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p. 15 of 30 BACK | NEXT Introduction Regional Energy Context Energy Policy Issues Structural Reform Energy Efficiency Supply Side Measures Demand Side Management Energy Pricing Energy and Environment Rural Energy Development Regional Cooperation and Energy Development Conclusions and Recommendations

Bank Policy Initiatives for the Energy Sector : Energy Policy Issues : Energy Efficiency

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Supply Side Measures

42. Considering the enormous amounts of capital invested in energy supply facilities, getting the maximum benefits from these facilities assumes great significance. The Bank believes that creation of additional capacities could normally be considered only for utilities that are optimizing the output from their existing facilities. In the 1980s, the Bank consistently advocated improvements in power subsector load forecasting and least-cost planning techniques to avoid building excessive capacities and reserve margins and has argued for realistic levels of availability of supply. The Bank also accorded high priority to reducing auxiliary consumption of generating units as well as transmission and distribution losses (total system losses among DMCs' power utilities range from 25 per cent to 35 per cent compared to acceptable levels of 15 per cent to 18 per cent). These aspects will therefore continue to receive high priority in the 1990s. In addition, the utilities will be encouraged to rehabilitate and retrofit in a cost-effective manner their older generating units and substations to optimize the efficiency of their operation and to prolong their useful lives (heat rates of many conventional thermal power plants in DMCs can be reduced from about 13000 Btu per kWh to about 10000 Btu per kWh). Efficient and economic O&M practices as well as load management efforts of power utilities to shift peak demands to off-peak periods will receive special encouragement. Promotion of technologies such as cogeneration, which simultaneously improve fuel consumption efficiency, environmental conditions (through fuel avoidance) and private sector involvement, would be specially encouraged. Box 2 gives some recent examples of Bank assistance to improve energy efficiency.

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