeting improved practices for refrigeration in the residential sector. Institutional a s- 28. Adequate institutional and financing amngernents are essential for the proper delivery of energy - eciency services. An rnadequate institutional framework could lead to neglecting comparative advantages of actors, duplicating activities, limited incentives and/or accountability of actors involved, and insufficient use of the private sector in the delivery of energy efficiency services, and result in an un&cient allocation of public resources. Financial incentives such as credit facilities for residential customers might be needed to allow economic substitution or saving of electricity; however these incentives should be carefully targeted and their actual impact monitored periodically in order not to result in economic inefficiencies. Specific financial instruments can be designed for p r o v i m quickly-processed financing for energy efficiency investments, as well as appraising/engineeriagadvice; such h c i n g should be provided under commercial terms similar to those applied to supply-side energy investments. 29. Several principles should be considered for designing institutional and financing anangements for the effective delivery of energy &ciency services: (i) the separation of functions between actors according to their respective comparative advantages and mandates; (ii) the deamtrahation of delivery structures; (i) the increased role of private sector actors; (iv) a consensual, flexible and (by definition) demandoriented approach to end-use energy efficiency; (v) monitoring and evaluating of the cost-effectiveness of the measures and policies implemented; (vi) establishing external lrnkages with o ~ o n with s recognized success in enhancing end-use energy efficiency and whose experience is relevant to the Colombian context; (vii) using financing incentives that are costeffective and minimize he-riders; and, (viii) liuking financing and delivery instruments. 30. Institutional amngements for the implementation of short term actions that are recommended to foster gas substitution for electricity as well as electricity conservation in the residential, commercial and public sectors are presented in detail in the report. In the case of gas substitution key roles are played by ACOGAS, a non-profit organization regrouping most gas sector operators, and ICONTEC, an independent entity charged with developing standards and certifying equipment. In the case of electricity conservation, demand side management pilot aqions should be developed by small special units in the utilities in the four cities, while certification and labeling of selected electric appliances would rest mainly with ICONTEC and the Committee for Developing and Stimulating National Industry (through its Division for Quality in the Power Sector). A Review Committee impulsed by the MME and the DNP would be charged with developing and applying energy efficiency standards and guidelines for public and commercial buildings. 31. A new entity should be created to promote energy efficiency, ensure coordination of actions and monitor results and impacts, in close cooperation with policy and phmhg work conducted by the MME and the DNP. This small-sized entity should involve and obtain its financial and human resources from public institutions, energy sector operators, financial entities, the private sector and donors, thus implying only a small financial burden for the Govemment. Its status would be that of Foundation or and Institute (such as CENERGIA in Peru) with financial autonomy. It should be complemented by a financial corporation responsible for providmg financing for energy efficiency projects. The corporation would obtain resources from local banks, industries, professional associations, bilateral donors and international financing agencies (on- lending by the Government); it would also obtain resources through its financial services. In a first stage it could be designed as part of the FEN, in order to build a confidence capital without incurring efforts and resources necessary to create a new structure.  . BACKGROUND CHAPTER 1 General 1.1 Colombia is a middle-income, Andean country covering about 1,140,000 km2, with a total population estimated to 32.3 million by mid-1990 and a per capita GNP of US$1,260 in 1990. Population literacy and life expectancy are above average for middle-income countries. Population growth is moderate and decreasing (2% during the 80s). and is forecast at 1.5% for the 90s. Urban population represented an increasing share of total population (70% in 1990), and grew at 2.9% per year during the 80s. Population in the four cities of special interest to this study (Bogota, Bananquilla, Medellin and Cali) was estimated at ...million in 1990, i.e. about ... % of total urban population. 1.2 Context. After a stable and relatively high growth rate compared to other countries in the region during the 80~1, Colombia's macroeconomic performance faced mixed results during the 1988-90 period. Part of this deterioration can be explained by swings in international coffee and oil prices, continued political violence that had adverse effects on the infrastructure (in particular in the oil sector) and the investment climate, and the sharpening of the power sector crisis resulting in a significant drain of public resources and the recent electricity rationing (since February 1992) that is expected to reduce output for 1992 by 0.5-1.096 of GDP. Inflation accelerated and reached a 15-year peak of 32% in 1990, while GDP growth fell from an average 5.6 percent in 1986-87 to an average 3.5 percent in 1988-90. In 1991, inflation fell to 27% but real GDP growth remained relatively weak at 2.2%. On the other hand due to the increase in oil prices and the expansion of petroleum and coal exports, the current account surplus in 1990 was equal to 1.5% of GDP; in the same year, external trade showed a positive balance of US$1,761 million at current prices (with total exports equal to 125% of imports value). 1.3 The debt burden has become a serious constraint to further economic development. The nominal value of the total external debt was about US$16.95 billion in 1989, compared to only US$1.25 billion in 1970. In 1989, the debtlGDP ratio was 50.38, while debt senice represented 46.3% of the exports of goods and services and 10.7% of GDP. 1.4 To tackle the economic issues, the government has embedded its macroeconomic policies into the Economic Modernization Program (EMP), which was launched in 1990 to improve the efficiency of resource allocation and use through trade liberalization, public sector restructuring and fmancial sector reforms. The EMP originally envisaged a gradual reduction of the non-fmancial public sector deficit to 2 percent of GDP in 1991 and less than 1 percent of GDP in 1992. Latest developments show a deficit of about 0.1 percent in 1991, well within target. In the wake of the ongoing structural reforms, the government's focus will shift to providing public goods in the case of market failure and to paying increased attention to the social sectors, infrastructure development and environmental protection. 1.5 The ener~v/economv linkage, Within the above context, efficient performance of the energy sector is critical to sustaining the economic modernization program and to enabling the government to focus on developing the infrastructure and social sectors. Although Colombia is endowed with abundant and diversified energy sources, its energy sector has been plagued by problems over the last decade, including financial crises in the power and coal subsectors, low levels of savings, and low operational efficiency. 1 However, with an average of 3.6%per year. GDP growth during the 80s decreased significantly compared with the 5.4%achieved during the 70s. 1.6 The energy sector remains central to the Colombian economy. Energy sector investment reached a level of about 45% percent of public sector investment, most of it for the power sector (25.6% in 1989). In 1989, the net contribution of the oil sector to the balance of payments was US$729 million, including 16.4% of total exports and 4.2% of total imports (gasoline mainly); in the same year, coal exports of US$460 million made for 8.1% of total exports. The oil sector is a significant contributor to fiscal revenues, with 11.5% of total public expenditure in 1989, as well as to regional development through oil royalties equivalent to about 12% of oil value at wellhead. The energy sector also generates savings of about 5% of GDP. On the other hand, the sector accounted for 53.4% of the external public sector debt (37% for the power subsector alone, 10.8% for the coal sector and 5.6% for the oil sector), a significant increase compared with 23.6% in 1980; the sector share of debt service has also increased sharply from 7.6% in 1985 to 55% in 1989 (out of a total U S 2 9 0 3 million), 34% being accounted for by the power subsector alone. The situation of the power subsector is indeed delicate: in 1991, internal cash generation of US$700 million was offset by a debt service of US$1.5 billion, leaving a frnancial gap of US$800 million. For the future, external investment requirements of the subsector over the next ten years are about US$2.2 billion. 1.7 Although the energy intensity of the economy has remained constant during the - last years, it has decreased slightly during the 1970s and the 1980s (see Table 1.1), but it is still above the average for similar Latin American countries. Final energy consumption grew at an average of 3.8% and 2.9% per year during the 70s and the 80s respectively, while GDP grew at 5.4% and 3.6% in average over the same periods. Energy intensity decreased mainly in the residential sector, which is explained by the slowdown in population growth and by the increasing urbanization process that is associated to substituting traditional fuels with more efficient energy sources and equipment. According to data from the Latin American Energy Organization (OLADE), the energy intensity of the Colombian economy was about 430 TOE per 1980 MUS$ in 1990, which is equal to the average energy intensity for all OLADE countries. While this number is slightly lower than the energy intensity in Mexico and Venezuela (458 and 472 TOW1980 MUS$ respectively), two countries with highly subsidized petroleum products, it is significantly higher than those of similar Latin American countries, such as Chile (333 TOW1980MUS$) and Uruguay (291 TOW1980MUS$). Table 1.1:Energy intensity by sector (in TJ/1980 MUS$) Share of GDP (%) Energy intensity Energy intensity with with respect total GDP respect sector GDP SECTOR 1980 1988 1980 1988 1980 1988 Agro- 1. 7. Mining Industry 26.7 26.1 6.1 6.1 20.0 17.8 Service 49.3 48.4 7.6 7.4 15.1 15.5 Residential - nla 4.6 4.0 - - Total 100 100 19.7 18.9 - - Source: OLADE, World Bank tor Overview 1.8 Reserves. Colombia has a diverse and abundant energy endowment of liquid hydrocarbons, natural gas, coal, and hydroelectric power. Proven reserves of crude oil are about 2 billion barrels, which will last for 12 years at the present production rate; the field of Cusiana, discovered in 1991, is expected to increase proven reserves by a quantity of between 0.7 and 1.5 billion barrels. Reserves of natural gas are about 4 Tcf, equivalent to about 670 million barrels of crude, with a reservesJproduction ratio near 29 years (without taking into account the reserves of associated gas in the Cusiana field, which had not been estimated at the time of this report). In addition, this estimate should be considered as conservative in view of the lack of incentives for gas exploration and production. Colombia has the largest coal reserves in Latin America, with about 6.5 billion tons of proven reserves, 70 percent of which corresponds to thermal coal. The hydroelectric potential hovers at around 93,000 MW, 10% of which is curreztly exploited. Finally, Colombia has a large potential of biomass fuels (wood, bagasse and a& residues), which is partly exploited. 1.9 Qverall S ~ l and v Demand. Colombia is energy self-sufficient, with the exceptior, - the importation of relatively small quantities of petroleum products. In 1990, crude output re&. -I 440,000 bid, supplying all the refineries (which absorb 56% of total production) and providin, an export surplus (165,000 bid). Natural gas production amounted to 420 MMcf/d in 1990. The two larger natural gas producing basins in the country, the Atlantic Coast and the Barrancabemeja region, are also the largest consuming areas. Coal production increased at 17.5 percent per year in the last decade, reaching 20.5 million tons in 1990 (75% for exports). This increase was possible mainly because of the Cerrej6n Project in la Guajira, which, in 1990, represented 70 percent of national production. Internal coal demand during the last decade has shown a yearly increase of 3.4 percent. 1.10 As pointed out before, overall energy demand has more or less followed the pace of economic growth during the 1980s. with an average growth of 2.9% per year. However, electricity consumption growth has been notably higher (5.4% during this period, compared to a GDP growth of 3.6%). especially in the residential sector with an average 6.5% per year. In this sector, this quick growth is due to the combined effect of increased the rate of coverage2 and, to a lesser extent, unit consumptions. Overall, electricity share of final energy demand increased from 5.4% in 1970 to 11% in 1989. Figure 1.1 shows the trend of electricity demand: during the 1970s. demand growth led to a doubling of installed capacity every 7 years, but the pace of demand growth considerably slowed down during the 1980s. 1.11 Effective installed power capacity in Colombia stood at 8,330 MW (78 percent hydraulic and 22 percent thermal) at the end of 1991. Currently, two important projects are close to completion (Guavio and Rio Grande 11). which will add 1,322 MW to capacity; interconnection with Venezuela and plant rehabilitation projects will add another 411 MW. Electricity supply grew at an average rate of 5.8 percent between 1980 and 1990, increasing from 19,481 GWh to 34,081 GWh. The level of electricity losses is extremely high (21.7% in 1990), placing Colombia above the Latin American average. These losses are mainly non technical, involving illicit consumption and poor commercial practices; above-the-average technical losses also stem from overloading of distribution networks, which result in part from insufficient investment in distribution compared to generation and transmission infrastructure and from the numerous illicit connections. From an economic point of view, non technical losses are estimated to represent about US$150 million a year, which amounts to about 10 percent of sales revenue. Since March 1992, the country has faced severe electricity rationing which has reached up to eight hours per day in the residential and commercial sectors; an emergency plan has been implemented by presidential decree and will bring an additional capacity of 278 MW. 2 In 1989, 64%of households were using electricity at national level and close to 99%of households of all municipalities.  Figure 1.1 ELECXRIClTY DEMAND TREND m -- Source: ISA, CNE HISTORICDEMAND - 7 YEAR DOUBLING + - - 11 YEAR DOUBLING 1.12 As shown in Table 1.2, final energy demand is fairly diversified, especially in the industry sector. While petroleum products have the largest share (43% in 1990), coal and natural gas each have a significant and increasing share (1 1%and 5% respectively). Characterized by a low end-use efficiency and a decreasing share, biomass fuels are dominant in the residential sector in rural areas but they also contribute to the industry sector consumption. As could be expected the transport sector is the largest consumer (with 29.4% of frnal energy in 1989), but the residential and industry sector have similar shares (27.9% and 26.8% respectively). It should be noted that some commercial activities are conducted in the households and, as a consequence, the commercial sector share of final energy consumption is underestimated to some extent. Urban areas account for about two thirds (67.6% in 1990) of total energy consumption of the residential sector Table 1.2: Final energy consumption by sector in 1989 (46) products esidential ~ommerciaVPublic Industry 2; 4,3 172 0,O 4,o 03 0,2 4,7 ::: 3.8 : $ 9.5 8 0.6 7,9 i.2 26,8 Transport 28,8 0,o 0,O 0.0 0,O 0,6 29,4 Agro 1.3 5 ,9 0,O 0.0 0.0 0.0 7,3 Other 4.2 0.0 0,O 0.2 0.0 0-9 5,3 Total 43,4 27,l 5.2 11,4 10,5 2,4 100,O Source: MME, 1990 Note: 100% = 19.45 MTOE 1.13 As shown in Figure 1.2, the residential sector accounted for almost 50%of electricity sales in 1990, which is an atypically high share. In this sector, uneconomic use of electricity for cooking and water heating3 is caused by low electricity tariffs and by the restrictions in the supply of substitute fuels, such as natural gas and LPG4. These aspects make the residential sector a priority target for demand side management actions and policies. Flgure 1.2 DISTRIBUTION OF ELECTRICITY SALES BY SECTOR IN 1990 Source: ISA Note: Total sales = 26,048 GWh 1.14 Natural gas total consumption grew moderately during the 1980s (by 25%) to reach about 392 Mcfd in 1990. Table 1.3 shows that natural gas is used mainly for power generation and in the industry sector. However, the consumption of the residential sector is increasing much faster than that of the other sectors, since it moved from almost negligible quantities in 1981 to 14.2 Mcfd in 1990, i.e. about 4% of total consumption. Residential consumption of natural gas is concentrated in the cities of the Atlantic Coast (Bananquilla and Cartagena mainly), Barrancaberrneja (a refining area) and, in the most recent years, Bogod. LPG consumption grew at 5.6% per year during the 1980s and reached 13,400 Bpd (about 103,000 tondyear) in 1990, mainly for the residential sector that represents 92% of total consumption. LPG consumption is supply-restricted especially in the central part of the country (Medellin and Cali). 3 The results of a survey conducted by the DNP in 1986 show that at national level, electricty accounts for 21%and 98%of energy cansumption f a cooking and water heating respectively. 4 The DNP survey indicates that at national level LPG accounts for 24%and 1.8%of energy cansumption for cooking and water heating respectively. Table 1.3: Natural gas consumption by sector 1981 1990 81-90 growth C MCFD % % year Power 151.5 48 164.8 42 0.9 ECOPETROL 82.6 26 102.5 26 2.7 Petrochemical 10.8 3.5 14.4 4 3.7 Industry 69.3 22 94.6 24 4.1 Residential 0.9 0.3 14.2 4 162 Transport(CNG) 0 0 1.7 0.4 nla Total 315.1 100 392.2 100 2.7 Source: ECOPETROL, 1991 .. 1.15 E w P n c u The current regulatory framework for energy pricing is the sector's gravest issue, particularly in regard to hydrocarbons pricing (liquids and gas). Over the last eight years, most of the progress in energy pricing has occurred in the power subsector, although further reform is needed to increase private sector participation in the subsector, in particular for power .- generation. Overall, the price-fixing system, administered by the Ministry of Mines and Energy (MME), keeps energy prices well below their opportunity cost and also maintains distortions in price structures. The system works on a cost-plus basis for petroleum distribution, and under the current pricing and taxation policy a large share of the economic benefits from oil production and exports is recycled within the sector in the form of price subsidies as well as through ECOPETROL's participation in CARBOCOL. Concerning natural gas, two additional pricing issues should be dealt with to encourage natural gas production. F i t , in the Atlantic region, the bulk supply prices of natural gas (mainly for power generation) should be brought in line with economic costs. Second, in the Central region, the purchase price for concessionaires should be readjusted to encourage longer-term development of adequate supply. .. 1.16 The Cnsis of the Power Sub- The power subsector is facing a major financial crisis, which has led to an increasing inability of the subsector to provide an economic and reliable supply and to service its debt, translating into a growing financial problem for the Government. This crisis is founded on two basic problems: (i) deep flaws in the institutional and regulatory framework of the subsector, in particular the lack of corporate autonomy and accountability of the utilities, leading to management inefficiencies (lack of well-defined and feasible objectives; high system losses, in particular non-technical losses; in some instances, disregard of economic choices; deficiencies in planning and execution of the expansion program; overborrowing); (ii) tariffs below cost recovery levels (overall average tariff reaching about 75% of LRMC). External factors that also played some role in the crisis include the devaluation that took place in 1985, the modifications of the terms of multilateral loans during the 80s, and the appreciation of hard currencies compared to the US dollar. 1.17 Several indicators show the seriousness of the crisis, including the return on assets, the tariff distortions and the debt service. The return on assets in the subsector is extremely low and has been decreasing since 1987 (4.9% in 1990); it is negative (-4.3% in 1990) when debt service is included (see Figure 1.3). The net internal generation of funds was negative by US$1170 million in 1990, but this deficit is expected to decrease under the effect of the ongoing restructuring program. According to the FEN, the deficit would still amount to about US$700 million overall for the period 1991-1994, therefore seriously hindering the subsector capacity for new investments. The overall picture disguises, however, differences between the situation of each utility: for instance, over the same period, the deficits of EEB and CORELCA would be US$223 million and 42 million respectively, while EPM and EMCALI would show superavits of 22 1 million and 16 million.  Flgure 1.3 : Return On Assets of the Power Subsector 15% 10% 5% -=- 0% - -5% , I * I I I I 8 7 1983 1984 1985 1986 1987 1988 1989 1990 m - ROA wlo debt service ROA with debt service I I Source: FEN 1.18 Electricity tariffs present significant distortions between sectors and socioeconomic strata. While industrial and commercial tariffs have kept increasing in real terns during the last decade and are currently above economic cost of supply, residential tariffs are characterized by cross-subsidies and an average level that is far under economic cost (see detailed data in Annex 2). Table A-12 in this Annex shows that among the four cities considered, Bogota has the largest distortions in the tariff structure (57% average subsidy in the residential sector and overcharges of respectively 80% and 30% in the commercial and industrial sector), while Cali has the tariff structure with the lowest distortions (46% subsidy in the residential sector and practically no overcharge in the industrial and commercial sectors). Figure 1.4 illustrates tariff distortions in the residential sector, which are proportionally higher in Bogota and Medellin than in the other two cities. In 1990, annual subsidies in the residential sector amounted to an estimated US$110 million in Bogota, 60 million in Medellin, and about 20 million in both Cali and Bmanquilla. For the overall four cities, it is noteworthy that strata 3 and 4 received in 1990 more combined subsidies than lower-income strata 1 and 2 together. 1.19 Financing the rapid expansion of power supply (installed capacity increased from 2080MW in 1970 to 8356MW in 1990, i.e. a factor of 4.5 over only 20 years) took up a large share of total public investment that varied between 21% and 30% during the last decade, and also resulted in massive external indebtedness. As shown in Figure 1.5 the total debt of the subsector increased steadily during the 1980s (reaching about a third of total external public debt in 1990), while revenues (in US$) remained more or less constant over the same period  flg. 1.4: Electrlclty Tarlff vs Cost in the resldentlal sector 50 T L I Note: Average values as of December 1991 Source: JNT, ISA, Consultant team Flgure 1.5 : Debt and revenues of the power subsector Source: FEN r a Revenue Debt  1.20 In view of the subsector crisis and as part of the program of reform of the public sector, the Government has started designing since 1991 a comprehensive restructuring program that would increase efficiency and curb public disbursements in the subsector. Specific objectives of the program are: (a) to create the legal and institutional framework required to introduce competition and contestability in the sector; (b) to create a new regulatory system and develop regulatory capabilities; (c) to promote the participation of private investors in the ownership and operation of subsector assets, in particular at the level of generation; (d) to eliminate or substantially reduce the need for the Government to provide financial support to the subsector. Following a series of seminars conducted with ESMAP support, to examine the organization of the electricity industry in several countries, and a national debate on the restructuring of the subsector, an Electricity Bill was submitted to Congress in February 1992. The next steps to be taken include the implementation of the new regulatory framework, the financial rehabilitation of the subsector enterprises and the startup of private sector initiatives that meet appropriate economic efficiency criteria (see action plan in Annex 4). Multilateral institutions (IBRD and IDB) are considering supporting this process through a proposed Private Sector Energy Development Project. 1.21 As presented in the indicative Expansion Plan prepared by ISA in June 1992, in order to provide an electricity service that matches demand efficiently, with adequate levels of reliability, quality and safety, the future development of power supply in Colombia should be based on a number of principles: integration with the development of other sectors, in particular natural gas and coal; improvement of economic efficiency, through the implementation of least- cost supply or demand options; promotion of competition and private sector participation, supported by the ongoing regulatory and pricing reforms; and flexibility for reviewing the plan to reflect uncertainty factors, actual demand growth and alternative supply options. In the short term, the completion of the Guavios (1000MW) and Riogrande I1 (322.5MW) hydroelectric projects, combined with the interconnection with Venezuela (capacity of 200kW) and the rehabilitation of thermal plants (21 lMW), would supply enough energy and capacity until 1997. 1.22 As shown in Annex 3, current options for the subsector expansion in the medium term (1998-2002) include 7 large hydroelectric projects, 8 coal power projects (1501300 MW each), and several gas turbine or combined cycle power projects, as well as 6 proposed private sector projects (small hydro, coal power plants, cogeneration and combined cycle plants). The Plan recommends to develop a minimum capacity of 2000MW for the period 1998-2002 (gas: 600 MW; coal: 600 MW; and hydro: 800 MW). This forecast is based on an electricity demand growth of 4.2% per year (base case) over the period 1992-2000, which takes into account electricity substitution induced by the natural gasLPG development program but does not consider the effects of the pricing reform or those of the electricity rationing on electricity demand. The Plan notes that in view of construction duration of available options, some rationing could reappear between 1997 and 1999, even if the execution of some of these options was to swC immediately. Implementation of cogeneration or combined cycle projects by the private sector could help avoid this situation; in addition quickly-operational thermal power projects should be favored for medium-term expansion plans. 1.23 LPG s u ~ p l vand distribution, LPG is produced mainly in the refineries of Cartagena and Barrancabermeja (13,361 bpd in 1990, i.e. 97% of total production) and in the gas plants located on the production fields (1,024 bpd in 1990). It is transported through a network of propanelpolyducts that links storage facilities where wholesalers obtain their supplies. The total storage capacity at national level was of 136,290 barrels in 1991, 58% of which belong to ECOPETROL and the rest to wholesalers; the latter, however, own the majority of storage facilities in Mansilla and Manizales that supply the Bogota market (27,070 barrels, i.e. 71% of 5 Scheduled for January 1993. total capacity of these locations). The supply of LPG is currently severely constrained due to the lack of refining capacity and importationlstorage infrastructure and a quota system is used' to share the available supply between the major demand centers. 1.24 LPG is distributed in Bogota; by about 30 companies, among which Colgas S.A. controlled about one third of the market with 1,215 bpd in 1990, while 7 other companies with sales above 100 bpd accounted for another third of the market; the remaining small companies sold 30-80 bpd each. Distributors estimate that about 15-208 of total sales in Bogota are destined to the industrial sector. In Medellin, Gases de Antioquia commercializes most of LPG, which is transported by truck from the Barrancabexmeja refinery (about 80% of total sales of 396 bpd in 1990) or from the Cartagena refinery; the use of LPG in the residential sector is practically negligible in Medellfn. In Cali there are five distribution companies, one of which (Colgas de Occidente) held about half of the total market of 445 bpd in 1990. In Barranquilla, due to the penetration of natural gas, the market of LPG is small (184 bpd in 1990) and limited to periurban areas and small municipalities; 2 distributors are operating in this area. . . . 1.25 buti ion, As of December 1991, total reserves of natural gas amounted to 3890 Gcf (i.e. 110 Gm3), 77% of which are located in the Guajira region on the Atlantic Coast (fields of Chuchupa, Ballena and Riohacha). Natural gas is produced directly by ECOPETROL, which controls alone about 16% of the remaining reserves, or by international companies under either concession (4% of reserves) or production-sharing contracts (80% of reserves), the latter including the Guajira fields which supply major demand centers on the Atlantic coast through the 400 km,2 0 gasoduct owned by PROMIGAS. The city of Bogod is currently supplied from the small field of Apiay (8-9 Mcfd), which is exploited by ECOPETROL; other small demand centers are supplied from nearby gas fields in the central region. 1.26 The prospects for increased supply of natural gas include: (i) associated gas in the giant field of Cusiana (with oil reserves estimated at between 700 and 1500 million of barrels in October 1992); gas reserves appear promising but have not been quantified yet; in addition potential production of natural gas would be low during the first years of exploitation due to its initial use for reinjection to increase oil recovery levels (until about the yea. 2000); (ii) imported gas from Venezuela (60- lSOMcfd), through the interconnection of the two countries' gasoduct networks, which would allow to supply the central regions of Colombia, including Medellin, Bogota and Cali; however, in addition to the large amounts of investment required, difficulties became apparent during recent negotiations between the two countries concerning the price of gas sold by Venezuela; (iii) increase in production capacity by about 150 Mcf through the installation of two offshore rigs at Chuchupa (Guajira), which would, however, decrease the reserve/production ratio from a cumnt 27 years to about 20 years, without new discoveries. In the meantime, the government has recently approved the interconnection of the Guajira fields with the city of Medellfn through the construction of the gasoduct Ballenas-Barrancabermeja- Medellfn, which should be operational by 1996. 1.27 Distribution of natural gas in the two major residential demand centers - Barranquillalcartagena and Bogod - is accomplished by respectively Gases del Caribe S.A. and - Gas Natural S.A., two private companies where ECOPETROL has some participation. Both companies have achieved excellent penetration rates: since its creation in 1977, Gases del Caribe has connected almost 60,000 households, i.e. over half of total households in served areas (which - themselves contain about half of total households), with higher connection rates in higher- income areas; the results of Gas Natural S.A. are even more impressive in Bogota; with about 90,000 households connected in a period of a little over 2 years and a final target of 300,000 households, mostly middle and lower-income families located in the Southern and Western parts of the city. 1.28 E n e r g v Most activities linked to energy production, transport and use have negative impacts on the environment and human health in Colombia. These environmental impacts can be significant and sometimes irreversible. Oil production, transport and refining, as well as coal mining (all major and growing economic activities in Colombia) bring about spills leading to water pollution and also cause some local air pollution. Power thermal generation leads to air pollution especially in the case of coal plants, while large hydropower plants, such as the ones currently planned in the power expansion plan, are associated with loss of agricultural land and population resettlement. The impacts of energy end-use are probably even greater than the impacts of production: air pollution due to petroleum product use, especially in urban areas (where the increasing majority of the population lives), as well as in the transport and industry sectors; deforestation and soil degradation due to fuelwood production and use in dry land and highland areas. However, it must be noted that these environmental impacts vary widely between regions and some are very site-specific. Also, several other economic activities have environment and health impacts that can be more significant than those of the energy sector, such as effluents and emissions in the industry sector (chemical, cement, paper, agro-industries, etc.), urban sewerage and solid waste disposal, and soil erosion due to agriculture land clearing or forest logging. 1.29 The government of Colombia has taken some measures to mitigate the negative impacts of energy sector activities, but the unfavorable macroeconomic context of the last decade has probably caused insufficient levels of so-called investment and maintenance activities to protect the environment. Current actions include emission~discharge regulation, forest and land protection, substitution and conservation policies and some integrated planning; also environmental assessments are routinely performed for projects with significant expected impacts6, and recommendations to cost-effectively minimize environmentally negative effects are applied. The government also has future plans to create a Ministry of Environment to oversee environmental planning, regulation and policy work, which is now dispersed at national level between the National Institute of Natural Resources, INDERENA (for issues of water pollution and land or forest degradation), the Ministry of Health (for air pollution issues), and the National Department of Planning (for overall planning, in particular through the Regional Corporations). 1.30 However, in the present, institutional coordination and effective application of the numerous, sometimes contradictory regulations remain deficient, with too much emphasis put on technical fixes to limit environment degradation. This technical focus should only be used to help design economic and regulatory policies and investment programs that support environmental objectives, based on a determination of actual environmental impacts of energy production and use and the economic tradeoffs in limiting these impacts. Adequate levels of public investment in environment maintenance should be determined to make measured use of scarce public resources. Finally, there is a need to depart from conventional supply-side energy policies, and evolve towards more integrated resource planning, which would include energy efficiency and cleaner or renewable energy options. This integrated planning should start from the demand side to determine what energy services are wanted and how can each service be most efficiently and equitably delivered in economic and social terms. Increases in energy efficiency are often less environmentally damaging than increases in supply to provide the same service. Indeed, there are favorable prospects for the development of cleaner fuels, such as natural gas and some renewable energies, or for increased energy efficiency as will be shown in this report. 1.31 Energy-related environmental policies should be affordable and sustainable, and should lead to both economic and environment improvements. They should focus on recipients (taking into account their values, priorities and opinions), reflect local conditions, and involve 6 Environmental assessments of power projects are performed by ISA's Power Sector Environment Committee (CASEC).which was created in 1987. regional authorities and the recipients themselves. However, there are no recipes or global solutions. Macro-level policies must combine different approaches and need to be complemented by micro-level studies to inform policy makers about consumers' social, cultural, and behavioral characteristics, all of which are crucial to efficient, environmentally benign energy development. 1.31 s c - t . . of - S The Ministry of Mines and Energy is the agency responsible for energy sector policies and planning, and for coordinating and overseeing the activities of energy sector operators, including the power utilities, ECOPETROL and CARBOCOL. The coordination and supervision of sector activities has been improved with the creation of the National Energy Commission (CNE) in 1989. The CNE's Board of Directors is chaired by the Minister of Mines and Energy and it is integrated by the head of the DNP, the President of ECOPETROL, the General Manager of ISA, the Director of the Nuclear Affairs Institute and two rotating members from power utilities; the CNE acts on the advice of its Executive Secretary, with support from two independent advisors and a number of consultants. The consistency of energy sector development with government economic policies is obtained through the National Council for Economic and Social Policies (CONPES), for which the DNP is the Executive Secretariat; the DNP approves and submits to Congress the budget of all government institutions, including energy sector public investments. The Financiers Energktica Nacional (FEN) provides financing to the sector by raising funds on the internal financial markets and by channeling external financing; in 1990, with Col$631 billion, the FEN provided about ..% of the sector's total investment. 1.32 The power sector has a complex institutional setup which is summarized in the corporate sketch in Figure 1.6. Power sector operators consist of three municipal companies in BogotA, Medellfn and Cali (EEB, EPM and EMCALI), four national institutions (ICEL, CORELCA, CVC and CHB), of which the first two regroup several smaller local companies, and an interconnection and generation company (ISA). EEB and EPM own generating plants and distribute electricity, while EMCALI only operates as a distribution enterprise. ICEL serves the different Departments in the country; it owns generating stations and transmission lines, but subcontracts their operation with its 15 subsidiaries who own and operate distribution networks. In the Atlantic region, CORELCA owns and operates generating and transmission facilities and it owns the majority of shares in its nine subsidiaries (distribution utilities). CVC generates and distributes electricity in the Cauca Valley and also sells it in bulk to EMCALI. Power tariffs are regulated by the J NT . As a result of this complex institutional framework, responsibilities between generation, transmission and distribution are ill-defined and objectives are often conflicting; this situation has led the government to initiate the ongoing reorganization effort. 1.33 The Empresa Colombiana de Petr6leos (ECOPETROL) is a public company entrusted with the administration, exploitation, and management of the oil and gas resources, oil pipelines, refineries, and other government properties in the hydrocarbon sector. The company is administratively and financially autonomous. It performs exploration and exploitation activities directly or in association with private national and foreign companies, and it distributes petroleum products to the public through its private companies, whose revenues depend on the margins established by the Ministry of Mines and Energy. ECOPETROL also imports fuels to meet the demand not met by its own refineries (gasoline and some LPG in the future). The institutional and regulatory framework for natural gas is not separate from the oil sector framework (apart for retail tariffs which the JNT regulates, as for electricity); this situation, combined with the lack of an adequate pricing policy, hinders the development of the natural gas market.  - 13- FIGURE 1.6 ORGANIZATION OF THE POWER SECTOR Ministry of Mines N a t i d Planning and Enmgy (W DeF=nt ( D m A I I MuaicipaEties I FEN National I JNT CVC Energy I Commission (CNE) I I I I EEB EPM EMCALI I I I I b CORELCA I- - I - - - k I - w ISA Local Dishibutiar Companies ISICEL Local Distribulion companies 1.34 Carbones de Colombia S.A. (CARBOCOL) coordinates exploration, exploitation, transport., and sales of coal through franchises for large-scale coal mining. CARBOCOL also provides technical assistance and mining rescue services to small and medium-scale industries. It is a 50% partner in the largest coal exploitation project (Cerrej6n Zona Norte, with an output of 15 million tons per year). The other partner, INTERCOR (an EXXON affiliate), operates the mine. To finance its participation in this project, CARBOCOL obtained loans from international institutions. The operating income of the project, however, has not been enough to cover the debt service. In the medium term, the company will continue to operate at a deficit and will have to depend on additional local and foreign loans. The deficit in 1992 is estimated at about US$31.3 million, and will increase to an estimated US$209.7 million by 1995. Coal is the only commercial fuel whose local price is not set by the government. 1.35 -encv . . m t u t ~ o n1aA s ~ e c y There is no institution or organization with a clear mandate or significant resources for the evaluation, development and promotion of end-use energy efficiency options, strategies and policies. A number of institutions and sector operators have played a role in this respect since the 1970's as shown in the following paragraph. Recently, the GOC has started reviewing the options of institutional organization for the better coordination and promotion of energy efficiency activities. At the end of 1992, it was envisaged - to charge the reformed Institute of Nuclear Affairs with that mission; renamed the Institute of Nuclear Sciences and Alternative Energy, it would promote alternative energy and energy efficiency in addition to its original mandate. ... . 1.36 Past a c t i w in e w p v c o - m Energy efficiencies activities in Colombia have coincided, as in many other countries, with high oil prices and/or power shortages; usually, they leaned on technical approaches and fixes and suffered from lack of coordination, follow-up and evaluation, and conflicts between energy sector operators and planners/regulators (see Annex 5 for more details). During the 1970s, ECOPETROL launched activities for energy conservation and losses reduction, which practically came to a halt in 1985. In 1980-1981 and again in 1988, ISA, jointly with other utilities (EPM ands CORELCA in particular), promoted electricity conservation in the residential and commercial sector, and, together with ANDI, in the industry sector. Since 1984, the Directorate of Planning of the MME has conducted a Program for Rational Use of Energy in the Industry and it is currently conducting further work for defining an energy efficiency strategy in the industry and transport sectors that would complement the results of this Study. In the Atlantic Region, the PESENCA program has developed, together with CORELCA, several activities for the promotion of energy efficiency in several sectors, including audits, promotion campaigns and financing and extension mechanisms. 1.37 Fnergv sector o r i e n t a t i a As part of its Economic Modernization Program, the government has the overall objective of improving the sector efficiency and ensuring that it contributes to the macroeconomic equilibrium. Improving the efficiency in resource allocation to the sector will be achieved by promoting competition and private sector involvement, and reforming the current pricing and taxation system, as well as the institutional and regulatory framework. For the sector to contribute to macroeceonomic equilibrium and economic growth, it will be necessary to reduce the use of public resources in the sector, increase oil and coal exports and achieve financial autonomy and equity diversification in the power subsector. At the sectoral level, the government seeks to provide an economic and reliable supply of energy by diversifying energy sources, promoting operational and financial efficiency in sector companies, and fostering the rational and environmentally-sound use of energy.  