2014/20 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: Lighting Africa, a joint IFC and World Bank program The Case of Lighting Africa launched in 2007, was the first private-sector-oriented effort to leverage new LED Why is this case interesting? Expansion of the electrical grid is a long-term solution for many lighting technologies to build unelectrified African households, but off-grid electrification will Africa faces a huge rural electricity deficit have to play a major role if the SE4ALL goal of universal access by sustainable markets that provide safe, affordable, and Global electrification in 2010 was estimated to be about 83 percent. 2030 is to be reached. Many of the benefits of better lighting can modern off-grid lighting to The deficit of 17 percent encompasses some 1.2 billion people,1 be captured through stand-alone home solutions, including solar communities in Africa that lack about half of whom live in Sub-Saharan Africa, where the unelectri- light products such as Pico-PV lanterns and solar home systems access to electricity. By 2030, fied population may actually increase between now and 2030.2 (SHS). Solar’s suitability for off-grid electrification has been affirmed the program aims to enable Most of the unelectrified population relies on fuel-based lighting by growing levels of private investment in solar lighting solutions, the private sector to reach 250 such as kerosene dry cell batteries, candles, and bio-fuels. These technological advancements that have lowered unit costs, increasing million people who now depend sources are costly, dangerous (to health and safety), and hard on the consumer awareness and acceptance, and the ease of tailoring solar on fuel-based lighting. environment, as well as offering inferior lighting. The lack of reliable lighting products to changing needs. access to lighting of good quality limits the productivity of nearly a The primary market for solar lighting solutions is the population quarter of the world’s population, hindering their ability to carry out that presently lacks access to electricity and uses kerosene and basic activities at night or in the early morning, including household other inferior fuels for lighting. But solar-powered lanterns are also chores, reading and schoolwork, and business. popular with people whose access to electricity is unreliable or Achieving universal access to modern energy services is one of intermittent and who experience frequent blackouts and those who the three complementary objectives of the Sustainable Energy for All need portable solutions. (SE4ALL) initiative. Formally launched in the UN General Assembly in Solar lighting is not a static solution. After consumers pay off the September 2012 and co-chaired by the president of the World Bank upfront lantern costs, they usually start accumulated savings that Daniel Murphy is a Group and the UN Secretary-General, SE4ALL calls governments, would have otherwise gone toward purchases of kerosene. These senior energy specialist savings enable consumers to buy more lanterns or larger systems. businesses, and civil society to address urgent energy challenges by in the World Bank’s 2030 (SE4ALL 2012). Lighting Africa, a joint IFC and World Bank program launched in Africa Energy Practice 2007, was the first private-sector-oriented effort to leverage new (dmurphy@worldbank.org). Light-Emitting Diode (LED) lighting technologies to build sustainable Arsh Sharma is an 1 World Bank 2013. markets that provide safe, affordable, and modern off-grid lighting to energy analyst in the 2 In the World Energy Outlook’s business-as-usual scenario (defined as implementation of World Bank’s Energy communities in Africa that lack access to electricity. By 2030 the pro- the government policies and measures that had been enacted by mid-2013), Africa’s unelectri- Practice fied population in 2030 will be larger than it is today (IEA 2013). gram aims to enable the private sector to reach 250 million people (asharma15@worldbank.org). 2 S cali n g U p A ccess t o E lec t r ici t y : T h e C ase o f L i g h t i n g A f r ica who now depend on fuel-based lighting. Low-income households For first-time customers in the non-kerosene category, the initial and small and medium-size enterprises (SMEs) are Lighting Africa’s experience colors future purchase decisions. The poor performance target customers. The goals of the program are to: of substandard lighting devices (with disposable or rechargeable • Demonstrate market viability by supplying companies and batteries) in the US$1–5 price range had biased many consumers investors with intelligence on market size, consumer preferences against modern lighting devices. and behavior, and “base of the pyramid” business models and In 2008, the largely undeveloped and unexplored African off-grid “Before the creation lighting market was devoid of essential information on market poten- distribution channels. of Lighting Africa, the tial, consumer needs and lighting preferences, product attributes and • Remove market barriers and improve the enabling environment solar off-grid market design characteristics, and distribution channels. (i) through a quality assurance program, (ii) by facilitating Restricted access to capital and financing along the entire supply had no system of quality business-to-business partnerships through conferences, chain has been a major impediment to growth of the solar off-grid assurance. More than workshops, and a dedicated website, and (iii) working with market. Lack of domestic and international capital for