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SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTpreliminary versionSMART Portugal 2020: ReducingEmissions and Increasing EnergyEfficiency through ICTPortugalReport Addendum

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTINSTITUCIONAL SUPPORTERS:Promoter:APDCSupporters:APDC, GeSI,Alcatel-Lucent, Cisco,CTT, EDP, Efacec, Ericsson, HP, IBM,Logica, ONI, PT, REN, Sonaecom,T-Systems, Vodafone,Visabeira Global / Real LifeTechnologies, ZonSUPPORTERS:Steering Committee:APDCCarla PedroDiogo VasconcelosMargarida CoutoVanda JesusGeSI – Global e-SustainabilityInitiativeLuís NevesANACOMJosé Amado da SilvaERSEVítor SantosJorge EstevesJosé BrazCNEL – Coordenação Nacional daEstratégia de LisboaCarlos ZorrinhoAlcatel-LucentAntónio Beato TeixeiraCiscoCarlos BrazãoJuan Carlos Castilla RubioCTTAlberto PimentaEDPAntónio VidigalPaulo AlmeidaSérgio FigueiredoEfacecAlberto BarbosaEricssonHans-Erhard ReiterHPCarlos JanicasIBMJosé Joaquim OliveiraAntónio Pires dos SantosLogicaVergílio RochaLuís M.F. BarrunchoONIXavier MartinPTAlcino LavradorDavid LopesFino GomesJoão BastosRENJosé PenedosArtur LourençoSonaecomJosé Pinto CorreiaLuis TavaresT-SystemsRui FrancoVodafoneAna Mesquita VeríssimoLuísa PestanaVisabeira Global / Real LifeTechnologiesPaulo VarelaAlexandre BrancalZONManuel SequeiraCoordenador:Jorge VasconcelosAnálise:BCG – Boston ConsultingGroupAcknowledgements:This report was commissioned byAPDC.Particular thanks to the membersof the Steering Committee and theeditorial team, who helped to developand sustain the project. The analysiscontained in this report would nothave been possible without analysisfrom BCG, co-editing by JorgeVasconcelos and Carla Pedro.Special thanks to the participationof individuals within the sponsoringcompanies (listed above), who wereinvolved throughout the analysis.We are grateful to the experts weconsulted for general guidance andto develop our regional case studies(Appendix 6) and also to the manyothers not listed who have supportedalong the way.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTINSTITUCIONAL SUPPORTERS:Conscious of the urgency in promoting increased energy production and consumptionefficiency, the ERSE considers studies such as the present as extremely useful, giventheir contribution to stimulating the industry in the sense of developing technicalsolutions aimed at encouraging consumers to rationalise consumption and promotingthe most adequate energy and regulation policies.SUPPORTERS:Alcatel-Lucent considers that the contribution given by telecommunications companies to reducing the environmental impact and bettermanaging energy resources in our planet assumes increasing importance. Therefore, the company has decided to actively contribute asa partner in the Smart Portugal 2020 study. The company is committed to environmental sustainability, particularly focusing on climatechange, taking advantage of its innovation and development teams to create new environment-friendly and energy-efficient technologies,striving to reduce the environmental impact of its operations. As a technological leader, Alcatel-Lucent actively associates itself to itsstakeholders, which include its customers and suppliers, in order to address environmental sustainability and climate change issuesthroughout its supply chain. Alcatel-Lucent actively participates in the United Nations Global Compact - Caring for Climate initiative andhas received the Sustainability Yearbook 2008 SAM Silver Class Award.Cisco was an active partner in the Smart2020 Study. We believe that Technology can help companies to be more efficient. Ourcommitment is shown in the solutions we develope, in our position in the Market and in the way we work internally.Environmental PolicyThe CTT Group adopts the principles of Sustainable Growth, the environmental aspect being part of its corporate strategy and practices.The Group assumes clear commitments in terms of continuous improvement in environmental performance, with a view to minimisingand preventing the environmental impacts resulting from Group business in local communities, neighbouring areas and the environmentin general, [namely]:(...) By promoting increased energy efficiency within the Group’s estate and automobile fleet, as well as controlling and reducing thelevels of atmospheric emissions;EDP is one of the largest Renewable Energy operators in the World. Being an innovative and early adopter of ITC solutions, EDPhas been an active partner in the launch of some of the reference Portuguese companies in this area. EDP strongly relies on ICT formanaging its worldwide operations, and is presently implementing, with Portuguese software houses a set of last generation systemswhich will help insure its competitive advantage. Among them InovGrid, a reference project is the area of the smart grids, and Skipperan innovative system for managing power plants, on an Utility 2.0 approach. As part of its development philosophy, EDP uses OpenSource Software, whenever relevant.“Efacec is committed with the development of innovative solutions for the Energy and Mobility sectors, using the latest technologiesapplied to the efficient use, monitoring, communication and management of related resources, contributing for the reduction of the CO2emissions from critical society activities, a key factor for the world sustainable development”.Ericsson believes that telecommunications will become an integrated and natural part of everyday life for the majority of the world’spopulation, while contributing to social and economic development. Technology is triggering change towards a more sustainable world.Telecommunication can remove obstacles in the path of sustainability and create a smarter, more resource-efficient society. It can enhancethe delivery of education, health care, government services and raise quality of life. With climate change high on the global agenda,our contribution to a less carbon-intensive society is a key focal point. Ericsson is demonstrating that wise use of energy is core to ourbusiness. Since our greatest environmental impact occurs when our products are in operation, continuous improvements in productenergy efficiency play an essential role. Actions and innovation as well as leadership and vision are needed to tackle the environmentalchallenges of the future.Green IT issues have been assuming increasing relevance for technological companies, as a way of meeting Customer needs and achievingsustainable growth objectives. HP has been increasing its investment in renewable energies while simultaneously betting on energyefficientsolutions and technologies for its Customers. In this way, we commit to reducing energy consumption and carbon emissions byapproximately 16%, by 2010. In this sense, it is imperative that we support energy-efficiency awareness studies.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTIn a global world where everything is becoming intelligent and connected, addressing energy and environment challenges andopportunities requires innovative technology and deep business insight. IBM has a unique ability to bring technology innovations,business process transformation, and industry expertise together in a comprehensive set of solutions to help clients tackle theirenergy and environment issues and opportunities. Portuguese Companies need to take action on energy management, theenvironment, and sustainability. Their customers, employees, regulators, investors, and other stakeholders look to them toaddress issues and opportunities in this area with actions that produce genuine results that improve their environmental andfinancial results. Companies of all sizes need to look across their operations, prioritize their focus areas and investments, andtake action now.Logica, as a leading European IT and business services company, aligns its business strategy along with the European and Globalsustainability initiatives, thus contributing to the most innovative and comprehensive answers of the ICT industry. Through its Energy& Utilities Competence and Innovation Centre based in Portugal with Portuguese solutions, Logica is committed to address efficientEnergy and Water management as part of the same global challenge in tackling scarcity and waste of resources. Through its IntelligentTransportation area Logica contributes to efficient transportation management and carbon emissions reduction targets. On the servicesside, Logica´s IT Outsourcing organization focuses on energy efficient Data Centres and infrastructures management. The Smart 2020study is therefore a guideline for Logica´s activity and understanding of the key market drivers.Oni Communications has always been particularly aware of environmental issues, namely carbon footprint reduction, having severalinternal and customer-oriented initiatives in course, in order to achieve the objectives of SMART2020.Awareness to the need for environmental protection is already a reality across our various business sectors. Due to its specificcharacteristics, the communications sector is assuming a leading role in this challenge, not only by possible rationalisation measureswithin the business, but mostly for its very significant impact on many other sectors, namely its contribution to digitisation of numerousactivities.“Our commitment towards a sustainable future: promoting innovation, respecting the environment and valuing society”.Through its mastering of telecommunications ant IT, Mankind has extended its intervention ability and its intelligence to the most remotelocations. It was possible to achieve a decentralised decision ability within society, regarding machinery, buildings and large energysystems, as well as monitor the resulting effects. The work of Mankind became more perfect, more efficient, less energy-consumingand less carbon-producing. Within the scope of its social responsibility and mission, REN lends its unconditional support to increasedsynergies between ITC and the various society sectors, particularly the energy sector, praising this APDC initiative.“Sonaecom strongly believes the challenges for the telecommunications sector and the opportunities identified for the futuredevelopment of ICT sector will potentially lead to the almost global replacement of products and services for digital solutionsor to the use of new technologies as the engine of an energetically efficient society. We recognise the important role of ICT inenhancing social inclusiveness, empowering people and creating a carbon free society.”T-Systems is the Deutsche Telekom Group business division including services aimed at corporate customers. Recently, thecompany presented its Green ICT portfolio in Lisbon, which evidences the way in which ITC may improve efficiency andsustainability practices within companies. Having led the SMART 2020 International study, T-Systems would necessarily lend itssupport to the SMART 2020 Portugal study. We believe that what constitutes a problem and a social responsibility issue todaywill represent an opportunity tomorrow, for all companies learning how to benefit from ITC.Real Life Technologies, included in the scope of Visabeira Global, may contribute in a differentiating manner to Portuguesedevelopment, through Information Technology and Communication solutions contributing to CO2 emissions reduction in varioussectors, such as transports, energy, industry and services, ensuring sustainability and economical growth within a perspective ofsocial responsibility and concern for the environment.Vodafone Portugal considers that climate change constitutes a universal problem, which may only be solved through globalcontributions. In this sense, Vodafone Portugal commits to continue promoting and applying the most effective measures toreduce greenhouse gas emissions, namely carbon dioxide, both by acting on the level of its own business and by developingmobile technology solutions aimed at effectively meeting the challenges of environmental quality preservation.Carbon emissions reduction is a social responsibility shared by all. However, companies have an accrued responsibility in thesense of reducing these emissions. Therefore, ZON wishes to contribute to finding a solution for this problem.The Smart Portugal 2020 study shows that ITCs are able to reduce greenhouse gas emissions through the implementation of goodpractices in companies. ITCs also allow creation of technological solutions aimed at reducing emission of gases resulting fromseveral human activity sectors.ZON is very enthusiastic about the market opportunities identified by this study regarding creation of new products and markets.Therefore, the company will continue to implement the good ITC practices identified by the study and develop entertainmentand communication alternatives entailing low gas emissions.

SMART 2020: Enabling the low carboneconomy in the information ageNome da Secção8

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTContents1 Foreword2 Summary3 Context4 Portuguese Carbon Footprint4.1 Portuguese ICT Industry carbon footprint5 The ICT Enabling Effect5.1 Direct ICT reductions6 Priority Areas6.1 Power Management6.2 Buildings6.3 Transportation7 Portugal 2020 Implications7.1 Public Authorities7.2 Citizens and Companies7.3 ICT Industry8 Concluding Remarks9 Appendix 1 – Forecast Methodology & Definitions10 Appendix 2 – Assumptions & Sources11 Appendix 3 – Portuguese Carbon Footprint: Sector by sector BAU11.1 Energy11.2 Industry11.3 Transport11.4 Residential/services (excluding ICT)11.5 ICT12 Appendix 4 – The ICT enabling effect: Sector by sector Reduction12.1 Energy12.2 Industry12.3 Transport12.4 Residential/services (excluding ICT)13 Appendix 5 – The SMART Way13.1 SMART Cities13.2 SMART Power13.3 SMART Inter-city13.4 SMART Industries14 Appendix 6 – Acknowledgments15 Appendix 7 – Sources Used16 Appendix 8 – Acronyms

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT01 ForewordsAll over the world, citizens, industry andgovernments are deeply concerned with thecurrent financial crisis. Restoring the credibilityand the well functioning of financial markets isindeed a top priority in order to avoid seriouseconomic and social damage. However, thisshould not distract us from another equallyimportant priority: to avoid the collapse ofplanet Earth due to climate change.It is technically feasible, financiallypossible and economically wise to reducegreenhouse gas emissions, thus avoiding thecatastrophic consequences of climate change.Portuguese greenhouse gas emissions arecurrently well above the allowed values for2012 and the expected targets for 2020.This situation has heavy moral,political and economic consequences. Therefore,it is urgent to act.A few months ago, the Globale-Sustainability Initiative (GeSI), under thecharismatic leadership of Luis Neves, togetherwith the Climate Group, published the “Smart2020” study; it shows how the application ofinformation and communication technologies(ICT) can achieve a 15% reduction ofgreenhouse gas emissions worldwide.Inspired by the “Smart 2020” study,APDC, under the active chairmanship of DiogoVasconcelos, decided to investigate how ICTcan help Portugal reaching its internationalcommitments and, simultaneously, boosteconomic development.The study “Smart Portugal 2020”shows that ICT currently accounts for only1.0 MtonCO 2e or 1,2% of total Portugueseemissions. ICT emissions are expected toincrease 0.7% per year in the period 2007-2020due to the inevitable increase in the use of ICT.But the main message of the present study isthat ICT-enabled measures have a potential forCO 2e emission reductions of around 15% of theoverall emissions expected in 2020 - about tentimes the expected footprint of the ICT industryin Portugal. Such a reduction is enough to meetPortuguese emissions targets for 2012 and evento reach the more ambitious targets currentlyunder discussion for 2020. The direct economicvalue associated with these reductions is about¤2.2 billion per year.The three priority areas identifiedin the “Smart Portugal 2020” study accountfor 55% of the total emission reductionpotential. These priority areas are: electricity,transportation and energy use in buildings.The systematic application of ICT topower systems allows not only a more efficientuse of electricity (namely through improveddemand side management and reduction ofnetwork losses), but also an increased and costeffectivepenetration of electricity generationbased on renewable energy sources. Thismeans that the carbon contents of each kWhcan be substantially reduced and the naturalrenewable resources available in Portugal canbe further exploited, thus increasing securityof energy supply and reducing imports of fossilfuels.Since 2001, Portugal has successfullyimplemented an aggressive policy aimed atincreasing penetration of renewable energy.ICT allows this policy to be further developedand to evolve from a quantitative, generationapproach, to a qualitative, systems approach.As regards transportation and energy usein buildings, the study “Smart Portugal2020” shows how Portugal can learn frominternational experiences and introduceinnovative, cost-effective solutions.I would like to thank APDC for having launchedthis initiative, BCG for their professionalcommitment and all participating ICT, energyand transportation undertakings and expertsfor their precious contributions. Thanks to theirenthusiasm and vision it was possible, in a shortperiod of time, to identify practical ways ofreducing greenhouse gas emissions and creatingnew business opportunities in Portugal. It wasan honour and a gratifying experience to leadthis project.Jorge VasconcelosCoordinator of APDC’s Working Group“ICT and Energy”

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTDiogo VasconcelosChairman of APDCA unique oportunityThe recent financial crisis caught the world offguard, undermined trust in the markets and isbeing tackled by governments though giganticbailouts. Climate change has been studied andscientifically proven and its consequences arealso gigantic. The difference is that this time, nobailout, no matter how large, will be enough tomeet the largest systemic risk at the planetaryscale. Sustainability is the only possible pathand there is no more time to waste. This reportis a true call for action.More than a report, it represents aunique opportunity for all: public authorities,companies and citizens. From society, newbehaviours are needed– rethinking the useof private cars, adopting new mobility andtelework solutions, being able to control energyconsumption among others. It is a change thatrequires participation, involvement and jointcreation from all. From markets, new businessopportunities are expected– the crisis and thebirth of a new paradigm create an enormouspressure to innovate, with an attitude of“Creative destruction”. In areas such as electricgrids, transport and building management,the report identifies tangible opportunities.From Governments and regulators, appropriatepolicies are needed – ones that are ableto orchestrate disperse intelligence, bothinside and outside the public sector, to fosterlow carbon solutions, technologies andinfrastructures.It was in this context, and withthis sense of urgency, that the AssociaçãoPortuguesa para o Desenvolvimento das A A AComunicações (APDC) chose climate change asone of its priorities. There are three reasons forthis choice:In the first place, APDC has positioneditself as a mobilizing agent for the civil societyaround one of the sectors with a highercontribution to the Portuguese GDP, for themodernization of the national economy and forthe promotion of innovation – the Informationand Communication Technology (ICT) sector.No other sector in the economy has, in recenthistory, contributed as much to change theways in which we work, communicate andinteract. Mobilizing this sector for the fightagainst climate change will have a tremendousimpact on the Portuguese society.In the second place, ICT is afundamental part of the solution. WithoutICT, it is not possible to achieve the ambitiousEuropean and national targets in terms ofGreen carbon emissions reduction. ICT cangive a decisive contribution to improve energyefficiency. This means creating a new wave ofopportunities, particularly relevant in timesof crisis, for all sectors and specifically for ICTplayers. The conclusions of the “Smart Portugal2020” are clear: realizing the opportunitypresented by ICT to reduce carbon emissionscan have a direct positive impact of ¤ 2 to 2.3Billion per year on the Portuguese economy.In the third place, thinking of asociety with lower carbon intensity meansrelying on new infrastructures for the future:broadband access through next generationnetworks. Making optic fibre available forall should be a national priority, not only foreconomic sustainability reasons, but also forenvironmental sustainability.Let us turn the challenges of climatechange and financial crisis into a uniqueopportunity for the Portuguese society andthe Portuguese economy. If the initiativespresented in the “Smart Portugal” report areimplemented, Portugal will become moresustainable and technology companies willcome out of this difficult context as globalleaders in products and services to promoteenergy efficiency.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTIt is Time for ActionThe Global e-Sustainability Initiative(GeSI) was created in 2001 by a groupof Information and CommunicationTechnology (ICT) companies in responseto the United Nations Millennium Goals(MDG).As GeSI Chairman I had theprivilege to Chair the “Steering Committee”which led to the most recent GeSIpublication “Smart2020 – “enabling the lowcarbon economy in the information age”.This report quantified, for the first time,the significant potential contribution thatICT can make at a global scale to improveenergy efficiency and address climatechange, while driving economic growth. Itis a good example of the potential of ICTto drive sustainable change while enablingother sectors to achieve greater efficiency.“SMART Portugal 2020 – reducingemissions and increasing efficiencythrough ICT”, the first national reportof its kind following the SMART2020Global report, represents a first step inthe contribution of the Portuguese ICTIndustry to address the Climate Changechallenge.Both reports are a call foraction; for the ICT industry but evenmore for those who ultimately carry theresponsibility of designing the global andnational climate change policy frameworks,which are needed to keep the planetsustainable and safe, and to ensure thatthe future of young generations is notjeopardized.As a Portuguese citizen, I couldnot be prouder and more pleased withthe vision and determination of DiogoVasconcelos, APDC Chairman, and JorgeVasconcelos, Chairman of the APDCCongress and leader of this study. It isimpressive how, in such a short period oftime, they brought together the necessaryteam and conditions to realize this project.More than a report, SMARTPortugal 2020 is the foundation for amore sustainable future for Portugal.This foundation must be continuallystrengthened. In times of economicuncertainty, SMART Portugal 2020 putsforward a comprehensive set of ICTsolutions which enable important impactsand efficiencies in relevant sectors of thePortuguese economy. Furthermore, it setsout the necessary pre-conditions to helpaddress the Climate Change challenge inPortugal.The ICT sector is ready to fulfillits role as enabler of economic and socialdevelopment. But the sector can not actalone. Appropriate policy environmentsthat foster ICT deployment, especiallyresearch and development, along withan appropriate financial framework, arenecessary to implement ICT sustainabilityrelated solutions.It is now time for the policy makersto understand the role that ICT can playand to undertake the necessary steps thatwill enable it to play its role not only inrealizing the United Nations MillenniumGoals, but also in laying the foundationsfor a more sustainable and harmoniousfuture. This is the challenge I want to leave.Luis NevesGeSI Chairman

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT02 SummaryThe Kyoto protocol representedthe first quantitative commitment from theinternational community to limit the potentialdamage caused by global warming. Signed in1997 by thirty-four countries, the agreementacknowledged that man-made emissions area root cause of global warming and defined atarget for 2012 of an average 8% reduction inGreen-House Gases (GHG) emissions relative to1990.The increased awareness aboutthe problems caused by increased GHGemissions coincided with a period in whichthe Information and CommunicationTechnologies (ICT) industry experiencedsubstantial growth. With the developmentand increased pervasiveness of innovativeproducts and services such as the Internet ormobile telephony, the industry’s impact in oureconomies and everyday lives is bigger andmore visible today than it has ever been. Thislevel of impact and visibility has increased theresponsibility of the ICT industry to take actionin the fight against climate change.In 2008, the Global e-SustainabilityInitiative (GeSI), an industry-led initiative tofurther sustainable development in the ICTsector, launched the “SMART 2020 – Enablingthe Low Carbon Economy in the InformationAge” report with the objective of determiningthe global ICT carbon footprint as well as howICT could enable a reduction in emissions,both in the industry itself and in other sectorsof the economy. The report examined howthe application of ICT could not only deliverenergy savings and carbon reduction, but doso in a way that drives even greater economicgrowth and productivity. The report quantifiedthe global footprint of the ICT sector in 2020at around 2.7% of global emissions, but alsoidentified potential for ICT to enable about a15% decrease in CO 2emissions in other areasof the economy. This decrease is over five timesthe size of the industry’s own footprint, and isthe result of potential ICT-enabled initiatives infive key areas: electric grids, buildings, logistics,motors and dematerialisation.In order to assess the potential forchange in Portugal and to outline an actionplan, the Associação Para o Desenvolvimentodas Comunicações (APDC) launched theSMART Portugal 2020 project, with the supportof The Boston Consulting Group. This project isthe first of several efforts worldwide to localisethe conclusions of the SMART2020 reportand derive implications at a country level, anecessary step to foster discussion, galvanisesupport and establish actionable plans to realisethe potential identified.This report is the first output of thisproject. The work behind this report was carriedout in three phases:I. A first phase to establish the currentand forecasted Business As Usual (BAU)Portuguese carbon footprint to 2020,highlighting the ICT sector footprint;II. A second phase to detail the potential forICT to enable improvement in differentsectors of the economy, including the ICTsector itself;III. Finally a third phase to identifyinitiatives with the highest potential,including a high-level analysis ofimplementation requirements.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTIn 2006 (the last year for whichdata is available) Portuguese GHG emissionsrepresented 82.7MtonCO 2e, well above thebinding target set for 2012.Of this 82.7MtonCO 2e, 59.2MtonCO 2e(72%) were the direct result of energyconsumption (and associated transformationand transport/distribution processes), withthe remaining attributed mostly to industrialprocess emissions, waste and agriculture. Thisshows the extent to which the fight againstclimate change is linked to the fight for higherenergy efficiency.With emissions from energyconsumption allocated to end user sectors, theones with the highest emission rates in 2006were, Industry 1 with 23.7MtonCO 2e, Transportwith 20.1MtonCO 2e and Residential/services(excluding ICT) with 14.4MtonCO 2e.In 2006 ICT accounted for only1.0MtonCO 2e (1,2% of total emissions),although this value does not include embodiedcarbon emissions that took place during themanufacture and transport of ICT equipment,which mostly takes place outside Portugal. Inthe estimates made in the SMART 2020 globalreport embodied emissions were included,hence ICT weight in the overall emissions washigher (at 2.7 %).Of the high emitting end user sectors,only industry is covered by the EuropeanEmissions Trading Scheme (ETS) Directive 2and hence with direct visibility on the costsof CO 2(and even this coverage is only partial).The residential and services sectors are onlyaffected by CO 2allowance prices so far as theyare reflected in electricity prices, and Transportis currently not affected in any way.The estimates made for the SMARTPortugal 2020 report by The Boston ConsultingGroup forecast that in 2020, in a Business AsUsual (BAU) scenario, Portuguese emissionsshould remain relatively stable, amountingto 81.1MtonCO 2e. This estimate considers theevolution of each different sector and theexpected economic evolution over the next11 years and is, as far as time horizons allow,consistent with projections and estimatesperformed by other entities, including thereference scenario of the PNAC (Plano NacionalPara as Alterações Climáticas), as publishedby the Portuguese state. In general terms,stabilisation of emissions will be related tolower emissions per unit of GDP, either throughtechnological evolutions or cleaner electricitygeneration, which will offset an increase indemand from the different sectors.A careful analysis of ICT-enabledmeasures, when applied to the Portugueseeconomy and with Portuguese expert opinionstaken into account, highlighted a potentialfor CO 2e emission reductions of around 15%of the overall emissions expected in 2020- about ten times the expected footprint1The Industry sector as considered in this document includesall activities related to Process and Manufacturing Industry andConstruction2European directive that establishes the need for certain sectors(the directive sectors, which include power generation, cement,metallurgy, glass, paper pulp and ceramics) to account for andobtain licenses for the CO 2emitted by their installations

