Download - Readiness for Investment in Sustainable Energy (RISE)...Readiness for Investment in Sustainable Energy 2 RISE Pilot Results Summary Readiness for Investment in Sustainable Energy 3

June 27, 2014 SREP Sub-Committee Meeting

Montego Bay, Jamaica

Readiness for Investment in Sustainable Energy (RISE)

Table of Contents

I. Setting the Context

II. Developing the Indicators

III. Moving Forward to a Global Rollout

Readiness for Investment in Sustainable Energy 2

RISE Pilot Results Summary


98

91

84

84

82

80

79

74

66

51

42

28

0 20 40 60 80 100

Tanzania

India

Mongolia

Kenya

Mali

Ethiopia

Nepal

Honduras

Solomon Islands

Yemen

Vanuatu

Liberia

Energy Access

83

75

65

54

35

35

34

29

27

26

24

24

23

23

22

21

14

0 20 40 60 80 100

Denmark

US

India

Chile

Kenya

Mongolia

Armenia

Ethiopia

Liberia

Honduras

Vanuatu

Tanzania

Nepal

Mali

Solomon Islands

Maldives

Yemen

Energy Efficiency

88

87

74

65

51

47

46

42

39

37

37

29

20

15

11

9

7

0 20 40 60 80 100

Denmark

US

India

Chile

Armenia

Mongolia

Honduras

Kenya

Ethiopia

Maldives

Nepal

Tanzania

Liberia

Solomon Islands

Mali

Yemen

Vanuatu

Renewable Energy

Planning

Policies and Mandates

Pricing and Subsidies

Procedural Efficiency

Cross-cutting Indicators

Countries are measured on 28 indicators and 85 sub-indicators

I. Setting the Context

What is RISE?


Global initiative

Policy indicators

Quality of the energy investment

climate

Develops

Measures

RISE

Global Tracking Framework

•USD 600-800 Billion required annually

SE4ALL Goals

SREP

Measuring outputs

What does RISE want to achieve?


Multi-faceted view Global scale

Primary data produce &

update

Actionable energy sector

policies

Contribute to achieving SE4ALL

goals

Contribute to domestic policy

debate

Benchmark performance

Feat

ures

O

bjec

tives

Long List of Indicators (over 100)

Guiding Principles

Multiple Consultations Internal WBG experts / External Advisory Group / Private sector

28 Indicators

How were the indicators selected?

Comparable Objective Actionable Context Neutral

Available Cost Effective Consensus


Stag

e 2

Stag

e 1

How are indicators structured?


Cross-cutting

Energy Access

Energy Efficiency

Planning




1 indicator (3 sub-indicators)

2 indicators (7 sub-indicators)










1 indicator (3 sub-indicator)

Renewable Energy

28 indicators and 85 sub-indicators are classified into 4 pillars and 4 frameworks

Which are the pilot countries?


How is the implementation process?

Data collection •Carried out by consultants in countries to count on

local capacity • Spent 26 man-month through •Primary data collected from official documents • Interview with developers and customers

General Scoring Principles • Score out of 100 for each indicator •Use traffic light to indicate scores •Equal weight to indicators when aggregate •Traffic light also used at aggregated levels


II. Developing the Indicators Cross-cutting

Indicators


Indicators Definition Source*

Retail Price of Electricity

A unit price per kWh at an average consumption level of residential and industrial customers C

Fossil Fuel Subsidy Percentage of electricity generated by fossil fuel that is subsidized (based on IMF data on fossil fuel subsidy and IEA data on fuel mix of electricity generation)

C

Utility Performance

Examine the availability and audit of the financial statements of the utility; assess key financial metrics including (i) EBITDA ratio, (ii) current ratio, (iii) debt service coverage ratio, (iv) days receivable outstanding, and (v) days payable outstanding

C

Carbon Pricing Mechanism

Assess the existence of GHG emission reduction target and carbon pricing mechanism P

* Type of sources P : Primary data collected by reviewing laws/regulations/policies C : Calculated based on statistics from primary data and other sources I : Interview with customers or developers