Towards an end-use energy efficiency strategy for end-use energv efficiency 1.38 In Colombia, several factors and aspects combine to make the formulation of an end-use energy efficiency strategy a justified and timely effort, which is likely to be cost- effective from the nation viewpoint, lead to significant benefits for the customers and decrease the impacts of the energy sector on the environment. These factors include principally: (a) the ongoing restructuring of the power subsector, which will lead to a more competitive environment, better quality of service and financially healthy utilities; as a consequence, distribution utilities will be able to engage in demand-side-management programs to deliver energy services rather than electricity per s 3 which in turn will )< decrease the cost of supply and therefore the cost of service to the customers; (b) the ongoing reform of the structure and level of electricity and natural gas tariffs (bulk and retail) to closer reflect economic costs of supply, which will be a prime incentive for consumers to use energy efficiently and to switch fuels when financially justified; (c) the government program for modernizing and opening the economy, which will increase the supply of more advanced and efficient energy equipment; (d) the government program to develop the supply of natural gas and extend coverage of urban markets, which will increase the prospects for economic substitution of electricity; (e) the major constraints on available energy financing, especially in the power subsector, in particular in view of the sustained pace of energy demand growth and the crisis of the power subsector, which will make supply investment deferral particularly attractive; (f) the government strong commitment to develop an integrated strategy for the development of the energy sector, including the promotion of energy efficiency improvements and natural gas development; (g) the fact that increasing end-use efficiency is often more cost-effective - and almost always less environmentally damaging7 - than increasing electricity supply ; (h) the pervasive subsidy of electricity tariffs for low-income households (even after the ongoing pricing reform), which makes them an attractive target for electricity conservation, since electricity prices will remain, in the medium term, much lower than the marginal cost of supplying electricity to these customers; (i) the rather poor public image of energy sector operators due to current electricity rationing, which could be improved through a greater emphasis on understanding and efficiently supplying customers needs (demand-side management approach), which in turn would allow the utilities to influence and better forecast electricity demand for a more adequate and cost-effective expansion of electricity supply; 7 For instance the conservation of electricity will eliminate the environmental impacts of avoided large hydroelectric dams, as well as C02 emissions of avoided thermal plants (which however are small compared to total emissions of the energy sector); substituting thermal-based electricity with natural gas or LPG would decrease C02 emissions (because of the greater efficiency of ditect thermal use versus power - production); on the other hand substituting hydroelecrricity with gas would increase - albeit slightly 0 2 emissions  (j) the large potential for increasing end-use energy efficiency in a cost-effective manner in all sectors of the economy. 1.39 Restructuring the energy sector, reforming energy prices, modernizing the economy and developing natural gas supply are essential ongoing actions, which by themselves will bring significant improvements in the efficiency of energy use in Colombia. Indeed, more competition, flexibility and diversification are needed to improve supply efficiency. Also, ongoing price reforms should boost the supply of efficient equipment in the medium term and they will give the customers immediate and strong incentives for saving or substituting energy sources. However, these reforms need to be accompanied by actions to lessen the market failures or distortions that are likely to remain after reform implementation, especially for the sectors or customers that could be the most affected by the refonns in the short term (e-g. low-income households). 1.40 These market barriers include mainly: (i) the imperfect information of customers about the benefits, costs and ways of implementing energy efficiency measures; (ii) the limited immediate availability of affordable, efficient energy equipment; (iii) high transaction costs (e.g. - for household connection and additional equipment to use natural gas); (iv) customers' high implicit discount rates for energy efficiency investments (especially for low-income households); (v) the lag in consumers' response to price changes, when energy represents a small proportion of total costs or due to the limited availability of efficient equipment as well as of electricity substitutes in some cities (e.g. Medellin and Cali); (vi) institutional bamers (i.e. the lack of intermediation structures to promote energy efficiency); (vii) structural disincentives (for example the different interests on one hand of designers, builders and landlords and on the other hand, managers, home buyers and tenants, with respect to energy efficiency in buildings); (viii) the limited interest of the private sector in energy efficiency services delivery, due to the incomplete appropriation of efficient energy technologies and the perceived limited size of the market for those products. 1.41 As evidenced by the opinion survey conducted in Bogod (see Chapter 2), few customers are fully aware of energy saving options. Little is known about energy efficient products, costs and potential savings. Manufacturers of domestic appliances do not indicate equipment characteristics in terms of capacity and energy consumption, and retailers usually are not knowledgeable or do not provide information on compared performance of equipment or about efficient ways to install and use appliances. More should definitely be done to provide adequate information to consumers, and this will combine with energy price increases to trigger consumer demand for more efficient equipment. Because of the current little consumer demand, this equipment is expensive and limited in supply, as well as generally inefficient due to lack of competition in the market of household appliances. Consumer interest in energy efficiency products and practices will induce to manufacturers to increase the supply of efficient equipment. 1.42 Consumer high implicit discount rates concerning the additional cost of energy efficient equipment8 are frequent in certain households, eg. low-income households, renters and young heads of households. They reflect a number of predictable factors such as: low energy prices, uncertainty about savings, high cost of available credit, competition between priority 8 First cost is certainly a hindering factor in the case o f lamps: in Colombia regular fluoresceat and compact fluorescent lamps cost respectively 20 and 40 times more than incandescent lamps with the same lumen output. Additional cost is also significant in the case of efficient refrigerators and air conditionas: about 1.5 times more for a 20' efficient refrigerator and a third more for a 1,400 BTU eff~cientwindow air conditioner compared with models manufactured locally. Short payback of additional cost is usual for h i s equipment but can hardly outweigh the impact of first cost on customer purchase decisions. investments, lack of liquidity of energy efficiency investments, consumer preferences or opinions that are not related with energy efficiency, etc. How much higher are these discount rates than the interest rates used by the Government in planning the expansion of energy supply is not known in the case of Colombia and it was beyond the scope of this study. The problem of high discount rates of certain categories of customers underlines the need for increased, targeted information actions for these customers; it should not be used as a rationale to introduce further distortions in the market, for instance by giving special financial incentives for these consumers to invest in energy efficiency, since it rather requires a global action throughout the economy. 1.43 As shown in Annex 11, the price elasticity of electricity demand is rather low for the three sectors of the study in the short term9, especially in the commercial sector where electricity price is already above cost or in the public sector where there is little incentive for energy efficiency. In the residential sector of the four cities, the short term price elasticity of electricity demand has been estimated to between -0.14 (in the case of Medellin, where electricity substitutes are strongly supply-constrained) and -0.35 (Cali), while cross price elasticity are even lower, except in the case of Barranquilla where the rapid development of natural gas supply has allowed significant electricity substitutionl0. Own-price elasticities of electricity demand in the commercial and public sectors have been estimated to only -0.1 and -0.16 respectively; electricity demand in this sector is mainly linked to the aggregated value of sector ouput. LPG demand in the residential sector was found to be more closely linked to the the cross-price of electricity (elasticity estimated to close to 2 at national level) than to its own price (elasticity of between -0.2 and -0.3 at national level). 1.44 Actions to lessen the above mentioned market imperfections should combine policy reforms (in particular pricing reform) and technical measures and should include a combination of information dissemination, technical capacity development, minimum efficiency standards and codes, appliance labelling, technology intermediation and, in some cases, financing mechanisms. Market mechanisms should be encouraged for the identification and delivery of energy efficiency services and for increasing the supply of substitutes of electricity (mainly natural gas and LPG), while autonomous centers, based on government and private enterprise joint involvement, could be used for providing customer information, technology intermediation and action coordination. Adequate incentives are needed to encourage private sector involvement in the supply of substitution energy sources (such as natural gas and LPG distribution), which will help diminish the need for Government investment and decentralize and improve energy supply. 9 Price and cross-price elasticity of electricity demand are usually higher in the long term than in the short term (although long term elasticities were not estimated in this study); this reflects the gradually inaeasing availability of efficient energy equipment and energy substitutes, as well as the gradual change in customer patterns of energy use. Price elasticity by strata were not reviewed in the study; elasticities often are lower in low-income households for which electricity is not a sumptuary good or that have low energy expenditure compared to total expenditure. Rice elasticities of electricity demand will also vary largely between various end-uses; for instance the demand for Lighting should be much more elastic than the demand for refrigeration; elasticity of the demand for cooking will mostly depend on the availability of substitutes. lo Elasticities considered by ISA for the projection of electricity demand are lower than those estimated in this study (except in the case of Medellin). ISA did not use data for the 1988-1990 period (with significant increases of electricity prices in real terms), which might mean an underestimation of the price effect. However for reasons of data consistency (in particular concerning the base case, i.e. trend demand, considered by ISA in the 1992 expansion plan), ISA's estimates of elasticies were retained in this study to prepare demand projections under various price scenarii. 1.45 In sum, the actions that were considered in this report for enhanced energy conservation and substitution can be divided in three main categories: (a) economic instnunerits, including pricing policies and frnancial incentives; (b) customer information; and (c) regulatory instruments, in particular for energy equipment and building standards. The report also examined the organizational framework and the intermediation structures that are required for proper definition and delivery of the above instruments and actions. 1.46 Residential Sector. The atypically high share of the residential sector in the total sales of electricity (about 50%)reflects its uneconomic use for cooking and water heating in urban households, which is caused by a conjunction of price distortions and market barriers, including restrictions in the supply of substitute fuels. Indeed, consumption per residential user is rather high (3137 kWh/year in 1989),when compared to similar Latin American countries, e.g. Mexico (1415 kWhIyear), Ecuador (1506 kWhJyear) or Perti (1643 kWh/year). Consumption of low- income (strata 1) urban households is also very high (around 300 kWh/month/user in Cali and Barranquilla, even with little water heating), due to the effect of large subsidies; non-metered low-income customers (paying a monthly lump sum for electricity), which represent a significant part of total customers in the Atlantic Region, are probably even more inefficient in using electricity. The widespread use of electricity for cooking and water heating is not only uneconomic when compared to any other substitute (see Chapter 3), but it also contributes to worsen peak demand problems for the utilitiesll. 1.47 In the residential sector, which currently concentrates most of energy subsidies, energy efficiency policies and measures would help to (i) lessen the effect of pricing reforms in the short to medium term, and (ii) induce economic substitution of electricity by natural gas and/or LPG for middle to low-income urban consumers, through the removal of price and non- price related barriers and disincentives. 1.48 Trans~ort Sector, The transport sector is the largest consumer of frnal energy and it constitutes a target for potentially large energy savings: individual and high-use vehicles are quite inefficient (because of the large proportion of outdated models or poorly maintained vehicles) and the transport modes and driving practices could be improved. Increasing energy efficiency in this sector would also decrease air pollution, in particular the emission of nitrogen oxides, lead, volatile organic compounds and carbon monoxide, which all represent a threat to public health in large, fast-growing cities. The price elasticity of transport fuels demand is usually high, which means that the priority action to achieve effective savings would be to raise the price of gasoline and diesel to their economic costs. Several complementary measures could then be envisaged, including: early vehicle retirement program, especially for high-use vehicles; developing the supply of unleaded fuels; efficiency/emissions standards; inspection and maintenance programs; training of high-use vehicle drivers; dieselisation of vehicle stock; promotion of substitute fuels, such as CNG (especially in urban areas close to gas fields). Non- energy related measures, such as improvement of transport modes and adequate road maintenance, would also contribute to saving transport fuels. 1.49 Industry sector, The industry sector consumes almost as much energy as either the transport or the residential sectors; also the share of the sector in total electricity consumption is relatively important (35%). Many industrial processes are very energy-intensive (e.g. mining, metallurgy, cement, chemicals, food, paper, etc.) in either electricity or heat or both. Significant l1 For instance, load measurements performed by EMCALI in 1990 showed that peak. demand t a b place at around 11:OO am. and is mainly accounted far by cooking needs of middle to low-income households (strata 2 and 3). savings with short pay-back periods (less than 2 years) can be achieved in these subsectors. Since electricity prices are higher than marginal costs, industry owners have already a powerful incentive to save or substitute electricity, but might not do it for lack of information or technical capacity. Private advisory services could be encouraged in that sense and would first target enterprises with favorable characteristics, in particular the following: (i) industries with high energy expenditure compared to turnover, for a potentially large impact on the enterprises' profit margins; (ii) large enterprises, to achieve a significant overall impact and to limit the costs of energy audits as compared to potential savings; (iii) financially healthy enterprises, with adequate motivation for energy savings; (iv) market-driven enterprises, since guaranteed, cost- plus-based prices do not give incentives for reducing energy costs; (v) industries with technologically sound processes and equipment, so that change of process or equipment rehabilitation is not the priority instead of energy efficiency; (vi) national enterprises, as opposed to subsidiaries of multinational companies, which usually benefit from headquarters assistance to increase productivity and efficiency, including energy conservation; (vii) private enterprises, for better receptivity to innovation and a competitive environment. 1.50 public & Commercial Sectors. Although the public and commercial sectors represent only a small share of final energy consumption (a little over 3% in 1990), their share of electricity consumption is more significant, with about 20% in 1990; in addition, tariffs in these sectors are already higher than marginal cost. While small commercial establishments can be dealt with in the same manner as residential consumers, large commercial buildings are likely to represent a more easily reachable potential for energy efficiency, especially buildings with cooling needs, such as in coastal urban areas, and establishments with both heating and cooling loads, such as hospitals and hotels; energy management or shared-savings contracts with specialized f m s should encouraged for large commercial buildings. Public sector buildings should be used for demonstration purposes (exemplary role of the government), with a mandatory approach to energy efficiency design for new buildings (since this sector does not respond well to market mechanisms. Public lighting could also be optimized through the installation of high efficiency lamps and fixtures, that would fit luminance needs more adequately. . . iectlves of the Studv 1.51 In view of the above context and prospects, the main objective of the study is to assist the Government of Colombia in the design of an integrated energy efficiency strategy in coherence with macroeconomic policies and energy subsector restructuring efforts. The strategy should put emphasis on implementing adequate policies (pricing in particular) and incentives and reforming the institutional and regulatory framework. The strategy would include a comprehensive set of options for economic interfuel substitution and electricity demand side management. The strategy would aim to: (i) lessening the impact of recent and future energy price increases on the budget of households, through energy conservation and substitution; (ii) inducing consumers to use least-cost substitution energy sources and to improve access to these sources; (iii) strengthening and reforming the institutional and policy framework concerning the delivery of energy efficiency services; (iv) defining a set of programs and short term actions. 1.52 The study focuses on energy efficiency options for the residential, commercial and public sectors, since it was agreed with the GOC that an energy efficiency for the transport and industry sectors would be developed separately, with support from the European Economic Community (EEC). The study concentrated its activities on the four major cities of Colombia (Bogota, Medellin, Cali and Barranquilla), which together represent about 60% of the total energy consumption of the three sectors. The study also placed special emphasis on electricity conservation as well as on natural gas and LPG substitution for electricity in the three sectors.  CHAPTER 2 PA'ITERNS OF ENERGY USE IN THE RESIDENTIAL, COMMERCIAL AND PUBLIC SECTOR 2.1 To assess the patterns of energy use and the characteristics of end-use equipment, the study's team undertook specific surveys and measurements, while processing some surveys conducted recently (in particular by EPM and EMCALI) and comparing the results obtained with those of surveys conducted in the past, in particular by the MME (National Energy Survey) and the DNP. In addition, the information obtained on the demand-side was compared to and, in some cases, adjusted with supply-side data obtained from energy sectors operators (i.e. the four electricity distribution utilities, the two gas utilities and ECOPETROL). 2.2. Surveys conducted in the residential sector during the study allowed to review end-uses and expenditure by energy source and socioeconomic category - with special emphasis on electricity - , as well consumers' opinions, preferences and expectations, in particular concerning electricity conservation and substitution'. The main national manufacturers of end-use equipment were surveyed to assess product characteristics, production and marketing strategy, plans and constraints for supply in^ more efficient equipment, and interest for participating in an equipment certification and labelli program. Some measurements of equipment performances in different operating conditions were alsu conducted for cooking ranges and ovens, refrigerators, water heaters and incandescent and fluorescent lamps. In the commercial and public sectors a sample of large establishments was surveyed and load curves were produced for a limited number of these establishments. The list of surveys and measurements performed is shown in Annex 1; all data in the following paragraphs originate from these surveys, unless specified. Energv demand in the residential sector 2.2 General, As shown in Table 2.1, although electricity is the main energy source used in the residential sector of the four cities considered in this study, its share of final energy consumption is considerably higher in Medellin (almost 100%) and Cali (96%) than in Bogota. and Barranquilla (about 52% in both cases), since there is no natural gas supply and only limited quantities of LPG in the former two cities. Bogota. accounts for almost half of national LPG consumption (mainly in middle-income households) and for most of the consumption of cocinol (a product close to gasoline used in lower- income households). Natural gas distribution in this city started in 1989 but it is developing at a f.-. pace, mainly in middle and lower income strata. In Barranquilla, natural gas has been available several years and is widely used, especially in middle to upper-income strata; LPG and kerosene is . limited to lower-income households. In the four cities, electricity consumption per household increases with the socioeconomic category. Total energy consumption per capita is higher in Bogota (significant use of water heating, as well as of petroleum products that are used less efficiently than electricity) and Barranquilla (large use of air conditioning) than in Medellin or Cali (with moderate use of water heating or air conditioning). Annex 6 presents detailed data obtained from the surveys for final energy consumption by energy source, socioeconomic strata and end-use for each city. 1 The opinion survey was performed in Bogota only and it should be conducted on a smaller sample of households in Medellin and Cali. TABLE 2.1: Estimated final energy consumption by city ELECTRICITY LPG GAS COCINOL KEROSENE O ~ E R TOTAL ~ PER CAPITA CONSUMF'TION TOEWEAR % % % % % % % Bogota 5 .6 18. 4. 100 0.56 Medellin 99.5 0.3 0.1 0.1 100 0.37 Cali 96.3 2.7 0.8 0.2 100 0.34 Barranquilla 5 1.9 9.3 33.3 1.7 3.9 100 0.45 Countryb 49.4 20.2 3.1 9.7 5.9 11.7 100 0.06 Source: Study surveys, November 1991 (a) excluding biomass (b) 1989 data 2.3 finerev ex~enditureAs could be expected, household average energy consumption increases with socioeconomi~strata. In BogotA for instance, energy expenditure is 2.4 times higher in stratum 6 than in stratum 1 (see Table 2.2)2. Together with large energy subsidies for lower income strata, this results in the energy expenditure of stratum 6 in this city being about twelve times as much as that of stratum 1. However, in relation with household income as estimated by the survey, the share of energy expenditure is rather constant and small (4-6%) along socio-economic strata. Since the survey might have underestimated household income, the share of energy in household budgets is probably even lower, especially for higher income strata. Table 2.2: Income and energy expenditure in Bogota Stratum Total energy Average Energy Energy cost Expenditure/ consumption Monthly expenditure (Col $ MJ) Income (MJIMonth) Income (Col $/month) (Col $) 1 1066 64 189 3112 2.9 4.9 2 2 103 120833 4752 2.3 3.9 3 1824 154268 6882 3.8 4.5 4 1929 329018 10807 5.6 3.3 5 2274 425500 16974 7.5 4.0 6 2507 584302 37098 14.8 6.4 9 Avera e 1956 4. 4.1 Source: Study surveys, November 1991 2.4 Electricitv consum~tion.Residential electricity consumption by socioeconomic stratum is presented in Figure 2.1, which shows large differences between the four cities. In BogotA and Medellin, stratum 3 accounts for the largest consumption, with a strong complement from strata 2 and 4, while stratum 1 is almost non-existent. In Cali, strata 2 and 3 account for the largest consumption share and ,while the importance of stratum 1 is very limited, higher-income strata also account for a significant share. In Barranquilla, the predominance of lower-income strata is striking, but the importance of stratum 6 must 2 The survey conducted in BogotA also showed that electricity accounts for almost all (98%)of the energy expenditure of stratum 6 households and 94% in stratum 5, while the share of petroleum products in the energy expenditure of households in suata 1 to 4 households is significant (between 20 and 30%). also be noted and probably helps compensate the negative impacts of subsidized lower-income strata on utility revenues. Figure 2.1: Residential electrici ty consumption by stratum and city in 1990 Cali - - Source: JNT, 1991 Note: In % of total annual residential sales of EEB (3008 GWh), EPM (2132 GWh), EMCALI (951 GWh) and ELECTRANTA (721 GWh) .. 2.5 Electncitv end-usea The distribution of electricity consumption by end-use and city is summarized in Table 2.3. These numbers should be used with caution since they reflect the results of three different surveys and because of possible inaccuracies in estimating nominal capacity and load factors of end-use equipment. However, they give a good idea of the relative importance of end-uses and consumpti - between the four cities (see also Annex 6 for detailed breakdowns by socioeconomic stratum). 2.6 In BOgOfa,cooking is the largest consuming end-use, but water heating, refrigeration and lighting also have important shares; the share of water heating increases sharply in higher-income strata, while, on the contrary, the share of lighting is higher for lower-income strata. Average consumption of strata 1 is only 37% lower than the average consumption of all households (313 kwhlmonth), while strata 6 consumption is 96% higher than overall consumption. 2.7 In B ,the high share of cooking in total consumption is noteworthy (49% overall), - especially for lower-income strata. Refrigeration is the second-largest consumer and, as for lighting, its share remains almost constant along socioeconomic strata. Water heating is used almost only in strata 4, 5 and 6. Average consumption of strata 1 and 6 show a difference of respectively -30% and +97% in - relation with average overall consumption. 2.8 In U, almost 40% of total consumption is accounted for by cooking (with an almost constant share along the strata), but refrigeration has also a significant share, while lighting and air conditioning each represent only about 10%of total consumption. Water heating contribution is extremely small and limited to strata 6 and 5. The shares of lighting, refrigeration and, to a lesser extent, cooking are rather constant along strata. Average consumption of strata 1 and 6 show a difference of respectively -33% and +119% in relation with average overall consumption. 2.9 In due to natural gas availability, the overall share of cooking is reduced to only 15%; large variations are noted along strata, which have different rates of gas penetration. Major end-uses are refrigeration and air conditioning, with increasing shares in higher-income strata. The share of lighting is only 14% overall and only slightly higher in low income strata. Average consumption of strata 1 and 6 show a difference of respectively -51% and +I6076 in relation with average overall consumption. Table 2.3: Estimated distribution of electricity consumption in the residential sector by end-use and city (in %) END-USE BOGOTA MEDELLIN CALI BARANQUILLA Lighting 20 10 10 14 Air conditioning -- -- 12 28 Water heating 22 14 3 -- Cooking 30 49 41 15 Refrigeration 19 22 28 34 Other 8 5 6 9 Average consumption (kWh/customer/month)313 362 322 225 Source: Study surveys: Bogota and Barranquilla (1 1/91), Medellin (1989/90), Cali (1991) Total consumption is negligible --: 2.10 0 .. Several factors influence the purchase and pattern of use of end-use energy equipment in households, including income and socioeconomic levels, the availability of energy sources and equipment and their absolute and relative prices, household size and activities, socio- cultural aspects and weather conditions. Equipment such as cookers, lamps, televisions and radios are present in all economic strata, but their quantity and unit capacity increase for higher income households, for which the use of some equipment can be minimal. Higher strata have access to more sophisticated equipment, which use energy much more efficiently than traditional equipment (such as microwave ovens and pressure cookers), or which increase electricity consumption and capacity demand significantly (such as air conditioning units, water heaters, electric cookers and cloth washers and d~yers)~. The intensity of use of energy equipment is higher in low-income strata, which own less equipment than higher income households. In low-income households, some practices lead to energy savings, either by choice (e.g. connecting water heaters only for a few hours, when hot water is needed) or by socio-economic pattern (e.g. meal preparation requiring less energy per capita than in higher income households). On the other hand, in these households, there is a larger proportion of old, outdated and poorly maintained equipment, which have a lower energy efficiency than equipment used in higher income households. 2.11 Customers' opinions on electricity savings were briefly assessed during the residential survey conducted in Bogota These can contribute to assess the prospects for energy efficiency actions in the residential sector. Some key aspects evidenced by the survey are the following: 3 In Bogota f a instance, tbe survey results indicate that between 55%and 70%of higher incame households (strata 4 to 6) coak with electricity, but only about 15%of low-income households, which on the other hand, are the almost exclusive users of natural gas; the same pattern exists for electric water heaters (60-75% of higher income households own om, compared to only 15-2096 of low-incomt households); in average in Bogota an estimated 31% of all households own an electric cooker and 27%own an electric water heater.  (a) an often wrong perception about which equipment are the main contributors to electricity consumption, especially in lower strata households: strata 1 to 3 households predominantly name the iron, refrigerator and television as the major consumers of electricity, but in these strata, the average combined consumption of irons and televisions accounts for about only 9 to 16% of total consumption, while lighting (which is never mentioned by the households) represents about 20% of total consumption; higher income households rightly identify cookers, water heaters and, to a lesser extent, refrigerators, as major electricity consumers; (b) customers strongly associate the concept of electricity savings to the improved use of electric - equipment rather than to the substitution of electricity by natural gas or LPG, or to the purchase of more efficient equipment: over 70% of households surveyed in Bogota referred to the improved use of electric appliances and, to a lesser extent, lamps as the prime solution to limit - their electricity consumption, while only 5% (mostly in higher income strata) mentioned substitution as an option; (c) customers believe that further energy savings can be achieved: only 5% of the households in Bogod do not see prospects for saving energy; only another 9% do not know how energy could be saved or did not answer the question (mainly households from strata 1 and 2); however, g pointed out above, the "believers" generally do not have the right perception of what : economic and/or high-impact energy efficiency measures, nor the sufficient incentives LU implement them, as will be seen later; (d) a large proportion of households (between 85% and 95% of those answering) are satisfied with the current configuration of energy equipment installed in their homes (the question concerned lamps, water heaters, cookers and refrigerators); quality and capacity seem to be the driving factors for equipment replacement, which is often hindered by font costs, while energy performance is hardly mentioned as a factor; on the other hand, a significant part of households (34%) declared to be willing to replace incandescent lamps with fluorescent lamps; the remaining households usually argue for the better lighting quality of incandescent lamps and frequently mention higher front costs of fluorescent lamps. 2.12 GeneraL The commercial sector includes four major categories: offices, restaurants, hotels and retail; it is constituted of rather heterogeneous establishments in terms of characteristics (e.g. size, ty- of energy equipment), patterns of occupation, patterns of energy use, importance of energy expend it^ there are also large variations between regions with differentiated climate. The public sector includes mainly government buildings (offices and services); it is more homogeneous in terms of patterns of occupation and energy use, although building characteristics vary considerably. The above variations made difficult the designing of a representative (small-size) sample for a survey in these two sectors4.. In 1989, electricity accounted for about 65% of total energy consumption of the commercial sector, which represented about 10% of total electricity consumption at national level. The same year, the public sector was accounting for almost 7% of total electricity consumption, which is the main energy source used in the sector. Table 2.4 shows the estimated distribution of final energy consumption in the - establishments surveyed during the study or by EPM in 1989 (non-representative sample in both cases); it underlines the importance of electricity, natural gas (in Barranquilla) and to a lesser extent LPC (in Medellin and Bogota). 4 The survey was conducted in Bogota (350 establishments) and Barranquilla (29 establishments only); in Medellin the results of a previous survey were used, while no information was obtained for Cali. Two problems must be noted: (i) the three surveys did not request the same infomation and had different methodologies; (ii) in the three cases the samples present a bias towards large and energy-intensive buildings, whose patterns of energy use are approximatel reflected in the above tables in order to orient energy efficiency actions. Table 2.4: Estimated distribution of final energy consumption in the commercial and public sectors (a) RETAIL HOTELS & PUBLIC RESTAURANTS BOGOTA Electricity LPG Fuel oil Woodfuels Diesel Other MEDELLIN Electricity 20 LPG 31 Diesel 26 Kerosene 23 CocinoYGasoline 0 BARRANQUILLA Electricity 1 52 97 Natural gas 99 46 1 Other 0 2 2 Note: Non-representative sample Source: Study surveys, 1991 (Bogota and Barranquilla); EPM, 1989 (Medellin) .. 2.13 Rlectncitv uspz Table 2.5 presents the estimated distribution of electricity consumption by end-use and city for the establishments of the sample; the results. For r e t a i l b l i s m , refrigeration and lighting are the main end-uses (especially in Bogota), as well as ventilation, elevators and water supply (all three are regrouped in the item "other"), and air conditioning (in Barranquilla and Medellin). In hotels and restaurants, refrigeration, cooking and lighting have significant shares, as well as water heating in Medellin and air conditioning in Barranquilla and Medellin. Ventilation, . . water supply and elevators are altogether the dominant use in Bogotii. In public sector bulldlngs, lighting accounts in BogotA for half of total electricity consumption (in government offices mainly), while air conditioning has important shares in Barranquilla and Medellin, and water heating in Medellin. In Barranquilla, pumping for water supply and sewage disposal makes up for more than half of total electricity consumption of the sector. Table 2.5: Estimated distribution of electricity consumption by end-use in the commercial and. public sectors (%) B TA RETAIL Lighting 23 12 16 Air conditioning 2 35 46 Water heating 2 4 0 Cooking 3 3 0 Refrigeration 39 14 13 Other 32 33 25 HOTELSRESTAURANTS Lighting 14 15 19 Air conditioning 2 16 40 Water heating 3 35 0 Cooking 13 15 3 Refrigeration 24 16 18 Other 45 3 20 PUBLIC Lighting 49 Air conditioning 6 Water heating 5 Cooking 1 Refrigeration 7 Other 32 Note: (1) Other includes: ventilation, water pumping, elevators etc. (2) Non representative sample Source: See Table 2.4 2.14 The survey and interviews of major manufacturers of residential appliances that were conducted during the study concentrated on the local production of appliances that account for most of the electricity consumption in households, i.e.: refrigerators, stove., incandescent and fluorescent lamps, water heaters and air conditioners (window units). Almost all these appliances are either entirely manufactured in Colombia or combine local manufacturing and assembling of imported parts (as in the case of air conditioners). The stock of imported appliance is extremely limited (some large, high consumption appliance are imported, mainly by high-income households; processing DANE'S existing statistics about equipment imports would have been a time-consuming activity not justified in view of - their minimal share of the market), although these imports will probably increase with the ongoing opening of the economy; imported equipment would include not only efficient, highconsumption North American/Japanese appliances but probably also smaller and less efficient equipment from neighboring - countries, such as Venezuela, Ecuador, and Brazil. Table 2.6 shows some figures for local production of major appliances during the period 1978-1988 and an estimate for 1992. In view of Government efforts to develop the use of natural gas in the residential sector in midland cities, the production of gas appliances (stoves and water heaters) is likely to increase sharply during the next years. As shown in Table 2.7, locally manufactured or assembled appliances are far behind the state of the art in North American countries and equipment performance could be significantly improved. The consultants estimated that possible savings could reach 10 to 40% (depending on the appliance) through enhanced design and the use of more efficient components. The largest savings could be achieved for electric water heaters and refrigerators. Table 2.6: Local production of residential energy end-use equipment (in thousands of units) Yearlv average 1992 - --- Incandescent lamps 46346 50000 Fluorescent tubes 4236 5000 Ballasts 1272 stoves 376 Irons 270 Refrigerators 207 200 Mixers 18 1 Televisions 123 Gas stoves 111 80 Electric stoves 97 100 Fans 84 Electric water heaters 76 50 Washing machines 57 Air conditioners (window units) 15 50 Note: Appliances with average yearly production of less than 50,000 units over 1978- 1988 are not included Source: Survey of appliance manufacturers, December 1991; DANE, 1978-1988 Table 2.7: State of the art of appliances in Colombia Years behind * Maximum Comments Refrigerators 10-15 25 Better insulation and compressor upgrade Water heaters 20 30-40 Improved insulation and heating elements Timer Stoves 10-20 Improved insulation and controls Air conditioners 15-30 EER enhancement Appropriate sizing Lamps Improved ballasts and reflectors Enhanced luminous efficiency Source: Consultant report, 1992 2.15 The production of household appliances of interest for this study is rather oligopolistic in Colombia. Table 2.8 shows that the production of major appliances is shared between four large manufacturers: manufacturer A, for most of electric water heaters and stoves and 40% of refrigerators; manufacturer B for about two thirds of incandescenf/fluorescent lamps and also 40% of refrigerators; manufacturer D for most of window air conditioners and a large share of gas water heaters; and manufacturer E for about one third of incandescent/fluorescent lamps. All large manufacturers have their own testing facilities and verify product compliance with a number of norms defined by ICONTEC. These norms generally concern product specifications, testing, labeling, packing and transport; they are usually adapted from international norms (including IEC, ANSIJAHAM, and ISO) and are related to product quality and safety aspects. In some cases, however, the norms have been oversimplified to limit constraints for manufacturers, while some other norms simply have been transposed without needed adjustments. Subsidiaries of international manufacturers usually have corporate norms, derived from international standards, which complement and strengthen ICONTEC standards. 2.16 None of the current norms includes a component related with the control of energy performance or with the use of more efficient components, in particular because the originatirln international norms seldom included one either. An exception to this deficiency of international nor: is the Energuides program that has been successfully developed first in Canada and in the United States (Energyguide). The objective of this program was to inform residential customers on the annual energy consumption and expenditure of selected appliances (refrigerators in particular) operating in standard conditions, as well as on the range of energy consumption to be expected from all equipment with similar characteristics that are available on the market. Table 2.8: Approximate market shares of local appliance manufacturers (%) APPLIANCE Manu. A Manu. B Manu C Manu. D Manu. E Manu. F Manu. G Others Electric water heater 90 10 Gas water heater (direct) 90 10 Gas water heater (tank) 30 20 50 Refrigerators 40 40 5 10 5 Stoves 75 10 5 10 Lamps 60 30 10 Air conditioners 85 15 Washers 10 10 Source: Swvey of appliance manufacturers, December 1991; AND1 data. 5 The Energuide program was developed in Canada at the end of the 1970s for the six mjor types of electric appliances in terns of consumption. It is considered as a highly successful program: an evaluation estimated that the . average electricity consumption of four types of appliances had decreased by 21% since the beginning of the program (this represented 466 GWh in 1983). It must be noted however that part of this gain is due to factors that are external to the Energuide program such as: trend of technological progress. global improvement of m a nuf actu re process, trend of consumption, improvement of customers' patterns of use of equipment not induced by the program, etc. C o m a assessment of the respective impacts of these factors on energy efficiency is the most difficult part of the evaluation of the cost-effectiveness of specific actions to enhance equipment efficiency, such as through the Energuide program. 2.17 It must be noted that in some cases the use of more efficient components is constrained by the specifications of electricity available to customers; for instance, important variations in electricity voltage or frequency (in particular because of high distribution losses, inefficient network configuration, load shedding practices, outages or dispatch problems, as is currently the case for some areas or utilities in Colombia) will affect considerably the life span of electronic ballasts, high efficiency motors or compressors and variable speed drives. As a consequence manufacturers are reluctant to produce and market this efficient but sensitive equipment. 2.18 Improving consumer practices relative to the use of energy equipment can have an even higher impact than enhancing equipment efficiency at production level. Inefficient consumer habits include for example: the excessive opening of refrigerator doors (many openings; leaving open for long periods) and the setting of thermostats for excessively low temperatures; the ways in which stoves and cookers are used (turning on the stove before cooking; utensils of inadequate size and without lids; little adjustment of power used); the opening of windows or doors of air conditioned rooms; the settings used and the continuous operation of air conditioners; the use of lighting in unoccupied rooms or with lamps of excessive capacity; the lack of maintenance of appliances. In Brazil, the PROCEL program estimated that enhancing consumer practices could account for as much as two thirds of potential energy savings in the residential sector. As pointed out before two complementary, concomitant and continuous types of action are needed to achieve better customer practices: energy price reform and public information. Together these actions will increase customer demand for more efficient energy equipment, which will induce manufacturers to invest in the development of the supply of efficient equipment, as compared to the current strategy of supplying low-cost, inefficient equipment that fit the characteristics of the market. Current Dract~ces . . for budding deswn and u s 2.19 Audits of 11 buildings and discussions with engineers, building managers and utility representatives provided a picture of current practices for building design and energy use. Several areas were reviewed including: general design, envelop, lighting, cooling, refrigeration, water heating. The findings are summarized in the following (see also Annexes 8 and 9 for more details). The two largest end-uses are lighting and, on the Atlantic Coast and Cali, cooling. Lighting practices are fairly efficient. Cooling practices on the whole are poor, although this is somewhat offset by the fact that most cooling systems are undersized. 