the bottom line promoting renewable energy through auctions: … · 2016. 7. 13. · develop...

The boTTom line

Although feed-in tariffs are now the cornerstone of China’s renewable energy policy, auctions have played and continue to play a role in identifying market prices for renewable energy in the country. Experience with the auctioning of wind and solar concessions enabled the Chinese authorities to modify auctions over time to yield accurate information about the costs of generation from renewable sources, allowing them to set feed-in tariffs at efficient levels.

Xiaodong Wang is a senior energy specialist in the East Asia and Pacific Region of the World Bank.

Luiz Barroso is a managing director at PSR, a global electricity and gas

consultancy and research company in Brazil.

Gabriela Elizondo is a senior energy specialist in the World Bank’s Energy Practice.

A k n o w l e d g e n o t e s e r i e s f o r t h e e n e r g y p r A c t i c e

Promoting Renewable energy through Auctions: The Case of China

Why is this case interesting?

China has set aggressive renewable energy targets and introduced policy incentives for rapid market development

China’s experience with the design and deployment of price- and quantity-setting policy instruments to support renewable energy development provides valuable insights on how to design, sequence, and customize different regulatory and market-based mechanisms to develop renewable energy markets. Feed-in tariffs are the corner-stone of the Chinese renewable energy policy framework, while the auctioning of concessions has played the critical role of establishing appropriate feed-in tariff levels.

China is an energy giant. Over the last decade, the country has made extraordinary investments in generation and transmission, more than doubling its installed capacity in just six years (from 519 GW in 2005 to 1,073 GW in 2011) and dramatically expanding access to grid-connected electricity for its 1.3 billion inhabitants. Although China still relies heavily on conventional electricity sources, particu-larly coal, for its expansion, programs to promote renewable energy have gained increased traction, to the point that the country is currently the world leader in total wind power capacity (75 GW at the end of 2013) and ranks third in total solar photovoltaic capacity (18 GW at end 2013) (REN21 2013). Moreover, China’s renewable energy sector has grown very quickly over a short period of time (table 1).

The electricity market in China has passed through several stages, evolving from a vertically integrated monopoly to a system in which generation is separated from transmission and distribution.

In 2007, the market exhibited a diverse and thriving generation segment, with five large generation groups owning 40 percent of total installed capacity and more than 4,000 smaller generation companies owning the rest. The transmission segment is characterized by large regional monopolies dominated by large grid companies, with the State Grid Corporation accounting for 80 percent of the system. The distribution segment has a complex structure, with more than 3,000 companies at the pro-vincial, prefectural, and county levels, a third of which are affiliated with the two largest grid

Table 1. Evolution of Chinese installed capacity and future targets, 2000–2020

Capacity (GW) 2000 2005 20102015

targets2020

targets

Hydropower 79 117 216 290 420

Wind power (on-grid) 0.34 1.26 31 100 200

Biomass energy 1.1 2.0 5.5 13 30

Solar photovoltaic 0.02 0.07 0.8 21 50

% of renewable energy in total primary energy — 7.0% 8.8% 9.5% 15%

Source: 12th Five-Year Plan, Chinese National Energy Administration 2012.

a. The 15 percent target for 2020 is for non–fossil fuel primary energy. Renewable energy likely makes up the vast majority of this total.

A k n o w l e d g e n o t e s e r i e s f o r t h e e n e r g y p r A c t i c e

2014/14

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2 P r o m o t i n G r E n E W A b l E E n E r G y t h r o u G h A u C t i o n s : t h E C A s E o f C h i n A

“The aggressive scale-up

of renewable energy

continued under the

12th Five-Year Plan

(2011–15), with special

focus on increasing the

competitiveness of the

renewables industry

through a combination

of regulatory policies

and market-based

mechanisms.”

companies. It is in this context that the renewable energy market has evolved.

The rapid growth of renewable energy in China followed from the 2005 Renewable Energy Law, one of the first in the developing world. The law, which took effect in 2006, set a solid foundation for achieving the ambitious goals of increasing the share of non–fossil fuel generation (including both renewable and nuclear energy) to 15 percent of primary energy supply by 2020. Although the law was ini-tially intended to support the use of a feed-in tariff, key stakeholders could not agree on the tariff level, and an auction-based concession scheme was adopted to establish market-based tariffs.

