2015/51 Supported by k nKonw A A weldegdeg e ol n oNtoet e s eSrei r e ise s f ofro r p r&a c t hteh e nEenregryg y Etx itcrea c t i v e s G l o b a l P r a c t i c e The bottom line Scaling Up Access to Electricity: Mini-grids, an increasingly attractive complement to Emerging Best Practices for Mini-Grid Regulation conventional rural electrification, provide electricity to Why is good regulation for mini-grids important? Meanwhile, in developed countries widespread distributed communities that would have to generation using customer-owned technology (such as solar roof wait years for the arrival of the Mini-grids can play an important role in closing the panels) has opened up a range of safe, field-tested technology main grid. Recent innovations energy access gap options that may either be connected to the main grid or integrated have spurred private interest with mini-grids. Finally, recent policy changes leading to lower growth One billion of the world’s people live without electricity, more than in mini-grids, but further half (589 million) in Sub-Saharan Africa. Of these, nearly 87 percent in renewable energy markets in the countries of the Organisation for development will require live in rural areas (World Bank and IEA 2015). While conventional grid Economic Co-operation and Development (particularly in Europe) better regulatory frameworks. extension is playing an important role in bringing electricity to those have provided the impetus for companies around the world to pay Properly structured, light-handed who live without it, its pace often proves to be inadequate, especially greater attention to markets in developing countries. regulation can lower risks to in Sub-Saharan Africa, where electrification rates barely keep up with Despite all these promising developments, renewable energy mini-grid developers through population growth. Despite increasing commitments, government mini-grids in developing countries still face constraints related to transparent rules on issuing budgets in general and national utility budgets in particular are still policy, regulation, and financing. The “Mini-grid Policy Toolkit” pro- licenses, setting tariffs, and stretched thin, and subsidies are insufficient to extend the lines, duced in 2014 by the European Union Energy Initiative’s Partnership preparing for the arrival of the especially when new connections cost upwards of a thousand Dialogue Facility (EUEI undated) provides an excellent overview of country’s main grid. dollars per household. Some of this unmet demand is being satisfied those constraints. Attributes of mini-grids are described in box 1. by off-grid household solutions, such as solar home systems and This brief will focus on enabling regulations for mini-grids, Chris Greacen is an solar lanterns. However, while solar home systems and lanterns are providing an overview of key issues, options, and good practices. independent consultant sufficient for powering efficient lighting and household electronics, While appropriate regulations are not all that is needed to spur focusing on energy access they are generally too small for productive uses like agricultural mini-grid development, regulation is usually one of the first obstacles and renewable energy in that potential developers face and therefore the most urgent issue milling and power tools or the larger appliances desired by many Southeast Asia and Africa. households, such as refrigerators. for governments. We draw on a case study of Tanzania, a pioneer in Stephanie Nsom is a The increasing potential of renewable energy mini-grids is driven setting an enabling and light-handed regulatory framework for mini- World Bank consultant by falling renewable energy (especially solar photovoltaics) costs; grids. Given the urgency of leveraging private sector investments for focusing on energy access radical improvements in efficient appliances, such as robust LED reaching the universal access targets of the international Sustainable and renewable energy in Africa and Haiti. (light-emitting diode) lighting; and the widespread deployment of Energy for All initiative, we also focus on regulatory issues relevant to cell phone-based payment systems (such as M-Pesa), pre-payment private sector entrepreneurs and investors. Dana Rysankova is a senior energy specialist in meters, and cell phone carriers’ internet-based monitoring and con- Mini-grid entrepreneurs need to know that their investment of the World Bank’s Energy trol systems. These factors have greatly lowered the costs of energy time and money will have a reasonable chance not just of being Practice. services provided through mini-grids while improving reliability. repaid but also of returning a profit. A clear and credible regulatory 2 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : Em e r g i n g B e s t P r a c t i c e s f o r M i n i - Gr i d R e g u l a t i o n Box 1. What is a mini-grid? There is no universally accepted definition of mini-grids or their smaller version, micro-grids. The Mini-Grid Policy Toolkit produced by the European Union Energy Initiative’s Partnership Dialogue Facility (EUEI undated) defines them as systems capable of generating from 10kW to 10MW, for mini-grids, and 1kW to 10kW, for micro-grids, and distributing electricity to a limited number of customers via a grid that can operate in isolation from national electricity transmission networks and supply relatively concentrated settlements. Those parameters allow for a very large number of variations. “Mini-grid entrepreneurs Mini-grids can be run by utilities, private companies, communities, or local governments. The support structure needed to develop and operate different need to know that their types of mini-grids depends on the mini-grid’s characteristics. For example, hydro- or solar-powered mini-grids face significant upfront cost barriers compared with diesel mini-grids, although these high upfront costs are compensated by much lower and predictable costs of operation and maintenance investment of time (O&M), making them more sustainable. Privately operated mini-grids require rates of return high enough to repay investors, whereas the main challenge and money will have a of community-run mini-grids is to make sure that tariffs stay high enough to cover O&M. Mini-grids may offer grid-quality service or basic, intermittent service for several hours a day—facts that governments and donors need to have in mind when thinking about financial support for mini-grids. reasonable chance not The U.S. Department of Energy and the National Renewable Energy Laboratory (NREL) are currently developing a quality assurance framework that will just of being repaid but differentiate mini-grid performance levels based on the international Sustainable Energy for All framework for measuring energy access (World Bank and also of returning a profit. IEA 2015) and provide quantitative yardsticks for assessing the power quality and reliability of mini-grid electricity services. A clear and credible regulatory framework that makes and enforces fair framework that makes and enforces fair and efficient decisions in addition, as mini-grid markets develop, competition may develop a timely manner helps entrepreneurs make informed investment for unelectrified villages (villagers may be unwilling to subscribe to and efficient decisions decisions. The key characteristics of such a framework, described a mini-grid that provides less attractive service than a mini-grid in a in a timely manner helps below, include licensing and registration, tariff setting, and what nearby village). entrepreneurs make happens when the main grid reaches the mini-grid. Boxes 2 and 3 Recognizing that applying for and issuing licenses imposes costs informed investment provide examples of how a light-handed regulatory framework may both for the licensee and for the granter of the license, licenses are be applied to various types of mini-grids. generally required only of larger mini-grids. In Tanzania licenses are decisions.” required only for projects that exceed one megawatt (MW). Smaller How do licensing and registration work with projects are allowed to register their businesses rather than apply for a license. Unlike licensing, registration does not require the approval mini-grids? of the regulator. Instead, registration simply allows the regulator and In practice, licensing is required only of large other government agencies to know that the enterprise exists and is mini-grids; smaller project need only be registered providing service. In some cases, however, mini-grid developers may seek a license, A license is a government-granted right to conduct a specified even if one is not required by the regulator. An optional provisional business, based on a determination that the licensed entity has license can secure a site from competition for a limited period of the technical and financial capacity to carry out the business. time and communicate the legitimacy of the planned mini-grid Utility-sector licenses are primarily a form of consumer protection, project to lenders or other key stakeholders. especially in situations where the business is a monopoly provider. License duration should be at least as long as the duration of Mini-grids are a grey area in this regard. Even if a mini-grid operator the power purchase agreement (PPA), if the mini-grid is selling a owns the only wires in town, it is also true that customers have other part of its electricity output to the national utility, and at least as options for lighting (kerosene, candles, solar lamps) and power for long as the length of bank loans. In Tanzania, initial regulations set electrical appliances (solar home systems or diesel generators). In license duration at 15 years, but after a few years of experience 3 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : Em e r g i n g B e s t P r a c t i c e s f o r M i n i - Gr i d R e g u l a t i o n with the country’s small power producer (SPP) program, this is approach to mini-grids would likely hurt the final customers most— being expanded to accommodate licenses up to 25 years with an by penalizing innovative business models that are leveraging energy option to renew within six months of expiration. In Sri Lanka and efficiency gains and focusing on providing energy services to their Uganda, license duration for SPPs is 20 years. The license application users. process includes a requirement that the public be notified via Tariffs should not be restricted to the “national uniform tariff” “Tariffs should not be local newspaper and that there be a public comment period (two common in many countries, which requires that city dwellers and restricted to the national weeks in Tanzania). A public comment period is also warranted if a rural residents be charged the same tariffs. Again, this may appear license is sold or transferred. Application forms for licenses, tariff counterintuitive, as mini-grid users often operate in poorer areas, but uniform tariff common in approval, annual reporting, and the like should be clear and readily in the absence of sustainable cross-subsidies (from grid customers many countries, which accessible—for example, over the Internet. Rules should specify the to mini-grid customers), variable tariffs are often the only way to requires that city dwellers period within which the regulator must act on a license application ensure sustainable service. For rural households, the choice is not and rural residents be (in Tanzania, it is 30 days after the public comment period ends). between grid and mini-grid supply, but rather between mini-grid Sometimes licensing can be linked to approvals for funding—e.g., and kerosene. However, if funding is available, governments may charged the same tariffs. from rural energy agencies and similar bodies. Close coordination also decide to subsidize the upfront costs of a mini-grid in order to But developers should be reduce the end-user tariff. between funding agencies and regulatory bodies is necessary to permitted to build cross- avoid potential