2014 EGI Global Partner Retreat 22-24 November, 2014

Ibis Riverside Hotel Bangkok, Thailand

Hosted by the World Resource Institute (WRI) and Healthy Public Policy Foundation (HPPF)

EGI Global Partner Retreat

Agenda

22-24 November, 2014

Ibis Riverside Hotel Bangkok, Thailand

Day 1: Saturday, November 22nd 9:00-9:15 Welcome Introduction (Bharath) Session 1 Governance challenges in meeting energy needs 9:15-10:45 Country-led Presentations Presentations by Indonesia (Fabby and Ami), Mongolia (Oyunbadam) and South Africa (Happy) 15-20 minute presentations on the key issues and key governance challenges of the country Presentations followed by 10 minute Q&A (per country) 10:45-11:00 Break 11:00-12:30 Country-led Presentations 11.00 – 12.30 Presentations by Brazil (Kamyla), Kyrgyzstan (Nurzat) and Philippines (Pauline) 15 - 20 minute presentations on the key issues and key governance challenges of the country Presentations followed by 10 minute Q&A (per country) 12.30 – 13.30 Lunch 13:30-15:00 Country-led Presentations Presentations by India (Narasimha, Antonette, Anjana), Tajikistan (Bakhadur), Thailand (Suphakit) 15 - 20 minute presentations on the key issues and key governance challenges of the country Presentations followed by 10 minute Q&A (per country) 15:00 – 17:00 Small group discussions

Day 2: Sunday, November 23rd Session 2 The Future of the Grid study 9:00-11:00 Presentations on the “Future of Grid” research by EGI partners (Sarah, Gilberto, Nurzat, Shantanu, Bharath) 11:00-11:15 Break 11:15-12:00 Open discussion

12:00-12:30 lunch 12:30 Leave for EGI Partners Field Trip to Sufficiency Economy Learning Center, Don Phing Daed Community, Phetchaburi province 14:30-14:45 Welcome drinks and refreshment 14:45-15:45 Presentations by Don Phing Daed Community • Welcome and Introduction • Organic farming • Community energy • Community enterprise on small-scale renewable energy • Organic products 15:45-17:00 Community visit 17:00-18:00 Travel to a restaurant by the sea in Samut Sakhon province 18:00-20:00 Dinner

Session 3: Sharing Advocacy approaches

10:00-12:30: Sharing advocacy experiences Presenters: Nurzat, Happy, Bakhadur, Thimma Reddy, Suphakit, Fabby

Session 4: EGI: what next? 13:30-15:00 Recent and future challenges on Energy Governance

1. Governance challenges for Oil & Gas sector: recent experiences in Thailand Ms. Somlak Huntanuwatr, Sub-committee in the National Law Reform Office 2. Governance challenges community energy development Ms. Wichitra Chasakul, NEW Foundation, Surin province

15:00-16:00 Q&A and open discussion 16:00-16:15 Break 16:15-17:00 Summary and closing Focusing on sustainability of EGI national network; grants, business sources, commercial activity for consumers, social enterprises

Participant List:

Brazil: Gilberto Jannuzzi (IEI); Kamyla Borges da Cunha (Energia Ambiente) India: Shantanu Dixit (Prayas); Narasimha Reddy (PMGER); Thimma Reddy (PMGER); Antonette D’Sa (IEI); Anjana Agarwal (WRI); Bharath Jairaj (WRI) Indonesia: Fabby Tumiwa (IESR); Ami Indriyanto (IIEE); Hakimul Batih (IIEE) Kyrgyzstan: Nurzat Abdyrasulova (UNISON); Mongolia: Oyunbadam Davaakhuu (OSF) Myanmar: Thein Aung (Dawei Development Association); Seng Gu (Paungku/Consultant for DDA); Win Kyaing (E D C, Union of Myanmar/R E A M) Philippines: Pauline Caspellan (Ateneo School of Government)

South Africa: Happy Khambule (Project 90x2030)

Tajikistan: Bakhadur Kabibov (Consumers Union of Tajikistan); lkhom Abidov (Consumers Union

of Tajikistan)

Thailand: Suphakit Nuntavorakarn (HPPF); Chom Greacen (Palang Thai); United States: Sarah Martin (WRI); Sorina Seeley (WRI)

Welcome note from Davida Wood (EGI Project Manager, WRI) Dear EGI partners,

Welcome to the 5th annual EGI partner retreat. Or perhaps this is the 7th EGI partner retreat. Back

in 2003, a smaller group of us met right here in Bangkok to discuss the possibility of developing

indicators of good governance of the energy sector, and then in 2006, we met here again in a big

jamboree in the Radisson hotel to present the assessments that had been done using those

indicators. Since then, we have grown both in number and in scope, building on our core

governance interests to encompass a broader range of thematic topics.

The electricity sector dynamics have shifted a lot since that time. We began in a context when trend

towards privatization was shaking the sector up, and since then, the sector has opened up to a

much broader range of actors than we might have imagined just 7 years ago – not just privately

owned utilities and IPPs, which were of such concern at the time, but also the space for smaller

clean energy entrepreneurs has flourished, and the potential for prosumers – individuals,

communities or firms that are generating their own power using local resources – is just beginning

to be felt. The sector is going from unbundled to distributed and is now possibly completely

unraveling – at least from the utilities’ perspective. At the very least, traditional roles are being

reformatted. We have been trying to come to grips with these new dynamics. On the retreat agenda,

the session on the Future of the Grid will share some of the findings that have emerged from a new

study some of us have been engaged with, and provide a space for a broader discussion with all of

your perspectives. The shifting power relationships raise new governance questions, but also keep

us on our toes.