The aggressive scale-up of renewable energy continued under the 12th Five-Year Plan (2011–15), with special focus on increasing the competitiveness of the renewables industry through a combina-tion of regulatory policies and market-based mechanisms.

The 12th Five-Year Plan laid out eight priority renewable energy programs, with emphasis on (i) planned large-scale wind power bases (each with an installed capacity of 5–10 GW) in the North, Northeast, and Northwest regions; (ii) off-shore wind development; and (iii) large-scale grid-connected solar photovoltaic bases in desert areas. Complementing the large-scale development of grid-con-nected renewable energy, the plan has also made renewables-based distributed generation a priority, particularly in a hundred planned “New Energy Cities” and 200 planned “Green Counties.”

In addition, the National Energy Administration is preparing a decree to set mandatory non-hydro renewable energy quotas for provinces, grid companies, and large-scale renewable energy developers.

What challenge did China face?

initial renewable energy prices showed significant variation, and the government’s targets were not achieved prior to 2005

The most important milestone in the development of renewable energy in China was the 2005 Renewable Energy Law, which estab-lished a clear roadmap and goals for the development of the industry and cemented the current structure of incentive mechanisms based on auction schemes as a price-discovery mechanism to support the

setting of feed-in tariffs. Introduced partly to respond to growing pressure from the

international community to take action to slow climate change, the law was motivated primarily by local environmental concerns and by national industrial development policy.

Before the 2005 law, under the 9th and 10th five-year plans, China had failed to meet official targets for expansion of renewable energy. A first auction to award wind power concessions was organized in 2003. Before that date, a few isolated wind power initiatives had been undertaken at prices set by local governments with a great degree of variation; most of these projects benefited from concessional finance provided by international donors and did not go through international competitive bidding (figure 1). Before the enactment of the 2005 law, it was unclear who would cover the incremental costs between renewable energy and energy generated from fossil fuels.

In the early rounds of concessioning, the prices bid were lower than the actual costs of production. As a result, some of the contracts awarded were not implemented. This outcome reflected the participation of inexperienced bidders (and the related absence of sufficiently stringent procedures to qualify bidders), as well as the fact that large state-owned enterprises wishing to enter the wind-power business bid very low prices without fear of being outbid, knowing that they could cross-subsidize their wind-power activities from their coal-based generation business.

The lower-than-cost bidding prices had the effect of slowing the expansion of wind power in China, sending the wrong market signals and discouraging wind-power developers as well as companies in the supply chain of wind power manufacturing.

Despite these problems, however, the auctions were effective in revealing costs and establishing cost benchmarks for the setting of more appropriate and economically efficient feed-in tariffs. In 2009, the government issued a “Notice of Improved Feed-in Tariff for Wind,” with geographically differentiated feed-in tariffs in four different regions depending on wind-resource potential, ranging from 0.51 to 0.61 Y/kWh (≈0.07 to 0.09 US$/kWh).

The development of solar photovoltaic followed a similar path—evolving from concessions to feed-in tariffs. The government issued feed-in tariffs for grid-connected solar photovoltaic at 1.0 Y/kWh in 2011 (≈0.15 US$/kWh), based on the concession results, then later


“Despite problems,

auctions were effective

in revealing costs

and establishing cost

benchmarks for the

establishment of more

appropriate and efficient

feed-in tariffs.”

moved to lower, geographically differentiated feed-in tariffs in three regions reflecting their solar resource potential. The regional feed-in tariffs ranged from 0.9 to 1.0 Y/kWh in 2013 (≈0.15 US$/kWh).

Feed-in tariffs for biomass were revised several times during the implementation of the policy. There were two reasons for the revisions. First, the prices paid by many biomass-fired plants for fuel (notably straw from agriculture residues) turned out to be much higher than originally anticipated owing to fuel price volatility. As a result, feed-in tariffs for biomass were raised to factor in the fluctua-tion of biomass fuel prices. Second, feed-in tariffs for biomass were originally designed to yield a fixed premium of 0.25 Y/kWh (0.03 US$/kWh) to top up baseline prices (based on coal-fired power plants) in each province, which resulted in wide discrepancies in biomass tariffs in different parts of the country. Learning from these lessons,

the government reset the feed-in tariff for biomass at a fixed level of 0.75 Y/kWh (≈0.12 US$/kWh).

