Inigo Arencibia Gonzalez, Project Manager, Central and Eastern Europe PEP - Energy Efficiency, International Finance Corporation

I remain convinced that energy efficiency is a pillar towards energy security. I mean it’s obvious, everybody seems concerned about oil and gas transit flows, relations between consumers, producers and transitors, but very few people are realizing that energy security pretty much begins at home. At home meaning our own apartment, our own business and this is something that very few people realize, is something that Ukraine would have in future to plan it. I like very much the call from an Armenian colleague this morning who mentioned that for them oil and gas flows was not an issue, that their energy security was pretty much how they would manage to make best use of the energy resources. So, I would like to summarize a few points that my colleagues have made.

First of all energy efficiency and renewable energy sources are a business opportunity, and it’s a huge economical opportunity for national economies. In the particular case of Ukraine, the country is foregoing the opportunity to add a whole new economic activity by making sure that there’s a sector of the national economy that evolves around implementing and defining energy efficiency of renewable energy resources. In my job at the International Finance Corporation we know globally there is an economic crisis but if any of you goes to look at investment funds and how they have been trading in the last few months, you’ll see that the only investment funds that are actually on the plus so far this year – the so-called green-investment funds providing capital to energy efficiency and renewable energy sources. This type of investments is actually making money and will be more successful in the future as reversing climate change will receive more attention.

Secondly, energy efficiency can play a key role in lessening the effects of economic downturns like the one we are currently experiencing. I mean now we are in a time when our economies are shrinking all over the world, you depict the decrease in Ukrainian steel manufacturing, for example. But energy efficiency provides a reduction of the operating costs of enterprises, thus increasing the competitiveness of those enterprises. Those managers who manage to reduce their energy costs in the coming years will be in a perfect position to make the most of the upturn in economic cycle.

The last point, which I would like to lead as food for thought and hopefully to launch the discussion is the analysis that Mackenzie Global Consultancy you all know, made a couple of years ago and their study are about energy productivity, as they call the energy efficiency for those of us who knows the subject less. And their assessment was that investment in the development of new energy sources and new transmission capacities is twice as expensive as the investments needed to achieve equivalent energy savings worldwide. That is, for every two dollars that would have to be invested in new energy sources and transportation, we can achieve the same result for investing one dollar in energy efficiency measures. And this is a striking figure; I think we should all consider this and look at this more carefully. Speaking of figures, I’m afraid that giving the right pricing signals to the market of energy consumers is critical. As long as we keep subsidizing energy consumption, entire economies will continue ignoring the financial, environmental and social benefits of energy efficiency, ultimately weakening the countries’ security of energy supplies.

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