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTof the ICT industry. This represents 11.9 to12.6MtonCO 2e 3 , of which 0.4MtonCO 2e wouldcome directly from the ICT sector. Such areduction would be enough to meet Portugueseemissions targets for 2012 and even reachthe more ambitious targets currently underdiscussion for 2020.The direct economic value associatedwith these reductions ranges from ¤2.2 billionto ¤2.3 billion per year. These values only takeinto account the avoided CO 2emissions cost,which stands at approximately ¤0.4 billiongiven a target price of ¤35 for CO2 allowances 4 ,and the end user value of the energy saved(as either electric power or fossil fuel), whichamounts to the remaining ¤1.8 billion at currentprices 5 . Capture of this environmental andeconomic value depends on the developmentof cost-effective technologies and solutions,and their application in the marketplace. Thetotal impact is likely to be higher, since indirecteffects such as technology development, orpotential additional effects such as reducedinvestment in energy production, transport anddistribution were not considered in this overallnumber. Also not considered was the valueof potential upside and additional economicgrowth associated with the creation of a newICT-supported sustainability cluster.The identified potential for “ICTbased”reductions depends on two factors;the starting point of each sector in terms ofenergy (and hence emissions) efficiency andthe role that ICT can play in enabling those3Depending on assumptions for the impact of power managementinitiatives4Aligned with current EC forecasts and assumptions5Prices assumed as follows: Electricity – ¤0.06/kWh; Diesel –¤0.39/litre; Gasoline – ¤0,48/litre (excluding fuel taxes)reductions. It is therefore not surprising thatthe two largest areas of opportunity identifiedare transportation and residential/services,specifically to more efficient use of energy inbuildings. These are sectors that are currentlynot covered by the ETS directive, and wherechange has been less pressing than in, forexample, industry. Achieving substantialreductions in these sectors will requiremonitoring and providing relevant incentivesto a very fragmented set of decision makers,with all that this implies in terms of informationgathering, processing and data transmission.In addition to these two sectors,a substantial opportunity was identified inbetter management of electricity generation,transmission and consumption. ICT-based realtime information gathering, transmission andprocessing can allow better planning and usageof electricity, facilitate greater use of renewablesources in electricity generation, and producesubstantial savings across a broad range ofsectors.The three priority areas identifiedin the SMART Portugal 2020 project accountfor 55% of the total emission reductionpotential identified and represent substantialopportunities for the development of the ICTindustry:• Transportation, with a directeconomic value of ¤477M throughthe adoption of urban mobilitymanagement systems. These systemscan continuously monitor realemissions and adjust automotivetaxation accordingly. A combinationof direct incentives and congestion

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTmanagement initiatives, such ascongestion gates, dynamic parkingpricing or traffic light coordinationcan effectively reduce congestionand emissions in the urban perimeter.This value does not include increasedpenetration of electric cars, which, inspite of their long term potential toreduce emissions, are not expected torepresent more than 3% of the overallfleet in 2020 (11 years from now) dueto the slow rotation of the installedbase 6 .• Power Management, with an economicvalue of 308-447M¤ (depending onassumptions for the effectiveness ofthe proposed solutions in shaping thedemand curve). This increased ICTbasedpotential is driven by two keyfactors. The first is improved grid andconsumption monitoring and control,allowing for better dispatch planningand increased capacity to handleintermittent renewable generationor distributed micro generation. Thesecond is consumption management,which allows for demand shaping andpeak shaving, reducing network lossesand the need for the highly responsivebut polluting thermal sources used forpeaks.• ICT-enabled Buildings efficiencyimprovements represent ¤410Mof economic value, in addition tothe improvements in emissionsfrom electricity generation alreadyaccounted for above. These savings are6Government projections predict that electric cars may representapproximately 20% of total car sales in 2020achievable by optimising energy usagethrough utilising ICT-enabled BuildingManagement Systems (operatingindependently of technologicalchanges to grids) to monitor andcontrol consumption of differenttypes of home or office equipmentsuch as lighting, appliances, HeatVentilation and Air Conditioning(HVAC). This value does not considernon-ITC building efficiencies e.g.in architecture and insulation thatcan also contribute to lower energyconsumption and therefore loweremissions.Realising this potential will requirewillingness and determination to act from allstakeholders involved, but in return will deliversignificant benefits that the country cannotafford to waste.Policy makers should adopt policiesthat foster the development and adoption ofthese types of innovative solutions, whichin turn can bring positive results at severallevels for the country: as well as being costeffective,they can generate new business andjob opportunities, whilst encouraging moresustainable behaviours.• Implementing key initiatives inTransport would require allowing andfacilitating real time measurementof emissions and changing theautomotive taxation regime toshift a higher percentage of thetax burden from fixed (IA, IUC) tovariable components linked to actualemissions.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT• Implementing Power Managementinitiatives would require not onlydefining the appropriate frameworkand responsibilities, specifically infinancing and operation, but alsoaligning the incentives of the differentplayers. Changing the remunerationscheme for regulated Transportationand Distribution (T&D) assets willhelp realise the potential benefitsfrom increased energy efficiency, andcoordination of initiatives to increaserenewable energy penetration andnew segments (e.g. electric cars) willbetter align the incentives of powerproducers.• Implementing Building Managementinitiatives would require the roll outof energy efficiency certification thattakes into account the benefits of theadoption of building managementtechnologies, and translates theimproved energy efficiency into taxincentives or penalties, helping fosteradoption by providing coherentincentives for citizens and companies.Changing policies in this way wouldcurb the growth in emissions of non regulatedsectors, help Portugal to reach the proposedtargets, and would also improve the tradebalance by lowering the need for imports ofprimary energy and emission allowances.Furthermore, it would help develop asustainability cluster, creating opportunities forPortuguese companies to develop pioneeringexportable solutions, fostering economicdevelopment and growth on a low carbonintensity industry.Citizens and companies would have tochange habitual behaviours and make use ofthe new tools at their disposal.• In transportation, citizens wouldneed to use ICT tools to rethink useof private cars and optimise theirmobility options,; technology canfacilitate the adoption of best practicesin order to reach sector sustainability;• In power management, citizens andcompanies would benefit from demandmanagement related savings, throughaccepting measures such as selectiveinterruptability or power limitationcontracts. An increased visibility ofenergy costs would also promoteincreased awareness on energy use;• In building efficiency, citizens andcompanies would react to incentivesand adopt solutions that increaseefficiency, leveraging potential gains inthe medium term.By doing so, they will not only benefitfrom a more sustainable environment, butalso from substantial improvements in energysavings, competitiveness and quality of life.For its part, the Portuguese ICTindustry has the responsibility and theopportunity to deliver the required solutionsand help in identifying and overcoming theimplementation hurdles associated with sucha major transformation, while developing newand interesting business areas.While most of the technologiesinvolved in the implementation of the proposed

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTsolutions are already developed (and insome cases already deployed), a substantialeffort is still required in systems integration,standardisation and industrialisation.• In transport systems, a standardsolution must be developed (atleast at the national level, even ifinternational standardisation allowshigher scale and lower costs) thatallows real time monitoring ofemissions as well as access controls.Even if the technologies involved(metering of emissions, user interface,communications with authorities,authentication, etc.) are well knownto the industry, special attention mustbe paid to the system integration andindustrialisation in order to minimiseoverall system cost and effort involvedin roll-out (installation)• In Power management systems,standardisation of meteringprocedures and data transmission, butalso of user interface and in-built orexternal actuators to control specificappliances, places challenges thatshould be met, ideally at the Europeanlevel.• In building systems, adoption willbe highly dependent on the abilityto build on and repackage existingtechnologies and solutions to developsystems that are cost effective, aswell as easy to deploy and userfriendly.This ease of deploymentmust consider the need to retrofitsystems into existing buildings and toadapt to the potentially lower level oftechnician specialisation.By taking these steps, the PortugueseICT industry has an opportunity to establisha leading position in this globally importantissue, taking advantage of a sizeable businesspotential not only in Portugal but also in othermarkets. In fact, the advanced technologicalnature of the solutions to be developedis a strong enabler for exportability, evenmore so given the increasing importance ofenvironmental issues on international businessagendas. In addition to these product/systemenablers, ICT could develop specialised valueadded optimisation systems for the various endcustomer segments.As stated in the original SMART 2020report by GeSI and the Climate Group “The ICTindustry, in partnership with other emittingsectors, has a key role in helping make society’simpact visible and to demonstrate in aggregate

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTthe demand for new ways of reducing thatimpact”.So, as before, the sector may cast itselfback in the role of the solution provider, andthis time in one of greatest challenges of ourtime: fighting climate change.Even though the solution does notlie entirely in the ICT sector, ICT has thepotential to be the unifying thread, bringingtogether Government, Companies, Citizens andsolutions.ICT’s potential can be rapidly realisedthrough existing technologies, know-how,and overall solutions. Decisions requiredfrom policy makers are known. Impacts onconsumer and company habits have beenidentified. Society is increasingly aware of theproblem and receptive to the adoption of thesesolutions.Now is the time to act.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT03 ContextThirty-four countries were involved in the legally binding Kyoto Protocol, the agreementnegotiated with the support of the United Nations Framework Convention on Climate Change(UNFCC). This agreement sets an average reduction of 8% by 2012 on Green House Gases (GHG)emissions for the EU15 countries relative to 1990 levels. This overall target for the EU15 countrieswas later allocated between them through the Burden Sharing Agreement, signed in June 1998and taking into account their respective starting points and expected economic evolutions.In the Portuguese case, the target set for 2012 is for total emissions of 75.1MtonCO 2e (a27% increase in GHG emissions relative to 1990). However, this limit has already been exceededand historical trends and initiatives in place show that the Portuguese target is not likely to bemet by 2012. Moreover, discussions on a post-2012 target have started and the proposals are evenmore ambitious: Portugal will probably need to reduce its GHG emissions to about 71.3MtonCO 2eby 2020.The cost of inaction is much higher than the cost of action. The Stern report strengthensthis argument by demonstrating that an increase in the average temperature of more than 2 o C isexpected if we carry on with Business As Usual, and 2 o C is generally accepted as the point beyondwhich significant and irreversible damage might occur. The unsustainable level of GHG emissionsmay produce serious damage to our planet. Rising awareness of the negative impact of allowingGHG emissions to increase at current rates has been the tipping point for a drastic change in publicperception. Portuguese companies, mainly those under the scope of the Emissions Trading Scheme(ETS) directive, are starting to realise that urgent measures are required to both reduce theircarbon emissions and also to have a positive impact in reshaping the Portuguese carbon footprint.The economic environment is changing, creating a materially different perspective forcompanies targeting sustainability; an environmental conscience is being generated by climatealerts and in many cases, emissions will represent real operational costs in the near future. Inreality, two main levers determine the course of action for modern companies on sustainability: thefirst is the increasing need to reduce OpEx (which can be achieved by reducing consumption andhence spend on energy); the second is that environmental responsibility is becoming not only aduty but also an increasingly important attribute of brands and their perception by consumers.This is also true for the ICT (Information and Communication Technologies) industry.Although it is true much can be done to improve the industry’s own footprint, when one considersthe whole of the economy, ICT is far more likely to be part of the solution to address the globalclimate challenge.In 2008, the Climate Group published the “SMART 2020 – Enabling the Low CarbonEconomy in the Information Age” report on behalf of the Global eSustainability Initiative (GeSI),

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTan industry-led initiative to further sustainable development in the ICT sector. This report wasa result of a 6 month project to analyse the worldwide ICT carbon footprint and identify thepotential for emissions reduction in this sector as well as potential to enable reduction in othersectors. The study identified 5 main opportunities for reduction: SMART motors, SMART logistics,SMART buildings, SMART grids and dematerialisation. The SMART concept created is intended tobe common to all areas of the economy – Standardisation, Monitoring, Accountability, Rethinkingand Transformation.The SMART 2020 study highlighted the potential impact the ICT sector can have on thereduction of worldwide emissions, showing that ICT-enabled reductions could amount to 5 timesthe sector’s own footprint by 2020.The SMART Portugal 2020 study, commissioned by APDC (Associação Para oDesenvolvimento das Comunicações) with the support of The Boston Consulting Group, is thefirst of several efforts worldwide to localise the conclusions of the SMART2020 report and deriveimplications at the country level, a necessary step to foster discussion, galvanise support andestablish actionable plans to realise the potential identified. The study so far has been conductedin three consecutive phases:• The first phase identified the national carbon footprint. Total Portuguese emissions weresplit by economy sector, and forecasts were projected to 2020 in a Business As Usualscenario;• The second phase identified ICT-enabled measures with high potential for emissionsreduction. Beyond the direct impact on the ICT sector, ICT technologies confirmedthe much more important effect that they can have in enabling reduction in the othersectors of the economy;• The third phase detailed key high impact measures, including a high level plan foradoption of these levers to reduce Portuguese emissions.This report serves to communicate the study results and to explain the methodologies andassumptions used. As such it follows closely the structure of the work performed so far.The first part, section 4, focuses on understanding the current carbon footprint of thePortuguese economy and on forecasting its evolution to 2020 in a Business As Usual scenario,including an estimate of the ICT industry’s footprint. Section 5 focuses on identifying the potentialfor reduction of the ICT industry’s direct footprint, as well as on identifying and quantifying ICTenabledinitiatives to reduce the carbon footprint of other sectors. Section 6 focuses on furtherdeveloping those initiatives that have the highest potential for emission reduction and a high ICTcontent, considering specific technological developments needed, implementation hurdles andfinancial impacts. Finally, section 7 derives the high level implications of the identified priorityinitiatives for policy makers, citizens, companies and the ICT industry. The report ends withconcluding remarks (section 8) that sum up the opportunity and call for action.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT04 Portuguese Carbon FootprintAccording to APA (Agência Portuguesa do Ambiente), in 2006, the latest year forwhich official data is available, Portuguese green house gases (GHG) emissions represented82.7MtonCO 2e.This value has been relatively stable since 1999, but is well above the 75.1 MtonCO 2etarget defined for Portugal in the Burden Sharing Agreement, which allocated emission reductionefforts among the EU 15 countries.Versão nova do slideMton CO2e100Evolution of national emissions-0.1 %1990Relativeweight (%)2006Relativeweight (%)8071.3+3.9 %76.383.581.583.287.982.884.887.282.7~75.1 BSA604059.140.349.053.460.659.160.364.359.861.363.959.26887210002006.34.68.10.28.45.9 7.31990 19970.36.5 6.3 6.2 6.8 7.2 7.20.3 0.3 0.3 0.3 0.3 0.37.58.47.78.57.88.87.28.77.28.77.48.17.48.37.31998 1999 2000 2001 2002 2003 20047.70.38.17.220057.90.3 0.3 148.46.8102006Energy108Industrial ProcessesSolvent and Other Product UseAgricultureWasteNote: Total emissions not considering LULUCF (Land Use, Land-Use Change and Forestry) representing ~-4Mton CO 2e in 2006; BSA: Burden Sharing AgreementSource: Portuguese government; IETA: International Emissions Trading Association; BCG AnalysisThe extent to which the fight against climate change is linked to the efforts for higherenergy efficiency becomes evident after analysing the composition of emissions in Portugal. In2006, around 70% of all emissions were directly linked to energy consumption, both from endusers and transformation into other types of energy.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT~72% of 2006 CO2 equivalent emissionscoming from the energy sector...... mainly composed of energy, transport andmanufacturing/constructionMton CO 2 e1008082.7Mton CO 2 e601.6 0.92.659.210.02.4% of EnergyRelatedEmissions6059.24019.950%4020207.98.40.36.8002006EnergyIndustrial ProcessesSolvent and Other Product UseAgricultureWasteNote: Total emissions not considering LULUCF (Land Use, Land-Use Change and Forestry)Note 2: Energy Industries considers energy transformation (e.g. electricity generation) and energy sector auto-consumptionSource: Portuguese Energy Balance (DGGE); UNFCCC - United Nations Framework Convention on Climate Change; BCG Analysis21.92006OthersAgriculture/forestry/fisheriesCommercial/institutionalResidentialManufacturing and constructionTransportEnergy industries35%Transport and industry are the largest end users, representing around 50% of theemissions linked to energy consumption. Production of other types of energy, mostly electricity,accounts for around 35% of the emissions associated with energy consumption.In order to gain a better understanding of the drivers behind GHG emissions in Portugalwe need to understand the end users driving those emissions. This means that we must understandhow primary energy is used and by whom.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTPortuguese Energy Balance 2006 (ktoe 1 )Net energyImports• Oil 66%• Coal 16%• Natural Gas 16%• Electricity 2%DomesticProduction• Electricity 2 29%• Others 3 71%Stocks andforeign boatsand planes85422,53326,7604,228Energy Supplyin CountryPrimaryEnergyConsumption25,906Conversionlosses fromfossil fuel toelectricity3,439Non electricenergy losses(inc. heatgeneration) andnon energeticuses 4ElectricAutoconsumptionand Network Losses5903,42718,450Final energyConsumption1. toe: tonne of oil equivalent; 2. Includes electricity from Hydro, Wind and Geothermal; 3. Includes urban waste, biomass, biogas and biodiesel4. includes use for non energetic purposes (e.g. road tar, lubricants, raw materials, etc.)Source: DGEG, BCG Analysis6536,9335,4305,434Others• Oil 67%• Natural Gas 2%• Electricity 28%• Others 3 2%Transport• Oil 100%• Electricity

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT2006 National Emissions split by emitting sectorMton CO 2e100755020.10.214.49.45.03.72.61.11.31.064.218.99.70.98.40.36.86.82.01.60.10.382.719.340.025023.75.810.07.9Industry/cons truction19.9TransportResidential/ Energyservices Autoconsunon-ITC mptionEnergeticlossesICT37.57.9Sectorswhere ICThas moreleverageAgricultureWasteOthers23.5TotalElectricity relatedEnergy Non-Electric relatedNon-EnergyNote: ITC emissions substantially smaller than Smart 2020 mainly due to fact that embedded carbon mostly generated abroad and hence notaccounted forSource: APA - Agência Portuguesa do Ambiente; BCG analysisTo summarise, allocating all emissions to end-user sectors shows the highest emittingsectors in 2006 were Industry/construction with 23.7MtonCO 2e, Transport with 20.1MtonCO 2e,and Residential/services (excluding ICT) with 14.4MtonCO 2e. These three sectors account for 37%,24% and 17% respectively of total 2006 emissions.The ICT sector accounted for only 1.0MtonCO 2e in 2006. Although it represents a lowshare of total emissions (1.2%), the ICT Portuguese emissions do not take into account embodiedcarbon emissions. The worldwide emissions do consider them, and as Portugal is a net importer ofdevices and equipment, the volume of emissions induced globally by the Portuguese ICT sector issubstantially higher, estimated at 1.9MtonCO 2e.Two other areas related with energy production were also considered, due to their highpotential for ICT-enabled emissions reduction; the first is energy production and transformation,for instance pumping and oil refining, and the second is energy losses from production and

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTdistribution.The remaining sectors were not detailed separately (agriculture and waste). Indeed, theywere considered to have very low potential for ICT-enabled emission reduction; hence emissionswere projected based on the forecasts for their sector’s growth.To forecast future carbon emissions, each sector was analysed using different drivers sothat projected tendencies could be applied to model the evolution of sector emissions. Due to itscross-sector effect, electricity generation was analysed separately, with trends such as the currentand planned national production mix detailed and projected, and considering the internationalenergy situation and efficiency plans in place in Portugal.Portugal 2020 analysed sectors drivers and tendenciesSector123456ElectricityGenerationIndustry/constructionTransportsResidential/services non ITCEnergyICT7Energetic lossesSector Drivers• Per capita energy consumption• Increase non-emitting energysources• Sales• Specific emissions• Rail passenger-km• Vehicles• Aviation movements• Navigation movements• Specific emissions• Penetration of electric devices inhomes and commercial services• Increase in refining emissionfollowing recent trends• ITC device penetration rates• Unitary electricity consumption perdeviceObserved Tendencies• +2% growth in electricity consumption• Stabilization of total emissions• Decrease in unitary emissions• Growth correlated with GDP evolution• Efficiencies can be achieved, major ones within cements• Particular increase by 2015 with high-speed ramp-up• Increasing at historical rates• Increasing considering the new Lisbon airport• Stable through the years• Compulsory targets for cars, historical decreases in other cases• Stabilization of current emission levels• Increase in per capita energy consumption balanced by loweremission factors• Stabilization of current levels of energy consumption inenergy sector• Slight increase in emissions due to energy consumption• Sector with largest CAGR increase of emissions• 4% increase in electricity consumption• PCs and datacenters as the main drivers for growth• Losses per kWh/km • Stabilization of current level of emissions• Increase in total energy lost in networkThe resulting Portuguese carbon footprint projected for 2020 is expected to reach81.1MtonCO 2e, in a Business As Usual scenario.The forecasted BAU scenario shows total emissions stabilising (approximately-0.3% CAGR 7 in total emissions from 2007 to 2020) without any effect on economic growth(approximately 1.8% CAGR growth in GDP from 2007 to 2020), which is only achievable througha significant decrease in the carbon intensity of the economy, but is not enough to meet the2012 BSA (75.1 MtonCO 2e) and even further from meeting the proposed targets for 2020 (71.3MtonCO 2e).The resulting calculation with a year by year projection for emissions from eachconsuming sector in a BAU scenario is included in Appendix 3.7AGR: Compound Annual Growth Rate