What solution was adopted?

China has applied successive adjustments to concessions auctions to improve their usefulness in setting appropriate feed-in tariffs

The ability of auction schemes to attract international players, foster competition among investors, and enable the rapid development of nascent economic sectors makes them attractive as a price-discovery mechanism for generation technologies for which feed-in tariffs have not been established (Elizondo-Azuela and Barroso 2014). The use

Figure 1. mean electricity prices for wind power generation projects operational at the end of 2006 (before the auctioning of concessions)

Source: Junfeng, Pengfei, and Hu 2010.

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“The Chinese authorities

had learned that

prequalification criteria,

as well as penalties for

noncompliance and

nonperformance by the

winning bidder, are critical

to the success of auctioned

concessions.”

of auctions enabled the government to gather cost information from renewable energy project developers in order to set appropriate feed-in tariffs, with the auction price being used as a proxy for the actual project cost. In theory, of course, the more competitive the environment, the closer the bidding price will be to the actual costs. By improving the competitiveness of concessions auctions, the gov-ernment was eventually able to find a reasonable price benchmark for power generated from specific technologies (Qiu and Anadon 2012).

While early experience with auctions as price-discovery mecha-nisms had been generally positive (as evidenced by their continued role under the Renewable Energy Law), concerns persisted that the lowest bids received in the auctions were in fact below marginal investment costs. The issue of aggressive bidding was clearly unac-ceptable, as ultimately investors needed to be adequately remuner-ated to ensure the long-term sustainability of the market, as well as the achievement of the national targets. When winning bids in early auctions of concessions proved too low, the minimum price criterion was supplemented with other criteria designed to discourage irratio-nal bidding behavior, to reward technological innovation, and to take into account bidders’ previous experience. The Chinese government also added local content requirements, intending to promote its wind power manufacturing industry and to reduce costs. In the auction launched in 2005, the price criterion made up 40 percent of the index used to compare bids; in the 2006 auction it represented only 25 percent. Even with the addition of the other criteria, the winning bids were still those that offered the lowest prices.

In the 2007 auction, the price criterion was completely rede-signed, so that the advantage would go not to the lowest bidder, but to the bidder that was closest to the average price resulting from all bids, after excluding the highest and lowest bids, which were consid-ered outliers (GWEC 2007). This practice was designed to screen out wild cards (irrational or inexperienced, poorly informed bids).

Ultimately, however, this approach was not retained. In subse-quent auctions for solar plants and offshore wind power generation capacity the minimum price criterion was restored as the basis for selecting the winning bid.

In the meantime, the Chinese authorities had learned that prequalification criteria, as well as penalties for noncompliance and nonperformance by the winning bidder, are critical to the success of auctioned concessions.

Although feed-in tariffs are now the cornerstone of Chinese renewable energy policy, auction mechanisms continue to play a key role in identifying market prices for renewable energy. Since the initial burst of renewable energy auctions in 2003–07 (a period in which five wind power tenders were carried out), tenders for solar photovoltaic have been carried out (in 2008 and 2010), for offshore wind power (2011), and solar thermal (2011).

Feed-in tariffs are now regarded in China as better suited for rapidly expanding renewable capacity than the auction-based schemes. Feed-in-tariff policies provide the same price certainty to investors, while also minimizing bureaucracy and transaction costs (Elizondo-Azuela and Barroso 2014). They do this by including a purchase obligation and rules on how, and how often, prices are modified. If these modifications are made through auctions, investors need to know the frequency and schedule of the auctions.

Today, feed-in tariffs for various technologies in China are competitive and comparable to international benchmarks (Wang and Wu 2013). The levels of FITs in both wind and solar reflect the prices that resulted from auctions (figure 2).

Figure 2. Comparison between Chinese fits and auction results, 2003–14

Source: Authors.

