grounding green power: bottom-up perspectives on smart renewable energy policy in developing...
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8/6/2019 Grounding Green Power: Bottom-Up Perspectives on Smart Renewable Energy Policy in Developing Countries
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Climate & energy PaPer SerieS 2011
grounding green Power
Bottom-uP PerSPeCtiveS on Smart renewaBle
energy PoliCy in develoPing CountrieS
lutz weiSCher, davida wood, athena BalleSteroS, Xing Fu-BertauX
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2011 Te German Marshall Fund o the United States. All rights reserved.
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rom the German Marshall Fund o the United States (GMF). Please direct inquiries to:
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views o GMF. Comments rom readers are welcome; reply to the mailing address above or by e-mail to [email protected].
wri wk Pps
WorldResources Institute Working Papers contain preliminary research, analysis, indings, and recommendations. hey arecirculated to stimulate timely discussion and critical eedback and to inluence ongoing debate on emerging issues. Mostworking papers are eventually published in another orm and their content may be revised.
ab gmF
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On the cover: (Le) A man works on power line rom a microhydro power source to E Wi Jo village in Tailand. (Right)
anzanian engineers and policymakers visit a solar arm in central Tailand built using Tai-made solar panels. Photos by
Chris Greacen.
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Grounding Green Power
Bottom-Up Perspectives on Smart Renewable Energy Policy
in Developing Countries
Climate & Energy Policy Paper Series
May 2011
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Acknowledgments
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Grounding Green Power 1
DEVELOPING COUNTRIES IN THE RENEWABLE
ENERGY TRANSFORMATION
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Executive Summary
Case study countri
Brazil
India
Indonesia
Kenya
Mexico
Morocco
Mozambique
South Africa
Sri Lanka
Philippines
Tanzania
Thailand
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The German Marshall Fund of the United States2
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PRINCIPLES OF SMART RENEWABLE
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Grounding Green Power 3
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The German Marshall Fund of the United States4
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Grounding Green Power 5
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Case study countri
Brazil
India
Indonesia
Kenya
Mexico
Morocco
Mozambique
South Africa
Sri Lanka
Philippines
Tanzania
Thailand
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The German Marshall Fund of the United States6
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Grounding Green Power 7
DEVELOPING COUNTRIES IN THE GLOBAL
ENERGY TRANSITION
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13 C Gc A Mb, Country Case Studies:Thailand & Tanzania. Feed-in-Tariffs and Small Power ProducerRegulations (W, DC: W Rc I,Nvb 22, 2010), p:///vp-cy-b
Context and Concepts
2
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The German Marshall Fund of the United States8
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All ElectricitySources
Fossil FuelsNuclearRenewables
450 ScenarioNew Policy ScenarioCurrent Policy Scenario
Non-OECD Countries OECD Countries
Figure 1: Projected Growth in Global Electricity Capacity, 2008-2035
19%
23%
3%
55%
38%
36%
22% 24%
57%
11%
8%4%
Distribution of new capacity expected based onpolicies and measures already formally adoptedand implemented.
Distribution of new capacity expected based oncurrent policies and new policy commitments thathave already been announced.
Distribution of new capacity needed in order tostabilize global atmospheric greenhouse gaslevels at 450 ppm of carbon dioxide equivalent
Source: International Energy Agency, World Energy Outlook 2010
(804 GW)
(946 GW)
(2271 GW)
(135 GW)
(178 GW)
(1389 GW)
(1476 GW)
(851 GW) (950 GW)
(2190 GW)(454 GW)
(293 GW)
Figure 1: Projected Growth in Global Electricity Capacity, 2008-2035
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Grounding Green Power 9
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A NEW ROLE FOR INTERNATIONAL SUPPORT
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The German Marshall Fund of the United States10
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Grounding Green Power 11
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c c c25
PRINCIPLES OF SMART RENEWABLE
ENERGY POLICY
W b y pcy he set
of rules, regulations, and government actions that
lead to an increased share of renewables in total elec-
tricity consumption in line with a countrys develop-
ment objectives.
My vp c v y xp- b y pc
by pjc-by-pjc-ppc, b
k c c
v py c B
xpc 12 c y c
p Rb Ey
Pcy Wkp x ,
ky pcp b y
pcy c b T ky pcp
by c b T x cp
c pcp pp
pcc
1. Smart renewable energy policy is a compre-
hensive package. Dvp cy xp
pcp kp
c j b y
py cv c-
R, b y pcy
k cc b cx
b p S b y
pcy v c b v-
c p c ,
v c c, -b cc c, cc
cpcy
25 O b b k by c, Kk, H, Wc,It Should Be a Breeze, Kk , Toward a SunnyFuture?
2. Smart renewable energy policy is basedon clearly defined objectives. Wkp
pcp pcy
b c
A c c b,
bjcv
p , b c c
cy vp, y cc,
cc vp A c c-
pcy bjcv c p
b y pcy cb
cy b vp p
3. Smart renewable energy policy encour-
ages private investment. T b
kp pcp,
pp by x -
b y pcy, pc v
pc y v
pv v by p cv
pcb k c T c
v k v b ccz
, , :
L cv b c
k c b
pv bkby pjc;
L c
c z pjc ;
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8/6/2019 Grounding Green Power: Bottom-Up Perspectives on Smart Renewable Energy Policy in Developing Countries
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The German Marshall Fund of the United States12
Box 1: Transparency, Accountability, Participation, and Capacity (TAP-C)
T Eccy Gvc Iv (EGI), j pjc WRI Py Ey Gp,
vp vc k z TAP-C pcp pcy, cc-
by, k pcp, cpcy vp b pcy
p pc, p pc c pjc pc,
c pc c v
Transparency and access to information: pc v c
c cz Ab pcy c cpv, ,
vby
Participation: p v k p c-k c ,
ppcv, p pb F pcp c cc v
pc pbc
Accountability and redress mechanisms: x c cy b v
c c-k, yc c p