I extend a big thank you to the Healthy Public Policy Foundation that has put serious thought into

how this gathering of civil society organizations can be of the most benefit both to visiting partners

and local experts, and for their work organizing the logistics and the special excursion. And thank

you to my WRI colleagues, Bharath, Sarah, and Sorina, as well as Shantanu Dixit, our special

knowledge partner from Prayas, Energy Group, for their hard work on both the agenda and the

logistics.

I am so sorry to miss being at the retreat, and catching up with all of you, both personally and

professionally. I always come away from our retreats feeling inspired by the unique space that is

created by the interactions of 20-30 brilliant people passionate about electricity governance!

I hope to see you at next year’s retreat. Meanwhile, enjoy!

Warm regards,

Davida

Session 1: Governance Challenges in Meeting Energy Needs

This session consisted of a full day of country-led presentations on key governance (transparency/accountability/participation/capacity [TAP-C] and equity) challenges to meeting energy needs per energy source in participant countries. Participants presented on governance challenges on all relevant energy sources (coal, gas, oil, large conventional electricity generation, large grid-connected renewable energy and other relevant energy sources) in meeting country energy needs. The session was a comprehensive approach in beginning move beyond electricity and exploring a more integrated picture. What is governance?

Governance consists of the traditions and institutions by which authority in a country is

exercised. This includes the process by which governments are selected, monitored and

replaced; the capacity of the government to effectively formulate and implement sound policies;

and the respect of citizens and the state for the institutions that govern economic and social

interactions among them. We need to look at transparency, accountability, participation, capacity

and equity and affordability.

TAP-C + Equity + Affordability

Ami Indriyanto (IIEE) – Indonesia

Indonesia has an 81% electrification rate with 47 million people without access to electricity,

mostly in remote areas.

Key Issues Transparency Accountability Participation Capacity Equity Coal Possess 3% of

world coal proven reserves, but #1 coal exporter in the world; has 80 years of reserves

Discrepancy in export data; Limited records on coal exploitation by smallholders & illegal miners; More detailed data needs to be opened for public

Coal production and transportation leads to damages in ecosystems and public infrastructure. No one is held accountable.

Collective action towards over-exploiting the resource and abusing the nature

Local communities face significant negative impacts, but have limited capacity to take charge in defending their livelihood

Poor electricity service in many coal production areas

Oil Production decline, net importer; has 23 years of reserves

Influential rent seekers in the trade of oil and oil products

Head of SKK Migas is in jail for receiving bribes

Weak capacity to increase proven oil reserve and crude oil production; No additional refining capacity in decades; Limited storage of oil products

Price of gasoline RON 88 and diesel fuel are heavily subsidized, but misallocated beneficiaries

Gas Possess 2% of world gas resources, but among top LNG exporters in the world; 50 years of reserves

Data on Domestic Market Obligation (DMO) implementation is not available

Implementation of Government commitment to allocate gas for PLN and other domestic consumers has been inconsistent

Limited gas infrastructure (pipeline, storage facilities)

Large Conventional Electricity Generation

Difficulties in expanding supply to meet 9% annual electricity demand growth; in sufficient reserves

Need more info at sub-national level to allow for participation of non-PLN stakeholders

FTP I: supposed to be completed in 2011, is still not 100% done. Problems in planning, financing, procurement, EPC quality, permitting, land clearance

Expecting more IPP role in the future, need an improved investment condition

PLN capacity to expand the system is limited by its financial capacity

Infrastructure development is still focused in Java

Large Grid Connected RE

Geothermal development has been stalled for many years due to conflicting regulation

Permitting and licensing procedures are long, costly and uncertain

Government agencies do not resolve conflicting policies and regulations

Large fund facilities to support RE are untapped, lack of capacity to establish clear policy and operational procedure

Small & Mini Re (Grid-Connected, Isolated)

Many resource potentials are underdeveloped

Permitting and licensing procedures are long, costly and uncertain; Grid-connectivity needs information from PLN at project planning stage

Limited data on resource potentials; Limited financial capacity of local government, developers and communities

Need a comprehensive policy to realize the potential of RE for meeting energy needs of people in remote areas; Subsidies for electricity price is applicable only for grid-electricity.

Fabby Tumiwa (IESR) followed up with two main points regarding in the Indonesian energy

sector:

1) The Indonesian government is panning the development of a new 4000 MW coal-fired

power plant in the next 5 years. 40-50% of the coal being used has low caloric value.

2) There are new moves to limit coal exports including the introduction of trade

regulations. These regulations would move to cap coal exports to no more than 400

million tons a year in an effort to curb coal production. However, regulations do not

currently seem to be having an impact on the mining sector.

Questions:

1) Are coal prices are coming down? When comparing the 2008-2009 international coal prices, the price is declining. These lower prices are hitting coal producers.

2) How is the government justifying the price for generation capacity? For all independent

power producers (IPP), the price is based on negotiations. There are many variables in the price calculations including the coal price. There are references prices agreed upon by the IPP and the utility. If the coal price is above the reference point, then the cost difference is passed through the utility that then needs to absorb the difference, the utility then passes the cost onto the consumer.

3) Who are the main markets for coal exports? India and China and now Thailand and

Singapore. The products go to investor companies so it is difficult to monitor investment. Officially, Indonesia exports 280 million ton of coal, the actual “non-official” figure is closer to 420 million tons. The 200 million ton discrepancy is an issue of not using export hubs and smuggling.