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTEmissions Split by Final Consuming Sector 1Mton CO 2 e2012 BSAtarget10087.282.784.283.382.782.381.5-0.3%81.3 81.3 81.1 81.2 81.2 81.1 81.1 81.281.175.171.32020ProposedEU Target75507.29.517.06.89.714.46.89.815.66.99.815.36.99.915.16.99.914.97.010.014.57.010.014.57.010.014.57.110.114.47.110.114.47.110.214.47.110.214.47.210.314.47.210.314.47.210.314.3OthersEnergetic lossesICTEnergy autoconsumption20.120.120.019.819.719.519.419.319.119.018.918.818.618.518.418.3WasteAgriculture25Residential/services non ITC024.8200523.7200623.7200723.4200823.1200922.9201022.6201122.5201222.6201322.5201422.6201522.6201622.7201722.7201822.8201922.82020TransportIndus try/construction1. Electricity generation emissions split into consuming sectorsNote 1: ITC emissions substantially smaller than Smart 2020 mainly due to fact that embedded carbon mostly generated abroad and hence notaccounted for Note 2: Emissions data excluding LULUCF (Land use, Land use change and Forestry)Source: APA - Agência Portuguesa do Ambiente; BCG analysisThe resulting emission forecast is in line with other existing reference scenarios. Recentgovernment projections 8 point to values between 80.9 to 84.6 MtonCO 2e for 2010 (depending onthe extent of implementation of measures considered). SMART Portugal 2020’s projection of 82.3MtonCO 2e for 2010 lies within this range.Projections for each of the main end-user sectors are:• Industry/Construction: Stabilisation of emissions (-0.3% CAGR 2007-2020)resulting in 22.8 MtonCO2e in 2020.• Transport: Slight decrease in emissions (-0.7% CAGR 2007-2020) leading to 18.3MtonCO2e in 2020, including new developments in all transport modes (e.g. newrailway and air travel capacities, electric car).• Residential/Services (excluding ICT): Slight decrease in emissions (-0.7% CAGR2007-2020) to 14.3 MtonCO2e in 2020.Because of its relevance to the overall carbon footprint it is also worth focusing on theevolution of emissions from electricity generation and as a result, on the role of energy policies.The evolution of electricity emissions is related to two key levers:• The first is the change in the amount of electricity consumed. This is related tothe levels of activity or output of the different sectors, as well as to the energyefficiency (the amount of electricity required to generate one unit of output oractivity). Higher or lower demand has direct implications on generation, withdemand for more energy being met by increased use of emitting (e.g. CCGT)generation. Energy efficiency programs set by the government directly reduce8MEI – A policy with ambition

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTexpected emissions from electricity generation by lowering consumption.• The second lever is the emissions required to generate one unit of electricity.For example, a higher mix of Renewable Energy Sources (RES) in electricitygeneration mean that for each kWh generated, less CO 2e is emitted. An expectedincrease in use of renewable energy sources through investments in wind andhydro will allow 48% of national generation to be from non-emitting sources in a2020 BAU scenario.The consideration and separation of both levers is key to correctly determining emissionevolution scenarios. This enables the separation of the impact of public policies on nationalgeneration mix and unit emissions from the evolution of demand, and its impact on electricityconsumption.In particular, it is worth mentioning the impact of public policies in increasing the use ofnon emitting sources, namely by fostering renewable energies. The SMART Portugal 2020 scenarioconsidered the latest government plans in terms of renewable capacity increase.Generation mixCO 2 e/kWh Generation Emission Factor% of generation100Ø 100ton CO 2 e/kWh0.40.35754043 46 480.30.300.250.2250303030300.22531000.127 26 24 22020072010201520200.02007201020152020RenewablesNatural GasFuel-OilCoalSource: REN; A PA ; DGGE; UE PRIMES Model ; INESC; B CG analysisSource: REN; APA; DGGE; UE PRIMES Model; INESC; BCG analysisThe execution of these policies is a key driver of the overall emissions evolution pattern.For example an increase in the use of non emitting sources in the overall mix of electricitygeneration will decrease the carbon content of every MWh consumed. This will lower the emissionfactor from 0.35 tonCO 2e/MWh in 2007 to 0.22 tonCO 2e/MWh in 2020 in the assumed BAUscenario.A detailed description of the hypothesis and assumptions for the different sectors can befound in Appendix 3.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT4.1 Portuguese ICT Industry carbon footprintFor the scope of the SMART Portugal 2020 study, and in order to ensure methodologicalconsistency, the ICT sector was defined exactly as in the global SMART 2020 report. This includesPCs and peripherals, IT services and Telecom networks and devices.Included PCs and peripherals: workstations; laptops; desktops and; peripherals such asmonitors and printers IT services: datacenters and their component servers, storage and cooling Telecoms networks and devices: network infrastructure components; mobilephones; chargers; broadband routers and digital TV boxesNot IncludedDefinition of ICT sector for this report Consumer electronics such as TVs, video equipment, gaming, audio devicesand media players Other electronic equipment such as medical imaging devicesIn the ICT sector, consumer expectations and demands are increasing at the same rate astechnological developments. This is mainly driven by increasing penetration of devices, demandson processing power and communication capabilities. ICT emissions are expected to increase 0.7%per year in the period 2007-2020 due to the continuing changes in the ICT industry.ICT sector emissions by subsectorMton CO 2 e1.51.01.011.03 1.011.01 1.021.01 1.031.050.7%1.071.09 1.101.11 1.121.13 1.130.50.020062008201020122014201620182020Source: IDC; INE; UE Primes Model; Expert interviews; A PDC associates interviews; BCG analysisTelcom NetworksDatacentersTelecom DevicesPC

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTThis small increase in ICT sector emissions is a result of different dynamics according tothe sub-sector considered;• Personal computer emissions are forecast to grow at 1.4% CAGR to reach0.59MtonCO 2e by 2020, mostly due to a large increase in the number of PC’s,although partially offset by a change in form factor 9 from the current highconsumption of desktops to a situation where laptops are dominant;• Telecom devices emissions are forecast to stabilise at 0.24MtonCO 2e (-0.2%CAGR 2007 – 2020) as an increase in the number of devices, especially CustomerPremises Equipment (CPE’s), is offset by lower emissions/consumption perdevice;• Telecom networks are forecast to see a clear reduction in emissions 10 (-3.5%CAGR 2007-2020) as investments are made in lower consuming networks(next generation fibre optics networks – NGN) or increased energy efficiency.Emissions should be at 0,08MtonCO 2e by 2020;• Datacenters are expected to see a large rise in emissions (2.1% CAGR 2007-2020), mostly due to a large increase in the number of servers, meeting anincreasing demand for processing power. Emissions should be at 0.21MtonCO 2eby 2020.A detailed description of the hypothesis and assumptions for the different ICT subsectorscan be found in appendix 3.9Form Factor: Mix of installed base between laptops and desktops10Confirmed through aggregation of data from 4 largest network operators

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT05 The ICT Enabling EffectAs seen in section 4, in a BAU scenario, the Portuguese carbon footprint is expected toreach 81.1MtonCO 2e by 2020.In this total footprint, the ICT sector is responsible for approximately 1.13 MtonCO 2e(1.2% of the total). The size of the number makes it clear that regardless of the potential to reduceICT’s direct footprint, this will not be a major contribution to the solution of the overall problem,although reduction is possible and should be pursued. The larger prize for the ICT industry willbe as part of the overall solution, mainly through its ability to enable reduction in emissions fromother sectors.A careful analysis of ICT-enabled measures, applied to the Portuguese economy, andtaking into account input from experts on the situation in Portugal, highlighted a potential forCO 2e emission reductions of 11.9 to 12.6MtonCO 2e. This represents 15% of the overall emissionsexpected in 2020, roughly ten times the ICT sector’s direct carbon footprint in 2020.This reduction in GHG emissions has a total economic value of ¤2.2 billion, of which ¤0.4billion is CO 2e reductions and ¤1.8 billion is energy savings. The transport sector is responsiblefor the majority (~57%) of these savings, with the residential/services sector and energyautoconsumption/energetic losses sector at ~ 20% and 12% respectively.This is, in fact, a conservative value that does not take into account possible breakthroughor disruptive technologies that may transform the CO 2emission landscape even further.Unexpected success of technologies associated with mass implementation of microgeneration/distributed generation, mass adoption of the electric car, or even breakthrough technologies incomputer virtualization or cloud computing may provide even greater reductions in CO 2emissionsthan identified here.Even in this more conservative approach, the full realisation of the identified ICT-enabledreductions would be enough to meet the proposed 2020 targets for Portugal.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT2020 BAU vs. 2020 Smart PortugalMton CO 2e100-15 %8087,282,784,281,169,271,360202020ProposedEUTarget0200520062007Note: Emissions data excluding LULUCF (Land use, Land use change and Forestry)Source: Agência Portuguesa do Ambiente; BCG Analysis2020 BAU2020 SmartPortugalAnalysis shows that the sectors with the highest potential reductions in emissions areTransport with 6.2MtonCO 2e and Residential with 2.4MtonCO 2e. These two sectors account forapproximately 72% of the identified reduction impact.Mton CO 2e1510.2%Emissions Reduction Potential per Sector Utilizing ICT4.6% 52.5% 19.9%9.2% 3.6%n.a. 1 2.4% 34.0% 16.1% n.a. 2 39.1% 15.0%1.1-1.80.411.9-12.6106.22.4Dependingon smartgrids impact501.2ElectricityGeneration0.5IndustryTransport#Residential/services non ICT# % of total reduction potential% reduction over 2020 BAU scenarioEnergy &EnergeticlossesICTReductionPotential1. Electricity generation not considered an independent emission sector. Emission reduction considered is due to lower unitary emission costs2. Energy and Energy losses saving consider include savings in energy consumption from residential and services sector and peak shavingSource: BCG analysis

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTThree key factors explain the high relevance of these sectors on the overall ICT –enabledreduction potential identified in Portugal:• Both sectors are substantial emitters. Transportation accounts for 23% of totalemissions in Portugal and Residential/Services accounts for 18% in 2020 (in a BAUscenario). This makes them respectively the 2 nd and 3 rd largest emitting sectors.• Neither transport nor residential/services are included in the current ETS directive 11(except indirectly through electricity production), and therefore are not subject toCO 2price signals and incentives to curb emissions as in industry.• In these two sectors, emissions depend on the individual behaviours of a fragmentedset of decision makers (home owners, automobile drivers), rather than regulatinglarge emitting units. Reducing emissions therefore requires monitoring and providingcoherent incentives to this large, disparate set of decision makers, with all thatthis implies in terms of information gathering, processing and transmission. This issomething that plays to ICT’s strengths, and a number of technologies and solutionshave been developed in recent years to address these concerns.In transport four key ICT initiatives account for 79% of the total ICT-enabled reductionpotential 12 of 6.2 MtonCO 2e:• A congestion management system could be applied to the major Portuguese urbanareas, as in the London congestion charge case study, with a potential impact of 1.4MtonCO 2e. ICT involvement would be crucial to achieving this – from gate control tomonitoring devices to real time pricing implementation and traffic data processingsoftware.• A Pay-As-You-Emit initiative would allow real time monitoring and accountingof real emissions. ICT solutions are required for real time monitoring, informationtransmission and data processing at different levels (users, tax authorities, citytraffic managers). Combining these with an automotive tax reform, including theapplication of the polluter-payer principle, would allow a reduction of 1.0 MtonCO 2e.This also relies on ICT to measure, process and transmit emissions data to both thedriver and the tax authorities.• Widespread adoption of freight logistics optimisation software could achievesignificant carbon footprint savings through more efficient route planning, deliveryscheduling and an increase in load factors – an estimated reduction of 1.5 MtonCO 2ecoming mainly from fuel savings. Such solutions are already commercially availablein Portugal 13 .• Driver training could represent a potential saving of 1.1 MtonCO 2e, mainly throughchanging driving styles to reduce emissions; in this case, ICT’s main involvement isthrough simulation tools for the training of professional drivers and other citizens.11Although power generation is included in the ETS, electricity consumption is not. The end result is that emission reducing initiatives todayare mostly focused on reducing emissions through increasing renewables without focusing on reducing emissions through increased energyefficiency in consumers.12Calculation details and assumptions in Appendix 413E.g. Be On product from RealLife Technologies

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTIn buildings, the identified emission reduction potential comes from the introductionof ICT-enabled functionalities in building energy management 14 . This reduction potential couldamount to 2.4 MtonCO 2e by deploying ICT-enabled energy efficiency systems, e.g. developmentof household equipment with lower consumption on stand-by, variable speed drives for HVAC orbuilding temperature and air monitoring systems. More complex systems can maximise energyefficiency by introducing:• Real time consumption monitoring, with warning and displays;• Customised information and advice on how to continuously improve energy efficiency;• Centralised and remote control;• Automated control for lights, HVAC, appliances (in home or in office).There is clear potential, particularly in office buildings, for convergence with otherrelevant management systems to increase savings potential (e.g. access, control, security,communication etc.).These ICT-enabled savings can be implemented autonomously by building owners oroccupants, independently of changes to the systems or overall “intelligence” of the electricitydistribution grid, but with the potential for further reductions if smart grid technologies areimplemented.Electricity generation and Energy & Energetic Losses have potential for sizeablereductions of 1.2 MtonCO 2e and 1.1 MtonCO 2e respectively, which would be achievable throughthe deployment of active grid management systems, commonly referred to as smart grids. Theseinclude communication and control capabilities in the network as well as household interfaceequipment (e.g. smart meters). The grid must be able to handle the diverse requirements of anetwork of the future, where information flows become increasingly complex and bidirectional.These include capabilities to handle information transmitting from producers to consumers, fromgrid management systems to microgeneration and developed distributed generation, as well asthe symmetric information flows coming from the consumers to the grid. Achieving this requiresthe ability to handle a new network paradigm, one resembling the early Internet. This wouldinclude new bidirectional communication and client control capabilities, household meter systemswith the ability to implement time of day/real time pricing, interruptability contracts, actuatorsable to selectively switch off or reduce consumption of appliances in response to price signalsor other information provided by the grid, or improved user information, which would togetherallow consumers to play a part in optimising the operation of the system. By doing this, ICTenabledsolutions facilitate the system’s operation and the handling of distributed generation,managing both supply and demand while providing consumers and suppliers with greater usableinformation.In the industrial sector, the application of ICT-enabled solutions would allow reductionsof 0.5 MtonCO 2e, mostly through better process monitoring and control and the application ofvariable control motors, which manage consumption to adapt to real time conditions and demandsinstead of operating continuously at full power. This potential is relatively small as emissions fromthis sector are already limited by the ETS directive, and hence a substantial saving has already14Energy efficiencies through non-ICT-enabled actions not included in estimates

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTbeen considered in the Business As Usual scenario.The ICT sector was also found to have potential to reduce its direct footprint by nearly40% vs. the Business As Usual scenario. While this is sizeable in relative terms, it represents nomore than 0.4MtonCO 2e, or 0.5% of total emissions by 2020.When considering the ICT-enabled emission reduction potential, it is also important toconsider an effect usually referred to as the “rebound” effect. This effect occurs when initiativesimplemented to reduce carbon emissions result in an equivalent emission through another activity,generated by the initial initiative. Two key levers exist to minimise the “rebound” effect:• Definition of initiatives that do not create user habits where current emittingactivity is tradable with other emitting activity;• Clear definition of incentives that reward lower emissions due to activity and do notreward only the activity (rewarding the “end” and not the “means”).Fully addressing the rebound effect will require other types of public policies such asemission caps or green certificates, not considered in the scope of this project.The impact of these ICT-enabled initiatives is not exclusively on the reduction of GHGemissions and the related contribution to sustainability. Considering the estimated CO 2price andend user value of the different energy forms that could be saved (power, fuel), it is possible todetermine the direct economic value of the identified initiatives. This direct economic impact froma full application of SMART Portugal initiatives would range from ¤2.2 billion to ¤2.3 billion. Ofthis value, CO 2emission reductions account for 19%, with the remaining coming from the differentforms of energy savings – in the transportation sector, savings were quantified in terms of fuelsaved although for the other sectors savings considered electricity savings.Potential Value at Stake per Sector Utilizing ICTM€2,5001.9%3.0% 57.7% 19.1% 11.9% 6.4%266-4281442,177-2,3392,0004261,5001,232Dependingon smartgrids impact1,000500042Electricitygeneration67IndustryTransportResidential/services non ICT# % of total reduction potentialEnergy &EnergeticlossesICTReductionpotentialSource: BCG Analysis

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTThis estimate of economic value is clearly conservative, since it does not account forother indirect or less tangible impacts that could be considered. These include potential businessbenefits for the ICT industry from additional sales of solutions developed or innovative commercialoffers created through proposed solutions for different end clients. For example, increasedcommunication capabilities with clients will not only allow suppliers to have greater knowledge ofconsumer profiles and create tailored energy consumption offers, but also serve as a portal to offervalue-added services to clients, stimulating market liberalisation.Another potential source of economic value is cost-avoidance in capital investments,namely in energy production, transport and distribution infrastructures, which would be a resultof reduced energy consumption or better usage of the installed infrastructure. As an example, theimplementation of smart grids could allow a ¤220M to ¤450M reduction 15 in capital investment inelectricity T&D networks.Further detail on the identified ICT-enabled initiatives and their impact on the emissionsof the different sectors can be found in Appendix 4.5.1 Direct ICT reductionsA sector built on the basis of constant innovation and growth, the ICT sector hasn’talways paid attention to its energy efficiency. Although consumption reduction has been anarea for innovation, current growth in processing and equipment capabilities mean that energyefficiencies are mostly offset by an increase in unit demand.However, the ICT sector is capable of greatly improving its energy efficiency, mostlythrough applying existing innovations across all equipment categories or by selectively launchingever more efficient products.Although the percentage reduction of the Portuguese ICT footprint in a SMART 2020scenario is the largest of all the analysed sectors, with up to 40% reduction, this full potential islimited to 0.43 MtonCO 2e, or 0.5% of the total emissions, as the sector only accounts for 1.2%of total emissions in the 2020 BAU scenario. A 40% reduction in emissions represents ¤144M inannual savings (due to avoided CO 2e and a reduction in consumed electricity).15Assuming a 3 to 5 year delay in investments (source: Austin, US) and reduction in grid capacity related investments; analysis for Portugalshowed a very high correlation between grid length, energy distributed and investments in grid expansion

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTICTImpactInitiativeInvolvementPotentialMtonCO 2 eGWh1234Increased PC efficiency• Utilization of ICT to increase energyconsumption management1 watt standby telecom devices• reduction of standby consumption oftelecom devicesDecrease in Telecom networks powerconsumption• Adoption of efficiency measuresAdoption of Datacenter best practices• power and cooling efficiency• virtualizationICT sector developmentsICT sector developmentsICT sector developmentsICT sector developments0.19 9370.11 5480.02 870.11 5370.43 2,110High potentialLow potentialSource: Smart 2020, Google, Nokia, Energy Star, Expert Interviews, BCG analysis5.1.1. PC’sPC emissions in the BAU scenario already point to an increase in energy efficiency. Thishigher efficiency is a result of the expected increase in penetration of laptops, which will replaceless efficient desktops.Additional savings could be achieved through an increase of PC power managementcapabilities. This is especially relevant when the machine is not utilised, as many existingcomputers have little or no consumption reduction. Potential for savings is large, as research pointsto up to 60% of corporate desktops remaining on during the night.Up to 50% additional saving in desktops and 25% in laptops can be achieved byimplementing best-practices in stand-by consumption reduction as well as active system powermanagement 16 .5.1.2. Telecom DevicesCurrent telecom devices are highly inefficient when in stand-by mode. Most mobilephones have little or no stand-by power management systems, and high consumption levels evenwhen not charging. Most CPE devices also have little or no stand-by power management systems,consuming the same amounts online or offline.Governments, regulators and suppliers are increasingly aware of this unnecessaryconsumption. Nokia-Siemens and Sony-Ericsson have created stand-by power reduction programswith aggressive objectives, while the market as a whole is aiming for 1 Watt stand-by consumptionobjectives in the medium-long term. Programs vary from reducing actual stand-by consumption tomechanisms that warn users to disconnect chargers not in use.An average of 50% reduction in overall energy consumption for devices can be achieved,driven by increased energy efficiency programs by equipment manufacturers as well as reductionin consumption while in stand-by mode. This opportunity by equipment type is determinedby analysing the potential for energy savings by applying current best practices (e.g. in power16Source: original SMART 2020 report, EnergyStar

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTmanagement) and industry targets such as 1 Watt standby to current usage patterns.5.1.3. Telecom NetworksAs stated in the Telecom Networks carbon footprint section above, analysis of emissionsdue to Telecom Networks was based on interviews with the main Portuguese telecom networkoperators. Incremental reduction would be achievable through additional initiatives currentlybeing piloted around the world. These include:• More efficient base station amplifiers,• Advanced standby power management,• Solar and/or wind-powered base stations,• Night battery operation.Interviews with all major Portuguese telecom operators indicate a maximum achievableemissions reduction of 23% in 2020 compared to the BAU scenario.5.1.4. DatacentersDatacenters are the fastest growing emissions sub-sector. Growth in capacity, processingpower and number of servers are driving up emissions. This accelerated growth has come to theattention of all stakeholders; from Governments, companies and manufacturers, to the generalpublic. However, research and detailing of best-practices has shown that there is substantial roomfor reduction in datacenter emissions.Currently datacenters consume energy both in server power consumption and in coolingand power systems. Existing data shows that non-operation related consumption (e.g. cooling)represents up to 50% of a datacenter’s total consumption. Best-practice benchmarking has shownthat up to 40% energy savings are obtainable through intelligent system and housing design,most through reduction of cooling and powering needs 17 not related to actual server utilisation.Additionally, developments in multi-processing programs and systems are allowing an increase inserver virtualisation, reducing the number of servers needed by pooling resources and utilising“unused” server power.Overall, a 40% reduction in server energy needs, and 28% reduction in number of serversneeded may be achieved through the introduction of both best-practices and new virtualisationtechnologies. The result is a potential 44% reduction in datacenter sub-sector emissions.17Source: Google Efficient Servers and Efficient Datacenters Benchmark

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT06 Priority AreasThe initiatives identified to obtain the necessary emissions reduction have differentlevels of both impact and ICT involvement. In order to identify priority areas for development, theinitiatives were ranked according to their CO 2e reduction impact, potential value and level of ICTinvolvement.The CO 2e reduction impact and potential value of the different initiatives were quantifiedin section 5 and detailed in appendix 6. ICT involvement was assessed qualitatively, by consideringthe device, communication and software requirements for each initiative.Prioritization of initiatives based on reduction potential and ICT involvementICT Involvement potentialHighDirect ICT Dematerialization1st Priority initiativesTotal SavingsPotential (M €)Energy SectorVirtualizationVirtualizationPay-as-you-EmitElectric car enablersCongestion managementPay-as-you-Emit +MediumCongestion managementBuilding EfficiencyIntermodalityFreight logisticsIndustryIntermodalityICTRes/ServIndustry Driver TrainingEnergyUrban TransportationDriver TrainingInter-Urban TransportationLow0.0 0.51.01.52.02.5CO 2 e Reduction Potential (Mton CO 2 e)Source: BCG AnalysisThree key opportunities emerge from this prioritisation matrix: Energy Sector (Electricitygeneration/transportation/distribution); Building efficiency, which consists of ICT–enabledsolutions to reduce energy consumption in buildings without the need for bidirectional real timeinformation exchange with electricity grids; and two key initiatives in Transportation – CongestionManagement and Pay-As-You-Emit.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTValue at Stake per InitiativeBillion €15Key initiatives to detail(55% of total potential)High potential butlower ICT involvement(22% of total potential)10 OtherInitiatives2.6101.51.11.952.311.92.40Pay as you emit+ congestionsmanagementPowerManagementBuildingsFreight logisticsDriver trainingOtherTotal1. Includes Increased energy efficiency in buildings and Increased visibilitySource: Industry expert interviews; BCG analysisCombined, these three initiatives achieve 55% of the total identified reduction potential,and recurring direct savings (in terms of avoided emissions and energy costs) of around ¤1.2billion per year in 2020.Given the magnitude of the potential impact and degree of ICT involvement, theseinitiatives have been further investigated to identify the key implementation requirements andpotential obstacles that will need to be overcome.6.1 Power ManagementUsing ICT to measure, transmit and process energy transit information improves gridmonitoring and control. This allows better planning of capacity dispatching and better capacityto handle an increased amount of variable generation by renewable sources or distributed microgeneration.Consumption management is enabled by a set of features usually called Demand SideManagement (DSM), which gives higher visibility of consumption and more differentiated pricesignals, as well as direct actuation or even selective interruptability of circuits or devices by theelectricity supplier. Allowing the customer to directly view consumption and prices tends to resultin an immediate reduction in electricity demand.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTDSM also enables demand shaping and peak shaving, reducing losses and the need touse the most polluting sources. Network losses are proportional to the square of the transmittedpower, so by reducing peak consumptions, a more than proportional reduction in losses isachieved.All these capabilities of power management rely on a high level of ICT involvement. Fromphysical metering devices for the monitoring of energy transits to the advanced software requiredfor real time analysis, ICT is required as an integrated solution, enabling differentiated capabilities.• The devices required include instrumentation and metering for the assessment ofconsumption levels, load and generation at different points in the grid. Visibilityshould be strengthened with the use of specific user interfaces and equipmentcontrollers to allow increased responsiveness from user-based dynamic pricing.It is also necessary to allow grid-consumer interaction to optimise potentialefficiencies within residences (e.g. permitting DSM capabilities). Greater controlcould be achieved by using energy-controlling devices for electric appliances,allowing effective peak shaving and appliance interruptability, as well asmonitoring of individual appliance consumption;• A good communication infrastructure is needed in order to enable bidirectionaldispatch of information, which is key to giving dynamic pricing signals to theconsumer. Remote control of equipment is also needed in this type of set-up.Security standards are critical to avoid security hazards and fraud;• Integrating consumer information with generation data relies on advancedsoftware capabilities, which should be able to collect process and display inintuitive formats (e.g. consumption profiles per household with incurred costs) oract automatically on a given set of rules.Implementation of ICT capabilities in power generation vary widely depending ondefinitions and capabilities included. Capturing the full potential implies a more inclusive solution,capable of handling the different aspects needed to prepare a grid to handle the demands of futurenetworks.From management of grid assets (including clients, power lines and generation units),to obtaining and processing information related to grid and consumption, a comprehensive SmartGrid solution will need complex, yet obtainable ICT solutions to reach the full potential identified.Handling efficiently intermitent generation from renewables as well as microgenerationwill only be possible through an end-to-end ICT-enabled Smart Grid approach to powermanagement. The real time feedback on consumption, electricity flows and network incidentsattained through the use of ICT in the grid are essential for better coordination of dispatchand consumption, as well as for better use of network assets, lowering the need for additionalinvestment and associated emissions. Smart Grid technologies are also the basis for activatingrelevant DSM features, e.g. allowing for peak shaving.Similarly, although estimated to have a smaller impact up to 2020, the large scale