Note: An exchange rate of 6.1 Y/US$ was assumed. FITs for wind power were established in 2009 and vary between 0.51 and 0.61 Y/kWh depending on the wind region. FITs for solar power were initially established in 2011 at 1 Y/kWh (constant throughout the country); in 2013 they were revised to vary between 0.9 and 1.0 Y/kWh, again, depending on region.

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Solar auction prices

Wind auction prices

2013201220102009200820072006200520042003 2011 2014


What is the key lesson?

Auctioning of concessions was an effective price-discovery mechanism for the determination of feed-in tariffs

Auctioning of concessions has played an important role in China’s scale-up of renewable energy, particularly as a price-discovery mechanism for the determination of feed-in tariffs.

The use of auctions for price discovery in China has significantly reduced the likelihood of feed-in tariffs being set above market equilibrium prices, thus avoiding excessive additions of renewable energy capacity and the heavy surcharge on consumers that excess capacity has entailed elsewhere (Elizondo and Barroso 2014). Of course, in China, the risk of excess capacity is mitigated through the country’s very fast load growth and the ease of diluting renewable energy costs in consumers’ electricity bills. Presently, renewable energy costs are passed through to consumers in the form of a surcharge of 0.008 Y/kWh (≈0.0013 US$/kWh).

The chief lesson from China’s experience with auctioning of concessions is that winning bid prices that are lower than actual costs wind up deterring the development of renewable energy. Some of the winning bidders during the first and second rounds of China’s wind-concession auctions were inexperienced players whose goal was to get into the promising wind market first rather than to maxi-mize profits. Some of them did not fully understand the wind-power business, having failed to conduct high-quality feasibility studies and thus lacking sufficient data on the potential of the wind resource. In the later rounds of the wind concessions, large, state-owned power generators dominated the tenders, but their core business was coal-fired power generation, which they used to cross-subsidize the marginal wind business. Even after the government adjusted its criteria for choosing the winners of wind-concession auctions, the winning bids in most cases were still those that had offered the lowest prices. Therefore, careful design of the concession scheme is necessary to ensure the success in the performance of auctions.

China’s policy for the development of renewable energy policy has reflected the country’s specific needs and characteristics (including the size and rapid growth of its energy market). Simply replicating another country’s successful policies with insufficient regard to underlying circumstances is not likely to lead to the most effective choice. The Chinese government is used to regulating prices under its traditional planned economy; in other countries where the government has not refined its price-setting power to the degree seen in China, auctions may be the right choice even if they do not help to perfect a system of efficient feed-in tariffs.

References

Elizondo-Azuela, Gabriela, and Luiz Barroso. 2014. “Promoting Renewable Energy through Auctions: Overview.” Live Wire 2014/12, Energy Practice, World Bank, Washington, DC.

GWEC (Global Wind Energy Council). 2007. China Wind Power Report. Beijing: China Environmental Science Press.

Junfeng, L., S. Pengfei, and G. Hu. “2010 China Wind Power Outlook.” Chinese Renewable Energy Industries Association, GWEC, Greenpeace, 2010.

Qiu, Yueming, and Laura D. Anadon. 2012. The Price of Wind Power in China during Its Expansion: Technology Adoption, Learning-by-Doing, Economies of Scale, and Manufacturing Localization. Energy Economics 34(3): 772–85.

REN21. 2013. Renewables 2013 Global Status Report. Paris: REN21 Secretariat.

Wang, Xiaodong, and Yun Wu. 2013. “China’s Renewable Energy Development Story.” Unpublished paper, East Asia and Pacific Region, World Bank, Washington, DC.

Gabriel Cunha (consultant, PSR) and Yun Wu (consultant, East Asia and Pacific Region, World Bank) provided research support in the preparation of this note, which was peer reviewed by Luiz Maurer (principal industry specialist for climate strategy and business development, IFC) and Katharina Gassner (senior investment climate economist, World Bank Group).

mAke fuRTheR ConneCTions

live Wire 2014/12. “Promoting renewable Energy through Auctions,” by Gabriela Elizondo-Azuela and luiz barroso.

live Wire 2014/13. “Promoting renewable Energy through Auctions: the Case of brazil,” by Gabriela Elizondo-Azuela, luiz barroso, and Gabriel rocha.

live Wire 2014/15. “Promoting renewable Energy through Auctions: the Case of india,” by Ashish Khana and luiz barroso.