Oyunbadam Davaakhuu (OSF) – Mongolia

Mongolia has 4 separate energy systems: Central Region Energy System (CRES); Western Region

Energy Systems (WRES); Eastern Region Energy System (ERES); and Altai-Uliastai Energy System

(AUES), all of which are almost entirely government owned with some minority private

shareholders. Currently, 95% of Mongolia’s electricity comes from coal, there are high transmission

and distribution losses, and 88% of the population has access to electricity.

Key issues in the sector include:

- Rising energy needs from growth in the construction and mining sector

- The government coal companies are discussing building new power plant –

however there are major delays in any construction due to political involvement

- Electricity prices are artificially low, leading to energy companies incurring losses.

As result, there is a move to move the market determined prices but due to political

reasons, subsidies are continuing.

- Lots of debts and receivables

- Very little transparency in the sector: transparency of budget information of

thermal power plants needs to be improved as well as with electric power

transmission and distribution companies.

- Some foreign donors are funding energy efficiency projects but due to budget

constraints the national government is not funding any big projects.

- 13% of energy is currently being imported from Russia in order to meet energy

needs.

EGI did their first assessment in Mongolia in 2013 and are now looking to undertake the second

assessment of electricity governance to see whether there is a change in the governance of the

regulatory and policy processes with the 2012 elected government.

Moving forward: the OSF is working to start the first assessment of the governance of major state-

owned companies in the energy sector of Mongolia using the Handbook for corporate Governance

developed by the International Financial Corporation in 2004.

Happy Khambule (Project 90x2030) – South Africa

Electricity Planning:

South Africa is technically 86% electrified, however only 10% have access to basic lighting. Coal has

been labelled as a strategic resource leading to high quality coal being exported and low quality

coal being used by domestic power plants which has major health implications for those living close

to power plants. Additional energy sources include and related issues include:

- Oil + Gas: Imported and subject to volatile prices and high operating costs.

- Solar and Wind: 3% of energy mix and all privately owned

- Biogas: Part of the IRP but only used by local communities in rural areas; is not

identified as a viable source; and is seen as a last resort rather than mainstream.

- Nuclear: 1.1% of generation capacity, likely to go up to 8% 2030. Nuclear is, like coal,

under political control

However the South Africa government is rent seeking from all sources. Coal has vested interests

and is under political control and influence.

South Africa has an Integrated Energy Plan, looked at every 10 years, an Integrated Resource Plan,

looked at every 2 years but no other policy documents that feed into these such as an energy

efficiency policy. Almost all polices are created by the Department of Energy even though

everything is closely linked to social issues. Additionally, many presidential decrees give conflicting

information which leads to a lot of public uncertainty.

Key challenges in meeting energy needs:

- Energy/electricity crisis including: electricity needs, greenhouse gas emissions, air

quality, water security

- Economic growth including: saturations, industrialization, low carbon economic

aspiration and GDP

- Inequality: including both economic and gender inequalities

- Poverty alleviation: affordability and energy poverty

- Job creation

- Climate change

- National vs. local planning

Key issues:

- Vested interests - Political influence

- Coal is not a debate, the government says we will have it

- No residential recognition for solar

- Do we need CSP plants when the demand is at household level?

- Local communities not benefiting from wind – mostly farmers, rich and elite

- Biogas – not identified as viable source from central government, seen as an alternative

- Nuclear – political issue, not discussed, secret and private

- Gas and oil: volatile prices and high operating costs not subject to political control

- Key changes from IRP since last year

- Policy inconsistencies – don’t have any certainty

Questions:

1) Is energy efficiency treated as a resource in IRP/IEP? Civil society is pushing to incorporate it

as a resource. Since energy efficiency is not on the supply side, what can be done are demand

side reductions so the IRP/IEP doesn’t talk of energy efficiency anymore.

2) What is the role of unions? They are not happy about the existing renewable energy process.

They are pushing for renewable energy localization.

3) Are the IRP and IEP processes open to the public? There are elements of public participation,

but no real public consultations.

4) What are the impacts of new transmission corridors on costs? Transmission starts from the

central corridor and moves outwards, it does not accommodate solar or wind corridors and so

maintaining this transmission network will cost more than connecting.

Kamyla Borges da Cunha (Energia Ambiente) – Brazil

The Brazilian energy sector is heavily dependent on renewable energy with 71% of electricity

generation coming from hydropower plants. Despite this energy source being renewable such a

heavy dependence also leads to a lot of uncertainty due to climate and rainfall patterns. According

to the government, electricity demand will increase 4% per year, reaching 689 TWh in 2023. With

such a demand growing, there is a need for the development of more plants; however the remaining

hydro potential sites are in biodiverse and fragile areas of the Amazon. Consequently,

complementary energy sources are going to be required to meeting growing demand.

High potential energy sources in Brazil and their challenges:

- Wind: already a mature and competitive player in the energy market. However there is

a lack of transparency of government auction mechanisms; a lack of human resources

specialized in dealing with wind technologies; and delays in connecting wind power

plants to the grid.

- Solar: planning still does not provide explicit the technical, economic, social and

political premises in making projections and there is lack of specialized human

resources to deal with solar technologies.

- Biomass: While there is a huge potential for biomass, it is hard for biomass to compete

in auctions and biomass availability depends on external factors, most of them related

to sugar and ethanol markets while natural gas availability is more stable.

Hydro 71%

Natural Gas 8%

Biomass 7%

Oil 4%

Ror Hydro 4%

Coal 2% Wind

2%

Nuclear 2%

Installed Capacity in Brazil

There are 3 main challenges standing the way of an environmentally sounds and socially equitable

power future:

1) Governmental Planning is not a real plan, rather a projection that changes every year.

Planning tools should guarantee affordable tariffs, ensure operational safety and have a

focus on renewables.

