Sustainable Energy Roadmaps

Alexander Ochs – Worldwatch Institute

December 4th 2012 – COP18 – Doha, Qatar

Ongoing projects • DR wind & solar roadmap (EEP, 2012 - finalized) • Greater Antilles (ICI, 2013) • Caribbean regional roadmap (CARICOM, 2013) • Central America (CDKN/EEP, Phase 1: 2013)

Future plans • Zero-carbon Islands • Pacific islands • Suriname • Africa: Burundi & Rwanda; Nigeria • India • China

Goal

• An energy system that is socially, economically and environmentally sustainable

Our role

• Provide the supporting research

• Help government define goals, design strategy

• Advise on implementation

Theory of change • Overall strategy and individual recommendations only

successful if they get buy-in from key drivers of change – Decision-makers in policy, business (entrepreneurs, project

developer) and finance (investors, banks, international funders)

– Media, NGOs and civil society as important communicators and pressure groups

• Necessitates a paradigm shift • Requires that we demonstrate that

– the outcome is in the clear interest of the people; allow for greater prosperity, security, integrity, happiness

– the pathway is technically, socially, economically, politically and financially feasible

Sustainable Energy

Roadmaps Policy

Recommendations

Vision & Long-Term Goals

Concrete Policy Mechanisms

Governance & Administrative Efficiency

Technical Assessment

Energy Efficiency Potential

Renewable Energy Potential

Grid Solutions

Finance & Policy

Assessment

Gap Analysis

International Support & Cooperation

Domestic Reform and Capacity Building

Socio-Economic Analysis

Levelized Cost of Energy +

Energy Scenarios

Macroeconomic Effects

Financial investment barriers and enablers

Barriers

Fin

an

ce B

arr

iers

Cost of capital

Unavailability of public financing

Unavailability of private loans

Unmanageability of small projects for development banks and international funders

High upfront capital costs

Co

st

Bar

rier

s

Higher Levelized Cost of Energy (LCOE)

Unaccounted external benefits and costs

Market and currency fluctuations

Po

licy Misplaced incentives

Policy and regulatory uncertainty and complication

Enablers

National renewable energy targets

Visio

n

Regulatory policies (Feed-in tariff, RPS, etc.) C

on

crete Po

licies

Fiscal incentives (tax incentives, subsidies, grants)

Public financing (public investment, loans, grants)

Energy market regulations

Trade agreements

Streamlining processes (planning, permitting)

Go

v. &

Ad

min

.

Socio-economic Assessments

Knowledge Barriers

Knowledge gap Worldwatch provides the information that important decision-makers at national, sub-national, and international levels often lack in terms of technical knowledge

Deficient dissemination of information Worldwatch disseminates gathered knowledge to stakeholders, enabling them more effectively and efficiently develop renewable energy projects

Capacity building Technical assessments can be used to more smartly develop the capacity needed to implement renewable energy projects

International knowledge sharing Results of technical assessments are available to a wide range of international stakeholders in the public and private sectors

Technical Assessments

Socio-economic Impacts of RE

Energy Priorities

Security

Economic Priorities

Industry development

Jobs

Social Development

Energy access

Health

Education

Redistribution/Equality

Environmental Integrity

Climate change

Natural resources

Barriers

Co

st B

arri

ers

Unaccounted external benefits and costs

Higher Levelized Cost of Energy (LCOE)

Po

litic

al

Political challenges

Pu

blic

A

ccep

tan

ce

Public opposition

Kn

ow

led

ge

Bar

rier

s Knowledge gap

Capacity development

REMOVE

Barriers

Systemic Vision Energy sector and industry vision

Policy and Regulatory Misplaced incentives, policy/regulatory uncertainty

Cost High LCOE, unaccounted costs, market and currency fluctuations

Finance Cost of capital, unavailability of financing, unmanageability for banks, upfront costs

Political Politicization of key issues, short-term priorities

Entrenched Interest Monopoly/vertical integration, anti-RE lobby

Infrastructure Unsuitability of infrastructure, high cost of development, intermittency/storage