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1 T r a c k i n g P r o g r e s s T o w a r d P r o v i d i n g s u s T a i n a b l e e n e r g y f o r a l l i n e a s T a s i a a n d T h e Pa c i f i c

THE BOTTOM LINE

where does the region stand

on the quest for sustainable

energy for all? in 2010, eaP

had an electrification rate of

95 percent, and 52 percent

of the population had access

to nonsolid fuel for cooking.

consumption of renewable

energy decreased overall

between 1990 and 2010, though

modern forms grew rapidly.

energy intensity levels are high

but declining rapidly. overall

trends are positive, but bold

policy measures will be required

to sustain progress.

2014/28

Elisa Portale is an

energy economist in

the Energy Sector

Management Assistance

Program (ESMAP) of the

World Bank’s Energy and Extractives

Global Practice.

Joeri de Wit is an

energy economist in

the Bank’s Energy and

Extractives Global

Practice.

A K N O W L E D G E N O T E S E R I E S F O R T H E E N E R G Y & E X T R A C T I V E S G L O B A L P R A C T I C E

Tracking Progress Toward Providing Sustainable Energy

for All in East Asia and the Pacific

Why is this important?

Tracking regional trends is critical to monitoring

the progress of the Sustainable Energy for All

(SE4ALL) initiative

In declaring 2012 the “International Year of Sustainable Energy for

All,” the UN General Assembly established three objectives to be

accomplished by 2030: to ensure universal access to modern energy

services,1 to double the 2010 share of renewable energy in the global

energy mix, and to double the global rate of improvement in energy

efficiency relative to the period 1990–2010 (SE4ALL 2012).

The SE4ALL objectives are global, with individual countries setting

their own national targets in a way that is consistent with the overall

spirit of the initiative. Because countries differ greatly in their ability

to pursue the three objectives, some will make more rapid progress

in one area while others will excel elsewhere, depending on their

respective starting points and comparative advantages as well as on

the resources and support that they are able to marshal.

To sustain momentum for the achievement of the SE4ALL

objectives, a means of charting global progress to 2030 is needed.

The World Bank and the International Energy Agency led a consor-

tium of 15 international agencies to establish the SE4ALL Global

Tracking Framework (GTF), which provides a system for regular

global reporting, based on rigorous—yet practical, given available

1 The universal access goal will be achieved when every person on the planet has access

to modern energy services provided through electricity, clean cooking fuels, clean heating fuels,

and energy for productive use and community services. The term “modern cooking solutions”

refers to solutions that involve electricity or gaseous fuels (including liquefied petroleum gas),

or solid/liquid fuels paired with stoves exhibiting overall emissions rates at or near those of

liquefied petroleum gas (www.sustainableenergyforall.org).

databases—technical measures. This note is based on that frame-

work (World Bank 2014). SE4ALL will publish an updated version of

the GTF in 2015.

The primary indicators and data sources that the GTF uses to

track progress toward the three SE4ALL goals are summarized below.

• Energy access. Access to modern energy services is measured

by the percentage of the population with an electricity

connection and the percentage of the population with access

to nonsolid fuels.2 These data are collected using household

surveys and reported in the World Bank’s Global Electrification

Database and the World Health Organization’s Household Energy

Database.

• Renewable energy. The share of renewable energy in the

energy mix is measured by the percentage of total final energy

consumption that is derived from renewable energy resources.

Data used to calculate this indicator are obtained from energy

balances published by the International Energy Agency and the

United Nations.

• Energy efficiency. The rate of improvement of energy efficiency

is approximated by the compound annual growth rate (CAGR)

of energy intensity, where energy intensity is the ratio of total

primary energy consumption to gross domestic product (GDP)

measured in purchasing power parity (PPP) terms. Data used to

calculate energy intensity are obtained from energy balances

published by the International Energy Agency and the United

Nations.