2) Government auctions are not designed in a transparent manner. They are determined by

the Ministry of Mines and Energy which creates space for economic and political

interference.

3) Environmental assessments lack an institutional, economic and political structure. They are

done by provincial agencies which lack technical and institutional capacity; only large hydro

and nuclear plants have environmental assessments done by federal agencies.

Governance Challenges:

Questions:

1) How does the government compensate for its low load factor with wind? Installed capacity

has increased but generation hasn’t increased that much – wind capacity is good.

2) Is there any people’s mobilization? Some civil society organizations have provided other

visions for the power sector, for example GreenPeace, provided a document in 2008 providing

a long term vision but people themselves are not really mobilizing.

3) What is the primary driver of demand growth? It is primarily residential caused by an

increase in the purchasing of appliances.

Additional comments by Gilberto Jannuzzi (IEI-LA) – Brazil

There are no explicit subsidies to wind, only subsides to developers. Wind can compete with

conventional sources but solar has not been able to win auctions. Wind complements hydro, during

the dry season wind can replace it.

Nurzat Abdyrasulova (UNISON) – Kyrgyzstan

Kyrgyzstan is 100% electrified, including remote areas but now there are a lot of new settlements

which are having problems with electricity connection. Almost 60% of all energy is imported and

most energy comes from hydrodams. The electricity sector in Kyrgyzstan has been closed and

highly corrupted for the last 20 years.

In 2010, Kyrgyzstan underwent a revolution, in part sparked by increased tariff rates without

public consultation. After the revolution, the new government established FESTI, which has

increased transparency of investments, utility costs, tariff structures and corporate polices of the

sector.

Key challenges in the electricity sector include:

- Tariff Policies: were political, final tariff prices are set by the parliament, even if the

government gave other recommendations. In 2014 there were changes of the Law on

Energy and Electricity and tariffs became issues of the government and an independent

regulator was set up. Currently there is a “medium term” policy leading up to 2017 which

would make electricity double the price and heat 70% more expensive.

- Energy Crisis: KyrgyzGaz was sold to GazProm in 2013 and Uzbekistan stopped supply to

the southern part of the country. Additionally, there have been periods of water shortages

and electricity deficits in the winter when consumption is three times higher. These

shortages are increasing the need to import more electricity from neighboring countries.

Addressing challenges:

- Increasing public information: on energy deficit and investment needs

- There is now an online camera of the Toktogul reservoir for transparency on water release

- Smart meters have been introduced and plans for establishing an independent cost center

- There has been a reduction of technical loses from 40% (2008) to 17% (2014)

Energy Sector Investments:

- New loan investments for generation and transmission capacities.

- Increased transparency and accountability by technical economic assessments and

environmental and social impact assessments.

Public objective on accountability:

- Decreasing corruption

- Low quality of supply and justification of tariff increases

- Independent financial audit of energy sector for justification of the cost of generation and

distribution

- Lack of trust in data because it comes directly from the companies

- Lack of Long term strategy development for the sector

Questions:

1) What are key structural issues? Mostly political issues, there is too much intervention from

parliament where there is still a lot of corruption

2) How are tariff calculations determined? Calculations were done by the ministry of energy,

now by an independent agency were public participation is required by law. Public discussions

need to be organized in all parts of the country, but often the government gives too short

notice for people to attend. Additionally, there is no instrument for feedback and showing if

and how public comments are incorporated.

3) What is the response to the blackouts? There is no real response; really it is blamed on

consumption rates being too high.

Pauline Caspellan (Ateneo School of Government) – Philippines

The Philippines has an 83% electrification rate however this is not seen as very accurate since 94%

of people surveyed live in urban areas and there are still 16 million people that have no access to

electricity. Currently, the Department of Energy’s 2013 Supply-Demand Outlook projects there to

be a 4.41% increase in electricity demand based on the annual average growth rate.

Main Energy Sector Goals:

1) Ensuring more energy security

2) Achieving optimal energy pricing

3) Developing a sustainable energy system

4) Aiming to expand the capacity of the existing grad and interconnect the island grids

While there is a National Renewable Energy Plan (NREP) oil and coal remain. Given archipelago

character of the country, move towards renewable energy makes economic sense. There are 3 main

grids in the Philippines, done by island groups: Luzon, Visayas and Mindanao.

Luzon: is the largest grid and more than half off installed capacity is from coal-fired or natural gas.

20% comes from hydropower 15% from diesel; and 5% from geothermal.

Visayas: 38% comes from coal

Mindanao: is vulnerable to power outages especially during long dry seasons sure to its reliance

hydropower plants.

There are 8 basic laws that govern the Philippine energy industry:

- Article 12, Section 2, 1987 Constitution (Natural Resources)

- Indigenous People’s Rights Act of 1997

- Electric Power Industry Reform Act of 2001

- Presidential Decree No. 40

- Electricity Crisis Act

- Renewable Energy Act of 2008: provided a lot of incentives for renewable energy

investment

- issuances of the Energy Regulatory Commission

- Wholesale Electricity Spot Market pricing rules

The National Renewable Energy Plan 2011: to increase the country’s renewable energy-based

capacity by 2030

Current issues in the power sector:

- Highest electricity rates in Asia

- Lack of transparency in energy pricing

- A continued dependence on fossil fuels

- The support for renewable energy development under the current administration is

unclear

- There are still many coal projects in the pipeline

- There is a lack on conducive legal frameworks for renewable energy finance

- A drop in natural gas power plants

- The “true cost of coal” is still not made clear

Questions:

1) Is there a lack of transparency in how the regulatory commission approves tariffs? There is

lack of public consultations – the rules are there but in reality, people are not notified so they

cannot participate.