Retail Price of Electricity • Retail price for residential customers ranges US$ 0.02 – 1.04/kWh • Retail price for industrial customers ranges US$ 0.02 – 1.28/kWh


2 6 3

10 7 6 7 8 13

19

32 25

37 31

57

78

104

2 8

15 8

16 19 21 22 18 22 15

23

34

46

57

84

128

-

20

40

60

80

100

120

140

US

cent

s/kW

h

Residential

Industrial

Fossil Fuel Subsidy • 6 out of 17 countries generate electricity from subsidized fossil fuel


100%

78%

55% 44%

11% 1% 0%

20%

40%

60%

80%

100%

Electricity generation by fuel type – subsidized fossil fuel and others

By subsidized fossil fuel By other fuel

Utility Performance • 7 countries indicate that their largest utility’s financial statements are available to

public and audited by third party • Except Mali, Nepal and Tanzania, the largest utility of all countries exceeds the

threshold for at least one of the five key financial ratios.


100

90 90 90

80 80

60

40 40 35

30 30 25

20

10

- - -

10

20

30

40

50

60

70

80

90

100

Score of Utility Performance Indicator Financial Performance

Financial Reporting

Carbon Pricing Mechanism • Among SREP countries, Ethiopia, Liberia, Maldives, and Mongolia have a

GHG emission reduction target which is a basis of carbon pricing


100 100

50 50 50 50 50

- - - - - - - - - - -

20

40

60

80

100

Score of Carbon Pricing Mechanism Indicator

Carbon Pricing Mechanism

GHG Emission Reduction Target

II. Developing the Indicators Energy Access

Indicators


Framework Indicators Definition Source*

Planning Electrification Plan Existence of a national plan; coverage of the plan on both grid and off-grid; the latest updated year P


Enabling Environment for RE Developers to Invest in Mini-grids

Existence of a regulation outlining rights and duties of mini-grid operators; some key attributes of the regulation, including the right of tariff level decision, the requirement of prior regulatory approval, standards, and subsidies or duty exemptions

P

Enabling Environment for Standalone Home Systems (SHS)

Existence of a national program for SHS; performance standards; subsidies or duty exemptions P

Pricing and

Subsidies

Funding Support to Electrification Existence of a dedicated funding line of the government for electrification; subsidy to grid extension and household connection cost P

Affordability of Electricity The relative cost of subsistence consumption (30kWh/mo.) to GDP per capita based on PPP C


Establishing a New Connection Time and cost for a rural consumer to make a new household connection to the grid I

Permitting a Mini-grid Time, cost and number of agencies to go through in order to obtain licenses and permits to operate a mini-grid I

* Type of sources P : Primary data collected by reviewing laws/regulations/policies C : Calculated based on statistics from primary data and other sources I : Interview with customers or developers

Energy Access Overall


98 91

84 84 82 80 79 74

66

51

42

28

0

20

40

60

80

100

Tanzania India Mongolia Kenya Mali Ethiopia Nepal Honduras SolomonIslands

Yemen Vanuatu Liberia




Planning

• Many of SREP countries score high in energy access • Tanzania and India are ahead of other countries

Planning


• All countries are planning well except Liberia that is yet to ratify its Electrification Plan

100 100 100 100 100 100 100 100

67 67 67

0 0

20

40

60

80

100

Ethiopia India Kenya Nepal SolomonIslands

Tanzania Vanuatu Yemen Honduras Mali Mongolia Liberia

Electrification Plan - Update

Electrification Plan - Coverage of Grid and Off-grid

Electrification Plan - National Plan



100

88 88 83 83

71 71

63 58

17

0 0 0

20

40

60

80

100

Tanzania Kenya Mongolia India Mali Ethiopia Nepal Honduras SolomonIslands

Vanuatu Liberia Yemen

Enabling Environment for Standalone Home SystemsEnabling Environment for RE Developers to Invest in Mini-grids

• Aside from Tanzania, all countries need to improve the enabling environment for mini-grids and standalone systems

• Many countries stand out in their focus on creating an enabling environment in solar home systems, compared to mini-grids