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTdevelopment and roll-out of the Electric Car is dependent on a complete Smart Grid solution, dueto the technological difficulties a non-Smart Grid solution would have in handling such a dramaticshift in the grid network paradigm.Current electric model(centralized and unidirectional)Future electrical model(decentralized and multidirectional)Generation UnitCentralized Generationin conventional power plantsDistributed generationbetween power plants,microgeneration, solar powerin homes, ...Consumers withmicrogeneration units,acting as users andproducersUnidirectional flowto the final consumerMultidirectional transportation anddistribution network, with telemeteringsystems, capable of monitoringdemand and production in real-timeValue added servicesGeneration UnitSolar panelsin homesand officesInformationdiffusionIndustrial consumersHomes & OfficesStorageMicroturbinesCHPFuel-cellsIndustrial plantsConsumers are only usersVirtual Power PlantRenewable Generation(e.g. wind)Source: European Smart Grids Technology Platform; BCG Experience;Hydrogen PlantHowever, not all systems present the solutions, and not all have the same capabilities. Aworldwide, or even European-wide, standard is far from being achieved, yet Portugal already hasprojects in development that seek to solve at least some of the problems pointed out earlier. TheEDP led InovGrid, which involved multiple technology partners, encompasses all elements in thepower transportation, distribution and consumption chain, while ISA’s SUIT project stands closer tothe Smart Meter solution, focusing on the multi-utility concept.The implementation of grid automation and Demand Side Management systems enablesbetween ¤308M and ¤470M of savings, depending on the extent of consumption managementimplemented.• ¤42M in CO 2allowance costs by allowing greater penetration of intermittent nonemittingrenewable generation. Expert interviews highlight the need for intelligentgrid operation systems to allow an increase in penetration of intermittent generation.Implementation of Power management systems would allow an increase in theamount of renewable energy sources in the overall electricity production mix to58%, up from 48% in the BAU scenario.• ¤26M from increased grid control and the ability to introduce greater amounts ofmicrogeneration/distributed generation (increasing from 10% to 20%, resulting in a380GWh reduction in network losses)• ¤88M from a 1.8% reduction in electricity consumption due to the introduction ofDSM and consumption management capabilities across the network. This is achieved

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTby a 10% reduction in peak consumption requiring CO 2e emitting generation (atthe low end of existing trial results), and 3.9% reduction in network losses due tothe associated reduction of network peaks. The high range of peak consumptionreduction in current trials points to a 15% percent decrease. This would result in a4.9% reduction in consumption and 10.2% reduction in network losses, increasingthe overall potential to ¤250M.• ¤152M from increased user consumption visibility through smart grid displays, andimplementation of dynamic energy pricing, where consumers shift consumptionto lower emitting hours, resulting in an additional reduction of 0.5% per year(effectively eliminating 2.0TWh of consumption by 2020).M €/year400Power management cost savings3001522630880CO 2costs2008891261000424226323New Increasedgeneration grid controlcontrol79ConsumptionmanagementConsumptionvisibility 1228TotalFuel costs1. Includes ~2150 TWh from Consumption Visibility from Smart Meters in HomesSource: BCG AnalysisThese savings would be realised by stakeholders along the value chain, and are inaddition to the positive environmental impacts for society resulting from the increased used ofRES, and the economic impact resulting from the reduced need to purchase CO 2allowances.The network operator would benefit from increased planning capabilities and improvedquality of service by reducing energy cuts. He would also benefit from better usage of the networkand lower investment needs, although these savings are not considered in the direct economicimpact.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTThe distributor would be able to offer a differentiated service based on the additionalservices supplied, competing on more than just the simple gap between power sourcing and retailprices. The economic value created in this process was also not considered in the direct impact,since it is hard to separate the incremental value from the transfer in value among differentstakeholders.The client would feel the benefits of this more efficient use of energy each month asenergy bills decrease (a value that is included since energy savings are considered at end-userprices).Savings are spread through stakeholders involved in Power value chainPower generationTransmission anddistributionCommercializationRetailIncreased penetration ofrenewables• Decrease in emissionsresulting from generation• Reduction of costs withprimary fuelsBetter planning conditions• Quicker failure recovery• Reduction of downtimesIncreased asset usage• Delayed grid investmentsdue to peak shavingsAdditional servicesprovided to the client• Differentiation based onadditional services offered• Client profile monitoringInterruptability allowsmanagement of energyacquisition costsReduction in energyconsumption• Direct savings inconsumers' energy billIncreased quality of service• Consumer ability to choseconsumption periodaccording to the costsElectricity sector would benefit from less associated costs• Reduced investments in generation fuels and transportation infrastructures• Reduced costs with losses, avoiding peak consumptions and increasing microgeneration• Increased service levels with less downtimesSociety would benefit in several dimensions• Reduced CO 2 emissions with positive impacts on the environment• Reduced imports of primary fuels, resulting in optimized national trade balanceThe investments needed for a Power Management solution would range from ¤0.6billionto ¤2.4billion. These values were estimated using international benchmarking of similar solutions,including a lower and higher technological complexity. Payback periods range from 1 to 8 years.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTPower management investments 1Payback Time (years)20Total Investment (B €)3,0002,4222,50015Years Payback (High Scenario)2,00010Years Payback (Low Scenario)Total investment7.91,500506052.08002.60.7 0.92.6~€100 per unit ~€132 per unit ~€400 per unitSimple meter +supportsystemsScale Curvecost modelingHighest costsolutiondeployedinternationally1,00050001. Considering 6 million units and total costs for implementing smart power initiatives per unitSource: E DP; ERSE; Press Search; Smart Grid Project Reports & News; BCG anal ysisMajor constraints in the adoption of such systems are linked with regulatory issues.The current market structure and price dynamics do not align the incentives of power generatorswith the deployment of technologies that are able to reduce consumption, particularly peakconsumption. To offset this, it is necessary to either rethink the power generation remunerationscheme, or to make sure the incentives are sufficiently high for increased renewable penetrationand new segment creation (e.g. electric cars). On the transport and distribution side, aremuneration based on rate of return regulations encourages increased investments, but needfor these is limited by the deployment of smart grids. Rethinking the roles, incentives andremuneration scheme of the different players in the Power business is a key step to realise theenvironmental and economic benefits enabled by ICT in the Power industry.The limited number of players in the Portuguese market, ambitious targets set forrenewable penetration and the public support of the electric car project may also act as powerfulmotivators for the adoption of this type of technology.Expert interviews, current technology and an analysis of initiatives in place show thatthe greatest challenge to maximising scale efficiencies seems to lie in the adoption of common

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTstandards. These would enable even shorter paybacks than the ones estimated in the currentsituation. Major players are already involved in many pilot projects in Europe, with no commontechnological framework.While the base technologies are ready for deployment, these multiple pilot projects ondifferent scales and technologies around the world illustrate that standardisation is required at thenational level for the system to be implemented. International standardisation is not a necessity,but would further minimise investment requirements,, and allow the full benefits of cross-bordercompetition to be realised.6.2 BuildingsA potential ¤410M reduction is achievable by implementing ICT-enabled solutions toincrease energy efficiency and reduce emissions in buildings.This value considers only the savings potential from ITC systems to monitor and controlenergy consumption within the building that are deployed independently of any technologiesadopted in the electricity transmission grid. It should be noted that further potential exists in thissector via the deployment of smart grids, specifically in demand side management (consideredin section 6.1) and the provision by energy management services, particularly in the residentialsegment. It also already takes into account the optimised scenario for the expected electricitygeneration mix in 2020 as described above. It is therefore completely incremental to the potentialidentified in power management systems.Savings from non-ICT initiatives, such as low consumption lighting, architecture orthermal insulation also have a substantial potential to reduce emissions by lowering the energyconsumption needed for lighting or climate control. These initiatives should be pursued but werenot contemplated in the calculations.The most basic ICT-enabled initiatives relate to occupancy-based lighting and airconditioning, while more sophisticated initiatives involve rethinking entire building constructionand management processes, from design phase (optimised engineering and architecture softwaretools used to enable better energy planning) to active and predictive (anticipative) energymanagement. Other areas include a reduction in consumption for different household appliances(e.g. active power management, low power standby) – including HVAC systems, kitchen and otherelectrical (household and office) appliances.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTBasic energy efficiency Green building Integrated green livingSimple energy efficiencysystems that control building/apartment temperatures• Enabling products– Dimmers, timers, movementand presence detectors,switches– Thermostat, floor heatingcontrol– Variable speed drives forHVAC, pumps, fans, motors–Green buildings integrate wholebuilding solutions fromconception to usage• With introduction of energyefficiency and control systemsin building design phase• Full introduction of enablingproducts• Building power managementsystems introducing controlsystems monitoring andresponding to inputsSophisticationGreen living integrated solutionstake energy efficiency inbuildings and merge it intoconsumer lifestyle• Communicating energy usagereal-time to user• Allowing user to control energyusage from a distance– Eg controlled from work• Including predictive energymanagement based on userlifestyle+Involving ICT technology is critical to reach the identified reduction potential:• Devices are required to gather and relay real-time information to users andequipment through specific sensors (e.g. temperature, lighting, presence) andactuators (e.g. light controllers) allowing continuous optimisation of consumptionprofile both proactively by the consumer and automatically by the device.• Reliable and secure communication platforms are required to enable device-todeviceand user-to-device connections. These would be the base for centralisedequipment control, allowing optional remote energy management by the user;• Advanced software should enable remote information processing, consumptionoptimisation and energy consumption management. Once again, the softwareshould be able to integrate information coming from the grid and from existingmicrogeneration / local production, proposing suitable efficiency measures to theconsumer.The ¤410M estimated savings assume a 25% reduction in building energy consumptionwhich is achievable through the deployment of most of the above mentioned ICT-enabledsolutions (design and architecture improvements were not considered, although they may alsobenefit from ICT through project support and simulation tools). It is a conservative scenario basedon European benchmarks and discussion with Portuguese experts. More aggressive estimates andcase studies exist in Portugal, but these were weighted and scaled down for 2020 in light of thecurrent situation in Portugal, efficiency programs already in place 18 , and the slow implementationspeed that is usually expected in the construction sector.The ¤410M direct savings are mostly (~84%) attributable to a reduction in energyconsumption, with reductions in CO 2emission costs making up the balance.Therefore, the majority of savings will be accrued directly by the consumer, as theyreduce their energy spend. Companies have been the most willing to install sophisticated energyefficiency systems due to their increased sensitivity to cost savings.18Portuguese Economy Ministry’s PNAEE program already points to a ~9% energy efficiency increase in Homes and Offices and isconsidered in the BAU scenario (although the implementation of the program is not yet in place)

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTSmart buildings cost savingsM €/year50040041067CO 2 Costs300200343Energy costs1000Source: BCG analysisTotalThe different levels of ICT sophistication involved translate into different amounts ofinvestment and reduction potential. Industry expert interviews indicate payback periods of 5-9years for this type of solution in Portugal, depending on the specific solution and the savingsrealised. This would imply that an investment of ¤2.1billion to ¤3.7billion is required to achievethe identified potential.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTSmart buildings investmentsTotal Investment (B €)43.7322.110~5 years Payback ~9 Years PaybackLower technologicalsolutionsHigh end solutionsSource: BCG analysisWithout policy changes, the implementation of this type of solution will not be quick.The long lifespan of buildings and the reluctance from builders to invest in more advancedsolutions (due to a lack of value to solutions by the market) are common obstacles. Furthermore,in order to realise the identified potential, adoption in existing buildings will need to be fostered.Widespread improvement of building efficiency could only happen if efficiency standardsare enforced by public authorities. The introduction of construction standards with certificationand auditing processes will allow annual taxes (e.g. IMI) to be adjusted according to the energyefficiency of the buildings, encouraging existing owners to invest in order to obtain a highergrade certification. This does, however, require that the certification process acknowledges andkeeps up to date with efficiency improving solutions until a certification process for the solutionsthemselves is put in place. The need for the Portuguese state to curb emissions in sectors notcovered by the ETS directive creates a powerful incentive for the adoption of these policy changes.From a technological standpoint, many of the required solutions are available, with thekey challenge remaining in standardisation and retrofit simplicity. Standardisation is key to achievescale and hence lower costs to make the business case even more compelling. More important,however, is the ability to develop solutions that are simple to deploy, particularly for retrofits. Thissimplicity includes for example the use of wireless communication technologies to minimise civilworks and the installation skills required from technicians.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT6.3 TransportationThe adoption of an integrated urban transportation strategy could enable substantialemissions reductions in Portugal. Combining Congestion Management with a Pay-As-You-Emitsystem could, if applied in the major Portuguese cities, achieve direct savings in the region of¤477M. These two initiatives were highlighted as they have a high ICT-enabled impact and are topconcerns for European authorities when considering sustainable mobility.Congestion Management systems have been highlighted by the European Commissionrecently as a key driver to achieve a more sustainable transport system. Several similar initiativeshave been launched internationally and served as basis for the identification of the potentialreduction.Singapore City pioneered this type of solution in 1975 with traffic reductions reachingas much as 45%. Following Singpore’s success, Seoul achieved up to a 25% reduction in traffic intheir first year of implementation 19 . Stockholm recently launched a congestion program; duringa seven-month trial in 2006 up to 14% emission reductions were achieved – the full deploymentduring 2007 was a natural consequence.Industry experts agree that for the Portuguese case, a conservative emission reductionof 20% is obtainable, similar to the direct impact of the London congestion charge on emissions 20 .London is frequently cited as a successful business case for congestion management in Europe.A Congestion Management scheme works along several levers. Urban charges to enterthe city, adequate parking pricing strategies and the increase of traffic light management are allpossible components of a sophisticated congestion management system.The Pay-As-You-Emit initiative would allow a real application of the polluter-payerprinciple, in much the same way as in business sectors currently covered by the ETS. Thecosts related to vehicle emissions would be directly linked to the users and their actual usage.International studies 21 estimate savings in the range of 10% to 15% on distances travelled afterapplication of Pay-As-You-Emit schemes.This implementation could be one of two scenarios:• Online real time transmission of information, allowing a better knowledge of userprofiles and east analysis of critical areas;• Offline storage of information which would then be sent off periodically forprocessing, requiring lower levels of complexity.19APEIS – Asia-Pacific Environmental Innovation Strategies20European Union position paper on public transport21Victoria Transport Policy Institute – Win-win Emission Reduction Strategy

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTIn vehicle emissionmonitoringEmissioncommunicationInformationprocessingEmission billingOnline SystemOffline SystemVehicle equipment measuresand displays emissionsinformationVehicle transmits informationor stores it for off-line analysisConsumption information isprocessed for billing andstatistical analysisBased on emissionsconsumers are billed or taxedSource: BCG analysisThe implementation of a Pay-As-You-Emit and Congestion Management system inPortuguese cities would require a high level of ICT involvement at different levels.• Car devices would be required for vehicle identification and emissions monitoring. Severalinterconnected devices would be needed for traffic control: static devices at city limits tomonitor entry, video cameras to visualise real time traffic flows and sensors to monitorreal time parking use;• Using the online mode would require a permanent synchronisation scheme to ensurethat vehicle information is integrated with real time city traffic and that dynamic pricingpolicies could be used. Different prices should be adopted for different vehicle types(e.g. exemptions for environmentally friendly vehicles) and occupancy features (highload factors could have charge benefits), while considering the vehicle mix and trafficflow. Alternatively, using the offline mode requires sophisticated web platforms so thatusers can submit information periodically for payment purposes. Regardless of whetheronline or offline is chosen, the communications channel security will be crucial to avoidtampering of information and fraud;• The software involved requires a strong set of capabilities. It will need to integrateinformation from real time traffic conditions (including traffic volumes, parking load …)and generate a dynamic price. The next step which is to proceed with billing also relies onsoftware features to ensure effectiveness and reliability.It is worth noting that in the context of the electric car project, similar technologicalsolutions are being considered.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTCongestion ManagementNoneGateGate and parkingComplexityPay-as-you-emitOffline OnlineOptimalscenario+NonePortugaltodayLondon/Singaporetoll system––Complexity+Source: Industry expert interviews; BCG analysisIn terms of savings, up to ¤477M per annum could be obtained across variousstakeholders. ¤277M of this would come from Congestion management schemes applied to variousPortuguese cities 22 ; saving around 1.4MtonCO 2e and 0.5 billion litres of fuel, assuming similarresults to those obtained for the London congestion charge scheme. The remaining ¤200M wouldbe generated by the Pay-As-You-Emit scheme, assuming the lower end (10%) reduction identifiedin international reports is achievable in the Portuguese case and assuming that only passenger carsand light duty vehicles would be affected.22The assumed base was 80% of total urban emissions. Although there are no statistics for geographical dispersion of emissions, it isestimated that greater Lisbon (including Setúbal) and greater Oporto (which account for ~60% of the population) would be enough to cover80% of emissions

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTUrban transportation cost savingsM €/year500 2004773582400165CO 2 costs30027748200395Fuel costs1002290CongestionmanagementPay-as-you-emitTotalSource: BCG analysisUsers would see direct savings through using their vehicle in a more efficient way,reducing their consumption and related fuel costs. A consequence of this would be an improvednational Trade Balance as less fuel is imported. Finally, the government would have a significantlyreduced need to buy CO 2licenses, reducing emission expenditures and Trade Balance impact.Again, the solutions described provide an effective way for national authorities to influence andcurb a fragmented but very substantial emission base, which is not covered by the ETS directive,but is nonetheless a key contributor to the overall excess emissions of the country.In terms of investments, the complexity required by the system will determine the timeto payback. The Stockholm case, for instance, estimates payback at less than 5 years 23 . Assumingthe cost per vehicle is between ¤250 and ¤1,000, the payback period will range from 4 to 17 years.This means that deployment of very advanced solutions would require large scale gains overcurrent deployments (usually at the fleet level) to substantially reduce paybacks.23The Stockholm Congestion Charging Trial – Expert Group Summary; Payback estimation considering internalisation of benefits such asroad safety

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTTransportation investments 1Total investment (B €)10Years PaybackTotal investmentPayback time (years)8.64086High-technologicalsolution with longpayback3017.120422.14.3100~250 per unit~1000 per unit0Cost of taxi meter +25% support systemsHigh end solutiondeployed in Portugal1. Considering 8.5 million units and total costs for implementing smartmobility measures per unitSource: Interviews; BCG analysisThese investments would be based on strong technological platforms, including devicesfor emissions monitoring and driver information displays, secure communications to relayinformation to central processing units, and software to process emissions information as well asestablishing congestion pricing, calculating and charging taxes or creating value added services forfleet owners and end users. Given the widespread adoption needed to realise the full potential andthe complexities of the logistics operation to deploy the solution, the ease of installation will becritical and the reliability of the overall technological package will define system credibility.Policy and regulation also has an important role to play. Improved visibility may drivemore responsible use of automotive transportation, but achieving the full potential will require anoverhaul of the automotive taxation system (IA, IUC, and ISP) in order to align overall taxationwith actual emissions. This will mean transferring part of the tax burden from fixed components(IA, IUC) to a new emissions-linked tax.Charges would need to be cautiously implemented to avoid a significant politicalbacklash and a perception of increased tax burden across the board. In reality, introducing anenvironmental component linked to actual emissions may contribute to a fairer system, whereresponsible behaviours are rewarded and where taxations such as ISP may be managed moreeffectively, so as not to affect overall income, and to minimise tax leakages, particularly to Spainthrough ISP arbitration.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTIn addition, city or metropolitan area authorities must deploy congestion managementsystems. The Portuguese case has some specific features that make it attractive for this type ofsolution, especially the high concentration of population in a limited number of metropolitanareas.The adoption of a mobility management scheme is highly dependent on the willingness ofusers to change behaviour and on a well designed financing scheme. Stakeholders benefiting fromthe adoption of such measures must be clearly identified, and cost/revenue profiles need to bedesigned to meet the needs of each stakeholder group.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT07 Portugal 2020 ImplicationsRealising the identified ITC-enabled opportunities could be enough for Portugal to meetthe proposed EU targets for 2020, as they indicate a potential 15% versus the BAU scenario.The three priority areas alone would represent an 8.5% reduction vs. the BAU scenario,closing 70% of the gap to likely 2020 targets.Realising this potential requires willingness and determination to act from all stakeholdersinvolved, but will deliver significant benefits that the country cannot afford to waste.Indeed, all key stakeholders could benefit from the adoption of SMART Portugal 2020initiatives to combat the expected sustainability problem: public authorities will have to cope withthe challenge of reducing emissions in the near term to meet Kyoto targets; citizens with increasedsocial responsibility need to engage in cultural change; ICT has a strong involvement in theSMART initiatives, and by being part of the solution, can find and use new business opportunities.However, to extract the maximum potential from ICT enablement, several constraintsmust be tackled. Authorities must adapt policies to bring incentives in line with the adoption ofsustainable innovative solutions. Regardless of sector, the success of the reduction strategies relieson more ambitious policies transferring responsibility to citizens. On their side, citizens have a keyrole to play in the success of the initiatives – acceptance of new measures by using new tools andchanging cultural behaviours will determine how successful the implementation becomes. Finally,the ICT industry needs to carefully estimate the potential investments and hurdles to be overcomein the implementation of such a transformation and hence decide on core capabilities that need tobe developed for application in Portugal.7.1 Public AuthoritiesThe SMART Portugal 2020 report identifies a set of initiatives that create an opportunityfor Portugal to set standards in the effort to curb GHG emissions.With application of the all the initiatives identified , Portugal would be well positioned toreach the agreed Kyoto targets and those that are being discussed for 2020, becoming a case studyfor the other member states.This report indicates a course of action with different levers that could be pulled incritical sustainability areas – from tackling sectors currently not covered by the ETS directive,like transportation, to a general increase in business efficiency, linked with energy and logisticsimprovements.Realising the potential upsides estimated in the SMART Portugal 2020 will requirestrong support from policy makers. This is especially true for the priority areas identified. Thelargest reduction opportunities identified require significant policy realignment – current legalframeworks are not in line with government ambitions to promote increased efficiency and