conflicts and unnecessary duplication of processes— In the case of Tanzania, the Tanzanian Energy and Water Utilities subsidization into tariff which raises costs for entrepreneurs and investors. Regulatory Authority (EWURA) encourages mini-grids to submit proposed tariffs using a simple, standardized cost-of-service schedules.” How should regulators handle tariffs? spreadsheet (tinyurl.com/SPPevaluator) to help the regulator make tariff-approval determinations. The regulator has the power to reject A mini-grid developer should be allowed to propose tariffs for being too high if profits are excessive. Regulators may also a tariff structure appropriate for the project wish to retain the power to reject tariffs for being too low (a problem with many community projects) if the project cannot cover its costs Providing electricity to rural customers via mini-grid is almost always even after several years of adding customers. The rationale, of more costly than electrifying urban customers connected to the course, is that a chronic failure to cover costs will affect the project’s national grid. And even among mini-grid solutions, costs vary widely. sustainability in the long run, leading sooner or later to a suspension A multi-MW hydropower project supplying electricity to local industry of service. In Tanzania, projects under 100 kW do not require prior and thousands of households will generally have much lower regulatory review or approval of retail tariffs, but EWURA reserves the costs than will a small solar or diesel mini-grid serving a village of a right to review retail tariffs if it receives complaints from customers. hundred households in a remote area. Developers should be permitted to build cross-subsidization In light of these variations, how should regulators treat tariffs? into tariff schedules. For example, in Tanzania, high-consumption Emerging experience suggests that any attempt by a regulator to customers are charged more in order to help electrify smaller poorer create a mathematical formula to prescribe tariffs for each and customers; in Peru, by contrast, tariffs are set lower for productive every possible case would be overly complicated and would squelch uses than for other customer classes. Mini-grids should be encour- innovation. Instead, developers should be allowed to propose not aged to use anchor customers (telecommunications companies, only retail tariffs that are appropriate for their project, but also agricultural processors) to help guarantee load. For example, EWURA tariff structures (flat rate, energy charge, demand charge, pre-pay, allows mini-grids to enter into power sales contracts with business post-pay, and so forth)—all subject to regulatory approval. This customers without regulatory approval. may appear counterintuitive to regulatory agencies accustomed to very detailed regulation of large utilities, but extending the detailed 4 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : Em e r g i n g B e s t P r a c t i c e s f o r M i n i - Gr i d R e g u l a t i o n How should regulators prepare for the day when • The mini-grid ceases generation and becomes a distribution-only company, purchasing electricity at wholesale for resale through the main grid reaches the mini-grid? its distribution network. Regulators must allow for at least five different • The mini-grid stops distributing but continues to generate, selling situations electricity to the national grid. “One key risk to mini-grid One key risk to mini-grid developers is that the main grid will reach • The national grid purchases the assets of the mini-grid. developers is that the their service area, taking away customers and rendering their invest- • The mini-grid abandons the site and moves its assets to another main grid will reach their ment useless. Regulators need to prepare for the day when top-down location. service area, taking away grid extension and bottom-up decentralized electrification meet. Rules should account for at least five different possibilities: If the mini-grid is to purchase wholesale electricity from the main customers and rendering • The mini-grid continues to generate and to distribute to retail grid (possibilities 1 and 2), it must be built to standards that are safe their investment useless.” customers, while purchasing electricity from the national grid to for utility-power distribution, including pole height and construction, meet peak loads and selling the surplus electricity it generates. conductor dimensions, and spacing. These specifications are typically included in a utility’s distribution code and should be made available to mini-grid developers. The regulation also needs to specify what will happen to retail tariffs at the time of intercon- nection. May the developer still charge a differentiated tariff, or will a uniform tariff apply and will a transition phase will be established? Connecting the distributed generator to the main grid to sell electricity (possi- bilities 1 or 3) requires that the regulator adopt a set of commercial and technical rules that facilitate safe and reliable grid interconnection for SPPs and that the generator and utility comply with these rules. An SPP program typically includes, in addition to interconnection rules, a Installing electrical poles standardized PPA between the utility and to bring electricity to the generator and a standardized tariff. households on the Mwenga Together, these documents provide a mini-grid streamlined approvals process and pro- Photo: Chris Greacen. vide assurances to the mini-grid devel- oper that the utility will purchase the SPP’s electricity at a fair tariff. Examples 5 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : Em e r g i n g B e s t P r a c t i c e s f o r M i n i - Gr i d R e g u l a t i o n Box 2. Devergy solar PV micro-grid in Tanzania Devergy started operations in 2012 and has successfully electrified more than 800 households in six rural communities in Tanzania’s Bagamoyo and Morogoro districts. Devergy’s micro-grids use