2.20 General. Building design is mostly based on first cost and aesthetics considerations without much concern for energy efficiency. Design methodology and tools are simplified and draw on a stock of equipment and materials that, for a large part, are not standardized. The design of large buildings (over 7000 m2) is strongly controlled by licensed architects; however construction practices often diverge from the initial plans by substituting materials and undersizing electric and mechanical -installations. In addition the majority of buildings are delivered to owners without electric installations, which introduces a further risk of inefficient equipment (except in the case of undersizing). Most commercial office buildings are metered by floor and have distributed cooling systems allowing for individual energy billing by tenant, who would thus derive direct benefits if they invested in energy efficiency. 2.21 Envelop Most buildings do not have roof insulation or reflective painting, which, for low latitude locations, are very efficient in reducing solar thermal loads inside buildings. Reflective glazings are sometimes used unnecessarily, more for aesthetics purposes than for reducing solar loads . Most buildings have operable windows that do not permit the control of air infiltration inside buildings. 2.22 The majority of lighting, approximately 75%. in commercial and public buildings uses domestically produced fluorescent lamps. Although fluorescent lighting is much more efficient than incandescent lighting, Colombian produced fluorescent ballasts are relatively inefficient and could be easily improved; reflectors could also be improved and standardized. There is widespread use of inefficient mercury vapor lamps in outdoor lighting, which should be . replaced with metal halide and high pressure lamps. Inside the buildings, illumination levels tend to be appropriate in most areas (average of 30 foot candles), although there is some overlighting and thus savings potential in comdors and common areas in office buildings. In most buildings there are no individual controls of lighting by workstation or by room) is not frequent, nor is the control of fluorescent lighting according to the variations in daylight levels. 2.23 cool& While there is a substantial amount of cooling in Medellin, Barranquilla and Cali (with fairly constant cooling loads throughout the year), cooling systems are almost non-existent in Bogota. A large percentage of cooling is accomplished with the use of locally assembled inefficient window air conditioners. Design changes in those systems could have a dramatic effect on overall cooling energy in the commercial sector. Most larger cooling systems are designed by mechanical contractors who are competitively bidding against other contractors. As a result most cooling systems are undersized and use less energy than a properly sized system. Most buildings have no mechanical ventilation systems and rely on operable windows for ventilation. This practice saves on fan energy but increases cooling energy use. In many buildings where windows are frequently open the net effect will be to increase energy use. Temperature control systems for cooling are operated poorly or are non-existent and thus in many cases cooling systems continue to operate even when the building might not require - cooling. In addition, cooling thermostats are usually set well below necessarys, in particular to try to compensate for equipment undersizing and for excessive air through windows. P 2.24 lr- Refrigeration is a significant energy user in food stores and restaurants. Many of the small restaurants and stores use residential type of refrigerators and any increase in efficiency in residential systems w ill have an effect in the commercial sector as well. Both small systems and large systems appear to be maintained at average or below average standards. Better maintenance practices will have a significant effect on energy use. 2.25 Water Heatinle, Little hot water is used in the commercial and public sectors, with the exception of hotels. Hot water tanks have minimal insulation and hot water circulation systems run 24 hours a day. Low flow shower heads and circulation pump sensors should be used. 6 Many of the controls of cooling sysrems in the buildings visited by t . consultants of the study had been set to 65 or 70 degrees F, while recommended levels would be 75-80 &gmx F, with 50.60% of relative humidity (in addition most systems do not control air humidity levels)  CHAPTER 3: COSTS AND PRICES OF ELECTRICITY, NATURAL GAS AND LPG 3.1 Electricity tariff structure and levels are defined for all utilities with reference to the Long Run Average Incremental Cost (LRAIC) of the interconnected system, as an approximation to the Long Run Marginal Cost (LRMC)l. As shown in Table 3.1, generation cost for the interconnected system varies little between base load and peak demand, due to the use of hydroelectricity for peaking, but there are however significant cost variations between seasons (see also Table A-1 in Annex 2 for a cost breakdown between capacity and energy). The average cost at the level of secondary distribution was about US7.3 cents/kWh in December 1991. Table 3.2 shows the variations of the marginal cost by city and subsector. As can be seen, marginal costs in Bogota, and Barranquilla are about 15% higher than in Medellin and Cali (with the exception of the industry sector in Barranquilla which is predominantly supplied in high and medium voltage). Table 3.1 Electricity cost structure by season and time of day In Col$/kWh (December 1991) BASE PEAK Summer Winter Year Summer Winter Year Generation Interconnection Transmission 33.37 36.46 39.55 ! i 24.7 1 :: ; ; 2:30.58 40.07 ? : ; 18.53 2 1.62 24.7 1 24.93 28.02 31.11 Subtransmission 42.34 27.50 33.37 42.86 27.50 33.90 Prim. Distribution 44.83 ~- -~ 29.99 35.86 45.35 29.99 36.39 Sec. Distribution 54.70 39.86 45.72 55.22 39.86 46.26 Notes: Summer: December-April; Winter: May-November Exchange rate: Co1$63'ONS$ Source: IS& CNE, Study team Table 3 3 Electricity cost by subsector and city In Col$/kWh (December 1991) Res~den~al Bogota 46.62 47.77 38.40 46.73 ~del1f.n 39.60 40.44 33.05 39.70 Cali 40.85 41.79 32.38 40.96 Barranquilla 46.97 48.13 31.94 47.10 Note: Load factors considered: Residential: 0.64: Commercial and Public: 0.6 1; industry: 0.8; Medium voltage industry: 0.85; Low voltage industry: 0.64 - - High voltage w Source: ISA 3.2 Electricity subsidies are concentrated in the residential sector, where they amounted to about US$200 million for the four cities in June 1991 (see Table 3.3). Distortions do not only concern the level of average tariff or cross sectoral differences but they also affect the intended distribution effect. Indeed, subsidies are not specifically targeted to lower-income customers: for instance in the four cities of the study, strata 3 and 4 were receiving a higher combined subsidy than strata 1 and 2. In Medellin and Cali customers from strata 3 receive about the same amount of subsidy per customer than customers from strata 2. In Barranquilla, the large amount of customers 1 In the case of systems with lumpy future investments, such as in Colombia, the LRAIC is usually above the short nm marginal cost but below the LRMC. in strata 1 (24%of the total) receive less subsidy per customer than households in strata 3 (due to differences in total consumption). Figure 3.1 also shows that middle income strata (3 and 4) benefit from larger subsidies in Bogota and Medellin than in the other two cities. Table 3.3 : Subsidies on electricity by city, sector and stratum Figure 3.1: Residential electricity tariff by city and stratum Col$/kWh) BOGOTA MEDELLIN CALI BARRANQUILLA I I Source: JNT 3.3 Through the Resolution 090 that was enacted in 1990, the policy of the JNT is to bring the price of electricity progressively closer to its economic costs for all sectors. Table 3.4 shows that this adjustment would apply fully to customers paying a much higher price than economic cost (such as industrial customers in Barranquilla and BogotA and commercial customers in BogotA). However the adjustment planned in the residential sector is only modest and partial and concerns mainly the two cities where prices are the lowest in relation with costs (i.e. BogotA and Medellin). Table 3.4 Current and targeted electricity tariff by sector in % of LRAIC -. & Bogota Barranqul~. 1991 1994 1991 1994 1991 1994 1991 194- Residential 43 67 50 70 64 . 71 58 64 Commercial 180 103 114 110 108 108 102 104 Public 94 103 96 104 98 103 98 98 Industrial 130 102 103 103 100 100 144 110 Prices of December 1991 Source: JNT 3.4 As shown in Table 3.5 the proposed adjustments in the residential sector would also maintain important distortions between different strata and consumption ranges. Thus middle and high income customers consuming less than 200 k w h per month would still be largely subsidized, as well as all customers in the 200-400 k w h consumption range. This latter range is above what could be qualified of basic consumption for which the Government could choose to provide a so-called "lifeline" subsidy. Such a consumption could be in the order of 150 k w h per household and per month and would correspond for instance to the following end-uses: 4 incandescent lamps (4 hours per day), a medium-size refrigerator, a television and a radio. Where substitutes for cooking and water heating (natural gas and LPG) are temporarily supply constrained, such as in Cali and Medellin, the basic consumption would be in the order of 300 k w h per month. Table 3.5 Targeted residential tariff by stratum and consumption range Stratum 0-200 kW h 201-400 k w h 401-800 k w h > 800 k w h 1 20 70 110 125 6 70 90 110 125 Source: JNT, Resolution 090 of 1990 3.5 The system of tariff differentiation by strata and consumption range is rather complex and customer understanding of the billing system is probably poor. This system could be simplified and made more transparent to customers, in particular with a clear indication of the cost of supply for each type of customers (or alternatively the amount of subsidy in relation with the LRAIC). The concept of socioeconomic strata was introduced for public service tariffs during the 1980's and was an actual improvement in relation to the previous tariff system which was based on the cadastral value of the housing unit (seldom updated). It must be noted that the strata system is also used for fiscal purposes and for other public services. However, the border between strata, which can mean significantly cheaper public services, is often difficult to determine and it is sometimes subject to political criteria (when municipalities are involved) or even financial criteria (when the distribution utilities are charged of defining or updating household classification and try to maximize their revenues). In addition it is not clear if the notion of strata is best suited to try to estimate customer affordability or willingness-to-pay. 3.6 Tariffs could be differentiated only by consumption levels, with a lifeline subsidy for the lower consumption range that would apply only to customers in this range; this could be combined with a monthly fee varying according to customer subscribed capacity; for larger customers (e.g. in the commercial and public sectors) for which consumption levels would justify the additional cost of a special meter, a time-of-use rate could be introduced to reflect the different cost between seasons. In any case, a smaller number of strata would be more realistic for tariff of s u ~ p l y puy oses; strata could be regrouped two by two and only the lower one (i.e. the equivalent of strata 1 a..d 2, but not stratum 3) would receive progressively decreasing Government subsidies. 3.7 Regarding sector distribution of customers, current tariff structures skew the apparent proportions of buildings in the residential, commercial and industrial sectors. Many buildings, and building spaces, that should be classified as "commercial" are classified as residential or as industrial, and this results in revenue losses for the utilities. This occurs in several ways: (a) all hotels are classified in the industrial sector; (b) large commercial customers (e.g. large shopping malls) are usually placed in the industrial sector; (c) many small commercial establishments are lumped in the residential rate, often in strata 1 and 2 as part of unmetered residential use. c cash Where available, natural gas and LPG should be the choii for the two major end-uses in the residential sector, i.e. cooking and ware. heating. These two fuels bear a significant advantage in relation with electricity in economic terms (see also Annex 2 for detailed tariffs of natural gas and economic cost calculations for natural gas2, LPG3 and cocinol). As shown in Figure 3.2, in the case of cooking, natural gas is between 2 and 4 times cheaper to use than electricity (in terms of useful energy, i.e. after accounting for end-use equipment efficiency, and including the cost of new equipment and internal installation in the case of natural gas and LPG), depending on the geographical location and on the origin of gas supply. The advantage of natural gas for cooking as compared to electricity is larger in Barranquilla, as well as for natural gas produced in Cusiana rather than in La Guajira fields (except for the Atlantic Coast). The above comparison of natural gadLPG and electricity for cooking has been made using average consumption and equipment cost for higher strata However, results would be similar for lower strata, which consume less final energy but use less expensive equipment and installation, leading to an equipment cost per unit of useful energy that is similar in both cases. 3.9 Natural gas and, to a lesser extent, LPG are also cheaper than electricity in the case of water heating, although with a significantly lesser advantage than in the case of cooking, due - differences in equipment costs and efficiencies. The efficiency of electric, gas and LPG w a ~ heaters was estimated at 60%. 50% and 45% respectively (while cooking efficiency was estimated at 55%. 50% and 45% respectively). Equipment cost would add US$4 to S/MBTU of useful energy. 2 Two options were considered t o estimate tbe economic cost of natural gas. Case A refm to increased supply to central regions from La Guajira fields (including the interconnection of the central and Atlantic gas pipelines and its extension to Medellin and C ali, but not the interconnection with Venezuela which might be hindered by difficult negotiations about gas price). Case B assumes that central cities are supplied from the field of Cusiana provided . reserves a re sufficient; since prospects for this option are yet unsure and remote in time (gas could not be supplied from Cusiana before tbe year 2000). Case A w as wasidend for demand projections and cost analyses in the rest of this report- Cases A and B have different wellhead and transport costs. Costs of distribution, connection, internal installation and equipment are identical for both cases but vary with socioeconomic stratum; they are based on average data for - Barranquilla and Bogota obtained from Gas natural SA. and Gases del Caribe SA in Decanber 1991. 3 Tbe cost of LPG supply also depends on the prospects of the Cusiana field. Currently, any sifl~cant increase in supply would translate into increased LPG imports through b g e n a (Case considered in Figure 32 and in the rest of this report). However, in the case of sufficient exportable excedents of LPG from C us- this sady estimates that the economic cost of LPG at user gate in Bogota would be about two times lower than in the case of imported LPG (see Table A14 in Annex 2) 3.10 Prospects for actual electricity substitution with natural gas and LPG for cooking and water heating in the residential sector depend ultimately on customers' decisions. These decisions are mainly based on customers' appraisal of the financial soundness of substitution, including the relative importance of front investment necessary and the payback time of this investment as compared with savings achieved. Other factors of choice include customers' perception and degree of information concerning convenience, safety and prices of substitution fuels and end-use equipment. Figure 3.2 Economic cost of WNenergy for cooking Notes: a) Cooking efficiency: ElecCricity: 5596; Gas: 5096, LPG:4596, CocinoVKerosene: 3596; b) Natural gas A: supply fromLa Guajira fields, Natural gas B: supply from the Cusiana field; c) LPG imported through Cartagena; d) Includes unit costs of LPGIgas equipment and internal installation ( in the case of higher stmta) Source: Study estimates 3.1 1 LPG Drices. As shown in Figure 3.3 LPG is sold to residential customers at prices that are between 23% and 38% lower than economic costs, depending on geographical location. Prices concern LPG retail in 40 lb cylinders (which are dominant in the distribution chain). LPG costs are based on the estimated CIF price of imported LPG, while distributors' margin is assumed to reflect costs in a fust approximation. Subsidies are supported by ECOPETROL which sells LPG to distributors at a price lower than opportunity cost. Subsidies are lower in Barranquilla which is closest to the entry point of imported LPG. Figure 3.3: LPG Prices and Costs by City T n Note: FOI401b. c y l i n h Source: ECOPEIROL. Shdy estimates Figure 3.4: Compared Prices and Costs of Natural Gas by City and Stratum BOGOTA B ARRANQUILLA L I Notes: (a) Avmne rrriccs rxr m3 amme monthly consumption of 30 m3 in strata 1,2 aad 3, and 65 m3 in shata 4.5 and 6; (b) prices do not kclude co'Gectio&d installation costs;-(=)sconornic cost at usa gate considers the case of natural gas b r n ~ u s i a n a < ~ l w B)or La Guajira (Case A). Source: Study estimates. JNT 3.12 m r a l - Natural gas tariffs include a fmed charge and a consumption chaige that vary by socioeconomic stratum. Assuming average consumption of gas as observed by the survey in households of higher and lower level strata (respectively 30 and 65 m3/month), Figure 3.4 shows that gas tariffs are much more distorted in Bogota, than in Barranquilla. However, if tariff were to remain the same in the medium term, in the case of gas supply from Cusiana only lower level strata would be subsidized in Bogot& while all households would be subsidized in Barranquilla. The economic cost of the current supply of gas to Bogota, from the small field of Apiay was not estimated for this study; however, it is probably higher than the cost of gas obtained from Cusiana (Case B) because of differences in the size of reserves that induce a higher price of gas at well head in Apiay. This means that through the current gas program in Bogota, only higher strata households do not receive subsidy; it must be noted that these households account anyway for a very small share of total residential customers in Bogota, since the program targets lower and middle-income households, mainly for cocinol substitution. 3.13 Household connection to the gas network and internal installation (including connection of cookers and water heaters) is performed by the gas distribution companies which recover these costs through a connection fee that varies again by socioeconomic stratum (see detailed numbers in Tables A17 and A 18 in Annex 2). Data provided by distribution companies indicate that these costs vary between Co1$120,000 and 140,000 per household. Only the fees charged to strata 1 and 2 are lower than this amount in both Barranquilla and Bogota. However the fee distribution by stratum is much more skewed in Bogota (where stratum 1 is charged less than half the costs and strata 5 and 6 about two times the costs) than in Bmanquilla (where fees for higher level strata households are only slightly higher than costs) 3.14 As evidenced in Figures 35a/b/c, with the current tariff structure, substituting natural gas or LPG for electricity for cooking is more attractive to higher strata households than to the ones in lower strata. For these, LPG is a more expensive option than electricity and, as will be shown later, the use of natural gas is constrained by the relatively high cost of connection, internal installation and newtretrofit equipment. In strata 3 and 4, LPG could displace electricity only in Cali, if it was available, while natural gas also has good prospects in Bogod and Barranquilla since in these strata the incidence of the equipment/co~ection cost of substitution is lower than in strata 1 and 2. .. 3.15 Economic Dnciqg. Economic pricing of electricity, natural gas and LPG is essential to induce efficient patterns of use and substitution of these energy sources, as well as to encourage their additional production with increased prospects for private sector participation. Subsidized energy prices in the residential sector are often perceived by governments as a tool for poverty alleviation and inflation control, while maintaining competitiveness is used as a rationale to support subsidies in the industry sector, especially in the case of energy-intensive enterprises. As indicated by an OLADENorld Bank study conducted in 1990 to assess energy pricing policies in Latin America and the Caribbean, the impact of significant increases in the prices of petroleum products on production costs and the resulting inflation would be rather limited in the absence of speculatory pressures, and even more so in the case of an economy moving toward more openness, such as Colombia4. Table 2.2 also showed that, in the four cities considered in this Study, energy expenditure accounts for a small part of total household expenditure, even in low income households: in Bogota for instance, a doubling of the prices of all energy sources would mean an 4 'be study (not yet published) reviewed the cases of Mexico. Venezuela and Ecuador and used an input-ouput maaix to show rhar, globally, production costs would not increment by m ore than 4% in the case of a 100% inaease in petroleum product prices (with higher increases occuring in the transpart,power and water sectm),while the resulting incremental inflation was estimated at between 4% and 8%. increase of total household expenditure of about 5% for low income households, without even considering the effect of the price elasticity of energy demand (although it is admittedly low for these households) or possible increases of household real income. 3.16 Removing energy subsidies can be achieved through gradual or sudden price increases. Step increases (either announced or not) allow consumers and producers to better adjust to price changes, particularly for the renewal of their stocks of energy-using equipment. However this method would give the private sector a strong incentive to speculate on storable energy sources and in addition it would result in consumers' and producers' investments in energy-inefficient equipment and technologies until economic costs are reached. Unannounced price increases will reduce but not eliminate energy storing practices, and they could also result in consumer and producer suboptimal decisions concerning investment in energy equipment due to the element of uncertainty. Moving suddenly enetgy prices to economic cost levels would provide an immediate incentive for energy efficient equipment and patterns of use. The corresponding additional revenues could be recycled by the government in the form of a temporary direct subsidy to compensate for energy expenditure increases, although a possible problem associated with this method is its administrative feasibility and costs (related to the difficulty of identifying and reaching low income households). This subsidy would apply to certain energy sources and socioeconomic strata and could be phased out gradually, serving thus the same purpose as a gradual price adjustement. In .- sum, price increases generally can be gradual for electricity and natural gas but should be complc and sudden for LPG and other storable petroleum products. 3.17 Recommendations. Integrated energy pricing reform should be the cornerstone of the energy efficiency strategy in the residential, commercial and public sectors in Colombia. The government has embarked on the gradual ajustment of electricity prices to economic costs, as well on examining additional electricity pricing measures that are necessary to accompany the power sector restructuring program, and it is also reviewing natural gas and LPG pricing options. The following are the Study's recommendations to strengthen and develop integrated pricing policies for residential and commercial energy sources in urban areas along the main lines of reform already chosen by the Government: (a) F i i n g up Resolution 90 by bringing all tariff to economic costs5 by the year 2000, with a gradually decreasing subsidy for strata 1 and 2 that would be paid directly to utilities from public funds and made transparent in electricity bills to improve customers' information; (b) Applying time-of-use rates: seasonal rates for all customers and time-of-day rates for commercial and large residential customers; (c) Simplifying and improving the use of the socioeconomic strata and consumption block system for tariff application during the adjustment period: regrouping strata in three groups (only the first one would be temporarily subsidized); only consumption lower than 200-300 kwh would be temporarily subsidized; subsidies would only apply to lower consumption and not universally to lower consumption block of a l l customers; (d) Connection charges reflecting full economic costs; s Long Run Marginal C ost for each type of service as a reference; once the Energy Regulatory Commission is established, the Short Run Marginal Cost could be used to establish a price cap at distribution level.  (e) Progressive elimination of lump sum tariff practices for customers without consumption metering (through the installation of meters) and achieving a lower proportion of illegal connections to the grid6; ( f ) Review and improvement of customers classification by sector to identify actual commercial users currently classified in the industrial or residential sectors; (g) Introducing financial incentives for energy-efficient equipment installation at large residential and commercial customers, depending on the results of a pilot program to test the relevance and impacts of these incentives. (g) Bringing prices to economic costs7 by 1995 without subsidies on fixed or variable charges (prefered to a gradual increases, since prices are already not too far from costs, meaning acceptable increases even for low-income households); (h) Fixed charges only reflecting fixed costs and not used to artificially decrease variable (consumption) charges, for instance in lower-income households, which would result in inefficient gas use; (i) Offering financial incentives to lower strata households for gas substitution for electricity for cooking and (if applicable) water heating, through partial subsidizing of or credit facilities for the costs of connection, internal installation and equipment purchasdretrofit. (i) Setting the sale price by ECOPETROL to distributors at opportunity cost (based on the prevailing supply system: dominant importation or dominant local production at Cusiana) (k) Eliminating the quota system (used for restraining supply and resulting in speculating practices and uneconomic use of electricity in supply-limited urban areas); (1) Freeing retail prices to final customers (possible because of the relatively large number of distributors partly serving the same areas), after a transition period with a price cap system that will require a detailed study of distribution margins (including adequate provisions for expansion of storage capacity and for cylinder maintenancdreplacement. 6 Non-metered or illegal electrical connections can recah signifkant proportions. For instance in Barranquilla, Elechanta indicates that about 50.000 customers are under a lump sum tariff regime (paying COB700 per month. i.e. US$1.2 only) and another 25,000 households are connected illegally to the grid (these 75,000 households repsent an amazingly high 32%of total residential customers of Electfanta);similar practices are found in Bogota, Medellfu and Cali although no estimates were obtained during the Study. 7 As estimated earlier (Case A or B), depending on the development program retained by the Government. Figure 3.5a: Compared prices of useful energy for cooking by city (Strata 1 and 2) BC(3=JTA MEDELLIN CALI B/Q UILLA I E E Ow; GAS Note: Excluding cost of connection. internal installation and equipment Source: Study estimates Figure 3.5b: Compared prices of useful energy (Strata 3 and 4) Figure 3.52: Compared prices of useful energy (Strata 5 and 6) 0 BOGCrrA MEDELL1N CALI B/QU I LLA  CHAPTER 4: DEMAND SCENARIOS 4.1 The Study assessed the impacts of various conservation and substitution measures and policies on electricity demand in the residential, commercial and public sectors of the four cities. Projections of energy and capacity demand were prepared for the period 1990-2010 and compared to the base trend. The base scenario is the one prepared by ISA for the indicative power sector expansion plan. Measures and policies that were considered include the following: (a) natural gas and LPG substitution for electricity (see Chapter 5), under two pricing scenarios: (i) economic pricing of electricity, natural and LPG; (ii) intermediate pricing (electricity subsidy remaining after 1994 for the lower three strata); (b) electricity conservation measures, concerning both technology and information aspects (see Chapter 6)- under economic pricing assumptions. These scenarios were used to estimate the economic benefits of the recommended energy efficiency strategy in the residential, commercial and public sectors in the cities considered, as well as its impact on the power sector expansion plan and on the sales of the four utilities operating in these cities. 4.2 ISA's scenario considers historic trends of electricity and natural gas demand, and the effects of GDP growth, electricity tariff reform and the ongoing natural gas development program in BogotA. Main assumptions of this scenario are the following: - GDP of 5% per year over 1995-2010 - Population growth decreasing from 1.9% (1991) to 1.7% (2001-2010) - Electricity tariff reaching the objectives of Resolution 090 (in 1994) and remaining constant in real terms thereafter - Natural gas and petroleum product prices increasing at 2.5% and 3% per year respectively (in real terms) over the period - Household rate of electrification at national level reaching 79% in 2010 - Elasticities of electricity demand (own price, cross-price and per capita income) as indicated in Annex 11. 4.3 As shown in Table 4.1, electricity demand growth forecast in the base scenario is lower during the 1990s than during the 2 0 0 0 ~ ~ mainly due to the effect of Resolution 090 and the ensuing freezing of electricity tariffs in real terms. Demand growth is higher in Cali and Barranquilla than at national level, while the contrary is forecast in the case of BogotA and Medellin. Higher growth rates occur in the public sector. In this scenario, the share of the residential sector in total sales at national level is expected to decrease from 48% in 1991 to 40% in 2010, while the share of the industry sector would increase from 28% to almost 40% in the same years. 4.4 The base scenario does not consider the effects of supply driven programs that would be implemented to develop the use of natural gas and LPG in the short to medium term, particularly in Medellin and Barranquilla; however the scenario assumes that the ongoing natural gas program is successfully completed in BogotB, which means that all cocinol would be substituted with gas in this city by 1995. LPG is supposed to remain supply constrained, especially in the central region cities. Natural gas demand in Barranquilla is assumed to follow historic patterns (resulting in a growth of 6.8% per year during 1991-2000 and 2.2%/year until 2010). It must be noted that, despite low cross-price elasticity of electricity demand, price assumptions considered (i-e. increase of natural gas and LPG prices and freezing of electricity tariffs from 1995, in real terms) further hinder the substitution of natural gas and LPG for electricity. Table 4.1: Electricity demand growth by city and sector in % (Base scenario) BOGOTA MEDELLIN CALI BIQUILLA NATIONAL SECTOR 9inooo 2000110 ~in000 u)o(uio 9inooo 2000110 9112000 2000110 9112000 2000110 Residential commercial Public 33 .S 3.9 3 . 4. 3. : 4.3 2. 4.; 3.8 4.2 : . 7 .7 4.7 5. 5.: 5.3 R : 4. 4.; 4.8 : . 7 -7 4.7 3-7 4.3 4.1 i:: 4.9 Note: Adjustment factors of 92% (Bogoth), 93% (Medellin). 94% (Cali) and 90% (Barranquilla) were used to estimate residential electricity demand in the four cities from the sales of the four utilities, which cover slightly larger areas than city boundaries. Source: ISA Substitution scenario 4.5 The substitution scenario reflects the Government's proposed program to promote the use of natural and LPG as economic substitutes of electricity for cooking and water heating in the residential sector'. To become effective, this program should meet several prerequisites concerning relative pricing and supply constraints: (a) pricing reform to reflect the costs of these energy sources; (b) sufficient supply2 of natural gas and LPG (Cusiana or La Guajira fields or freed-up quantities from the Barrancabermeja refinery and others, or from increased imports in the case of LPG); (c) actual development of the gas transmission infrastructure from the supply sources toward existing (Bogota. and Barranquilla) and new (Medellin and Cali) demand centers; (d) removal of market barriers at customer level (in particular those outlined in Chapter 5). The program supposes the concomitant development of the gas market in all sectors (especially power and industrial), since the residential, commercial and public sectors could not economically justify by themselves the large investments that are needed to develop the gas transmission infrastructure. 4.6 Demand forecasts in this scenario use the same price elasticities as the base scenario. It is also assumed that price reform will include the following measures: (a) LPG price reaches economic cost in 1993 (calculated from CIF cost in Annex 2); (b) Natural gas reaches economic costs (reflecting Case A of Annex 2, i.e. use of La Guajira gas) for all strata, in 1993 for Barranquilla and in 1995 for BogotB, Medellin and Cali (date of scheduled completion of the transmission pipeline system for central region cities); (c) Electricity tariff are adjusted according to two sub-scenarios3: (i) Gradual economic pricing reaching 1991 LRMC levels for all strata in the year 2000; (ii) Same as (i) except for strata 1, 2 and 3 for which tariff in real terms would remain at the levels reached in 1994 (Resolution 090), as indicated in Table 3.5; 1 The prospects for supplydriven electricity substitution with natural gas in the commercial and public sectors were not quantifiedduring this study since in most cases cooking and water heating (end-uses where electricity can be substituted) only account for a very small share of total energy consumption i n these sectors; in the case of hotels, restaurants and some public sector establishments (such as hospitals), natural gas could economically replace LPG, although without any impact on electricity savings. 2 ECOPETROL's plans, as indicated in the Gas Development Program prepared with the DNP and CNE,allow for increased supply of natural gas and LPG necessary for the residential sector, which in addition would still account for a limited share of total sales of natural gas. 3 Named "high tariff and "low tariff" in the consultant team report. 4.7 Natural gas substitution4 in the residential sector of the four cities is assumed to take place at the following pace: - In Bogotil, 8000 households per year, gradually increasing up to 10200households per year in 2000 and then decreasing to 2000 per year in 2010; - In Cali and Medellfn, 1500 households per year starting in 1995, up to 6000 per year in 1997 and constant thereafter; - In Barranquilla, constant rate of 6000 households per year between 1993 and 2010 Under these assumptions, about 58% of a l l households in the four cities (i.e. about 1.9 million) would be using natural gas in the year 2010. It must be noted that this scenario is more conservative than the DNP scenario which assumed a penetration rate of about 78% in 2010. 4.8 Electricity savings through natural gas and LPG substitution were calculated on the basis of specific consumption of useful energy for cooking and water heating in the four cities-as estimated by the Study's surveys. Estimates of end-use equipment efficiency are indicated in Paragraph 3.7. Cons-on scenari~ 4.9 The conservation scenario reflects the implementation of cost-effective measures for electricity conservation in the residential, commercial and public sectors. These measures are presented in detail in Chapter 6 and can be regrouped as follows: (a) measures for existing and new buildings in the commercial and public sectors; (b) program for the supply of more efficient (main) appliances in the residential sector; (c) program to increase customers' awareness about electricity conservation in the residential sector (leading to retrofit measures); (d) improved efficiency of street lighting. In the rest of this report the "efficiency scenariowwill refer to the combination of economic tariffs, substitution measures and conservation measures. Results .. 4.10 E l e c t m e savi w As shown in Figure 4.1, substitution would account for the largest share of electricity savings in the four cities, while there is only a small difference in savings between the two tariff scenarios. The effect of conservation measures is relatively small, although it must be noted that these are highly cost-effective measures-as will be shown in Chapter 6-, which in addition have a higher impact on capacity savings than substitution measures. Figure 4.2 shows that the efficiency scenario would mean a decrease of 21.5% of total national residential sales in 2005 in relation with the base scenario (i.e. 4723 GWh), equivalent to a decrease of total sales by 9%. Tariff and conservation measures in the commercial sector would lead to an estimated 244 GWh savings in 2005, equivalent to 5.1% of the sector's projected sales, while savings in the public sector would reach 231 GWh in 2005, i.e. 7% of projected sales. Thus the residential sector would account for close to 90% of total estimated savings, which also means that its participation in electricity total sales would decrease, mainly to the advantage of the industry sector: in 2010, in the efficiency scenario the residential sector would account for only 34% of total sales, compared to 40% in the base scenario. Overall total electricity sales at national level would increase at 3.8% per year over the 1991-2000 period, instead of 4.7% per year in the base scenario. Over the period 2000-2010, the growth rate would be 4.4% per year, compared with 4.8% per year in the base scenario. The relative impact of the efficiency scenario would be larger in Bogota and Medellin (because of the scope of the substitution program) than in Barranquilla (substitution already partially achieved) or in Cali (little water heating). 4 LPG would play a transition role m the substitution scenario, as a substitute for electricity m Medellin and Cali until the arrival of natural gas in these two cities; in smaller cities, however LPG substitution for electricity should continue to be encouraged. Figure 4.1: Electricity savings in the residential sector of the four cities in 2005 m w TARIFF HIGH TARIFF SCENARIO SCENARIO SUf3mON TARIFF EFFECT CONSERVAnON TtJTAL Figure 4.3: Capacity savings in the residential sector of the four cities in 2005 LOW TARIFF SCENARIO TARIFF EFFECT SUB!jTlUllON . HIGH TARIFF SCENARIO (30NSERVAnON - - TOTAL 4.11 Power c a ~ s i t v sav' Estimated capacity savings that could be achieved in the residential sector through the%ciency scenario would amount to 738 MW in 2005, equivalent to about 6.5% of projected capacity demand in this year (see Figure 4.3). Savings in the commercial and public sectors would amount respectively to 22 M W and 19 MW in 2005, i.e. only a combined 5%of total capacity savings. The efficiency scenario results in proportionally les; capacity saved than energy, since part of the savings are achieved off peak hours. 4.12 With the efficiency scenario, the requirements of installed capacity of the interconnected system would increase at 3.6% per year over the 1991-2000 period, instead of 4.4% per year in the base scenario. Over the period 2000-2010, the growth rate would be 4.4% per year, compared with 4.8% per year in the base scenario. 4.13 Total installed capacity (taking into account losses and reserve capacity) would be reduced by 1472 MW in 2005. T his is equivalent to the total capacity of the following projects (that are part of the power expansion plan): Urra 1, Miel 2, Porce 2 and 60% of Nechi. The efficiency scenario would result in postponing the implementation of these projects by a period of 1 to 2 years, with the same reserve factor as in the base scenario. 4.14 Fx:ono& benefits. Table 4.2 shows the estimated benefits of the substitution program, calculated as the difference between the economic costs of substituted electricity and the costs of electricity substitutes (including connection, installation and equipment), after accounting for the effect of tariff reform. As pointed out earlier, the program is more attractive in Bogod than in the other three cities, in terms of both rate of return and total benefits. Electricity substitution in Cali is marginally attractive. Substitution costs vary between 3.1 and 5.3 cents of US$ per kwh. Table 4.2: Economic indicators of gas substitution for electricity in the residential sector BICratio EIRR(9b) Benefit NPV Substitution cost LRAIC WS$91) (UScents/kWb) (UScents/kWh) BARRANQUILLA 2.6 150 46 3.4 7.5 BOGOTA 1 .9 76 203 3. 1 7.4 MEDELLIN 1.6 49 91 3.7 6.3 4.15 Summarized results of the analysis of the economic viability of electricity conservation programs are presented in Table 1 in Annex 14, as well as samples of the calculation methodology and steps followed to obtain these results. The impact of electricity conservation programs on electricity demand was estimated after accounting first for the effect of price reforms as well as for the effect of natural gadLPG substitution for electricity (with economic pricing in both cases). The following programs were considered: * Lighting in all cities (services and public sectors) * Cooking in all cities (residential sector) * Air conditioning in MedelWCali (servicedpublic sectors) and Barranquilla (all sectors) * Refrigeration in all cities (services and public sectors) * Water heating in Bogota and Medellfn (all sectors) Refrigeration is the most attractive program, both in terms of economic viability and overall electricity savings. Cooking and water heating programs are economically very attractive but could yield relatively limited savings due to the impact of gas substitution on these two applications and because water heating is limited to Bogot.4 and Medellfn. Improved lighting is economically marginally attractive and yields average savings. Bogota and Medellfn account for almost two thirds of estimated potential savings. Conservation costs of major programs vary between 1.6 and 5.3 cents of US$ per saved kwh (with even lower costs in the case of public education campaigns targeting improved practices for refrigeration in the residential sector).  : FOSTERING GAS SUBSTITUTION FOR ELECTRICITY CHAPTER 5 5.1 This chapter identifies the major baniers to the development of natural gas and LPG substitution for electricity in the residential, commercial and public sectors of the four cities. Concurrently, it includes some recommendations on actions and policy reform that would help lessen these barriers. Finally, the chapter outlines short term priority technical activities for enhanced safety and efficiency at different levels in the gas sector (distribution, installation, end- use equipment), as well as for raising customer awareness. 5.2 Three main issues need to be addressed for the adequate development of natural gas and LPG use as electricity substitutes in urban areas: (i) gas and electricity pricing; (ii) sector regulation; and, (iii) sector organization. These issues are common to natural gas and LPG, but both fuels also carry important specific issues that are presented below. 5.3 Pricine. Pricing issues were discussed at large in Chapter 3. It was shown that integrated economic pricing is a prerequisite for customers to capture the economic benefits of using natural gas and LPG as electricity substitutes. In case of pricing under economic cost, proportionality between energy sources should be kept for each socio-economic stratum, thus keeping intact customers' incentives for substitution. It was also concluded that LPG is economically less attractive than natural gas for electricity substitution in the residential sector, especially if prospects for LPG supply from Cusiana do not materialize. 