2 Solid fuels are defined to include both traditional biomass (wood, charcoal, agricultural

and forest residues, dung, and so on), processed biomass (such as pellets and briquettes), and

other solid fuels (such as coal and lignite).

1 T r a c k i n g P r o g r e s s To wa r d P r o v i d i n g s u s Ta i n a b l e e n e r g y f o r a l l i n e a s T e r n e u r o P e a n d c e n T r a l a s i a

THE BOTTOM LINE



energy for all? The region

has near-universal access to

electricity, and 93 percent of

the population has access


despite relatively abundant

hydropower, the share

of renewables in energy

consumption has remained

relatively low. very high energy

intensity levels have come

down rapidly. The big questions

are how renewables will evolve

when energy demand picks up

again and whether recent rates

of decline in energy intensity

will continue.

2014/29

Elisa Portale is an

energy economist in

the Energy Sector




Global Practice.

Joeri de Wit is an

energy economist in


Extractives Global

Practice.



for All in Eastern Europe and Central Asia




(SE4ALL) initiative


All,” the UN General Assembly established three global objectives

to be accomplished by 2030: to ensure universal access to modern

energy services,1 to double the 2010 share of renewable energy in

the global energy mix, and to double the global rate of improvement

in energy efficiency relative to the period 1990–2010 (SE4ALL 2012).






















the GTF in 2015.



Energy access. Access to modern energy services is measured

by the percentage of the population with an electricity connection

and the percentage of the population with access to nonsolid fuels.2

These data are collected using household surveys and reported

in the World Bank’s Global Electrification Database and the World

Health Organization’s Household Energy Database.

Renewable energy. The share of renewable energy in the energy

mix is measured by the percentage of total final energy consumption

that is derived from renewable energy resources. Data used to

calculate this indicator are obtained from energy balances published

by the International Energy Agency and the United Nations.

Energy efficiency. The rate of improvement of energy efficiency is

approximated by the compound annual growth rate (CAGR) of energy

intensity, where energy intensity is the ratio of total primary energy

consumption to gross domestic product (GDP) measured in purchas-

ing power parity (PPP) terms. Data used to calculate energy intensity

are obtained from energy balances published by the International

Energy Agency and the United Nations.

This note uses data from the GTF to provide a regional and

country perspective on the three pillars of SE4ALL for Eastern




“Live Wire is designed

for practitioners inside

and outside the Bank.

It is a resource to

share with clients and

counterparts.”

1 U n d e r s t a n d i n g C O 2 e m i s s i O n s f r O m t h e g l O b a l e n e r g y s e C t O r

Understanding CO2 Emissions from the Global Energy Sector

Why is this issue important?

Mitigating climate change requires knowledge of the

sources of CO2 emissions

Identifying opportunities to cut emissions of greenhouse gases

requires a clear understanding of the main sources of those emis-

sions. Carbon dioxide (CO2) accounts for more than 80 percent of

total greenhouse gas emissions globally,1 primarily from the burning

of fossil fuels (IFCC 2007). The energy sector—defined to include

fuels consumed for electricity and heat generation—contributed 41

percent of global CO2 emissions in 2010 (figure 1). Energy-related

CO2 emissions at the point of combustion make up the bulk of such

emissions and are generated by the burning of fossil fuels, industrial

waste, and nonrenewable municipal waste to generate electricity

and heat. Black carbon and methane venting and leakage emissions

are not included in the analysis presented in this note.

Where do emissions come from?

Emissions are concentrated in a handful of countries

and come primarily from burning coal

The geographical pattern of energy-related CO2 emissions closely

mirrors the distribution of energy consumption (figure 2). In 2010,

almost half of all such emissions were associated with the two

largest global energy consumers, and more than three-quarters

were associated with the top six emitting countries. Of the remaining

energy-related CO2 emissions, about 8 percent were contributed

by other high-income countries, another 15 percent by other

1 United Nations Framework Convention on Climate Change, Greenhouse Gas Inventory

Data—Comparisons By Gas (database). http://unfccc.int/ghg_data/items/3800.php

middle-income countries, and only 0.5 percent by all low-income

countries put together.