pc, b c c j, y pc p k-
Capacity: cpcy v c c y py,
by pv cc c-k pc, cpcy cv
cy (pcy NGO ) yz pcp cvy1
1
Ap T Eccy Gvc Tk: Bck B Pcc P Accby EccySc J 2007 EGI j pjc WRI Py Ey Gp
L y b y
k, b b
p c, b
cc b,
c pv b - cp-
v v26
26 T , , k vp by p xpc b y c v pv p pcy b y M-v I Cc RbE Gy 2004 S Ky H, UnlockingFinance for Clean Energy: The Need for Investment Grade Policy,Ey, Ev, Dvp P Pp(L: C H, Dcb 2009), 8 Dc BkC C Av pp c,z pcy, vy cy S DBC C Av, Paying for Renewable Energy: TLC atthe Right Price. Achieving Scale through Efficient Policy Design (N Yk: Dc Bk Gp, Dcb 2009), 15
4. Smart renewable energy policy is cost-effec-
tive. I by kp pcp
pbc y b p c
y v bck by
py, xpy,
cy pcy bjcv Bc
bjcv c c, xp, v
- pc c pp
c vp
pcp cy
x py c, b
c c pcy v vb-
z
5. Smart renewable energy policy encourages
innovation. Exp kp
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8/6/2019 Grounding Green Power: Bottom-Up Perspectives on Smart Renewable Energy Policy in Developing Countries
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Grounding Green Power 13
c pp by b py, pv
c y cpv
p T b
c c
pv pc, by,
y b y c-
b c c
bc p pc
-v v T,
v v c
c c v-
b p c pcc z-cb p
: c vp,
, py, 27
W v
y pp c vp-
p, kp pcp
v by b,
cyc pc, c
ppy c,
y y O c v
v by b c b by
y cv v c-cv- pc c
27 S T, P Z, C Ly, Innovationand Technology Transfer: Framework for a Global Climate Deal(E3G C H, Nvb 2008), p://3/p/c-c/3-p-c-v--cy--k---b/
6. Smart renewable energy policy is designedthrough transparent, accountable, and
participatory processes. A b c
b, kp pcp
cvy xp ck p,
p, ccb c-k
pc cv
c pcy p Cvy,
bc pcp ccy
c vc b b
c T pcp pcy,
ccby, k pcp,
cpcy (TAP-C, Bx 1)
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8/6/2019 Grounding Green Power: Bottom-Up Perspectives on Smart Renewable Energy Policy in Developing Countries
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The German Marshall Fund of the United States14
Planning and Developing a Strategy
3Table 1: Renewable Energy Targets
in Different Countries
Country Target
Brazil N
India15% RE by 2020; 41 GW by 2017, 72
GW by 2022
Indonesia5% , 5% b, 5%
RE by 2025
Kenya N
Mexico 66% RE by 2012
Morocco 2 GW 2 GW by 2020
Mozambique
100 MW , 125 MW
y, 3 b p, 79,000
PV y c
South Africa 10,000 MW RE by 2013
Sri Lanka 10% -cv RE by 2015
Philippines A 6,972 MW by 2030
Tanzania N
Thailand N
Sc:P v b y pcy kp, p:///vp-cy-b N:
T Ppp py T I by v, b p S
T v cp c k b y pcy c
c
pcp bv p-
Ec cp
ky , c by xp
c I c p, c cp
c -
c pp b ppc
LESSONS LEARNED:
SUCCESSFUL POLICY NEEDS A PLANI xp py b,
v, cy, pv v
c cc b k
T p pv pcby
p pc y p
v cc p -
, , b v
cy, c xpc b
Official renewable energy targets are a crucial
first step. T c
c by py ccy
cv cx
cy vb c cpc D
ccy, c pv v
vby by pc c
b y py My vp
c v b y (
Tb 1)28
S c v c -
b y v p x,
28 I b kp pcp xpcc cc b c,k c k pc b c c cpcy cc by I , pcy b p y c
c India29 O c, c Indonesia
v c30
Y ppc
b cpcy F xp,
Philippines cy c
c b y cpcy by
6,972 (MW) b 2010
2030 T c b bk by
cy, xp c P-
29 S K, Cy C Sy: I (p Rb Ey Pcy Wkp, WRI, W, DC,Nvb 22, 2010), p:///vp-cy-b
30 Fbby T I Rb, Scaling Up Renew-able Energy Investments. Lessons form the Best Practice Modelsin Indonesia (W, DC: Bk I C, Jy2010)
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Grounding Green Power 15
pp, 1,420 MW , 985 MW , 4,167 MW y, 200 MW b,
80 MW , 120 MW c y
R j pz b,
cc by cv
b k Ppp p
pc by p
pc S A31
Planning can grow more sophisticated as deploy-
ment expands; for serious scale up of renewable
energy, long-term planning will be necessary.
F v cc pjc y FT p,
y pcv
b y c
y y
y b pv I , c-
vp y--z pjc
vp xpc p
v v k B v
c, p c
pbby cc v pjc
xp c,
cc , vb I , c p
c p b b
b y b ccy
y
Thailand p cc p
p pc (SPP) vy p
pc (VSPP) b-p
vp b y c
cc , v
p pj-
c I SPP/VSPP c pbc p b
y vp p cy pc
31 P H M, Cy C Sy: Ppp(p Rb Ey Pcy Wkp, WRI,W, DC, Nvb 22, 2010), p:///vp-cy-b
, -v c T NGOk ccy v VSPP c c
ppy p T p
vp p b 200732
I Jy 2010, South African v
b vp I Rc
P (IRP 2010) c bjcv
b y vp x 20
y T S-Ac IRP xp
cpv ppc c
pjc, c vby, c
b c y, b ppy 33
Planning decisions need to be based on a trans-
parent and sound assessment of the full cost of
different options. Lv py
c y q -
c, b, k,
c y c cy
py y p pc T ,
c, ppy- k c
c ccy c b
c k p
c b y O xp c
c y
p pc c p
c , c y c
p c A , c
b pv cv v-
, xc
32 Gc Mb, Country Case Studies: Thailand &Tanzania. Feed-in-Tariffs and Small Power Producer Regulations.
33 H Tp, Status of renewable energy implementation inSouth Africa with a focus on the REFIT and the role of Multi-lateral Development Banks (W, DC: W RcI, Nvb 22, 2010), p:///vp-cy-b
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The German Marshall Fund of the United States16
cpcy34
I c p pz c x c
v Ty p
c vb c
b k z v
Ev c c
b y pjc T p
vp p, Thailand y
pp b y p I p,
p
c k cv (,
b y, c) p v py b y
B p q cp
p T vpp vc c-
- p
pc cc k
c
pc cv p c W
VSP p cc p,
c ppc, c p q
cv cb pc y -
c v c
D TAP-C ccp, T NGO
v vp v p vp-
p k vc
c
p c-k pc
W c pbc cy p p,
y p pp c vc
34 T Eccy R: Pvz B Scz C Rk, Cc SGc C Gc, Pacific Affairs V 77, 3,F 2004 A Mq, T O Dvp S Ac Ey Pcy, Uvy Cp T, J 2006p 168 A c c C Ek B Bbby G N P Cb CpT Fb 26 2010
v - p35
The planning process benefits from transpar-
ency, accountability, and stakeholder participa-
tion. Pbc cy
b b pc
y y A p, -
c p k c p v
, c jb c v
pc O, p pc b
p by v , p cb
pp p v c I c
b b -
v c, pc cc
cp c
Cv cy c py
pcy p
p p c (c p-
b c, k, )
cp vy b Cv cy p
p pc By
z xp y ,
p z p, c
vccy, p v v
p p p pc pbc cy
35 T NGO vp -k vyc c 14 c vc Eccy Gvc Iv k ppy Tp pc T c b - k k vc y c-k, y pv pcy pc pbc p B c-k pcy c VSPP ppy pT p vp p pp by T cvcy cb - ,c- b y, c c-c c c pjc pp cy: 54,005MW 8,535MW Pby Spk Nvk, Hy Pbc Pcy F, 14 A Acp Cc, Bkk 2010:p://ccyvc//2010/12/-14----cp-cc
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Grounding Green Power 17
I Jy 2010, South African vb vp I Rc
P (IRP 2010) c bjcv
b y vp x 20
y IRP 2010 c pcy
pvy c ccy p pc
b pbc Cv
cy bv v p b
p y
y p Hv, y v -
IRP y b
pv pp
c b b y c- cv c F
xp, cc b b
vp c b y qp-
c xpcy
IRP 2010
I S Ac, v c
c vp b y -
pc, b y ck cy
cpcy c v
p Acc cv cy
bv, ppc p- y, c -
b y vp, by
p cv y (c c)
xp cpcy T pcp-
cv cy p p pc
vc vb vp-
b c
p pc36
Cv cy z Thailandv
cc pv c-
k pc T NGO v k pv b pc bv
pc p pc,
TAP-C k T c vy
36 Tp, Status of renewable energy implementation in SouthAfrica with a focus on the REFIT and the role of Multi-lateralDevelopment Banks.