5.4 Regulation and standards. While gas industry regulation is a high priority for the Ministry of Mines of Energy, there are still important gaps concerning the definition, certification, application and control of standards for quality and safety in the downstream gas industry; these levels: (i) products and elements used in gas distribution, deficiencies affect two d i f f e ~ n t installations and end-uses; (ii) design and construction practices of distribution and internal installations. Major problems include: (a) only a limited number of items and equipment used in the gas industry are standardized and the current process for preparing new standards (through ICONTEC) is rather lengthy; (b) there are no recognized, properly-equipped laboratories for verifying equipment compliance with standards; (c) control capabilities at the MOE, at the Superintendency of Industry and Commerce and within the Municipalities are weak in terms of human and financial resources; (d) generally, customers are poorly informed about safety and efficiency aspects of natural gas and LPG installation, equipment and end-use. 5.5 Properly applied and divulged quality and safety standards for gas products and installations are essential to ensure the effective development of the market of natural gas and LPG. Adequate safety levels would lessen customers' apprehension about perceived risks of gas use, which is often a serious obstacle for gas substitution. Product quality will usually bring together enhanced energy efficiency. Indeed, it will be more effective to merge energy efficiency goals with wider objectives of product quality promotion. Customer information through product certification and labeling will be determinant in developing the demand for - good-quality, environment-benign, as well as energy-efficient products. 5.6 . . The structure and organization of the gas industry presents a two-fold problem, which, casually, is not specific to Colombia; Venezuela, for instance, suffers the same drawback. At the upstream level, gas and LPG production and supply has no autonomy vis-a-vis the oil industry which manages the gas industry through the Ecopetrol group. The development of the gas industry should rely on a specific entity (or entities) separated from the oil business and acting on a pure commercial basis as a normal supplier of a raw material; private sector participation should be achieved through adequate legislation, contracts and regulations and appropriate energy pricing policy. At the downstream level, although natural gas and LPG distribution industries are clearly decentralized and involve the private sector, there is still a latge direct or indirect participation of Ecopetrol in every major downstream company; for instance Ecopetrol has 48% of the shares of Gas Natural S.A. and 49% of those of Gases del Caribe. More autonomy, combined with stronger regulation (in particular for safety aspects and customer coverage-in the case of natural gas) and adequate pricing, would increase the efficiency of the downstream industry. 5.7 In addition to the above general issues, the development of the market of natural gas in the residential, commercial and public sectors faces the following specific obstacles: (a) lack of network development; (b) low levels of unit consumption; (c) ownership-related barriers; (d) household affordability of connection/conversion costs. These obstacles are briefly analyzed in the following paragraphs. 5.8 Transmission and distribution networks are not developed yet for cities in the central regionl. This will be viable only with joint market development, through the emergence of strong industrial and power sector markets-complementing much lower (although rapidly growing) residential demand-that will allow to keep transmission costs down to reasonable levels. In addition, pricing and organizational reforms summarized in the above paragraphs are prerequisites for private sector participation in gas distribution in the residential sector, which is perceived as a riskier, less profitable market than the industry and power markets. Private sector participation will ease the pressure on government funds for the development of distribution infrastructure and would also lead to better customer service. 5.9 The low levels of household unit consumption, which is limited to cooking and sometimes water heating needs, hamper the financial viability of residentiallcommercial customers connection to gas networks, both from the distribution company and customer perspectives. There is no demand for space heating in any of the four cities, which is the most profitable gas use in the residential and commercial sectors in Northern countries with fast- growing natural gas markets. Alternative uses of natural gas should be investigated, such as supplying air conditioning and refrigeration needs in the service sector and for large residential customers*; 5.10 There is a clear lack of incentives for either owners or tenants for the conversion of rented housing/commercial units to natural gas, since owners cannot recover their additional investment for connection and internal installation from lower energy bills (when these are paid by tenants) and tenants are also reluctant to undertake this investment, especially if the rental duration is uncertain. Gas conversion of existing housing units should target units that are occupied by owners, or tenants with a long lease and tenants for which utility (and other service) bills are included in the rent as a lump sum. A similar problem arises in the case of new housing/commercial units, for which developers/owners are trying to keep front costs down; regulation could be used to deal with this obstacle: for at least all large new housing multi-story buildings, gas connection and internal piping could be made compulsory by municipal or 1 In 1992 the Government has approved the consauction of a gas pipeline between the Atlantic Coast (Ballena) and the refinery of Barrancabenneja with an extension to Medellin; this city could thus be supplied with natural gas freed up by heavy oil substitution in the refinery (as planned by Ecopetrol), in addition to gas transported from La Guajira fields. 2 Apparently several gas-fueled N C units have been installed in the Atlantic region, in particular in Barranquilla; these experiences should be used to assess the technicaland economic m er its of natural gas A/C and to determine the potential market of this technology in the service and residential markets and its impact on the prospects and strategy for the development of natural gas o v d use in these sectors. government authorities3 (even when the extension of the gas distribution network to the specific area is only expected to take place in the near future). Finally, legal problems due to household reluctance to a "gas building" could arise in the case of housing conversion/connection to gas in multi-story buildings where the agreement of all owners and renters is required; this restriction should be eased by lifting the unanimity condition for individual connection to the gas network, provided safety aspects of gas connection, installation and use are properly met and contr011ed. 5.11 The additional costs of household connection, internal installation and new equipment4 are a significant obstacle not only because of the many claims on already scarce capital, especially among lower income households, but also because, depending on consumption levels, it can strongly diminish the financial viability of gas substitution. The first fact explains why gas distribution companies currently provide fmancing5 for the cost of connection and internal installation (but not for gas equipment), even to higher income households. This financing facility, together with the current large subsidy of natural gas in lower strata, account for the very fast-growing expansion of the natural gas residential market, especially in Bogota (in the areas covered by gas networks the penetration factor is 52% of all households in Barranquilla and '58% in Bogot4 only two years after the beginning of the gas development program implemented by Gas Natural S.A.). However, with all residential fuels at or close to their economic costs (as recommended by the Study), Annex 12 shows that the financial viability of gas substitution6 is far from being systematic, especially for low consumption customers (lower strata), or for customers that expect short payback of their investment (less than 5 years) or if electricity remains subsidized in lower income households (lower tariff scenario). Also. substitution is much more attractive in Bogota than in the other three cities (especially Cali where water heating is hardly used), where some subsidy for connection costs would be systematically needed to make gas substitution financially attractive for households belonging to strata 1 to 4. 3 Promoting gas use for cooking and water heating in new buildings should not lead regulators to authorizing or requesting the decreasing of the electrical load made available to these buildings (in order to keep initial costs for building energy supply as low as possible), since this would prevent bouscholds fram switching back to electricity- for preference or economic ~ ~ S O I and ~S it-would , thus aeate a captive market for natural gas, which might lead to luwisfactory customer service. 4 Table 1 in Annex 12 shows that these costs vary between USS100-200 m lower income strata and USS556 600 for higher-income saata,assuming that tbe lacter would use gas-fueled water beating. The f~nanceable part of these costs (connection and intemal instabtion) represents about 8690% of total costs for lower income households and only 35-45% for higher incame households. 5 F m c i n g facilities provided by the 2 main distribution c o m m s utilities (see Table 2 in Annex 12) are quite similar, although Gases del Caribe has stricter cwditions, that sre rather close to commeckd consumer loans: maturity varies between 2 and 5 years (longer for lows strata), downpayment varies between 40% (higher income households) and 15%;interest is the same for all households, 2.5%/month in Bogot4 and 3%/month in Barranquilla. In addition, for those customers previously using LPG,the gas distribution companies could set up a system to purchase used LPG cylinders at a discount (a new 40 1b cylinder costs about USS20 and one of 100 Ib costs almost USS40). especially if the campany is also involved m LPG distribution, such as Gases del Caribe. 6 The assessment of the f m c i a l viabiity of gas substitution in the residential sector-for cooking (in all . strata) and water heating (only m slrata 4.5 and 6 )- hasbeen made Er<rm the user's perspective, based on consumption data obtained from the household survey. The difference in energy expendim before and after substitution is compared, for the two tariff scenarios, with the additional cost of substitution in terms of comection, internal installation and end-use equipment (including taxes). Two indicators are used: payback time and intemaI rate of return of customers' additional invesmeot. If the maximum p awt ime ~cceptable to households were 5 years for lower strata households and 8 years f a higher strata (as assumed by the Study's consultants. a certain pemmtage of comection costs should be subsidized to achieve financial viability (as shown in the last column of tables in Annex 12). In the case of the low tariff scenario for elect~icity, the tables show that natural gas should also be subsidized (albeit proptionally less than electricity) in stratum 1 households m all four cities to achieve the financial viability of gas substitution. 5.12 Special attention should be paid to safety aspects concerning equipment conversion. Households switching from LPG very often adapt cooker/oven burners for using natural gas. If not properly done, this operation can result in serious health hazards in addition to inefficient operation. To minimize risks and make substitution more attractive the gas program in Bogota;-which targeted mainly cocinol users in its fvst phase-systematically removes cocinol cookers from households and replaces them with a basic 2-burner gas cooker, the cost of which is supported by the "Plan Cocinol" with government funds. In the case of LPG appliances, a system of coupons for an amount equivalent to the cost of conversion could be set up by the distribution companies. This system has k e n successfully applied in other countries but it requires the full collaboration of appliance manufacturers andlor retailers and could also be counterproductive if coupon trading develops in parallel with continued unsafe conversion of LPG cookers. In the case of electric cookers and water heaters, this problem should not appear since conversion costs more than purchasing new gas appliances. 5.13 Since LPG is economically less attractive than natural gas for electricity substitution, its role in the four cities should therefore k Limited to specific geographical areas: (i) zones awaiting for the development of natural gas transport networks-particularly in Cali and Medellin-where LPG would k a transition fuel; (ii) zones where housinglroad infrastructure is not convenient for gas development7; and, (iii) areas where lower income households (stratum 1) are dominant (since gas substitution is less financially attractive and involve front cost investment that are less affordable than in other strata)8. Specific issues for the development of LPG are briefly described below and include the following: (a) LPG supply constraints; (b) problems with product quality and image; (c) unsatisfactory system for maintenance and replacement of LPG cylinders; and, (d) prospects for temporary use of LPG in mini-networks prior to natural gas availability. These issues are relevant for the development of LPG distribution and use in general, not only in the four cities of this Study but also as a substitute to kerosene and fuelwood in smaller cities and rural areas. 5.14 The supply of LPG faces severe constraints at several levels: availability, storage and transport. A study estimated that potential demand could increase two-fold through LPG substitution for kerosene and fuelwood in the residential sector at national level (mainly outside the four cities of this Study); in addition apparently significant amounts of LPG are diverted from the residential sector and used in the commercial and industry sectors. Limited quantities of LPG are available from the refineries and gas plants and Ecopetrol has no incentive to increase imports because of the insufficient level of LPG (regulated) price to wholesalers. To alleviate forthcoming shortages (which the Government has been trying to control through a quota system bound to inefficiency), Ecopetrol plans to add about 3.8Mbpd (compared with the 1990 production of close to 13.4Mbpd), mainly through reprocessing at the Barrancabermeja refinery, and to incrzase capacity storage by 7500 bbl in Cartagena to allow importing an additional 2Mbpd. In the short term, total supply could thus increase up to 19.2Mbpd. In the medium term, there are two mutually exclusive options for significantly increasing LPG supply: (i) build an 7 For safety reasons, gas networks should not be built in districts where urban characteristics do not reach a certain threshold: (i) buildings, including single-family houses, must be built in hard materials not likely to be destroyed, in particular due to climatic conditions; (ii) street routing should be final and the risks of unauthorized road works (that could damage piping) should be minimal; (iii) street and sidewalk surface should be stabilized so that the minimum depth at which pipes are buried is secured; (iv) street width should be sufficient to enable maintenance brigades to access any site in case of emergency; (v) finally, the risk of network vandalism and illegal connections should be low. 8 LPG should be made available in 6 kg bottles to lower income households in order to: (i) facilitate supply by customers (often ensured by children for which the 12 kg bottle is too heavy; (ii) better fit family budget (lower amount of money required for bottle refd and initial purchase.. import terminal in Santa Marta, as well as a pipeline to Barrancabermeja (parallel to the existing one) to make LPG available to central regions; (ii) use LPG that could be produced in Cusiaha, depending on the amount and specifications of natural gas in this field. 5.15 Storage capacity is largely insufficient: in 1992 it was equivalent to about 6 days of average consumption, which should be increased to at least 12 days, as agreed by all involved parties. The problem, however, is that wholesalers/distributors' authorized margins do not allow for building additional storage capacity. Either margins should be increased or the government should finance the construction of additional storage capacity that could then be leased to private sector distributors. Although LPG transport capacity has not been reviewed in detail during the Study, there is an obvious constraint in the case of Medellin where distribution companies (mainly Gases de Antioquia) have to use road transport from Puerto Salgar, or even from as fat as Cartagena 5.16 Customer perception of LPG quality and image is generally poor. Many customers feel that the cylinder content is actually less than the amount sold. Others perceive health hazards because of unburned fuel or deteriorated cylinder. Wholesalers/distributors complain that LPG supplied by Ecopetrol contains a high amount of liquids (according to Colgas the amount of non-gaseous fuel in LPG retailed in cylinders could amount to 8% to 15%). thus decreasing the real quantity of fuel available to customers. Improving LPG image could be achieved through two actions: (i) strengthening of Ecopetrol's system for quality control to decrease the proportion of liquids in the LPG sold to customers; (ii) achieving the "moralization" of LPG distribution by the industry itself-through ACOGAS-to achieve better product quality and regain customer confidence. 5.17 The system for LPG cylinder control, maintenance and replacement does not work satisfactorily, leading to dangerous condition of large numbers of cylinders. During the sixties and the first half of the seventies, cylinder maintenance and replacement was the distributor's responsibility-with government regulation concerning the nature and frequency of work to be performed (rarely applied in practice). However cylinder condition progressively deteriorated, the number of accidents increased and in 1976, the Government created autonomous regional entities, the Facilities for Cylinder Maintenance and Replacement ("Fondos de Mantenimiento y Reposici6n & Cilindrosn, FMRCs), to control and ensure minimum safety levels concerning LPG cylinders and associated accessories through proper maintenance and replacement. A unified standard was also prepared (ICONTEC 522) and enacted. It was established that all LPG distributors should be member of a FMRC; in addition, minimum sales of 1.5 million of gallons per month were required to create a new FMRC. There are currently seven FMRCs, to which funds are made available in proportion of total sales of LPG by their members. These funds are included in the LPG retail price structure that is established by the Ministry of Mines and Energy. However, there is little control on maintenancdreplacement work actually performed by the FRMC (as well as on the use of funds made available to them), which on the other hand complain that the relative margin for this purpose has been decreasing over years. The fact is that, as reported in the statistics of the Department of Firefighters of Bogota for instance, the number of emergencies and customer complaints due to cylinder condition is growing, which indicates that the current system is not adequate. A particular . constraint is that the current system led to a dominant rate of cylinder ownership by the customers (instead of cylinder leasing as in some other countries), which lessens distributors' incentives for proper cylinder maintenance and replacement. 5.18 The use of propane gas in mini-networks designed for natural gas-prior to the availability of natural gas- is an attractive option from a commercial point of view. It enables the gas distributor to have early revenues and to secure a captive market and, in the case of delay in gas network construction, it allows the distributor to service sooner those customers having already paid the connection fee. This option has been investigated in Cali for instance. Some basic precautions have to be taken however. Meters and regulators should be designed to operate at natural gas pressure, and therefore LPG should be distributed at the same pressure. Once the mini-network is connected to the gas network, appliances should be converted to use natural gas and propane gas should not be used anymore, not even as a backup fuel (to avoid this risk the propane tank should be removed at this stage); using propane in natural gas appliances, even for a limited period of time, could result in severe health hazards, due to several factors: partial combustion leading to leaks of unburned propane (heavier than air) and risks of explosion, production of carbon monoxide. 5.19 In addition to the pricing and organization reform required in the gas sectorfindustry, priority activities are outlined in more detail in this report concerning the proper application of standards for quality and safety aspects, the strengthening of technical capabilities at distribution/installation level and customer information. These activities include the following: (i) standards preparation and implementation; (ii) equipment certification and labeling; (iii) training of technicians for distribution, installation and maintenance; (iv) certification of technicians; (v) customer information campaigns; and, (vi) study of options for streamlining LPG cylinder replacement system. 5.20 The background, objectives, scope of work, organization and estimated costs of these activities are summarized in the following boxesg. The total cost of this short term program over the period 1994-1996 is estimated at about US$874,000; recurrent costs have not been quantified exactly although they could be in the order of US$100,000 to 200,000 per year. These activities, which can be viewed as a short term program. are further developed and costed as a separate sub-project in the national consultant report (Annex S).  - 54 - Box 1: Standardization of gas equipment, design and installation  - 55 - Box 2: Certification and labeling of gas products  - 56 - technicians Box 3: Training of dis~bution/installation  - 57 - Box 4: Certification of installation technicians  - 58 - Box 5: Public information campaigns  CHAPTER 6: FOSTERING ELECTRICITY RATIONAL USE 6.1 This chapter presents the scope and impacts of cost-effective actions f o r the conservation of electricity in the residential, services and public sectors in the four cities of the Study. Based on proper pricing of gas and electricity as a policy prerequisite, electricity conservation in Colombia should be enhanced in the short term through a five-prong approach': (i) development of standards and guidelines for new buildings in the commercial and public sector; (ii) enhanced energy efficiency in existing buildings in the commercial and public sectors; (iii) development of certification and labeling of residential energy equipment, together with public information and education campaigns; (iv) implementation of pilot programs of Demand Side Management by the utilities; (v) improved street lighting. These action lines are developed below. encv standards and guidelines for new building^ . . 6.2 Background There is no history of energy efficiency building design in Colombia: first cost is extremely imponant as a basis for design selection, which results in eliminating energy efficient designs that are often associated with additional costs. Architects control design decisions but they appear to have little training and little interest in energy performance of buildings, for which design decisions are predominantly based on aesthetics and cost. Once the design is done, numerous changes are often made during construction; these changes are to lower first cost and generally result in reduced efficiency and overloaded systems. The building process is over-burdened with numerous regulations; for example, one large developer estimated that over 300 separate steps of paperwork approvals are needed to get a project constructed. In addition, existing regulations are often ignored and are difficult to enforce by ,municipal authorities; for example, according to a DNP urban planner about half of all constructions in Bogod are not in agreement with the construction permit issued. Adding additional energy regulations would worsen an already cumbersome system, would likely be avoided and could be expected to have little or no impact on building energy efficiency. 6.3 Because of the general deficiency of energy-efficiency-related practices, standards, education or infrastructure in buildings, actions should focus on simple and separate measures to improve the efficiency of specific pieces of equipment and to encourage fuel switching where it appears appropriate. Only once the most important measures are underway, should the focus shift to secondary or tertiary measures. On the other hand, because many elements of an energy infrastructure for buildings either do not exist, or exist in only the most rudimentary forms, efforts to build important infrastructure elements should proceed immediately, since their effects will be felt in the long term only. In general, these are relatively low-cost efforts involving education, committee action, development of standards, testing 1 Load management sbould also be pursued. In the sedors considered it would be achieved most effectively through tariff incentives, such as time-of-use rates (seasonal) and rhemf-day rate$ and even intermpu'blerates (for residential air conditioning). Ripple control for residential water heating could also be envisaged for higher strata households (not likely to ~ ~ S C O Mtheir ~ C ~equipment periodically) procedures, and the building of testing facilities. Economic incentives are proposed in the short run as the most effective means of effecting change. Mandatory regulations are not proposed'or encouraged, except in specific instances, for government-owned buildings for instance. 6.4 Priority measures in new buildings that were considered for the electricity conservation scenario described in Chapter 4 include the following (see Annex 14 for a sample of saving calculations): d e- as .. . * T8fElectronic ballast combination in place of T12 * High efficiency magnetic ballast in place of regular ballast * Higher efficiency furture * Daylight control (2 step) * Daylight dimming control * Limit on use of incandescent lamps Fnvelo~ (air c .. . v * Roof insulation (1 inch) * Improvement of roof absorptivity from 0.7 (dark) to 0.3 (white) * Improvement of fenestration shading coefficient from 0.6 to 0.3 * Increase coefficient of performance (COP) of DX from 3 to 3.5 * Water cooled reciprocating variable air volume unit (COP=4.3) instead of air cooled constant volume unit (COP=3) * Fan control: from none to variable speed 6.5 SDecific p r o m Enhanced energy efficiency in new buildings would be achieved through a comprehensive program including the following main elements: (a) economic incentives (b) standards for energy efficiency (c) education and information dissemination (d) demonstration operations (e) research 6.6 Wentives are needed to induce more energy efficient choices by designers, owners and contractors. This is quite important, since there is not a history of energy-efficiency in buildings in Columbia Together with the envisaged energy pricing policy reform, several types of incentives could be considered for owners and developers, including: (i) Financing: incentives can be provided through the current methods of financing buildings (e.g. UPAC loans that are used for most buildings). Incentives would be given, if identified packages of energy conservation measures were used, either via reduced interest rates or -better- via providing a larger percentage of construction funding. (ii) Cash payments: incentives could be paid directly to owners or developers for the use of specific energy measures or sets of measures to cover part of the additional costs of these measures. (iii) Hookup charge variation: hookups for buildings with energy efficient measures would be less than for buildings without the measures. This could be done at various levels of detail and sophistication. 6.7 f -or energy efficiency of buildings systems, components and equipment are in widespread use in many countries. It is recommended that such standards be developed as guidance for energy-efficient building design and operation in Colombia. These standards could be used as guidance for voluntary application by the private sector, as a basis for mandatory standards for government buildings, and as basic criteria for the provision of the above economic incentives. Because there is not a tradition of energy design in Columbia, it is recommended that the first generation of such standards be simple, and that they focus on a few key energy efficiency measures, defined for specific components rather than for building overall efficiency. The design of building standards would complement the programs for electricity substitution, equipment certification and labeling (to encourage the supply of more efficient equipment in the marketplace-both imported and in-country manufactured) and the pilot DSM actions implemented by the utilities. Developing the fust draft of the standards is a priority activity that has been defined in further detail during the Study (see Box 7 and consultants report for detailed . description of this activity). 6.8 To provide reasonable guidance to building designers and owners, it is recommended that two levels of standards be provided where applicable: (i) minimum energy efficiency standards; (ii) recommendations for "high-efficiency practice" that results in even more energy efficiency, but is still very cost-effective. For example, in climate and construction situations similar to those existing on Colombia's Atlantic coast, applications of the minimum requirements can, with reasonable probability, produce energy and peak demand reductions in new buildings such as offices and hotels of 30% to 35%. Applications of "high-efficiency measures could produce reductions of some 50% to 60%. As it has been evidenced in other countries (e.g. Thailand, Jamaica), these results are highly cost-effective from both national economic and owner financial perspectives. 6.9 Several key minimum standards for each building system have been identified from recent analysis of current construction practices in Colombia, in combination with experience in standards development in a number of countries. To include considerable climate differences, the standards would apply differently in each of the main Colombian urban areas: lighting standards would apply in all four cities; while envelope and air-conditioning standards would apply only in Cali and Barranquilla. A list of proposed basic draft standards for commercial and public buildings is presented in Annex 15. 6.10 In the residential sector, standards and guidelines would concern more efficient designs and layouts, especially for kitchen and laundry. T hes e guidelines should become part of courses taught to architects and to electrical technicians and they would include such items as: (a) proper arrangement of kitchen appliances for energy efficiency, e.g. range and refrigerator not adjacent, proper ventilation for refrigerator, etc. (b) proper location of water heater, and insulation of pipe from heater to point of use. (c) lighting design guidelines (e.g. CFLs, fluorescent lamps, optimal use of daylighting). (d) electric wiring minimum specifications, to insure energy efficient and functional locations of lighting and electric power in residences2. 2 In construction for lower srratahouseholds, locations of energy equipment are now chosen to minimize wiring, with little regard for function and efficiency. 6.1 1 The preparation of standards and guidelines would be coordinated by a multi- institution, multi-discipline committee. The role of the committee would be to provide policy oversight and technical input to the development and implementation of such standards, in particular on the following aspects: guidance in and review of the selection of the contents of energy standards, including measures covered, formats, and stringency of requirements. The contents and fonnats will probably vary by city, indicating the need for appropriate regional representation. - guidance in the identification, scope definition, and accomplishment of any needed research, analysis or related studies. guidance in the implementation of the energy codes and standards. This can include: information dissemination activities; technology transfer activities; establishment of regulatory mechanisms; development, implementation, and oversight of compliance procedures. The committee would be primarily private sector, with representatives of building professionals (electrical, architectural, mechanical), equipment suppliers, energy sector operators, as well as government entities, ICONTEC, and universitiedresearch centers-such as Universidad Nacional, Universidad de 10s Andes, Universidad Javeriana (Bogod); Universidad del Valle (Cali). However, there would be sufficient government representation to provide policy coordination, and it is envisioned that a government entity, such as the DNP or the MME, would provide a secretariat function for the committee. 6.12 E d u c a t io . n . about the standards should target professionals, as well as university lecturers. For professional architexts and engineers, this can include workshops for professionals, provision of analysis tools and training in their use, and training in the identification, selection and use of energy-efficient technologies and design strategies. Workshops would involve fust identifying and training in-country professionals, who would then conduct the workshops. The workshops would include computers, with one per each 3 to 4 workshop participants, to teach concepts, interspersed with hands-on experience, on the following aspects: standards compliance, general energy efficiency in buildings, specific strategies and methods. There are several analysis tools that could be of wide-spread use in the professional community. Copies of these tools and their documentation would be made available, and their use would be explored as part of the workshops. Example tools include: DOE-2; ASEAM2D; loads analysis programs; daylighting mathematical analyses and physical models; illumination and lighting power calculations. Two excellent sources of information could be: (i) a compendium of recent articles and report on energy conservation in buildings, with an emphasis on pragmatic building design and operations information; and (ii) information via electronic mail question and answer dialogue among participants in various locations. 6.13 At university level, courses for architects on building energy efficiency are also most needed. Architects control many energy-related decisions concerning buildings in Colombia, yet have very little technical training to prepare them for evaluating these decisions. Course materials should include the key energy factors important in the various regions in Colombia: illumination criteria, and lighting and daylighting calculations; external loads imposed on air-conditioning; internal load calculations; ventilation requirements and methods; air- conditioning. Cooperative arrangements between universities in Colombia and those in other countries (e.g. Lawrence Berkeley Laboratory in the USA) could be established. In addition, collaborative research and teaching efforts among various Colombian universities in different cities should be promoted, for example, in setting up and operating one or more technology demonstration centers (lighting or daylighting would be a prime subject). 6.14 on ouer-in a sample of new private and public sector buildings (at design stage) are needed to confirm savings that can be achieved through the standards,,to defrne costs of measures more accurately and to serve as a training tool. The sample should differentiate the following aspects: building type - offices, retail and housing; building system - lighting, envelope, air-conditioning (as appropriate); geographical location - Bogota, Barranquilla, Cali, Medellin. The program should provide financing for additional costs of efficient design for sample buildings. Regarding public sector buildings, the energy efficiency standards should be applied as mandatory requirements for all new buildings and for major retrofits and additions as well. The requirements of this program will provide a training ground for architects and engineers in applying the criteria and a test bed for energy technologies and strategies that have not had much use in Colombia heretofore. 6.15 . .. h actwltie~are needed to better understand current and potential building practices as they apply in Colombia Research activities to be accomplished by Colombian analysts and researchers, with some guidance by international experts, would include: (i) surveys of use of specific technologies and identification of conservation potentials; (ii) compilation of weather data into usable formats for thermal energy analysis, especially for Cali and Barranquilla; (iii) conducting detailed energy and economic analyses of impacts of energy conservation measures for buildings; (iv) research into specific technologies as they apply to Colombia, for example the use of high efficiency lamps and ballast combinations under low and variable voltage conditions, or the proper application of daylighting controls. Each of these items is discussed below. 6.16 Several detailed surveys of specific building systems are needed. These have three main objectives: (a) to identify in detail the current state of specific energy-related technologies via statistical surveys; (b) to identify more specifically the energy efficiency measures that make sense for Colombia, and how they might be properly applied; (c) to enhance in-country energy analysis expertise and experience. Three surveys have been identified: (i) lighting systems; (ii) building envelope; and, (iii) air-conditioning and ventilation systems. The lighting survey would be done in all four major urban areas, whereas the envelope and air- conditioning surveys would concentrate on Barranquilla and Cali. 6.17 Proper weather data are needed in order to conduct effective energy and economic analyses in locations in which air-conditioning is used. Hourly data is needed as input to energy simulation tools that consider the impacts of internal and external loads on sizing and operation of air-conditioning equipment (e.g., loads programs for equipment sizing, energy simulation programs such as DOE-2 and ASEAM2D). For this reason, the f m t priority is to compile such data in proper formats for Cali and Barranquilla (as representative of similar locations on the Atlantic Coast). Such data can be used for policy-related studies. It can also be distributed to architects and engineers, along with appropriate analysis tools, to improve the analysis of energy factors in buildings being designed or considered for retrofit. 6.18 Energy and economic analyses are critical as bases for policy decisions about the cost-effectiveness of energy measures and programs for buildings. For example, the results can be used as a basis for establishing incentives and performance requirements for whole buildings and for specific energy efficiency measures. Also, the results may be used to establish appropriate levels of efficiency standards. Three basic sets of activities should first be accomplished as a basis for the energy and economic analyses: (i) weather data (see previous paragraph); (ii) selection of appropriate analysis tools as a basis for policy decisions (typically, the DOE-2 energy simulation tool is used for detailed analysis of air-conditioned buildings, while for other buildings, much simpler tools can be used); (iii) detailed descriptions of specific energy-related features of typical buildings (using professional judgment combined with the results of building surveys), which become base cases for analyses of impacts of energy efficiency measures. After identifying energy efficiency measures and estimating their incremental fmt costs and operating cost, analyses of the energy and economic impacts of the measures are conducted, considering the impacts of the measures taken singly and. in combination. The results of these analyses will identify cost-effective measures and levels of energy efficiency for each of the main Colombian urban areas, and for the country as a whole. These results become a powerful tool for making demand side management energy policy decisions and are necessary for proper policy foundation. 6.19 High efficiency fluorescent lamps and daylighting controls seem very promising technologies in terms of energy efficiency and cost-effectiveness, but their effective use in Colombia would require some research. Use of certain high-efficiency fluorescent lamps (e.g. T8126mm lamps) would be very cost-effective, but significant voltage variations preclude their use with ballasts currently available in Colombia. Research is needed on lamp/ballast combinations that would permit use of such lamps. For example, electronic ballasts especially- designed for use with such lamps under the variable voltage conditions in Columbia might permit widespread use of this technology. Use of such lamp/ballast combinations might reduce lighting energy use some 30% or more from current practice. From numerous studies and building examples in the US and elsewhere, use of daylighting controls can reduce lighting energy use by up to 50% or more in the building areas to which they are applied, if the electric light output is reduced or turned off. Studies need to be made on how to effectively incorporate this technology, using modem lighting controls, into Colombian lighting design practice. Some of this analysis can be incorporated into the energy and economic analyses described above. Also, demonstrations of daylighting controls installed in case study buildings would provide direct examples of the effectiveness of this technology. Such demonstrations could show that, through proper design, lighting quality can be improved at the same time that energy is saved 6.20 S a v i n g A small group of energy efficiency measures were analyzed by the Study team by means of building visits and discussions with utility managers, engineers, architects and builders. Out of the over 200 measures that are typically possible in commercial and public buildings, 26 were chosen based on their savings potential, availability in Colombia, and typical cost effectiveness (see description in Annex 10). As a result, the cumulative saving potential estimated in this Study for commercial and public buildings does not represent the maximum potential of energy efficiency3 but rather what is achievable easily and over a short period of time. Future studies should consider a more complete list of measures and verify their costs and impacts on energy use. 6.21 Most selected measures focus on cooling and lighting, which have been identified as dominant end uses in commercial and public sectors of the four cities (see Chapter 2) and for which substantial savings are possible. Alone these two end uses represent over 40% of energy consumed in the sectors. Some of the proposed measures can be implemented with material already available in Colombia. Others require new imports or new manufacturing processes. Some measures such as high efficiency motors or electronic ballasts will only be applicable when technical obstacles such as voltage fluctuations and harmonic distortion problems have been quantified and solved. Below is a summary of the findings of the measure analysis for existing commercial and public buildings: Liehting: savings of 30% (technical potential) and 18% (feasible potential in 2005). Most of the lighting savings focus on fluorescent lights, which account for an estimated 75% of lighting consumption. In addition, the use of mercury vapor lamps should be immediately reduced in favor of high pressure sodium and metal halide lighting. 3 Feasible saving potential is even lower. since factors such as rate and speed of measure penetration have also been taken into account to establish the energy consemation scenario described in Chapter 4.  Cool& savings of 23% (TP) and 12% (FP). The highest savings potential in cooling'is achieved through the use of cooling equipment with higher COP (coefficient of performance). There is also substantial savings potential through the use and maintenance of cooling system controls, i.e. thermostats and cooling tower controls. Hot Water; savings of 24% (TP) and 7% (FP). Substantial savings are possible through only three measures; however the overall impact of electric hot water heating on sector total consumption is small. Cost effective low flow shower heads should be considered for hotels, as well as in the residential sector. Refrigeration:savings of 5% (TP) and 2% (FP). Although a great deal more savings potential exists for Refrigeration in industrialized countries, most measures are complicated and expensive. Since a great deal of energy is used in Refrigeration in Colombia, further investigation is needed into possible measures to determine which are feasible. 6.22 Measllre Pnon- . .. . There are several ways to prioritize energy conservation retrofit measures in existing buildings, the most accurate being a cost-benefit analysis of the avoided cost savings (in energy and demand) compared to the measure cost. In a fvst approximation, the measures have been sorted by their total energy savings and by the ratio of energy savings to annual cost of implementation. This prioritization is shown in Table 6.1; it applies to commercial sector buildings but would yield a similar breakdown for public sector buildings. Measure costs and benefits were then analyzed by end-use and city (see Table 1 and others in Annex 14). 6.23 In preparing Table 6.1, cost and savings of each one of the 26 measures were analyzed on the single unit or system level; for example, compact fluorescent lamps were first analyzed on a single lamp basis. The resulting savings and cost numbers were then applied to the total energy and demand for each given end use and city. Costs and savings were estimated based on experience in the US4; a priority for future studies should be to establish better estimates of measure costs and savings. 