Narasimha Reddy (PMGER); Antonette D’Sa (IEI); Anjana Agarwal (WRI) – India

At all stages of power production there are losses and technical and financial issues. 36% of people

don’t have electricity and there are so many issues with primary energy that secondary energy is

required for electricity generation. Supply of electricity is poor with inadequate supple and full

access not provided.

The power sector in India is largely government controlled. About 70% of coal produced goes to

power generation and 60% of power is produced from coal.

Indicators of bad electricity governance in India:

- Supply deficit

- Pricing targets

- Low access

- Low efficiency

Key issues in the Indian power sector include:

- Resource availability

- Improper methodology used to estimate reserves

- A lack of competition in supply

- Artificially lower prices

- The environmental clearance process is slow

- There are very few captive mines producing coal

- Coal linkages are given for an amount great than production capacity increase

Key challenges include:

- Institution and territorial fragmentation

- Badly managed multi-level governance

- Limit capacity and the local level

- Unclear allocation of roles and responsibilities

- Questionable resource allocations

- Bad financial management

- Lack of long term strategic plans

- Poor economic regulation

- Poorly drafted legislation

- Insufficient means for measuring performance

- Weak accountability

- Low transparency

- Misaligned objectives

- Poor management of interactions between stakeholders

There is no “one-size-fits-all” answer to respond to governance issues, rather home-grown and

place-based policies are needed. It is necessary to take stock of recent experience, identify good

practices and develop pragmatic tools across different levels of government and other sectors with

increased engagement and fair and sustainable energy policies.

Bakhadur Kabibov (Consumers Union of Tajikistan) – Tajikistan

Key challenges in the power sector include: political “sustainability”; regional tension and trade and

nepotism. Everyone moved to electricity for heating and now electricity is used for everything.

Although the country is 100% electrified (99% from hydropower), some places only have 3-4 hours

of electricity a day.

Governance challenges:

- Theft chain and losses

- “Administrative” energy efficiency

- Bribery

- Contract management vs. restricting

- Partial investment

Suphakit Nuntavorakarn (HPPF) – Thailand

The current electricity generation breakdown in Thailand is: 65% natural gas; 21% coal (all

imported) and lignite; 7% imported; 4% domestic hydro and 2% hydro. National energy planning is

ongoing, including a renewable energy development plan.

The problems of Alternative Energy Development Planning and the implementation in

Thailand:

- Merit Order VS. Priority Access for renewables

- Assessment of renewable energy potential: ‘feasible’ potentials

- Limitations of the Grid capacity

- Opening the Transmission System Development Planning for renewable energy

- No systematic mechanism for adjusting the Adders and Feed-in Tariffs to reflect the cost

reduction

- A root cause for corruption

- Civil society is pushing for Renewable Energy Act for not only rely on each government and

each minister policy

There is currently an energy conservation master plan which is highly economically feasible. In

2011, the government approved a target of 96653 GWh in 2030 which is equal to the decrease in

Peak demand of 17,470 MW. Taking into account the reserve margin of 15% in PDP, the target will

reduce the need for new power plants of 20,091 MW, in comparison; it can replace 25 coal power

plant projects.

The new Energy Efficiency Master Plan 2015-2035 will:

- Increase energy efficiency targets in 2035 to 24,500MW

- Reduce the need for new power plants

Problems of power development planning in Thailand:

- Over forecast on peak demand

- Not including the full potential of sustainable energy options, particularly EE

- Lack of meaningful public participation

- No real acceptance of PDP from people

- Conflicts in power plant projects

- Structural issues

Structural problems of the Power Development Plan

Questions:

(1) What is the difference between the PDP plan and the Alternative Energy Development Plan? The PDP plan and AED plan – done by different departments; PDP is the priority – done by main power ministry. In principle, all four master plans are equivalent but in practice, PDP is the most important.

1) How much of the natural gas is imported? What is the projection for the future? Starting to

import from Myanmar but gas reserves in Myanmar are also depleting, so they are now

importing from Oman and therefore costs have gone up.

Win Kyaing (E D C, Union of Myanmar/R E A M) – Myanmar

In Myanmar, 76% of energy usage comes from wood and charcoal and is mostly off-grid. Currently,

there is no regional energy policy and plenty of natural gas that does not get used. There is 540

million tons of coal in reserve, but it is all of low quality so we mostly import it from China. There

are also potential sites for hydropower dams being mapped out. As Myanmar develops, there will

be an increased demand for electricity and more of a need to improve distribution systems and

more of a need for foreign investment.

Breakout groups:

In this section, partners broke out into groups of 5-6 people to discuss issues related to electricity

governance and the potential role for EGI.

How to make public participation more meaningful

What is meaningful public participation? Having a substantial period of time for a process of

public participation that is decided upon ahead of time – and making sure that this time period is

known by the public in advance. Also, have a minimum threshold of people that need to consulted

as a part of the process.

Four ways to make public participation more meaningful:

1) Technical expertise: CSO input is often narrative – we need to find a way to make the input

more quantitative (learning to speak the same language as the government) might not

really be possible for the public but they can work with technical NGO’s/CSO’s who relate

this information – for example WWF, Greenpeace, academic institutions

2) Expanding the public voice: people can use mass media to make public participation more

meaningful – more campaigning – more advocacy

3) Defining a legal framework for including public participation, for example having input

models or feedback loops for addressing public opinions and making sure they are

addressed.

4) Regional and international solutions: not only approaching the national government but

also other institutions such as the World Bank; IMF, international embassies etc.

