UNDP in Montenegro

Montenegro is well positioned to capture a share of the growing clean energy market

Budva, 27 – 29 April 2010

Statement by Mr. Alexander Avanessov, UN Resident Coordinator and UNDP Resident Representative to Montenegro at the Regional Conference “Sustainable Energy Management in Public Buildings – from Policy to Local Action” http://www.energy-efficiency-conference.com/***

I am very happy to participate in this conference and glad to share with you some thoughts on the topic based on UNDP experiences. These experiences are part of UNDP programme activites in Montenegro in the area of sustainable economic development and environmental protection, which is becoming also an integral part of the recently adopted UN Integrated Programme to be implemented in close cooperation with so called non-resident agencies, including UNEP, UNIDO, UNESCO, FAO and others.

In adopting the several key strategic documents - National Strategy for Sustainable Development, National Energy Development Strategy - Montenegro institutionalized its startegic vision toward a sustainable economic development. These documents are a solid basis to translate the concept of ecological state, contained in the Constitution of Montenegro, into reality.

Most recent research and findings that further inform our own understanding of and the knowledge stock in the cumulative impacts of human activity on climate change put an even higher emphasis on the need to revolutionize the manner in which the world powers its economy and a drastic shift from the so called black energy (coal, oil) to the so called green energy (renewable).

In addition to diversifying the energy supply (ensuring energy independence through tapping into various energy sources, but moving toward the low impact, renewable supply), the other side of the energy policy coin represents rationalization and efficiency of use that is energy efficiency, cleaner production, elimination of transmission/distribution losses on both company and household levels.

The global market has already picked up on this trend as we see that in 2007 alone the private sector invested nearly $150 billion of new money in clean energy technologies, with this number expected to reach $600 billion by 2020*. The latest long-term projections show that the annual global expenditure on renewable energy projects alone will increase from $90 billion in 2009 to $150 billion in 2020, with the further increase to $200 billion by 2030 given the current policy targets**. Gradually, but surelly, the black energy is pricing itself out of the market, with the clean, green and renewable production and energy, step by step, taking (or will take) its place.

Montenegro is well positioned to capture a share of this growing market and make this trend as one of the factors of economic growth and human development.

Support to decentralization of renewable energy production (small scale producers), investment in cleaner production and energy efficiency, as has shown globally, is likely to create a vibrant job and income generation market in Montenegro especially considering the twin benefits of a conducive business environment and natural resource potential. On the one side, this year Montenegro received its best rating in the last six year in the World Bank’s ’Doing Business 2010’ report, which was specifically underlined during the recent UK-Montenegro investment forum in London as a strong evidence of creation of favourable investment climate in Montenegro, including that for investors into “green” economy.

On the other side, Montenegro is exposed to some 1500-2000 hours of direct solar radiation per year (in line with Barcelona and Rome, the European leaders), it uses less than ½ of its total hydrological potential, with wind and biomass as yet untapped.

We understand that energy development is vital to one country’s economic progress and we understand and support the Government’s commitment to responsibly exploit the renewable sources of energy that it has been blessed with including the hydro power.

Montenegrin position in this global market and its capability to capture the growing market share in this new area will largely depend on how quickly Montenegro itself creates an enabling environment that support creation of national jobs in areas such as recycling, low impact food production, manfuacturing/installing/maintaining equipment for capturing different types of renewable energy, reforestation, auditing buildings for energy efficiency and retroffiting them, conservation and sustainable use of protected areas.

How many Montenegrin jobs currently exist in these sectors that address some of the crucial challenges that countries regionally as well face? Let’s consider some of them:

Challenge: Montenegro is some several times more inefficient in using its energy for economic gain than an average in Europe***. Opportunity: development of new skills and new Montenegrin jobs for performing energy audits of buildings and production facilities, new jobs for retroffiting these installations for a more rational utilization of electricity, new jobs in maintaining energy efficiency appliances.
Challenge: Rising energy prices, especially in the tourism and meat processing sectors, where electricity is predominantly used to heat the water (not to mention the individual households). Opportunity: new Montenegrin jobs for producing, installing, manufacturing equipment for capturing renewable energy. Recent UNEP study found that the savings for the hotel and restaurant industry in Montenegro are up to 70% of their electricity consumption if the solar power is utilized to heat the water. In addition there are some 6 distributing companies of solar water heating equipment in Montenegro - but very few provide own expertise in maintaining and installation.
On a household level, the UNEP study found that for 400 l of hot water demand, the monthly savings in electricity consumption are €41.55 - this is not even considering the price for no pollution, extraction and processing of coal for example and its transportation. The Bloomberg research forecasts that the renewable energy will make up 22% of the world’s installed power generation base by 2020 (largest expension expected in solar PV and onshore wind, with the limited growth in hydropower sector), up from 13% today.
Challenge: rising carbon footprint in transport of food. Opportunity: new Montenegrin jobs in producing domestic food products where Montenegro has comparative advantage and can produce healthy, low impact, in some cases organic food goods that would on one side demonstrate increased competitiveness of national businesses, provide healthy food, and on the other reduce import related costs and overall transport-related carbon footprint.

And this is just few examples of the benefits which efforts in developing energy efficiency policies could bring.

Within this context, globally, UNDP as well as other relevant UN agencies, such as UNEP, provide assistance to the Governments on achieving a low-carbon economic growth that is socially inclusive, environmentally responsible and economically efficient.

In Montenegro, our work will continue to be focused on ensuring a balanced regional development and generating green jobs through responsible use of natural resources in protected areas, renewable energy sources, sustainable tourism and healthy food production consistent with the Government’s commitment to low-carbon development path as reconfirmed at the Copenhagen COP 15 UNFCCC meeting in December 2009.

Let me wish this conference a productive and interesting discussion and conclusions.

Thank you.

*‘Charting a New Low Carbon Route to Development: A Primer on Integrated Climate Change Planning for Regional Governments,’ UNDP June 2009
**’Bloomberg New Energy Finance Model Projects Clean Energy Investment at $200 Billion per Year by 2030’ March 17th 2010 http://worldenergyresearch.com/Downloads/BNEF_GE2M_press_release_03_17_10.pdf
*** Pobjeda, April 27th- World Bank project on energy efficiency

*** The Regional Conference “Sustainable Energy Management in Public Buildings – from Policy to Local Action” gathered relevant political and economic subjects with a view to disseminating the idea about the significance of energy efficiency and finding new possibilities of cooperation in this area, with an accent on energy management in public buildings.

In conformity with EU and international directives, Montenegro has been implementing intensive activities in creating the prerequisites for reducing energy consumption for a number of years. To that end, the most significant legal acts have been drawn up and a series of measures and activities on raising awareness about the importance of rational energy consumption have been implemented. Taking into account the size and importance of the public sector, the need for organizing a conference precisely on this theme has arisen.

The organizers of the Conference were the Ministry of Economy of Montenegro, German Technical Cooperation – GTZ with its two projects, ASE from Podgorica and ORF from Sarajevo (which are funded by the German Federal Ministry for Economic Cooperation and Development) as well as the Energy Community Secretariat with headquarters in Vienna.