6.24 Bamers, incentives and recommended actions, As evidenced in previous chapters, there are several different barriers that must be overcome before widespread implementation of energy efficiency retrofit measures occurs in existing buildings. The commercial and public customers have a unique set of concern different from that of residential customers that will need to be addressed before investments in energy efficiency can materialize. These concerns or barriers include: - The lack of proven track record for the financial benefits of energy efficiency investments. - Customers' need to see returns on investments within one or two years at most. - An overwhelming constraint on first cost of any building component. - Customer perceived hassle and unreliability factor of complicated changes to building operations linked to enhanced energy efficiency. - A general lack of knowledge of energy-efficient building exploitation practices 4 The savings potential numbers were based on limited data from Colombia and similar studies conducted in the U.S. and other countries with comparable climates, and were adjusted for the various climates in Colombia. When available. equipment costs used were those found in Colombia and were otherwise based on U.S. costs. including additional shipping ( ~ W O duty ) , (15%) and sales tax (12%). However, energy users in buildings Colombia are generally responsible for paying energy bills directly, unlike some other countries where lease contracts that integrate the cost of services (including energy) are frequent in the case of buildings. 'Ihis makes customers more receptive to the proposed pricing reform, and it also is an incentive to implement energy efficiency measures since improvements will result in lower operating cost for customers, even if in the case of tenants. 6.25 As a complement to the envisaged pricing policy reform, the primary incentives and program options that should be considered to enhance energy efficiency in the commercial and public sectors in Colombia are based on a three-prong approach: (a) information dissemination and technology demonstration; (b) financial incentives for selected customers; (c) standards and mandated retrofits for public sector buildings. In addition, research activities recommendedin the program for new buildings (see paragraphs 6.15 to 6.19) would also be necessary for the successful implementation of the proposed actions in existing buildings. 6.26 Lnf o r m a t i o n &It is necessary to demonstrate that energy-efficient technology is reliable, actually saves energy and money, and can be installed without a disruption to business. Such an effort would include: (i) information . . and equipment; (iii) showcase building dissemination; (ii) testing and monitoring of buildings retrofits; and, (iv) training. Information d i s s e m i n u is usually performed through literature distribution or through building energy auditsJevaluations. Literature distribution is cheap and fast to implement, while energy audits are much more costly and require trained auditors (usually from the utility) with the appropriate tools, but have a much higher impact; a combination of both tools would be more effective. Testing or research and development of efficient technologies will be needed to ascertain what measures are the most cost-effective in Colombia; although full use should be made of previous testing work in other countries, local testing will correct for climate differences and will help determine what equipment is available in Colombia. . and whether or not it will hold up under the local electricity conditions. Showcase buildiu retrofits or demonstration projects can help persuade skeptics of the benefits of efficiency improvements and help determine the actual cost of the retrofits. Demonstration buildings should be chosen with care to insure that the buildings are representative of the stock to be targeted; special attention should be paid to offices and medium sized retail businesses, which account for a large share of sector electricity consumption. Training over time can prove to be one of the most effective methods of encouraging energy conservation. Training is needed for utility employees, building managers, engineers, architects, equipment suppliers and energy sector decision makers. 6.27 Financial I n c e n h Pricing reform should precede the application of financial incentives, which should target in priority those customers with rather inelastic electricity demand. Financial incentives are meant to bring the cost of efficiency improvements within reach of typical spending practices and therefore to encourage the implementation of energy conservation measures. Typically, the implied discount rate of many businesses (especially small ones) for energy investments is in the range of 100%. Most conservation measures have a lower return on investments, ranging from 20% to 50%. Even with strong improvements in information dissemination and technology demonstration, many commercial customers will not invest in conservation. Financial incentives can take several forms, including rebates in the purchase of efficient equipment, financing at subsidized interest rates, rebates to distributors of efficient equipment, and shared savings mechanisms. Since utility rebates are not allowed in Colombia and subsidized financing can easily have perverse effects (inefficient allocation of resources, free riders phenomenon, etc.), shared savings would be the most appropriate mechanism, to be applied either through utilities or third parties: the participating customer is charged each month for a minor part of the value of estimated savings achieved through the implementation of a given energy efficiency measure. This mechanism is applied by several utilities in the US, where splitting the cost of a conservation measure between the customer and the utility results for the utility in return on investments that range from 50% to 200%. which are much higher than the utility's usual rate of return on supply-side investment. 6.28 Standards and Mmdated Proerauns, Standards and mandated programs are choice instruments for customers or products that do not respond adequately to economic or financial incentives: most energy equipment and public sector customers are cases in point. Energy equipment efficiency is only slowly influenced by customer demand induced by energy price reform; production and financial constraints hamper manufacturers' scope for moving rapidly towards the production of more efficient, but more expensive, equipment. Cost-effective mandatory standards for key equipment, such as shower heads, fluorescent ballasts and window air conditioners, could have a significant effect on energy use in existing buildings. Mandatory retrofit measures with a predetermined payback (e.g. 2 years) should be established for all government buildings in a step approach: first detailed audits would be conducted in a sample of public sector buildings; second, cost-effective measures would be determined for each building type; then a few demonstration projects would be implemented and their results used to define mandatory retrofit measures; finally these measures would be extended to most government buildings. 6.29 Pilot DSM Prop- While the above actions should form part of a long term program, it is proposed to address short term needs through the design and implementation of pilot demand side management (DSM) programs in the four cities. Proposed programs axe summarized in Box 8. Their key objectives are the following: (i) confirming savings and costs of energy efficiency measures; (ii) strengthening data on customer characteristics; (iii) testing the effectiveness of several mechanisms for DSM; (iv) defining a strategy for a larger DSM program, possibly at national level. 6.30 The programs should be developed in parallel with pricing and regulatory reform and efforts to implement appliance and building standards. By achieving a better understanding of customer characteristics and behavior, DSM programs would contribute to better define pricing and regulatory instruments. Successful implementation of the DSM pilot programs, as well as achieving their rapid extension to larger programs, will require the full support and participation of the electric utilities, including the four distribution utilities and ISA for coordination and supervision. Interviews with high level staff of these utilities during the Study evidenced a high level of receptivity and many suggestions for efficient delivery of the pilot programs were made, based on specific conditions and constraints of each utility and their respective experience in energy efficiency programs. A key issue will be to keep administrative costs down to reasonable levels, and to properly assess actual impacts and benefits of the programs. on and label in^ of 6.31 W e r s . There are several barriers to the development of efficient products used in the residential sector. These barriers occur at all levels: manufacturers, retailers, customers, and government. They are detailed below. 6.32 w t u r e r s could increase equipment efficiency, often without any change in production process or retooling. In addition, some of them - mostly subsidiaries of international - companies are fully a w m of latest technology developments. However they primarily respond to market pressures, where the vast majority of customers is looking for low cost, inefficient products. To compound these factors, the market of appliances of interest to this study (i-e. electric cookers, refrigerators and water heaters) has been almost totally captured by only two manufacturers, which further hampers the development of technologically-improved, energy- efficient products through competition pressures. 6.33 B - are completely uninformed of energy efficient products, or even of the respective energy costs and advantages of the various products they sell. Although manufacturers have this information, they usually do not p a s it on to the retail level. Again there is no customer pressure for moE efficient products at retail level. 6.34 As explained earlier, w m e r s are not familiar with, or aware of, energy efficiency products, and their impacts and savings. Practices of equipment usage often result in inefficiencies that are higher than the ones caused by equipment low performance. As a result, and because of low income levels and subsidized energy prices, customer preferences go to equipment with lower first cost (always a decisive factor) but also with lower efficiency since operating costs are less a factor.  -71 - Box 8: Designing and implementing pilot DSM programs in the four cities ialear% a ~ a ~ q a 01 d%iaua30 X3ua13gja paamqua 3u~nsindUJ a ~ ~ l u a m x ~ e pue '~uawd~nba 3~0x1se mq Xpoqou araqm 'uogenlys =netua@tssq-~ qmpn 01 papaau qsApea o m atp aq 1q%!ur 'burouo~a q ~ jo %quadoa v yip iatpa%a'turojar %upudASiaua %qo%uo aq,~ 9C-9 s ' s u o ~ ) e a g dd%iaua jo uoye31fia~apnpq Apnsn IOU saop pue ~ p u o d pues paym y IaAaI 1ue1d re %upm uogFppe UI -Amnme iado~d %upalqaeioj y%nouaIIam padd~nba ssoi3e JOU ' e ~ q u r o ~ o ~ turo~~un readde 1ou op saagaeid %ups=n aauegddv d n r ~ lou op arojaratp siaurolsna qqqm 01 'smadsle dauapga X'aiaua ssarppe - a ~ u e ~ ~ o q31q1e 1ou saop 1~'(sioreia8ujar -%.a) luatudrnba auros 103 QsIxa h p n b lanpo~d jo 3ugaqe1 q%noytw wxxn)xjnuetu iaIpws 01 iajsrren B o ~ o u q m io %ugaqe~ ruawd~nba 'uoge3npa pue u o p e w q q ~awo1sn3 se q3ns ~ 3 a d s elueuod~ 01 ppd aq p~nom uoguaue a p l g '(a3ueuuopad Asiaua iaq%!q 01 awy ayl jo lsou speaI s ~ yq%noyl@ l 'haps pue h p n b lanpoid a~oidw!01 X1u!ew) %u!rsar pue spmpue1s mawdpba A~a~lsnpxa 1sowle ssaippe plnom suqd )uauru~a~o% '1a~ .Xaxa!3r~~a mauxd~nba pax.r~qua % q ~ a % u~ m pasaraq sreadde a u SE'9 transparency of the market. Through this double process, consumer interest in energy efficiency products and practices will be raised and would result in an increased pressure on local manufacturers and retailers for better products. In turn, concurrent customer and manufacturer pressures would justify a more comprehensive approach of the government to energy efficiency, in particular through several integrated actions: customer information and education, greater technology transfer, enhanced and uniform testing, simpler regulation and improved standards, targeted labeling and compliance programs, etc. 6.37 Savings potenti& As presented in Table 2.1 in Chapter 2 significant savings of 10% to 40% (depending on the type of equipment) could be achieved by bringing appliance efficiencies to state-of-the art levels, i.e. the ones found in the USA and Canada. A large part of these savings could be attained through a limited number of simple measures, which concern either improved manufacture specifications or retrofit of installed equipment, including the following: Water heating (BogotA and Medellin): - Insulation improvement - Timer upgrade - Insulating blanket Refrigeration (all cities): - Compressor upgrade - Insulation improvement Cooking (all cities): - Oven insulation - Cooktop upgrade Room air conditioning (Barranquilla) - COP upgrade (from 6 to 8) 6.38 In addition, public information and education campaigns to improve consumer practices and behavior would be implemented in all cities. Measures that could be addressed include among others: refrigerator usage; stove usage; air conditioning practices; hot water usage; appliance positioning; etc. In countries where they were applied, continuous and multi- faceted campaigns have yielded savings of 15% to 25% for participating households, although they usually require recurrent efforts. In Colombia, potential savings are larger than in developed countries, although part of these savings would be achieved through the recommended energy pricing reform, while the rest might not be easy to reach for reasons associated to income, culture, literacy and energy expenditure levels. This Study considered education programs only for improved use of refrigerators and ranges in all cities, and air conditioners in Barranquilla; conservative savings of 10% and consumer response of 5% were assumed for refrigeration and cooking, and respectively 20% and 10% for air conditioning. The costs and benefits of information and equipment-related measures were roughly assessed by end-use and city and are summarized in Chapter 4 (see sample calculations in Annex 14). 6.39 Action Dropram Actions aiming to enhance the efficiency of residential equipment as well as customer behavior should focus on making the equipment market more transparent. In Colombia, this would entail the following comprehensive activities: (i) Developing a uniform and appropriately equipped system for voluntary standard design, and equipment testing and certification, in harmony with international andlor regional standards systems; priority products w i ll include first refrigerators, ballasts and window air conditioners, and then ranges and water heaters.  (i) Developing a labeling program, which includes some form of compliance, e.g. using existing Colombian advertising legislation. (iii) Designing and implementing a public information and education campaign to raise consumer awareness in areas of sigmcant potential savings. (iv) Developing linkages to benefit from successful experiences between relevant interest groups in Colombia and other countries, for instance: between utilities for consumer education and information and DSM promotion; between standards bodies (e.g. ICONTEC with the Canadian Standards Association or with the Jamaica Bureau of Standards); between government entities for labeling, market research and public education (e.g. ISA "Comitk Calidad" with PROCEL in Brazil); between manufacturers on mearch results and manufacturing methods; between consumers groupdassociations. (v) Encouraging technology transfer to the manufacturing industry, as an incentive to move toward more efficient products and as a complement to customer incentives (see DSM pilot program) for those efficient equipment that already are available in Colombia. (vi) Conducting further research into consumer characteristics and habits, and monitoring market penetration of efficient products and practices by end-use, stratum and city. (vii) Supporting the introduction by the manufacturing industry of a training program on efficient products and practices directed at wholesalers and major retailers. . . 6.40 _QrganlzatlonalewqEk, The above actions should be developed through a consultative approach between government, manufacturers, retailers and consumers, to ensure that a consensus is attained on the efforts for promoting energy efficient equipment and practices. Also, in order to avoid conflicts of interest and to ensure effective implementation, it will be particularly important to achieve the separation of four important functions in the program: (a) standard and testing development, including: developing base standards and testing procedures; certifying testing agencies and controlling uniformity of testing; conducting random spot tests of labeled products; reporting results to government and consumer groups; this function could be fulfilJed by ICONTEC; (b) equipment testing: certified testing bodies would test equipment selected by ICONTEC, and provide results and recommendations on labeling or no labeling to government and ICONTEC; only one or two such bodies would be necessary at the beginning of the program; (c) equipment labeling and compliance, and industry support: a govenunent entity (probably the existing "Committee for National Industry Development and Promotion") should control the process, award and retire labels, strengthen technology transfer and bilateral linkages (in collaboration with ICONTEC), and organize retailers training; (d) consumer education and information and consumer/e.quipment monitoring: this function could be performed b the distribution utilities and ISA in part in the framework of the I pilot and follow-up D M programs (see Box 8). 6.41 Costs. The costs of designing and implementing program activities WL.--. for they would only concern standard update and development, continued roughi; nqtimated during the Study for a period of five years. Costs beyond the fdth year should b. dram, .zlly, -ling aL.rl -.. compliance, and maintaining public education and information. A breakdown o~ qts is presented below for the period 1994-1998: l.Lmnus Standard and testing development Standard preparation (5 types of applian.) 250 Testing procedures 50 Equipment testing Laboratory set-up (1) 500 Training 100 Labeling and compliance Labeling 100 Compliance 100 Industry support Activities 100 Equipment 200 Retailers training 150 Public education and information Research and data base 100 Programs 1,500 Government participation Staff (15) 900 Office spacdequipment and other 250 TOTAL 4.300 for Improved Street Lighting Pros~ects 6.42 Stock situation. The Study briefly assessed the stock of lamps for street lighting through a survey with distribution utilities in the four cities (EEB. EPM, EMCALI and ELECTRANTA). As shown in Figure 6.1, with 50.2 MW BogotA accounts for more than half of a total installed- capacity of 94.8MW in the four cities in 1991. Mercury lamps are predominant (65.2MW), especially in BogotA where they account for close to 80% of total capacity. The significant share of inefficient, incandescent lamps in Barranquilla is also noteworthy. Efficient high-pressure sodium lamps account for only 27% of total capacity. The majority of mercury lamps (86% of a total of 378,369 in the four cities) are equipped with 125 W bulbs, while most sodium lamps rate 250 W or 400 W (39% and 48% respectively, of a total of 58,405 in the four cities) and incandescent are either 100 W (most) or 200W. It is worth mentioning that a 200 W sodium lamp has about the same luminance as a 400 W mercury lamp (20,000 lumens). The design of mercury lamp street lighting in Colombia is therefore different from that using high pressure sodium lamps: the former uses low-wattage, low-luminance lamps which requires shorter spacing of lamp supports than the latter system. Mercury and sodium lamps have about the same life span which is much longer than that of incandescent lamps, meaning lower replacement costs for the former ones. 6.43 Based on the above data and assuming lamp operation of 4200 hourslyear, electricity consumption for street lighting in the four cities is estimated at 412 GWh5 in 1991 (with 220 GWh in BogotA only). This accounts for about half of total consumption reported by utilities for street lighting at national level. It also represents 1.6% of national sales of electricity. 5 Estimates made by the Study fall quite close to sales reported by the utilities for street lighting, except in the case of Cali (25%higher) and Barranquilla, indicating a significant proportion of burned lamps in these two cities.  Figure 6.1: installed power of public lighting sys, 10 5 0 BOGOTA M E D W CALI BARRANQUKLLA SODIUM HIGH PRESSURE MERCURE INCANDESCENT Note: Including ballasts losses Source: Study survey. 6.44 Saving ~ o t e n t i aStreet lighting could be improved through the substitution of mercury and incandescent lamps with high pressure sodium lamps, which have a high luminance/wattage ratio. At least three options can be considered: (a) replacing 125W mercury lamps with 50W sodium lamps: lamps and fixtures should be replaced, without having to modify post design or spacing; this measure is marginally cost-effective6 but allows significant capacity savings; the cost of replacing all existing lamps and fixtures is estimated at about US$65 million; (b) replacing all incandescent lamps with 50W sodium lamps, including replacement of lamp fixture and post redesign and spacing modification; although initial costs are high (and could not be estimated during the Study), this measure should be cost effective because of the much higher life span and luminance ratio of sodium lamps; (c) replacing 400W mercury lamps with 250W sodium lamps, with the same design considerations as in point (a). 6.45 Applying these three measures to the total stock of street lamps would yield capacity savings of about 30MW (assuming a coincidence factor of 0.95) and energy savings of 131 GWhIyear. However, effectively replacing lamps and fixtures faces several constraints: technical limitations, since the current pace of lamplfixture replacement is rather low (2.5% of 6 This measure would be higly cost-effective if, as claimed by some lamp manufacturers, it was possible to replace only the lamp,(and ballast); utilities claim that this would greatly diminish lamp life span, which could be avoided by also replacing the lamp fixture. total stock each year in the case of EEB); financing constraints (due to high initial costs), for utilities that are already stretched7 ;customer opinions, that sometimes claim inferior lighting'of sodium lamps as compared with mercury lamps, even at identical luminance levels (this is probably subjective and a matter of fwiliarization with a different light color). 6.46 Becommended actions, In the short term, the following actions are recommended for improving street lighting: (i) increasing EEB's pace of street lamp replacement (up to 5% per year) and concentrating on 125W mercury lamps; lowering street lighting consumption is particularly attractive for EEB, which does not perceive any revenues from this service, contrary to other utilities that are paid by the municipalities; (ii) allocating financial resources to Electranta (from municipal budget) for replacing progressively all incandescent lamps and fixtures; (iii) investigating to verify possible life span reduction of sodium lamps operating in a mercury lamp fixhue; (iv) reviewing design practices for street lighting, in order to prepare adequate standards and guidelines and to disseminate them to a l l utilities. 7 This applies particularly to Electranta, for which, however, the substitution of humdescent lamps would be highly cost-effective.  CHAPTER 7: INSTITUTIONAL AND FINANCING ASPECTS 7.1 Adequate institutional and financing arrangements are essential for the proper delivery of energy efficiency services. As was shown in this Study, iden- cost-effective energy efficiency measures and the obstacles to their implementation are rather straightforward tasks, as well as defhmg the policies that are prerequisites for the effective application of these measures (in particular, electricity and gas pricing reforms). However, the lessons of past efforts in Colombia and other developing countries for promoting end-use energy efficiency show that the effectiveness and, even more important, the sustainability of such efforts depend very much on the nature of the institutional and financing framework for developing these programs. An inadequate institutional framework could lead to neglectmg comparative advantages of actors, duplicatmg activities, limited incentives andlor accountability of actors involved, and insufficient use of the private sector in the delivery of energy efficiency services, and result in an unefficient allocation of public resources. Financial incentives such as credit facilities for residential customers might be needed to allow economic substitution or saving of electricity; however these incentives should be carefully targeted and their actual impact monitored periodically in order not to result in economic inefficiencies. Specific financial instruments can be designed for providmg quickly-processed financing for energy efficiency investments, as well as appraising/engkring advice; such financing should be provided under commercial terms similar to those applied to supply-side energy investments. 7.2 Several principles should be considered for designing institutional and financing arrangements for the effective delivery of energy efficiency services: (i) the separation of functions between actors accordmg to their respective comparative advantages and mandates: policy and planning which coresponds to the MME and DNP; promotion, information, and coordination; and delivery of energy efficiency services and products; (ii) the decentralization of delivery structures: the regional program operating on the Atlantic Coast, PESEWA, is a case in point; by belng close to end-users it allows better understanding of issues and constraints as well as decreasing admtnistrative costs; (iii) the increased role of private sector actors: this is needed to enhance efficiency in service delivery and to lessen the financial burden of the State; (iv) a consensual, flexible and (by definition) dernand-oriented approach to end-use energy efficiency: the idea is not to force energy efficiency actions or programs on to customers but to obtain a clear understandug of their real needs, expectations, opinions, priorities and constraints for better program designing and customer targeting; (v) importance of monitoring and evaluation of the cost-effectiveness of the measures and policies implemented: this often a missing and yet very important activity in many energy efficeincy programs; with recognized success in enhancing end-use (vi) external linkages ~ith'or~anizations energy efficiency and whose experience is relevant to the Colombian context: as  - 79 - underlined earlier it would be beneficial to establish such links with CENERGIA in Peru and PROCEL in Brazil; (vii) using financing incentives that are cost-effective and minimize free-riders; and, (viii) linking financing and delivery instruments; 7.3 A new en- should be created to promote energy efficiency in all sectors, ensure coordination of actions and monitor results and impacts, in close cooperation with policy and planning work conducted by the MME and the DNP. This small-sized en- should involve and obtain its financial and human resources from public institutions, energy sector operators, financial entities, the private sector and donors, thus implying only a small financial burden for the Government. Its status would be that of Foundation or and Institute (such as CENERGIA in Peru) with financial autonomy. 7.4 The above entity should be complemented with a financial corporation responsible for providing financing for energy efficiency projects. The corporation would obtain resources from local banks, industries, professional associations, bilateral donors and international financing agencies (on-lending by the Government); it would also obtain resources through its financial services. In a first stage it could be designed as part of the FEN (as a small unit of about 5 persons), in order to build a confidence capital without incurring efforts and resources necessary to create a new structure. 7.5 Institutional arrangements for the implementation of short term actions that are recommended to foster gas substitution for electricity as well as electricity conservation in the residential, commercial and public sectors are presented in detail in the report (see Chapters 5 and 6). In the case of gas substitution key roles are played by ACOGAS, a non-profit organization regrouping most gas sector operators, and ICONTEC, an independent entity charged with developing standards and certifyrng equipment. In the case of electricity conservation, demand side management pilot actions should be developed by small special units in the utilities in the four cities, whlle certification and labeling of selected electric appliances would rest mainly with ICONTEC and the Committee for Developing and Stimulatmg National Industry (through its Division for Quality in the Power Sector). A Review Committee impulsed by the MME and the DNP would be charged with developing and applying energy efficiency standards and guidelines for public and commercial buildings.  LIST OF ANNEXES Annex 1: Work conducted during the Study Annex 2: Costs and prices of electricity, natural gas and LPG in the residential, commercial and public sectors Annex 3: Summary of power subsector expansion plan Annex 4: Power subsector restructuring strategy. GOC's action plan Annex 5: Summary of energy efficiency activities in Colombia and relevant programs in Brazil and Peni Annex 6: Energy consumption by sector, end-use and stratum Annex 7: Options for enhanced patterns of electricity use in the residential and commercial sectors Annex 8: Overview of energy efficiency practices in building design in Colombia Annex 9: Summary of rapid audits of 11 buildings Annex 10: Description of recommended energy efficiency measures for commercial and public buildings Annex 11: Demand elasticities Annex 12: Financial viability of natural gas substitution for electricity Annex 13 Organizational diagrams for the standardization, certification and labeling of gas/LPG and electricity end-use equipment Annex 14: Economic evaluation of electricity conservation programs Annex 15: Basic energy efficiency standards for new buildings Map 1: Colombia electric power systems Map 2: Oil and gas fields, pipeline network and supply facilities  Annex 1 Page 1 of 2 ANNEX 1 WORK CONDUCTED DURING THE STUDY . Demanda y oferta de energia en el sector residencial, commercial y pbblico. C h Gonzdez . Equipos energeticos y edificios: mercado, nomas, aspectos institucionales y subproyecto de cert5caci6n y etiquetaje. Humberto Prieto . Suministro y uso de gas natural y de GLP. Alvaro Santoyo . Propuestas de subproyectos para el subsector gas. Alvaro Santoyo. . Andhis de costos y tarifas de algunos energeticos en Colombia. Luz M a d G o n d e z . Desarrollo de estihdares e implementaci6n de medidas de conservaci6n en edificios. Diagn6stico. Santiago Moreno and Joseph Deringer. . Desarrollo de estihdares e implementaci6n de medidas de conservaci6n en edificios. Subproyecto. Santiago Moreno. . Appliance energy efficiency program. Kevin Knight . Current practices and efficiency opportunities in the commercial and public sectors in Colombia. Peter Rumsey. . Andhis econ6mico y recomendaciones institucionales. Ignacio Rodrlguez . Programas piloto de administraci6n de la demanda. Ignacio Rodrlguez and William Gould. . Estudio de eficiencia energetics en 10s sectores residencial, comercial y oficial (composite report). Felix Betancourt. . Survey of the residential, commercial and public sectors in Barranquilla (with support from CORELCA): 200 households, 29 commercial and public customers. . Survey of residential customers opinions and preferences in Bogod: 575 households . Survey of the residential, commercial and public sectors in Bogod: 593 households, 350 commercial and public customers. . Survey of energy equipment used in the residential and commercial sectors . Data cleaning and processing of a survey conducted by EPM in the residential, commercial and public sectors of Medellfn in 1989-1990: 3440 households and 553 commercial and public customers. . Data cleaning and processing of a survey conducted by EMCALI in the residential sector of Cali in 1991: 1500 households. Measurements . Load factor and efficiency of end-use energy equipment: incandescent and fluorescent lamps, electric water heaters, gas and electric ranges, electric refrigerators. . Electric load curves of 17 commercial and public customers in Bogot& Medellfn and Barranquilla  Annex 2 Page 1 of 12 ANNEX 2 COSTS AND TARIFFS OF ELECTRICITY, NATURAL GAS AND LPG IN THE RESIDENTIAL, COMMERCIAL AND PUBLIC SECTORS A. Electricity Electricity tariff policy is supervised by the Junta Nacional de Tarifas de Servicios Pdblicos (JNT), which was created in 1968 as a technical body within the Departamento Nacional de Planeaci6n (DNP). JNTs policies were founded on some basic principles of pricing for public utilities: tariffs should be based upon the real costs of service and generate a sufficient return, so as to provide adequate financing of the investment programs of the utilities and debt service; tariffs should be adjusted promptly to reflect the evolution of costs and they should also take into account the ability to pay of low-income customers. However, the JNT has not been totally successful in guaranteeing the observance of these pricing criteria: after significant increases of electricity tariffs in real terms during the second half of the 1970s, the gap between costs and tariffs increased during the 1980s, mainly because of pricing policies in the residential sector. Since the resolution 086 of November 1986, electricity tariff structure and level are defined for all utilities with reference to the Long Run Average Incremental Cost (LRAIC) of the system. Except for fixed charges of the residential tariff, there is not a unified national tariff but rather certain intervals (defined as percentages of the system LRAIC) for each utility, within which the various components of the tariff could vary. While establishing a rational, transparent framework for tariff policy and setting the basis for annual adjustments of tariff levels across the country (according to minimum wage increases complemented by further increases in real terms), the resolution 086 did not eliminate the considerable distorsions of the residential tariffs. Also, the influence of regional political groups and the frequent interpretation of JNT's resolutions as maximum tariffs often resulted in tariffs that were below those prescribed by the m. Resolution 090 of December 1990 went further towards reconciling tariffs with average costs. It established that by the end of 1994, electricity tariffs should closer reflect economic costs of service, as shown in the following table. Thus, tariffs in the industrial, commercial and public sectors would decrease for most utilities, while residential tariffs would be gradually increased and the remaining limited subsidies would be directed to the middle-lower to lower income and/or low-consumption households (see Tables A-11 and A-12 in this Annex). However, the average tariff would remain lower than the system LRAIC, due to subsidies in the residential sector (as can be seen in the following Tables A-7 to A-10, all customers with less than 200 kwhlmonth and low to middle income customers (4 strata) with less than 400 kWh/month would benefit from subsidies). In addition, the actual application of Resolution 090 was stalled at the beginning of 1992, due to severe electricity rationing and consequent consumer dissatisfaction. In the residential sector, the electricity tariff structure includes an energy charge, a fixed charge and a connection charge, all of which vary according to customer socio-economic strata Since 1984, residential customers are distributed in one of six socio-economic strata, based on the aspect, size and localization of the housing unit1 as an indirect indicator of household income 1 Weighted indicators used for socio-economic stratification are the following: geographic localization (25%);house front aspect (30%);existence of garage (20%);builtlunbuilt land (15%);road access (5%);type of services available (5%). Stratification is performed by the National Administrative Department of Statistics (DANE), the Agustin Codazzi Geographic Institute and representatives of the relevant Municipality. It is updated  Annex 2 Page 2 of 12 : (this classification is also used for income redistribution purposes). Further differentiation is made according to monthly consumption levels, with the existence of 6 blocks (up to 200 kwh; 200-400 kwh; 400-800 kwh; 800-1600 kwh; and more than 1600 kwh). Higher fixed charges for higher-income customers somewhat compensate for subsidies on consumptions of less than 400 kwhlmonth. Unlike in the industry sector, there is no tariff differentiation between peak and off-peak demand in the residential, commercial or public sector. Tariff targets of the Decree 090 for 1994 (in % of LRAIC) Consumption Charge 200-400 k w h 400-800 k w h > 800 kwh Residential socio-eco. stratum Very Low Low Medium-Low Medium Medium-High High Non-residential sectors Source: JNT B. Natural and LPG The Ministry of Mines and Energy is responsible for setting the wholesale and retail prices of LPG, as well as the city gate price of natural gas,. Both LPG and natural gas are sold to the distribution companies by ECOPETROL. Since 1988, the retail price of natural gas is set by the JNT, as it it considered as a public service. While the city gate price of natural gas is only moderately subsidized, it has also decreased in real terms during the 1980s. LPG price has also decreased in real terms and this fuel benefits from higher subsidies than natural gas in the residential sector. The natural gas tariff in the residential sector includes a fixed charge, an energy charge and a connection charge, all of which vary according to the socioeconomic stratum. Tables A- 17 to A-19 show the tariff structure in Bogota and Barranquilla in December '1991. There are only three blocks of monthly consumption (c30m3; 30-60m3; >60m3), with increasing prices. Most residential customers fall in the middle category. The tariff also sets a minimum monthly charge The retail price of LPG is low by international standards and represents only 60% to 80% of economic cost, depending on the location. Subsidies are lower for the cities on the Atlantic Coast. Total LPG subsidies represent however a much smaller amount than total gasoline subsidies. Retail unit prices vary inversely with the quantity delivered; for instance, in 1988, the gallon delivered by tanker ("carro tanque") was about 20% cheaper than a gallon delivered in a . 20 lb cylinder, thus reflecting a decreasing cost of delivery. every 5 years. Urban households are classified on a block by block basis, while in rural areas stratification is made is made for each individual household.  Annex 2 Page 3 of 12 Cosdro A-1: KSTBUCTOU DE COSMS DKL S m ELECTRIC0 C O ~ I b 1 0 0 COST0 1 p - 1 -0 DE U R G O PIdZO (CIPLP) Pesos de Diciembre de 1991 RIVa A'ILMPTICO HEDELLIN MX;(YTA VALLE DEL UCIONAL CAUCA .................................................................................... CmERACIOR 16.90 16.90 16.90 16.90 16.90 INTERCOImEOti 18.68 18.68 18.68 18.m 18.68 WSIISION 20.56 20.68 20.64 20.85 20.80 SWTRANSIfSIoN 21.74 20.84 20.89 21.08 21.20 DISTR. PRINARXA 22.61 21.55 21.29 91.38 21.81 DISTR. SEC(1100ARU 23.64 22.56 23.20 22.12 23.19 .................................................................................... msrw nrr- <$nu--) .................................................................................... HTVEL ATLANTIC0 HEDELLIti VALLE DEL RACIOIUL CAUCA .................................................................................... CEWERIICION 43479.8 43479.8 43479.8 43479.8 43479.8 INTERCOHHXION 50172.9 50172.9 50172.9 50172.9 50172.9 TRANSIf SIOR 57339.0 65933.2 74954.2 62318.3 68926.5 SUB~SIISIOti 64257.2 82302.5 114390.3 80370.9 90748.0 DISTR. PRMARU 94028.4 82025.0 102191.6 101089.2 104609.9 DISTR. SECUlOOARU 131519.2 96118.8 131908.9 105646.9 126324.1 ................................................................................... ................................................................................... ti- ATLANTIC0 HEDELLIR MK;OTA V U DEL RACIORAL CAUCA ................................................................................... C-CIOR 24.54 24.54 24.54 24.54 24.54 I ~ C O I m E O R 27.49 27.49 27.49 27.49 27.49 TRMSPIISIOR 28.74 30.09 31.34 29.74 30.64 1 ~ i t0w 1m ~ u t 30.37 31.89 36.B 31.87 33.39 DISTR. PRDMRU 35.24 32.57 35.01 34.96 35.86 DISTR. SECUNDARIA 47.10 39.70 46.73 40.96 45.72 F u e n t e : Interco~.rion E l e c t r i c . S.A. O f i c i n r & P l u r e a c i o n . 9 C o s t o s 1ncr.nuntales de h r g i a y P o t e n c l a en 1991. E s c a l a c l o n con Indlce de C o i t o s del S e c t o r Electrlco: D o c r n n n t o I S A - O m 185E. H e d e l l l a , H w i a n b r e 20 de 1991. F a c t o r e s de carla: Goneraci6n e Intercoaexi6n: 0.65: T r u u m i s 1 6 n : 0 . 8 0 , S u b t r m r m i s i l n y D l s t r i b u c i 6 n p r l m a r i a : 0.85, D i r t r l b u c L 6 a secund.rl8: 0.64  Annex 2 Page 4 of 12 Bogotl hdrllfn Call Earraaqullla ......................................................................................... TARIFAS VIcms: Sector Rosl&nclal Sector CaP.rcl.1 Sector Mbllco Total Subsldlos por estratos B.jo bajo B.30 h d l o 88j0 hdlo h d l o Alto Alto Sector Resldenclal 60 33 15 11 Sector Camarcla1 (7) (3 1 (2) (1) Sector Mbllco (4) (1) (1) (1) Total 49 29 12 9 Subsldlos por estratos socloeconbelco (Ulllows de D61ar.s Dlc 1991) h t a r tarlfarlas BaJo baJo BaJo WIdLo Bajo hdlo k d l 0 Alto Alto ...................................... Los v a l o r * ~entr* par4ntesLs son u t r a c o s t o s . Puente: CIlculos r e a l l s d o s con ldormmcl6n obtanld. do Inter-816n ~ PlunacL6n. Kl4ctrLu S.A. O f l c de .SubsldLos Ippllcltos en l a Ilwva P o l l t l u Tarifaria do1 Smctor Kl4ctrlco Colomblmo~. Doc-nto ISA-OP OW O88E. Medellin. J u d o & 1991 Bogotl Mmdellln Call Barraaqullla ....................................................................................... Subsldlo oar, ? o -tajr d m 1 Costa -00 (W) (X) Sector Rosldenclal Tarifas Dlc 1991 (X) 57 50 46 42 h t a s Tarifarias (I) 33 30 29 36 Sactor Cowrclal Tarifas Dic 1991 (X) (80) (14 (8) (2) h t a s Tarlfarlas (X) ( 2) ( 3) 0 (10) Sactor Mbllco Tarlfar Dlc. 1991 (XI 6 4 2 2 Metas Tarlfarlas (I) ( 3) ( 4) ( 3) 0 Sector Industrial Tarlfar Dlc 1991 (X) (30) ( 3) 0 (44) h t a s Tarlfarlas (I) ( 2) ( 3) 0 (10) ...................................................................................... Fuenta: CAlculos reallsador con LPformacl6n da Cudro A-4, 6 y 7  Annex 2 Page 5 of 12 W r o k .2-3: ~.trlkrdbnporcmtmld. kr u ~ r k nrld.nckk. r por ao&oumhb Dlckmbm 1990 ................................................................................................... Estrato Bogotl kdellln Cali Atlrntico --------------- ------------- ----------- -------------- 2 2 2 2 ................................................................................................... Bajo bajo 0.99 1.93 6.43 24.40 Bajo 28.15 32.20 37.47 39.22 k d i o bajo 40.80 39.95 29.18 18.91 Uedio 18.30 14.62 6.55 6.62 k d i o Alto 8.15 8.32 15.87 5.11 Alto 3.61 2.97 4.50 5.75 Total 100.00 100.00 100.0 100.00 Total Usuarior 911,207 424,091 242,042 237.380 ..................................................................................................... RENTE: Actualizacibn d e l d o c m n t o de l a Junta Racioml de T a r i f a r , ' k u u r i o de E r t d i r t i c a r B l r i c a r d e l Sector E16ctricom, D o c m n t o 1169-Dic191. Cumdro b. 2-4: D b t r h i h &l camm~r r a i h i r l & mmrglr e 1 L c t r L u por e a t r a t 0 .oci-co D i c i r b r r 1990 Ertrato Bogotl Uedellln C.1i Atlhtico --------------- ------------- ----------- -------------- 2 2 2 2 ................................................................................................... Bajo bajo Bajo Uedio bajo kdio Uedio Alto Alto Total 100.00 100.00 100.00 100.00 FUENTE : A c t u l i z a c i b n d e l d o c m n t o de l a Junta Raciorul de T a r i f a r , 'Anuario de E a t a d i s t i c a r Blsicar d e l Sector E16ctricom, Docmento 1169-DicI91.. .  Annex 2 Qudro A-3: W TARIPA A S DB CABCO -CI Precioa de Diciombre de 1991 m - ............................................................................ cmco POR consum (~~kwh) Page 6 of 12 COW l UON PIJO 0 a 201 a 401 a 801 a >I600 $lualurio $luarurio 200 400 800 1600 kwh Eatrato a o c l o e c o ~ l c o Bajo-bajo 0 106 5.90 18.09 39.79 57.81 81.46 hJ0 0 275 5.90 18.09 39.79 57.81 81.46 lhdlo-bajo 24904 722 5.90 18.09 39.79 57.81 81.46 hdio 36605 1515 5.90 18.09 39.79 57.81 81.46 Xedio-Alto 73210 3107 18.60 40.98 50.10 57.81 81.46 Alto 122015 4850 23.15 40.98 50.10 57.81 81.46 ........................................................................... Tarifa Uonamia: Sactor Camercial: 80 Sector PGbllco: 45.12 ........................................................................... Qvdro A-4: W. S DS BQ86IA -C. B Precioa dm D i c i d r e & 1991 TAR I P A CABCO CARGO F m COIJSUII) ($/kwh) COW l UOR PIJO 0 a 201 a 401 a 801 a >I600 Slualurio $/uaruri 200 400 800 1600 kwh ............................................................................ Hatrato ~ O C ~ M C O ~ ~ C O Bajo-bajo 0 106 7.84 14.80 25.64 48.36 70.50 Bajo 0 275 7.84 14.80 25.64 48.36 70.50 lbdio-brjo 24904 722 7.84 14.80 25.64 48.36 70.50 lbdio 36605 1515 7.84 14.80 25.64 48.36 70.50 Xedio-alto 73210 1107 23.21 34.82 38.69 48.36 70.50 Alto 122015 4858 27.07 34.82 38.69 48.36 70.50 ............................................................................. Sector No reaidencial: a Tarif. - : Commrclal 46.51 Mbl ico 38.69 Tarifa Binanla: Commrcial: % u r l l a ($/kwh) 31.83 P o t e c i a (Slkw-as) 4778 Mblico: Eaer&la ($/kwh) 28.80 Potoncia ($/kw-ws) 4778 ...........................................................................  