p pc (VSPP) ppyp T P Dvp P
py NGO T p
cp b y ccy
ppy p y p y
c by xpv v-
y p p T
p vp p pp by T
cv cy cb -
, c, b
y c cc c c
pjc p p
cy, 54,005 MW 8,535 MW37
INTERNATIONAL SUPPORT: CAPACITY
DEVELOPMENT, INSTITUTION-BUILDING, AND
TECHNICAL ASSISTANCE FOR SOUND POWER-
SECTOR PLANNING
I c pv cc -
c cpcy b c
vp p y
c F xp, Gb Ev
Fcy (GEF) pp pjc S Ac
2007 pv k, ,
y vp cy I
Rc P b 38
Sy, pp c
Rb Ey Ey Eccy P-
p v pp v G
Mzbq ppy p c-
37 P by Spk Nvk, Hy PbcPcy F, 14 A Acp C-
c, Bkk 2010: p://ccyvc//2010/12/-14---cp-c-c
38 Tp, Status of Renewable Energy Implementation in SouthAfrica with a Focus on the REFIT and the Role of Multi-LateralDevelopment Banks, 2010; S Nk A B-, Investing in Sustainable Energy Futures. MultilateralDevelopment Banks Investments in Energy Policy, WRI Rp(W, DC: W Rc I, 2010)
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The German Marshall Fund of the United States18
k c GIS yz bc , - 39
I c y, W Bk Ey Sc
M Ac P (ESMAP)
c c, c
cc c, pp -c
c vp p vy y
ppy c z- -cb c-
y p40
I pv cc xp, ,
, c pv
pp pc
cy p A
c bv p, ccb,
p pc z by y -
v cy cpcy cc
D c b cpcy
cv cy p y c py cv
p pc
39 p://p/_p/7217_pppA8Fp
40 W Bk, p://p/p/vv
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Grounding Green Power 19
y p pjc p by41
Pcyk c c b v yp
-b cv z
Tb 2, ky v
bck
T c, y pp
vp vp c,
pc c ccy c, -
p c Avy,
c c y b cv y py
pbc b T c k c-
c p c
pbc b c, pcy
jy vp c
cpcy c pb
v pcy py
Hv, 18 vp c cy v
FT, 5 v b RPS,
11 cpv b pc b
y Tb 3 z cv c-
c y c
In many situations, feed-in-tariffs are the most
appropriate generation-based incentives to
encourage private investment in renewable
energy. T FT y c-
v c by Svy-v pc
b pvc cpcy 45 pc
b cpcy pp by FT
200842 A v cv c
vp by Dc Bk C
C Av vc FT c
b ppp c pv
pcy, vy, cy pc v k I
41 S p c RbEy Pcy Wkp, vb p:///v-p-cy-b
42 REN21, GSR 2010, 23
Designing Generation-Based Incentives
4SELECTING A GENERATION-BASED INCENTIVE
T p
b k p b c
Pcyk
p c v by c-
v Pcyk c v
p c vb k v-
b p A c
xpc , -b
cv c ky cp
b x pcy y
G-b cv b c
cp, b b pcyv Cp 5
Policymakers need to choose an appropriate
incentive for their context. It is important that
incentives reward actual power production, not
just installation. O cc cp
b y pcy b vp
vp c c -
py b y pc
ccy, k pjc
ccy vb T py y
p bv k cvc I pb c cv
c k pc, bc
bz p cp c -
y c pjc b b
c v pz p-
c, c c,
v cc
A cv k pp
v b cc
b y b c
p pc T c FT India, Philippines, South Africa, Sri
Lanka p pc (SPP)
p Thailand Tanzania I
c Brazil India, p
pc b pc p k
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The German Marshall Fund of the United States20
Table 2: Generation-Based Incentives for Renewable EnergyIncentive Mechanism Defnition Advantages Disadvantages
Individual Power Purchase Agreement (PPA)
A PPA cc b ccy ( p p pc, IPP) by( p, y, , ccy pp),pcy c c ccy bb: , pc, y,c 1
A cy xpc b bcpcy
L cv cv, pcy cy b c
Feed-in Tariff (FiT)
T v p- p pc b p PPA
vy k b y U y q cc y qy
pc b ccy pc ccy I b-pcc FT, y by cy, b c-y-pcc c p b p, v z, c v, b v b
Pv v cy v
M y pcy by c pb
Dc ppp ; b
k pjcvb cv v, y v v-bz
Renewable Portfolio Standard (RPS)
T v cv c b y, c c by , PPA, , y y, bypc Rb Ey Cc (REC) I
REC y, b p pc p k pc, b p c c b y pc, cc b p T
cv by RPS by cc y pvcpc
continued next page
Av c , p by k
Pv cy v
U by cy, y v xpv pjcyp cy
b ( y b vp xc xpv )
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8/6/2019 Grounding Green Power: Bottom-Up Perspectives on Smart Renewable Energy Policy in Developing Countries
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Grounding Green Power 21
Sc: L Rv2
1 I b xpc pc PPA c b U c pc PPA v pjc PPA, pc cv c- b
2 O v -b cv c REN21, GSR 2010; K S Cy, T C, CKyck, Feed-in Tariff Policy: Design, Implementation, and RPS Policy Interactions, Tcc Rp NREL/TP-6A2-45549(G, CO: N Rb Ey Lby, 2009); IEA PVPS (I Ey Acy Pvc PSy P) 2009 P Dv G-Cc PV P: I Ey Acy; H R 2001 RvRp P S Eccy Rb Ey Sc EU C B: Ep C-; H, T E 2006 Photovoltaic Incentive Design Handbook. Np, CA: C P Rc; L JI, W RH (2007)F Rb Ey Tcy Iy: A I Cp W Iy Pcy Spp Mc- Ey Pcy 2007;35(3):184457; Rz, M, H, A, Rc, G, Fb, T, H, R, Hb, C, M, PE, J,SG, C, R, V, M, Rc, G, Kvc, I, Hy, B, 2007 A pz by pp c Ep ccy k, OPTRES F Rp, K; M, PE, A, H, G,A, Bc, I (2009) T Ecc W P W Ey: T Fc P T Avb p://-y--c/c//Cp3p
pjc vp Epc vc
EU py c
FT b , py, pp p kW FT y
pc cc RPS y44 Hv,
pcyk c b RPS c-
, Dc Bk C C Av
y pv
vc FT c b c RPS by
b pc
cc45
44 M, PE, A, H, G, A, Bc, I (2009)The Economics of Wind Power. Wind Energy: The Facts PartThree. Avb p://-y--c/c-//Cp3p
45 DB C C Av, Paying for Renewable Energy:TLC at the Right Price. Achieving Scale through Efficient PolicyDesign. T p FT RPSc, Cy, C, Kyck, Feed-in Tariff Policy.
Table 2: Generation-Based Incentives for Renewable EnergyIncentive Mechanism Defnition Advantages Disadvantages