Innovation Patent protection, lack of R&D

Public Acceptance NIMBY, cost of RE to consumers

Knowledge Knowledge gap, capacity building, deficient and uncoordinated dissemination of information

Trade Tariffs, trade disputes

Enablers

Long-term Vision

Policies (policy toolkit)

RE support policies

Climate Policies

Energy Market Regulation

Int’l. Cooperation

Effective Governance and Administration

Policy Analysis and Recommendations

Financial Analysis and Recommendations

Sustainable Energy

Roadmaps

Technical Assessment

Energy Efficiency Potential

Renewable Energy Potential

Grid Solutions

Grid Assessments: DR

• One of the highest rates of distribution losses in the world • Electricity instability costs the country $1 billion every year (3.4% GDP) • Population resorts to inefficient small-scale fossil fuel-based units

RE Maps

The Need for Integrated Planning

Seasonal Variation Daily (Diurnal) Variation

• Great similarities & divergences among countries

• All Caribbean countries can be powered 100% carbon-free

• Enormous wind, solar, biomass, hydro potentials

• Enormous potential for energy efficiency

• Need to build and/or renovate grid

Selected Highlights Technical Assessments

Sustainable Energy

Roadmaps

Socio-Economic Analysis

Levelized Cost of Energy +

Energy Scenarios

Macroeconomic Effects

The Need for LCOE+ Modeling societal costs and benefits

LCOE+ Jamaica • Energy pricing does not

reflect the true costs of different generation options

• LCOE+ modeling adds societal costs and benefits on top of generation costs to help governments make more informed choices in the energy sector

0

5

10

15

20

25

30

35

40

45

USc

/kW

h

Generation Pollution Climate Change

LCOE – No External Costs

0

5

10

15

20

25

30

35

40

45

Oil Steam OilCombustion

Turbine

Oil CombinedCycle

DieselGenerator

Natural GasCombined

Cycle

PetcokeCogeneration

Wind Solar Hydro Bagasse

USc

/kW

h

Generation

LCOE+ with Low External Cost Assumptions

0

5

10

15

20

25

30

35

40

45

Oil Steam OilCombustion

Turbine

Oil CombinedCycle

DieselGenerator

Natural GasCombined

Cycle

PetcokeCogeneration

Wind Solar Hydro Bagasse

USc

/kW

h

Generation Pollution Climate Change

LCOE Projection

0

5

10

15

20

25

30

35

40

45

Oil Steam OilCombustion

Turbine

Oil CombinedCycle

DieselGenerator

Natural GasCombined

Cycle

PetcokeCogeneration

Wind Solar Hydro Bagasse

Usc

/kW

h

2010 2015 2020 2025 2030

Generation Scenarios based on Reference Case Demand Growth

0

2000

4000

6000

8000

10000

12000

2012

2015

2020

2025

2030

2012

2015

2020

2025

2030

2012

2015

2020

2025

2030

2012

2015

2020

2025

2030

GW

h

Petroleum NGPetcoke Renewables

Business As Usual 30% Renewable Energy 50% Renewable Energy 20% Renewable Energy

Cumulative Costs & Savings for Electricity Generation Scenarios: 2012-2030

0

2000

4000

6000

8000

10000

12000

14000

Total Investment Required toMeet Annual Demand

Total Cost of Electricity Generation Total Savings Over Business AsUsual

USD

(In

Mill

ion

s)

Business As Usual 20% Renewable Energy

30% Renewable Energy 50% Renewable Energy

Job Creation Case Study: Direct Jobs in the Solar PV Value Chain

Processing of raw materials

Engineers

Technicians

Manufacture of cells and modules

Engineers

Technicians

Installation and plant construction

Project development analysis

Wholesalers

Solar PV system designers and installers

Construction workers

Meteorologists

Operation and maintenance

Technicians

Maintenance staff

Decommissioning

Construction workers

Materials recyclers

Jobs Creation Estimates per MW for Various Energy Sources over Lifetime of Facilities