Annex 2 Qvdro A- 5 : W TARIPA A S m - Prmcios de Dicianbrm b.1991: CARGO PICrPIcA n .' CILI CARGO POR W N S U m (Slkvh) Page WHWON PIJO 0 a 201 a 401 a 801 a >I600 Slrururio $/rururi 200 400 800 1600 kvh Lstr.26 socioeconomic~ Bajo-bajo 0 106 8.17 29.88 42.44 49.89 70.50 Bajo 0 275 8.17 29.88 42.44 49.89 70.50 hdio-bajo 24904 ,' 722 8.17 29.88 42.44 49.89 70.50 Xedio 36605 1515 8.17 29.88 42.44 49.89 70.50 Xedio-alto 73210 3107 23.94 35.92 43.90 49.89 70.50 Alto 122015 4858 27.94 35.92 43.90 49.89 70.50 ............................................................................. Sector No residencial Tarifas Xonomias: Comercia1 44.91 Xblico 40.82 Tarifas Biamniar h r c i a l : Energfa (Slkvh) 29.34 Potencia (Slln-mor) 4056 .............................................................................. Qvdro A-6: W A S m m u msmf.IcA B Precios de Dicianbre de 1991 ........................................................................... TARIPA CARGO CABCO POR WNSUlO (Slkvh) CORPEION PIJO 0a 201 a 401 a 801 a >I600 Slrururio Slrururi 200 400 800 1600 kvh ............................................................................ Lstrato socioeconomic~ hjo-bajo 0 106 10.01 27.48 46.50 57.36 62.63 hj0 0 275 10.01 27.48 46.50 57.36 62.63 hdio-bajo 24904 722 10.01 27.48 46.50 57.36 62.63 hdio 36605 1515 10.01 27.48 46.50 57.36 62.63 Xedio-alto 73210 3107 27.53 41.30 50.48 57.36 62.63 Alto 122015 4858 32.12 41.30 50.48 57.36 62.63 ............................................................................ Sector No rer idencial : Tarifa Xonomia: Comercia1 49.29 Of icial 47.01 Tarifa Binomia Comercia1 Energla (Slkvh) 37.32 Potencia (Slln-mor) 3740 Oficial h r g l a (Slkvh) 28.31 Potencia (Slln-mer) 3740 ............................................................................. Qydro 1 W A S m -a. A-2: CIBCO FX.70 ' Precios do Dicianbre de 1991 Cargo por coaexi6n Cargo Pijo hnarul Sluarurio USSluarurio Slrururio USSluarurio Sector Rer idencial : Lstrato Socioecon6mico Bajo bajo 0 0 106 0.17 Bajo 12201 19 275 0.44 Xedio bajo 24403 39 722 1.15 Medio 36604 58 1515 2.41 Xedio alto 73209 116 3107 4.93 Alto 122015 194 4858 7.71 Sector No residencial: Media Tuui6n: 8053 Slnt 13 US Slnt Baja Tenai6n: 8785 Slnt 14 US $ / W 8053 SIKVA 13 US SIKVA haute: Departammnto Naci-1 de Pluuacibn. Junta lffiionrl de tarifas. .Boletln rruurl do Tarifas. Sat. P4 de Bogoti 1991. Tasa de cunbio: Col $630/US  Annex 2 Page 8 of 12 Tabla 15. Participacibn en e l consuro y 10s ingresos de 10s sectores residmcial, corercial y oficial en 10s totales nacional y de I a s c u a t r o ciudades --------- - --- ----- Consuro Porcen tajes Z Ventas Z 6wh 11) 12) 13) Nillones US Residential : Bogoti 3204 44 Nedel 1i n 2168 30 Cali' 1102 16 Barranquil l a 741 10 Total 4 ciudades 7215 100 54 Total Nacional 13385 Corercial BogotA 653 39 Nedellin 443 26 Cali 356 21 Barranquil la 245 14 Total 4 ciudades 1697 100 b l Total Nacional 2765 Oficial Bogota 395 36 Hedell in 364 33 Cali 161 15 Barranquil la 181 16 Total 4 ciudades 1101 100 59 Total Nacional 1869 Total Oficial, corercial, residential Cuatro Ciudades 10013 56 36 470 57 36 Total National 18019 66 802 61 TOTAL NACIONAL Todos 10s sectores 27293 1321 ------------------------------ ------ (1) Porcentaje con respecto a1 total del sector correspondiente de las cuatro ciudades (2) Porcentaje con respecto a1 total del sector correspondiente en el total nacional 13) Porcentaje con respecto a1 t o t a l nacional de todos los sectores Fuente: ISA, 1991  Annex 2 Page 9 of 12 W R O A-13. corto ~corr6nic0, dcl . . ;.. as kturol (US/KPC) , ., r; CASO A: ~ A t m c i m i . n t bbsdm mi- b s b ~r C r u j i r r CASO B: ~ r s t m c i m i m t o ............................................................................................................ BogotA Modmllin Cali Barrmquillr BogotA Mobllin Cali Brrrrnquillr Trrrrrportm 1.85 1.98 4.11 0.20 0.85 1.09 1.89 0.20 Rurtr b Ciudrd (City Crtm) 2.91 3.04 5.1 1.26 1.60 1.97 2.64 1.08 Rurtr b Usrurio 4.62 4.75 6.88 4.31 3.31 3.68 4.35 4.13 ............................................................................................................ A - Gasto acmhlm &l CLP (USSlIQiO) CASO A: Importrci6n por C a r t r g m r CWO B: Produccih Cwiana-Exportrcih .................................................. ......................................................... BosotA B r r r s q u i l l r BogotA Barrr~quillr ........................................ -----_----------------------------------------------&---- Prmcio FOB 3.96 3.96 Prmcio FOB 3.96 3.96 Trrrrrportm h r l e i m o 1.56 1.56 Trrrrr. r R u r t o + Trrsimgo Exp. (1.33) (0.09) Costo CIP 5.52 5.52 Costo mr-poro 2.63 3.87 Rurtr d m Ciudrd (City Cat.) 7.08 6.04 m Ciudrd Rurtr d 2.99 4.55 Pumrtr d m Usrurio 8.02 6.98 Rurtr b U s u u i o 3.93 5.49 ............................................................................................................ C a l i tlmm costos similrrms r 10s b BosotA~ Modellin timm un costo d P crrrotmqru, m t r a n s p o r t ~l o c a l . supmrior rl b BogotA on US$0.851118TU. Fumntm: Suitoyv, Alvrro. ,SrrrLnf.tro y Uso & Cu Baturrl y C LP' , Proymcto b E f l c i u r c i r Enmrg6ticr. h a t a f 6 & BogotA, Enmro 20 d m 1992. I 1 CUADRO 3.15 I 1 I COST0 ECONOMIC0 DEL US0 DEL COCINOL I I 1 I US$MBTU I I I I 1 I I ESTWlTO : I I I DESCRIPCION f y 3 1 I I I :COCCION DE ALIMENTOS I 8 : Frontera 4.56 : iTransporte 0.48 : :Puerta de la Ciudad 5-04 : lDistribucion 0.32 1 1Puerta de Usuario 5.36 : : Estufa 0.38 ! !Use final 5.74 1 Fuente: Estudios Tecnicos."Estudio de Factibilidad Preliminar Interconexion Gasifera con Venezuela" Agost0 de 1991, Calculos del consultor U r n A-158 dm l a arareia G t i l en cocclbn del C11, CLP, CocLnol Y tpIerOil'ap0 (pmrta del Costos e c o ~ i c o s murrio) y relacion con l a electricidul Preclos da Diciambra 1991 ................................................................................ Costos Econ6mlcos (US$/MMBTU) Ralacl6n da Costos , , EE GN A GN B GLP EEIGNA EE/GNB EEIGLP ------ ------- ------- ------ -me--- ------ ------ BOGOTA 39.41 9.94 7.12 17.82 4.0 5.5 2.2 NEDELLIN 33.47 10.22 7.92 19.56 3.3 4.2 1.7 BARRANQUILW 39.70 9.26 8.88 15.51 4.3 4.5 2.7 CALI 34.53 14.80 9.36 17.82 2.3 3.7 1.9 EE CoCINOL QUEROSENO Ralacl6n Costos ------ -------- --------- --------------- BOGOTA 39.41 15.31 2.6 CALI 34.53 14.94 2.3 ................................................................................. Supuestos: 1) Tasa do comb10 = Col$630/US$1 Ralacl6n Calorlflca EE: 3412 BTUlkwh. RelacL6n Calorlflca GN: 0.9297 KPCIMBTU. 2) En GLP sa supona importado pot Cartagena. 3) El GN hay'dos casos: Caso A=abastaclmlento de 10s yaclmlentos da la Guajlra. Caso B- hay excedantes suflclentes en Cuslana. 4) Eflclencla en coccl6n: EE: 55X1 GN: SOXI GLP: 45%. $1sin COV,~,~ k i n h l u r i ~i*ttr*a y t\t,iyr C O C C ~ ~ I-' Ok 0 P wl 10 X I-' NN  Annex 2 . Page 11 of 12 -A-17: W A S =CIS m D T 1 U P P u a m r . n ................................................................... CARCO FIJO o r 31 r d m I(.. CARCOPORCONSUM ($1113) Trrlfr + 1hdaIsciA COILU~~P ...................................................................... 'w.. Sluaurri 30 60 60 SIU~urtio P Bstrrto socimconomiao . h j ~ h j o -'I22 31.00 45.00 61.00 73.200 Brjo -;, 305 37.00 49.00 61.00 103.700 hdio-brjo 732 43.00 51.00 61.00 122.000 Hmdio 976 49.00 55.00 61.00 134.200 hdio-Alto 1220 55.00 59.00 61.00 146.400 Alto 1464 61.00 61.00 61.00 158.600 Smetor No rasidurcirl: 3660 49.00 49.00 49.00 ..................................................................... CARCO CARCO POR CONSUM ($I-) Trrlfr PI JO 0 r 31 r Ikr & Corurih + ~ ~ rt4la(;*~ Slusurri 30 60 60 SIUs~rio ..................................................................... Bstrrto socimeonomieo Brjo-bajo 77 20.00 32.00 92.00 4 0. P O O BIo~ 154 43.00 55.00 92.00 97-600 hdio-hjo 307 52.00 65.00 92.00 1 3+ . r o o hdio 615 58.00 74.00 92.00 I 83.0~0 hdio-alto 1229 68.00 83.00 92.00 23 I .$OD Alto 2458 77.00 92.00 92.00 274. 5 e u Smetor Uo rasidmncirl: 1844 61.00 61.00 61.00 December \ 33 1 Source: J d i  Annex 2 Page 1 2 o f 1 2 I 1 I - CUADRO 3-16 I I I COSrOS DE INVERSION EN IAS ESTUFAS I 1 I I (Pesos Col .) I a I I I I I t 1 I I I ESTRATO . III I I I I I I ENERGGTIm I t I - 7 3 4 5 ~ 6 I I I I 1 4 CUADRO 3.17 I I I I COu'JTDS DE INVERSION EN L 1 3 S CALENTADORES 1 I I I (Pesos c o l ) I I I I I I I I ESTRATO a t I I I ENERGETICO 1 1 I 1 I I 4 5 ~ I6 I I I !GAS NATURAL :106,000 106,000 : !G. L. P. :106,000 106,000 1 IELECI'RICOS I 56,000 56,000 : -- - -- -- - Source: B r i e f s u r v e y of a p p l i a n c e r e t a i l e r s i n Bogota, qecember 1 9 9 1  Annex 3 Page 1 of 2 PUN - DE EXPANSION GENERACION TRANSMISION. RESUMEN. EJECUTIVO  ESTRATEGIA DE INVERSIONES DE GENERACION PROYECTOS PARA ADELANTAR ACCIONES (11 OPCIONES CAPACIDAD MINIMA A CONETRUIR PARA EL PERIOD0 . PROVECTOE DIEPOMBLEE FECHAE LIMITEE DE DECISION REEPON6ABLEE 161 131 l4J i a a e - 2 0 0 2 12) GAS Rapot.nclrci6n/Ciclo Combinado Carlagno 360 MW Primer CORELCA-Enter roplowlaa Barrmquilla 400 M W trimaatra TurbogAnlCiclo Comblwdo 60° MW Suroccidanta 1993 Empr. E l l c t r l z u -Entar CundlwnurceNala "' 160 M W ragionrlu Paipa I V 160 M W EBSA Tanajaro II 160 M W CENS-ISA 1ibita 300 M W Cuarlo €Ell San Jorga 300 M W Irlmantra ISA-Entan r nploculr CARBON Coo h4W ZIP* VI A m,,. 1 6 0 MW 160 M W 1993 EEII EEPPM Enlar roglorulw La Loma 300 M W CMIELCA-Enwr r o g l o w l ~ r Son Luin 160 M W ESSA-Entan raplonakr - Urrl I.' 340 M W COAELCA.Entrr r o g l o d ~ r Porca I I 392 M W Tarcar ' EEPFM MId l y M i d I I 3761400 M W trimantra CHEC-ISA-En101 r ~ g l o n d w HIDROELECTRICAS 800 MW ~i.chbn BO MW 1992 EEPPM.P Ivadcr Calln~a I l l 240 M W CVC-Enter r a p l o d a a h n v . Ov4ar CVI; - R E S VENEZUELA 300 MW CJcul. Guojira Aiauca Mamond Anocada Ovalad (Ant.) 300 M W BO M W 123 M W I 2 MW I ISA-Emp. d k r t r l u r rag. Prlvador PRIVADO Sanla h a 11 M W P Cam. Carib. 166/256 M W Smorl~l-Cart6nda Col. I10 MW A L PLAN DE EMERGENCIA ('I !XiaFade~ prJyecto. 278 MW ECO~~IIOI Coralca lmportacionu a p r o ecto se debe adelantar l a a c t i v i d a d siguiente en e l cronograma de acuerdo con e l esta& (2) Estimada de acuerdo con loo resultados del anhl i s i s de f l e x i b i l idad econblca. 6 0 MW I60MW 60 MW 7 ( 3 ) Para t e e r m p l a n f l e x l b l e se deben adelantar acclones en por l o menos dos veces l a capacldad m i n i m requer 1%. o ectos r o stos e ac udo con e l catblogo dlsponlble, en e l f u t u r o pueden presentarse d lf l c a c l ~ n c s ('I ! CXparecR E v a s a Aern&Ivas. (5) U r r i I c o n t i d e construccih. (6) Propuesta de ISA. 10s entes regionales corresponden a agmtes pljbl lcos, privados o mixtos. (7) Putda deearrollarse para c m s u l r crudo de Cast1 (la.  Annex 4 P a g e m ANNEX 4 POWER SUBSECTOR RESTRUCTURING STRATEGY GOC's ACTION PLAN November 1992 Milestone INSTITUTIONAL REORGANIZATION Electricity Law enactment July 1993 Start of activities of the Energy Regulation Commission July 1993 RegulationsIDecrees of the Electricity Law October 1993 ISA's breakup into: December 1993 . 1 generation company . 1 interconnection/dispatching/consultingcompany FINANCIAL REHABILITATION Reactivation of tariff adjustment program toward economic costs March 1993 Implementation of subsidy program for low-income households July 1993 Action plan for sector financial rehabilitation July 1993 Attainment of overall tariff target (87% of LRAIC) July 1995 PRIVATE SECTOR PARTICIPATION Startup of Mamonal private power plant (95 MW) April 1993 Transforming of national public companies into stock companies December 1993 Bidding for retrofit or construction of natural gas plants (600MW) July 1993 with private capital participation and contracted private management Prefeasibility study for coal power plants for similar bidding July 1993 in the medium term (total of 600 MW)  COLOMBIAN POWER S E T O R - GOVERNMENT POLICY Annex 4 ~ - - - Already OBJECTIVES Taken Programmed Implement adequate Decree-Law 700 promulgated, requiring utilities to institutional framework allow independent generators and other utilities to and create a private access transmission and distribution networks and to seaor friendly sell electricity directly to endansumers. environment Prepare and present to Congress the new Electricity Law designed to introduce competition, transparent regulation and to attract private investment. Approve new Electricity Law (opening-up of retail mark-, free access to transmission and distribution Law promulgated before July, 1993 networks, separation of generation, transmission and distribution functions) Set up new Regulatory Commission for the power Regulatory Commission starts to function sector in July, 1993 Prepare subsidiary legislation to allow the Subsidiary legislation, rules and implementation of the Electricity Law (pooling and regulations ready by October, 1993 settlement agreement rules, grid and distribution codes, use of system contracts, power purchase agreements, regulatory licenses, regulatory agency articles, investment planning protocol) Separate ISA into two separate and independent companies: one in charge of transmission and power December. 1993 rro ID plant despatching, and the other dedicated to power generation.  - Already OBJECTIVES Introduce incentives to ACTIONS Increase of average tariffs to end-consumers from 41 - Taken Programmed economic efficiency in US$ millslkwh in 1991 to 54 US$ mills (32% 1992 the sector's operation increase) and investments, and guarantee the financial Resume monthly tariff increases (discontinued since the May, 1993 viability of utilities beginning of power rationing in 1992) Reduce cross subsidies and adjust tariffs to reach 87% of long-run marginal costs (tariff adjustment program Before July, 1994 would continue towards the goal of covering marginal costs completely) Complete design and start implementing a direct and July, 1993 transparent subsidy scheme to low income consumers Start financial restructuring of utilities with swaps of 1991192 debt for shares or productive assets (US$ 1.5 billion) Complete design and start implementation of last phase July, 1993 of financial restructuring of utilities Imvlementation of imvroved disvatch rules July, 1994  Already OBJECTIVES I ACTIONS Taken Programmed Expand generation Award first BOO contract for supply of 150 MW to capacity diminishing CORELCA vulnerability of the power system to Fit independent power sector generator (mainly auto- Mamonal private plant (95 MW) starts droughts, and reduce producer) starts to sell electricity to other consumers operation in April, 1993 the role of the Government in the Invite independent power generators to bid for BOO power sector to that of contracts to supply 750 MW of thermal capacity policy maker and (combined cycle natural gas plants 600 MW and fuel- Invitations to bid sent by September, 1993 regulator oil 150 MW) Scheme ready in July, 1993 1 Design scheme for the development of 600 MW of coal-fired plants with private sector participation I Transform utilities owned by the National Government December, 1993 into joint-stock companies and first offer of shares for I sale to utility employees and the private sector  Annex 5 Page 1 of 4 ANNEX 5 SUMMARY OF ENERGY EFFICIENCY ACTIVITIES IN COLOMBIA AND RELEVANT PROGRAMS IN BRAZIL AND PERU Colombia The increase of oil prices during the 1970's and the rationing of electricity in 1977, 1979, 1980-81 and in 1990-91 in the Atalantic Coast led the energy sector operators to design and implement campaigns and measures for the rational use of energy directed to the consumers. During the 1970's ECOPETROL launched a campaign for saving gasoline used in personal vehicles. At the beginning of the 1980's the main power utilities promoted electricity conservation to minimize the effects of rationing. Between 1984 and 1987, the MME conducted the Program for Rational Use of Energy (PUR). The PUR had four objectives: (i) human resource development; (ii) estabilizing the consumption of liquid fuels, in particular through substitution; (iii) institutional strengthening through the creation of a Center for the Rational Use of Energy; and, (iv) support to the energy pricing policy. The PUR completion report underlines that the project was successful in sensitizing the sector institutions and operators to energy savings, which would make future efforts easier. Energy audits were conducted in the industry sector and evidenced a potential for energy saving estimated at 5% of total energy consumption, while the potential for coal substitution was estimated at about 1 million TOE per year (10,000 Tcal). Recommended policies included: (i) pricing reform to reflect opportunity costs of energy sources; (ii) implementation of standards for energy equipment; (iii) banning the use of energy sources in certain activities; (iv) creation of the Special Fund for technological development for an amount of about Co1$6 billions. Three training events took place and were attended by a total of 124 technicians representing 72 companies; the prospects for including courses on energy efficiency in the programs of the SENA (technician-level training) were also investigated. Several documents were published including: a directory of companies with capabilities in energy efficiency (30); (ii) a leaflet on electricty tariffs for non-residential customers (distributed to about 3,000 enterprises; (iii) three documents on energy audits and savings in rice mills, brick- making and paper industries. While the PUR achieved some of its objectives, it also faced drawbacks. Neither the Center for Rational Use of Energy nor the Special Fund for technological development were created, because of the lack of funds and human resources. Only 20 industrial audits were performed (out of 50 that were programmed) and the energy saving potential that they identified did not materialize or faded away rapidly, due to the low prices of energy and the generally small share of energy in total expenditure of industries (with the exception of some energy-intensive industries or international companies, some of which implemented a permanent system for energy management); another problem was the lack-up of follow-up after the initial audit. Finally the SENA did not modify its programs. Concerning the promotion of electricity savings, ISA and other utilities launched massive information campaigns through the media during the 1981-82 electricity rationing, and they also targeted the industry sector with informative leaflets. However these campaigns were short-lived and, more importantly, their impact was not assessed, since it was found extremely difficult to separate the different factors underlying electricity consumption, especially in a period of rationing. In 1990-91, CORELCA repeated similar campaigns through the media (press, radio and television) and tried to assess the impact of these campaigns, without conclusive  Annex 5 Page 2 of A results: average electricity consumption of high-income households (strata 5 and 6) was found to decrease from 900 kWh/hh/month to 800 kWh/hh/month for similar periods during 1990 and 1991 but this could be attributed to tariff increases and to the penetration of natural gas foor cooking and water heating in these households; conversely, the electricity consumption of low- income households (strata 1 and 2) increased over the same period, probably because of the declining of electricity tariffs in real terms combined to an increase in the number of non- metered households and the little use of electricity substitutes. Following the example of ISA in Medellln, CORELCA also prepared special leaflets on energy efficiency for primary schools but lack of funds prevented full dissemination. As part of the PESENCA program (conducted with * CORELCA support), several audits were conducted in the agoindustry and commercial sectors; in doing this, the emphasis was placed on cost-recovery and shared-saving mechanisms, as well as on developing a local capability for delivering energy efficiency consultancy services. Another important ongoing effort is the three-year EURCOLERG program, which includes three components: (i) development of the market of natural gas at national level; (ii) power load management study (in the residential and commercial sectors of Bucaramanga and in the industry sector of the Department of Boyaci); and, strategy for the rational use of energy in the industry and transport sectors. The latter component is designed as a complement to this study and should be completed in 1993. PROCEL (Brazil) The Program for Electricity Conservation (PROCEL) has been implemented by the national utility, ELETROBRAS since 1985; it was based on the findings of small-scale initiatives by the regional utilities, in particular by LIGHT, the distribution utility of the State of Rio de Janeiro. PROCEL is part of the numerous initiatives for energy conservation in Brazil, which, in addition to the large program for alcohol substitution for gasoline, include: a special conservation fund (CONSERVE) established in 1981 to promote petroleum products substitution for electricity (which has now come to a halt); a program for industrial energy conservation launched in 1977 and managed by the National Petroleum Council (while the survey of about 2400 enterprises showed a large potential for low-cost energy consesrvation measures, the CNP has found difficulties in handling information requirements due to the sunstantial volume of data collected); the Voluntary Program to Economize Diesel and Lubricants (PRODEL) has existed since 1985, but largely on paper. The Program to Rationalize Energy (PROEN) was set up in 1986 in conjunction with the National Bank for Social and Economic Development and provides esay financing terms for energy conservation projects. Recently the Program of Conservation and Rationalization in the Production and Use of Energy Petroleum Products (CONPET) has been launched to complement PROCEL; the combination of PROCEL and CONPET is called the PROENERGIA program. The main objectives of PROCEL are far-reaching and ambitious: to rationalize the use of electricity (which represents a third of final energy consumption in Brazil), so that the same service can be provided with less consumption, lessening losses and securing an overall reduction in supply costs and new investments. A symbolic target was set by the government: to save the equivalent of one "Itdipu" (an hydroelectric plant with a capacity of 12,600 MW) by the year 2010. The wide-ranging goals of PROCEL may be summarized under the following headings: . Electricity conservation via a set of measures (including standards and codes, energy saving targets, demonstration projects, studies and energy audits, publicity campaigns, educational programs, and information dissemination) in the residential sector (certification and labeling program), public sector and commercial buildings, public lighting, and the industrial sector (electric motors and furnaces)  Anne:- 5 Pa, of 4 . Load Management, via the consolidation of LRMC-based electricity t a r i h *he improvement of the average system power factor and the implementation of pi!. ; programs (centralized and decentralized telecommended load control schemes ana devices to restrict demand); .Loss reduction via the installation of capacitor banks in distribution networks; . Cogeneration, via studies on cogeneration using residual biomass fuels, suh as bagasse. The above programs provide significant potential for savings in peak capacity, energy or both. According to ELECTROBRAS estimates, these savings amounted to 1209 GWh in 1990, most of which originated from improvements in the efficiency of lighting and appliances (mostly fridges) in the residential sector, with respectively 38% and 31% of total estixated savings, followed by improvements in the industry sector (9%). commercial buildings '"%), public lighting (8%) and public sector buildings (4%). ELECTROBRAS forecasts that sa\ .--cs would reach about 19,000 GWh in 2000 and 66,000 GWh in 2010, with a significant increi. in the contribution of the industry sector to total savings (53% in 2010). Programs costs are funded mainly from ELECTROBRAS operational budget, with som. additional contributions by regional utilities. PROCEL budget totaled US$17.2 millions over the period 1986- 1991, with a somewhat decreasing trend. This is less than 0.1 % of total investment in the power sector of Brazil over the same period, which amounted to about US$42 billions. Starting in 1993, PROCEL budget would be included in ELECTROBRAS investment budget (which has to be approved by the Congress), thus ensuring more stability in the funds available. While it must be kept in mind that the level and structure of energy prices are the critical elements in any effect effective energy management strategy, many of the non-price approaches to energy conservation pursued by the Brazilian authorities, in particular through PROCEL, clearly aimed to reduce some market distortions: lack of awareness od customers, in particular in the residential sector; limited availability of efficient end-use equipment; weak institutional and legal framework; and, in some cases, lack of technical capacity. However, it would be necessary to assess the real extent of these distorsions in order to ensure that non-price measures implemented by the government are cost-effective (as a complement to price measures) and do not introduce additional market distortions beyond the ones they are designed to redress. CENERGIA (Peru) CENERGIA is a small non-profit organization that was created in 1985 to implement a program to promote the rational use of energy. Initially, the focus was placed on the conservation of petroleum products, as one of the responses to the transformation of a Peni into a net importer of oil. CENERGIA is governed by a General Assembly and an Executive Board, which represent energy sector operators (PETROPERU and ELECTROPERU), the industry and mining sectors through the National Society of Industries and the Mining and Petroleum National Society, and financial institutions (Industrial Bank of Peni, BIP, and Financial Corporation, for Development, COFIDE), as well as the institute in charge of norms and standards (ITINTEC), the Ministry of Mines and Energy through the National Energy Council (CONERG) and the National Corporation for Development (CONADE). Since 1989, CENERGIA has received technical and financial support from UNDP and the European Community (which amounted to about US$1.5 millions over the period 1989- 1990). CENERGIA also benefits from technical and (some) financial support from its associates, and manages to cover an increasingly large part of its operational expenses with the revenues from the sales of energy services (audits mainly) to industries. Recently, special agreements have also been concluded with the Regional utilities and with the Social Security  Annex 4 Page 4 of 4 Institute, and there are prospects for a GEF-funded activity to reduce the impact of the transport and industry sectors on the envirobnment in Lima. CENERGIA's approach to the promotion of end-use energy efficiency has been three- prong: (i) to develop a technical capacity (internal and among national consulting companies) for the assessment and implementation of energy saving measures, thus building credibility with industries and energy sector operators, and improving the prospects for a market of energy efficiency services; (ii) to conduct information and promotion actions to increase customer awareness; (iii) to define the necessary legal and regulatory reforms. CENERGIA has been rather successful in attaining its objectives: recent evaluations show that in the in dustry sector almost half of the measures with no cost or low payback time (less t!!an 2 years) that had been identified through the audits conducted by CENERGIA in the indusuy sector, have actually been implemented by the industries; another revealing indicator is the rapidly growing share of CENERGIA's operational budget that is accounted for by the sale of Znergy services: from about 16% in 1989, it would be close to 100% in 1992, with forecast revenues of about US$500,000; audits which were initially free or charged at a small portion of their cost are now systematically charged at full cost to the customers. This success can be attributed to the following key factors: (a) the active participation of energy sector operators and private industries, as well as financial actors; (ii) the constant and sufficient availability of financial and human resources (either from external or internal sources); (iii) the political autonomy of CENERGIA.  Annex 6 Eage 1 of 16 ENERGY CONSmlPTION 3 V SECTOF., EID-ITSF il_UD SIRATI?! btudio dc Efidmcir EncrgLticr hcxo D m TOTAL D- I m ExRcmmBL Dm, (xlmBfl frROMmI0 ----- ESTRATO EE GLP GN Cn LENA TOTAL 3/ Los consuros especificos corresponden unicarente a 10s hoqares que consuren enerqia elbctrica o cualquier otro enerqbtico para coccidn de alirentos y calentariento de agua. a/ LDS consumos proredios son equivalentes a1 consuro t o t a l de energia dividido por e l nurero total de hogares, independiente de la canasta energetica, con que dispone cada hogar  Annex 6 Page TZTG Estudio dr Eficirndr Enrrgttia hero b ruArrm lea- 2 u s ~ D 9 3 ~ c GBCLIIELRgSIImicnK~ ESTR4TC) EB GLP KJ ~ C ' B R B O N O T R O PROM. - E m EE GLP PLJ LUA CARBON OTRO TOTAL  Annex 6 Page 3 of 16 Estudio dr Eficiencia E n r r g i t i u hrxo D ~ E o 3 , X ( m I J m DEm - ~RESIDLWCIBCURBB\90 CALI mS U MS E S W CI F m I m)ms  Annex 6 Page CCL KI ESTRATQ HE GLP QJ a . KJ mL A  Annex 6 Page 5 of 16 Estudio dc E f i c i m d r b c r p i t i c r hexo D ESTRATO IUM. COCCION CALENT. REPRIG. OTROS TOTAL DE AGUA EsTRA!m 1m. COCCION CALmr. REFRIG. OTEEOS TOTAL DE AGUA DIsTRIWCI019 KBCXTWL IlgL COIOSUPI) RUElEDIO KR USOS - - p - p --- pp---p-pp---- ESTRATO 1m. COCCION CALENT. REFRIG. OTROS TOTAL DE AGUA  Annex 6 btudio dr Eticimcir Entralticr REFRIG. OTROS TOTAL DE AGUA -------- 183.4 11-7 226.1 23.8 280.1 79.0 295.3 83.2 315.0 116.4 309.8 251.1 EsTRATo Iurn. coccION cxm!r. RBFRIG. OTEEOS TOTAL DE AGUA ------- 1 27.1 165.9 4.4 53.7 3.4 254.5 2 31.5 179.7 8 .6 66.2 7.0 293.0 3 35.7 188.1 33. 5 82.1 23.2 362.5 4 41.4 146-3 92. 9 86.5 24.4 391.6 5 53.9 157.4 145. 4 92.3 34.1 483.0 6 73.5 204.9 269.9 90.8 73.6 712.7 DIszwmCIaP EaammAL DQI mmm PRcnmIO POW urns ESTRATO Iurn. m1ON CALENT. REFRIG. m s TOTAL DE AGUA PROM. 10.38% 48.87% 13.64% 21.59% 5.53% 100.00% -  Annex 6 Page 7-Z-E btudio dr Eficimeir Enrrgitiu hrxo O uJMm130. 7 B zmBES1m- C f m S T m D B C ~ ~ Cs K C A L I O O b l m PEQmIO KBm Kmu/ms I COCCION CALENT. REFRIG. ACOND. DE O TROS TOTAL DE AGUA MBIENTES PROM. 113.2 445.4 35.2 303.9 128.6 71.1 1097.5 BSTRATO I COCCION CALENT. REFRIG-Am. DE O TROS TOTAL DK AGUA AMBI B NTBS PROM. DI-rn RlmmlJBG mR US06 DXL O O N P ~ HmDIO p-7-p- ESTRATO I COCCION CALZNT. REFRIG. A m . DE OTROS mrAL DE AGUA AMBI E NTES - ------- -- 1 10-23% 49.70% 0.00% 26.08% 7.67% 6.33% 100.00% 2 10.12% 45.23% 0.23% 29.50% 8.73% 6.20% 100.00% 3 11.05% 40-94% 0.87% 31.13% 8.69% 7.32% 100.00% 4 11.91% 37.59% 0.81% 26.22% 14.M 8.94% 100.00% 5 10.44% 32.89% 5.86% 25.85% 18.37% 6.59% 100.00% 6 8.04% 37.29% 16.84% 17.50% 16,65% 3.69% 100.00%  Annex 6 Page KTiT btudio dr Etirimeir Enrrplticr Anrro 0 raArrzn 100. 8 COl llsZl C Dm--CB ~REsIDBPJCIBLU61BB1YO ESl'RATO IUM. COCCION ACOND. DE REFRIG. OTROS TOTAL m1BFms ESTRATO IUM. COCCION ACOND. DE REFRIG. OTROS TOTAL AneIBNTBS ESTliaTO IUM. COCCION ACOND. DE REFRIG. OTROS TOTAL rnIEN!rES ------------ 1 17.26% 10.82% 10.00% 50.47% 11.46% 100.00% 2 17.82% 23.30% 18.23% 32.603 8.06% 100.00% 3 11.62% 5.93% 32.80% 41.46% 8.18% 100.00% 4 13.07% 15.91% 31.29% 32.84% 6.89% 100.OOX 5 12.43% 5.16%: 44.8'7% 28.22% 9.31% 100.00% 6 11.24% 20.53% 35.85% 20.74% 11.63% 100.00%  Annex 6 Page 9 of 16 M A ....................................................... Estrato Cons- Espuifico Porcentaje & Energfa E l k t r i m Sustitucih Total Coccibn C.1. Ague Cocci6n C.1. Ague Kh/m Kh/m Kh/m % % Est. 1 551 291 126 52.8% 22.9% Est. 2 625 300 180 46.0% 2B.8% Est. 3 697 320 194 45.9% 27.9% Est. 4 476 210 130 44.1% 27.2% Est. 5 611 260 195 42.5% 31.9% Est. 6 R1 320 214 44.4% 29.7% Estrato Cons- Equivalente Cons- Equivalente Gas L i c d Gas Natural Cocci6n C.L. Agur Total Cocci6n CaL. Agur Total Lb/a Lb/a Lb/a PC/a PC/a PC/a ................................................................ Est. 1 58 25 a2 1177 510 1687 Est. 2 59 36 95 1213 RI) 1941 Est. 3 63 38 102 12% 786 2OBO Est. 4 41 26 67 648 525 1373 Est. 5 51 39 90 1049 788 1837 Est. 6 63 42 106 12% 866 2159 Estrato Conur,Especifico Porcentaje & Energfa E l k t r i m krtitucibr Total Cotci6n C.L. A- Cocdbn C.1. A- Kh/a Kh/a Kh/a % % -------- ............................................... Est. 1 255 166 4 65.2% 1.7% Est. 2 293 180 9 61.3% 2.9% Est. 3 362 188 a 51.9% 9.2% Est. 4 392 146 93 37.4% 23.7% Est. 5 483 157 145 32.6% 30.1% Est. 6 713 205 270 26.8% 37.9% Estrato C o n s u m Equivalente Cons- Equivalente Gas L i e d Gu Natural C a e i b n C.L. A- Total Coccibn C.L. A - Total Lb/a Lb/a Lb/a PC/a PC/a PC/a ................................................................ Est. 1 33 1 34 671 1B 688 Est. 2 36 2 37 R6 35 761 Est. 3 37 7 44 760 135 896 Est. 4 29 1B 47 592 375 %7 Est. 5 31 29 60 636 588 1224 ................................................................ Est. 6 41 53 94 821) 1091 1919  Annex 6 Annex l?TFiT Estrato Conrtao Especifico Porcentnje & Enrgfa E l k t r i c a Sustitucidn Total C o c c i h CaL. Agw Coccidn Cat. Agur Kwh. / Kwh/. Kwh/r X X --------. .---------------------------------------------- ESt. 1 217 108 0 49.6% 0.0% €St. 2 299 135 1 45.2% 0.2% ESt. 3 286 117 2 40.9% 0.9% Eat. 4 308 113 2 36.0% 0.0% Eat. 5 379 124 22 32.n 5.9% Est. 6 706 263 119 37.3% 16.0% --------. .---------------------------------------------- Estrato Corwa*, Equivalente Cons- Equivaleqte Gas Lieuarb Gas Natural Coccidn Cal. Agua Total C o c c i h Cat. Agua Total Lb/. Lb/. Lb/. PC/ . PC. / PC/ . -----------------------------------. .---------------------------- Est. 1 21 0 21 436 0 436 Est. 2 27 0 27 546 3 549 Ett. 3 23 0 24 41J 10 483 Est. 4 22 0 23 458 10 168 Est. 5 24 4 29 501 90 591 Est. 6 52 23 76 1064 480 1% BmmnaJILU ---------.--------------------------------------------- Estrato Conrum Especlflco Porcentaje de E n r g f a ElCctricr Sustituclh Total C o c c i h CaL. Ague CoccihCal. Agua ----------------------------------------.-------------- Kwh K&/. Kwh/ . X X Est. 1 171 72 0 42.1% 0.0% Est. 2 240 107 0 14.5% 0.0% E S ~ .3 405 176 o u.n 0.0% E8t. 4 412 149 o 36.2~ 0.0% Est. 5 483 140 0 29.0% 0.0% Est. 6 to5 240 0 31.1% 0.0% Estrrto Conrum Equivalmte Cons- Equivalcnte tu Llcundo GM Natural C o c c i h Cal. Agua Total Coccldn -1. Agw Total Lk/r Lb/. C P/. ................................................................ Lb/. PC/. PC. / Est. 1 14 0 E8t. 2 21 0 Est. 3 35 0 Ett. 4 29 0 E8t. 5 28 0 E8t. 6 47 0 ............................ Fumte : Estudlo de E f i c i e n c i a EnrgCtica  P~lnex 6 Page l o f 6 WllEREIO 12939 801 12 694 4757 0 0 37 0 0 19259 REST. & UOT. 159l9 19355 90 2832 0 273 4481 S 22 1U2 44962 STC. OFICIAL 77392 1383 3 10599 1287 369 11 1619 0 7 flnl - - ~ - -- - - - - ~ - - - - - - - - ICTIVIDIB EE 6v a ID FO ra n a em LE TOTAL ~OnolIC1 MlllERCIO 67.32 4.22 9.12 3.62 24.72 4.92 0.02 0.22 0.02 0.02 100.02 REST. & HOT. 39.92 43.42 0.22 4 0.02 0.62 10.12 0.02 4-12 3.42 100.02 Sit. OFICIAL - 78.42 1.12 0.02 10.72 4.32 3.32 0.02 - 1.U 0.02 0.02 100.02  Annex 6 Page 1TiTiT Estudio dm Eficimcir Enmrgtticr hmro D WNSW M E E R 6 I A ELECTRICA SECTOR WlEReIhL Y OFICIAL Cmlmos PROllEDIO WR us0 IBN/rn - - ACTIVIDAD ALUIIBRADO COCCION CALENT. DE REFRIG. A. ACOND. APARATOS APARATOS TOTAL ECONMICA - A6UA -- --ELECTROHEC. ELECTRON. - COHCRCIO 96.0 14.1 6.4 166.0 6.0 119.5 17.9 426.6 REST.&HOT. 34.0 32.0 8.2 62.5 4.1 99.6 14.9 256.0 SEE. OFICIAL 427.6 . 6.9 43.4 61.6 48.6 234.2 45.1 067.3 -- ACTIVIDAD ALU)IBRADO COCCION CALENT. DE REFR16. A. RCOND. A P W T O S APARATOS TOTAL EWNMIICA A6UA ELECTRMIEC. ELECTRON. -- COERCID 28.1 4.1 1.9 48.6 2.0 35.0 5.3 125.0 REST.&HOT. 10.2 9.4 2.4 18.5 1.2 29.2 4.4 75.0 SEC. OFICIAL 125.3 2.0 12.7 18.0 14.2 68.6 13.2 254.1 DISTRIBUCION PORCENTUAL POR USOS DEL COHSUHO PROHEDIO ACTIVIDAD ALUHBRADO COCCI01 CALENT. DE REFRIG. A. 4CONO. APARATOS APARATOS TOTAL EMlllOtlICA A6UA ELECTROHEC. ELECTRON. ------- -- ---- COtlERCIO 22.52 3.31 1.51 38.91 1.61 28.01 4.21 100.01 REST. & HOT. 13.62 12.52 3.21 24.41 1.61 30.92 5.81 100.0'2 SEC. OFICIAL 49.31 0.81 5.02 7.1'2 5.61 5.21 100.02 ----- 27.01 ---  -- Annex 6 Page 1 3 & o f llr Estudio d e Eficiencir EnerpLticr bmro D CUADRO no. 11 U#SUIIO DE EIIERGETICDS SECTOR COHERCIAL Y OFICIAL H E D E L L I H U # S W PRDllEDIO MESTRAL DE EHEMETICOS DTUJIIES ACTIVIDl EE 6LP CCL DO CDC KJ CV I TOTAL ECONonICA MltlERCI 0 33067 53318 0 43391 88 39476 0 0 169340 REST. i HOT. 30712 28269 63727 34353 0 0 312 0 157373 SEC. OFICIAL 39005 11352 0 4473 0 0 0 1564 56394 DISTRIBUeION PORCPlfllAL W R MERMTICOS DEL WNSUH0 PROHEDID HUESTRAL - - ACTIVIDAD EE 6LP CCL DO CDC KJ . CV Q TOTAL ECONOHICA ------- ~ ~ WHERCIO 19.51 31.52 0.OZ 25.62 0.1Z 23.32 0.0% O.OZ 100.02 REST. i HOT. 19.51 18.OZ 40.5Z 21.BZ O.OZ O.OZ 0.2Z O.OZ 100.02 SEC. OFICIAL 69.22 20.1Z 0.OZ 7.R O.OZ 0.0Z OmOZ 2.8Z 100.OZ  Annex 6 Page 1 4 o f 1 6 btudlo d l Eficimcir Enmrp4tlcr hmxo 0 CDElMOS PROmDIO WR S U DTU/HES ACTIVIDAD ALUHBRADO COCCION CALENT. DE REFRIG. A. ACOW. APMATOS APARATOS TOTAL EcononICA ASUA ELECTROHEC. ELECTRON. COflERCIO 37.2 8.3 11.5 45.8 111.4 87.2 16.9 318.2 REST. & HOT. 56.6 55.9 120.8 57.7 58.8 4.4 7.0 370.0 SEE. OFICIAL 406.2 79.4 ' 438.0 49.9 419.8 501.5 86.2 1981.0 - -- ACTIVIDAU 1 ALURMMDO COCCION - . DE REFRIB. 8 . ACOKD. VARATOS VARATOS TOTAL ECWlOHICA ABUA ELECTROEC. ELECTROW. MIERCIO 10.9 2.4 . 34 13.4 32.6 25.6 4.9 93.3 REST. & HOT. 16.6 16.4 37.7 16.9 17.2 1.3 2.3 108.4 SEC. OFICIAL --- 119.0 23.3 128.3 14.6 123.0 - 146.9 25.3 580.5 DISTRIBUCIWI PORCENW1L POR USOS DEL C O l W M PROHEDIO - ACTIVIDAD ALLLUHBRADO COCCION CALEIYT. DE REFRIG. A. ACOND. APARITOS VARATOS TOTAL E C ~ W OCA ~I ABUA ELECTROHEC. ELECTRON. WltERCIO 11.71 2.61 3.62 14.41 35.02 27.41 5.31 100.02 REST. & HOT. 15.32 15.11 34.81 15.61 15.n 1.2~ 2.11 100.02 SEE. OFICIAL 20.51 4.01 22.12 2.52 21.22 25.32 4.42 . 100.01  Annex 6 Page 13 of 16 btudio de Eficimdr Enerpitica hero D CDNSMO DE EWERGETICOS SECTOR COHERCIK Y OFICIAl CONSMIOS PROHEDIO HUESTRAL DE EWEMETIEOS KBTUIBS - ACTIVIDAO EE 6LP 611 DO 61 TOTAL EcononIu -- - --- - - - - - - - CDlERCIO 251538 0 32806372 52589 0 33110499 REST. IHOT. 307423 o 268371 sns 45877 631449 SEE. OFICIAL 1595501 38389 109639 52922 63856 1060309 - ACTIVIDAD n ~LP a DO a TOTAL ECONOHICA C€lHERCIO 1.E 0.02 98.62 0.21 0.01 100.02 REST. iHOT. s2.n 0.02 45.62 0.71 1.62 100.0~ SEC. OFICIAL 96.62 o.n 1.41 1.51 0.22 1oo.01  Annex 6 Page 1FET-E W O NO. 14 CMlSUtO DE = R I A ELECTRICA SECTOR COIIERCIAI Y DFICIAL B I R R A W O U I L L A CDISUMOS PROMEDIO POR US0 KBTU/tW ACTIVIDAD ALUIBRADO COCCION CALENT. DE REFRIG. A. ACOWD. APARATOS APARATOS TOTAL EWNOUICA A6UA ELECTROHEC. ELECTRON. ------------------ - --- -- - - - -- - COHERCIO 116.9 2.2 0.0 95.6 355.4 146.4 45.6 742.1 REST. I HOT. 152.0 19.7 0.0 142.6 315.1 129.2 31.5 790.1 SEC. OFICIAL 189.3 12.6 0.0 25.2 875.8 1317.4 103.5 2523.8 ACTIVIDAP ALUUBRAPO COCCION CALENT. PE REFRIG. A. ACOND. APARATOS APARATOS TOTAL EWIOI!ICA A6UA ELECTROHEC. ELECTRON. -- COERCIO 34.3 . 06 0.0 28.0 98.3 42.9 13.4 217.4 REST. IHOT. 44.5 58 . 0.0 41.8 92.3 37.9 9.2 231.5 - SEC. OFICIAL 55.5 . 37 0.0 7.4 256.6 386.0 30.3 739.5 - PDRCEWTUAL PDR USDS DEL CDWSUllD PRWIEPID D1SfRI~IUN - ACTIVIDAD ALU)IBRADO CIlCCIOW CALUT. DE REFRIG. A. IICOND. APARATOS APAMTOS TOTAL . ECONOIICA A6UA ELECTROUEC. ELECTRON. ~- - ~ - - - - - - ~ - - - - COUERCIO 15.9Z 0.3Z O.OZ 13.01 45.6Z 19.0Z 6.21 l00.0Z REST. & HOT. 19.31 2.51 0.OZ 18.11 39.72 16.41 4.01 l00.0Z SEC. OFICIAl 7.5Z 0.51 O.OZ 1.OZ S4. n 52.21 4.11 100.01  Annex 7 P a g e 1 of 3 0PTIO:IS FOR El.THANCED PATTEWS O F E I , E C T I ? I C I T i USE I Y TIIE COFC!ET,CIAL AXD P.ESIDENTIXL SECTORS Ahorro dednergia Electrica en 10s Hogares 1. La energta el4ctrica en las cuatro ciudades objeto del presente estudio, se usa principalmente en: 1. Coccidn de alimentos 2. Calentamiento de agua 3. Aire acondicionado 4. lluminacidn 5. Refrigeracidn 6. Planchado de ropa 7. Utilizacidn de ouos electrodom4sticos y aparatos electrdnicos. Los cinco primeros usos son 10s de mayor consumo y por lo tanto 10s que ofrecen el potencial mas alto en el ahorro de electricidad. Ahorro en coccidn d e alimentos 2. Las perdidas de energta en 10s aparatos electricos utilizados para preparar 10s alimentos se deben a su ma1 uso. Algunos consejos para ahorrar energta en dichos aparatos son 10s siguientes: 1. Utilizar recipientes de igual didmetro al de la parrilla y cuyo asiento sea plano. Los materiales de estos recipientes deben ser buenos conductores de calor como el cobre, el acero y el aluminio. 2. Tapar 10s recipientes para disminuir el tiempo de coccidn. 3. Forrar con papel de aluminio la lamina que esta debajo de la parrilla para reflejar hacia el recipiente el calor radiado hacia abajo. 4. Utilizar ollas de presidn para reducir el tiempo de coccidn. 5. No usar el horno de la estufa para preparar platos pequefios. Para estos casos es mejor utilizar electrodorn~sticosmas apropiados como hornos microondas, tostadoras, etc. 6. Apagar las parrillas unos minutos antes de terminar la coccidn de 10s alimentos, 7. Mantener limpias las parrillas para aumentar la conductividad termica. 8. Revisar las conducciones al menos una vez al aiio para evitar las fugas de corriente. 9. Evitar abrir el horno durante el proceso de coccidn. Tampoco es conveniente precalentarlo.  Annex 7 Ahorro en calentamiento de agua Page 2 of 3 3. El calentador puede llegar a consumir el 30% del total de la electricidad u t i l i d a Bogota y Medellln, y el 20% en Cali. Las perdidas de energla en forma de calor se producen principalmente por dos razones: i) 10s aislamientos termicos inapropiados tanto en el aparato coma en la tuberla de conduccidn del agua, y ii) la utilizacidn inadecuada del calentador en cuanto al tiempo en . que perrnanece encendido y a la maxima temperatura a la que se desea el agua. Para ahorrar energla en 10s calentadores se deben observar entre otras las siguientes precauciones: 1. En caso de ser posible, cambiar el calentador elecvico por uno de gas. 2. Utilizar agua caliente sdlo para ducharse. Eliminar el uso en lavado de ropa o de lei: 3. Aumentar el aislamiento tdrmico del apano cubriendolo con mantas u otro elemento que permita aislar el entorno del tanque del calentador. 4. En nuevas construcciones o en remodelaciones de la vivienda es conveniente colocar el calentador cerca de donde se consume el agua caliente. Ademas se puede mejorar el aislamiento de las tuberlas de agua utilizando caiiuela aislante de 2.5 cm de espesor. 5. Encender (conectar) el calentador unas tres y media horas antes de usar el agua caliente. La mejor alternativa es instalar un temporizador automatico que permita programar el encendido y posterior apagado del aparato. Ahorro en aire acondicionado 4. Las perdidas de energla de un sistema de aire acondicionado se originan en: i)10s malos aislamientos termicos, y ii)el uso inpropiado de 10s equipos. Algunas acciones para ahorro energla eldctrica en 10s sistemas de aire acondicionado son 10s siguientes: 1. Revisar y mejorar el aislamiento, especialmente en 10s marcos de las puenas y . ventanas. 2. Mantener cerradas las puertas y ventanas de 10s cuanos y salones con aire acondicionado durante el tiempo en que el equipo esta funcionando. 3. En horas de radiacidn solar directa a 10s cuanos y salones con aire acondicionado, utilizar persianas o coninas para reflejar 10s rayos del sol. 4. Ajustar el dispositivo de control de encendido y apagado del motor del equipo a una temperatura razonable. Se aconseja ajustarlo a unos 25 grados centlgrados. Por cada grado menos se consume un 5% mas de electricidad. 5. Dependiendo de las condiciones climaticas, el aire acondicionado puede reernplazarse por un ventilador. Su consumo electric0 es significativamente inferior. 6. Apagar el aire o, en caso de un sistema central cerrar las rejillas del conducto, si el cuano o saldn va a estar desocupado por un period0 de tiempo mayor a una hora.  Annex 7 Page 3 9f 3 7. No obstruir la salida de aire acondicionado con muebles u otros objetos. 8. timpiar las rejillas de ventilacidn para permitir mayor circulacidn del aire en el sistema. Tambien los dunos del fluido refrigerante para evitar perdidas por obstrucciones. estas limpiezas deben ser periddicas, del orden de al menos una vez por ano. Ahorro en iluminacidn 5. Las perdidas de energla en forma de calor en iluminacidn son causadas por: i) el empleo de niveles de iluminacidn superiores a los necesarios ye ii)por el uso inadecuado de la luz solar. Para ahorrar energfa por este concept0 se deben observar entre otras las siguientes norrnas: 1. Pintar las paredes y cielo rasos con colores claros que permitan mayor reflexidn de la IUZsolar y por consiguiente menores requerimientos de iluminacidn artificial. 2. Adquirir dispositivos que ajusten la intensidad de iluminacidn al nivel requerido de la tarea especlfica que se realice. 3. Las ldmparas de filament0 (incandescentesl producen mds perdidas por radiacidn del calor que las ldmparas de fluor (fluorescentel, sodio o mercurio. Se recomienda entonces, en la medida de lo posible utilizar estas Cltimas. Ahorro en refrigeracidn 6. Las perdidas de energla en las neveras y congeladores se deben principalmente a: i) falta de hermeticidad; ii)mala ubicacidn de los rnismos y, iii)ma1 empleo. Los ahorros por este uso se pueden aumentar considerando las siguientes observaciones: 1. Revisar periddicamente los empaques de las puertas de los refrigeradores para asegurar un buen ajuste. 2. Localizar 10s equipos de refrigeraci6n alejados de aparatos de cocqi6n o de calentamiento, para evitar que el calor de estos provoque un mayor trabajo en estos. 3. Dejar espacio suficiente entre el aparato refrigerador y/o congelador y las superficies circundantes, principalmente del lado del condensador 4. Ajustar la temperatura de operacidn de neveras y refrigeradores de acuerdo con el clima de la regidn. 5. Evitar abrir frecuentemente la puerta de los equipos. 