Coal is, by far, the largest source of energy-related CO2 emissions

globally, accounting for more than 70 percent of the total (figure 3).

This reflects both the widespread use of coal to generate electrical

power, as well as the exceptionally high CO2 intensity of coal-fired

power (figure 4). Per unit of energy produced, coal emits significantly

more CO2 emissions than oil and more than twice as much as natural

gas.

2014/5

THE BOTTOM LINE

the energy sector contributes

about 40 percent of global

emissions of CO2. three-

quarters of those emissions

come from six major

economies. although coal-fired

plants account for just

40 percent of world energy

production, they were

responsible for more than

70 percent of energy-sector

emissions in 2010. despite

improvements in some

countries, the global CO2

emission factor for energy

generation has hardly changed

over the last 20 years.

Vivien Foster is sector

manager for the Sus-

tainable Energy Depart-

ment at the World Bank

([email protected]).

Daron Bedrosyan

works for London

Economics in Toronto.

Previously, he was an

energy analyst with the

World Bank’s Energy Practice.

A K N O W L E D G E N O T E S E R I E S F O R T H E E N E R G Y P R A C T I C E

Figure 1. CO2 emissions

by sector

Figure 2. energy-related CO2

emissions by country

Energy41%

Roadtransport

16%

Othertransport

6%

Industry20%

Residential6%

Othersectors

10%China30%

USA19%

EU11%

India7%

Russia7%

Japan 4%

Other HICs8%

Other MICs15%

LICs0.5%

Notes: Energy-related CO2 emissions are CO2 emissions from the energy sector at the point

of combustion. Other Transport includes international marine and aviation bunkers, domestic

aviation and navigation, rail and pipeline transport; Other Sectors include commercial/public

services, agriculture/forestry, fishing, energy industries other than electricity and heat genera-

tion, and other emissions not specified elsewhere; Energy = fuels consumed for electricity and

heat generation, as defined in the opening paragraph. HIC, MIC, and LIC refer to high-, middle-,

and low-income countries.

Source: IEA 2012a.

1 T r a c k i n g P r o g r e s s To wa r d P r o v i d i n g s u s Ta i n a b l e e n e r g y f o r a l l i n e a s T e r n e u r o P e a n d c e n T r a l a s i a

THE BOTTOM LINE



energy for all? The region

has near-universal access to

electricity, and 93 percent of

the population has access


despite relatively abundant

hydropower, the share

of renewables in energy

consumption has remained

relatively low. very high energy

intensity levels have come

down rapidly. The big questions

are how renewables will evolve

when energy demand picks up

again and whether recent rates

of decline in energy intensity

will continue.

2014/29

Elisa Portale is an

energy economist in

the Energy Sector




Global Practice.

Joeri de Wit is an

energy economist in


Extractives Global

Practice.



for All in Eastern Europe and Central Asia




(SE4ALL) initiative


All,” the UN General Assembly established three global objectives

to be accomplished by 2030: to ensure universal access to modern

energy services,1 to double the 2010 share of renewable energy in

the global energy mix, and to double the global rate of improvement

in energy efficiency relative to the period 1990–2010 (SE4ALL 2012).






















the GTF in 2015.



Energy access. Access to modern energy services is measured

by the percentage of the population with an electricity connection

and the percentage of the population with access to nonsolid fuels.2

These data are collected using household surveys and reported

in the World Bank’s Global Electrification Database and the World

Health Organization’s Household Energy Database.

Renewable energy. The share of renewable energy in the energy

mix is measured by the percentage of total final energy consumption

that is derived from renewable energy resources. Data used to

calculate this indicator are obtained from energy balances published

by the International Energy Agency and the United Nations.

Energy efficiency. The rate of improvement of energy efficiency is

approximated by the compound annual growth rate (CAGR) of energy

intensity, where energy intensity is the ratio of total primary energy

consumption to gross domestic product (GDP) measured in purchas-

ing power parity (PPP) terms. Data used to calculate energy intensity

are obtained from energy balances published by the International

Energy Agency and the United Nations.

This note uses data from the GTF to provide a regional and

country perspective on the three pillars of SE4ALL for Eastern




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