World Energy Outlook 2006

and another to buy a car. But there is no available scale of generally accepted
discount rates for different goods and regions. We accordingly provide the
undiscounted values of the additional outlays and the reduced fuel bills.
The payback time of the policies included in the Alternative Policy Scenario
is usually very short. Payback times of about two years can be achieved in
commercial lighting retrofits or generally in buying compact fluorescent lamps
instead of incandescent bulbs (IEA, 2006). Payback times in OECD countries
are usually longer than in non-OECD countries. Payback times are also longer
for investment made later in the projection period. This is because the marginal
cost of improving efficiency is higher once the cheaper options available in early
years have been exploited. Payback periods vary between one and eight years.
The longest payback is in the transport sector in OECD countries (Figure 8.6).
A significant number of demand-side measures across various sectors are
feasible both in OECD and non-OECD countries (Boxes 8.2 and 8.4). Highefficiency
industrial motors and irrigation pumps in most developing
countries, for instance, can save electricity at a cost in the range of $5 to $30
per MWh (World Bank, 2006). Our analysis shows that investment required
to save 1 kWh in the residential and services sectors in non-OECD countries
years
Figure 8.6: Indicative Average Payback Period of Selected Policies
in the Alternative Policy Scenario by Region
9
8
7
6
5
4
3
2
1
0
2005-2015
OECD Non-OECD
Road transport
2016-2030
2005-2015
2016-2030
Electrical equipment in residential and services sectors
Motors in industy
206 World Energy Outlook 2006 - THE ALTERNATIVE POLICY SCENARIO
© OECD/IEA, 2007