Competitive Bidding
I y Cpv B, p- pjc c b p pc b vp Wv c pc cc vp pjc b p
Ac ypc- p
Dvp b pc pjc b vb v b c p
FT y c cy-
pcc pp v pcv
cy vp cb , y
k y vy pc b
cv43
I cy vy b
py pcy , pcy-
k cv x v -
b y py c
RPS y b ppp c
Hv, xpc vp c
y yc REC k
b y p ccy, c c c v k
, ,
43 DB C C Av, Paying for Renewable Energy:TLC at the Right Price. Achieving Scale through Efficient PolicyDesign.
(continued)
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The German Marshall Fund of the United States22
FT pv c
c y c, y v b byIndia, Kenya, South Africa, Sri Lanka,
Tanzania, Thailand( Tb 3) b
c by vp c,
xp N Mzbq46 A
Rb Ey Pcy Wkp Nvb
2010, y xp pcp c y
c xp pc FT, bc
y y-- y p
46 S DB C C Av, GET FiT Program: GlobalEnergy Transfer Feed-in Tariffs for Developing Countries, p 53-57 vv -- Ky,S Lk, S Ac, T, Tz T N- Eccy Ry C Rq Pp pp U S T Dv-p Acy vp k p ppc c PPA b y pjc, N Rb EyIPP Fk, Sc Nb 2010-11022A, vb p://bv/p/TDA/TDA1/TDA1/2010-11022A/, cc Mc 26, 2011
b pcp y cccy c pv v-
vp c T
qy cc
b FT cy
ppp p-
pc py B,
c p
k
Competitive bidding can result
in lower prices and be an appro-
priate incentive mechanism forlarge-scale projects. By ,
cpv b pp-
p c pjc,
pp c b
pjc U cpv b,
c v b
b cc vy
pc, cp FT
T , v, k pjc
vp b pc y
c
pjc b c p p-y
I Brazil, -y c v b cc
cx b c c,
b v-
ppy b b cp c
v c b c cp-
v b pc T vb pc
pvy x pc T
v 77 US c/kW p
p c
A 2010 cyp (146 167 c) pjc v-
p Bz x-pc c
B c b qp
cp c ,
Bz y c cv pc
Table 3: Generation-Based Incentive Mechanismsin Different Countries
Country FiT RPSCompetititve
Bidding
Brazil N N Y
India Y Y Y
Indonesia Y N N
Kenya Y N N
Mexico N N N
Morocco N N Y
Mozambique Uvp N N
South Africa Y N N
Sri Lanka Y N N
Philippines Y Y N
Tanzania Y N N
Thailand Y N N
Sc: P v b y pcy kp, p:///vp-cy-b
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Grounding Green Power 23
I b pjcvp c c z
v, v y
vy pc cpcy c F xp,
bv cpcy c pjc
Bz cv c (PROINFA)
0255 R G N
2009, cpcy c b 0451 0490
c I pjc
ccy p
c, b y cpv
Bz47
I China, v b y c vp
b pc , v-
p b b pjc c
b cp C -
b
c y cy b FT
y b pc
c c pc 48
LESSONS LEARNED:
GENERATION-BASED INCENTIVES CAN
BE MADE MORE COST-EFFECTIVERb y cv y py,
xpy,
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bjcv c py,
by v c c I -
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c c
c-cv
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47 S P, Status of Brazilian Renewable Energy Policy.
48 J L, P S, H G, 2010 China Wind PowerOutlook (Bj: C Rb Ey I Ac-, Gb W Ey Cc, Gpc, Ocb 2010)
y y p-c-b cv
Governments can increase the cost-effectiveness
of renewable energy support by reducing fossil
fuel subsidies. A cp
c b, v c
c c-cv b
y pc T c y
v py , by c
b
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pcy 1) b c b
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b pv
T xc b y
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cp b $312 b -
200949 Bc c b
c cc, v
c c c b c cc Nv,
b IEA k q v
p b y
pp 200950
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49 I Ey Acy, O EccC-p Dvp, W Bk, The Scopeof Fossil-Fuel Subsidies in 2009 and a Roadmap for Phasing OutFossil Fuel Subsidies, IAE, OECD, W Bk J Rp
Pp G-20 S, S (P, W, DC,Nvb 11, 2010)
50 Ax M, F F Sb A 12 T Spp Rb, Sy S, Jy 29, 2010, p://bbc//2010-07-29/--b--12--pp--b-y- N cc b v 12 , bc b IEA 2008 F pp c 2009; c 1:7
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The German Marshall Fund of the United States24
b c b pb y pc F, b
v c y Sc,
y c cpv vby -
b, y b p
pp p b cp S
b y pcy
c c b R-
b bc cpv pbc
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p, p p c, - vy
y ppy), vp cc
y k
b pc, c c
pcy b
pc52
Deciding how to fund an incentive mechanism
raises political and equity challenges that may be
more easily navigated with help from the TAP-C
principles. W p pv -
51 I Ey Acy, O EccC-p Dvp, W Bk, The Scopeof Fossil-Fuel Subsidies in 2009 and a Roadmap for Phasing OutFossil Fuel Subsidies.
52 T L, Cp B, B P, Strategiesfor reforming fossil-fuel subsidies. Practical lessons from Ghana,France, and Senegal(Wp, Mb: I I Sb Dvp, 2010), 8
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c xp b y
c c T bv
pc p c b , xp,
by c bck p
p y bck ,
y c v
ccy cp53
I c y c, b
p v b v v pc
p A c Cp 5, -p ccb pc
p c c p
cv c ccp qb
W Brazil -b c-
v cpp FT, p c
b ppc, p c by
vy y c y
cp bv 80 k 54
I Indian M,
pc b c
53 Nvz Db, Power politics: equity and environmentin electricity reform, WRI Rp (W DC: WRc I, 2002); S Nk, S Dx, Nvz K Db, Empowering people: a governance analysis ofelectricity, WRI Rp (W DC, P, I: WRc I, Py Ey Gp, 2007)
54 S P, Status of Brazilian Renewable Energy Policy.
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Grounding Green Power 25
p b y cv-
ccy c 55
I Thailand, c c
90kW p v cv
ccy c Pc pc b-
c,
qy, p K b T T My
Ey Ey P Pcy Oc (EPPO)
yz pc VSPP & SPP -
py :
$000233/kW y 20102011
$000894/kW y 20122016
$000710/kW y 20172022
T , vy pc, pcy p,
v b v T Hv,
by p (c T)
cc b, c vy v b
p, pbby c56
A price premium that decreases over time can
drive performance improvement and cost reduc-
55 N R, Distributional Impacts of Climate Change Miti-gation in the Electricity Sector: Case Study of Maharashtra, India,D Wk Pp (S, CA: S Uvy,2010)
56 A p cc C Gc Cc S Gc P T, Mc 2011
Table 4: Wind Project Developers Cost Submissions Before the Electricity Regulatory Commissionin the Indian State of Andhra Pradesh
Client Submission Date Cost per MW (in million Rs)
Gujarat Alkalies and Chemicals Ltd. Mc 2007 514
Chennai Port Trust Ap 2007 536
Rajasthan State Mines & Minerals Ltd Ap 2007 516
ONGC Gujarat J 2007 608
Bharat Electronics Ltd J 2007 745
Sc: IWEA
tions. T b y pcy
k y c c cpv cv y c T,
v p pjc
c v F xp, Gy
C, FT py ck pjc
pc vc y b
FT pjc y57 T
c p k k v
xpc , k c, c-
c vp c py b
I c py vc,
c v pv vb v
, p v pv
c pc y pvy
cp pv Hv,
c , k v-b-
z py58 S ,
xp c c c vc
vp , b FT bc
pp, pcyk c c c
c p v v
57 F G c, BMU, 2009 EEG Payment
Provisions (B: F My Ev, NCv Nc Sy, A 16, 2008), p://b-///p/ppc/p/_v_p F C c, C Pbc U C, F-T Pc, Feed-in-Tariff Price, , p://cpccv/PUC/y/Rb/F-+T+Pc
58 F c p- c c, Kk , Toward a Sunny Future?, 13-14
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The German Marshall Fund of the United States26
Getting the price right at the beginning, based onan assessment of the technology, market condi-
tions, and resource availability, is critical for the
success of a FiT. A pc c FT
pc ,
by c pc k
A C Ey, G Gvc,
R F c-cv by WRI, I,
Py Ey Gp (Py)59 Cp T
My 2010, S Ac, I,
Mxc c cc b c vby cy p-
c c p -
v
I I, y c y
c b by v pjc
vp FT v Hv,
y c, v y, p
vby qp pv
Tb 4 cp c b by v
pjc vp A
P Eccy Ry C
(APERC) p T
b c 45 pc
b c T xp
yy ccy
y c pp
FT60
Sy, C Eccy Ry
C (CERC), v S
Eccy Ry C I,
cy c FT PV I 2010,
FT by CERC 18 pc
59 Py p c vccy b M, I I Ac ccy b Cp T, S Ac
60 Rj Dk, Renewable Electricity and Governance Cases from India (W, DC: W Rc I,Nvb 22, 2010), p:///vp-cy-b
by y c Gj Y Gj cc c
500MW cpcy pc (
Tb 6)61
FiTs are most effective if they are set at a rate that
reflects the cost of generation of the specific renew-
able energy technology. In order to save scarce
resources, they can also be set at a price that only
reflects the utilitys avoided cost, but this will limit the
FiTs impact. Icv c bjcv
cy y p c-
bjcv c c cy, pp b
cy pcc
I Thailand Tanzania, S P Pc
(SPP) pv -
cc, -
z p pc T pcc
b y c
c cc ccy
Tz b py y
v c v vp
py b y
p O , T py c-
y-pcc vp
v c
I Tanzania, p SPP b
v c y Tz
q p , pcy
, pc
ycc T p ,
Tz y pc cpcy
c y cy pc-
, p xpv
F SPP cc ,
cy y c, b
c b b pb Oy b 2
pc pp Tz
61 Ib
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Grounding Green Power 27
Table 5: Renewable Energy Online or with PPAs SignedUnder the Thai VSPP and SPP Programs, as of October 2010
VSPP (MW) SPP (MW) Total (MW)