manufacturers governments to make the policy environment favorable for 95 percent of available also affected distributors, as they could not benefit from supplier off-grid lighting markets. products had not been credit, while local financial institutions were reluctant to lend to • Build sustainable off-grid lighting markets by forming the Global small enterprises with innovative but untested products. Retailers tested for quality.” Off-Grid Lighting Association, institutionalizing quality-assurance also felt the squeeze, as there were no natural providers of capital in methods, and scaling-up and replicating successful business this space (such as microfinance institutions or commercial banks). models. Without access to finance, end users must assume the high upfront Lighting Africa has also helped governments integrate off-grid costs of lanterns. lighting into their electrification programs. Potential consumers lacked awareness about reliable solar-pow- ered lighting products and their benefits. Among those who were What were the key challenges? aware of the products, there was the misperception that portable Barriers affect the supply chain solar products were more expensive than fuel-based lighting. Communication campaigns aimed at key but remote rural customers Sub-Saharan Africa would seem a good market for portable solar are difficult to design and implement when both manufacturers and lighting products, given its low grid penetration, low levels of urban- distributors are cash-strapped. ization, large population, and high energy prices, but Lighting Africa Inconsistent government regulations and a poor business climate encountered challenges across the entire supply chain of the market has been the rule in much of Sub-Saharan Africa, making it hard for as well as in the policy realm and business environment. These the off-grid lighting market to thrive. Policies to incentivize the adop- challenges can be grouped into market barriers and early-stage tion of solar lanterns were either absent or have not been properly development challenges, as discussed below. implemented. Solar components and products in many places were Before the creation of Lighting Africa, the solar off-grid market subject to multiple taxes (import duty, excise duty, value-added tax, had no system of quality assurance. More than 95 percent of and surcharges), increasing the price of product by 5 to 30 percent. available products had not been tested for quality. The region lacked Meanwhile, kerosene subsidies, which suppress demand for modern credible testing facilities and manufacturing standards, which lighting devices, remained the primary tool of government to allowed the quality problems of local manufacturers and distributors increase access to lighting while awaiting extension of the grid. to persist. For most consumers, lighting decisions emerge as a Lighting Africa expected these challenges, but others were choice between kerosene-based and non-kerosene-based sources. unexpected. For example, in its early days, the program anticipated 3 S cali n g U p A ccess t o E lec t r ici t y : T h e C ase o f L i g h t i n g A f r ica that large international businesses would drive the manufactur- Market intelligence. The market for off-grid electrification ing-to-sales supply chain. Instead, small, entrepreneurial firms came existed before Lighting Africa, but intelligence on consumer prefer- to dominate the off-grid lighting market in Sub-Saharan Africa. The ences, distribution, and quality was scarce. Such intelligence was needs, shortcomings, and concerns of these firms varied greatly needed to help emerging players in the supply chain make informed from those of large businesses: business decisions. Lighting Africa’s market intelligence work, • Their limited working capital made them unattractive for such as its report entitled “Solar Lighting for the Base of Pyramid: “Lighting Africa stepped Overview of an Emerging Market” (Lighting Africa 2010), helped to mainstream financing based on balance sheets. Even growth in in to provide public goods the customer base was stunted by lack of operating liquidity. build upstream knowledge by assisting manufacturers, importers, that would benefit the wholesalers, and distributors in understanding market opportunities. • They had limited knowledge of operations and supply chains in Lighting Africa also undertook in-depth market research for five entire nascent industry, the fast-moving consumer goods markets in Sub-Saharan Africa, countries (Ethiopia, Ghana, Kenya, Tanzania, and Zambia) to get especially by helping despite identifying appropriate target markets and understanding detailed consumer insights on pricing, design, and features of off-grid consumer needs. manufacturers to produce lighting products. • They could not find skilled labor (especially technicians). Product quality assurance. Lighting Africa’s quality assurance quality products, educating The absence of any large corporations to provide capacity and efforts provided manufacturers with incentives and opportunities consumers, and helping leadership to transform the business landscape was an overarching to differentiate their products. Early emphasis on quality assurance distributors and retailers challenge faced by the market as a whole. The situation stands in was one of the key reasons why the Lighting Africa program took off. to better understand and marked contrast to the success of mobile telephony in the region, Lighting Africa tested commercially available products on minimum market to consumers.” where