distributed, networked solar PV with battery storage together with prepayment meters to provide small amounts of electricity (up to 250 watts per household) for lighting, mobile phone-charging, television, fans and other household and small business “Sales of mini-grid assets to appliances. Each micro-grid provides 24-volt DC electricity to between 60 and 400 households. Small inverters can be purchased to allow use of small AC appliances. Devergy is expanding at a rate of about 500 households per month. the national utility should Licenses versus registration. Devergy falls below the 1 MW threshold and therefore is not required to obtain a license. The implications of one be subject to regulatory company installing numerous micro-grids that add up to more than 1 MW will eventually have to be considered by EWURA, the country’s power regulator. intervention to ensure that Regulation of tariffs. The micro-grids do not exceed the 100 kW limit and thus are exempt from prior regulatory review and approval of retail tariffs. a reasonable price is paid Devergy sets its tariffs at 10 to 15 percent below what people pay currently for kerosene, dry-cell batteries, and local phone-charging service, recognizing that a single LED light they sell can replace several kerosene lights. The energy services are offered in packages (daily, weekly, and longer). While Devergy’s for the assets.” tariff expressed as a charge per kWh is a multiple of the national tariff, the company is serving areas that the grid may not reach for years while providing electricity that is generally more reliable than the service provided by the grid in the rural areas that it has reached. In addition, Devergy’s energy packages provide additional benefits to its users, such as access to energy-efficient appliances, including television sets, fans, and refrigerators. Direct comparison with the national tariff can therefore be misleading. The main grid arrives. The distribution network of the Devergy micro-grids is not built to the standard of the AC grid and so could not be assumed by the utility. When the main grid does arrive in an area served by Devergy, the company will either have to remove its equipment and deploy it elsewhere or gamble that enough customers will prefer their Devergy service to a grid connection. This may not be an unreasonable gamble because the grid connection fee—especially if not subsidized—is still significant for poor rural households. In addition, Tanzania’s national grid, TANESCO, suffers from frequent outages during the dry season, whereas Devergy’s micro-grids provide reliable 24-hour power. of SPP regulatory documents in a variety of countries are discussed than average customers pay. The demand charge measures the by Tenenbaum and his colleagues (2014). If the grid-connected mini- peak amount of power (kW) or apparent power (kVA) drawn from grid both produces its own electricity and purchases from the main the utility at any time during a predefined period (typically several grid, then it should have the option of intentionally isolating itself monthly billing cycles). Utilities are concerned about peak power, from the grid—a practice known as “intentional islanding”—provided because they must size infrastructure to meet peak loads. Energy it can disconnect and reconnect safely and without disturbing power charges measure cumulative energy (kWh) consumed over a billing quality. Islanding makes power more reliable for customers and period. As a result, for SPPs, which may need backup electricity only provides better revenue opportunities for the mini-grid operator. for a very short period of time, the demand portion of the backup In situations where the mini-grid is connected to the main grid power can be prohibitively costly. Countries in which SPPs go offline but continues to operate independently of the main grid (as an SPP), frequently because of instability on the national grid should consider the issue of tariffs for backup power also arises. A backup or standby implementing a backup power tariff that has no demand charge, tariff compensates the national utility for providing electricity to an counterbalanced by charges for energy (kWh) that are similar to what SPP when it is not generating enough electricity to meet its loads. regular (nonindustrial) customers pay. The tariffs that most utilities apply for SPPs are identical (or at Sales of mini-grid assets to the national utility (possibility least very similar) to typical industrial power tariffs. These include 4), should be subject to regulatory intervention to ensure that a a hefty “demand charge” and somewhat lower energy charges reasonable price is paid for the assets. Compensation should reflect 6 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : Em e r g i n g B e s t P r a c t i c e s f o r M i n i - Gr i d R e g u l a t i o n the residual value of the asset (after depreciation) and also take into adhere to transparent and publicly available plans for grid electrifi- Make further consideration the fact that that mini-grid assets are more likely to be cation. Doing so allows mini-grid developers to plan investments in connections useful to a utility if built to utility standards. areas that are not scheduled for electrification within a period that is Finally, a developer may elect to abandon the site and move the long enough to allow them to recover their investments. Live Wire 2015/38. “Integrating mini-grid to another location (possibility 5), particularly if the assets Variable Renewable are moveable and the developer wishes to expand to new villages. References Energy into Power System Some small solar-powered mini-grids providing direct current, such EUEI (European Union Energy Initiative). Undated. “Mini-Grid Policy Operations,” by Thomas as the Devergy example presented in box 2, can recover most of Toolkit: Policy and Business Frameworks for Successful Mini-Grid Nikolakakis and Debabrata their assets and reuse them in another location. This is not possible Rollouts.” GiZ, Eschborn, Germany. http://euei-pdf.org. Chattopadhyay. for a large alternating-current grid built according to the utility grid Tenenbaum, Bernard, Chris Greacen, Tilak Siyambalapitiya, and code, such as the Rift Valley example discussed in box 3, would have Live Wire 2015/44. “Mapping James Knuckles. 