• All countries receive some form of funding support for electrification • A subsistence amount of electricity is typically affordable for most of the

countries 100 100

92

83 83 83 83

67 67

58

35 33

0

20

40

60

80

100

Ethiopia Tanzania India Honduras Kenya Mali Mongolia Nepal Yemen SolomonIslands

Vanuatu Liberia

Affordability of Electricity

Funding Support to Electrification



• A rural consumer in Liberia takes 14 days and $20 to get a connection, but only for a limited number of people since grid extension outside Monrovia is rare

• A rural consumer has to wait a year to get a connection in Ethiopia

98 98 97 95 93 88 87

75

65 62

47 41

0

20

40

60

80

100

Liberia Mongolia Nepal India Mali Honduras Tanzania Yemen SolomonIslands

Kenya Vanuatu Ethiopia

Establishing a New Connection - Cost

Establishing a New Connection - Time

RISE and Sector Outcome


Ethiopia

Honduras

India

Kenya

Liberia

Mali

Mongolia Nepal SI

Tanzania

Vanuatu

Yemen

-2%

0%

2%

4%

6%

8%

10%

12%

14%

0 20 40 60 80 100In

crea

se o

f acc

ess t

o el

ectr

icity

, 200

0-20

10

RISE Energy Access Score

Ethiopia

Honduras

India

Kenya

Liberia Mali

Mongolia

Nepal

SI Tanzania

Vanuatu

Yemen

0%

20%

40%

60%

80%

100%

0 20 40 60 80 100

Acce

ss to

ele

ctric

ity, 2

010

RISE Energy Access Score

RISE and Access to Electricity (2010) RISE and Increase of Access to Electricity (2000 - 2010)

II. Developing the Indicators Energy Efficiency

Indicators


Frame work Indicators Definition Source*

Planning

National Plan for Increasing EE Existence of a national target, sector-specific targets and national energy efficiency legislation/action plan P

Entities for EE Policy, Regulation and Implementation

Existence of entities responsible for key functions regarding formulation and implementation of energy efficiency strategy, policy and regulation P

Policies and

Mandates

Quality of Information Provided to Consumers

Billing cycle; type of information available on electricity bills; provision of EE information by utilities to consumers P

Incentives or Mandates for Utilities to Invest in EE

Existence of energy efficiency mandates on utilities; penalties for non-compliance in place; M&V for savings; cost-recovery mechanism for utilities P

Incentives or Mandates for Public Entities to Invest in EE

Energy saving obligations on public buildings and facilities; public procurement of EE products; whether allowed for multi-year contracts and energy savings retention P

Incentives or Mandates for Large-scale Users to Invest in EE

Existence of energy efficiency mandates on large energy users; penalties for non-compliance in place; M&V for savings; types of incentives provided P

Minimum Energy Efficiency Performance Standards (MEPS)

Existence of MEPS for appliances, lighting, electric motors and industrial equipment; provision for regular updates; penalties for non-compliance in place P

Energy Labeling Systems Existence of energy labeling schemes for appliances, lighting, electric motors and industrial equipment P

Building Energy Codes and Information Existence of building energy codes and compliance system; application to renovated buildings; systems to disclose building energy usage information in place P

Pricing and

Subsidies Incentives from Electricity Pricing

Examine electricity tariff structure - among increasing, constant or declining block rates or flat fee per connection; whether large users are charged based on demand (kW) and reactive power (kVAr) in addition to consumption (kWh)

P

*P: Primary data collected by reviewing laws/regulations/policies

Energy Efficiency Overall


• All piloted countries have initiated some measures targeting energy efficiency • India stands out among emerging economies – due to recent promulgation of new

policies

83

75

65

54

35 35 34 29 27 26 24 24 23 23 22 21

14

0

20

40

60

80

100Cross-cutting



Planning

*Two cross-cutting indicators, “Fossil Fuel Subsidy” and “Carbon Pricing Mechanism” are included in scoring energy efficiency