PPA signed Generating PPA signed Generating PPA signed Generating
Solar 2,020 16 90 - 2,110 16
Biogas 85 69 - - 85 69
Biomass 2,108 710 70 583 2,178 1,293
Municipal
Waste
95 32 - - 95 32
Mini/micro
hydro
6 1 - - 6 1
Wind 67 0 - - 67 0
Total 4,381 830 160 583 4,104 1,364
ccy S v by
11 - by y
I c, SPP y
y py -
, b b cv
b c-y vp Ay,
PPA p p v b ,
c p p p by ,
cc k, c-yp, b pc p T c
b c b y
c vp pjc
b y62
Thailands SPP Vy S P Pc
(VSPP) c c 1992
2002 pcvy v b cc
v 1,300 MW b y
cpcy (S Tb 5)63 Sc Dcb
2006, p FT by
p v c, c - , by cy yp by
62 Gc Mb, Country Case Studies: Thailand &Tanzania. Feed-in-Tariffs and Small Power Producer Regulations.
63 T Vy S P Pc (VSPP) p pp p 10 MW ccy xp T S PPc (SPP) pp 10 MW 90 MW
z A p-kW b pv
pjc -p cc
, pc
k pvc v
c y v cc T -
pv v y p
cy yp P - ,
vy VSPP - v
VSPP p p c2002 Bc p b b
v c, y pjc b
pjc, b, py k, cp
T cy-pcc - c
cy vy pp64
Caps can be used to control the cost of an incen-
tive mechanism. FT vp c
vy cpp T cp cy
c p v py,
c by, b c
vb c c Cp c v v cy;
k pjc y c
cp p cp, v-
64 Gc Mb, Country Case Studies: Thailand &Tanzania. Feed-in-Tariffs and Small Power Producer Regulations.
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The German Marshall Fund of the United States28
c cc pjc v I
pbc c bc vb,
xp cb, x cpp
FT c b c p by c
cpy v cp
Cp v cpcy b pp pc, c, India Philippines; cp
x b pjc z
, c, Sri Lanka, Thailand, Tanzania,
India N S M
Combining different generation-based incen-
tives can also help control the cost of renewable
energy policy. T b
-b cv
c pjc yp F xp,
FT b c b
ppc c c yb pjc B cy
RPS cpv b
c, xp y c
cy b c
pjc c yp pjc
c pjc vp FT
bc c
I q c REC c-x
FT, v p pc xby
c y y bv b
pb Sc x India cy c Philippines65
I Ppp, b
REC b y b
y c cv by FT, c
A FT pjc vp
cy c y
, India b c
c b y xp A p
N S M, cpcy
500 MW pjc b ppv FT by
CERC D p pjc
vp, CERC p v c
65 K, Cy C Sy: I
Table 6: Different Rates for Solar PV in India Under FiTs and Competitive Biddingin Gujarat and at the National Level
Commission Date Levelized Cost
per kWh (US$)
without tax
benefts
Levelized Cost per
kWh (US$) with
tax benefts
Discrepancy
Gujarat State
Electricity Commission
(GERC) solar PV FiT
Jy 2010 - 028 -
Central Regulatory
Commission (CERC)
solar FiT
Mc 2010 040 03318 pc
GERC
Central Regulatory
Commission (CERC)
competitive bidding
NSM
Nvb 2010 027 (v) -
32 pc
FT
by
C
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8/6/2019 Grounding Green Power: Bottom-Up Perspectives on Smart Renewable Energy Policy in Developing Countries
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Grounding Green Power 29
c pc b 32 pc FT y pvy ( Tb 6)66
Incentives need to be designed in a way that
limits speculation by imposing penalties or
canceling permits if no generation projects are
built. Mc b
c b cv c
pc cc p
F xp cpcy
b pp p pc
p qy, cp
v ppy p cy vp pjc
pc v p I
pp, c b bck
cpcy cy b W-
c p pc,
xp by p c p pjc
b p pc -
I Thailand, cp pp p
pc VSPP p
y vp pjc
I y cq PPA cv
c y pjc vp
T c cy b pc
py T pb
by c A b
b pjc v 100 kW q,
pjc pc p y
c c cv
cy-pcc -- p O-
y b67
66 Dk, Renewable Electricity and Governance Casesfrom India.
67 Gc Mb, Country Case Studies: Thailand &Tanzania. Feed-in-Tariffs and Small Power Producer Regulations.
INTERNATIONAL SUPPORT: CAPACITY-BUILDING
AND INTERNATIONAL PUBLIC FINANCE
TO ADDRESS INCREMENTAL COSTS WITH
PREDICTABLE GENERATION-BASED INCENTIVES
A pcy v, cv c,
k b vp
c vv,
pbc c I v pp
b y pc, y v
c y pp pc-b c-
v T vv b cpcy b
cc c p-
c-b cv c cv A
xpc p-
FT x vp , S-
S xc y b ppp c
b cpcy c (
Bx 2)
Pv pbc
c cv c
vv c c v
p I b ppc
, b c v vpc c p b
vp
Mc pv v -
k xpv c
-b cv c
pp c b vy cv v v
c T H Lv
Avy Gp L T Fc c
by UN Scy G c
vc k c c
c c pv cp by v k
p68 Sv z
v pp k FT vp c
68 H Lv Avy Gp L T Fc, Reportof the Working Group 7, p 21
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The German Marshall Fund of the United States30
b pp c T
, v c v -
b y vp c bc ypcv k , FT c b
p k Hv, b
FT c b p cp
b y pcy c p
py b
cb vp b, py
xpy vp c b
c c A - pbc c c
pv pc p O
b pp, GET FT ccp,
vp by Dc Bk C C
Av ( Bx 3)
Box 2: South-South Exchange of Experiences Between Thailand and Tanzania1
T b S-S xc xpc b T Tz,
c T xpc vy p pc (SPP/VSPP) p
T p Tz vp SPP ppp cx T
p c T Tz c, ppcb c-
, , p c p SPP c vp
c c, c U S, cb c-
y cp cv vy pb B b cc SPP
c vp vp c Tz vp
ky b
I Mc 2010, W Bk p pv b Tz T k cp T VSPP p T cp
Tz My Ey c, y , pv cy -
y y, c, pjc vp T k cc q T
cp, y c c p v
y v SPP A pjc vp b cy Tz b
cc k cv b p Bkk, c
qp Fc My Ey c ($16 ) -
c v y by cc bk p jp
pc by cc
A xc k y p b y Tz W T pcy
T y p VSPP p T y pp cz VSPP p FT