2014. From the Bottom Up: How Small Power to leave assets behind if it moved and therefore needs to be able to Smart-Grid Modernization in Producers and Mini-Grids Can Deliver Electrification and choose one of the other four possibilities. Power Distribution Systems,” Renewable Energy in Africa. Washington, DC: World Bank. The attractiveness of the five options just described will depend by Samuel Oguah and World Bank and IEA (International Energy Agency). 2015. Progress on specific country circumstances, the type of mini-grid, and the Debabrata Chattopadhyay. Toward Sustainable Energy 2015: Global Tracking Framework developer’s business strategy. It is preferable to set rules for all five Report. Washington, DC: World Bank. possibilities, rather than expect one solution to fit all cases. Beyond regulation, however, the best way to avoid the clash The peer reviewers for this brief were Katherina Glassner and Isabel Netto. between grid electrification and mini-grid development is to set and Box 3. Rift Valley Energy’s Mwenga hydropower mini-grid in Tanzania Rift Valley Energy’s Mwenga mini-grid near Mafinga, Tanzania (www.riftvalley.com/energy/), was commissioned in September 2012. By September 2015, the project had connected more than 1,400 customers in 14 villages, with another 700 applications awaiting completion of the planned network extension. Electricity is either three-phase or single-phase alternating current delivered to pre-paid meters through 204 km of distribution line (160 km high voltage; 44 km low voltage) at standards that exceed those of the national utility. The 4 MW hydropower plant also sells electricity to the national grid, pumping stations that irrigate tea plantations, and a large tea factory. The company intends to grow to serve 5,600 customers in 32 villages. It received a $500/connection grant from Tanzania’s Rural Energy Agency, plus a European Union grant. License versus registration. The Mwenga mini-grid project exceeds 1 MW and has obtained the necessary generation and distribution licenses from EWURA. Regulation of tariffs. Mwenga far exceeds 100 kW in capacity and thus requires regulatory approval for tariffs. Rift Valley Energy chose to set household tariffs at a level close to TANESCO’s then-retail tariffs. Residential customers who use up to 50 kWh per month pay Tsh 60/kWh (about 3 US cents). Once these customers exceed 50 kWh in any month, their tariff rises to 273 Tsh/kWh (about 13 US cents) for subsequent units used in the course of the month. Commercial users, or customers who typically expect to use more than 50 kWh per month, are charged 234 Tsh/kWh (about 11 US cents) for all of their power requirements. The decision to charge national tariffs greatly simplified the regulatory approval process by reducing the risk of political opposition to the project. When the main grid arrives. The distribution network is built to main-grid standards and is already connected to the main grid for wholesale electricity sales. With customers well served by the Mwenga mini-grid project at national utility tariffs, TANESCO has no reason to expand lines into Mwenga’s service territory. Indeed, TANESCO officials have reported that the Mwenga hydropower project is a win-win case for them—relieving pressure from rural communities to expand TANESCO’s rural distribution network and providing valuable end-of-the-line voltage support to help TANESCO serve the nearby town of Mafinga. Get Connected to Live Wire Live Wires are designed for easy reading on the screen and for downloading The Live Wire series of online knowledge notes is an initiative of the World Bank Group’s Energy and self-printing in color or “Live Wire is designed and Extractives Global Practice, reflecting the emphasis on knowledge management and solu- black and white. tions-oriented knowledge that is emerging from the ongoing change process within the Bank for practitioners inside Group. For World Bank employees: and outside the Bank. 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Once a year, the Energy and Extractives Global Practice takes stock of all notes that appeared, reviewing their quality and identifying priority areas to be covered in the following year’s pipeline. Please visit our Live Wire web page for updates: http://www.worldbank.org/energy/livewire e Pa c i f i c 2014/28 ainable energy for all in easT asia and Th 1 Tracking Progress Toward Providing susT TIVES GLOBAL PRACTICE A KNOWLEDGE NOTE SERIES FOR THE ENERGY & EXTRAC THE BOTTOM LINE Tracking Progress Toward Providing Sustainable Energy where does the region stand on the quest for sustainable for All in East Asia and the Pacific 2014/29 and cenTral asia energy for all? in 2010, eaP easTern euroPe sT ainable en ergy for all in databases—technical measures. This note is based on that frame- g su v i d i n had an electrification rate of Why is this important? ess Toward Pro work (World Bank 2014). SE4ALL will publish an updated version of 1 Tracking Progr 95 percent, and 52 percent of the population had access Tracking regional trends is critical to monitoring the GTF in 2015. to nonsolid fuel for cooking. the progress of the Sustainable Energy for All The primary indicators and data sources that the GTF uses to track progress toward the three SE4ALL goals are summarized below. consumption of renewable (SE4ALL) initiative C T I V E S G L O B A L P R A C T I C E ENERGY & EXTRA • Energy access. Access to modern energy services is measured T E S E R I E S F O R T H EIn declaring 2012 the “International Year of Sustainable Energy for energy decreased overall A KNO W L E D G E N Oand 2010, though by the percentage of the population with an electricity between 1990 All,” the UN General Assembly established three