large multinational firms presided over rapid change. quality standards. Initially, the minimum requirements included also Lighting Africa stepped in to provide public goods that would performance standards, such as how bright the light is, but these benefit the entire nascent industry, especially by helping manufac- were later removed, and the focus shifted to the truth-in-advertizing turers to produce quality products (a function assured in the telecom to certify that the lantern’s performance is as advertized. Lighting space by large firms with established brands), by educating consum- Africa developed a standardized specification sheet for manufactur- ers, and by helping distributors and retailers to better understand ers to help them communicate about their products effectively and and market to consumers (paralleling the large marketing campaigns credibly (www.lightingafrica.org/specs). undertaken by telecom firms). During the initial phase, only 6 of the 32 products tested passed. To increase the pass rate, Lighting Africa provided services to What solutions were adopted? companies that demonstrated a strong commitment to quality and Lighting Africa addressed market barriers published a series of need-based technical notes. The International Electrotechnical Commission (IEC) has since adopted Lighting Africa’s with targeted interventions test methodology and minimum quality standards as a reference Lighting Africa has remained a constantly evolving program, chang- point for quality assurance of off-grid lighting products. A hundred ing with the off-grid electrification market. The program leverages the products have now been tested using the global IEC technical World Bank’s comparative advantage in supporting governments to specification 622257-9-5. Lighting Africa built its testing capacity for structure activities financed by the public sector, complemented by manufacturers, distributors, nongovernmental organizations, and IFC’s expertise in helping the private sector to develop commercial other stakeholders by partnering with test laboratories in the United markets. States, Germany, and Kenya. As the market evolves toward larger 4 S cali n g U p A ccess t o E lec t r ici t y : T h e C ase o f L i g h t i n g A f r ica lighting systems (such as solar home systems and plug-and-play As the number of distributors grew, Lighting Africa could not solar solutions), Lighting Africa will keep step with the market by provide the same one-on-one support, and so began to phase out providing certifications of these large systems. or outsource some of its support and to become more selective in More than 40 percent of the off-grid lighting market now consists choosing companies with which to engage. To be able to assist a of products that have met minimum quality standards, up from just growing number of local distributors, Lighting Africa developed a risk 3 percent in 2009. More than four million quality-approved products guarantee facility for modern lighting products in partnership with “The obstacles have been sold. the Bank of Africa. encountered—and Lighting Africa has also become an important advocate for Lighting Africa also facilitated access to carbon finance for mod- aggravated—by the small modern off-grid lighting products through the organization of the ern lighting products. The recently updated methodology of the UN Global Off-Grid Lighting Conferences, at which key stakeholders in Framework Convention on Climate Change and Clean Development firms that dominated the the private sector, government, academia, civil society, and the donor Mechanism prequalifies any product that meets the Lighting Africa market, as well as the community come together. standards and targets for CDM projects. growing importance of Lighting Africa’s efforts to focus on market intelligence and Consumer education. Lighting Africa’s consumer education improving the regulatory quality assurance paid off as the program grew quickly in scope and campaigns, which focused on behavior change rather than just and business climate, relevance. However, the obstacles encountered—and aggravated— awareness, helped people with very limited disposable income to by the small firms that dominated the market, as well as the growing make informed buying decisions. Campaigns were piloted in Kenya caused Lighting Africa to importance of improving the regulatory and business climate, caused and Ghana. About 11 million people in Kenya and 676,000 people move to tackle several new Lighting Africa to move to tackle several new issues to ensure contin- in Ghana have been reached through road shows, social and trade issues to ensure continued ued success. Those issues are discussed below. group forums, door-to-door consumer engagements, and retailer success.” Access to finance and business support services. Lighting recruitment drives. Focusing on the rural poor, some 1,300 village Africa leveraged IFC’s investments and advisory services to provide forums have been organized by Lighting Africa in Kenya and Ghana working capital and trade finance to manufacturers and distributors. to educate rural families about the benefits of solar light over The approach evolved over time. Lighting Africa’s first attempt to kerosene. provide access to finance was through a Development Marketplace Because behavioral change campaigns tend to require sub- Grant Competition that offered more than US$3 million in seed stantial funding and the dominant early-stage startups lacked the funding to 16 winning projects. The goal was to encourage