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Design and performance of policy instruments to promote the development of renewable energy
This report summarizes the results of a recent review of the emerging experience with the design and implementation of policy instruments to promote the development of renewable energy (RE) in a sample of six representative developing countries and transition economies ('developing countries') (World Bank 2010). The review focused mainly on price- and quantity-setting policies, but it also covered fiscal and financial incentives, as well as relevant market facilitation measures. The lessons learned were taken from the rapidly growing literature and reports that analyze and discuss RE policy instruments in the context of different types of power market structures. The analysis considered all types of grid-connected RE options except large hydropower: wind (on-shore and off-shore), solar (photovoltaic and concentrated solar power), small hydropower (SHP) (with capacities below 30 megawatts), biomass, bioelectricity (cogeneration), landfill gas, and geothermal. The six countries selected for the review included Brazil, India, Indonesia, Nicaragua, Sri Lanka, and Turkey.
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Implementing energy subsidy reforms
Poorly implemented energy subsidies are economically costly to taxpayers and damage the environment. This report aims at providing the emerging lessons form a representative sample of case studies in 20 developing countries that could help policy makers to address implementation challenges, including overcoming political economy and affordability constraints. The sample has selected on the basis of a number of criteria, including the countrys level of development (and consumption), developing country region, energy security and the fuel it subsidies (petroleum fuel, electricity, natural gas). The case studies were supported by data collection related to direct budgetary subsidies, fuel and electricity tariffs, and household survey data.The analysis provides strong evidence of the success of reforms in reducing the associated fiscal burden. For the sample of countries, the average energy subsidy recorded in the budget was reduced from 1.8% in 2004 to 1.3%GDP in 2010. The reduction of subsidies is particularly remarkable for net energy importers. Pass-through of international fuel prices was also notable in the case of electricity generated by fossil fuel. For the sample of countries, the average end-user electricity tariff increased by 50%, from USD 6 cents in 2002 to USD 9 cents per kWh in 2010.In spite of the relatively price inelastic demand for gasoline and diesel, fossil fuel consumption in the road sector (per unit of GDP) declined in the 20 countries examined from 53 (44) in 2002 to about 23 kt oil equivalent per million of GDP in 2008 in the case of gasoline (Diesel). The most notable decline in consumption was recorded in the low and lower middle income countries. This reflects the much higher rate of growth in GDP in this group of countries and underlines the opportunities to influence future consumption behavior rather than modifying
the existing consumption patterns, overcoming inertia and vested interests. Similar trends are recorded for power consumption.While there is no one-size-fits-all model for subsidy reform, implementation of compensatory social policies and an effective communication strategy, before the changes are introduced, reduces helped with the implementation of reforms.
eBook
The design and sustainability of renewable energy incentives
Rapid urbanization and economic growth, new demographic trends, and climate change are key challenges that developing countries must face as they strive to meet growing energy demand. The main objectives of this study are to offer: (a) a global taxonomy of the economic and financial incentives provided by renewable support schemes and (b) an economic modeling of the sustainability and affordability of such support schemes. In an attempt to contribute to the lively debate, this study provides a global taxonomy of the economic and financial incentives provided by renewable energy (RE) support schemes. It summarizes economic models of the sustainability and affordability of such support schemes, alongside operational advice on how the regulatory design may need to be modified to minimize the impact on the budget and be affordable to the poor, as well as how to identify and fill the financing gap. This analytical framework: (a) differentiates and illustrates tradeoffs among local, regional, and national impacts, in the short and long run; (b) captures distributional impacts (since subsidies to cover the incremental costs of RE may have very different beneficiaries); and (c) captures externalities and compares (where possible) alternative projects based on equivalent output and cost (comparing, for example, RE and energy efficiency projects against those using fossil fuels). The report is organized as follows: chapter one gives introduction. Chapter two presents the analytical framework that underpins the case studies, and provides the background for the principal research hypothesis of this report, which is better attention to the principles of economic analysis and market efficiency leads to more sustainable and effective policies. Chapters three to ten present country case studies for Vietnam, Indonesia, Sri Lanka, South Africa, Tanzania, Egypt, Brazil, and Turkey. The conclusions of the study are presented in chapter eleven.
eBook
Transitioning island nations into sustainable energy hubs : emerging research and opportunities
\"This book shows that islands represent great opportunity for demonstrating energy solutions, offering various advantages as laboratory for studying 100% renewable energy sources, can be a great source for export to the mainland. It provides a great understanding of current status in islands worldwide and potential future solutions with several examples assessing the technic-economic potential\"-- Provided by publisher.
Book
Power market structure
The current distribution of power markets around intermediate structures between full integration and unbundling suggests that there has not been a linear path to reform in practice. Instead, many developing countries may retain intermediate structures in the foreseeable future. This possibility exposes a large gap in understanding about power market structures, since most theoretical work has focused on the two extreme structures and there is limited evidence on the impact of unbundling for developing countries.The study reports the evidence from statistical analysis and a representative sample of twenty case studies selected based on the initial conditions, such as income and power system size. It proposes a novel analytical approach to model market structure, together with ownership and regulation, controlling for several variables, as a key determinant of performance across several indicators, including access, operational and financial performance and environmental sustainability. The results of the analysis provide the following conclusions for policy guidance on power market restructuring for developing countries: There seems to be credible empirical basis for selecting a threshold power system size and per capita income level below which unbundling of the power supply chain is not expected to be worthwhile. Indeed a dichotomy emerges between high income countries characterized by a large system size for which unbundling and other reforms are significantly linked to better performance and low income countries characterized by small system power size for which there is no strong evidence that unbundling and other reforms delivered improvements in performance. Unbundling deliver consistently superior results across the board of performance indicators when used as an entry point to implement broader reforms, particularly introducing a sound
regulatory framework, reducing the degree of concentration of the generation and distribution segments of the market by attracting additional number of both public and private players and encouraging private sector participation. Partial forms of vertical unbundling do not appear to drive improvements, probably because the owner was able to continue exercising control over the affairs of the sector and hinder the development of competitive pressure within the power market.
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Energy and global climate change : bridging the sustainable development divide
Energy and Global Climate Change: Bridging the Sustainable Development Divide focuses attention on two urgent global development challenges faced by the UN and its member states: access to sustainable energy for all, and global climate change. This book presents compelling evidence about an often neglected aspect of the energy-climate change-development nexus faced by millions of poor: problems caused by the use of inefficient and polluting energy sources, and the lack of access to sustainable energy services.
Based on a detailed examination of major UN global climate change and sustainable development negotiated outcomes over the course of several decades, this book argues in a powerful and insightful manner that intergovernmental negotiated outcomes aimed at solving the climate change and energy access challenges have been restricted by being placed in different negotiating silos. This \"siloization\" or compartmentalization has resulted in separate tracks of negotiated outcomes on two inextricably linked global development challenges; and, has thereby hindered prospects for integrated action.
This book points out that the existence of these two silos is especially hard to ignore in light of the urgent UN-led quest for an integrated and universal post-2015 development agenda anticipated to be anchored by new sustainable development goals on energy access and climate change. By addressing the heavy reliance on inefficient and polluting energy services which result in indoor air pollution and short lived climate pollutants that tragically impact millions of poor people, this book highlights the unique importance of integrated action on the energy-poverty-climate change nexus in the UN's post-2015 development era.
eBook