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTtechnological development, especially in fragmented sectors such as buildings or transportation.For the transport sector, realising the full potential requires adoption of real timemonitoring tools – and a change in the automotive taxation system so that emission costs aremade visible to the user. The adoption of these tools by the automotive industry is not likely tohappen in the medium term as it would require an implausible level of standardisation. Thus, localadoption is highly dependent on local authorities’ willingness to act.A shift in the automotive tax burden is an example of action that should be promoted ona local/national scale. The transfer of a high percentage of the overall tax burden from fixed (IA,IUC) to variable components linked to actual emissions, without necessarily changing the overalltax burden, would require ICT devices to ensure the success of the overall solution. A reduction orincrease in the total tax burden remains a purely political decision.€20.000Estimated vehicle total lifecycle costs1 115.000Variable costsFixed costsCan be lowered tocover investment costs3.9772.5412.72517.1646.702Cos tsIncentives39%10.0008002.88610.4621.436Possible to lower ISP withoutlosing overall revenue byadding emission costs5.0002.65210.46261%4.125Can be fullyvariabilized0ISV + IVAIUC Insurance Fixed costs Fuel + ISP 2MaintenanceTotalNew EmissionIncentive?1. Excluding base price2. Considering ISP as 63,9% of total fuel costsNote: Estimates based on Renault Mégane II model, the car with more sales during 2007 in the Portuguese market, assuming 8 years lifecycle and 10.220km/year; Insurance costsbased on annual cheapest market proposal; fuel cost based on average Diesel price in the market for 2007 (1,081); Maintenance assuming 500€/15.000km; ISV – Imposto SobreVeículos; IVA – Imposto sobre o Valor Acrescentado; IUC – imposto Único de CirculaçãoSource: Guia do Automóvel; Direcção Geral de Energia e Geologia; BCG analysisFurthermore, this change in automotive taxation would allow a greater degree offlexibility in assigning tax benefits to specific sectors (the benefit would be linked to the vehicleand not to the type of fuel), and in avoiding fuel tax arbitration to Spain (as previously discussed).Similarly in Power Management initiatives, implementation would initially require thedefinition of responsibilities. The impact on key stakeholders currently in the electricity sectorshould be further detailed so that authorities could adapt regulatory frameworks, and so thattechnology development initiatives (e.g. increase in use of renewable energy sources, electric cars)and timings can be implemented according to the potential investments and savings at stake.For each stakeholder, redesigning remuneration schemes is critical to assure the correctincentives for the introduction of the identified solutions. Whether by changing the relativeweights of price formation components (renewables), or by rethinking existing remunerationschemes applicable to regulated T&D assets, realising potential benefits is made more attractive

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTdue to the reduced investment needed for the solutions identified.A similar path would be required for a review of buildings certification. Although buildingenergy certification is already in place today, capturing the benefits of the adoption of SMARTsolutions implies that these benefits should be transferred to the user by tax incentives (or in theopposite by tax penalties) so that citizens and companies have a positive business case persuadingthem to adopt efficiency tools.To conclude, the overall impact in the broader Portuguese economy could be verypositive. The impacts identified for the different industry areas would also result in a potentialimprovement of the National Trade Balance by reducing fuel imports and eliminating future CO 2related payments.However, reaching the identified potential requires policy makers to take a proactiveapproach to validation of local conditions for application of the initiatives, and to decide onthe best course of action for promotion of initiatives. ICT can only help realise potential if theregulatory landscape is realigned to increase society’s responsibilities.The Portuguese economy would benefit from the development of technological clusterswith advanced applications and solutions for sustainability, a topic at the top of internationalagendas. Applying these solutions in Portugal and achieving the expected positive results wouldincrease international focus on national solutions, and have a direct impact on the internationalperception of the Portuguese technology industry.7.2 Citizens and CompaniesSMART Portugal 2020 initiatives encourage citizens and companies to share a commongoal: behave in a responsible way to fight climate change. This common attitude can only comefrom an increased accountability for emissions responsibility, in both in industries already underETS directive, and in other sectors like residential/services and transport, currently outsideregulation.From the citizen’s perspective, reducing GHG emissions is part of an increased socialresponsibility. As expressed in the Context section of this report, the impacts from Climate Changecould seriously damage the outlook for future generations, and as a consequence, individualstoday need to change social behaviours.From a corporate perspective, the adoption of environmentally friendly practices wouldbe source of value creation. The inherent reduction of costs would come from several areas:savings from energy efficiencies, not only from electricity consumption but also primary fuels,savings on emissions related cost, with lower taxation levels; and Capex savings by optimisingasset use.The link between environmental behaviour and taxation has the potential to be themissing link and trigger a behavioural change. Individual and corporate actions are expected to

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTchange as taxation becomes more directly influenced by their own behaviours. An emissionconsciousattitude would benefit from reductions in energy cost, making environmental awarenesseven more important. In addition, several of the initiatives described here have a direct implicationon an individual’s quality of life, be it in terms of air quality, lower traffic congestion or overallenergy savings.That being said, citizens will be forced to rethink their lifestyle in the different sectorscovered by SMART Portugal 2020. In transportation, users should consider the new taxation andresulting cost of vehicle ownership to develop different mobility strategies. The use of publictransport and the adoption of eco-friendly driving attitudes would increase, driven by the directcost to the individual.On the Power Management side, consumers should be open to a shift towards a morerational use of electricity. Both citizens and companies should be alert to pricing signals and reactaccordingly; they should also be willing to actively reshape their consumption profiles to allow theintroduction of cheaper and less polluting generation methods.The same attitude should increase adoption of efficiency standards across households.If a structured incentive scheme is in place, people will tend to adopt solutions more quickly.Successful implementation of energy efficiency schemes is already happening in Portugal, asevidenced by the increased penetration of energy efficient lamps in public and private lighting.7.3 ICT IndustrySMART Portugal 2020 is a key opportunity for the Portuguese ICT industry. Theinitiatives identified require a high level of ICT involvement, with the development of specificsolutions incorporating advanced technology. Beyond the direct business opportunity fromICT as an enabler, it is an opportunity for the Portuguese ICT industry to be recognised for itstechnological leadership, both in Portugal and abroad.In fact, the ICT enablement effect identified by SMART Portugal 2020 highlights thebusiness opportunity that exists for ICT. Estimated savings in terms of carbon emissions andenergy can only be reached with significant ICT investment. However, first pay-back estimatesconfirm the sound business case underlying those investments.Portugal, due to its characteristics in terms of size, demographics and market structuresmakes an attractive “living lab” to showcase many of these solutions before deployment abroad.The majority of the technologies involved in the initiates already exist. The required effort liesmostly in packaging integrated solutions, with specific applications and features that enable realsavings, rather than developing entirely new technologies.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTDependency on political willingnessLowMediumHighHigh• Intermodality• Dematerialisation• Freight logistics• Building efficiency• Driver Training• Energy sector• Congestionmanagement• Pay-as-you-emitImpactLow504M€• Industry efficiencies• Direct ICT reductions• Electric car enablers657M€ 785M€N.A.N.A.235M€xxM€Value at stakeSource: BCG analysisHowever, not all initiatives depend on enactment of policy changes. The economicbenefits and stakeholder concentration required to make them happen create businessopportunities with an impact on overall emissions that should be pursued by the ICT industry.The existence of market conditions suitable for the deployment of these solutions isdemonstrated by the solutions and projects already in development. The ICT industry is activein production of environmental solutions, and does not need to wait for policy makers to movebefore it can become a larger part of the solution to the climate change problem.Areas such as logistics planning for freight forwarders and logistics operators, initiativesin the ITC industry to reduce its own footprint, or the increasing offer of dematerialised servicesshow the ability of the industry to initiate a change. Even in areas where public policy might berequired for full deployment and achievement of the potential identified in the research (such asbuilding automation systems), the industry is already active. The challenge lies in systematicallyidentifying specific areas of opportunity that can be tapped into, and developing adequatelypackaged solutions to address those areas. This means a targeted approach to the needs of specificcustomer segments, catering for specific concerns and eliminating cost-adding features that are notvalued by these clients.Although technologically all the pieces are in place, in many cases substantial efforts arestill required for standardisation and industrialisation to achieve the required reliability, cost andease of deployment.In Transport systems, even if the technological building blocks are in place, a standardsolution must be developed that allows real time emissions monitoring and access control. Thistype of solution can be deployed nationally, although wider standardisation would allow higherscale economies and easier adoption.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTThe technologies involved (metering of emissions, user interface, communications withauthorities, authentication, etc.) are known to the industry, but significant effort is needed toeffectively industrialise the technology and meet requirements for overall cost and ease of rollout.In Power management systems, several pilot programs are already in place to demonstratethe feasibility of the solutions proposed. However, challenges remain in the standardisation ofmetering procedures and data transmission, in user interfaces and in external or in-built actuatorsto control specific appliances.Ideally, and in order to realise the maximum scale advantage, standardisation at anEuropean level should be sought; however, given the large number of projects and trials alreadyunderway at the European level with no common technological platform, standardisation at thenational level, with leveraging of international scale at the sub component level (e.g. sensors,actuators) is probably the most realistic approach.Given the critical nature of the services being managed, security and system integrity areadditional key features to be developed in the process.In Building systems, adoption will be highly dependent on the ability to build on theexisting technologies to develop solutions that are cost effective and easy to deploy, includingretrofitting into existing buildings, a key barrier to widespread adoption.This requires a targeted effort to package existing technologies into solutions that can bedeployed with minimal retrofit construction works and that take into account the skill set requiredfrom technicians in installation.The deployment of SMART initiatives with high ICT involvement in Portugal will be anopportunity for the Portuguese ICT industry to be recognised for its technological leadership.Industrialising and deploying solutions for SMART Portugal 2020 would increase ICT industrycapabilities and product portfolio. Moreover, the successful results predicted for Portugal wouldimprove international perception of Portuguese technological capabilities. As a consequence,the ICT industry could increase its exportability and generate new business in other countriesfollowing the same SMART path.In addition, the platforms for data gathering and systems actuation created for differentinitiatives will enable the development of value added services (e.g. consumption optimisationalgorithms, usage pattern analysis, payment for services) for end users based on those resources.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT08 Concluding RemarksAs stated in the original SMART 2020 report by GeSI and the Climate Group, “The ICTindustry, in partnership with other emitting sectors, has a key role in helping make society’simpact visible and to demonstrate in aggregate the demand for new ways of reducing that impact”.In an age of uncertainty, when the effects of climate change are already being felt (andare occurring at the same time as one of the largest global financial crises of the last 100 years),Governments, Companies and Citizens are looking for solutions that will allow business and peopleto thrive without compromising the long term sustainability of the planet.Solutions will need to be innovative and fundamentally change the way we work, traveland entertain ourselves. If there is one sector where innovation has always been a cornerstone,it is ICT. Over the last few decades the sector has brought increasing innovation to our fingertips,revolutionising the way we live.The time has come for the sector to re-cast itself in the role of a key solution provider.And this time the solution is for one of our biggest global challenges – the fight against climatechange. In Portugal’s case the sector can reduce emissions by over 10X its own footprint, andbecome a critical pillar by reducing Portuguese emissions by up to 15% versus Business As Usual2020 levels. This contribution of the ICT sector would be enough for Portugal to achieve its 2020targets, as proposed in the EU Energy Package.2020 BAU vs. 2020 Smart PortugalMton CO 2e100-15 %8087,282,784,281,169,271,360202020ProposedEUTarget020052006Note: Emissions data excluding LULUCF (Land use, Land use change and Forestry)Source: Agência Portuguesa do Ambiente; BCG Analysis2007 2020 BAU2020 SmartPortugal

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTEven though the solution is not purely driven by the ICT sector, no sector like ICT hasthe potential to be the unifying thread to achieve this solution, bringing together Government,Companies, Citizens and solutions.Quick steps should be taken to realise an emission reduction potential of 11.9 CO2e andto capture the estimated ¤2.2 billion of opportunities identified for the Portuguese economy.The ICT sector should serve as the unifying thread and work along side other sectors and policymakers to develop the necessary next steps to realise this potential – broadly discussing theconclusions and recommendations of this study, structuring a detailed roadmap and implementingthe proposed initiatives along the three main areas of action identified: Transport, Energy / PowerManagement and Buildings.For the ICT sector this means, in the first instance proactively identifying and pursuingopportunities to develop solutions that are independent from policy changes or other third partyactions.However, it is important to acknowledge that the largest potential for change lies in areaswhere policy change is a requirement for either the implementation of initiatives or realisationof its full potential. At the same time, the implementation of the proposed SMART initiatives iscritical to provide the necessary basis for realising the full benefits of public policy in these threemain areas of action, and to develop new relevant policy measures.Starting from the global Smart 2020 report, the Smart Portugal 2020 localises its conclusionsand derives implications at a country level. It proposes a path for future action, identifying anddetailing the most relevant ICT-based initiatives to be implemented in Portugal. To facilitate theinteraction between all stakeholders relevant to this implementation process, the Smart Portugal2020 report also identifies initial requirements and key success factors, as well as barriers to beovercome.It is now up to the ICT industry, working together with the key stakeholders and policyagents, to discuss, validate and further detail the solutions (technological and policy) that whencombined maximise the contribution to GHG emission reduction and align the incentives of thedifferent stakeholders with rapid deployment of solutions. The stakeholder vision developed inAppendix 5 – The SMART Way, is a first contribution to thoughts on how this can be achieved.ICT’s potential can be rapidly realised through existing technologies, know-how, andoverall solutions. Decisions required from policy makers are known. Impacts on consumer andcompany habits have been identified. Society is increasingly aware of the problem and receptive tothe adoption of these solutions.Now is the time to act.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT09 Appendix 1_ForecastMethodology & Definitions• Drivers in forecasting electricity generation emissions were production mix, specificemissions per raw material and technological efficiencyFuel mixGenerationemissionsSpecific emissionsper fuelTechnologicalefficiency• Industry/construction footprint estimation was based on sales projection and specificemissions per unit of outputCements...Industry/constructionCeramicsMetalsTotal salesSpecificemissions...Glass...Pulp andpaper...Others...

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTspecific emissions and distances travelled, aviation considered air movements, railwaysconsidered total passenger-km and navigation considered port movementsRailwaysTotal passenger-kmSpecific emissionsPassengercars...Number of carsRoadtransportsCommercialcarsAverage km per carEmissions per KmTransportsHeavy cars...Motorbikes...AviationTotal movementsSpecific emissionsMaritimeTotal movementsSpecific emissions• Residential and services (excluding ICT) was assessed using total inhabitants, averageconsumption per capita and generation emissionsResidentialandCommercialemissionsNumber ofinhabitantsAverageconsumption (kWh)per capitaEmission per kWh• The ICT sector was split into four main areas: personal computers, telecom devices,telecom networks and datacenters

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTSubsectorsegmentationPersonalComputers• PCs vs. Laptops• Home vs. EnterpriseICTTelecomsDevicesTelecomNetworksDatacenters• Mobile phones• IPTV STB and otherCPEs• Routers• Fixed line• Cellular networks• Broadband• 3 segments of serversbased on size• Personal computer estimates were based on number of units, consumption per unit andspecific generation emissions# of Company DesktopsCompanydesktopsAverage kWh per desktopDesktopcomputersEmissions per kWh# of Private DesktopsPrivatedesktopsAverage kWh per desktopPCsEmissions per kWh# of Company LaptopsCompanylaptopsAverage kWh per LaptopLaptopsEmissions per kWh# of Private LaptopsPrivatelaptopsAverage kWh per LaptopEmissions per kWh• Telecom device projections were also based on the number of units, their consumptionand specific generation emissions

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT# of mobile phonesMobilePhonesAverage kWh perphoneTelecomDevicesEmissions per kWh# of CPEsCPEsAverage kWh perCPEsEmissions per kWh• Telecom network estimates have been forecasted according to interviews with the 4 mainnetwork operators• Datacenter estimates were based on the number of servers, their consumption andspecific generation emissions

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTServersVolumeServersHigh-endserversMid-rangeservers# of serversAverage kWh per server# of serversAverage kWh per server# of serversAverage kWh per serverDatacentersStoragesystems/servers# of serversAverage kWh per serverSupportsystemsPowersystemsCoolingsystems# of systemsAverage kWh per systems# of systemsAverage kWh per systems

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT10 Appendix 2_Assumptions &SourcesEnergy Assumptions SourcesGeneration • Generation emissions driven by increase • DGEGin electricity consumption and expected • RENgeneration mix• MEI– Electricity consumption based on • EU Primes Modelexpected EU consumption andgovernment energy efficiency plans– Generation mix based on governmentplans for electricity Generation mix• INESCAutoconsumption• Auto-consumption based on maintenanceof current consumption levels (electricityand refining)– Auto-consumption as a percentage ofcurrent energy balanced maintained•••DGEGRENEU Primes ModelNetwork losses• Network losses based on level inprevious year with percentage gain dueto penetration of micro-generation anddistributed generation• 10% penetration of Micro-generation(resulting in ~1% reduction in electricitynetwork losses)•••DGEGRENINESCIndustrySales growthAssumptions• Sales driven by GDP forecasts and specific •SourcesEconomist Intelligence Unitadjustments with sector specificities • Instituto Nacional de Estatística– poor GDP evolution in the short term(decreasing until 0.7% in 2009) butthen increasing to reach ~2% from2012 on• Expert interviews

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTSpecificemissions• Reductions up to 2020 assumed toresult from application of best practicetechnologies already available in themarket– 28% for cements, 15% for pulp andpaper, 9% for metals and 13% forothers• Tracking Industrial EnergyEfficiency and CO2 Emissions- International Energy Agency• Agência Portuguesa doAmbienteTransportRailwaysAssumptions• Passenger evolution projected according •SourcesModelo Integrado de procurato RAVE studies and internationalbenchmarks– Ramp-up was estimated based on •de Passageiros – Steer DaviesGleave, RAVEBenchmarking – Steer DaviesFrench SNCF and Spanish AVE cases• Railway specific emission reductions were •GleaveAnuário dos Transporteslimited assuming all of the fleet will beelectrical and renewal of remaining 35%diesel stock– Considering average emissions of50g/pass-km for the electrical trainand 115g/pass-km for the diesel one,potential optimisation of 31% inemissions for the coming years•2008 – Instituto Nacional deEstatísticaAgência Portuguesa doAmbienteRoad• Emissions for the road sector were basedon the European Union 2012 targetsavailable for the automotive industry– Average total fleet specific emissionsin 2020 assumed to be similar to EUtargets for new cars in 2012– 120g/km for PCs, 175g/km for LDs,600g/km for HCs and 100g/km forMBs• Car fleet growth were extrapolatedaccording to historical growth analysis andrecent trends• Average travelling distances assumed to beconstant through the years in a Business AsUsual scenario– 10,220 for PCs, 16,715km for LDs,45,545km for HCs and 10,000km forMBs• ACAP – Associação Automóvelde Portugal• ANECRA – AssociaçãoNacional das Empresas doComércio e da ReparaçãoAutomóvel• European Commission• Agência Portuguesa doAmbiente

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTAviation• Aviation movements were based onprojections including the new airport– Assumes movement forecasts thatalready exist for future years (onemovement includes landing and takeoff)• Specific emissions extrapolated fromhistorical analysis•••Estimativas de Procura –Parsons FCG, NAERANA Aeroportos de PortugalAgência Portuguesa doAmbienteMaritime• Movements (one port entry) and specificemissions extrapolated from historicalanalysis••IPTM – Instituto Portuário edos Transportes MarítimosAgência Portuguesa doAmbienteResidential Assumptions SourcesElectric• Slight decrease of consumption in • DGEGConsumption residential and services sector due • MEIto lower electrical emissions • PPPEC– Increase in per capita electricity • INEconsumption– Non-electric emissions maintained asincreased efficiency offsets increasedpenetration– Increase in electrical efficiency of~10% based on government programsICT Assumptions SourcesPersonal• Increase in emissions due to • IDCComputers increased penetration of PC’s • INE– Increase in number of personal • World Development Indicatorscomputers for both private anddatabasecommercial use• ASE 2007 energy report– Large penetration and slightsubstitution effect between desktopsand laptops– No evolution in unitary consumptionas more powerful PC’s require moreenergy– Penetration growth declines aspenetration approaches those of moretechnological nations

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTTelecomDevicesTelecomNetworks• Telecom device emissionsgrowth stabilises as increasedefficiency offsets increased devicepenetration– High increase in number of mobiledevices in first few, but slowing assaturation limit is reached– Large investments in broadbandnetworks with large increases innumber of clients with CPE devices– Slight decrease in unitary equipmentefficiency based on equipmentmanufacturers• Increase in telecom networkefficiency due to decreasedemissions per kWh– Average electricity consumptionmaintained due to gained electricalefficiencies balancing increasednetwork capabilities• IDC• ANACOM• Merrill Lynch Global WirelessMatrix• Nokia• Ericsson• APDC associates• APDC Associates

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT11 Appendix 3_PortugueseCarbon Footprint: Sector by sectorDatacenters• IDCBAU• US EPA• Increased emissions due tomaintained growth in number ofdatacenters– Increase in number of serversfollowing international trends– No electric energy consumptionsavings considered as more powerfuldatacenters require more energy torun and coolEconomicAssumptions• CO price in 2020 = 35 ¤ / ton CO e2 2• Electricity Price = 6.0 cent¤/kWh• Fuel:– Gasoline = 0.48 ¤/litre– Diesel = 0.39 ¤/litre••BCG AnalysisDGEG2006 National Emissions split by Report SectorMton CO 25.81008060402023.710.020.10.219.914.49.45.03.72.67.90Industry/const Transport Residential/se Energy Energetic ICTructionrvices non-lossesITC2 3 4 1 1 51.11.31.064.218.937.57.9Sectors whereICT has moreleverage9.70.98.4Agriculture0.32.0 0.1 82.76.81.60.36.819.340.023.5Waste Others TotalElectricity related 1Energy Non-Electric relatedNon-EnergySource: APA Agência Portuguesa do Ambiente; BCG analysisThis section details the assumptions behind the growth projections for each of the mainsectors considered:• Electricity, split into Energy Generation, Energy (energy sector auto-consumption)and Energy Losses• Industry/Construction Sector• Transport Sector• Residential and Services sector (excluding ICT)