*

Planning


• 8 SREP countries don’t have EE national target or related legislation/action plan • All countries have entities responsible for formulation and implementation of EE

strategy, policy and regulation

88 88 83

67

54

42

33 33

25 25 23 21 17 17

13 8 8

0

20

40

60

80

100

Entities for Energy Efficiency Policy, Regulationand Implementation

National Plan for Increasing Energy Efficiency



• A lot needs to be done in most countries • Consumers in all countries receive information on electricity usage and cost – yet

lacking energy efficient behavior

80 77

62

35

27 23 21

17 12 11 11 11 11 11 8 8 8

0

20

40

60

80

100 Building Energy Codes and Information

Energy Labeling Systems

Minimum Energy Efficiency Performance Standards

Incentives or Mandates for Large-scale Users to Invest in EE

Incentives or Mandates for Public Entities to Invest in EE

Incentives or Mandates for Utilities to Invest in EE

Quality of Information Provided to Consumers



• Residential consumers in most countries are charged at increasing block rates • On the contrary, industrial consumers in many countries have constant or declining

block tariff rate, discouraging energy efficient behavior

100 89

83 83 83 78 78

67 67 67 61 61 61

56 50 50 50

0

20

40

60

80

100 Incentives from Electricity Pricing - Charge Type

Incentives from Electricity Pricing - Tariff Structure



RISE and Primary Energy Intensity (2010) RISE and CAGR of Primary Energy Intensity (2000 - 2010)

0

10

20

30

40

50

60

70

0 20 40 60 80 100

Prim

ary

ener

gy in

tens

ity (M

J/$2

005

PPP)

RISE Energy Efficiency Score

High Income

Upper-middle

Lower-middle

Low Income

-6%

-4%

-2%

0%

2%

4%

6%

0 20 40 60 80 100

Annu

al g

row

th ra

te o

f prim

ary

ener

gy in

tens

ity, 2

000-

2010

RISE Energy Efficiency Score

High Income

Upper-middle

Lower-middle

Low Income

Maldives

Armenia

Liberia

II. Developing the Indicators Renewable Energy

Indicators


Framework Indicators Definition Source*

Planning Planning Capacity

Whether an electricity expansion plan includes RE development; whether transmission planning considers RE scale-up and incorporates proactive planning process; existence of RE target and action plan; existence of high quality national atlas on resource potential and strategic planning and zoning guidance on existing RE resources

P


Legal Framework in RE Existence of a legal framework on RE development P

Transmission Connection and Pricing Existence of policies for connection cost allocation and wheeling charge P


Economic Incentives Existence of price/quota policies that provide economic incentives to RE developers, e.g. Feed-in Tariff, REC, price premium, auction, etc. P

Investment Grade Attributes

Examination on the predictability of price and the existence of purchase obligation; whether the price subsidy is passed through to the consumer tariff; whether the total volume of price subsidy is affordable; whether the price level is appropriate; assessment of accessibility to the grid by examining prioritized access, grid code and curtailment cost policies

P, C

Public Financial Support Mechanism Provision of fiscal incentives, public financing supports, credit enhancement, and utility payment guarantee P

Procedural Efficiency Starting a New RE Project Time, cost and number of agencies to go through in order to obtain licenses

and permits to start a new renewable energy generation facility I

Cross-cutting Utility Performance Introduced in the cross-cutting indicator section C

Carbon Pricing Mechanism Introduced in the cross-cutting indicator section P

* Type of sources P: Primary data collected by reviewing laws/regulations/policies, C: Calculated based on statistics from other sources, I: : Interview with customers or developers

Renewable Energy Overall


• All piloted countries have introduced some measures to increase renewable energy generation

• India leads among developing countries in the sample due to its extensive experience in policy design and implementation and the measures it has introduced with time

88 87

74

65

51 47 46

42 39 37 37 29

20 15

11 9 7

-

10

20

30

40

50

60

70

80

90

100

Cross-cutting Indicators




Planning

Planning


• All SREP countries except Maldives have planning capacity to some extent • Most SREP countries do not have high quality resource mapping information

published by the government

100 100

75 75

63 63

50 50 47

38 38 31 31

25

13 13

- -

20

40

60

80

100Planning Capacity - High Quality Resource Mapping

Planning Capacity - Target with an Action Plan

Planning Capacity - Proactive Transmission Expansion

Planning Capacity - RE in Expansion Planning



• All countries with a score have a legal framework on renewable energy • Countries which lead in this category (those with a score of 92) have also a clearly

defined policy or rules on connection cost and network usage pricing.

