EBRD Industrial Energy Efficiency Programme
Policy measure

The European Bank for Reconstruction and Development (EBRD) introduced the Industrial Energy Efficiency Programme in Russia in 2003. The programme targets energy intensive sectors: steel, chemicals, pulp and paper, cement, mining, etc. (EBRD, 2008)

Implementation

According to EBRD (2008), the following measures were taken within the EBRD programme: “The EBRD works closely with a client’s technical specialists to help identify energy saving opportunities, select economically viable projects and develop a long-term investment programme for energy efficiency. This programme is then discussed with a company’s management and financial decision-makers to raise the priority of energy efficiency projects and ensure that viable projects are incorporated into the company’s long-term investment plan, financed fully or partially by the EBRD. Finally, the EBRD helps a client develop a culture of energy conservation through staff training, and supports the implementation of energy management systems.”


By the end of the project, the EBRD had conducted 50 energy audits and arranged 5 energy management trainings for its clients. This support led to the development of 61 projects financed by the EBRD, with a total contribution from the Bank of more than EUR 750 million (excluding funds syndicated to commercial banks) (EBRD, 2008).

Challenges
No identified challenges.
Outcomes

According to EBRD (2008), “these projects resulted in energy savings equivalent to the electricity produced by a 2,500 MW base-load power plant, and an estimated annual reduction of CO2 of 5.5 million tons”.  


The EBRD had several large industrial clients in Russia:

  • Severstal is one of Russia’s largest steel producers. Its main steel production facility in Russia in Cherepovets has an annual capacity of more than 11 Mt. Like many Russian plants, the specific energy consumption per tonne of steel at Cherepovets is more than 35 percent higher than the average of similar plants in Europe.

  • In 2007, the EBRD provided loans amounting to EUR 600 million to support Severstal’s implementation of 11 high-priority energy efficiency investment projects, including: energy management system, a new oxygen plant, the modernization of compressor stations, the construction of a new combined cycle gas turbine plant and the reconstruction of five steam boilers. In parallel, the company implemented an energy efficiency management system similar to those found in steel plants in Europe. The efforts lead to electricity savings of more than 10 percent and savings in natural gas of 3.5 percent as well ascarbon savings of 1 million tonnes of CO2 per year. The project internal rate of return is estimated at 15-90 percent (EBRD, 2008; IEA, 2009).

  • Chelyabinsk Tube Rolling Plant: a EUR 205 million loan was granted to finance new investments in steel making and energy efficiency. EBRD conducted energy audits and identified EUR 50 million energy efficiency investments at two production sites, including: the modernization of reheat furnaces in rolling mills, the modernization of compressed air systems, the installation of combined heat and power units, the upgrade of the electricity system, new transformers and automatic switchgear. If the company implements these measures, the EBRD (2008) estimates potential yield savings of electricity of more than 25 percent and savings of natural gas of more than 10 percent. The project internal rate of return is estimated at 23-100 percent (EBRD, 2008).

References

EBRD (European Bank for Reconstruction and Development), 2008. Improving industrial energy efficiency – Thematic factsheet. Available at: www.ebrd.com/downloads/research/factsheets/industriale.pdf.


IEA (International Energy Agency), 2009. Energy Technology Transitions for Industry: Strategies for the Next Industrial Revolution. Paris. Available at: www.iea.org/textbase/nppdf/free/2009/industry2009.pdf.