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT• ICT Sector11.1 Energy11.1.1 GenerationAs stated in Section 4, from an emission production perspective electricity generation isresponsible for 19.3 MtonCO 2e of emissions in Portugal. These emissions are influenced by twofactors – actual electricity consumption by sector (e.g. ICT, residential/services, etc.) and thenational electricity production mix of emitting and non-emitting energy sources (e.g. coal, gas andfuel vs. hydro, wind and other non-emitting sources).To clearly split the analysis between these two effects (production effects versusconsumption effects) electricity generation was analysed separately from electricity consumption.Although electricity consumption was allocated to each end user sector and emissions wereanalysed from a consumption point-of-view, a clear analysis of the electricity production sectoris key in order to understand what scenarios/initiatives are due to changes in the generation mix(maintaining these in the electricity generation sector), and what scenarios/initiatives are due toincreased electricity efficiency or changes in electricity consumption (linked to each consumptionsector).As such, Electricity Generation was analysed in parallel with other sectors, influencingtheir emissions through changes in unitary emissions per kWh consumed.To project a 2020 BAU scenario of emissions (and to determine potential for emissionreduction) several assumptions were used for electricity generation in Portugal:• Emissions only relate to electricity production inside the Portuguese borders.As such, emissions related to electricity produced outside national borders wasconsidered as non-emitting (due to emissions being produced outside nationalborders), and total electricity produced equals national production plus net imports(net imports equals imports minus exports)• Changes due to an increase or decrease in rain and hydro generation availabilitywere not modelled, and an average value was considered for hydro production inrelation to installed capacity• Energy sector auto-consumption and network losses were considered as anindependent emitting sector, included in analysis in the same way as the remainingconsuming sectors. This maintained the independent influences from each sector’sdrivers, relating energy sector specific emissions to energy sector specific trends.Inputs from several sources were used to determine a 2020 scenario for electricitygeneration, including;• Government scenarios 24 for existing and new generation as well as expected electricitygeneration mix• EU Primes Model predictions on electricity intensity (consumption per capita)24Latest scenarios set on publications from “MEI – A policy with ambition”

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT• Existing Government programs 25 for electric efficiency and impact on EU electricityintensity models.• Conservative projections of the increase in penetration of microgeneration/distributedgeneration (up to 10% of installed capacity) in consumer locations, resulting indecreased electricity demand from consumers.This data enabled scenarios to be modelled that take into account not only expectedelectricity demand but also expected generation mix.Electricity demand projections based on various sources (EU, Government Plans, andElectricity Sector Stakeholders) resulted in a BAU annual growth rate of 2.0% in electricitydemand. This result is more aggressive than EU targets which point to a reduction of EU electricityconsumption growth from 3.1% to 2.4% in 2010 to 2020. This is due to specific Portuguesegovernment programs and measures impacting electricity consumption.Electricity Production (KWh per capita)Total Electric GenerationKWh/habGWh8,0006,0005,2925,3715,6045,900+2%6,1866,4876,8027,13280,00060,000+2%72,79269,98267,28064,68362,18559,55256,134 57,0084,00040,0002,00020,000002007200820102012201420162018202020072008201020122014201620182020Source: REN; APA; DGGE; UE PRIMES Model; INESC; BCG analysisSource: REN; APA; DGGE; UE PRIMES Model; INESC; BCG analysisThe specific emissions of the power generation segment take into account the latestpolicies and initiatives implemented by the Portuguese administration. The latest publicationsfrom the Ministry of Economy highlight the plan to keep Portugal at the top end for renewableenergy penetration in European countries. The latest scenarios set by the administration have fourmain underlying assumptions:• Gradual elimination of fuel generation, leading to full elimination by 2010• Increase of renewable and non-emitting electricity generation (through growth of windand hydro) to reach 45% renewable electricity by 2015 and 48% by 2020.• Maintain the gradual decline of the amount of coal generation in the overall mix, asseen over the last 5 years (reduction from 30% of national electricity generation fromcoal in 2002 to 27% in 2007, and gradual decline to 22% in 2020 as new gas units comeonline)• Remaining demand captured by Natural Gas generation25PNAEE, Portugal Eficiência 2015 - Plano Nacional de Acção para a Eficiência Energética; PNAC, Plano Nacional de Alterações Climáticas;PPEC, Plano de Promoção de Eficiência ao Consumo

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTMoreover, technological advances are expected to impact unit emissions, regardless ofthe fuel used to produce electricity. To that extent, technological efficiency gains across emittingsources have been included for this projection.Generation mixCO 2 Generation emission factors% of generation100Ø 100ton CO 2 e/ MWh2.02007-2020CAGR (%)7534 34 35 351.56 9 11 13-1%50303030301.0-1%2531000.527 26 24 22-2%02007 2010201520200.02006 2008 2010 2012 2014 2016 2018 2020Others (non emitting)RenewablesNatural GasFuel-OilCoalSource: REN; A PA ; DGGE; UE PRIMES Model ; INESC; B CG analysisCoal Emission FactorFuel-Oil Emission FactorNatural Gas Emission FactorNote: Considered electricity imports as a non-emitting form ofgeneration – emissions produced from outside national bordersSource: REN; APA; DGGE; UE PRIMES Model; INES C; BCG analysisThe resulting scenario predicts an increase in non-emitting generation from 40% to 48%(2007 – 2020), or an increase in energy from renewable generation amounting to an additional 12TWh from 2007 to 2020. This scenario also includes the following assumptions:• Conversion, in 2014, of +800 MW of conventional coal to clean coal• +4,063 MW in natural gas up to 2012• Decommissioning of fuel plants after 2010• Increased ability to use renewable energy sources (approximate +33% increase inavailability)

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTProjected installed capacity andelectricity producedCapacity usage per technologyMW InstalledGWh Produced30,00072,79280,00069,98267,28064,68362,18559,55220,93256,13457,00819,781 20,055 20,340 20,636 60,00020,00018,55714,66813,79440,00010,00020,000% usage100806040200200720082010201220142016201820200 02006 2008 2010 2012 2014 2016 2018 2020OthersWindHydroFuel-OilNatural GasCoalElectric ProductionRenewables (inc. wind)HydroFuel-OilNatural GasCoalSource: REN, APA, DGGE, UE PRIME S Model, INESC, BCG AnalysisFor electricity generation sector emissions, the scenario projects a 3.3% CAGR reductionin unit emissions (CO 2e emitted per kWh generated) from a 2007 starting point of 0.35ton CO 2e emitted per kWh to 0.22 ton CO 2e/kWh in 2020. This translates to a 1.3% CAGRreduction in total electricity generation emissions.This reduction is especially relevant because it affects the emissions in all electricityconsuming sectors, and is an important factor in each sector 2020 BAU scenario.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTElectric generation emissions should maintain currentlevels despite lower unitary emissionsMton CO 2 e40ton CO 2 e/kWh0.4300.350.300.270.250.220.32019.319.518.7 18.218.0 17.3 17.016.9 16.7 16.716.6 16.4 16.3 16.216.00.2100.1020062007 2008 2009 2010 2011 20122013 2014 2015 2016 2017 2018 2019 20200.0Generation emissions (Mton CO2e)Unitary emissions (ton CO2e/ kWh)1. Plano de Promoção de Eficiência do Consumo 2. Plano Nacional de Alterações ClimáticasSource: REN; APA; DGGE; UE PRIMES Model; INESC; BCG analysisThe emissions from the power sector are expected to be 16.0MtonCO 2e by 2020, a 17%decrease during the period 2006-2020.11.1.2 Auto-consumptionAuto-consumption is related to both the generation plants/hydro pumping consumptionand to refining activities. Therefore, SMART Portugal 2020 projections assumed a continued stableshare of gross energy production for plant/pumping consumption and used the historic trendobserved for refining activities.This estimate results in a small increase in emissions related to energy sector autoconsumption(0.4% CAGR growth), equal to 3.9 MtonCO 2e in 2020.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTEmissions growth directly related with refining emissions increaseMton CO 2 e50.4%43.73.73.7 3.73.7 3.73.8 3.83.8 3.83.9 3.93.9 3.9321020072008201020122014201620182020PumpingAutoconsumptionRefiningSource: REN; APA; DGGE; UE PRIMES Model; BCG Analysis11.1.3 Network losses 26The last sub-sector in electricity generation is emissions due to electricity transportationand distribution losses. In 2007, 7.7% of gross electricity production did not reach the endconsumer.In a Business As Usual scenario, network losses will decrease due to the penetration ofmicrogeneration/distributed generation, which in a conservative scenario could account for up to10% of total generation by 2020. The reduction in network losses will be driven mainly by lesshigh-voltage/low-voltage transformations and lower distances from generators to consumers.This 10% penetration of microgeneration/distributed generation results in a reduction ofnetwork losses from 7.7% to 6.7%, and a lower unit emission factor, with a CAGR decrease of 2.5%in emissions associated with electric network losses.26For this report network losses are measured as a percentage of total gross generation + net imports (therefore including autoconsumptionand MAT consumption). Network losses are usually reported from exit reference point, therefore measured as a percentage of consumption,excluding MAT consumption and auto-consumption (resulting in higher values: 2004 = 8.61%; 2005 = 8.09%; 2006 = 7.19%)

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTEmission from electric network lossesMton CO 2e2.01.51.501.431.371.341.281.241.22-2.5%1.191.181.161.131.121.101.081.00.50.02008 2010 2012 2014 2016 2018 2020% Networklosses 1 7.7% 6.7%1. Network losses measured as percentage of total generation + net imports (therefore not excluding MAT consumption). Network losses measuredfrom exit reference point (excluding MAT consumption and autoconsumption): 2004 = 8,61%; 2005 = 8,09%; 2006 = 7,19%Source: REN; APA; DGGE; UE PRIMES Model; INES C; ERSE; BCG Analysis11.2 IndustryThe emissions coming from the manufacturing/process industries and construction will bedriven by the increase in output (measured as sales) and also the reduction in specific efficienciesthat the sector is expected to achieve.The growth in output was modelled as a function of the growth in GDP, where EconomistIntelligence Unit forecasts were used. Different factors were considered when translatingGDP to industry output for each industrial sector. The increase in efficiency, in a Business AsUsual scenario, results from the alignment with best practice technologies already available

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTin the market. To that extent, SMART Portugal 2020 used international reports with bestpractice benchmarks that revealed potential savings for each sector. This increased emissionsefficiency comes mainly from improvements in energy and feedstock efficiency, since no majorbreakthroughs which can reduce process emissions (e.g. in clinker production) were considered inthis or any other scenario.Estimations on potential efficienciesReduction potential (ton/M€)2,500OthersPulp and paper2,000MetalsCeramicsCements1,50011%1%1%1%9%1,00078%50002008 2010 2012 2014 2016 20182020Source: APA – Agência Portuguesa do Ambiente; International EnergyAgency; BCG analysisThis results in a slight decrease of the Industry sector emissions, at a CAGR of -0.3% until2020, and total emissions of 22.8 MtonCO 2e in 2020.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTIndustry emissions will stay stable through the yearsMton CO 2 e30-0.3%2023.75.823.45.522.95.222.54.822.54.622.64.522.74.322.84.27.2 7.1 6. 9 6.8 6.8 6.8 6.7 6.7108.1 8.2 8. 2 8.3 8.5 8.7 8.9 9.102006 2008 2010 2012 2014 2016 2018 20202007relativeweight24%1%2%3%5%30%35%Electricity emissionsPulp and paperMeta lsGl assCeramicsCementsOthersNote: Industry emissions considering construction onesSource: International Energy Agency; Economist Intelligence Unit; Instituto Nacional de Estatística; BCG analysis11.3 TransportFor the projections in this sector, aviation, road transportation, railways and maritimewere considered separately. This split allowed a more specific forecast for each sub-sector, takingin account its particular dynamics.Transport sector emissions will decline slightlyMton CO 2 e252020.119.819.519.3-0.7%19.0 18.818.618.32007 relativeweight1%151058.4 8.4 8.3 8.3 8.3 8.2 8.2 8. 25.1 5.1 5.1 5.1 5.1 5.1 5.1 5. 05.7 5.4 5.2 5.0 4.8 4.6 4.4 4. 30%1%2%42%26%28%020062008201020122014201620182020Source: Agência Portuguesa do Ambiente; BCG analysi sElectricity emissionsRailwaysMaritimeAviationPassenger cars and motorbikesLight duty carsHeavy carsTransport emissions are expected to decrease from 20.1MtonCO 2e in 2006 to18.3MtonCO 2e in 2020.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT11.3.1 RoadEmissions from road transportation account for the large majority of total Transportemissions (95% in 2006). The projections were detailed by vehicle type (passenger cars, light dutycars, heavy cars and motorbikes) and for each of these a specific scenario was considered.The evolution of emissions associated with each vehicle type was based on three keyelements:• A forecast of the fleet evolution in terms of number of vehicles,• Average number of km travelled by car by year,• Average emissions per km per vehicle.The observed trends for all types of vehicles are very similar: the increase in car fleets willbe offset by a decrease in emissions, undeniably a key concern for the European Commission.Passenger carsLight duty cars# passenger carsgCO 2 /km# light duty carsgCO 2 /km8,000,0002002,000,0003006,000,0001501,500,0002004,000,0001001,000,0001002,000,00050500,00002006 20082010 2012 2016 20182014 2020002012 20142006 2008 2010 2016 2018 20200Specific emissions8.22 8.18 8.14 8.10 8.07 8.03 7.99 7.96 5.13 5.12 5.10 5.09 5.08 5.07 5.05 5.04VehiclesTotal emissions Mton CO 2Note: Assuming historic fleet evolution in the future and average distance/year/carconstant (10,220 km)Source: Agência Portuguesa do Ambiente; BCG analysisNote: Assuming historic fleet evolution in the future and average distance/year/carconstant (16,715 km)Source: Agência Portuguesa do Ambiente; B CG analysisHeavy carsMotorbikes# heavy carsgCO 2 /km# motorbikesgCO 2 /km200,0001,000200,000150150,000800150,000100600100,000100,0004005050,00020050,00000002006 2008 2010 2012 2014 2016 2018 20202006 2008 2010 2012 2014 2016 2018 2020Specific emissions5.65 5.43 5.21 5.01 4.81 4.62 4.43 4.26 0.18 0.18 0.18 0.18 0.19 0.19 0.19 0.20VehiclesTotal emissions MtonCO 2Note: Assuming historic fleet evolution in the future and average distance/year/carconstant (45.545km)Source: Agência Portuguesa do Ambiente; BCG analysisNote: Assuming historic fleet evolution in the future and average distance/year/carconstant (10.000km)Source: Agência Portuguesa do Ambiente

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTAs the pictures show the emissions projections assume a continuation in the growth trendfor automobile stock, but also a reduction in emissions per km, in line with the targets set by theEuropean Commission for the automotive industry. By 2020, the average of the rolling stock willbe emitting in line with the targets set for new vehicles in 2012.11.3.2 Aviation, Railways and MaritimeThe aviation sector will face significant changes during the period 2006-2020. The newLisbon International Airport in Alcochete is expected to become a hub for connections fromEurope to both Latin America and Africa. To address this, the emission projections include anestimate of movements 27 taking into account the new infrastructures.Nevertheless, the specific emissions by movement were analysed historically and thehistoric decline in emissions is used going forward, mainly driven by technological progressionsand efficiency gains in engines.Aviation# movements tonCO 2 e/movement500,0002.0400,0001.5300,0001.0200,000100,0000.5006 08 10 12 14 16 18 200.0Source: Agência Portuguesa do Ambiente; NAER; BCG analysisSpecific emissionsMovementsSimilar changes are expected in the rail sector. The high speed projects to connect Lisbon-Madrid and Lisbon-Porto are expected by 2013 and 2015 respectively, and will impact the demandside of rail transportation in Portugal.The projections have taken into account the forecasts from RAVE for the new demandin the sector (passenger-km). In addition to these studies, international benchmarks have beenstudied to clearly understand and model the ramp-up phase and transported passengers.Another crucial element for these projections was to credibly estimate the potential for27Parsons FCG, NAER estimates

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTspecific emissions reduction in a Business As Usual scenario. Rail emissions have historically beenrapidly decreasing, due to the migration from diesel to electrical locomotives. For this reason, thepotential reduction has been limited assuming penetration of electrical equipments rises from 65%(2006) to 100% (2020).Railways# passengers-km6,000,000tonCO 2e/passenger0.0250.0204,000,0000.0152,000,0000.0100.005006 08 10 12 14 16 18 200.000Source: Agência Portuguesa do Ambiente; RAVE; BCG analysisSpecific emissionsPassenger-kmThe maritime sector will, predictably, face fewer changes. The sector has been quite stableand no major influences are expected to affect the sector materially for the period under analysis.This being said, the projections have taken intro account a slight increase through theyears, according to the historical analysis 28 and including all Portuguese ports. The same historicalperspective has been used to forecast unit emissions; following other modal trends, these are likelyto decrease, although at a slower rate than in other transport means (once again, reductions will bedriven by more efficient engines and equipments on board).28IPTM – Instituto Portuário e dos Transportes Marítimos

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTMaritime# movements tonCO 2 e/movement15,0002010,00015105,0005006 08 10 12 14 16 18 200Source: Agência Portuguesa do Ambiente; APP; BCG analysisSpecific emissionsMovements11.4 Residential/services (excluding ICT)The Residential/services sector is the one that includes a higher portion of overall ICTcontent. However, as one of the main goals of this study was to detail the ICT Industry’s ownimpact, ICT has been detailed separately, and excluded from Residential/services. Therefore, allconsiderations in this section will not relate to ICT-related emissions 29 .The key factor for the emissions evolution is energy consumption. Effectively, twomain forces are responsible for shaping the energy landscape of the future in the residential andservices sector: a tendency for higher consumptions offset by decreasing direct emissions (both ofelectricity and other forms of energy).In terms of electricity, the increasing per capita consumption will come from the continualincrease in penetration of appliances such as powerful TVs, HVAC equipments, consoles, kitchenappliances, etc.Electric Consumption (kWh per capita)Electric Consumption (kWh)kWh/hab4,0002,6822,00002,7302,882+3%3,0633,2353,4193,6183,831kWh40,00030,000+2%39,09937,22435,46533,82232,28330,62328,456 28,97420072008201020122014201620182020National Population20,000Millions of habitants1510.6 10.6 10.61010.5-0.3%10.510.410.310.210,000020072008201020122014201620182020502007 2008 2010 2012 2014 2016 2018 2020Source: INE; UE PRIME S Model; BCG analysis29For ICT definition see section 4.1

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTIn terms of other energy forms (e.g. natural gas), the same trend will be observed –more equipment in households, although technological improvements in these appliances willallow consumption to stabilise. Government programs already in action 30 plan to reduce ~10% ofresidential and office consumption by 2015, mostly through better construction materials and non-ICT related energy efficiencies.The improvements in emissions efficiency are related to the generation efficiencies aspreviously described in Electricity Generation, section 11.1.1.Residential/services emissions are expected to decrease slightly from 15.0 MtonCO 2e in2006 to 14.3 MtonCO 2e in 2020.Residential and services emissionsMton CO 2e201515.615.315.1 14.914.5 14.5-0.7%14.5 14.414.4 14.414.4 14.414.4 14.3105020072008201020122014201620182020Other Non-electric EmissionsTotal Electric EmissionsNote: ITC sector emissions are excluded from this sectorSource: INE UE P RIMES Model; B CG analysis11.5 ICT30PNAEE, Portugal Eficiência 2015 - Plano Nacional de Acção para a Eficiência Energética

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTDefinition of ICT sector for this reportIncludedPCs and peripherals: workstations; laptops; desktops and; peripherals such asmonitors and printersIT services: datacenters and their component servers; storage and coolingTelecoms networks and devices: network infrastructure components; mobilephones; chargers; broadband routers and IPTV boxesNot IncludedConsumer electronics such as TVs, video equipment, gaming, audio devicesand media playersOther electronic equipment such as medical imaging devicesICT sector emissions by subsectorMton CO 2 e1.51.01.011.03 1.011.01 1.021.01 1.030.7%1.05 1.071.091.101.111.121.13 1.130.50.02006 2008 2010 2012 2014 2016 2018 2020Telecom NetworksDatacentersTelecom DevicesPCSource: IDC; INE; UE Primes Model; Expert interviews; A PDC associates interviews; BCG analysis11.5.1 Personal ComputersThe penetration rate of Personal Computers (PCs) in Portugal in 2006 was 0.19PCs/user,substantially lower than in other EU countries. Portugal is slowing moving in line other countriesas penetration rates increase through the younger generation who are more used to living withIT. A clear example of this is the success of Government initiatives in this field through subsidisedcomputers for schoolchildren of all ages. This should result in a strong increase to 0.63PCs/userby 2020, aligning with current best practice rates (e.g. 0.68 in Netherlands in 2006). This stronggrowth represents a CAGR of 8% in the number of PCs over the period.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTCurrent PC penetration rateSEUS0.760.76NLPT 2020UKDEIE0.680.630.600.550.49+239%PT 20120.40ES0.28+112%PT 20060.190.0 0.2 0.4 0.6 0.8 1.0PC's per usersSource: World Development Indicators database; IDC; Expert interviews;APDC associates interviews; BCG analysisThis forecasted increase will be come mainly through an increase in laptops (once again,the target of government subsidies). Since laptops have substantially higher energy efficiency thandesktop PCs, and current substantial progress on overall energy efficiency of PCs and peripheralsis expected to continue, electricity consumption will grow at a lower rate of 5% CAGR during theperiod 2006-2020.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT10Personal Computers Installed BaseMillionsPersonal Computers Electric ConsumptionGWh3,5008642.42.63.34.28.3%5.05.86.46.83,0002,5002,0001,5001,0001,4191,4801,6721,920+5%2,1672,3832,557 2,6892500020072008201020122014201620182020020072008201020122014201620182020Home DesktopCommercial DesktopHome LaptopCommercial LaptopHome DesktopCommercial DesktopHome LaptopCommercial LaptopSource: World Development Indicators database; IDC; Expert intervi ews;APDC associates interviews; BCG analysisSource: World Development Indicators database; IDC; Expert interviews;A PDC associates interviews; BCG analysis’This leads to an overall increase of PC emissions of 1.4% per year (CAGR 2007-2020),improved by the additional impact of the expected reduction in unit emissions per unit ofelectricity (see section 11.1.1 on energy generation).PC subsector emissionsMton CO 2 e0.80.60.490.49 0.490.490.500.510.521.4%0.55 0.560.58 0.590.59 0.600.60 0.590.40.20.020062008201020122014201620182020DesktopsLaptopsNote: Printers not includedSource: IDC; INE; UE Primes Model; Expert interviews; A PDC associates interviews; BCG analysis11.5.2 Telecom DevicesThe expected emissions from telecom devices are influenced by two different factors.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTAlthough a continued increase in penetration rates is expected, it will happen at a slower ratethan in previous years. A decrease in unit equipment consumption is also expected, mostly due toreduction in stand-by consumption of devices.Portugal has one of the highest penetration rates of mobile phones per capita in Europe:the penetration rate reached 134% in 2007. As a consequence, the increase in the number ofmobile phones will be slower (1% CAGR 2006-2020) than previous years, even when taking inaccount expected penetration of device-to-device communication.Evolution of number of mobile phonesMobile Phones (Millions)201514.314.615.015.3+1%15.615.916.316.61050Phones percapita2007 2008 2010 2012 2014 2016 2018 20201.34 1.38 1.41 145 1.49 1.54 1.58 1.63Source: IDC; INE; UE Primes Model; Expert interviews; APDC associatesinterviews; Merrill Lynch; "Global Wireless Matrix 1Q08"; BCG anal ysisHowever, Customer Premises Equipment (CPEs) will see strong growth during the period.This growth will be driven by two main forces: the rising penetration of TV equipment in ourhouses and Internet related broadband devices. The first case is related to the multiple applicationsavailable today for our TVs, e.g. set-top boxes. The second case is linked to the tendency forincreased connectivity, which leads to the increase in the number of routers.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTEvolution of number ofCustomer-premises Equipments 1CPE's (millions)86420CPE's perhousehold+5%5.34.94.43.83.62.62.42.22.02.02.22.5 2.71.6 1.82007 2008 2010 2012 20146.35.83.12.83.0 3.22016 20186.83.33.520200.64 0.68 0.77 0.86 0.93 1.01 1.10 1.19TV RelatedInternet BB Related1. Considering Direct-to-home, Cable TV set top boxes, cable modems,ADSL modems and other BB connections (including ISDN connections)Source: IDC; INE; UE Primes Model; Expert interviews; APDC associatesinterviews; Merrill Lynch; "Global Wireless Matrix 1Q08"; BCG analysisAll telecom devices considered were identified as very inefficient devices in stand-bypower consumption. Interviews with experts and companies showed that companies are startingto focus on this consumption, therefore a slight reduction in power consumption per device wasassumed.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTMobile Phones and CPE's yearlyconsumption per unitkWh/unit/year30252015105015,014,413,4-4%12,4 11,510,69,89,1Mobile phoneyearly consumption20072008201020122014201620182020kWh/unit/year250200150100500139,82007139,82008137,02010-2%131,6 126,32012 2014121,32016116,52018111,92020CPE yearlyconsumptionSo urce: IDC; INE; UE Primes Model; Expert interviews; APDC associates interviews;Merrill Lynch; "Global Wireless Matrix 1Q08"; BCG analysis’The result is a stabilisation (-0.2% CAGR 2007-2020) of telecom devices emissions ataround 0.24 MtonCO 2e in 2020.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTTelecom device subsector emissionsMtonCO2e0,3-0,2 %0,25 0,25 0,25 0,240,230,24 0,23 0,24 0,24 0,24 0,24 0,24 0,24 0,24 0,240,20,10,020062008201020122014201620182020Mobile PhonesCPEsNote: CPE = Customer Premises EquipmentSource: IDC; INE; UE Primes Model; Expert interviews; APDC associates interviews; MerrillLynch; "Global Wireless Matrix 1Q08"; BCG Analysis11.5.3 Telecom NetworksThe analysis of the likely evolution of telecom network consumption, and henceemissions, was mainly based on interviews with APDC associate members, Major Portuguesemobile network operators were interviewed and their views used in the overall estimate.In the coming years, the networks will change dramatically. Indeed, the major playersare already working on lowering network consumptions by swapping from copper to opticalfibre technology. Transition to optical equipment will allow considerable cost savings, throughboth energy saving, with the subsequent impact on CO 2emissions reductions, and maintenanceexpenditure. This trend is key to the projected emission reductions, decreasing at 3.5% CAGR from2007 to 2020.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTTelecom network subsector emissionsMton CO 2e0.150.100.140.130.120.120.110.110.100.10-3.5%0.100.090.090.090.090.090.080.050.002006 2008 2010 2012 2014 2016 2018 2020Source: IDC; INE; UE Primes Model; Expert interviews; A PDC associates interviews; BCG analysis11.5.4 DatacentersDatacenters are the fastest growing ICT sub-sector by emissions. International trends arefor increasing computational power, with an impact not only on direct server consumption, butalso on ancillary services (e.g. cooling).This tendency towards increased processing capacities can also be observed in Portugal.As a result, we can predict a strong increase in the number of servers, but also in the directconsumption per server (driven by higher capacity). Therefore, increased electrical consumptionwill be the key driver for the high negative impact forecasted on emissions.This expected tendency is in line with international expectations on growth in number ofdatacenter servers as well as expected growth of datacenter unit consumption.The expected 5.2% CAGR in number of servers from 2007 to 2020 (representing a 93%growth in number of servers), is accompanied by a slight increase in server unit consumption,resulting in a 5.8% CAGR in total Datacenter consumption up to 2020. This represents a doublingof electricity consumption by Datacenters in Portugal to 2020.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT12 Appendix 4_The ICT enablingeffect: Sector by sector ReductionElectric Consumption(average yearly kWh per server)Total number of serverskWh/serverThousands6,000250+1%4,0004,5224,5474,5984,6494,7014,7544,8074,861200150100101.3107.0116.9130.55.2%144.4159.7176.7195.52,0005000200720082010201220142016201820202007 2008 2010 2012 2014 2016 2018 2020Source: IDC; INE; UE Primes Model; Expert interviews; APDC associates interviews;BCG analysisEven if the reduction of unit emissions in electricity generation already mentioned (seesection 11.1.1 on electricity generation above) is included, emissions from Datacenters increasewith at 2.1% CAGR from 2007 to 2020, representing 0.21 MtonCO 2e in 2020.Mton CO 2 e0.25Datacenters emissions0.200.150.150.160.160.160.160.160.170.172.1%0.180.180.190.190.200.200.210.100.050.002006 2008 2010 2012 2014 2016 2018 2020Source: IDC; INE; UE Primes Model; Expert interviews; AP DC associates interviews; BCG analysis