objectives to be connection and the percentage of the population with access Energy modern forms grew rapidly. d Providing Sustainable accomplished by 2030: to ensure universal access to modern energy energy intensity levels are high to nonsolid fuels.2 These data are collected using household Tracking Progress Towar services,1 to double the 2010 share of renewable energy in the global surveys and reported in the World Bank’s Global Electrification but declining rapidly. overall THE BOTTOM LINE energy mix, and to double the global rate of improvement in energy e and Central Asia trends are positive, but bold Database and the World Health Organization’s Household Energy for All in Eastern Europ efficiency relative to the period 1990–2010 (SE4ALL 2012). stand policy measures will be required where does the region setting Database. The SE4ALL objectives are global, with individual countries on that frame- on the quest for sustainable to sustain progress. is based share of renewable energy in the their own national targets databases— technical in a measures. way that is Thisconsistent with the overall of • Renewable energy. The note version energy for all? The region SE4ALL will publish an updated their ability energy mix is measured by the percentage of total final energy to Why is this important ? spirit of the work initiative. (World Bank Because2014). countries differ greatly in has near-universal access consumption that is derived from renewable energy resources. of trends is critical to monitoring to pursue thetheGTF in 2015. three objectives, some will make more rapid progress GTF uses to Data used to calculate this indicator are obtained from energy electricity, and 93 percent Tracking regional othersindicators primary will excel and data sources that elsewhere, depending on their the while the population has access le Energy for All in one areaThe goals are summarized below. balances published by the International Energy Agency and the the progress of the Sustainab respective track starting progress pointstowardand the three SE4ALL comparative advantages as well as on services is measured to nonsolid fuel for cooking. access. Accessthat they modern to are able to energy marshal. United Nations. despite relatively abundant (SE4ALL) initiative the resources and support Energy with an electricity connection Elisa Portale is an l Year of Sustainable Energy for To sustain percentage of by the momentum forthe the population achievement of the SE4ALL 2• Energy efficiency. The rate of improvement of energy efficiency hydropower, the share In declaring 2012 the “Internationa energy economist in with access to nonsolid fuels. three global objectives objectives, andathe means of charting percentage of the population global progress to 2030 is needed. is approximated by the compound annual growth rate (CAGR) of renewables in energy All,” the UN General Assembly established the Energy Sector surveys and reported access to modern universalAssistance The World TheseBank and data are the collected International using household Energy Agency led a consor- of energy intensity, where energy intensity is the ratio of total consumption has remained to be accomplished by 2030: to ensure Management Database and the World of theenergy intium of 15 renewable international in the World Bank’s Global agencies toElectrification establish the SE4ALL Global primary energy consumption to gross domestic product (GDP) energy the 2010 share of Program (ESMAP) relatively low. very high energy services, to double Database. measured in purchasing power parity (PPP) terms. Data used to 1 t ’s Household provides Energy a system for regular World Bank’s Energy the global rate of improvemen and Extractives Tracking Framework Health (GTF), which Organization in the energy intensity levels have come and to double the global energy mix, Global Practice. (SE4ALL 2012). based on energy. of renewable The sharepractical, rigorous—yet energy given available calculate energy intensity are obtained from energy balances to the period 1990–2010 global reporting, Renewable down rapidly. The big questions in energy efficiency relative setting by the percentage of total final energy consumption published by the International Energy Agency and the United evolve Joeri withde Wit is an countries individual mix is measured Data used to are how renewables will The SE4ALL objectives are global, economist in with the overall from renewable energy when every resources. person on the planet has access Nations. picks up a way energy that is consistent 1 The universal derived that isaccess goal will be achieved balances published when energy demand in from energy their own national targets through electricity, clean cooking fuels, clean heating fuels, rates the Bank’s Energy and countries differ greatly in their ability calculate this indicator are obtained to modern energy services provided productive use and community services. The term “modern solutions” cookingNations. again and whether recent spirit of the initiative. Because Extractives Global rapid progress and energy for Energy Agency and the United liquefied petroleum gas), 2 Solid fuels are defined to include both traditional biomass (wood, charcoal, agricultural will make more by the refers to solutions International that involve electricity or gaseous fuels (including is pellets and briquettes), and of decline in energy intensity some t of those of efficiency energy and forest residues, dung, and so on), processed biomass (such as to pursue the three objectives, Practice. depending on their or solid/liquid fuels paired with Energy efficiency. The rate stoves exhibiting of overall improvemen emissions rates at or near other solid fuels (such as coal and lignite). will excel elsewhere, rate (CAGR) of energy will continue. in one area while others liquefied petroleum gas (www.sustainableenergyforall.org). annual growth as well as on approximated by the compound and comparative advantages is the ratio of total primary energy respective starting