Routes to improve access to electricity

Access does not just mean end use; it means something that enhances productivity – electricity as a commodity, and use of electricity for income generation, i.e. something more than mere satisfaction of lighting, cooling requirements. There needs to be a prioritization of electricity in the planning process, as an indicator and target and the allocation of resource to facilitate increased access. Additionally, there needs to be a shift from national planning to more local planning. The potential uses of technology:

- At every level/scale – more efficient production at the large, power plant scale, and also at the smaller community and household scale [target not just poor households but all households, technology as a means to integrate] – coupled with different regulations/governance structures for each level

- To facilitate optimal energy use, use for income generation - For links to other sectors - GIS mapping, etc. better location of projects - Monitoring impacts and effectiveness of plans - When discussing technology, it is important to make a cost comparison and that cost

comparison should include the cost of using that technology in different geographies and cost of any capacity building that may be required to deal with O&M

Procurement of renewable energy for efficient tariff and effective scale

There are many benefits of moving towards renewable energy. Renewable energy does not only

generate electricity for the national Grid but also:

- Can generate income for people who can sell fuel and energy, particularly farmers

- Can create jobs

- Can create a new industry and market

- Can protect the country from increase and/or volatile fossil fuels prices

- Can help prevent climate change

The problem is that renewable energy development is designed badly or not at all so currently:

- There is no data or information available to the public

- There is a closed off decision making process

- There is a large burden on consumers

- There are large profits for certain companies

- “The richer and getting richer and the poor are getting poorer”

Institutional changes needed for improving electricity planning

There is a need for more decentralized planning, including equity as a top priority in planning.

Additionally, there is a need for institutions to focus more on distributed energy structures to help

to respond to geographical discrepancies. There is currently a big disconnect between consumer

and electricity issues. Consumers unions should be at the table during all planning processes and

there needs to better coordination between different sectors and agencies. There are also financial

challenges, with a lack of government financing to fund projects talked about in planning strategies.

What is the potential role of EGI?

- Use data from energy modelling at sub-national level to provide inputs to planning process

- Cost delineation for use of technology in different geographies

- Align energy planning and policies with socio-economic objectives at the local level

- Roadmap for inclusive participation

- Access index across countries, updated yearly

- Transparency initiative on the cost of RE

- Global learnings on procurement policies

- Inclusion of distributed energy options on 10Qs on IRP

- FoG 2.0

Session 2:

The purpose of this half day discussion was to share current research findings on the “Future of the Grid” research being conducted by EGI partners. This is a multi-country study of technology and cost trends and implications for the centralized grid systems and actors like regulators, grid managers and utilities. Future of the Grid Research Team: Sarah, Gilberto, Nurzat, Shantanu, Bharath

There are key changes taking place in the electricity sector including rapid growth and increases in demand. Modern infrastructure has yet to be built in some countries with very limited energy access in some places, energy efficiency potential yet to be explored and an increase in direct renewable energy purchasing. The future of the grid looks at these questions from the point of view of how they impact the centralized grid. It looks at how things have traditionally been looked at, how regulations have been developed and what else is happing in countries.

Key Questions in the Future of the Grid Project:

- How will the growth in decentralized technologies, renewable energy and energy efficiency impact the centralized electricity system and the utility planning processes?

- What opportunities does this evolution present and, in turn, what institutional capacities need to be enhanced?

- What risks to the delivery of affordable, clean power could these trends raise? Approach: By focusing on a select group of developed countries that are already seeing these trends impact the centralized electricity system (Germany and the US) and developing countries that see large potential in EE and RE scale up (China, Brazil, India, and Kyrgyzstan), the project seeks to:

• Identify the potential new roles that the centralized electricity system would need to play to make effective use of these trends and opportunities

• Guarantee system reliability, stability and affordability Currently, paradigm shifts in the energy sector are causing uncertainty. There are changes happening in technology, policy and business models. Although policymakers intend to make changes in fuel shares (i.e. higher share of renewable energy), the rates at which these changes are occurring are not accurately predictable and may lead to unintended consequences or leave too short a time to prepare for the implications.

Key trends:

- Growth rates of more than 50% for solar and around 25% for wind

- Growth rates of electric vehicle sales demonstrate an annual growth rate of 100%

- Solar PV technology improvement What is driving this growth?

- Huge improvements in technologies and EE

- Massive drops in prices for good technology

- Solar PV/LED lights

- Significantly higher and more volatile coal prices

- Seeing cost in RE technologies dropping significantly

- Growth in government support for RE

- Alternative grid models for electricity consumers to meet their needs

- Pace of adoption is increasing

18,300

57,300

100,400

22,800

11,600

29,900

65,900

17,700 13,500

27,400

29,300

10,500 8,200

7,200

10,100

5,300

51,700

122,050

206,450

57,500

2011 2012 2013 Q1 2014

RoW

China

Japan

Europe

North America

The Future of the Grid: Brazil Prof. Gilberto Jannuzzi (IEI-LA) - Brazil There is a global trend towards cleaner technologies, even if some countries are not doing it or are

not interested, they are going to have to accept these trends are happening. The large

interconnected centralized power system that we currently have is an important system that

already exists and works well. Since we already understand the grid and it works, we should

integrate new technologies into it.

There is high participation of centralized renewable sources:

Wind is rapidly growing due to feed in tariffs and auctions. Due to a high dependence on hydro, Brazil is highly vulnerable to climate change. While hydro is not as intermittent as most renewable energies, since 2003, Brazil has stopped building damns due to environmental reasons and storage capacity since then has not be stable. Evolution of Regulation:

- Regulatory facilities for new sources of electricity generation and their connection to the grid

- Incentives to Micro-generation (<100kW) Mini-generation (100kW-1MW) - Net metering scheme for residential consumers - Some states are offering fiscal incentives to RE local generation and installation of RE

manufacturers

Biomass 8%

Wind 1%

Natural Gas 11%

Oil 4%

Nuclear 2% Coal

3%

Hydro 71%

Policy Instruments:

- Large Feed-in Program - Public Benefit Charges - Competitive and technologies specific auctions

Bottle necks of the current energy sector and towards a new grid system:

- Need to improve planning methods and governance of the power sector to accommodate more solar, wind and de-centralized resources. Improving the articulation amongst public agencies.