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT12.1 Energy12.1.1 GenerationCurrently, energy transport and distribution grids are mostly passive elements, carryingenergy that is produced based on consumption estimates. These estimates are made withoutrecourse to real time information on consumption or network load, and without the ability tocommunicate and act on end user consumption. The use of ICT to communicate real time energyconsumption, and to act, also in real time, on the different network elements and consumptionpoints, enable a substantial improvement in overall system efficiency.Combining this ability to forecast energy needs more accurately at any given momentwith active demand side management, which reduces total demand and shapes the load curvesby shaving peaks, enables a higher and more cost-effective penetration of renewable/nonemitting technologies in the overall electricity production mix. This penetration will continue tobe limited by the low predictability of most renewable sources (it is hard to determine when thewind will blow or when it will stop, with existing alternatives, e.g. thermal generation, being moreexpensive); however, a more accurate measurement of real needs with DSM, and potentially use ofstorage elements such as batteries (e.g. in electric cars), would enable an increase in installation ofintermittent renewable power and higher usage of the existing base, leveraging the push made inrecent years by the Portuguese authorities for a higher capacity in renewable energy.Expected generation mixSpecific generation emissions% Generation150%100%50%0.22030%22%48%(ton CO 2 e/ MWh)0.30.2040.221%21%0.158%(Mton CO 2 e)200.220154.31011.75(ton CO 2 e/ MWh)0.250.2040.200.152.40.109.90.050%2020BAU2020SMART0.002020BAU2020SMART0.00Unitary Generation Emissions(ton CO2e/MWh)Unitary Generation Emissions(ton CO2e/MWh)Gas GenerationCoal GenerationRenewables (non-emitting)Gas Generation Emissions(Mton CO2e)Coal Generation Emissions(Mton CO2e)As a consequence, direct emissions would drop from 0.220 tonCO 2e per MWh, in a BAUscenario, to 0.204 tonCO 2e per MWh in a SMART scenario by 2020 (from an increase of between48% and 58% in renewable generation).

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTGeneration emissions reduction splitby reduction leverMton CO 2 e20Emissions reduction potential per sectordue to lower unitary emissionsMton CO 2 e1.51516.002.491.2112.301.00.350.090.060.111.21100.600.5502020 BAUGenerationEmissionsEmission Emission 2020 SMARTReduction due reduction due to Generationlower lower unitary Emissionsconsumption in emissionsother sectors0.0Res/Serv IndustryGridLossesICTOthersTotalSource: BCG AnalysisReductions in energy consumption translate into a reduction in emissions from 16.0 to12.3 MtonCO 2e. This value is split into two effects:• The first is reduction due to energy no longer consumed. This reduces electricityconsumed by 12.3 TWh electricity, saving approximately 2.5 MtonCO 2e (split acrosssectors). These CO 2e savings are due to energy efficiency initiatives, and are notconsidered as savings due to increasing renewable generation, but decreasing emittinggeneration.• The second is saving due to increasing generation from renewable sources in thenational mix (from 48% to 58%), which has on the effect of improving all the remainingconsumption by reducing the CO 2e emission costs for electricity consumed. This effectsaves 1.2MtonCO 2e.Only the second effect is considered for electricity Generation (final potential is a1.2MtonCO 2e reduction), while the remaining savings are allocated to the sector responsiblefor the reduced consumption. The result is lower unitary emissions for all electricity consumingsectors. This reduction has an economic value of ¤42M (due solely to CO 2e costs avoided since noactual electricity is saved).To isolate the effects, the whole of these savings have been accounted for in Powermanagement initiatives. Other initiatives affecting consumption in end user sectors are accountedfor using the reduced emission factor in order to avoid overlaps.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTICTImpactInitiativeInvolvementPotentialMtonCO 2 eMWh1New technology advancement in generation• e.g.: clean coal, higher efficiencygeneration, others...Devices and software todesign and monitor newgeneration unitsn.a. 1 n.a. 12New capabilities in handling intermittentgeneration• Utilization of ICT to allow a largerpenetration of intermittent renewablegeneration• effectively allowing a system to bedependent on 57% non-emitting generation(vs 48% in BAU scenario)Monitoring and controlsoftware for generation andgrid load control systems1.21 0 2High potential1. Improvements of efficiency in thermal generation already considered in BAU;2. No actual reduction in electricity. Effect is only due to reduced emission cost (tonCO 2e/MWh)Source: Industry expert interviews; International Energy Agency; BCG analysisLow potential12.1.2 Energy transformation & Energy lossesAn increased control over the network, mainly driven by more accurate predictability,could enable additional use of microgeneration in the grid. This would require strong ICTinvolvement, as the monitoring of grid status is dependent on pervasive measurement devicesthat are able to communicate data and receive instructions, as well as advanced softwareand processing tools. Stabilisation of the grid could allow an additional 10% penetration ofmicrogeneration by 2020. This increased penetration of microgeneration, much of which willbe renewable (an effect already accounted for in generation), enables a further reduction ofemissions by requiring a lower number of high voltage/low voltage transformations and a shorterdistance between production and consumption. This has an impact on network losses, estimated at0.08MtonCO 2e and 380GWh; with an associated financial value of ¤26M.However, the major reduction potential could come from the full implementation ofDemand Side Management (DSM). In fact, the management of individual client consumptionswould allow application of selective interruptability or power limitation, reshaping theconsumption periods according to the amount of generation available. Additionally, DSM is alsoimportant in compensation for intermittent wind/solar generation, thus avoiding more expensive(e.g. tertiary) reserve capacity.DSM would require an integrated approach with high ICT involvement. From the controlof devices in households or offices to real-time consumption monitoring and conveying real timeprice signals, all the information integration and analysis relies on ICT enablers.Implementing DSM would allow peak shavings in the current power consumption (load)curve, either through the activation of interruptability contracts or through the provision ofadequate price signals. Given the results achieved in pilot tests in the US (Washington, Austin,California), DSM could enable a 10-15% reduction of peak demand, which would, in a typicalPortuguese load curve, represent 2-5% of total power and hence emissions. Furthermore, becauseof the quadratic nature of network losses, shaving 10-15% of peak energy could represent 4-10%

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTof total network losses. The overall impact of DSM implementation could reach 0.26MtonCO 2ewith savings of 1,289GWh; the associated financial value would range from ¤266M to ¤428M.ICT could provide devices and software to monitor real time consumption and providereal time price signals, so that consumers can assess and rethink their behaviour. ICT could supportconsumer price signalling features and increased consumption visibility: the consumer would moveto use of more efficient equipments and so limit consumption to what is really needed when it isreally necessary.In this field, using ICT-enabled monitoring and communication equipment would beessential to transmit consumption profile to users, including data such as dynamic pricing,improvement options and maintenance programs. Research by the Carbon Trust in the UKestimates that this increased visibility could reduce consumption by up to 0.5% per year.Total potential for increased consumption visibility and application of dynamic pricing toclients gives a reduction of 2,064 GWh, or 0.75MtonCO 2e in avoided emissions. This represents upto ¤152Mper year in CO 2e and electricity savings.Another key aspect to be considered is the increased use of the capacity in theinstalled network. The above mentioned trials in the US have shown investment delays in localinfrastructures of 3-5 years; this means lower levels of Capex required for grid expansion andmaintenance while achieving the same quality of service.Pilots projects that implement Power Management systems using ICT are occurringworldwide, as the sector implements these innovations in the Grids. Examples include a pilot inCalifornia and in several European countries, which confirm the maturity of the technology and itsreadiness for deployment.Considering the 3 detailed initiatives, up to 1.1 MtonCO 2e reduction is possible, from a decrease in3.7 TWh, worth ¤266M.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTICTImpactInitiativeInvolvementPotentialMtonCO 2 eGWh1Increased grid control• Greater knowledge and control of network• Increased capabilities allowing greaterpenetration of microgenerationDevices and software tomonitor and process0.08 3802Implementation of DSM features• Usage of ICT enabled monitoring andcommunication equipment to transmitconsumption profile to users, permitselective client interruptability and peakshavingDevices and software tomonitor and process0.26 1,2893Increased consumption visibility• ICT enabled monitoring and communicationequipment to transmit consumptionDevices and software tomonitor and process0.75 2,0641.09 3,733High potentialSource: Industry expert interviews; BCG analysisLow potential12.2 IndustryIdentifying SMART reduction initiatives in industry involved analysis and discussion ofthe area with industry experts. This is a sector already within the scope of the ETS directive andtherefore already has strong incentives to curb CO 2emissions. It is, therefore, not surprising thatthere is not a huge potential for further ICT-enabled optimisation, something that was confirmedby the various sources used to estimate the potential reduction.The PNAEE, Plano Nacional de Acção para a Eficiência Energética, in its Industryworkgroup, identified several optimisation levers, split by area. These areas were considered to bethe initiatives that could bring more significant reductions across industry. Here are the four majortransversal fields of action identified:• Electrical motor systems, connected to all types of engines, pumps and other industrialequipment used in industrial processes. Electric engines are used more in Europeanindustries due to their elasticity (easiness of use and charge flexibility);• Heating and cooling production, taking into account cogeneration and all combustionand heat recovery systems;• Lighting, including optimisations in terms of electricity consumption related to the useof more efficient equipment and occupancy based systems;• Industrial process efficiency, which covers topics such as monitoring, effluentstreatment, process integration, equipment maintenance and other related issues.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTICT has different levels of involvement in each of these fields.For the electrical motors and the lighting initiatives, ICT is likely to be an importantenabler: in electrical motors, monitoring devices allow the visualisation of working conditionsand fine-tuning if needed; in lighting, sensors can manage occupancy based consumption andefficiency across the process.In the other two areas of interest, ICT would be used mainly for simulation tools usedin the designing phase that precedes any industrial process change/optimisation. Therefore ICTenabledpotential in these areas is not as significant.ICT enablement potentialestimates by sourceMton CO 2 e0.60.4 0.26Consideredas maximumpotential forPortugal0.540.20.280.390.0PNAEE source IEA source GESi sourceNote: PNAEE – Plano Nacional de Acção para a Eficiência Energética; IEA – InternationalEnergy Agency; Industry expert interviews; GESi – Global e-Sustainability InitiativeSource: PNAEE; IEA; SMART 2020; BCG analysisFor the assessment of this potential, several sources were used to estimate a range foremissions reduction 31 . A maximum 0.5MtonCO 2e ICT-enable reduction was identified within theindustry, equal to approximately only 0.5% of total national emissions by 2020, or ¤67M in value.31PNAEE estimates consider total potential identified for the industry applied to industry emissions by 2020 in the BAU scenario; IEAestimates are based on best potentials for each industry sector; GeSI estimates are based on same share of ICT enablement in industry asadopted in the global SMART 2020 report

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTICTImpactInitiativeInvolvementPotentialMtonCO 2 eGWh1234Motor systems• Monitor engines functioning to constantlyassess potential to fine-tuneCool and heat production• Mainly cogeneration and optimization ofcombustion systemsLightning• Optimize lightning conditions through theuse of sensors (occupancy based)Process efficiency• Permanently reengineering the process,with process integration, waste recovery, ...Devices and software toprocess monitored infoSimulation softwareDevices (e.g. sensors) toallow more efficiencySimulation software0.54 781High potentialSource: Industry expert interviews; International Energy Agency; BCG analysisLow potential12.3 TransportIn the global SMART 2020 report, SMART logistics was identified as having majorpotential in Europe; similar results were expected for Portugal as transportation is the secondlargest emitting sector.An analysis of best practices internationally, in parallel with a discussion of strategieswith industry experts, led to the identification of seven reduction initiatives with significant ICTinvolvement. These initiatives were detailed in terms of ICT-enablers for emissions reduction andin terms of direct economic value involved.M €1,500Split of transport initiatives by value113241,2321161,00022742579%(€979 M)2755002778072000Pay-as-youemitCongestionmanagementFreightlogisticsDriverTrainingVirtualizationIntermodalityElectric carenablersTotalNote: Car sharing initiative not considered as it has marginal impact and low ICT enablement potentialSource: Project Team AnalysisIntercity TransportationUrban Transportation

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTTransportation initiatives could be worth ¤1.2billion, although 79% of the potential wouldcome from four initiatives: Pay-As-You-Emit, Congestion Management, Freight Logistics andDriver Training.Pay-As-You-EmitThis initiative is based on the concept of increased responsibility for those who actuallyemit. A monitoring system of emissions would establish a polluter-payer principle across thetransport sector, forming a link between real emissions and vehicle charges.The initiative requires a high level of ICT involvement. The basis would be thedevelopment of an in-car device to measure emissions in real time. Two alternatives could then beconsidered: either the online mode, where information would be sent in real time for processing,or the offline mode, where it would be stored for later treatment. This second alternative wouldrequire the adoption of submission standards so that the driver could be charged periodically(rather than in real time).The monitored information could also be displayed in real time to the driver, increasinghis awareness of environment impact and cost, motivating a smoother driving.In vehicle emissionmonitoringEmissioncommunicationInformationprocessingEmission billingOnline SystemOffline SystemVehicle equipment measuresand displays emissionsinformationVehicle transmits informationor stores it for off-line analysisConsumption information isprocessed for billing andstatistical analysisBased on emissionsconsumers are billed or taxedSource: BCG analysisInternational studies identify a potential 10-15% saving on distances travelled 32 , althougha more conservative scenario has been used for Portugal after estimates from industry experts.Only passenger cars and light duty vehicles were assumed to reach a 10% reduction, giving apotential emissions reduction of 1.0MtonCO 2e. Considering the additional 0.4 billion litres offuel saved, Pay-As-You-Emit could have an economic value of ¤200M¤. Of this, 82.5% is fromfuels savings, directly linked with user cost reductions, and the remaining 7.5% is from avoidedemissions.32Victoria Transport Policy Institute – Win-win Emission Reduction Strategies

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTCongestion ManagementThe Congestion Management initiative could act on several levers in order to reduce citytraffic congestion, all of them requiring heavy use of ICT. These can include the more traditionalparking taxation right through to the application of tolls in the boundaries of the major cities.Singapore pioneered use of such systems in 1975 - traffic reductions reached 45% witha very simple toll system. Since then, similar systems have been implemented in other developedcities worldwide, such as Seoul with a 25% reduction in traffic during the first year 33 , or the morerecent adoption in Stockholm, with up to 14% emission reductions in a seven-month trial in2006 34 .The congestion charges applied in London are another example of strategies to reduceemissions. In fact, in only 5 years a very positive result of 20% CO 2e emissions reduction has beenachieved 35 .In addition to the emission profile of the Portuguese economy, which makestransportation a key area of action, the demographics of the country, with the two major urbanareas (greater Lisbon, including Setúbal and greater Oporto) accounting for more than 60% of thepopulation (Lisbon and Oporto) 36 , make congestion management not only a high impact initiative,but also relatively easy to action (when compared to other countries).Another key aspect for the success of the Congestion management scheme is thealternatives that the users will have for city transport. Public transport services need to beadjusted to cope with increased traffic, potentially through a restructure of the network. InPortugal, the very low load factors of public transport (e.g. 21% load factor in Carris in 2007)indicate that free capacity available will be able to cope with at least some of the additionaldemand.The implementation of a similar system in Portuguese cities would require strong ICTinvolvement at different levels. A car device would be required for vehicle identification. Severalinterconnected devices would be needed for control: static ones at the city limits for the entrymonitoring, video cameras to visualise real time traffic flows and sensors to monitor real timeparking use.A permanent synchronisation scheme would be required to ensure that vehicleinformation is integrated with real time city traffic and that dynamic pricing policies couldbe used. Different prices should be adopted for different vehicles types (e.g. exemptions forenvironmentally friendly ones) and occupancy features (high load factors could have chargebenefits), always considering the vehicle mix and traffic flows.The pricing strategy for the urban parking could also be reshaped with online usageinformation. Although parking is already charged for in major Portuguese cities, parking fees are33APEIS – Asia-Pacific Environment Innovation Agency34The Stockholm Congestion Charging Trial – Expert group summary35European Union position paper on public transport36INE – Censo 2001

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTstill not sufficient to dramatically affect major congestion. A significant increase in the peak timeprice in problematic areas would considerably reduce the number of trips to cities by car andwould encourage the use of public transport.A more ambitious scenario would be to develop the current traffic light managementsystems, (e.g. Gertrudes in Lisbon), and increase their capability to incorporate real time trafficinformation, not only from each specific street, but also from other areas affecting or beingaffected by the behaviour of each traffic light. Nowadays, this system coordinates traffic lights tocreate waves of traffic depending on time of day. However, it could incorporate traffic informationand proactively manage major bottlenecks by redirecting problematic flows, adapting dynamicallyto traffic as well as conducting traffic to desired city locations.In Portugal, this initiative could save up to 1.4MtonCO 2or 0.5 billion litres, assuming thesame level of impact as the London congestion charge scheme could be achieved on 80% of theBAU urban emissions (a conservative scenario considering other referenced examples). This has adirect economic value of ¤346M in avoided CO 2emissions and saved fuel.Freight LogisticsOptimising freight logistics can bring significant savings from both an emissions andeconomic perspective. Several levers can be incorporated into fleet management systems toincrease operators’ efficiency.In Portugal, these applications are already being used today, although in a specific set ofmore developed fleets, and with a lower level of functionality 37 . ICT involvement, through globalpositioning systems located in the vehicle and real time traffic visualisation, enables continuousoptimisation of routes and related consumption. The optimisation takes into account distances,roads, traffic, and the type of activity to be performed. Such systems have been shown to reachconservative travel and consumption reductions of 10% in Portugal, as national heavy duty fleetsare very fragmented 38 and related operations are still not optimised with advanced applications.Freight optimisation could also be developed through integration of other functionalities,such as increased load factors and better scheduling integrated into fleet management systems.Load factor optimisation for duty vehicles, typically lower in the return phase, hasroom for improvement. This would require development of web platforms for operators to matchavailable free capacity and demand for transport. ICT would enable optimisation by increasingvehicle occupancy.Freight Logistics could also enable optimisation of the city delivery system, with a directimpact in terms of traffic optimisation. Retail supply chains today are designed by product type,instead of an optimised service by destination. In the optimised case, each retailer would only bevisited once and the same logistics operator would deliver all categories of goods.In a well structured system, there would be benefits for everyone involved. The retailerwould be more efficient, as it would only receive one delivery. The logistics operator would37E.g. Luis Simões fleet management system38Portuguese heavy duty fleets are still fragmented, resulting in a reduced investment capacity per fleet from the operators