6. No introducir alimentos calientes. Es necesario espera. a que alcancen la temperatura ambiente antes de ser introducidos. 7. Si los equipos no son de descongelacidn automdtica, debe realizarse un descongelamiento periddico, evitando la formacidn de capas gruesas de escarcha en los serpentines.  ANNEX 8 Page 1 of 6 ANNEX 8 Overview of energy efficiency practices in building design in Colombia (Excerpts from consultant report) PRACTICAS EXISTENTES DE CONSERVACION DE ENERGIA A continuaci6n se examinan las prActicas de conservaci6n de energfa en las diferentes Areas de diseiio de edificios en el sector comercial y oficial. Se analizan las siguientes Areas: (i) Proceso de construcci6n y diseiio; (ii) PrActicas de conservaci6n de energia en el diseiio de cubiertas de edificios; (iii) PrActicas de conservaci6n de energfa en el diseiio de alumbrado; y, (iv) Mcticas de conservaci6n de energia en el diseiio de sistemas & aire acondicionado. El precedente hist6rico de conservaci6n de energfa en Colombia es en general muy limitado, no existe una inclinaci6n profesional hacia el fomento de niveles supenores & eficiencia. El contexto tknico en el cud se toman decisiones de diseiio esta en general caracterizado por la ausencia de informaci6n acerca de mttodos de computaci6n y carateristicas de comportamiento de productos. Por ejemplo: * Estudios & iluminaci6n son la excepci6n. La utilizaci6n del mttodo de computaci6n L1Smen basado en cavida&s zonales es muy poco difundido. * Solo a partir de 50 toneladas de capacidad & aire acondicionado se hacen cailculos & carga tdrmica. * Solo aproximadarnente 20 por ciento de 10s productos en el sector elktrico estarfan homologados (de acuerdo a la informaci6n suministrada por un ingeniero eltctrico colombiano experimentado). * Informaci6n bhica sobre conductividad para materiales locales es limitada * La producci6n de vidrios antisol y ahumados no esta normalizada. Se estima que, en el caso de las ciudades examinadas durante este estudio, solo en el 30 por ciento de 10s casos donde es necesario el uso de un alto coeficiente de sombra se utilizan vidrios reflectivos o ahumados. Por consiguiente 10s diseiiadons toman decisiones sobre conservaci6n de energfa sin los datos que permitan evaluar el impact0 de un product0 sobre consumos de energia futuros. Por otro lado, 10s constructores tampoco fomentan el uso de productos m b eficientes. Esto ha llevado a que arquitectos y proveedores, quienes en gran pare controlan la especificaci6n de productos, basen esencialmente sus decisiones en dos variables: Dos t i p s & disefiadores toman decisiones tecnicas iniciales: 1. Proyectos con Areas inferiores a 10s 7000 M2: el 80-90 por ciento son diseiiados por proveedores de productos o por tknicos egresados de institutos de capacitaci6n tknica como el o SENA ( S e ~ c i Nacional de Aprendizaje).  ANNEX 8 Page 2 of 6 2. Proyectos con Areas superiores a 10s 7000 M2: estos proyectos son disefiados por arquitectos con el apoyo dcnico de ingenieros profesionales. Las decisiones preliminares de orden dcnicos son en gran parte controladas por el arquitecto. Los proveedores desempefian un papel importante en todos 10s proyectos. Una vez que un proyecto de construcci6n pasa a la fase de presupuesto, 10s proveedores inician frecuentemente un proceso de substituci6n de productos y subdimensionamientode instalaciones con consequencias menos que 6ptimas. En iluminaci6n, de acuerdo a la informaci6n suministrada por el mismo ingeniero elktrico, el 60- 70 por ciento de 10s edificios son entregados a usuarios sin sistema de alumbrado. Por consequencia es de esperar que la especificaci6n posterior del sistema resultara en instalaciones menos eficientes que acarearh mayores consumos tanto de alumbrado como de aire acondicionado (salvo en el caso de un subdimensionamientode 10s instalaciones). A continuaci6n se examinan las prhticas de conservaci6n de energia en el disefio de cubiertas. Se analizan 10s siguientes aspectos: 1. Control de transmisi6n solar en fachadas. 2. Control de transmisi6n solar en techos. 3.Ventilaci6n natural e infi1taci6n. 2.1 Control de Transmisi6n Solar en Fachadas En zonas con climas tropicales (como en el caso de Barranquilla), la carga drmica solar constituye el 30-35 por ciento de la carga total drmica de un equipo de aire acondicionado (Ver como referencia el report. "Energy and Economic Analyses in Support of Energy Conservation Standards for New Commercial Buildings in Malaysia" por Lawrence Berkeley Laboratory). Por consiguiente la minimizaci6n de esta por medio de la manipulaci6n de 10s coeficientes de sombra en el vidrio o el uso de proyeciones externas en la fachada es muy efectiva en reducir el consumo de energfa por concept0 de aire acondicionado. En Colombia, la utilizaci6n de vidrios reflectivos y ahumados parece ser basada miis en consideraciones est6ticas que en propiedades de transmicidn solar. Se observ6 por ejemplo: * El uso de vidrios reflectivos en situacionesinnecesarias. * Con alguna frequencia en proyectos medios el uso a posterior de pelfculas adhesivas polarizantes. * La ausencia de aislamiento drmico en seciones de vidrio opaco en fachadas flotantes * La ausencia en muchos casos de vidrios con altos coeficientes de sombra en cubiertas de vidrio. * Con la excepci6n de Cali el poco uso de voladizos o balcones. Esto es en parte debido a que estas proyecciones deben ser consideradas en las distancias de aislamientos y en consequencia limitan el h utilizable.  ANNEX 8 Page 3 of 6 2.2 Control de Transmisi6n Solar en Techos En el 55-65 por ciento de 10s casos se observ6 la falta de tratamientos reflectivos en techos. Con un simple cambio de color la absorbci6n solar de un techo puede ser disminuida dramAticamente. En este respecto pinturas aluminicas con fibra de vidrio son tratamientos muy efectivos en techos irnpemeabilizados con brea o mantos de fibra de fibra de vidrio. Tampoco se observ6 la utilizaci6n de recubrimientos t6micos. 2.3 Ventilaci6n Natural e Infiitraci6n Con la excepci6n de algunas tomes de oficina en exceso de 20 pisos en las que se utiliza vidrio fijo, todos 10s edificios con aire acondicionado utilizan ventanas operables. Esto contribuye a que se aumente la carga t6rrnica por concepto de infiltraci6n de aire externo en dos formas: 1. No todos 10s sistemas de ventanas incorporan mecanismos para el control de infiitraci6n. 2. Siempre habd un cierto niimero de ocupantes que mantienen sus ventanas abiertas durante periodos de acondicionamientode aire. A continuaci6n se examinan las pdcticas de conservaci6n de energia en el diseiio de alumbrado. Se analizan las siguientes W: 1. Luminarias 2. Niveles de ilurninaci6n 3. Fuentes de iluminaci6n 4. Controles 3.1 Luminarias * Balastos: El 80 por ciento de 10s balastos producidos en Colombia son balastos reciclados con factores de potencia bastante inferiores a las nomas intemacionales (de acuerdo a la infomaci6n suministrada por el principal fabricante). Medidas parciales por consultores locales han producido factores de potencia del orden de10.78, mientras que la noma minima en 10s E.U. es 0.90. Esto significa un consumo mayor de energia: una luminaria de 2 tubos fluorescentes de 40 vatios deberia tener una potencia de aproximAdamente 88 vatios incluyendo las firdidas de balastos. En Colombia esta potencia oscila entre 105 y 110 vatios. Se debe aiiadir que tampoco existe una homologaci6n de balastos que pennitan a 10s diseiiadores hacer una evaluaci6n tknica entre equipos. * Tubos: El parque de tubos fluorescentes est.4 en su mayoria compuesto por tubos de 40 vatios de 48 pulgadas. No se distribuyen tubos mAs eficientes de 36 o 32 vatios. * Pantallas: Las pantallas de iluminaci6n son producidas en Colombia por un niimero bastante disperso de pequeiios productores sin nomalizaci6n o especificaci6n tknica en lo que se refiere a reflectores. Esto conduce a firdidas i n n d a s de luz en el interior de las luminarias resultando en eficiencias de luminosidad y en coeficientes de utilizaci6n inferiores. Para un espacio y un nivel de  ANNEX 8 Page 4 of 6 iluminaci6n establecido esto se traduce en un consumo de energia miis elevado. TambiCn hay que . Madir que except0 para la iluminaci6n de calles y vias no existe informaci6n sobre curvas fotomCtricas que permitan a 10s disefiadores evaluar instalaciones de alumbrado. * Medios de Control: De acuerdo al estirnado de un ingeniero eltktrico colombiano, aproximadarnente un 50 por ciento de las luminarias en uso son abiertas, mientras que el 40 por ciento utilizan lentes prismAticos. El 10 por ciento restante corresponde a instalaciones con rejillas parab6licas o de otro tipo. Siendo estos sistemas 10s m b eficientes no existen oportunidades para conservaci6n de energia en esta area. 3.2 Niveles de Iluminaci6n Las medidas de niveles de iluminaci6n para una muestra limitada de instalaciones produjeron las siguientes observaciones: * Oficinas en el sector comercial: 320-370 luxes, este nivel es solo el 60 por ciento del nivel recomendado en 10s E.U. Evidentemente, un incremento en 10s niveles de iluminaci6n a la par con 10s niveles norteamericanos causaria un incremento en el consumo de energia. * Oficinas en sector oficial: En el 40 por ciento de 10s casos se observaron niveles de 538 - 591 luxes, o sea niveles comparables a 10s E.U. Los casos restantes mostraron niveles a la par con oficinas en el sector comercial. * Circulaci6n: 320-370 luxes, este nivel es equivalente a1 encontrado en oficinas y es considerado demasiado elevado para el tipo de actividad. El nivel recomendado en 10s E.U. es 225 luxes. * Aulas: 160-215 luxes, el nivel usado en 10s E.U es 323 luxes. Hay que anotar que el nivel preponderante de iluminaci6n para oficinas en Colombia de 320-370 luxes es adecuado. En investigaciones entre la productividad y niveles de iluminaci6n se ha comprobado que esta intensidad de iluminaci6n es suficiente para la actividad. A partir de 375 luxes la productividad de trabajo no responde a incrementos en iluminacih. Encima de este nivel solo factores relacionados con la calidad de luz tienen impact0 (Ver: Smithmea Numerical Verification Tests). 3.3 Fuentes de Iluminaci6n Algunas de las areas en que se observaron ineficiencias son las siguientes: * Utilizaci6n frequente de bombillas incadescentes en vestibules de ascensores, en pasillos de hotelesJmoteles y en conjuntos de vivienda. Esta prktica puede ser desplazada por la utilizaci6n de bombillas compactas fluorescente con eficiencias cinco veces m h altas y duraci6n siete veces superior. * En el sector residential cocinas y baKos tambien son candidatos para la utilizaci6n de fuentes de iluminaci6n fluorescente. * Utilizaci6n frequente de bombillas de vapor de mercurio en parqueaderos y otras areas exteriores. La iluminaci6n con bombillas de sodio AP es m h econ6mica.  ANNEX 8 Page 5 of 6 * Utilizaci6n muy reducida de fuentes de alta eficiencia luminica tales como bombillas de mercurio hal6geno y sodio AP en supermercados, salones mliltiples y teatros. 3.4 Controles Intemptores locales para el alumbrado no son en general instalados en edificios oficiales, 10s usuarios de oficinas inkpendientes no tienen la capacidad & apagar las luces. En teoria el personal de seguridad apaga por sectores de iluminaci6n por medio de 10s intemptores en 10s paneles centrales a medida que las oficinas van siendo desocupadas. Sin Embargo, en la prActica se observ6 que despuQ de horas normales de trabajo un alto porcentaje de luminarias permanecian encendidas. En el sector commercial & oficinas intemptores son normalmente incorporados. La utilizaci6n de controles fotoel&tricos para reducci6n de consumo de energia en luminarias fluorescentes en cantidades proporcionales a la disponibilidad de luz natural es prhticamente no existente. En general no se anticipa su posible uso en disefios existentes puesto que su configuraci6n no define circuitos dedicados para las luminarias que comn paralelamente a las ventanas. Esta tecnologia tiene un gran potencial ahorro de energfa. Se ha estirnado que se pueden lograr reduciones hasta del50 por ciento en el uso del alumbrado en Areas donde se aplica esta medida y ahorros del 15 al 20 por ciento del consumo de energia total en edificios con aire acondicionado. Sin embargo, cabe anotar que la introducci6n de esta tecnologia no es necesariamente directa en Colombia puesto que estos controles de iluminaci6n fuorescente son solo adaptables a balastos y tubos especlficos. En hoteles/moteles se observ6 la ausencia del uso de intemptores centrales en 10s cuartos de hukspedes que permitieran apagar las luces del recinto en conjunto. Las prActicas de conservaci6n de energia en el disefio de sistemas de aire acondicionado son examinados respecto a las siguientes variables: 1. Condiciones & diseiio interior 2. Suministro de aire exterior 3. Control termostatico 4. Estado de la tecnologia 4.1 Condiciones de Disefio Interior Los niveles de temperatura registrados en 10s termostatos variaron entre 16 "C y 21 "C sin control de humedad; estos comparados con un nivel recomendado de 24.4-C y 55% H.R. indican posibles economias con un simple ajuste de temperatura Hay que anotar sin embargo que la intenci6n con fijar bajas temperaturas en el termostato es la de limitar el ciclaje de compresores al minimo con el objeto & compensar sea el subdimensionmiento del equipo o sobrecargas tkrmicas de infiltraci6n causadas por ventanas abiertas. 4.2 Suministro & Aire Exterior Aire exterior se suministra solo con alguna frequencia en instalaciones superiores a las 25 toneladas. La infiltraci6n natural de aire exterior no es en general controlada. Se estima que este tip0 de diseiio es ineficiente. Como se puede observar en la figura 2.3 la rata de sumunistro de aire exterior tiene un gran impact0 sobre el uso total de energia La estrategia de diseiio normalmente empleada en otros paisa es la de controlar la infidtraci6n natural estableciendo una presi6n positiva en el edificio.  ANNEX 8 Page 6 of 6 4.3 Control Termosuitiw Aunque esta es la forma m4s b4sica de controlar la frequencia de ciclaje de 10s compresores, muchas instalaciones carecen de termostatos, o cuando estos existen son desconectados con frecuencia. 4.4 Estado de la Tecnologfa En cuanto a distribuci6n de aire solo se observ6 el uso el & sistemas de voliimen constante. Cajas de voliimen variable y motores de velocidad variable son considerados sistemas ex6ticos. Para sistemas centrales, sistemas de voldmen variable pueden tener un gran impacto sobre el consumo & energh total. En cuanto a sistemas primaries la tendencia es la de utilizar paquetes en vez de sistemas centrales. El uso de estos solo se observ6 en un n6mero reducido de grandes torres de oficina para uso oficial. A pesar de ser 10s sistemas centrales m h efficientes que 10s sistemas de paquete, estos son m h utilizados debido a que normalmente en el sector commercial a cada copropietaricdinquilino le es proveido su propio sistema con el f m de establecer un solo punto de responsabilidad en cuanto el pago de consumo de energfa. Se prevee que la utilizaci6n futura de compresores ser4 en su mayorfa de tipo reciprocante o de.tomillo, puesto que el uso de centrlfugos estari4 limitado por el acuerdo de Montreal (el cual limita el uso futuro de 1 tipo de fre6n comentemente utilizado en chillerss centrffugos). La configuraci6n de equipos de paquete es tan diversificada como en 10s E.U. tanto torres de enfriamiento o condensadores de aire son combinados con sistemas de expanci6n d k t a y chillers. En cuanto a controles, fuera de control termostAtico no se observ6 en ning6n caso el uso de controles basados en temperatura exterior o temperatura de agua de condensaci6n. Los controles tienen un gran impacto sobre el consumo de energh. En cuanto a motores, por debajo de 100 caballos no se publican datos sobre eficiencias. Motores tienen factores de potencia bastante bajos: 0.60 sin condensadores. Dadas las fluctuaciones de voltaje en Colombia y la sensitividad de motores de alta eficiencia, la introduci6n de estos no &be hacerse sin investigaci6n previa.  Amex 9 Page 1 of 9 ANNEX 9 Summary of rapid audits of 11 buildings A total of eleven buildings were audited in four cities over the period of a week in December 1991. These buildings included in Barranquilla: Corelca, Hotel Royal, Centro Comercial; in Bogota: Departamento de Arquitectura de la Universidad Nacional; In Cali: Banco Popular, CVC, Oficentro, Universidad del Valle (Sede San Fernando); and in Medellfn: Palacio Municipal, Cento Comercial San Diego, Edificio de Apartamentos. Half a day was spent in each building. The purpose of these rapid audits was to observe current practices and qualitatively determine what energy conservation measures could be taken. Due to the time limitations, not all possible measures were considered. However, the recommendations below represent the measures that are easily implemented and that would have the largest impact on energy use. The findings of the rapid audits are summarized below. Corelca Dbservations: As with other commercial buildings lighting and cooling were the primary energy users in the Corelca building. The cooling system consists of four packaged units per floor with all the units using a common cooling tower on the roof. There are no temperature controls on the units. One of the maintenance personnel reported that the thermostats were removed due to excessive tampering by employees. The only ventilation is through the use of operable windows. The lighting consists almost exclusively of 4 foot fluorescent lamps. There are no light switches in the offices. The building was designed in this way in order to save on fust costs. The guard turns off the lights from a central panel in the evenings. One of the observed panels had exposed wiring and was an extreme fire hazard. Most off the offices have windows that either look out onto the city or onto an enclosed atrium. Lighting levels in the offices and halls averaged 30 foot candles. This is close to the standard for the ofices but is more than needed in the halls. The parking lots were lit with four foot fluorescent lamps. Recommendations: Cooling - Installing thermostats in the office areas with lock boxes that prevent employee tampering could potentially have substantial effect on energy use. The temperature setting should never be lower than 78 degrees F. Although the existing windows are slightly tinted, reflective window film would help reduce cooling needs in the morning and afternoon hours. If it is not currently being done, a regular (every six months) maintenance program of the packaged units needs to be implemented. Special attention should be placed on proper lubrication of the compressor and fan motor and cleaning of all filters and coils. This maintenance would be best done by a trained cooling technician. / Lighting - Lowering light levels in the halls by removing lamps would save lighting energy. The fluorescent lighting in the parking lot should be replaced with high pressure sodium lighting.  Annex9 Page 2 of 9 W O f f photo cells attached to just the lighting fixhues on the perimeter of offices with windows would allow for some lights to be turned off on bright days. Care should be taken if reflective window f ilm is put on the windows. Although cooling usage will be reduced, some of the visible light will also be blocked. When they become available in Colombia either energy efficient magnetic ballasts or T8 lamps with electronic ballasts should replace the existing fluorescent ballasts andlor lamps. Such equipment is currently available in the U.S. and could be imported to test its effectiveness in Colombia or to demonstrate the technology to other building owners. Hotel Royal The Royal Hotel has already been audited by a project sponsored by GTZ. The hotel is relatively new and the rooms are in a tower of approximately 15 floors. The rooms are cooled by window air conditioners and have tinted glass. Many of the window units seemed to be poorly maintained. The Refrigeration systems in the kitchen have recently been improved as a result of the previous audit. The room lighting is incandescent. Cooling - Regular maintenance and replacement of the window air conditioners should be implemented. When they become available, high efficiency window units should be purchased when replacing the old or broken down units. Lighting - When they become available, compact fluorescents should be used in the rooms. Hot Water - When they become available, low flow shower heads should be used in all rooms. Time clocks or temperature sensors for the hot water circulation systems should be investigated. Centro Comercial QbservatiQns The center was built very recently. As a result cooling and lighting equipment is new and there are few maintenance problems. The mall is made up of several small boutiques each with its own meter and cooling system. The cooling systems are small packed units (1 to 2 tons). The lighting systems are almost exclusively fluorescent. Light levels are good with almost no over lighting. Cooling - Each tenant should have a maintenance contract to insure that their cooling systems continue to function properly. If the tenant stays long enough to see the cooling system bum out, the new system should be a high efficient type.  Annex 9 Page 3 of 9 Lighting - The fluorescent lighting is much more efficient than incandescent. As such. immediate opportunities are few. - When they become available, energy efficient magnetic ballasts or T8 lamps with electronic ballasts should replace the existing light systems. - - Universidad Nacional Bogota Departamento de Arquitectura ahow Although we were not able to conduct a full audit of the building, we were able to observe the lighting systems. In one office with the lights off daylight provided over 50 foot candles on the work surface. Lighting systems consisted of four foot fluorescent tubes. When we inspected the ballasts we found that they were extremely hot. This shows that the losses in the ballasts are quite large. There was no cooling system. Pec0mmendatia.s Lighting - On/Off photocell controls for half of the lights in perimeter offices would provide significant savings. When available, energy efficient magnetic ballasts or T8 lamps with electronic ballasts should replace the existing lighting systems. Banco Popular Qbservati~tl~; The Banco Popular is located in a relatively modem 20 story office tower. The lower floors are cooled by a large Carrier centrifugal chiller. The top 15 floors are cooled by packaged unit cooling systems, one on each floor. The chiller appeared to be well maintained. The packaged systems were not as well maintained. The thermostat control for the packaged units was positioned near the plenum air return. The glass was not tinted. In several of the observed offices windows were wide open while the cooling system was operating. The Light levels were adequate with most lighting consisting of four foot and eight foot fluorescent tubes. In the hallways 150 watt incandescent lamps were used. Recommendations: Cooling - A tighter maintenance schedule on the package units should be implemented. The use of tinted window film should be considered. A locked thermostat should be installed in the office area. People should be encouraged to close the windows or the amount a window can be opened should be limited. When windows are open the occupants of that floor should have the option of turning off the cooling system. When the various fan and pump motors on the chiller system bum out high efficiency replacements should be considered. Although these motors are not yet available in Colombia they are readily available in North America and Europe.  Annex 9 Page 4 of 9 Lighting - AU incandescent lamps should be replaced with compact fluorescents or fluorescent tubes. Energy efficient magnetic ballasts or T8 lamps with electronic ballasts should be considered. Lighting energy would be reduced with the use of photocell on/off controls for perimeter lighting. cvc The CVC building is a new five story office building. This was one of the best maintained buildings visited. Each floor had 4 packaged unit cooling systems all connected to a central cooling tower on the roof. The quality of maintenance was due to the on-site maintenance manager who had been trained at a local technical institute. The thermostat controls were located in the offices. Some were set at 70 degrees F. Light levels were somewhat high in the offices. In the hallways, light levels were above what is needed. Each floor was quite large with large core zones thus lowering the potential for photocell lighting controls. The windows had previously been retrofitted with window film. In the cafeteria the small Refrigeration systems were all well maintained. However, the larger systems needed improvement. Cooling - Cooling tower controls should be investigated. High efficiency fan belts for the packaged units and cooling towers would also save energy. Temperature controls should be set at 78 degrees F. As the packaged units burn out high efficiency replacement units should be purchased. Lighting - Energy would be saved if light levels were reduced in the hallways and corridors. High efficiency magnetic ballasts or T8 lamps with electronic ballasts should be used as soon as they are available. Refrigeration - Maintenance of Refrigeration systems along with thermometers to check set points should be installed in the larger coolers. Oficentro The Officentro building is a typical medium sized office building in Cali. The cooling system was a central reciprocating chiller with fan coil units in each of the offices. The cooling tower was a dry cooling tower unl& all of the other observed cooling towers. The maintenance 6f the system was below average and the system itself was at least 10 to 15 years old. The thermostat controls were in poor condition. Exterior glass was already tinted. Lighting levels were normal or below normal. Hallways were illuminated with incandescent lamps.  Annex 9 ~ a g m Becommendations: Cooling - Regular maintenance and monitoring of the central system and the fan coils could have a substantial effect on energy use for cooling. Maintenance should include a check of the pressure set point of the compressor. The thermostats should be serviced and protected from tampering with a lock box. Reflective roof paint would have an impact on the cooling loads for the top floor. Lighting - All of the hall lights should be changed to either compact fluorescent or fluorescent tubes. Fluorescent lighting should be improved with energy efficient ballasts or T8 lamps with electronic ballasts when they become available. Photocell controls might be used in offices that face the inner court yard. - Universidad del Valle Sede San Fernando O b s e m The San Fernando campus of the university house. the departments of architecture, medicine and administration. Each department has somewhat different lighting and cooling systems. The ric architecture department had little or no cooling and lower a a il light levels in conjunction with daylighting. The medical department had high lighting levels in conjunction with window air conditioners in every classroom. In various large buildings there were direct expansion packaged systems. One such system in the library had a broken thermostat. Most of the employees of the library had to spend the day wearing sweaters to keep warm while the temperature outside was a comfortable 80 degrees F. The head facilities manager claimed that the maintenance on the cooling systems was poor due to lack of funds. Recommendations: Cooling - h All cooling systems should be maintained on a regular basis. Tis would include cleaning coils and verifying that all controls are functioning properly. Thennostatic controls should be repaired and set to the proper temperature. Window air conditioners should be replaced with high efficiency models as they become available locally. Lighting - All fluorescent futures should be retrofitted with high efficiency ballasts and lamps when they become available. Photocell controls should be considered for some classrooms. Occupancy sensors might be needed if lights are left on when the classrooms are empty.  Annex 9 Page 6 of 9 Palacio Municipal -municipal is a 13 story very modem building. AU of the cooling is accomplished with two centrifugal chillers in the basement. A set of three fan coils was used on each floor. Thermostats were all in the return plenum room next to the air intake to the fan coil units. Windows were only slightly tinted. Again the only source of outside air were the operable windows. Light levels in the offices were normal but in the comdors they were above what was necessary. There were no local light switches in the offices. H alf a year before the audit all lights were lift on 24 hours a day. The facilities manager then instituted a program to turn off the lights at night. Cooling - Reflective window film would probably reduce cooling loads significantly. The cooling tower fans were constantly on and had no controls. The towers should be retrofit with controls to turn off the fan when the condenser water temperature is low. The temperature control systems should be reconfigured to measure the temperature in the office areas. In addition, the temperature set point should be maintained at or above 78 degxtxs F. Lighting - Delamping in hallways and comdors in order to lower light levels would help reduce lighting energy. High efficiency lamps and ballasts should be used when they become available. The fluorescent lighting in the garage should be converted to high pressure sodium. - Centro comercial Sandiego abow This shopping mall consists of several small boutiques along with a departmentlfood store. The primary audience of the center is higher income Colombians. Originally the boutiques were not cooled but in the last few years some of the shops have installed their own rooftop packaged unit cooling systems. All of the shops are individually metered. Most of .the boutique lighting is fluorescent. There is some incandescent spot lights in the display windows. The department store, Superley, had very well maintained refrigeration and cooling systems. In the supermarket nighttime case covers were used to reduce refrigeration costs. Lighting levels were adequate and most lighting was accomplished with eight foot fluorescents. Cooling - When purchasing new cooling equipment boutique owners should consider high efficiency units. Proper maintenance of the rooftop systems will also be necessary. Lighting - Parking lot mercury vapor lighting should be converted to metal halide. High efficiency ballasts and lamps should be used when they become available.  Annex 9 Page 7 of 9 Observatio11~; One apartment in a complex was visited. Although apartments do not fall into the commercial sector some of the observations are applicable to both the residential and commercial sectors. Lighting was both incandescent and fluorescent. Most hallway lighting was incandescent. There were no cooling systems. Lighting - Use compact fluorescents where feasible. Use timer switches in the hallways. Hot Water - Encourage the use of low flow shower heads. Water heater blankets or timers would help cut down on standby losses from water heater tanks.  Summary of Savings, Costs and Simple Payback* Corela Building: Barranqilla, Columbia Annual kwh Equipment and Annual Savings Simple Payback Measures: Savings Labor Cost in $US in $US in Years Cooling: Thermostat Installation Reflective Window Film Cooling System Maintenance Lighting: Delamping Fluorescent to HPS Photo Cells EE Magnetic Ballasts T8 Lamps/Eltmc Ballasts Oficentro Building: Cali, Columbia Annul kwh Equipment and Annual Savings Simple Payback Measures: Savings Labor Cost in $US in $US in Years Cooling: Thennostat Set Point Adj. 12 .000 $370 5850 0.4 Reflective Roof Paint 4.050 $950 5280 3.4 Chilled Water Set Point Adj. 1 2.000 $53 S850 0.1 Lighting: Incandescents ro Fluorescents 6.000 $460 $420 1.1 Photo Cells 9 .300 $810 S650 1.2 EE Magnetic Ballasts 12 .000 52500 $850 2.9 T8 Larnps/Eltmc Ballasts 56.000 % 10200 $3.900 2.6 Palacio Municipal: Medellin, Columbia Annual kwh Equipment and Annual Savings Simple Payback Measures: Savinas Labor Cost in $US in $US in Years Cooling: Cooling Tower Fan Controls 140.000 $54,000 $8.400 6.4 Reflective Window Film 280.000 51lO.Oo0 517,000 6.7 Thermostat Set Point Adj. 210.000 $7.300 513,000 0.6 Lighting: Delamping 160.000 5640 59,400 0.1 o HPS Fluorescent t 39.000 $7,000 $2,400 2.9 T8 Lamps/Eltmc Ballasts 1.100.000 $200.000 566,000 3.O Banco Popular: Cali, Columbia Ann& kwh Equipment and Annual Savings Simple Payback Measures: Savings Labor Cost in $US in $US in Years Cooling: Cooling System Maintenance 10,700 $390 $750 0.5 Reflective Window F ilm 21,000 $7.600 51 .500 5.0 Install Thermostats 16,000 S1.100 51.100 1.O Lighting: . Incandescents ro Fluorescents 8.000 5610 5560 1.1 Photo Cells 1 2.000 Sl,100 5860 1.3 EE Magnetic Ballasts 16.000 $3.300 S1.100 3. O T8 Lamps/Eltmc Ballasts 74.000 513,000 S5.200 2.5 'These data have been rounded to 2 significant figures and have an error of plus or minus 20%.  Annex 9 P a g e m Table 1 Cooling Watts per Square Foot Calculations - -- Assumptions Baranquilla Cali Medellin Bogota Assumed Square Metem pa Ton of Cooling 24 26 27 N/A Assumed coefficient of ~eaformance (COP) Resulting Warn per Square Meter Resulting Watts per Square Foot 1Assumed Floorspace LO Window Area Ratio Resulting Waas of Cooling per Square Meter of Window Resulting Watts of Cooling per Square Foot of Window Assumed Average Floor Area to Roof Ratio Resulting Waas of Cooling per Square Meter of Roof Resulting Watts of Cooling per Square Foot of Roof Assumed Full Load Operating Hours Table 2 Commercial Sector Table 3 Electriciv Tariffs 12/1/91 Exchange Rate PesosAJS: 630 lksm l~aranquillal Cali I Medellin I Bogota I Commercial E&D SUSkWh 0.08 0.07 0.07 0.12 Official E&D SUSkWh 0.07 0.06 0.06 0.07  Annex 10 Page 1 of 5 ANNEX 10 Description of recommended energy efficiency measures in commercial and public buildings L LIGHTING A. Energy Efficient Magnetic Ballast Electromagnetic (core-coil) ballasts for fluonsant lamps provide' four important functions for lighting system operation: they limit the current during lamp operation, improve the power factor, provide start-up voltage, and help suppress radio interference. Energy-efficient electromagnetic ballasts provide these same services while consuming significantly less energy than standard ballasts. The higher efficiency is obtained through the use of larger iron cores and substitution of copper for aluminum wirings. These ballasts are well proven and have recently become the minimum standard for new buildings in California and other states. B. Photocell Control Photocell controls can be used in commercial office space to adjust the amount of electrical lighting needed as the amount of daylight increases or decreases. OnJOff photocell controls can be connected to half of the lamps in perimeter zones so that when daylight is available light levels will be cut in half. C. TS/Electronic Ballast Package Electronic ballasts perform the same service as conventional ballasts (starting and operating fluorescent lamps) but at much higher efficacies. Electronic ballasts have additional advantages as well. They convert the operating frequency of standard ballasts from 60 Hz to about 25 Hz. This higher frequency eliminates the flicker and hum associated with electromagnetic ballasts. There are generally two types of electronic ballasts: dimmable and non-dimmable. A four lamp four foot fluorescent fixture consumes 188 watts as compared to the same fixture with T8 lamps and an electronic ballast which uses only 114 watts. D. Compact Fluorescent Lamps Compact fluorescent lamps consist of either an electronic or magnetic ballast and a twin tube or quad tube lamp. In the case of an integral lamp, the ballast and lamp are fixed together. With the modular lamp, the lamp may be changed at burnout (approximately 10,000 hours). As the life of a typical ballast is almost 50,000 hours, the ballast can be used over the life of 5 lamps. Conventional incandescent lamps last only 1000 hours. Compact fluorescent lamps also come in two wiring configurations. Screw-in Edison bases permit easy relamping into existing fixtures. However, these lamps may be removed and disposed of at any time. A hardwired lamp on the other hand, is not so easily changed over. E Delamping in Common Areas The purpose of all lighting systems is to provide the necessary amount and quality of light for a specific task or group of tasks. Common areas such as hallways, stairwells, etc., do not require the same amount of electrical lighting that other areas requite. Typical lighting requirements in offices is around 30 foot-candles while light levels from 5 to 15 foot-candles are required in common ateas. Removal of some of the lamps in common ateas will reduce the amount of lighting, and thus save energy.  Annex 10 Page 2 of 5 F. Mercury Vapor to Metal Halide Conversion Mercury vapor lamps are the least efficient high intensity discharge lamps that are currently available. Metal halide lamps are an excellent retrofit for mercury vapor lamps because they provide good color rendition and do so at relatively high efficacies. G. Mercury Vapor to High Pressure Sodium Mercury vapor lamps are the least efficient high intensity discharge lamps that are currently available. High pressure sodium lamps are an excellent retrofit for mercury vapor lamps because they provide color rendition that allows most colors to remain generally recognizable and have relatively high efficacies. But, the slight color shift that does occur may be unacceptable where exact color identification is needed. Thus, high pressure sodium lamps are suitable for parking lot and warehouse applications where color identification is not critical. H. Fluorescent to High Pressure Sodium Fluorescent lamps provide excellent color rendition and have average efficacies. Retrofitting fluorescent lamps with high pressure sodium lamps would save since their efficacies are relatively higher. This retrofit option should only be considered when excellent color rendition is not a critical requirement since high pressure sodium lamps have relatively poor color rendition. 11. COOLING A. Reflective Roof Paint Light colors applied to exterior surfaces will reduce solar absorption. When heat flow is reduced, air conditioning load can be reduced. This measure is more suitable for roofs than walls, given the incidence of solar radiation and building aesthetics. In new construction, this is primarily a design measure and the incremental cost is negligible. B. Reflective Film Retrofit Installation of solar gain reducing devices or techniques can significantly reduce the building cooling load by cutting back the solar gain. Solar heat gain through windows can be a major contributing factor to load on air conditioning equipment and results in higher than necessary cooling energy requirements. This is particularly true for buildings with large glass areas facing southeast or southwest: the sun is lower in the sky during the cooling season at these exposures. One way to reduce solar heat gain is to install reflective or tinted plastic on the window surface which reflects or absorbs a large portion of the heat producing sunlight while allowing sufficient light to penetrate for daylighting purposes. The film is typically applied to the inner surface of the window with an adhesive that last 10 to 20 years. C. Temperature Set point Adjust and Lock Box Install Energy can be saved by raising cooling temperatures to more economical levels. Standards for most occupancies are 76 - 80 degrees F for cooling. Many people falsely believe that if the temperature is lowered the system will cool faster. For this reason and for individual's differences in comfort levels controls are often tampered with and as a result do not operate efficiently. Only the building manager should alter the temperature setting. In order to ensure that this is the case, a clear plastic lock box with slots for air to circulate through should be placed over all thermostats.  Annex 10 Page 3 of 5 D. Install Thermostats Thermostats are a vital component of any cooling system. Cooling is used to produce acceptable comfort levels in the work environment. Thus, the thermostat should be in the work area, rather than in the return plenum where air is heated from lighting fixtures. Systems without any thermostat will run at full load continuously regardless of the temperature in the work area. This practice can be extremely wasteful. E. High Efficiency Window Unit High efficiency room air conditioners with an EER of 10.2 are commercially available in the U.S. Typical standard efficiency window units have a maximum EER of at most 8.5. The high efficiency is made possible by increasing condenser and evaporator areas and using a more efficient fan motor and compressor. F. High Efficiency Packaged DX System High efficiency DX Systems are capable of supplying up to 50 tons of air cooling and have an EER of 10.5. Standard efficiency systems have EERs of 8.5. These systems will be commercially available in South America within the next five years. G. High Efficiency Chiller Higher efficiencies in chillers are achieved by varying condenser and evaporator area (larger areas generally produce higher efficiencies). Given the impending phase-out of ozone depleting Refrigerants, chillers using R-22, R- 123, and R-134a are the common alternatives to R- 11 and R- 12 traditionally used in centrifugal chillers. The base case (0.75 kwlton) represents current efficiency for non-ozone depleting Refrigerants. Higher levels of performance (about 0.60 kwlton) are available using traditional CFC's but may not be possible with new Refrigerants. Using the new Refrigerants efficiencies of .65 kwlton can be expected. In general, retrofit requires replacement, and thus' is similar to new construction. However, centrifugal chillers can be retrofitted with oversized condensers or multiple staging controls to increase efficiency. H. Cooling Tower Controls Cooling towers are sold with either centrifugal blowers or with propeller fans. Cooling tower fans are typically cycled on and off in order to control condensor water temperature. However some systems are built with no controls, thus leaving the fans running continuously. Installing controls is relatively cheap and can reduce fan energy substantially. L Fan Motor Replacement with High Efficiency Motor High efficiency motors make use of improved alloys, tighter windings, and higher bearing tolerances to increase motor efficiency. High efficiency motors have countless applications ranging from industrial processes to residential and commercial HVAC systems, and Refrigeration to swimming pool pumps. High efficiency motors are generally components of other systems and, as such, are usually sold to manufacturers of other systems. J. Condenser Pump Motor Replacement with High Efficiency Motor Electricity use by motors accounts for a large percentage of commercial and industrial energy consumption and peak demand. Motors themselves are not an end use, but rather are the means by which other end-use services, such as cooling, ventilation, Refrigeration, and industrial processes, are provided. Like other energy consuming technologies, new motors have been designed which are more efficient than the units comprising the existing motor population.  Annex 10 Page 4 of 5 High-efficiency motors obtain their greater performance by using thinner steel laminations in the stator and rotor core, minimizing the gap between the stator and rotor, and using more copper in the stator windings. These improvements result in lower operation temperatures (less waste heat generated) and, consequently, longer motor life. K. Chiller Water Set point Adjustment In general, the higher the chilled water temperature, the higher the coefficient of performance of the chiller. Thus, there is potential to save energy and money by increasing the chilled water temperature as the cooling decreases t o maintain constant return water temperature. In most chillers, capacity is controlled by sensing the temperature of water leaving the chiller and modulating the Refrigerating capacity of the compressor accordingly. As the load drops, the sensor detects colder supply water temperature and lowers the chiller's capacity to maintain constant supply water temperature. To apply water temperature reset, the supply temperature set point should increase as the load decreases. L. Clean Condenser and Evaporator Coils Dirt accumulation on either the evaporator coil or filter lowers the compressor suction temperature and increases fan energy. Dirt or scale accumulation on an air- or water-cooled condenser elevates the condenser temperature. Lowering suction pressure and increasing condenser temperature increases the energy intake of the compressor. M. Efficient Belt Drives The efficiency of a belt drive system generally ranges from 88-92 percent. Losses in belt drive systems are largely the result of compression of the belt as it runs through the sheave. Belts are now available with notches along its length, thus requiring less energy to compress the belt. I l l HOT WATER A. Low Flow Shower-head Low Flow Shower-heads consist of a threaded nozzle which attaches to the existing plumbing fitting to reduce water flow of the existing showerhead (4-8 gallons per minute) down to 1-2.75 gallon per minute. B. Circulation Pump Thermostat or Time Clock A time clock can be wired to control a domestic hot water loop circulation pump in a hotel to save energy. The time clock saves energy by shutting down the pump during late night and early morning periods when hot water usage is infrequent. The pump will only start when the water temperature at the furthest point in the circulation loop drops. This ensures that the pump is only on when needed. C. Reduce DHW Temp Water set at a temperature higher than necessary wastes energy by increasing heat loss from the storage tank and distribution pipes. The domestic hot water temperature should not be set higher than 120 degrees F, unless some special use requires it to be set higher.  