innovative necessary financial and human capital capacity, Lighting Africa’s role business and financing models and approaches that delivered was critical. improved lighting products to low-income consumers. Policy and public sector operations. Lighting Africa’s policy As supply chains started to form, Lighting Africa focused on component was not initially part of the program, which had a providing targeted assistance (such as advisory services) to manu- market focus, but it became prominent because of the many policy facturers and distributors. The program helped link manufacturers and regulatory barriers that market participants faced. Most Sub- with local distributors and, through its website, provided a virtual Saharan governments did not consider solar lanterns as credible networking and information-sharing platform. In parallel, Lighting instruments for electrification, favoring kerosene instead. As Lighting Africa engaged local financial institutions to encourage them to lend Africa evolved, it became clear that government support (or at least to distributors and consumers, providing them with information, endorsement) would be necessary for large-scale success. Lighting training, and risk-mitigation instruments. Today, eight microfinance Africa thus began to engage in systematic discussions with govern- institutions help consumers purchase off-grid lighting products that ments, while also carrying out comprehensive policy studies in eight have passed Lighting Africa quality tests. interested countries (Cameroon, the Democratic Republic of Congo, 5 S cali n g U p A ccess t o E lec t r ici t y : T h e C ase o f L i g h t i n g A f r ica Ethiopia, Ghana, Kenya, Rwanda, Senegal, and Tanzania) to identify Figure 1.  Growth in unit sales of quality-approved solar lighting key policy barriers (related to subsidies, taxes, tariffs, standards, products across Sub-Saharan Africa, 2010–14 and procedures) and mitigation strategies. Eventually, governments 4.5 4.1 began to integrate off-grid lighting programs into their rural electrifi- 4.0 3.5 cation initiatives. Five countries have now integrated Lighting Africa 3.0 2.7 Millions 2.5 activities into energy-access projects funded with US$27.7 million in 2.0 “Lighting Africa’s policy World Bank financing. 1.5 1.0 0.8 component … became These changed perceptions about the importance of removing 0.5 0.3 0.04 prominent because of the market barriers resulted in other government actions both within and 0 2010 2011 2012 2013 2014 outside the Lighting Africa program. For example, the government of many policy and regulatory Ethiopia has waived duties on all off-grid lighting products that meet Source: Lighting Africa. barriers that market or exceed Lighting Africa’s recommended performance targets. In participants faced.” Kenya, all imported LED lighting equipment and solar components Figure 2.  Solar lantern sales and household grid connections are exempt from taxation. The Ugandan government implemented a in Kenya, 2010–14 45 percent subsidy on solar equipment as part of its Energy for Rural 850 Transformation program. 900 Solar lantern sales 800 700 Grid connected households What were the key lessons? Thousands 600 500 486 400 348 Lighting Africa was a successful catalyst and 300 196 290 285 292 200 inspired new programs 100 23 59 118 0 2010 2011 2012 2013 2014 Lighting Africa succeeded as a catalyst for the off-grid lighting market in Sub-Saharan Africa. As of December 2013, products approved by Source: Lighting Africa. Lighting Africa had provided more than 11 million people in Africa with clean lighting and better access to energy due to solar lanterns. More than four million units of 58 different off-grid lighting products On the climate front, the program has avoided 274,000 tons of from 32 manufacturers, which have met the global Lighting Africa greenhouse gas emissions, the equivalent of taking 35,000 cars off quality standard, have been sold in 29 African countries through local the road. Upstream, 15 technical briefing notes have helped manu- distributorships since 2010 (figure 1). facturers design and improve their lighting products, and three Eco Another success is apparent in the spectacular trajectory of solar Design notes have explored health and safety issues for consumers, lantern sales in Kenya (figure 2). In 2010, sales of solar lanterns were distributors, and manufacturers. equivalent to just 12 percent of grid-connected households, but by Important lessons were learned during the first phase of the 2014, they far exceeded them, registering a 37-fold increase in sales program. Some interventions were very successful; others could within four years. The intervention in Kenya helped manufacturers have been done differently. The lessons from an independent review and distributors reach a large base of unelectrified people. conducted in 2011 are summarized in table 1, with specific examples to help guide future programs. 6 S cali n g U p A ccess t o E lec t r ici t y : T h e C ase o f L i g h t i n g A f r ica Table 1. Lessons learned during Lighting Africa’s first phase What worked What could have been done differently Lighting Africa was regarded as a highly relevant Market selection criteria for country pilots should be well documented and should be geared to and innovative program that contributed to the emphasize the need for intervention rather than overweighting the existing IFC-WB footprint. “Lighting Africa has development and growth of the market. It was Ghana was not an ideal pilot country as it already had a high electrification rate and an aggressive recognized as an innovative example of base-of- rural grid electrification campaign with subsidized connections. avoided 274,000 tons of pyramid market transformation and best practice for IFC–World Bank collaboration Conversely, Kenya’s success should not serve as a blanket yardstick for all African nations, as Kenya greenhouse gas emissions, has a highly developed entrepreneurial culture with somewhat developed distribution channels and the equivalent of taking a strong tradition of microfinance. 