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICThave the same business volume, assuming a reasonable distribution of deliveries, and wouldoperate mainly in a single zone, with reductions in traffic allowing faster service with less fuelconsumption. Society would benefit from lower traffic related emissions.Overall savings estimated for Portugal could reach 1.5MtonCO 2e and 0.6 billion litres offuel, representing ¤275M of value, mainly due to a reduction in fuel consumption, and also costefficiencies for logistics operators.Driver TrainingThis initiative has proven to have a potential consumption reduction of up to 15% bytraining drivers to adopt a more eco-friendly attitude. However, taking into account the profile ofPortuguese drivers, the estimated impact would be about 1.1MtonCO 2e, given a more conservativeestimate. This initiative could be worth ¤227M in terms of direct CO 2and fuel value.Compared to other initiatives, ICT involvement in this initiative would not be veryintense. Simulation technologies could be developed to allow training sessions for not onlyprofessional drivers, but the whole of society. Monitoring and visualisation applications wouldenable drivers to track their own behaviour and adopt a smoother style.VirtualisationThe virtualisation of different tasks can avoid a significant amount of travel. Manyapplications, all of them based on ICT, could have an important impact in transportation besidesthe dematerialisation itself.Leading companies are starting to promote tele-working in spite of the existing culturalbarriers.Videoconferencing, for instance, is considered to potential for reduction of up to22MtonCO 2e in Europe, by avoiding up to 20% of business travel. In fact, business travel could bereplaced in many occasions by ICT-enabled applications that reduce transportation dependency.Another area with significant interest is the Portuguese e-government strategy. Theincreasing availability of services that can be performed online helps reduce vehicle travelsrelated to such services, as well as the pure dematerialisation of physical support. Details ofdematerialisation effects on physical purchases is detailed below in the Residential/Servicessection.The overall virtualisation impact could reach 0.6MtonCO 2e reduction, assuming Portugalaligns with European average travel reduction by 2020.IntermodalityIntermodality should be considered for both freight and passengers. In both cases, ICTcould have significant involvement – on the freight side, technologies can be used to optimisetransportation costs taking into account available options in real time and to track freight paths

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTthrough devices such as RFID; on the passenger side, the use of ICT can support the developmentof personal travel systems, allowing individuals to assess mobility options in real time.On the freight side, the major obstacle in the Portuguese market is the low quality ofservice that is currently offered by less emitting methods. The most considered alternative is rail,as emissions can be reduced by up to 65%. However, efficient transportation of goods by train hasa minimum distance requirement, on top of scheduling flexibility for charging procedures.On the passenger side, reduction targets can be met by a shift from road to train. Thetargets identified by the PNAC 2006 39 seem achievable and have been discussed with industryexperts. Much of this is likely to be due to an increased use of underground railways (Metro) inurban areas.A total reduction of 0.5MtonCO 2e could be achieved with fuel savings totalling up to 0.2billion litres.Electric Car EnablersThe electric car is relevant whenever discussing the future of transportation. However,technological maturity has not yet been reached and full deployment of this technology in carfleets would require several structural changes to infrastructure.The main change required would come from managing the load on the electric gridthat would come with mass adoption. Some vehicles are already equipped with simple chargingsystems, but the increase in electricity demand in peak hours (typically by 18h-21h, when peoplearrive home) would exceed generation capacity. Therefore, such penetrations implicitly require thepresence of SMART Grids for simplicity and comfort of use.Electric engines are still being demonstrated and their reliability is still to be proven;therefore, the penetration of this technology among car fleets by 2020 is estimated to rangefrom 1% to 5%, following expert estimates for the Portuguese market. In order for estimates tobe conservative, this report considered a penetration of 3% in the passenger car fleet by 2020.However, more ambitious scenarios have been discussed during the interviewing phase, with moreambitious projections pointing 10 to 12% of car fleets penetration.Electric cars are not emissions-free; their fuel, electricity, is responsible for emissionsduring generation. To estimate the potential reduction, a specific electric vehicle 40 was used as abenchmark; for the same distance travelled, it was 80% less polluting than conventional vehicles in2020. A total reduction of 0.1MtonCO 2e could be reached, and the economic value at stake wouldrepresent ¤24M.39Potential targets of 0.25MtonCO 2e for Lisbon and 0.1MtonCO 2e for Oporto40Electric car chosen as indicative was the Tesla

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTICTImpactInitiativeInvolvementPotentialMtonCO 2 eLitres (B)1234567Pay-as-you-emit• Monitor real consumptions or emissions and link carfees to the environmental contributionCongestion management• Charge fees to enter the urban spaces consideringthe type of car and the day periodFreight logistics• Use better fleet management systems and alsoincreased scheduling applicationsDriver Training• Train people to adopt smooth driving style sinceschool, focusing particularly professional driversVirtualization• Use technologies such as videoconference andapplications such as e-governmentIntermodality• Incentive switch from road to more cost-effectivetransport modes (both for freight and transport)Electric car enablers• Create applications to support the use of electriccars, mainly driven for the rechargeDevices and software to processmonitored informationDevices and software enablingdifferentiated charging systemFleet management applicationsand virtual logistic platformsSoftware simulation tools for amore efficient learning processAll enabling software andhardware requiredFleet management applications,RFID devicesSMART devices to manageadditional energy demand1.01.41.51.10.60.50.10.40.50.60.40.20.20.16.2 2.4Note: Car sharing/pulling initiative was also identified as having impact, although with very reduced enablement from ICT (therefore not considered for the potential)Source: Industry expert interviews; Victoria Transport Policy Institute; European Union - Position paper on public transports; APDC associa tes; BCG analysisHigh potentialLow potential12.4 Residential/services (excluding ICT)Potential reductions in this sector can be split in two major fields of action: energyefficiency and dematerialisation.One of the EU’s critical levers, building energy efficiency, has a very high potentialto reduce energy consumption. Pilot projects throughout the EU, and particularly in Portugal,indicate savings potential of ~30% in all buildings by using ICT to create, and renovate, greenbuildings. Reduction potential of 15-20% were identified and realised, even in buildings withenergy efficiency measures already in place. ICT plays a central role in achieving this potential:• Energy efficient building design, through simulation and modelling,• Implementing energy efficient home equipment (e.g. Intelligent equipment that activelyoptimises energy consumption levels),• Constant monitoring of equipment consumption levels,• Adapting equipment consumption according to a need or occupancy basis,• Intelligent and variable motor systems in heating and cooling.The BAU scenario considers a 10% energy efficiency improvement in Residential andServices, which, in the absence of a specific initiative to foster intelligent building management,will come mostly from replacement of tungsten lamps for low consumption lighting and othernon-ICT related measures. These measures reduce emissions by lowering the amount of energyrequired for lighting or climate control. The SMART scenario considers an incremental energyefficiency improvement of up to 25%. This potential equals 1.9MtonCO 2e, or 5.6TWh, resulting ina financial potential of approximately ¤410M.Process dematerialisation could bring significant reductions in consumption of physical

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT13 Appendix 5_The SMART Waymaterials. Indeed, as mentioned above, e-government services are an example where physicalsupports are avoided, but other situations can follow the same path.Dematerialisation is only possible due to an increased penetration of broadband servicesand PC’s in the home, and allows many services to be moved online, with important effects on theemissions profile for the average citizen. Availability of on-line services combined with widespreadbroadband penetration eliminates the need for• Purchase of physical entertainment media, or in the near future, even of paper (booksor newspapers),• Paper based communication, a reality already felt today as most work relatedcommunication goes online,• Many of the trips made by citizens to banks, public entities, supermarkets, or evenwork.Replacing all media purchases with online content could have an impact of approximately20ktonCO 2e in Portugal. Likewise, avoiding 25% of paper usage could avoid a further 410ktonCO 2eper year. The total dematerialisation opportunity represents financial savings of ¤0.15M per yearin avoided CO 2e costs. Also, as previously calculated in the Virtualisation initiative in Transport,approximately 0.6MtonCO 2e can be avoided due to tele-presence or tele-working.It is estimated that each new adult broadband user in Portugal enables a saving of ~290kgCO 2per year. This number does not affect the final conclusion since it is assumed that, by 2020,broadband penetration will have reached its saturation point, but the speed with which accessspreads does have an impact on how fast reductions are realised.The total potential reduction for the residential and services sector, in CO 2emissions,represents up to 2.36MtonCO 2e with financial savings of 426M¤.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTICTImpactInitiativeInvolvementPotentialMton CO 2 eTWhIncreased energy efficiency• Utilization of ICT to increase consumptionenergy efficiencyDevices and software tomonitor and process1.91 5.6Increased consumption visibility• ICT enabled monitoring and communicationequipment to transmit consumptionDevices and software tomonitor and processn.a. 1 n.a. 1e-paper transactions• Elimination of processes within and amonggovernment, enterprises and private usersEquipment and software tohandle transactions0.43 n.a.Online purchases and media• Usage of ICT equipment (pc's and cpe's) byusers to acquire media onlineEquipment and software toallow transactions0.02 n.a.High potentialLow potential2.36 5.61. Consumption reduction due to increased consumption visibility included in Energy and Network Losses reduction potential (associated to DSM)2. Including e-paper transaction, online purchases and avoided transportation due to telecommuting and teleconferencingSource: Celpa; GFK ; Assoc.Fonografica Portuguesa Industry expert interviews; BCG analysisAs said before in this report, the original SMART 2020 global report identified five mainareas for emissions reduction: SMART Motors, SMART Logistics, SMART Buildings, SMARTGrids and Dematerialisation. This framework organises intervention areas from the perspective ofsolutions, allowing exhaustive coverage of ICT enabling applications.In addition to the original SMART perspective, the SMART Portugal 2020 studyhighlighted the need for an actionable perspective to ensure initiatives were put in the field.Therefore, reduction strategies were grouped according to the area of action and primaryinterfaces for its application.SmartMotorsSmartLogisticsSmartBuildingsSmartGridsDemateriali-zationOthersSmartCitiesUtilizing ICT to reduce emissions and consumptions in cities and urban areas reshapingurban environments towards sustainabilityreducing mobility emissions, residential and services emissions, logistics and dematerializingSmartPowerUtilizing ICT to reduce emissions due to increasing dependence onenergy production, transformation and consumptionreducing unitary energy production and transformation and losses emissionsSmartInter-CityUtilizing ICT to reduce emissions due to increasingly important networksbetween cities and production centersreducing transportation, communication and logistics emissionsSmartIndustriesUtilizing ICT to reduce industry emissions and optimizing consumptionscreating a green economyreducing industrial processes emissions, and logistics emissions

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTWith this complementary perspective, the initiatives identified in this report can bearranged in four key blocks: SMART Cities, SMART Inter-city, SMART Power and SMARTIndustries. Each of these has clear policy and industry interfaces (ministries, municipalities,regulators, associations, etc…), and through the development of specific ICT solutions, a definedset of end-users who would be involved as stakeholders, all connected by ICT companies:• Smart Cities bring together Government Internal Administration Entities andMunicipalities with Consumers, Constructors and Public Transportation Companies• Smart Power brings together Government Energy Entities, Regulators and Power SectorCompanies• Smart Intercity brings together Government Transportation Entities with FreightCompanies• Smart Industry brings together Government Industry Entities with Industrial GoodsCompanies

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTSmartCitiesPolicy Makers• Ministries (PCM, MEI,MAODTR, MOPTC)• Municipalities• Metropolitan areas• Associations (various)End-usersUrban inhabitantsBuilding constructorsTransportation companiesSmartPower• Ministries (PCM, MEI)• Energy Regulator• Associations (various)Energy sectorcompaniesSmartInter-City• Ministries (PCM, MEI,MOPTC)• Associations (various)Freight CompaniesLong-haul companiesSmartIndustries• Ministries (MP, MEI)• Associations (various)Industrial goodscompanies13.1 SMART CitiesSMART Cities has the goal of reducing emissions and consumption in cities to reshapeurban environments and living for sustainability. This group has the largest potential for emissionsreduction at 6.8MtonCO 2e. Several initiatives from transportation and energy efficiency contributeto the identified potential.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTSmart Mobility• Pay-as-you-emit• Congestion management• Car Sharing• Electric VehiclesInitiativesCarbonReductionPotential(M ton CO 2 e)3.96Value atStake(M €)807EmissionsReductionPotentialSmart Living• Increased Energy Efficiency• Increased Consumption Visibility• e-paper transactions• Online purchases2.36426Green Technology• Increased PC efficiency• 1 watt standby equipment• Energy efficient communication• Green Datacenters0.43144Total6.751,376−−ICT is crucial for the development of a green city in two key areas:Sustainable Urban Development – ICT give planners, designers and consumersaccess to sustainable energy, creating a multi-stakeholder sustainable partnership bymonitoring and measuring sustainable energy use, identifying key areas for interventionand constantly balancing energy use and comfort levels all the way from design toconsumption;Sustainable Mobility – ICT is a key lever in creating an integrated framework, a visionfor city transportation including investment and scenarios, measuring and monitoringresults and then passing benefits (and costs) directly onto sustainable mobility users.Sustainable Urban Development relies on the ability to access and utilise information onenergy consumptions. ICT allows not only the monitoring of the current situation but also theprocessing of energy efficiency data, and therefore different stakeholders at different levels ofurban development can profit from ICT involvement.Sustainable Urban Development requires careful planning and an integrated set ofpolicies to encourage green behaviour. A new urban mobility paradigm would require a realisticregulatory framework, increasing citizens’ responsibility over emissions. Mobility managementshould use ICT platforms to increase alternative transportation offers and reduce private car use. Aconsumer’s behaviour should be directly linked to their direct cost rather than to a cost distributedthrough society.The Greater Toronto initiative is a well known example of the adoption of best practicesacross different environmental areas, with the launch of a local program to increase citysustainability: “The City of Toronto’s environment, community and economy should be healthy andvibrant and should meet the needs of today without compromising the ability of future generationsto meet their needs.”13.2 SMART Power

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTSMART Power considers the initiatives that rely on ICT to reduce emissions relatedto increasing dependence on energy production, transformation and demand. Potential carbonreduction is up to 2.3MtonCO 2e and all initiatives are related to information gathering and flowacross the power generation grid, right through to end users.InitiativesCarbonReductionPotential(Mton CO 2 e)Value atStake(M €)New capabilities in handling intermittent generation• Utilization of ICT to allow a larger penetration ofintermittent renewable generation1.2142EmissionsReductionPotentialIncreased grid control• Increased knowledge and control of network allowinggreater penetration of microgenerationConsumption management (DSM)• Usage of ICT enabled monitoring and communicationequipment to transmit consumption profile to users,permit selective client interruptability and peak shaving0.080.262688Increased consumption visibility• ICT enabled monitoring and communication equipmentto transmit consumption0.75152Total2.30308The SMART Power concept groups initiatives that optimise power generation,transportation and consumption in an integrated and dynamic way. The combination of SMARTGrids and DSM has a stronger effect than if the effects of the two were considered separately.

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT14 Appendix 6_AcknowledgmentsOn the generation side, better coordination of dispatching and consumption gives increasedpredictability and as a consequence, use of renewable generation could increase (especiallymicrogeneration).On the transportation side, increased penetration of renewables would reduce high-voltage/low-voltage transformations, resulting in lower network losses. This effect would be strengthened bythe potential peak shavings in demand.Transportation would benefit from better asset use, meaning lower network investments forthe same service level.On consumption, real time monitoring is key to consumer awareness and behaviour change.DSM would also allow interruptability, a key feature to manage grid load and reduce emissions ingeneration.13.3 SMART Inter-citySMART Inter-city includes all the initiatives related with the optimisation of flows betweencities and production centres. This area has a potential reduction of 2.3MtonCO 2e, and all relatedinitiatives have a transportation origin.InitiativesFreight logistics• Use better fleet management systems and alsoincreased scheduling applicationsCarbonReductionPotential(Mton CO 2 e)1.5Value atStake(M €)275EmissionsReductionPotentialDriver Training• Train people to adopt smooth driving style since school,focusing particularly professional driversIntermodality• Incentive switch from road to more cost-effectivetransport modes (both for freight and passengers)0.30.25240Virtualization• Use technologies such as videoconference andapplications such as e-government0.358Total2.3425The optimisation of logistics is not just a question of environment responsibility anymore.The use of ICT applications can bring benefits in areas such as fuel expenditures through with routeoptimisation, supply chain efficiencies through load factor improvements and risk diversification.Indeed, beyond route and load optimisations, the use of alternative transportation methods reduces

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTexposure to oil market price volatility, and therefore reduces thebusiness risk exposure.Consequently, SMART Inter-city should be consideredan opportunity for value creation rather than a simple path toregulatory compliance.Reductionpotential+MonitorTransformMitigation• Corporate oriented• Short term payoffTransformation• Practices change• Uncertain payoffRethinkValue creation• Strategic view• Business orientedSMART logistics+ICT level-Compliance• Tactical view• Quick payoffAccount-- +Investment levelSource: Industry expert interviews; MIT Center for Transportation and Logistics13.4 SMART Industries

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTSMART Industries include all the initiatives coveringIndustry efficiency. As previously stated, there is limitedopportunity for optimisation in Portuguese industry. Severallevers were identified in this study, but with reduced impact.Two factors contribute to this reduced potential: onthe one hand, Industry is one of the sectors covered by the ETSregulation, resulting in optimisation over the last few years; onthe other hand, Portuguese Industry has a limited effect on theeconomic landscape.Overall, a potential reduction of 0.5MtonCO 2e could beachieved.APDC would like to thank the project team, the studysteering committee, as well as all the involved entities andexperts for their valuable contributions to this report.Project team:• Jorge Vasconcelos, APDC (Coordinator)• Diogo Vasconcelos, APDC• Carla Pedro, APDC• Luis Gravito, BCG• José Manuel Fernandez, BCG• Ramon Baeza, BCG• João Henriques, BCG• Tomás Adão da Fonseca, BCG• André Cardoso, BCGSteering Committee:• Alberto Barbosa, Efacec• Alberto Pimenta, CTT• Alcino Lavrador, PT Inovação• Alexandre Brancal, Visabeira Global /Real-LifeTechnologies• Ana Mesquita Veríssimo, Vodafone Portugal• António Beato Teixeira, Alcatel-Lucent• António Pires dos Santos, IBM Portugal• António Vidigal, EDP Inovação• Artur Lourenço, REN – Redes Energéticas Nacionais• Carlos Brazão, CISCO• Carlos Janicas, HP• Carlos Zorrinho, CNEL – Coordenação Nacional daEstratégia de Lisboa

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT15 Appendix 7_Sources Used• David Lopes, PT Comunicações• Fino Gomes, PT Comunicações• Hans-Erhard Reiter, Ericsson• João Bastos, PT Comunicações• João Mateus, CNEL – Coordenação Nacional da Estratégia de Lisboa• Jorge Epifânio, Visabeira Global /Real-Life Technologies• Jorge Esteves, ERSE – Entidade Reguladora dos Serviços Energéticos• Jorge Moreira da Silva, Consultor Presidência da República• José Amado da Silva, ANACOM - Autoridade Nacional de Comunicações• José Braz, ERSE – Entidade Reguladora dos Serviços Energéticos• José Joaquim Oliveira, IBM Portugal• José Penedos, REN – Redes Energéticas Nacionais• José Pinto Correia, Sonaecom• Juan Carlos Castilla Rubio, CISCO• Luís M.F. Barruncho, Logica• Luís Neves, GeSI - Global e-Sustainability Initiative• Luis Tavares, Sonaecom• Luísa Pestana, Vodafone Portugal• Manuel Sequeira, Zon Multimédia• Margarida Couto, APDC• Paulo Almeida, EDP Distribuição• Paulo Varela, Visabeira Global• Ricardo Bruno, IBM Portugal• Rui Franco, T-Systems• Sérgio Figueiredo, EDP - Fundação EDP• Vanda Jesus, APDC• Vergílio Rocha, Logica• Vítor Santos, ERSE – Entidade Reguladora dos Serviços Energéticos• Xavier Martin, ONI CommunicationsWith special thanks to:• Alexandre Fernandes, ADENE• Anabela Pedroso, AMA - Agência para a Modernização Administrativa• Bruno Pimenta, ADENE• Carlos Cagica, Siemens• Carlos Melo Ribeiro, Siemens• Carlos Pelicano, Schneider Electrics• Cruz Serra, Instituto Superior Técnico, Perito em testes e medições

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT• Franco Caruso, Brisa• Gonçalo Quadros, Critical Software• Henrique Matos, Instituto Superior Técnico, Perito em indústria• João Peças Lopes, Faculdade de Engenharia da Universidade do Porto, Perito em energia• João Picoito, Nokia Siemens Networks Portugal e Espanha• Joaquim José Borges Gouveia, GALP Energia• Jorge Nabais, CARRIS, Desenvolvimento e Inovação• Jorge Pereira, Comisão Europeia• Jorge Saraiva, ISA• José Alves Baptista, Siemens• José Basílio Simões, ISA• José Viegas, Instituto Superior Técnico, Perito em transporte e mobilidade• Luís Malheiro, LMSA• Luís Marcelino Ferreira, Instituto Superior Técnico, Perito em energia• Luís Rochartre Álvares, BCSD• Maria António Rosário, Luis Simões• Maria da Graça Carvalho, Consultora Presidente da Comissão Europeia• Paulo Ferrão, MIT- Director nacional do Programa Portugal, Perito em sustentabilidade• Pedro Sampaio Nunes, ISA• Rui Biscaia, Critical Software

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT16 Appendix 8_Acronyms• 2008 Update of the Profiling and Mapping of Intelligent Grid R&D Programs, ElectricPower Research Institute• Advanced metering for SMEs - Carbon and cost savings, CarbonTrust• Advanced Metering Infrastructure, National Energy Technology Laboratory, US DOE• Assessment of Demand Response and Advanced Metering, Federal Energy RegulatoryCommission, US DOE• Electricity Consumption and Efficiency Trends in the Enlarged European Union - Statusreport 2006, Institute for Environment and Sustainability• Energy Billing And Metering - Changing customer behaviour, UK DTI• Energy Techonology Perspectives 2006, Scenarios & Strategies to 2050, OECD• Engineering - Traction energy metrics, Rail Safety & Standards Board• Estatísticas da Produção Industrial, 2005-2008, Instituto Nacional de Estatística• ESTIMATING TOTAL POWER CONSUMPTION BY SERVERS IN THE U.S. AND THEWORLD, Jonathan G. Koomey• European Energy and Transport – Trends up to 2030, DGET – EU• European Information Technology Observatory 2007• GridWiseTM: The Benefits of a Transformed Energy System, US DOE• Integrated Product Policy Pilot Project – Stage 1 Final Report: Life Cycle EnvironmentalIssues of Mobile Phones, Nokia• Meeting The Energy Challenge - A White Paper on Energy, UK DTI• MEI – A policy with ambition• Modelo Integrado de Procura de Passageiros – Rede Ferroviária de Alta Velocidade, SteerDavies Gleave, RAVE• Moving Beyond the Hype: The Future of the Intelligent Grid, IDC• Network Electricity Use Associated with Wireless Personal Digital Assistants, JonathanKoomey; Huimin Chong; Woonsien Loh; Bruce Nordman; and Michele Blazek• OECD-Workshop on ICT’s and Environmental Challenges, Copenhagen, 22-23 May 2008• Panorama of Transport, 2007 Edition, Eurostat• PC Energy Report 2007, Harris Interactive• PDIRT - Plano de Desenvolvimento e Investimento da Rede de Transporte, REN• Portugal Eficiência 2015 - Plano Nacional de Acção para a Eficiência Energética• Portuguese National Inventory Report on Greenhouse Gases, 1990-2006, AgênciaPortuguesa do Ambiente (submitted under the United Nations Convention on ClimateChange and the Kyoto Protocol)• Preparatory studies for Eco-design Requirements of EuPs - Lot 3, European CommissionDG TREN• Previsões e análise da procura para o Novo Aeroporto e 9 Aeroportos ANA, Parsons FCG,

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICT

SMART Portugal 2020: Reducing Emissionsand Increasing Energy Efficiency through ICTRua Tomás Ribeiro, 41 _ 8º1050-225 Lisboa _ PortugalT. + (351) 213 129 670www.apdc.ptwww.gesi.org