- New energy technologies: Room for domestic R&D and industrial development; need new business models, new regulation, new agencies (dedicated EE&RE bodies).

- Incorporate energy efficiency and other demand-side resources in the planning and operations of the sector.

- Need to move beyond large centralized hydro-plants - Utilities are interested in investing in centralized renewable energy plants but await official

guidelines (public policies) and incentives - Increasing awareness about the effects of climate on domestic energy security favoring de-

centralization and regionalization of supply sources Overall, there is a need for better and a more sustainable use of our primary energy resources. We need to build off of existing infrastructure and integrate low carbon technologies and lifestyles. Shatanu Dixit (Prayas, Energy Group) – India In India, there are people without access to electricity and a lot of electricity shortages, due to structural problems. There are natural resource limitations and concerns over energy security. As the share of renewable energy increases, weather dependency also increases. Implications for India:

1) The character and nature of grid will change very significantly – move from unidirectional flow of electricity (from a few centralized projects) to multidirectional flow of electricity –

already starting to see this – will increase complexity, and how we deal with transmission network, etc.

2) Many more participants in this process – many consumers may rely on grid only as backup or for ancillary services, like wheeling, energy banking – shift away from primary energy provider – change in role of grid.

Challenges associated with these changes:

1) Cross subsidy approach will come into question – huge political issue. 2) Need for completely different tariff structure - say tariff x for providing reliability services

3) In this scenario, maybe the cost of providing grid services will increase. 4) Much greater focus needed on knowledge management 5) Rethink institutional framework – role of local engineers will become more complex – they

will have an increased role in system management and planning.

Sarah Martin (WRI) - USA

Common implications of global trends:

- Increased number of generating entities: For example, in Germany, over 50% of RE

generation is owned by individual citizens or energy cooperatives.

- Changing utility roles/business models: valuation of utilities is reducing dramatically. For

example, in Germany, utility share of electricity generation fell by 7% between 2011-2012.

Additionally, the role of the electric utility is becoming more focused on providing series

through programs and policies such as: energy banking and net metering; enable captive

(self) use and open access models; and facilitating integration infrastructure.

- Changing electricity markets: From vertically-integrated utilities operating with wholesale

competition in the US to open access laws in India, electricity markets world-wide are

moving towards increased competition.

- System Planning/Planning process: Planning is shifting from solely meeting annual energy

requirements to managing increased system complexity a new priority.

- Grid network development: There is increasing attention to planning and massive

investments in transmission network development to accommodate RE integration

- Network technologies: There are new network technologies – forecasting, ICT systems,

storage, energy efficiency, etc. – are continually emerging and changing what is technically

possible for the grid.

- Price equity/considerations: Properly valuing and distributing system costs amongst

customers will become increasingly important to increase electricity access and

maintaining affordable prices.

Session 3 – Sharing Advocacy Approaches: In this session, partners shared case studies and examples of both successful and unsuccessful advocacy approaches EGI partners have used to influence electricity governance in their countries. The session was used as a skill-share of successful advocacy efforts – with the aim of enhancing the networks collective knowledge, but also identifying how and why certain approaches were successful, how successes were defined, how successes were tracked and measure, what the role of the media and national politicians was, were international actors involved, was there a use of EGI tools and how were the resources for the advocacy interactions established? Fabby Tumiwa (IESR) – Indonesia PLN is the only utility in Indonesia and it serves 54 million customers. It has a complete monopoly over the electricity sector. From 1972 to 2009, PLN has a special status as “Authorized Agency for Electrical Power Business” but in 2009, the status was removed. PLN is now no different than any other utility of IPP but is assigned by the government to supply electricity to the general public. It is still the largest utility in Indonesia today, with revenue of $23 billion in 2013.

Challenges:

- Changes in the power - Chronic governance issues such as: lack of transparency; heavy political intervention

corruption; lack of supervision from regulatory bodies. - Public trust in PLN is very low

Potential areas of corruption:

- In investment decisions - Procurement of fuel and electrical equipment - Consumer interfacing activities - Commercial operation and electricity left - IPP contracts

Strategy moving forward: 2003-2009

- Detected vulnerabilities in policy/regulation

- Assessed governance challenges of PLN

- Investigated possible corruption practices

- Worked with anti-corruption commission

- Demanded public transparency

- Used mass media – created headlines, shaming and naming

2009 and onwards:

- Looking at more structural improvement – e.g. tariff and subsidy, level of services

- Encourage on positive development of improving good corporate governance and anti-

corruption effort of PT PLN

- Use media to deliver critiques, but less shaming and naming

Creating an enabling environment:

- Effective anti-corruption policies since 2005 – onwards

- Anti-Corruption Commission performance

- The establishment of President Delivery Unit (UKP4) that set up key performance

indicators for Ministries and SOEs that deliver public services

- Perception of financial market

Notable progress to date:

- Prosecution of corrupt employees

- Internal improvements at the PLN on procurement

- Overall improvements on GCG

Nurzat Abdyrasulova (UNISON) – Kyrgyzstan Through using the EDIT toolkit, UNISON has highlighted some main concerns in the Kyrgyzstan electricity sector:

1) Low quality of electricity 2) Bureaucracy 3) Low public awareness 4) Complicated communication with utilities

In 2014, UNISON repeated the EGI assessment (first completed in 2009) to look for improvements in the sector. The preliminary results were quite positive. Through using measurements of voltage quality, they found that in apartments 96% of electricity was good quality but in households, only 8% was good quality. In 2011, FEST was established and CSO’s have more of an official roles and status. Consumer energy advocates are:

- Looking at issues from a grassroots level and making regional changes at the consumer level

- Travelling to regions and hosting public discussions and inviting local NGO’s to the network - Creating active Facebook pages, using YouTube, website and information corridors - Using crowdsourcing the information dissemination through cell phones

Main achievements include:

- 3000 appeals made by energy consumers - Public consultation for 5000 citizens - 300 trainings, workshops, roundtables, 10 public hearings - 9500 participants - Regular policy briefs and position papers from the consumer perspective

Case study: at the mid-term tariff policy there was monitoring of public decisions; releasing policy briefs and press releases of topics and opinions; and FESTI organized a workshop. In September, new tariff was released which was twice as high but then based on NGO appeal, it was cancelled and a new draft of the tariff methodology was released.

Shantanu Dixit (Prayas, Energy Group) – India

There is a lack of transparency at the level of service. There were attempts to sanction regulators and to put monitoring systems on main lines but after many years of trying, the utilities and regulators would not do it. As a result, Prayas, Energy Group is putting together a consumer monitoring system. The monitoring system is the small hub, the size of a mobile phone charger which connects to a household plug and can collect data for several years. The hub records voltage each minute and transfers the information directly to a website. On the website, summary reports are easily viewable. CSOs can then use this information as concrete evidence when approaching regulators and utilities. Bakhadur Kabibov (Consumers Union of Tajikistan)

Key advocacy approaches with EGI Tajikistan:

- The use of mass media: using www.barknest.tj

- More cooperation between Consumers Union and Barki Tojik; Consumers Union and State

Agencies and working more with agencies such as the World Bank

- Changes at the local level and using the EDIT toolkit

Thailand: Suphakit Nuntavorakarn (HPPF)

Session 4 – What Next? External speakers were invited to share their ideas on recent and future challenges on electricity governance. Governance Challenges for the Oil and Gas Sector: Recent Experience in Thailand – Thai Leak Group There is an increasing awareness among Thais about energy issues which has had an impact on political unrest. People have become more aware that the government and energy corporations are not being fully transparent. In efforts to increase access to information, the Thai Leak Team has travelled around the country, giving over 300 hundred lectures and empowering local people. They are trying to bring awareness to issues such as:

- Exploiting Thailand’s natural resources - Preventing the construction of more drilling rigs - Prevention invasion of public rights - Preventing natural gas exploration - Preventing more petroleum exploration

The profits for oil and gas companies are extremely high while the public is adversely affected in terms of health, livelihood and their environment. Current laws are outdated and are still being used to benefit companies and not the public. The discovery of shale gas in Thailand means that there is a real need for both social and environmental impact assessments to be objectively completed. The government needs to provide transparent policies for managing energy and natural resources for the public’s best interest.

The Social and Environmental Aspects of Renewable Energy- Bharath Jairaj (WRI) – India During this retreat we have spoken a lot about the governance challenges associated with conventional energies; however we also need to think about the governance challenges associated with renewable energy. When renewable energy is scaled up, several of the issues that are relevant to traditional energy are also applicable to renewable energy. Costs and Benefits:

- How are the costs on renewable energy developed? - How are feed in tariffs covered? In India, rural consumers were charged high rates and in

Germany, costs fell on private households and energy intensive industrial plants were exempt

- Projects with partial or full local ownership and tangible local benefits have a much higher acceptance rate

Environmental Issues:

- 45% of wind turbine construction happens in forested areas

- Constructing roads to mountain top areas leads to: land fragmentation, soil erosion and hill

top cutting which all have cascading impacts and full life-cycle impact assessments are

necessary

Other concerns include: property rights and property value; gender issues, religious beliefs; health

risks; aesthetics; impacts on wildlife and biodiversity.

Renewable energy is not all “clean and green” and governance (TAP-C and equity) issues are all still

relevant. Not focusing on proper scale up will impact the acceptance, growth and scale of renewable

energy.

Governance Challenges for community development - Wichitra Chusakul (NET foundation) – Thailand What is local community energy development? It is development that involves local people in the decision making process as well as in project implementation. Often for larger projects, local people don’t get involved in the process since they do not have the right access to data and sufficient knowledge of impacts. Energy development by local community’s needs:

- Appropriate know how from communities - Investment capital - Enabling finance and loans - Networking - Local wisdom mixed with new technology - Experience

Wrap up and next steps for EGI:

- Improving Access (global) - ESMI (country level) - Scaling up renewable (global) - Adding to the “10 Qs to Ask” series (global) - Integrated planning (country level) - Future of the Grid (FoG)

Partner suggested next steps:

- Comparing fossil fuel subsides among EGI counties? - A framework on studying environmental externalities? - Renewable energy best practices? - Studying the costs of fossil fuels? - Studying renewable energy policies in major oil and gas manufacturing nations? - Start producing educational info in local languages - Promote local level energy planning in alignment with national level socio-economic

objectives - Look at the role of mini-grids in providing energy access - Have a public participation framework - 10Qs to Ask on Regional/Cross-Country energy projects - Need to make more connections between climate change issues and the energy sector. - Study deployment of large scale rooftop and cross subsidy surcharge implications - Expand network? Develop national networks? Engage with more local CSOs.