points marshal. where energy intensity that they are able to intensity, measured in purchas- the resources and support domestic product (GDP) for the achievement of the SE4ALL consumption to gross calculate energy intensity Elisa Portale is an To sustain momentum terms. Data used to charting global progress to 2030 is needed. ing power parity (PPP) the International energy economist in objectives, a means of balances published by the Energy Sector International Energy Agency led a consor- are obtained from energy The World Bank and the SE4ALL Global Energy Agency and the United Nations. Management Assistance agencies to establish the the GTF to provide a regional and tium of 15 international for regular This note uses data from Program (ESMAP) of the which provides a system for Eastern Tracking Framework (GTF), the three pillars of SE4ALL World Bank’s Energy and Extractives on rigorous—yet practical, given available country perspective on Global Practice. global reporting, based has access Joeri de Wit is an will be achieved when every person on the planet The universal access goal heating fuels, clean cooking fuels, clean energy economist in 1 agricultural provided through electricity, biomass (wood, charcoal, to modern energy services The term “modern cooking solutions” to include both traditional and briquettes), and Solid fuels are defined the Bank’s Energy and use and community services. biomass (such as pellets 2 and energy for productive petroleum gas), and so on), processed fuels (including liquefied and forest residues, dung, involve electricity or gaseous at or near those of Extractives Global refers to solutions that overall emissions rates other solid fuels (such as coal and lignite). with stoves exhibiting Practice. or solid/liquid fuels paired (www.sustainableenergyforall.org). liquefied petroleum gas Contribute to If you can’t spare the time to contribute to Live Wire, but have an idea for a topic, or case we should cover, let us know! Do you have something to say? We welcome your ideas through any of the following Say it in Live Wire! channels: Via the Communities of Those working on the front lines of energy and extractives development in emerging economies Practice in which you are have a wealth of technical knowledge and case experience to share with their colleagues but active seldom have the time to write for publication. By participating in the Energy Live Wire offers prospective authors a support system to make sharing your knowledge as easy as and Extractives Global possible: Practice’s annual Live Wire • Trained writers among our staff will be assigned upon request to draft Live Wire stories with series review meeting staff active in operations. By communicating directly • A professional series editor ensures that the writing is punchy and accessible. with the team (contact • A professional graphic designer assures that the final product looks great—a feather in your cap! Morgan Bazilian, mbazilian@ worldbank.org) Live Wire aims to raise the profile of operational staff wherever they are based; those with hands-on knowledge to share. That’s your payoff! It’s a chance to model good uroPe and cenT ral asia 2014/29 all in easTern e ble energy for “knowledge citizenship” and participate in the ongoing change process at the Bank, v i d i n g s u s Ta i n a ess Toward Pro 1 Tracking Progr where knowledge management is becoming everybody’s business. A KNOWLEDGE NOT E SERIES FOR THE ENERGY & EXTRACT IVES GLOBAL PRAC TICE rgy Providing Sustainable Ene Tracking Progress Toward Or 2014/5 1 U n d e r s ta n d i n g C O 2 emissiOns frOm the glObal energy seCt THE BOTTOM LINE pe and Cen tral Asia for All in Eastern Euro stand where does the region on the quest for sustaina ble based on that frame- measures. This note is databases—technical updated version of energy for all? The region SE4ALL will publish an has near-universal access to WhyD is this important? ERGY PRACTICE work (World Bank 2014). E G E N O T E S E R I E S F O R T H E E N to electricity, and 93 percent of A K N O W L g regiona l trends is critical monitoring the GTF in 2015. data sources that the GTF uses to Trackin The primary indicator s and the population has access s of the Sustain able Energy for All the three SE4ALL goals are summari zed below. the progres track progress toward Understanding CO Emissions from the Global Energy Sector nonsolid fuel for cooking. is measured to modern energy services THE BOTTOM LINE to Your Name Here t (SE4ALL) initiativ e Energy access. Access connection despite relatively abundan 2 population with an electricity ional Year of Sustainab le Energy for by the percentage of the access to nonsolid fuels. 2 hydropower, the share the energy sector contributes In declaring 2012 the “Internat objectives percenta ge of the population with establish ed three global and the and reported about 40 percent of global of renewables in energy All,” the UN General Assembly using household surveys Why is this issue important? access to modern These data are collected 2030: to ensure universal and the World Become an author has remained emissions of CO2. three- consumption to be accomplished by of renewable energy in in the World Bank’s Global Electrification Database high energy knowledge the share of the 2010 . energy requires very relatively low. Mitigating climate change services, to 1 double ld Energy Database quarters of those emissions rate of improvement Organization’s Househo CO2 intensity levels have come and to double the global Figure 1. CO2 emissions Health Figure 2. energy-related The share of renewable energy in the energy come from six major the global energy mix, sources of CO question s2 emissions to the period 1990–201 0 (SE4ALL 2012). by sector Renewab le energy. emissions by country consumption down rapidly. The big economies. although coal-fired in energy efficiency relative countries setting percenta ge of total final energy mix is measured by the of Live Wire and global, with individual LICs evolve les will opportunities to cut