92 92 92 92 92

83

67

58 58

50 50 50 50

0 0 0 0 0

20

40

60

80

100Transmission Connection and Pricing

Legal Framework in Renewable Energy



• India is the frontrunner in this category as it is the only country which offers utility payment guarantees as well as economic incentives and fiscal/financial incentives

• Yemen and Maldives have economic incentives but lack the attributes that are considered significant in attracting investment

89 83 81

64

50 43

29 28 28 25 19 18 17 17

4 0 0

0

20

40

60

80

100Public Financial Support Mechanism

Investment Grade Attributes

Economic Incentives



• Maldives scores the highest in this category due to the relatively low time, cost and number of agencies required to started a RE project, Nepal has demonstrated good practice on this front as well

• Some countries score zero due to lack of private sector market or information 100 97

80

66 64 60 58

52

27

0 0 0 0 0 0 0 0 0

20

40

60

80

100Starting a New RE Project - Number of Agencies

Starting a New RE Project - Cost

Starting a New RE Project - Time



RISE and Renewable Electricity Share (2010) RISE and Change in Renewable Electricity Share (2000 - 2010)

0%

20%

40%

60%

80%

100%

0 20 40 60 80 100

Rene

wab

le e

lect

ricity

shar

e, 2

010

RISE Renewable Energy Score

High Income

Upper-middle

Lower-middle

Low Income

-30%

-20%

-10%

0%

10%

20%

30%

0 20 40 60 80 100

Chan

ge in

shar

e of

rene

wab

le e

lect

ricity

, 200

0-20

10

RISE Renewable Energy Score

High Income

Upper-middle

Lower-middle

Low Income

Kenya

Armenia Denmark

III. Moving Forward to a Global Rollout

Global Rollout


Plan to launch in late 2014

Aim to cover 100+ countries

ESMAP and IRENA have confirmed support

What Would Be Different


What we do differently What we ask countries to do differently

• Indicators will be refined based on lessons and feedback from pilot

• Measurement of indicators will be improved (e.g. fossil fuel subsidy, RE subsidy, time and motion, etc.)

• Linkage to the SE4ALL GTF results will be established and analyzed

• Data availability needs to be improved (e.g. official documents, financial statements, LCOE, etc.)

• Support to data collection from the government can be made by strengthening monitoring capacity

Governance Structure

Advisory Group

43 Readiness for Investment in Sustainable Energy

Steering Committee

Implementing Agencies Donors Implementing

Partners

and more..

Pilot Expenditure


Funding Source Inflow Outflow

SREP Others SREP Others

Revenue SREP $340,000

USAID $80,000

World Bank Group $335,000

ESMAP $25,000

REVENUE TOTAL $340,000 $440,000

Expenditure Indicator development $130,000

Data collection – hiring local experts $160,000 $20,000

Data processing, analysis and report $290,000

Website and communication technology development

$70,000

EXPENDITURE TOTAL $230,000 $440,000

Balance As of June 30, 2014 $110,000 -

Global Rollout Budget


Item Estimate

Budget estimates

Data collection in 100+ countries – hiring local experts $1.5 – 2.0 million

Data processing, analysis and report $0.9 – 1.8 million

Improving website and communication technology $50,000 – 100,000

Publication and dissemination $150,000

ANTICIPATED TOTAL $2.5 – 4 million

THANK YOU

Gevorg Sargsyan Program Manager, The World Bank [email protected]

mailto:[email protected]

Download - Readiness for Investment in Sustainable Energy (RISE)...Readiness for Investment in Sustainable Energy 2 RISE Pilot Results Summary Readiness for Investment in Sustainable Energy 3

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