cc A p, T y c v b Tz y
p SPP c pv c c pp SPP cc
Chris Greacen, Palang Thai
1 F v, C Gc, South-South Policy Transfer: Thailand & Tanzania (W, DC: WRc I, Nvb 22, 2010), p:///vp-cy-b
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Grounding Green Power 31
Box 3: The GET FiT Program
T Gb Ey T F- T P (GET FT) ccv by Dc Bk
C C Av (DBCCA) Jy 2010 p v U
N Scy G Avy Gp Ey C C (AGECC) p
ccp v b y v vp 1 DBCCA p
GET FT, pp c pbc-pv pp pp b
b y c-p y cc
T GET FT ccp b p pv b - pp v 160
xp cp b-p, pv c ppcv b y c
vp k2 I by xp b p p , by
vb c cy p vp b y
T GET FT v c yp pp: 1) c pbc c
c b y cv, 2) k c
c, 3) c cc c -c b c
b v pjc vp
Sc b y pc b p c vp cy cx, GET FT
pp p
pp pcy
by -
(F 2)
I c c,GET FT cb
pbc c
bv-k c
b ccy
p c,
c
pc ccy
k pc
T bz v
c c -
1
F pp, DB C C Av, GET FiT Program: Global Energy Transfer Feed-in Tariffs for DevelopingCountries, vb bccc
2 GET FT b p pp c vp by: A Hc Wk Gp L- Cpv Ac, E-p C J Rc C, UN Dp Ecc Sc A, Ep Rb Ey Cc Gpc, W F Cc, W W Ey Ac, I Rb Ey Ac, PjcCy
3 DB C C Av, GET FiT Plus: De-Risking Clean Energy Business Models in a Developing Country Context, F-c Rp (N Yk: Dc Bk Gp, 2011)
Targeted GET
FiT SupportGET FiT Solution
Avc
F- T
Pv pp py bv-kp by pc y
vc - -,ccz, b c
LP PcA(PPA)
U p pc p-FTy c c c c, c v -cy ck c
M- O-G App-c
Ap FT pcp c p-c-b cv cz - y , pcy -, c
Figure 2: Project types addressed under GET FiT.3
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The German Marshall Fund of the United States32
W p
c FT x , x
c c T C
Dvp Mc (CDM), cb-k
c c Ky Pc,
xp pc-b
c pv c k
k pv ( c,
c b c c pv k pc)69 Cb
vp pv-c
v b vp
c I 2009, v b -
(, b, yp) c
23 pc CDM k70
69 H Lv Avy Gp L T Fc, Reportof the Working Group 8
70 W Bk, State and Trends of the Carbon Market, 2010;H Lv Avy Gp L T Fc,Report of the Working Group 8, p20 I b
y c pc y v CDM pjc b b CDM pjc vp A b pp CDM p b c p-c v pjc pc, xpc c pc, c c v c pc xc pcI c, y b pv byp z ppc b- pjc-by-pjc b c
T c pcz
vp bk c
pp c c v p
vb pv cc-
c c p c py
-cb c T C Iv-
F (CIF) c v
xp k by v p
vp c b p bcv y c cy T
$63 b b Jy 2008
p 2012, c
W Bk vp-
bk T c pp by
j c v
U K, U S, Jp A
My 2011, 14 v v p
CIF T bk ($476
b) c pp py
c y c k -
v c (GHG)
jc vp c71
71 Pycp, C Learning from the Climate Investment Funds,World Resources Institute, Nvb 2010, p:////2010/11/-c-v-
c pv c cp b c c b b
y pjc43I pv c c cv, GET FT ccp
c k by v
pcy c
W pp - pc, GET FT v cz,
pcpv ppc pp b y I c c, pbc c c c
cv , cc c b bz ppp pp
b T GET FT ccp p c c b xby
p pcc cx c b c b, , b b
Christina Hanley, Meister Consultants Group
4 F c py c, : DBCCA (2010), GET FiT, p 18
Box 3: The GET FiT Program (continued)
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Grounding Green Power 33
T CIF, C TcyF (CTF), c b pp vp
c v p c j
pp c
c q -
pp My p pb
p c c pp
-b / y cc c
c c b b pv c
v p by -c
pcc c c c
b y pc (c FT
p) vp cy
I , W Bk ESMAP
c vv c c-
, cc c
pp -c c b
p vy y ppy c
z-cb cy p72 I vp
k Ac xp c c
c p c p c
FT p
Pv x FT
c vp c b
cv y v
x pc FT vp
y c b pcc
vp , cpp, c-
y-pcc, cb FT pv
vy cy v Bc
cc c c, vp c-
v b FT
p
F xp, c Tz SPP
b c b y
c pp vp
pjc b y Tz
c p cy-b
SPP p , b ky
72 W Bk, p://p/p/vv
pp b b 73
I c c, c p b
b vp cy py
c p
pp c-p
y:
FT c c c
c
FT b v c
b cy-pcc c
Cp cpcy pp by FT
c v cp
73 Gc Mb, Country Case Studies: Thailand &Tanzania. Feed-in-Tariffs and Small Power Producer Regulations.
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The German Marshall Fund of the United States34
LESSONS LEARNED:
SMART RENEWABLE ENERGY POLICY NEEDS
STRONG INSTITUTIONS, SOUND PROCESSES,
AND WELL-DESIGNED REGULATIONS
Spy pv -b cv
cv c c b
cp c p
b y py A b
v p pc
p
I pv p, WRI vp -
k b b y v z pcy-
k c y
pcy74 B x pc, -
, cpc ccy
c c b pbc pv v-
b y p,
pp k p
y cy c p b
pv ccy vc
cc, c v c
( Bx 4)
Any generation-based incentive needs to be part
of a broader set of power sector rules and regula-
tions. F xp, cc y
b q p
cc b y pjc
T cc bc -b cv
y p pc c pc
p , b
p pjc c cc A
xp cy b
v cy ,
p, c by pjc
74 Nk B, Investing in Sustainable EnergyFutures. Multilateral Development Banks Investments in EnergyPolicy
I Thailand, SPP/VSPP p c -cc Ty p y
y jc ppc ppc cy
cpc pb cc -
T p c
cc p, bc pv
pcb y v y -
p p pc ccy
b b by y75
D xcy b y
pjc b c c b c-
c c Expc cy pp Mexico
vc p , y cy
vv, pv b c
b v pjc y pc
76
Institutions and procedures for transparent,
accountable, and participatory decision-making
can lead to better decisions and improve public
support for renewable energy programs. G
vc cc pc b
y pcy W pcyk
p pc, y c
y q F xp, b
-b cv, y y k: Wc
c yp pjc b
c? W cpcy ? Wc
ppp c? Wc c-
c b pp
b pjc? I FT , c
ppp b ? W py?