emissions of greenhouse aregases used to plants account for just are how renewab Identifying The SE4ALL objectives le energy resources. Data 0.5% picks upunderstanding of the main sources ofin those a way that is consistent with emis- the overall that is derived from renewab energy balances published 40 percent of world energy when energy demand requires a clear their own national targets in their ability are obtained from calculate this indicator Other Carbonrates for more than 80 percent of differ greatly countries Residential production, they were again and whethersions.recent dioxide (CO2) accounts spirit of the initiative. Because 6% sectors progress Other MICs nal Energy Agency and the United Nations. will make more rapid 15% intensity gas emissions globally, 1 primarily from the burning s, some 10% by the Internatio China improvement of energy efficiency is contribute to your responsible for more than of decline in energytotal greenhouse to pursue the three objective on their Other HICs . The rate of energy sector—defined include toexcel elsewhere, depending Energy efficiency 30% growth rate (CAGR) of energy will continue. of fossil fuels (IFCC 2007). The will 8% in one area while others by the compound annual Energy 70 percent of energy-sector as well as on 41% approxim and heat generation—contributed and compara tive advantages 41 ated Japan 4% energy the ratio of total primary Industry emissions in 2010. despite fuels consumed for electricity respective starting points 20% Russia energy intensity is that they are able to marshal. in 2010 (figure 1). Energy-related intensity, where USA product (GDP) measured in purchas- improvements in some percent of global CO2 emissions the resources and support 7% gross domestic practice and career! up the bulk of such ent of the SE4ALL Other consump tion to India 19% intensity is an at the point of combustion make for the achievem calculate energy countries, the global CO2 Elisa 2 emissions COPortale To sustain momentum transport Road 7% EU terms. Data used to andinare generated by the burning of fossil is needed. global progress to 2030 6% transport fuels, industrial ing power parity (PPP) the International economist objectives, a means of charting balances published by emissions 11% emission factor for energy energy 16% EnergyandSector nonrenewable municipal waste to generate nal Energy Agency led electricity Internatio a consor- are obtained from energy The World Bank and the thewaste, generation has hardly changed United Nations. ent Assistance venting and leakage to establish the emissions SE4ALL Global Energy Agency and the sector at the point and over the last 20 years. and heat. Black carbon and methane Managem tium of 15 international agencies Notes: Energy-related CO2 emissions are CO2 emissions from the energy from the GTF to provide a regional of the for regular This note usesanddata domestic Program (ESMAP) are not included in the analysis presented in this rk note. which provides a system (GTF), of combustion. Other Transport includes international marine aviation bunkers, of SE4ALL for Eastern Extractives Tracking Framewo available Other Sectors rail and pipeline transport; perspect ive on the three include pillars commercial/public World Bank’s Energy and given aviation and navigation, country on rigorous—yet practical, services, agriculture/forestry, fishing, energy industries other than electricity and heat genera- Global Practice. global reporting, based elsewhere; Energy = fuels consumed for electricity and Where do emissions come from? tion, and other emissions not specified as has in the opening paragraph. HIC, MIC, and LIC refer to high-, middle-, access Joeri de Wit is an will be achieved when on the planet heat generation, every person defined The universal access goal of countries heating fuels, energy economistare Emissions concentrated in 1 in a handful to modern energy services provided through electricity, fuels, clean and low-income clean cooking countries. cooking solutions” to include both traditional biomass (wood, charcoal, agricultural The term “modern Source: IEA 2012a. Solid fuels are defined and briquettes), and the Bank’s Energy and use and community services. biomass (such as pellets 2 and come primarily from burning and energy coal for productive electricity or gaseous fuels involve (including liquefied petroleum gas), of and forest residues, dung, and so on), processed Vivien Foster is sector Extractives Global refers to solutions that overall emissions rates at or near those other solid fuels (such as coal and lignite). with stoves exhibiting or solid/liquid fuels paired emissions closely manager for the Sus- The geographical pattern of energy-related CO Practice. gas 2 (www.sustainableenergy forall.org). liquefied petroleum middle-income countries, and only 0.5 percent by all low-income tainable Energy Depart- mirrors the distribution of energy consumption (figure 2). In 2010, ment at the World Bank countries put together. almost half of all such emissions were associated with the two (vfoster@worldbank.org). Coal is, by far, the largest source of energy-related CO2 emissions largest global energy consumers, and more than three-quarters globally, accounting for more than 70 percent of the total (figure 3). Daron Bedrosyan were associated with the top six emitting countries. Of the remaining works for London This reflects both the widespread use of coal to generate electrical energy-related CO2 emissions, about 8 percent were contributed Economics in Toronto. power, as well as the exceptionally high CO2 intensity of coal-fired by other high-income countries, another 15 percent by other Previously, he was an power (figure 4). Per unit of energy produced, coal emits significantly energy analyst with the more CO emissions than oil and more than twice as much as natural 2 World Bank’s Energy Practice. Gas Inventory 1 United Nations Framework Convention on Climate Change, Greenhouse 0.php gas. Data—Comparisons By Gas (database). http://unfccc.int/ghg_data/items/380