Framework for Energy Efficiency White Certificates in the Emirate of Abu Dhabi

Abstract

Abstract Energy efficiency in the demand side is considered one of the cheapest ways to achieve reductions in Green House Gases emission, as well as to avoid heavy investments in production, transmission and distribution of electricity. In the context of the Emirate of Abu Dhabi, UAE, where buildings (residential, office, retail and villas) consume about 87% of the electricity, most of which is devoted to indoor air-conditioning, energy efficiency has a huge potential for development. Under the current political/economical scenario, a series of measures to diversify the economy and attract expatriates are in place. These include heavy subsidies on retail electricity prices—which has the side-effect of limiting the economic feasibility of investments in energy efficiency. In this study, a series of building retrofits were tested on a model of the average office building in the Emirate. The best performing retrofit was identified to be the chiller's Coefficient of Performance (COP) improvements, having the lowest cost/benefit ratio and resulting in an overall annual electricity savings of around 12%. Under the current subsidized electricity price, investments in energy efficiency of existing buildings are not attractive for the owner-consumer, as over the lifecycle of the measure, the return on investment is low or negative. In this paper we attempt to assess the applicability, in the Emirate of Abu Dhabi, of energy saving obligations and tradable white certificates as a mechanism to enable investment in demand-side energy efficiency and achieving average investment returns of 7% over a 25 years horizon. The application of white certificates can enable the market of energy efficiency to develop in the Emirate. The economic return of applying a chiller retrofit under the studied white certificate scenario avoids the increase of 17% of current electricity prices.