T vby cc k-
xpc c c
p k c I ,
c v p, ccb,
75 Gc Mb, Country Case Studies: Thailand &Tanzania. Feed-in-Tariffs and Small Power Producer Regulations.
76 P B, La Ventosa Mexico Wind Case Study (W-, DC: USAID, Spb 2009)
Creating an Enabling Policy and
Regulatory Framework5
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Grounding Green Power 35
pcpy pc -
cy y q
b y pcy
A cp FT PV
p I bv , k
pp v b,
bc p pjc v-
p b c v
cpcy c-cck Cv cy -
z v py p c
yy b c b
y c pc -
b y - p vp p
Y p cv cy pcp
c-k pc b pc
pc b y -
z Acc vy by
US N Ac Ry Uy
C,
F, cv cy z ck
cy cpcy, c cc
y pc y Sc, y pcv y pc
v by v -
77
T v b xp
v cv cy pcp c y
c W pp cpcy
vp b, c
b pc cx Ay pc
by Hy Pbc Pcy F (HPPF),
P T, NGO Thailandv
b c c p VSPP p
p vp p T p
77 NARUC, T R C Oz EccySc Pc I: R NARUC Gb Svy,2006 Fy- z 38 c p NARUC Gb Svy
Box 4: WRIs 11 Point Framework on Enabling Investments in Sustainable Energy
Policies & Regulations
L- y p
Pc c y ccy
Pc p b y
Acc ccy p
Pc c c ccy c cp
Sby v c p vby b y
p
Institutional Capacity & Governance
Excv c cpcy b ccy
Ry c cpcy v p b ccy pcy
U cpcy p y ccy b
Tpcy pcy, p, y pc ccy
Sk pcy, p, y pc
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8/6/2019 Grounding Green Power: Bottom-Up Perspectives on Smart Renewable Energy Policy in Developing Countries
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The German Marshall Fund of the United States36
c p y ccy bc ppy p 78
I South Africa, I, G Cc, S-
b Ey Ac, NGO v y
p p pc c
p pbc c, c pc
ppcv y -
by c 79
Py y C Ey R Cv
Scy I c p pbc
p b y
byIndian y c80
T y, c v y pc
cc k v v I
, cc
F, ck b b -
b y, c c vby, c,
pc y
ccy pc cv cy z
b ppy yz y c
p , k
p vby q c
T c y b
c v cz
cv cy pcp, c
pcp y cp F cv
cy z, c v
y pc
v T b cyc -
, cv cy z y y
78 P by Spk Nvk, Hy PbcPcy F, 14 A Acp C-c, Bkk 2010: p://ccyvc//2010/12/-14---cp-c-
c79 Tp, Status of Renewable Energy Implementation in South
Africa with a Focus on the REFIT and the Role of Multi-LateralDevelopment Banks
80 Py Ey Gp, C Ey R CvScy I: N C Ecv Pcp,Ocb 2010 , p://ccyvc///C_y__c__p_c10p
y pc, pcp pc b cp by pjc vp
c, p b pp
pc b y
ccy b
Processes should allow for periodic review and
changes to the generation-based incentives if
necessary. I cpcy pc
, v, c b
cc
T vc v
ccc India p
b y pc cc v F
c, Py cpv y ,
, b I v
b p pv pb
yy A pcy v
yy c-
, Py p pc v
c cv pc81
INTERNATIONAL SUPPORT: BUILDING POLICY,
REGULATORY, AND INSTITUTIONAL CAPACITY
W cy, b
v c c-
cy c pv cpv
c pv v by, y
v cy py
c b v pccy
p pv v c y
v, c b y82
S c
p cv b v-
F xp, Gb Ev
81 Py Ey Gp, C Ey R CvScy I: N C Ecv Pcp,Ocb 2010
82 Db, Power Politics: Equity and Environment in ElectricityReform; Nk, Dx, Db, Empowering People: AGovernance Analysis of Electricity.
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Grounding Green Power 37
Fcy (GEF) pp pjc S Ac 2007 , ,
y p b
y, c xp v
FT cy c pv v
b y83
Sy, C Ac, I-Ac
Dvp Bk pv cc -
c pp G, C Rc, P,
vp pcy y
, A Dvp Bk
pp cv Pk, S, I84 B c v pp
cv, c Fc Dvp-
Acy pp y c
p b M85
I c y, W Bk ESMAP -
c vv c, c
cc c, pp -
c c vp p vy
y ppy c z- -cb
cy p86
Nv, 2010, WRI y pppv by vp bk
pp
c b v, c
pc c
pv v b y c-
T c pp cv cy
z pcp cb
pcyk p pc
83 Tp 2010; Nk B, 2010
84 Nk B, 2010
85 p://bc/cc--v-b-c/001B1005261A+-20------p----c---cc?ScSMp=1190
86 W Bk, p://p/p/vv
A vp bk y pp b cv,
y , xp, 79 v-
p pcy by W Bk,
I-Ac Dvp Bk, A
Dvp Bk b 2006 2008, y
pjc v
11-p k b b
y v ( Bx 4)87
M pp c c
pp cv cy z pc-
p cb pcyk p pc I pbc c-
c b y b b,
c b pv p
b pcp Acc yc c
p p cv cy z-
cc cpcy T p c
b c c b
z b k cv cy
z c qby
pc y c b p T ,
, b b y
c v p ppy pp cv cy pcp
c cpcy cv cy pcp
87 Nk, B
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The German Marshall Fund of the United States38
c Ov , IREDA c vby b y pjc
I, c c cc
bk c c c -
b y pjc89
I Brazil, N Dvp Bk
(BNDES) pc c c
b y pjc, c
y 60 pc cy pc
qp90
INTERNATIONAL SUPPORT:
SUBSIDIZED CAPITAL AND RISK MITIGATION TO
ADDRESS INCREMENTAL INVESTMENT NEEDS
AND HIGHER COSTS OF CAPITAL
G by c b v-
, c y
b cy c b
cy b c-p v
b y c Sc b
c c c
c pjc, c v
p c cp v,
c cp k pcp
V v b p
k, c pv
c b bz cp, cb-
c c vp
cv c pck, -
c c c
F xp, R Ey Ep Dv-
p (REED)91 p, UN Ev
P (UNEP) v, pv
cp - cy 89 M, W L, P Financing Renewable Energy,Dcb 2005, K Wb (KW)Eckbk
90 S P, Status of Brazilian Renewable Energy Policy.
91 UNEP REED P p://p///c_/
LESSONS LEARNED:
BETTER FINANCING CONDITIONS ARE CRUCIAL
P c p cp -
-b cv by c v k
p cp
T c v b cc
py b y b vp
vp v y p-
c cv c c
b y, b v k p
c c vby pjc T
p c c x cv y
cc cp p c
T ppc : T
c cp, p b cv by
-b cv A c bv,
b c b y
py by bz cp c ,
cv y ky bjc-
v c p pc T,
ppc b cy bc cp-
c
I Thailand, SPP/VSPPp, v 4 b b
($133 ) 13 cc bk 05
pc c cp
pv p 50 b
($16 ) p pjc p-
4 pc 88
T Indian Rb Dvp Acy
(IREDA) pv - c p
70-80 pc pjc c T
pjc p cpv
cb y - I b p cpcy v
c IREDA b p c
cp k by b pv
88 Gc Mb, Country Case Studies: Thailand &Tanzania. Feed-in-Tariffs and Small Power Producer Regulations.
Providing Attractive
Financing Options6
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Grounding Green Power 39
pv c pjc-by-pjc b92
Sc p c cp
pjc, pv , by pv
vby pjc Hv ppc
pjc c c c
S p v cb b-
z cp F xp, I Rb
Dvp Acy (IREDA) cb
cc c v-
p c c A Dvp
Bk, KW, W Bk,
Gb Ev Fcy pv - c p 70-80 pc pjc
c93
IREDA b p c cp
k by b pv
c Acc c cp by v-
cc c c b
v cv I V, xp,
W Bk c 80 pc
pv by cc bk b
-c b y pjc, by
c cc pjc94
UNEP y c
P S 2004 2007 (PROSOL),
p T c
c y95 PROSOL p
vp k by pv
c pp cpcy -
c cp b
pc T p by
PROSOL p c
pcp bk T, c k
92 C Fc Op, UNEP Rb Ey E-
p Dvp (REED) p://ccp/c//45
93 M, W L, P Financing Renewable Energy,Dcb 2005, K Wb (KW)Eckbk
94 W , 2010
95 Fc C C, UNEP 2008
c c c py p- c-p v b
y c
A xp b
c cv c pck Pp-
p ppc c p T P-
pp Rb Ey B c cb
c pck by c bk cb
pp ky ccy
kck- -
cy U c, c bk pv
p v pp pjc v-p, c 50 pc c
T pv y
c D
I Dvp Acy, Ppp
Exp Ip C Acy, K Exp
Ip Bk, Jp Bk I
Cp96 Sy, I Fc
Cp p Pp-
p pp c bk c
b y pjc by pv cc
c pp c c
p p 50 pc pcp97
96 P H M, Cy C Sy: Ppp(p Rb Ey Pcy Wkp, WRI,W, DC, Nvb 22, 2010)
97 p://ck//16504_0410pp_p
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The German Marshall Fund of the United States40
LESSONS LEARNED:
TECHNICAL CAPACITY AND INFRASTRUCTURE
ARE NECESSARY
Dvp, , p,
b y pjc q pcc cpc-
Sk p,
, p p
b y
cc Pjc qp-
p pc
c vby pjc cc
Svc pv, bk cc
cp, cy vp pjc
A c y b ppy
cp p qp c
ccc v T x,
cy cc cpcy c
b y c, b v
b p b b
T c p
pp c-y -p c p b
cpcy
The unique challenges renewables pose for grid
infrastructure in terms of transmission and inter-
mittency need to be addressed. Rb y
ccc k c
p F, b y c-
b: I b pc
c pp c Y c -
c v b vp
cv k c , c c b
p c vy c
pp c Sc-p py
b y q b c, cc
c b y
c Spc b p
pc k y
Sc, b y vb T ccy pc by
b y c p
y A pb pv
ccy ccy vb
T q p c
y ppy
T ccy pc by b
y c p
y M q
p y bc ppy ccy
ccy cy T-
y, ccp by p ppy W c v
k y
c, p b ppy
y y Fc
ppy c b c p
p W
b y cpcy v pz
pc ccy
c, vc cy,
pc pc, c p -
c cv p
Bundling of renewable energy projects into
clusters can help transmission planners prioritize
geographic areas for building new grid capacity.
T p c v -
cpcy p
c-p b y vp, pjc
b c pcy , c
pp ppcv v T pc
pz q -
p pc,
pv c k, -
c q pppyc c
IMexico, p c pv
Oxc c c
cb b-
vp y T
Building the Necessary
Technical Environment7
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Grounding Green Power 41
Oxc vy y c, p 10,000 MW p
b 2,000 MW pjc
Hv, c
c cc cpcy
c Mxc T
pbc y c c cy
xp pbc T p
b b c
c p cpcy
b vp p by -
I pbc y c
b c pjc vp c -
c py 80 pc c98
INTERNATIONAL SUPPORT:
TECHNICAL CAPACITY BUILDING AT THE
OPERATIONAL LEVEL
By pv pp c b
v v vc
c b, v py
pp by -
pjc v, b k
cc cpcy b
p v
I Cb, Cb, P, xp,
UK Dp I Dvp
vp p-by-p v p-
c-y, , b, y
b vp bc k v
- pb99 I p
by GTZ, DID G qv,
p b y
98 Fcc J B, A Op S Sc DvpT Icc Iv LW F Mxc (W, DC, Ap 1, 2009),p://cbk/INTENERGY/Rc/335544-1232567547944/5755469-1239633250635/Fcc_J_Bp
99 p://vk/4/PDF/Op/R8018Tcc-pp
z 200 , 1,500 vc c y
p C100
Pv pp cp -
b cpc q
b y c, c -
cy I cc c p
p v, A Dvp Bk
pv pp S G Cp
C vp p, c-
c b y ccvy
, p p cy, y 101
100 G Tcc Cp, W p c c pjc, p://z///-pzk/c/8641
101 p://b/Dc/TAR/PRC/43053-01-PRC-TARp
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The German Marshall Fund of the United States42
T k pp yz c vp c b y
pcy c, cc
pcy b c p b y
Scc ppc vy by cy, b
c :
S b y pcy c k
by pcb, c-
cv, -b cv
pc v
S b y pcy vp,
p, p c-
k pc p,
ccb, pcpy
S b y pcy
cy cc cpcy, c
c, c pc
pp py
W pcy x y b cx-
cy-pcc, cc
c pp v
c Pcyk v-p c k
cc pc
pp Cv cy pv
c vp c p
ky pcp cp b
y pcy D
c pp p-
pc c pcp
b y pcy
T pp v U S, Ep, vp
c, b pp
, ppc
z c pp v -
b y c-p vp c T
q vp cy-pccpp pck x c
c c T bc
vc cc pp
pp v by pjc-by-pjc
c cy- c-b
p
b y pcy
T pp v c:
1. Technical assistance, capacity development,
and institution building to help developing
countries develop strategies, targets, and
policies. T c:
A v pcyk
cpcy cc k-
, y c p, ,
v b
y;
A v y
p, ccb,
pcpy c-k pc;
Cpcy b cv cy
z cvy pcp
p y pc,
k b y pcy
cv c;
Spp by - cc c
pjc, bc k
v
cc b b pp
- pp
2. Grant-based international public financing
for generation-based incentives to cover
additional cost. T pp
cy vp y b cc
Recommendations
8
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Grounding Green Power 43
cv pjc-by-pjc pc pp
C y v b
y pc -b
cv pc p ppy
z b
vy y F xp, cy
y , cpp FT
pc, x cp c b c
v p b
c c b b
B
b p v ppc,
ky c v
y c
b y
I ,
b ppp c
-, -c
b pp -b
cv b vp
c
3. Subsidized capital and risk mitigation to
address incremental investment needs and
higher costs of capital. D v
xpc pv
c c pv ,
k v
b y vp
G-b c, c
pv bz cp,
cc c b b
cc cp b qy c
-c pc b y
p
4. Technical capacity building. D
p cy cc cpcy
x pc qp p c ccc, vp, , -
, p b y pjc
c
-cc pjc
V c py pv
pp:
Bilateral development agencies, p
b vp c
x ccy c
k, pcc b c c-
v, c cy
v c pv pp
bv Tcc c,
cpcy b p, c
S-S xc c p
L c
pp b c
B c vp p
vv pp pck T p
c v p ccp
v
Multilateral development banks c W Bk vp
bk, bilateral financial institutions,
export-credit agencies v py
c v k M
vp bk v y
ccy c
vp c c py
p c k v
pbc cp pp
pcy, cpcy
cy c
p pcy
Ex multilateral climate funds
c G C F,
c p, c pv
pp b y pcy
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The German Marshall Fund of the United States44
p cy- -cb p(k NAMA) c v F
x pc, y
bv
International technology cooperation
c I
Rb Ey Acy
UNFCCC cy c c py
p by c k
, S-S xc, cpcy
b
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Grounding Green Power 45
Annex:
Overview of Case Study Countries9Country Expert Focus Material Online
Wkp vb p:///vp-cy-b
Bz Ov S P (Uv-y Sv, Bz C Ey C C)
Pcy x/ --b cv
P, CyC Sy
I Rj Dk (Py Ey Gp), S K (C- I Iy),Nj Upyy (MyP R LvPjc)
Pcy x/ c-; vc; ycc
Cy P,Gvc P,Gvc C Sy
I Fbby T (I E Svc R)
Gvc, - vp bk
P, B PccC S
Ky Mk Hk (c) Ey cc; FT P; RC Sy (S Ac)
Mxc O B (c) FT P
Mcc Mp T (IRENA) R c y; S-S cp; I- pp
P, RC Sy (M E N Ac)
Mzbq Ov S P (v N EccyCc)
C LDC cc ; S-S cp Bz
P
Ppp P M (Rb EyB); Jp Iv (G-
pc)
Pcy x/ c-
P
S Ac H Tp (I) Gvc; - vp bk
P; CyC Sy; Bck REFIT
S Lk Ak Aby (Ey F, Av EyM)
Pcy x/ c-
P; CyC Sy
Tz A Mb Pcy x/ c-; S-S cp- T
Cy P;S-S CpP; CyC Sy
T C Gc Pcy x/ c-
; S-S cp- Tz
Cy P;
S-S CpP; CyC Sy; S-SCp C Sy
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Off i c e s