Page 5 of 5 IV. REFRIGERATION A. Refrigeration System Maintenance Refrigeration equipment maintenance includes the fine-tuning of various control points, valves, , EMS, etc. as well as the cleaning of evaporators, condensers, and the like. This will help to enhance or optimize the operation of a Refrigeration system. B. Set point Modifications Refrigeration systems have a known set point dependant upon the type of materials that are being cooled within the system. To optimize the operation of a Refrigerator system with the set point temperature as the parameter, periodic monitorings of an installed thermometer are required. These monitorings will determine if the temperature of the system is below the desired set point temperature. The thermometer should be installed in the warmer part of the system (i.e. near the top). If the system temperature is below the set point temperature, the system temperature should be raised via the thermostat up to the set point temperature.  Annex 11 p- a ANNEX 11 DEMAND ELASTICITIES (excerpts from consultant report) 1. Sector Residencial 1.1 Elasticidad Propia y Cruzada de la Energia ElCctrica La energfa elktrica tiene como sustituto a nivel nacional el gas licuado. La elasticidad con respecto a la tarifa propia y la tarifa del GLP (cruzada) se evaluo a nivel nacional por medio & dos modelos econometricos, cuyos parametros aparecen a continuaci6n. LCEE = - 50 - 0.44LTEE(- 1) + 0.14LniLP + 3.48LPOB - 0.04DUMMY DW = 1.86 ~2 = 0.99 donde: LCEE : Logaritmo &l consumo & energia elktrica LTEE: Logaritmo de la tarifa & energfa eltctrica LniLP : Logaritmo & la tarifa &l gas licuado del petr6leo. LPOB: Logaritmo & la poblaci6n national. DUMMY: Variable Dummy para consi&rar el efecto & 10s racionamientos & energfa & 10s aAos de 1977 y 1981. Como se puede observar la elasticidad precio & corto plazo varia entre - 0.44 y - 0.64, mientras que la elasticidad cruzada con la tarifa &l gas licuado es & 0.14. Adicionalmente, se intent6 obtener la elasticidad del consumo de energfa electrica respecto al ingreso, sin obtener un nivel & signifcaci6n aceptable en las pruebas estadisticas. La raz6n de este resultado es que el incremento del consumo de la electricidad se ha &bid0 al dpido proceso de la electficaci6n (ampliaci6n de la cobertura) del pafs y el ubanismo. De esta forma, la demanda de electricidad tiene factores explicatorios independientes del ingreso, entre 10s cuales resalta la poblaci6n.  Annex 11 Page 2 of 4 Se calcularon las elasticidades propias y cruzadas de la energia elktrica para las cuatro ciudades del estudio, como figura en el cuadro a continuaci6n (el cud incluye tambien las elasticidades utilizadas por ISA): BOGOTA MEDELLIN CALI BIQUILLA TARTFAPROPIA PROYECTO -0.30 -0.14 -0.35 -0.30 Period0 1973-90 1972-90 1973-89 1974-89 ISA -0.21 -0.18 -0.26 -0.17 Periodo 1976-87 1979-87 1979-87 1981-87 SUSTITUTO PROYECTO 0.08 0.06 (GLP) (GLP) ISA 0.10 0.16 0.16 Las cuatro ciudades presentan elasticidades menores que la total para el pais, indicando una mayor respuesta al precio en las ciudades intermedias y pequeilas. La elasticidad mils alta se presenta en Bogotd, Cali y Barranquillal, donde existen sustitutos en diferentes estratos, en tanto que en Medellin la elasticidad es mils baja, por cuanto el sector residencial no tiene sustitutos. Las diferencias con 10s estimativos de ISA se deben fundamentalmente a las diferencias de las series hist6ricas utilizadas. Por ser mucho m h cortas las de ISA (en particular, no incluyen 10s dltimos tre. a o s , 10s cuales han tenido 10s mayores incrementos de precios), es posible que no capten el incremento en el tiempo que ha tenido la elasticidad por efecto de incrementos del precio. No obstante, las elasticidades de ISA fueron usadas en las proyecciones del proyecto para guardar consistencia con el escenario de referencia, el cual componde al usado por ISA para determinar el plan de expansi6n. Los resultados anteriores indican una baja respuesta al incremento de la tarifa del sustituto, por 10s muy bajos niveles en 10s que se ha mantenido el GLP. La respuesta a su propia tarifa es algo mayor, pero aun baja y tender6 a aumentar en la medida que 10s precios aumenten y se le ofrezcan alternativas a 10s consumidores. 1.2 GLP La elasticidad con respecto a la tarifa propia y a la tarifa de la energia elktrica (cruzada) se evaldo por medio de dos modelos, cuyos padmetros aparecen a continuaci6n (para la sene 1972-1990): Los resultados para Barranquilla corresponden a1 sector residencial &l Departamento del Atlantico, ya que esta la fecha no se dispone de toda la i n f d 6 n referente a la ciudad.  Annex 11 Page 3 of 4 LCGLP = 5.86 - 0.2 1LTGLP + 1.79LTEE(-1) Donde: LCGLP: Logarirtmo del consulo de gas licuado &l sector LTGLP: Logaritmo de la tarifa del gas licuado. LTEE: Logaritmo de la tarifa de energia elktrica LCGLP = 5.84 - 0.28LTGLP(-1) + 2.04LTEE(-1) La elasticidad precio de corto plazo del gas licuado oscila entre -0.21 y -0.28 y la elasticidad cruzada tarifa de energia elktrica oscila entre 1.79 y 2.04. Es evidente que la demanda de GLP ha dependido y depended m b del precio de la electricidad que del propio ( d i d o tarnbien para el gas natural). 2. Sector Comercial Elasticidad Propia de la Energia elCctrica La elasticidad tarifa se eval6o con el siguiente modelo: LCEE = - 10.89 - 0. ILTEE + 1-54LVACOM + 0.72MA Donde: LCEE: Logaritmo del consumo de energia elktrica LTEE: Logaritmo de la tarifa de energia elktrica LVACOM: Logaritmo del valor agregado del sector MA: Elemento autoregresivo de la ecuaci6n. La elasticida de -0.1 es muy pequeiia per0 realists, ya que en 10s usos sustituibles (procesos &rmicos) el consumo de electricidad es muy bajo (el proceso de sustituci6n hacia combustibles m b baratos se dio en el pasado ya que la tarifa de electricidad ha estado por encima del costo desde hace muchos aiios). Por esta raz6n. no hay respuesta significativa a1 precio de otros energeticos. El  Annex 11 Page 4 of 4 valor agregado del sector -nivel de actividad econ6mica- se configura como la variable explicativa fundamental del consumo. 3. Sector PGblico Aun cuando, la actividad del sector pablico es mi% de carhter social que lucrativo, el consumo de energfa elktrica presenta alguna sensibilidad respecto a la tarifa, aunque pequefia. El calculo de la elasticidad precio se realiza con el siguiente modelo: Donde: LCEE: Logaritmo del consumo de energia elktrica LTEE: Logaritmo de la tarifa de energia elktrica LVA: Logaritmo del valor agregado de las actividades econ6micas de las instituciones oficiales. De esta forma, la elasticidad precio es del orden de -0.16.  Annex 1 2 Page 1 of 5 ANNEX 12 FINANCIAL VIABILITY OF NATURAL GAS SUBSTITUTION The following tables are used as an approximation to assess the financial viability of gas substitution in the residential sector-for cooking (in all strata) and water heating (only in strata 4, 5 and 6)-, from the user's perspective. The difference in energy expenditure before and after substitution (which is assumed to be constant over the period of analysis, although the economic cost of natural gas is likely to increase faster than that of electricity, because of increasing depletion allowance) is compared with the additional cost of substitution in terns of connection, internal installation and end-use equipment (including taxes). The analysis considers the prices that electricity and natural gas are supposed to reach in 2001: (i) economic cost in the case of natural gas; and, (ii) in the case of electricity, high tariff scenario (economic cost for all strata) or low tariff scenario (strata 1 - 2 and 3 still moderately subsidized). The tables show the payback time and the internal rate of return of customers' additional investment for connection and equipment. In addition, the maximum payback time acceptable was assumed to be 5 years for lower strata households and 8 years for higher strata, in order to calculate what percentage of connection costs should be subsidized to achieve financial viability (last column of tables). In the case of the low tariff scenario for electricity, the tables also show that natural gas should also be subsidized (albeit proportionally less than electricity) in stratum 1 households for substitution financial viability. Tables 1 and 2 show the assumptions used in the financial evaluation concerning connection and equipment costs in Bogot4 and Barranquilla, as well as the terms respectively applied by Gas Natural S.A. and Gases del Caribe for the financing of household connection to the gas distribution network (including the internal installation) Table 1 Connection and equipment costs (1991 US$) - - Connection Water. Total Stratum Bogota. Blquilla Cooker Oven heater 1 77 116 20 97 I 136 2 155 165 20 1751 185 3 180 194 20 2001 214 4 21 1 213 99 89 175 5651 567 5 246 232 99 89 175 6091 595 6 27 1 252 99 89 175 6341615 .......................................................................................... Source: Gas companies; Study's estimates. Note: Includes sales tax Table 2 Financing terms of gas distribution companies for connection costs ................................................................................ Term Downpayment Monthly interest Stratum (Years) % % ........................................................................... 1 513 15/20 2.513.0 2 513 15/20 2.513.0 3 43 20120 2.513.0 4 313 25/30 2.513.0 5 312 30140 2.513.0 6 312 30140 2.513.0 .......................................................................... Source: Gas Natural S.A (number to the left) y Gases del Caribe (number to the right).  :binex 12 Pgge -2 of 5 OQXITA: ESCENARIO DE TARIFAS ALTAS - - ~ ~ - - ~ ~ - - ~ ~ - - ~ ~ ~ ~ ~ ~ ~ . ~ --------- 11 P e r i d & I Subeidios l~ubeidio I Estrato I s u s t i t u c i b 1 EE Fwt. s i n I~actura I con S u s t i t u i b , I ~ e n e f i c i o Bruto T I R , Total I Iconxi6n I 1 UWI I USPI u sGN ' ~ecuperaci6nI EE GI I 91 USSPI 1 USS~I x x ~ i i o ~I x X1I X I - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - . - - - I ; I ! 2561 62 76 118 46.0% 85.6% 2.6 1 0.0% 0.0%; 0O . OX I 290 67 87 138 155 j 135 46.7% 73.2% 3.0 1 0.0% 0.0XI 0.00% 1 1 1 2 3 1 i 323 1 85 93 178 1 145 44.9% 70.6% 3.0 j 0.0% O-OrI 0.00% I 1 1 4 : 221 1 63 62 125 f % 43.4% 23.0% 7.4 I 0.0% 0.0%: 0.00% !1 s6 i1 283 I n 83 155 / 128 45.3% 32.5% 5.4 j 0.0% 0.0%; 0.m 335 1 87 97 1 151 45.1% 37.8% 4.6 0.0% 0.0%; 0 . a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --------- . . . . . . E#ULAIIIO DE TARIFAS WAE - - - - - - - - - - - - - - - - - - --------- ~ ~ ~ I Estrato I Fwt. s i n l~acturacon S u s t i t u i 6 n IBeneficio Bruto TIR Periodo & I Subsidies l~ubsidio I I Sustituci6n EE W1 Total1 ~ect@eraci6nl EE GW I~anxi6n1 I I USS9I USS91 US91 % % US91 "Sf91 ;-------------------------------------------------------------.--------------.-------------------------- Mos I X X I % I ! 1 l 2 i 37 89 651 132 48 53 42.7% 28.8% 32.3% 32.3% 5.0 5.0 j 56.7% 37.3% 51.7% 0.0%; 100.00% i i--------- 86.40% I I - : 3 j 95 161 1 91 36.2% 35.5% 5.0 I a.ix o.oxl 13.52% I 1 4 ; 225 64 63 127 i 97 43.4% 25.7% 7.2 / 0.0% 0.q 0.m j 157 I 1 5 i 288 74 84 130 45.3% 33.4% 5.3 1 0.0% 0.0%: 0.00% 1 1 . . . . . . . . . ., . . . . . . W 6 , U O 88 . . . . . . . . . . . 38 . . . . . .1 . . . . . . --------- . .8% 187 153 45.1% 4.5 0.0% 0.0%1 0.00% I BARIUIIQUILU: E-I0 DE TARIFAS ALTAS ------------------------------------------------.------------- I I Fact. s i n 'Facturn can S u s t i t u c i h I B m f i c i o Bruto T I R P e r i d & I Subeidios Estrato / 9bsidio I I s u s t i t u c i b I EE Total 1 I I GY Recrqcraci 6n1 EE GY ,C0nxi6nI I I US91 / US91 US91 US91 US91 % X ! % % I % II I------------------------------.------------------------------------------------------------*---------.------------------l ! I ! 91 ', 53 13 26 28.0% 32.3% 5.0 1 0.0% 0.OXI 27.86XI 1 2 1 128 1 71 19 38 29.6% 45.4% 5.0 1 0.0% 0.011 24.39%; , 1 1 3 1 215 I 121 32 1531 63 29.1%53.3% 4.0 0.0% 0.0%, 0.00XI 1 4 ' I 220 140 27 167 53 24.0% 21.9% 8.0 / I 0.0% 0 . ~ ~ 1 13.3~~: 1 5 1 258 183 25 209 [ 50 19.3% 14.3% 12.3 0.0% 0.0%; 0.00%! 1 6 1 377, 248 43 291 1 85 22.6% 32.4% I 5.4 0.0% 0.0%I 0.00XI ------------------*-----------------.---*---------.--------------------------------------------------------------------- ESQYARIODE TARIFAS MUS -------------------------------------------------*---------------------------------------------------------------------- 1 Estrato I Fact. s i n I F w t u r a con Suatituci6n I ~ e n e f i c i o Bruto T I R P e r i o d ~ & I Subsidios I Subsidio I I I I Sustituci6n I EE GN Total , I ~ecuperac i6 n( EE GW I Conexi6n I I US91 1 US91 US91 US91 I US91 X X A i b s I X X I X i l.,-*.,-,,--,,-.,-----------.--------------------------------------------------------------------------------------------l ' 1 i 20 10 29' 5 14.1% 32.3% 5.0 / 63.5% 27.7~1 100.00~1 I 1 2 1 20 61 [ 14 18.3% 32.3% 5.0 43.0% 0.0%, 78.22%: 1 3 1 104 1 103 33 136 / 48 26.0% 40.0% 5.0 / 17.1% 0.0%; ll.lOXl 1 4 2261 144 54 24.0% 21.9% 8.0 0.0% 0.0%: 9.46XI I , i 266 I 189 27 26 214 lR I 51 19.3% 15.1% 11.6 1 0.0% 0.0%: O.O0%I 1 6 1 387 1 2551 44 3001 88 22.6X 33.9% 5.2 0.0% 0.0%; 0.00XI ---.------------------------------------------------------------  ~ ~ m m ~ * o p q u d ~ k ~ * - m ~ 1 $ ~ l a ~ ? 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"9 X I s S n 33 / so!p!sqns X X lup!ae~acb-~~au ap -pad oanJa 111 L6Sn w!ma~amsw a eJnaaejI OIDI~UI~ / 13 . 01 L6Sn -aaej Io 33 up!ma!ams U!S /oam~asl; I I ................................................................................................................... s v l s~v 4 1 m 3a 01-3 :IIl13- g 2 0 I. aae; zT SSLl.1-;  Annex 12 Page 4 of 5 BOGOTA: 1) El aborro en la factura del usuario es bastante grande: oscila en= el 43% y el 47%. 2) El nivel de rentabilidad financiera es alto en todos 10s estratos. Con tarifas al costo, la TIRF varia entre 23% y 86% y no se requiere de subsidios para lograr 10s periodos de recuperaci6n de la inversi6n seiialados. De hecho, 10s periodos de recuperaci6n son bajos: entre 2.6 y 7.4 aiios. 3) Con tarifas de la electricidad subsidiadas (escenario de tarifas bajas), en 10s estratos 1-2- 3 el proyecto sigue siendo rentable, aunque la TIRF decrece a menos de la mitad. Adicionalmente, se requieren subsidios en estos estratos para lograr un periodo de recuperaci6n de la inversi6n de 5 aiios. Especialmente crftica es la situaci6n del estrato 1 (por ausencia de calentamiento de agua), el cud requiere, adicionalmente a un subsidio del 100% de la conexi6n, de un subsidio al GN del orden del50%. BARRANQUILLA: 1) El ahorro en la factura del usuario oscila entre 19% y 30%. Aunque en tt5rminos absolutos el ahorro es mayor en 10s estratos altos, en tt5rminos relativos se benefician m h 10s estratos bajos. 2) El nivel de rentabilidad financiera es atractivo en todos 10s estratos, aunque bastante menor que el de Bogotll. Con W a s al costo, la TIRF varia entre 14% y 53% y se requiere de subsidios para lograr que el perfodo de recuperaci6n de la inversi6n sea de 5 aiios en 10s estratos 1 (28%) y 2 (24%) y de 8 aiios en el 4 (13%). Estos subsidios a la conexi6n pueden considerarse moderados. 3) Con tarifas elktricas subsidiadas en 10s estratos 1-2-3 (escenario de tarifas bajas), el proyecto sigue siendo rentable, aunque la TIRF decrece. Adicionalmente, se incrementan 10s subsidios a la conexi6n para lograr un perfodo de recuperaci6n de la inversi6n de 5 aiios: estrato 1 (100%), estrato 2 (78%) y estrato 3 (11%). Especialmente critica es la situaci6n del estrato 1, el cud requiere, adicionalmente, de subsidio al GN del orden del 28%. MEDELLIN: 1) El ahorro en la factura del usuario oscila entre 29% y 37%. Aunque en drminos absolutos el ahorro es mayor en 10s estratos altos, en tCrminos relativos es bastante homogCneo. 2) El nivel de rentabilidad financiera es atractivo en todos 10s estratos y tambiCn bastante menor que el de BogotL Con W a s a1 costo, la TIRF varia entre 18% y 88% y se requiere de subsidios a la conexi6n para lograr que el periodo de recuperaci6n de la inversi6n sea de 5 aiios en 10s estratos 2 (18%) y 3 (26%) y de 8 aiios en el 4 (87%). Los subsidios de 10s estratos 2 y 3 pueden considerarse moderados; sin embargo, el de14 es grande y se debe al costo del calentador de agua, acoplado a un bajo potential de sustituci6n en este uso (el consumo especifico es muy bajo). En vista de este resultado, podria optarse por eliminar 10s incentivos a la sustituci6n del calentador de agua en este estrato y supeditar la implementaci6n a una eventual disminuci6n del costo de 10s aparatos.  Annex 12 Page 5 of 5 3) Con tarifas subsidiadas en 10s estratos 1-2-3 (escenario de tarifas bajas), el proyecto sigue siendo rentable, aunque la TIRF decrece. Adicionalmente, se incrementan 10s subsidios a la conexi611para lograr un periodo de recuperaci6n de la inversi6n de 5 aiios: estrato 1 (100%). estrato 2 (71%) y estrato 3 (43%). En esta ciudad, a diferencia de las otras, el estrato 1 no requiere de subsidio al GN. CALI: 1) El ahorro en la factura del usuario oscila entre 12% y 20%. 2) El nivel de rentabilidad financiera es atractivo en 10s estratos 1-2-3-4. Con tarifas de la electricidad a1 costo, en estos estratos la TIRF varia entre 20% y 32% y en todos se requiere de subsidios a la conexitin para lograr que el periodo de recuperaci6n de la inversi6n sea de 5 afios en 10s estratos 1 (33%). 2 (55%) y 3 (68%) y de 8 afios en el 4 (97%). Estos subsidios pueden considerarse altos, por la combinaci6n de transporte costoso y ausencia de agua caliente. En 10s estratos 5 y 6 el proyecto no parece atractivo, tanto desde el punto de vista de la TIRF como del periodo de recuperaci6n de la inversi6n. Dado que no se consideran subsidios en estos estratos, su implementaci6n estaria supeditada a una disminuci6n de 10s costos del equipo, principalmente de 10s calentadores de agua (en Cali, estos estratos demandan agua caliente con un consumo especifico muy bajo). 3) Con tarifas de la electricidad subsidiadas en 10s estratos 1-2-3 (escenario de tarifas bajas), se incrementan apreciablemente 10s subsidios a la conexi611para lograr un periodo de recuperaci6n de la inversi6n de 5 a o s : estrato 1 (100%). estrato 2 (100%) y estrato 3 (93%). Especialmente critica es la situaci6n de 10s estratos 1 y 2, 10s cuales requieren, adicionalmente, de subsidio al GN del orden de 12% a 38%.  ANNEX 13 ORGANIZATIONAL DIAGRAMS FOR THE STANDARDIZATION AND CERTIFICATION OF GASILPG AND ELECTRICITY EQUIPMENT 7 ore .L SISTEMA PROPUESTO PARA LA NORMALJZACION DEL SECl'OR GAS AUTORIIAI PROGRAHA GENERAL 1 EH O RHALIACO I H PARA COLO ABI I EXP D I E NORHAS TECHC I A S OFICIILES bISCUSIOH P UaLICA IE ACOGAS VA LD I ACIOH 1EL PROGRAAA LO5 AIITEPROYECTOS PROPUESTO PO! ACOGAS IE bE HCRllAS ACM RD O AL PROGRAIIA (PROPUESJRS PDR ACOGAS] I I 6EW i R ALE STAILECD I O ( 6 R UPOS IE TRAJ A O J PROGRAIIA DE IlORIlALIZACIOH PARA EL SECTOR GAS A 1 AHTEPROYECTO 1E HORRAS PARA EL SECTOR 6AS 1. Autoridad Hdrional a 1a curl rorrrspondr rrgolar la tatrria, lrpemltoria lel limisterio l r btsarrollo. A p a r e ~ t r ~ rl~ att Saprrintrndrnria dr Iadastria 7 Corrrcio, a cargo actaal l r l a actividal, stria rrtrplaaida por el Institoto l r Ilor~aliracibn7 Ietrologia. 2. ICOIlTEC. Entilad Hacional de Horralizaci6n rtronocida coro ta1 por el btalo. 3. ACOGAS. Orqano 10 6ubrr1a1ental a car90 dr 11 Rormaliracibn del Sector 64s. 1. Dependencia d e l H i n i s t e r i o de D e s a r r o l l o por d e f i n i r . ( c o r r e s p o n d e r i a a1 I n s t i t u t o Colorbiano de Norralizacidn y Hetrologia]. 2. En principio, l a c e r t i f i c a c i b n de I a b o r a t o r i o s , el e t i q u e t a j e de produrtos y l a inspeccidn a l a i n d u s t r i a e s t a r i a a cargo d e l ICONTEC, por l a e x p e r i e n c i a y recursos d e que ya dispone para e s t e f i n . Las Q l t i r a s dos a c t i v i d a d e s podrian s e r d e s a r r o l l a d a s en el f u t u r o d i r e c t a c e n t e por ACOGAS o por o t r a entidad r u t o r i s a d a . 3. El esquera planteado e s independiente d e l S e l I o d e Conformidad con Norra 4ue, a travPs de o t r o s r e c a n i s r o s y can base en d i f e r e n t e s c r i t e r i o s , expide e l ICONTEC a 10s produ:tos ranufacturados por empresas que s a t i s f a c e n c i e r t o s modelos de organizacibn i n d u s t r ~ a l . . .. nib "¶  Annex 14 Page 1 of 17 ANNEX 14 ECONOMIC EVALUATION OF ELECTRICITY CONSERVATION PROGRAMS Tables and Figures in this Annex include a summary of the results of the costhenefit analysis of electricity conservation potential programs (Table 1 and the following 4 figures), as well as a sample of intermediate calculations that were performed during the Study for all cities, sectors and main end-uses, including in particular costs, penetration rates and potential savings (in capacity and energy) of the different programs (or measures constituting these programs) The threshold for selecting energy efficiency measures for the economic analysis was a financial payback time of less than 3 years from the user's perspective. Calculation samples include: (i) technical potential and financial viability of improved lighting in new buildings of the services sector in Bogota (Table 2). as well as in existing buildings (Table 3); (ii) viable potential of capacity and energy savings from improved lighting in the services sector in Bogota (Table 4); (iii) costhenefit analysis of improved lighting in the services sector in Bogota (Table 5); (iv)' viable savings and cost-benefit analysis of improving domestic refrigerators in Bogota (Table 6); (v) cost-benefit analysis of public education campaigns in Cali (Table 7). The impact of electricity conservation programs on electricity demand was estimated after accounting fvst for the effect of price reforms as well as for the effect of natural gadLPG substitution for electricity (with economic pricing in both cases). The following'programswere considered: * Lighting in all cities (services and public sectors) * Cooking in all cities (residential sector) * Air conditioning in Medellfn and Cali (servicedpublic sectors) and Barranquilla (all sectors) * Refrigeration in all cities (services and public sectors) * Water heating in Bogota and Medellin (all sectors) The costlbenefit analysis was performed under the following assumptions: - LRAIC of electric energy and capacity for each city and sector - Shadow rate of labor: 0.83 - Import duty: 15% (for financial viability analysis from user perspective) - Sales tax: 12% (for financial viability analysis) - Free market exchange rate: US$ 1 = Co1$630 (12131/93) - Program administrative costs: 30% of program costs during the first 5 years, 0 thereafter - Period of analysis: 15 years - Real discount rate: 12% - All costs in constant 1991 US$  Table 1: ECONOMIC INDICATORS OF ELECTRlCrPl CONSERVATION PROGRAM LIGHTING AIR CONDITIONING REFRIGERATION WATER HEATING ;COOKING B/C Saved kwh B/C Saved kwh B/C Saved kwh B/C Saved kwh B/C Saved kwh CITY/Sector ratio (UScents) ratio (UScents) ratio (UScents) ratio (UScents) ratio (Uscents1 EK)(;CTTA Commercial 1.1 4.3 41.5 0.1 17.2 0.4 Public 0.9 5.3 36.3 0.2 18.7 0.3 Residential (equipment) 4.7 3.2 1.7 2.3 1.9 2.6 Residential (practices) 41.9 0.3 5.2 1.4 M E D U Commercial 1.1 4.3 1.6 2.8 35.7 0.1 16.8 0.3 Public 1.3 3.7 1.2 3.4 18.2 0.3 Residential (equipment) 3.4 2.9 1.7 2.2 2.4 2.6 Residential (practices) 19.7 0.4 8.0 1.7 BARRANQUIU Commercial 1.1 4.3 2.2 2.1 48.1 0.2 Public 1.O 5.3 1.4 1.6 Residential (equipment) 1.4 2.3 2.8 2.6 1.8 4.6 Residential (practices) 4.6 0.8 12.5 0.6 1.9 4.5 CALI Commercial 1.1 4.4 2.0 2.3 48.8 0.2 Public 1.O 4.9 2.1 2.1 Residential (equipment) 4.6 2.2 2.7 3.7 Residential (practices) 13.5 0.5 1.9 1.1 Note: Water heating and refrigeration programs In the services/public sector have a very small overall potential impact and therefore they are not included In the following Figures of this Annex  Annex 1 4 Page 3 o f . 17 IMPACTS OF CONSERVATION PROGRAMS STRUCTURE OF ENERGY SAVINGS BY SECTOR HIGH TARm: IDWTARIFF SCENARIO SCENARIO YEAR 2005 COMMERCIAL PUBLIC STRUCTURE OF ENERGY SAVINGS BY CITY HIGH TARIFF mw TARIFF SCENARIO SCENARIO  Annex 14 Page 4 of 1 7 STRUCTURE OF ENERGY SAVINGS B Y PROGRAM HIGH TARIFF LOWTARZFF SCENARIO SCENARIO  STRUCTURE OF ENERGY SAVINGS (2005) COMMERCIAL AND PUBLIC SECTORS COMMERCIAL SECIOR YEAR 2005 SAVINGS IN THE RESIDENTIAL SECTOR BY END-USE 2005 HIGH TARIFF IDWTARIFF REFRIG. COOKING rn IWTWA'IFR rn COOLING  Annex 1 4 Page 5 of 1 7  COST OF SAVED ENERGY vs TOTAL SAVINGS CITY: MEDELLIN BRESIDENTIALMOTWATER SAVED GWH IN THE YEAR 2005  COST OF SAVED ENERGY vs TOTAL SAVING CITK BARRANQUILLA 1 -- w ru m m -4 z- 3 0 I I I I I I I I o m w x 3 0 10 20 30 40 50 60 70 r r -4 4- SAVED GWH IN M E YEAR 2005  Annex 1 4 Page 8 of 1 7  U)'O :(s01w) WSJCWJI 8) ep ouloleu ~ $1 el01pnuv OJW Z S L L :(sn wo$ :(sn $1 elqo ep m w A 'd1nb3 ~ n OJW w w0f :(sn $1 epuetod ep 01~03 IW enuv OJJWV 00'0 :(MY) e13ue1od ep OJW ZS'LIZS :(sfl $1 @leu3w 01603 PP PW 0JloW er :(wq) wPleue ep p n u f ~ ollw OltlVflStlOtl313NVNU SISllVNV Y i Y a l I Yo06 O m OM) 1 'i"L YdX)L Oml *mL YoOL O M I %S0 PSSE PSSE I P SSE OW'SE:.m I OPS'SE ( r 9.0s) OPS'SEI (~l'otl I 91'~s :(sn $1 lei0101603 :.(~wsn $1 w l q o ep ~w OlsO3 :.(JH) uo(%lelsulodUJell 6I'Ef SE'Lf (bs'af) (t~'os1 I $ ~ L . P :.odlnba 01co3 L'S1 6'9 1 0'9E S'LE B'PE :.sueM oreldwetl quo:, 6u1urup1q611Aep:lolluo3 1q6!1Aepdels-z u61sepn 3 y!m elrqxlj SEOI xs wlm 1031~0 I 4 3 ~ ld6 e l ~ a o ~U .1381301 : . o z P ~ ~ w 0p ~ O~~~~JWXI OW'SE OP9'SC 0~9'5E OW'S1 I OPS'SE : . m wot 00'0$ 00'0s wa 00'0s :(sn $1 m o l 0 1 ~ 0 3 :.(rwsn $1 elqo e~ 0-w 01~03 :.(JH) u q ~ w ~ e lep ~ s uodweu :.(sn $1 Wnb3 0 1 s ~ 6.61 6'66 :.SUBM eSBQ OSB3 660( %LZ W!M lSel(86 I - pols lo were rooy zu, I esn lue3sepuewl E \ue3spue3ul E ' JonU ,8 P .t 1SellBq ~ I ~ U ~ B' MUIJ 9 2 DETALLE DE LAS TECNOLOGIAS Y PROGRAMAS Us0 Flr)al I ': 1 Uso Flnal: Alumbrado Cludad: Bogoh Sector: Comerclal Conslrucclon: Nuevo Medlda I : ] 1 6 I I Deacrlpclon': T8IElect. Ballast Pack Tlpo(r) do Uro Flnal': 4' nuor. Retroflt(lyROB(2~uevo(3~: 3 - Unldader d d Anallslr*: m2 noor area of stoc Vlda de la Unldad Horm=l Anlorm2 *: 1 Consumo Energla en el Uso Final Anual (QWh): 53 Ahorro Anual Energla (QWh): 2 Consumo Potencla Pko en el Uso Flnal (MW): 6 Ahorro Demandn Pko (MW): 0 Ahorro Costo Anual del U?ruarlo($ US): $24,342,111 En. magnetlc ballast a'.&8' nuor. 3 1 - m2 noor area of stoc 6 1 Umlt Incandescent use Incandescent 3 stock m2 noor area of stack 1 53 13 - $158,619,026 I Costo Anuallzado del Equlpo a Nhrel del Sl?rtema($ US): $46,580 $177.436 Costo Anuallzado Mano de Obra para el Systema ($ US): $0 $0 Corto d r l Equlpo Anuallzado Acumulado ($ US): $46,590 $300,902 Corto Mano d r Obra Anuallzado Aoumulado ($ US): $0 $0 Ahorro Enrrgla Acumulado en d Uro Flnal (YO): 3.83% 43.92% Ahorro Potrncla Acumulado en d Uro Flnal (%): 3.25% 27.99% Ahorro Anual Enwgla Acumulado (GWh): 2 23 Ahorro Anual ~otencla Acumulado (MW): 0.2 1.7 NOTAS -> Date: 1t20192 8:35 AM Page: 2 of 2 DETAUE DE LAS TECNOLOGIAS Y PROGRAMAS Annex 14 Table 3 nage 11 o f 1 7 Uso Final # ': 1 Uso Final: Alumbrado Ciudad: Bogota Seaor: Comeraal Construction: Exktinq MdUw:1 2 3 [krcrlpdon': Compact Fburesoent O M Photocell Ctd EE Magnetic Ballast Tlpo(a) da U.o Flrul*: Incandescent 4and 8' Fluor 4' and 8' Fluor. Retrotll(l~ROB(2~u.~o(3fi 1 1 1 UnUdoa d .l Anallala*: Fixture C onW Fixture Vldr de la Unldad(Honrrl,Anloa&)*: 1 1 1 Dewrlpclon Cuo BW*: 75 Watt lncandebcenl 10,- 2F40T12 wlo Ctd 2 F40 TI2 wl Std Ball. car0 Base watts': 75 940 94 Costo Equip ($ US)': $1.00 $0.00 $2.00 Tempo de Instaladon (Hr)': 0.25 Costo Mano de Obra ($ USMr)': $1.53 $0.00 $1.W Costo Total (S US): $1.38 $0.00 $3.00 Vtda*: 1,000 lMOO 40000 Dascrlpclon de Rmplazo*: 18 Wan Compact Fluoc 1CL2FdOT12w/ Cbl 2 FaO TI2 w/ EEMag ~ernphzo Wans': 18 720 86 Costo Equipo': $17.00 $75.00 $5.00 Tmpo Instabdon (Hr)': 0.25 10.00 0.33 Costo Mano de Obra ($ USMr)': $1.53 $1.53 $1.53 Cost0 Total ($ US): $17.38 $76.53 86.53 v i : 10,000 lam 40000 Horas Anual de la Operaeion Equip*: 4000 4000 4000 F a w de Coinadencia a m el Pico del Sistema': QV% 0% 90% % Aplicable Usa Fu~al': 10% 75% 75% , Potendal de Saluracion Maxima (%)': 75% 25% 75% % No alto Efidente': 95% 1bCPX 1000/0 Ahorro Energla X: 76% 23% 9% Ahono Potencla X: 68% 0% 8% Coau Equlpo ($ US): $17.00 $75.00 $5.00 o 0bra ($ US): Coato ~ a n de $0.38 $15.30 $0.50 Corm de ModIda (S US): $17.38 $90.30 $5.50 ANAUSIS FINANCIER0 USUARIO Ahcrro anual de eneqia (kWh): 228 88D 32 Ahom Anual del Costo de Energia ($ US): 527.36 $105.60 $3.84 Ahono de Potencia (kW: 0.05 0.00 0.01 Ahorro Anual del Costo de Potencia ($ US): $0.00 .$0.00 $0.00 Ahorro Anual Equip. y Mano de Obn ($ US): $5.53 . $0.00 $0.00 Ahorro Anual Total (S US): $32.89 $105.60 $3.84 Retorno de la Inversion (Anii): 0.53 0.86 1.43 POTENCIALA NIVEL DEL SlSTEMA Consumo Energia en el Uso Final Anual (GWh): 89 89 89 Ahom, Anual Energia (GWh): 5 4 4 Consumo Potenda P b en el Uso (MW): 11 11 11 Ahom, Demanda P i (MW): 0.54 0.00 0.47 Ahorto Cost0 Anual d d Usuario (S US): 5578,322 . $466.670 $511.277 Cosm Anualizado del Equipo a Nivel del Siteina ($ US): $143,735 $133.145 $66,572 Costo A n d i d o Mano de Obra para el Systeme ($ US): 53.234 527.162 86,722 Coato del Equlpo Anualtudo Acumulado (S US): $143,735 5276.880 8303.452 Coato Mrno de Obra Anualtudo Acumulado (S US): $3.234 530.396 $37.1 18 Ahorro Energla Acumulado en el U o Flnal (X): 5.4246 9.57% 13.89% Ahorro Potencla Acumulado en el Uao flnal (%): 4.87% 4.87% 8.97% Ahono Anual Energla AewnUdo (GWh): 5 9 12 Ahorro Anual Potencia Acumulmdo (MW): 0.5 0.5 . 1O NOTAS -w Dale: 119192 Page: 1 of3 DETALLE DE LAS TECNOLOGIAS Y PROGRAMAS Annex I$ ?age 1 2 of 1 7 Uso Rnal X *: 1 Us0 Final: Alumbrado Ciudad: Bogota Sedor: Comerclal Construction: Existinq W l d a w: 4 DoacrIpdo~P: T&Elec.Ballast Padc. Tlpo(8) & U.o Flru19: 4' Fluor. 5 ' Debmp Common Are Merc. Vap to Met Hal 4' and 8' Fluor. Mercury vapor Retroflt(l)lROB(2~wvo(3~: 1 1 1 Unldrd.. d d An81i.k9: Fixlure Fixlure Fixture Vlda de I8 Unld8d(Honr=l,Anlor=2)*:1 1 1 DorcrlpcbonC a m Ban9: 4 F OO TI2 wl Std Ball. 4FOOT12wl2StdB. 400 Wan Merc. Vapo~ Caso Base Wans*: 188 188 450 Cosm Equip ($ US)': T m p de Imtahcion (Hr)': Cost0 Mano de O b a ($ USMr)': Cosm TO~JI ($ US): $0.00 $0.00 $0.00 V i * : 40000 40000 24000 Dorcrlpclon & Rempktog: 4 F32 T8 w l Elec Ball 2F OO T I 2 w l Std Ball 250 Wan Metal Halide Remphto Watts': 114 94 295 Cost0 Equip*: $52.00 $0.00 $111.00 Tempo I n r t a k b n (Hr)': 0.33 0.33 2.00 Costo Mano de O b a ($ USMr)': $1.53 $1.53 $1.53 Costo Total ($ US): $53.53 $1.53 $112.53 V i * : 40000 40000 20000 Horas Anual de la Opeacion Equip': 4000 Factor de Coinadenda can el P i del Sitefna': 90% 90 A p l i Uso Final*: 65% ' Potendal de Sahrraaon Maxima (%)': 25% % No alto Ehdente': 100% Ahono Energia %: 39% Ahono Potenck X: 35% Costa Equlpo (S US): $52.00 Corto Mino do O b n (S US): $0.51 CoSU do M.dld8 (S US): $52.51 ANALISIS FINANCIER0USUARIC A h m anual de energia (kwh) Ahorro Anual del Costo de Energia ($ US) Ahono de Potencia (kW): 0.07 Ahorro Anual del Cosb de Potencia ($ US): $0.00 Ahom Anual Equip. y Mano de Obra ($ US) A h m Anual Total ($ US) Retorno de la Inversion (Anios) POTENCIAL A NlVEL DEL SISTEMP Consurno Energia en el Uso final Anual (GWh) Ahom, Anual Energia (Gwh) Consumo Potencia P i en el Uso Final (MW) A h m Demanda P i (MW) Ahono Costo Anual dd Usuario ($ US) Costo Anualizado del Equip a Nwel dd Sitema ($ US) Costo Anualizado Mano de Obra para el Systema (S US) Costo del Equlpo Anualludo Acumulado (S US) Corto Mano de Obra Anualludo Acumukdo (S US) Ahorro Energla Acumulado en el U l o Final (K) Ahorro Potand. Acumulado en el U l o Final (K) Ahono Anud Energh Acvmukdo (GWh), Ahorro Anu8l Potencla Acumulado ( M y NOTAS -, I Date: 119192 Page: 2 of DETAUE LIE LAS TECNOLOalAS Y PROGRAMAS Annex 1L Page 1 3 of 1 7 Uso Final # ': 1 Uso Final: Alumbrado Ciudad: Bogota Sedor: Comercial Construction: Existinq Mod* #:I7 Tlpo(s) do U.o Flrul': Mercury Vapor Rotrotlt(lyRO8(2~~0(3 1~: 4 F Dercrlpclon': Merc. Vap to HP Sod Flwrescent to HPS 'and 8' Fluor 1 Unld.drr d d AmlW..: Fixture Fixture Vlda do k ~ n l d a d ( ~ o n a = l ~ n l o a t 21 ).:( Dorcrlpdon Cuo Baug:140OWan Merc. Vapa Caso Base Warns*: 4 S Costo Equip ($ US)': Tmmpo de Instahdon (Hr)': Costo Man,de Obra ($ USMr)': Corm Total (S US): $0.00 $0.00 v i - : 2400 40000 Ooscrlpclon do Rompluo': XK) Wan HP Sodium 150 Watt HP Sodium Remphto Watts': 235 175 Cost0 Equip': $85.00 $72.00 T m p o Instalacion (Hr)': 2.00 3.00 Costo Mano de Obra ($ USMr)': $1.53 $1.53 Costo Total (S US): $86.53 $73.53 V i : 20000 24000 I Horas Anual de h Operadon Equipo*: 4000 Factor de Coinadencia an el P i del Sitema': 95% X A p l i Uso Final': 1% Potendal de Saluradon Maxima (%)': 60% Yo No alto Efidente*: lCC% Ahono Enorgla X: 48% 38% Ahono Potonck K: 45% 3696 Costa Equlpo ($ US): 585.00 $72.00 Coat0 Mano do Obm (S US): $3.06 54.58 Corto do Modlda (S US): $68.06 576.50 AMUSIS FINANCIER0 USUARIO A h m anwl de energia (kwh): 860 428 Ahorro Anual d d Cost0 de Energia ($ US): $103.20 551.36 Ahorro de Potencia (kw): 0.20 0.10 Ahorro Anwl del Cosm de Potencia (S US): 50.00 $0.00 Ahorro Anual Equip. y Mano de Oka ($ US): $0.00 $0.00 Ahorro Anual Total (S US): $103.20 S1.36 Retorno de la Inversion (Mi): 0.85 1.48 POTENCIALA NIVEL DEL SISTEMA Consumo Energia en d Uso fir& Anual (GWh): 89 89 Ahom, Anwl Energla (GWh): 3 3 Consumo Potenda P i en el Uso Final (MW): 11 11 A h m Demanda P i (MW): 0.30 0.30 Attono Costo Anual del Usuario (S US): $306.160 3303,926 Costo Anualizado d d Equipo a Nwd del Sistema (S US): t50.433 $71.011 Costo Anuatizado Mano de Oba para el S-tema ($ US): $1.816 54.527 o Equlpo Anualludo Acumukdo (s US): $537.799 ~ o s t dd $608,810 Costo Mano de Obm Anualbdo Acumulado ($ US): $41.923 t46.a Ahorro E n e g k Acumukdo on 01 U l o Firul (K): 28.00% 30.05% Ahorro Poten& AWmUl8dO on 01 U l o Final (%): 22.64% 24.74% Ahono Anual Enorgia Acumukdo (GWh): 25 27 Ahorro Anual Potencla Acumulado (MW): 2 5 . 2.7 I I Dam: 119192 Page: 3 of 3  Table 4 POTENClAL VIABLE DE AHORRO DE ENERGIA Y D M A N D A GWh Conrumo cncr sin conrv 89 91 93 96 99 103 107 111 llS 119 123 128 133 137 142 147 152 A h o m cncr nux (conr~r.cxis~.) 27 27 27 . 27 27 27 27 27 27 27 27 27 27 27 27 27 27 Ahorro encr nux (nucvr conatr.) 0 2 3 5 7 8 10 12 13 I5 16 18 20 21 23 25 26 A h o m cnergir T O T A L 27 29 30 32 34 35 37 39 40 42 43 45 47 48 50 52 53 A h o m cncrgir T O T A L % 30% 31% 33% 33% 34% 34% 34% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% Consumo cnrrgir con conrv mrx 62 62 63 64 65 68 70 73 75 77 80 83 86 89 92 95 99 MW Consumo pol sin consv II II II 12 12 13 13 13 I4 14 15 16 16 17 17 18 18 A h o m pot mrx (conar. exid.) 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 Ahorro pol n ~ r x (nucvr cot~slr.) 0.0 0.1 0.2 0.4 0.5 0.6 0.7 0.9 I.O I.I I.2 1.3 1.5 1.6 1.7 1.8 1.9 Ahorro potencia TOTAL 2.7 2.8 2.9 3.1 3.2 3.3 3.4 3.6 3.7 3.8 3.9 4.0 4.2 4.3 4.4 4.5 4.6 Ahorro potcncir TOTAL % 25% 26% 27% 26% 27% 25% 26% 27% 26%. 27% 26% 25% 26% 25% 26% 26% 25% Demada con consv mar 8 8 8 9 9 10 10 9 10 10 II I2 12 13 13 13 14 Ahorm virhle dc encrgir (GWh) 2.864 3.745 4.851 6.222 7.893 9.893 12.236 14.921 17.925 21.203 24.690 28.311 31.984 35.635 39.199 42629 A h o m viable dc polencis (MW 0.28 0.36 0.47 0.59 0.74 0.92 1.13 1.36 1.63 1.91. 2.21 2.52 2.83 3.14 3.43 3.71 Cons~~moJeencrgirconconservrcio~~(GWh) 88.14 89.26 91.15 92.78 95.11 97.11 9876 I0008 101.07 101.80 103.31 104.69 105.02 106.37 107.91 109.77 Ahorro viable de encrgir en % 3.1% 4.0% I 6.3% 7.710 9.21 11.0% I 3 0%. 15.1% 17.2% 19.3% 21.3% 23.31 25.1% 26.6%. 28.0% DcmrnJa con conservrcion (MW) 1072 1064 11.53 11.41 12.26 12.08 11.87 I . 12.37 13.09 '13.79 13.48 14.17 13.86 14.24 14.66 Ahorn, viahlc de polencia en % 2.6% 3.3% 3.9% 4.9% 5.75, 77% 8.7% 97%. 11.6% 12.7% 13.8% 15.71 16.6% 18.4% 19.41 20.2% :d . P, m ID  Annex 1 L Page 15 of 1 7 Table 5 C06t0 Marginal de Energia en US$/kWh C06t0 Marginal de Potencia (G,T,D) en US$/kW Cash de eqaipo anualizado f 1,645,3?3 Z.4 Cost@ e:ontnica de e q u i p (sin irpuestos/;raaceles) $1123!,094 2.6 A h ~ r r ot 2 eneigia cax te:ni:o en SYH ec 2005 50 C3stc ~:3ii6:i~0 de equipa ( s i n icpue;:osJ;raccela;) par 6Kh ;5arraic €22,622 Cast0 ;nai!iiado de ran0 e t cb:; E45,450 Coste e:an6cic~ d~ 5;na d~ ehia $;9,554 Casio esonS;ica de mano de ohra pzr 6Wh ahsrrado $771 c-.L- Y:Lw E C G : ~ ; ~ C G t o t a l ds !a inv~i;ion pa; 6YH aharrada €25,39; Casio dz adcini;tra:iia del proijiaaa en I de1 Casto e:onbai:o de equip0 basada en el potencia1 t~:ni:o #a; P:i~nr 5 a505 de! projrara 302 Setjundo peiiodo 02 dn'0 Aharro dhorro Fcneficio Cosko de Costo de Casto Beneficio Relacibn Energia Potencia Total inversibn Admin. Total Netc F ~ n e f i c i o (000's) (OGO's) (000's) (003's) (000'5) Co;:o 6Wh Eli US6 US€ USE USE US€ V? E;,598 Valcr Kwh Ahcrraio 4.34 rus!/#wh  Case: Domestic Refrigenton (Insulation and Comprcuor Upgnde) Annex 1 4 City (Cities): Bogom Page 1 6 of 1 7 Toul Total Total Yearly Number Market Yearly Peak Table 6 Annual of Penetration Enerp~ Demand Enerpy Fridges of Savings Savings Consumption Technology (GW.h) (Mw) Year (GWh) Total Tow1 Labour lncremenwl Cummulative Yearly Cummulative New New Growth Cost Cost Incremenu1 Energy Energy Replacements Cost Savings Savings Year (Us S) (Us 5) (Us S) (Us (Us S) NPV Benefit Cost Ratio Simple Payback Penemtion ~ a w : 100% aF)r~ t5 years) I Coincidence Factor: 1 Residential Power Tariff: S0.03 per kW.h Incrcmenul Cost Per U N ~ : 341.00 Energy Savings due to measure 300 kW.h per year Annual Energy Consurnprion per unit B~sciine 12OO kW.h  Annex 14 Page 1 7 o f 1 7 PROGRAMAS DE MODIFICACION DE LOS HABITOS DE CONSUMO DE LOS USUARIOS (resultados agregados) CIUDAD CALI REFR! PRACI COCCIhl .............................................................................................. Charro dnoira bpnefizi; i;;:~ E g e f i r i ; : hf io; : ;:;a fpn~ficia Lost; E~crfici;: Fzcr:i; 0-L I 0 - : - UL~?:IL+D Wet6 I E n ~ i q i ; Fc:cncia Hsto : 0;- L3.. 8 ALU ," :swhji! It$$ ES$ : (znh/;! :CCQ CS$ l$$O I$$ i!j#) 1000 US$ 1990 L!z$ J$CC bS$ : ......................................... . !. ? - G.CC C.39 0 n c: O.CO' c.00 o c -10: :5q g.3~ 4.90 o c a: c.oz c.~o o c , - ! . , I !393 15.37 4.06 135 150 :t95 : 7.~1 :.ye so7 150 !57 : 1394 15.91 a.2~ 1311 150 1 1 : e. 2: 2.09 t39 0 : 1995 1T.5C 2.42 1356 153 12Cb : 5.48 Z.15 t59 1 cn A .' \a 509 : 5''A: ' 1 i2.27 4.62 1116 150 126t : E.79 2.23 683 150 :-7 ce.' ; 1997 19.32 4.88 1497 150 1347 : 9.20 2.3 714 I50 564 : 1998 23.33 5.14 1576 75 1531: 5.53 1.43 745 75 670 : 1999 21.39 5.40 1654 75 1579 : 9.96 i.53 774 75 tir9 : 2000 22.19 5.61 1720 75 1545 : 10.30 2.51 eoo 75 725 : 2 ~ 1 13.08 5.84 1789 : 7 :: I:: 1C.67 2.71 ez9 75 is! : 2002 23.99 6.05 1855 75 1730 : 11.0i 2.31 860 75 785 : 2C03 24.eC b.27 1922 50 1Ei2 : 11.57 2.94 e99 59 840 : 2004 25.G 6.46 1386 50 193 : 12.07 3.06 938 50 EZ8 : 2CC5 2 - 4 9 t.7C 2053 55 1065: i2.60 3.20 979 50 429 : 2006 27.?0 k.90 2llt 50 2066 : 13.09 3.32 1017 50 Pi? : 2007 28.12 ?,;I 2180 50 Z13C : 13.60 3.45 1C57 50 lC07 : -------------------------------------------------------------------------------------- __-_-_-_-_------------------------------------------ I I I TOTAL CALI Ahorro Ahorro Beneficio Costo Beneficio: I I Energia Potencia Neto I I I I Pic0 I . I I (Gwh/a) (MW) 1000 US$ 1000 US$ 1000 US$. I I------------------------------------------------->-i I : 1991 0.00 0.00 0 0 0 I : 1992 0.00 0.00 0 0 0 1 1 1993 23.88 6.05 1852 300 1552 1 : 1994 25-14 6.37 1950 300 1650 : ' : 1995 25.98 6.58 2015 300 1715 1 1 1996 27.05 6.85 2098 300 1798 1 1 1997 28.52 7.22 2212 300 1912 ! : 1998 29.92 7.57 2320 150 2170 1 1 1999 31.30 7.92 2428 150 2278 ) 1 2000 32.48 8.22 2520 150 2370 1 1 2001 33.75 8.55 2618 150 2468 1 1 2002 35.01 8.86 2715 150 2565 1 : 2003 36.37 9.21 2821 100 2721 1 : 2004 37.70 9.54 2924 100 2824 1 ! 2005 39.08 9.89 3031 100 2331 : 1 2006 40.39 10.23 3133 100 3033 1 : 2007 41.72 ----------,------------------------------------------ 10.56 3236 100 3136 1 VP €133 TIR =loo%  Annex 15 Page 1 of 3 ANNEX 15 BASIC ENERGY EFFICIENCY STANDARDS FOR BUILDINGS A continuacidn se discuten 10s criterios y medidas de eficiencia por sistema. que conformarian el estandar para el sector comercial y oficial, basados en el an6lkis de las practicas de disefio existentes en Colombia (ver Anexo 7). La primera generaci6n del estandar no cubre todas las posibles variables, el objetivo ha sido el de concentrarse en las keas de mayor oportunidad con el fin de limitar la complejidad inicial de las normas. Los sistemas regulados por las normas en el sector comercial/oficial incluyen: 1. Cubiertas 2. Alumbrado 3. Distribuci6n elktrica 4. Sistemas de aire acondicionado 5. Calentarniento de agua Cubierta del edificio: Techos: D Absorci6n solar de techos: solo se aprueba el uso de colores claros. o Aislamiento t6rmico en techos: llmites sobre el coeficiente de conductibilidad t6rmica para techos en plancha de concreto y de teja fibrocemento ventilada. Paredes: o Limitaci6n de carga t6rmica solar por ventanas: se establecen combinaciones aceptables de protecci6n solar respecto a la manipulaci6n simultanea de tres elementos: - Proporci6n de ventanas respecto al Area total de pared. - Coeficiente de sombra efectivo del vidrio (incluyendo el efecto de persianas). - Utilizaci6n de voladizos. o Limitaci6n de conductibilidad tbrmica en keas de vidrio opaco en fachadas flotantes. Alumbrado o Niveles de iluminaci6n: el disefio del sistema de alumbrado debe star basado en 10s niveles de iluminaci6n definidos en este esthdar. o Circuitos de alumbrado: circuitos e interruptores para alumbrado han de ser independiente. de circuitos de aire acondicionado y otros usos con altas cargas.  Annex 15 Page 2 of 3 o Ntimero de interruptores: un interruptor minim0 por cada 1.5 KW de carga o para cada recinto definido por paredes hasta el cielo raso. Edificios oficiales estiln exentos, otras exenciones son aplicables. o Intemptores en cuartos de huwedes en hoteles/moteles: luminarias fijas y himparas portables deben ser controladas por un interruptor comtin a la puerta de entrada. o Controles de alumbrado exterior: el alumbrado exterior debe ser controlado por fotdlula, temporizador o una combinacibn de 10s dos (se excluye alumbrado diseiiado para operaci6n continua). o Balastos de tubos fluorescentes: se limitan los factores de potencia y de eficiencia con ciertas excepciones. Se aplicar4 el nivel minim0 de eficiencia utilizado en 10s E.U.(este nivel es 0.90 para el factor de potencia). o Pantallas en luminarias con t u b s fluorescentes: M t e s sobre la eficiencia de pantallas en luminarias con t u b s fluorescentes. Esto implica la homologaci6n de pantallas con respecto a caracteristicas reflectivas. o Circuitos de alumbrado en Areas con acceso a luz natural: circuitos de alumbrado en .Areas con acceso a luz natural s e r h dedicados. Se establecerh cruitos especiales para edificios que utilicen controles fotoel&ricos. o Utilizaci6n de fuentes de iluminacidn incadescentes: en Areas de recepci6n, corredores y lobbies se restringe el uso de incandescentes al 10 por ciento de la carga en las heas definidas (esto para permitir el uso de incandescentes para acentos de iluminaci6n). o Fuentes de ilwninaci6n en garajes y parqueaderos: se restringe el uso bombillas de vapor de mercurio, solo se aceptan bombillas de vapor de sodio AP y hal6genas. o Densidad de carga de alumbrado: de acuerdo a la funci6n del edificio (oficina, bodega, etc...) se establecen Ilmites de densidad de carga de alumbrado (vatiolm*). Este requisite es solo aplicable a disefios complejos. o Dimensionamiento de transformadores: cuando la capacidad total de transformadores excede 40 kVA se requiere el adisis de cargas utilizado para dimensionamiento del transformador. o Eficiencia de motores: se establecerfan mlnimos niveles de eficiencia por cabalhje. Antes de implementar esta medida es necesario establecer el impact0 de la variabilidad del voltaje existente en Colombia sobre motores mils eficientes.  Annex I f Page 3 of 3 Sistemas de aire acondicionado o Dimensionamiento de equipo: se requiere la utilizaci6n de una metodologia consistente de dimensionamiento que incluya el d c u l o de cargas ttrmicas internas y externas con limites de sobredimensionamiento. o Condiciones de diseiio interior: para enfriamiento de aire se fijan las condiciones de diseiio interior a 25.5 O C ( 7 8 ~55 ~ ciento Humedad Relativa. ) por o Suministro de aire de renovaci6n: se fija la rata de suministro de aire exterior a 3.5 L/s (75 cfm) por persona en keas donde no es permitido fumar y 11.7 L/s (25 cfm) por persona en areas donde es permitido fumar. Se recomienda la presurisaci6n positiva del edificio con el objetivo de limitar la idltraci6n. o Control termostAtico: se requiere control termostatico por sistema y por zona. o Aislamiento ttnnico de ductos de suministro y circuitos de "chilled water": se establecen limites respecto al coeficiente de conductibilidad del aislamiento ttrmico de ductos de acuerdo con las diferencias en temperatura y d h e t r o de caiiuelas. o Ciclo economizador: en las ciudades de Cali y Medellin bnicamente, sistemas de s un ciclo ventilaci6n con capacidad superior a 1900 L/s (4000 dm) han de ser d i s e ~ d ocon economizador que pueda utilizar hasta el 100 por ciento de aire exterior cuando la C (5°F). diferencia entre temperaturas exterior e interior wceQ 2.8 O o Eficiencias de equipo: se fijan limites respecto a 10s coeficientes de rendimiento (COP) y coeficientes de potencia consumida (EER) para paquetes terminales de aire acondicionado, sistemas unitarios y paquetes de agua de refrigeraci6n de tornillo y reciprocos. Calentamiento de agua (aplicables a hoteles/moteles y a hospitales bnicamente. o Eficiencia de dentadores de agua: se fijan limites respecto al factor de energia, ptrdidas "standby" y de calor. o Aislamiento ttrmico de caiuelas de agua caliente: lirnitaciones de conductibilidad tCrmica. C (90 o Controles: se requiere el uso de termostatos con capacidad de ajuste hasta 322 O "F). o Temperatura de u t h c i 6 n de agua en lavamanos pbblicos: se limita la temperatura a C (110 T). 433 O o Flujo en duchas y lavamanos: se requiere el uso de restrictores de flujo con limites de 3.00 gpm y 050 gpm para duchas y lavamanos respectivamente'.  RED NACCONAL DE OLEODUCTOS Y POUDUCTOS, SUMINlSTRO Y PUERTOS ECUADOR - ~1IVEWCIOWES - hspnoaveto c h 1 h - q - a . -. o *yI- -*-*-- -s-x-x- -----a- / ---- -9-+-t a L.L6.- -- -* - - @wrra c w 0 0 p . ~ ~ WW(. a ECOPETROL DOL I U -0.- 0 -