Energy technology Construction, installation, and

manufacturing jobs

Operations & maintenance

and fuel processing jobs

Total jobs

Solar PV 0.29 – 1.48 0.12 – 1.00 0.41 – 2.48

Geothermal 0.10 – 0.44 1.67 – 1.79 1.77 – 2.23

Biomass 0.11 – 0.21 1.21 – 1.53 1.32 – 1.74

Solar Thermal 0.18 – 0.41 0.22 – 1.00 0.40 – 1.41

Small Hydro 0.14 1.14 1.28

Nuclear 0.38 0.70 1.08

Wind 0.10 – 0.44 0.14 – 0.40 0.24 – 0.84

Coal 0.21 0.59 0.80

Natural Gas 0.03 0.77 0.80

CO2e Emissions

0

1E+09

2E+09

3E+09

4E+09

5E+09

6E+09

7E+09

8E+09

9E+09

1E+10

2012 2015 2020 2025 2030

kg

Business As Usual 20% Renewable Energy

30% Renewable Energy 50% Renewable Energy

• Islands pay astronomical price for fossil fuel dependency

• Petroleum high share of electricity produced (Jamaica 2009 : 96%)

• All imported (J: Oil import US$2.2 bn/2011, 14.9% of GDP; CARICOM: 23%)

• Sustainable energy solutions lead to major cost savings & social benefits

Selected Highlights Socio-economic Assessments

Sustainable Energy

Roadmaps

Finance & Policy Assessment

Gap Analysis

International Support & Cooperation

Domestic Reform and Capacity Building

Sustainable Energy Finance

• Gap analysis – Lack of finance

– Access to finance, cost of finance etc.

• International sources and cooperation – International climate funds; CDM

– Multi-lateral development banks

– Bilateral aid

• Domestic reform and capacity building – Business and banking sector

Financial Barriers and Enablers

Barriers

Fin

ance

Bar

rier

s

Cost of capital

Unavailability of public financing

Unavailability of private loans

Unmanageability of small projects for development banks and international funders

High upfront capital costs

Co

st B

arri

ers Higher Levelized Cost of Energy (LCOE)

Unaccounted external benefits and costs

Market and currency fluctuations

Po

licy Misplaced incentives

Policy and regulatory uncertainty and complication

Enablers

National renewable energy targets

Visio

n

Regulatory policies (Feed-in tariff, RPS, etc.)

Co

ncrete P

olicie

s

Fiscal incentives (tax incentives, subsidies, grants)

Public financing (public investment, loans, grants)

Energy market regulations

Trade agreements

Streamlining processes (planning, permitting)

Go

v. &

Ad

min

.

Sustainable Energy

Roadmaps Policy

Recommendations

Vision & Long-Term Goals

Concrete Policy Mechanisms

Governance & Administrative Efficiency

Policy Recommendation

• Vision & goals: ”Long, loud & legal”

• Concrete policy mechanisms – EE, RE, grid reliability

– Market mechanisms, regulatory policies, incentive systems, standards, education

• Administrative efficiency & governance – Institutional capacity & interplay; mainstreaming

– MRV; transparency; stakeholder participation

– Working bureaucracy

Administrative Procedure to Obtain a RE Concession in the Dominican Republic

Application for a provisional concession at

CNE

CNE publishes the concession

request in a national

newspaper

CNE publishes the granting of the provisional

concession

Application to Electricity

Supervision Board (SIE)

CNE includes the applicant in the Special

Regime Production

Facilities Register

Granting of provisional concession

Application for a permanent concession

Environmental Impact Study (SEMARENA)

Resource and production

analysis by a company

authorized by CNE

Grid study CDEEE

guarantee of PPA

Guarantee

CNE receives the reports of

the SIE and SEMARENA

Definitive concession

• Long-term vision often exists, can be more ambitious

• Policies & measures exist but often do not work to their full potential; additional policies needed

• Governance & administration need to be strengthened; capacity-building, mainstreaming, simplification

Selected Highlights Policy Assessments

Thank you!