35,000 cars off the road.” Quality standards were a critical component of market Cost-effectiveness is enhanced through scalable activities that have market-wide effects instead of transformations given the high risks of promoting one-to-one advisory support, particularly where IFC and World Bank staff is concerned. inferior products in opaque markets. In the beginning, Lighting Africa worked one-on-one with firms, but as the market grew, this became inefficient. There was a need to wholesale IFC’s support and to focus on companies that could help achieve scale. Cross-cutting platforms, such as industry-wide forums In-country government engagement is critical in ensuring progress even in private-sector-focused and websites, were and remain powerful tools for market transformations with relatively limited public policy dimensions. market mobilization. Lighting Africa conferences have The policy component, which was missing from the pilot initiatives, proved to be a constraint, mobilized key stakeholders and provided a good especially in Ghana. The program needs to try to make governments “own” Lighting Africa as theirs. platform for knowledge exchange. Ethiopia’s government accepted Lighting Africa’s recommendation to allow certified products to enter the country duty-free and provided loans denominated in U.S. dollars to distributors to overcome the barrier imposed by foreign exchange regulations. The program has now distributed more than 100,000 lanterns. Sound ideas are more important than innovative ideas. Interventions that address critical barriers and require on-the-ground engagement need dedicated local specialist resources in addition to global expertise. The Lighting Africa Development Marketplace competition was Lighting Africa’s first engagement Lighting Africa’s financial access program has struggled because of a lack of committed in-country with the market. It chose innovative ideas that were expertise. This component took a long time to develop, and IFC has had difficulty convincing both its not always sound from a business perspective. These investment colleagues and outside investors to provide funding for off-grid lighting companies. lessons were valuable when Tanzania decided to run its own competition with Lighting Africa’s support. Here, where the main criterion was the strength of the business plans, nine out of ten grantees over-delivered on their targets. Where is the program headed? • Solar home systems. Lighting Africa will expand its focus to multi-light and small-scale solar home systems. As the market evolves, so do Lighting Africa’s • Consumer awareness. Lighting Africa will develop additional challenges mixed-media materials to be customized and rolled out at the Going forward, the Lighting Africa program will support the geo- country level. graphic expansion of ongoing activities to enable market-based • Impact evaluation. Impact evaluation experiments will be solutions for affordable, modern off-grid lighting. The following conducted to better understand the outcomes of various challenges will be addressed: program interventions. 7 S cali n g U p A ccess t o E lec t r ici t y : T h e C ase o f L i g h t i n g A f r ica The emergence of the Lighting Asia program is a major develop- Make further ment in scaling up the Lighting Africa program. Lighting Asia provides institutions become more inclined to lend to local distributors. an overview of the off-grid lighting market in India, Bangladesh, However, this has only occurred after years of program implemen- connections Nepal, Cambodia, Indonesia, Pakistan, the Philippines, and Papua tation and as a result of Lighting Africa’s intensive engagement with Live Wire 2014/9. “Tracking New Guinea, offering investors and industry players the opportunity these institutions. Faster solutions in new markets will be needed. access to electricity,” by to serve communities that presently lack access to reliable electricity. Changing markets. The acquisition of basic lighting through Sudeshna Ghosh Banerjee In Africa, Lighting Africa continues to expand to new countries, solar PV lanterns (and the savings those lanterns generate for users) and Elisa Portale. as it is now mainstreamed into World Bank and IFC operations. should cause many consumers to transition to a larger home lighting Lighting Africa also has inspired initiatives from governments and system. Greater emphasis on larger plug-and-play systems will Live Wire 2014/21. “Scaling up other multilateral development banks. For example, GIZ programs ensure that Lighting Africa keeps pace with the needs of consumers. access to electricity: The Case on off-grid electrification in Africa have adopted a market-based Recycling. As the Lighting Africa program winds down, a of Bangladesh,” by Zubair approach similar to Lighting Africa. Governments in Kenya, Tanzania, strategy to recycle the millions of lanterns sold should be developed. Sadeque, Dana Rysankova, and Burkina Faso have launched market-based initiatives in off-grid Raihan Elahi, and Ruchi Soni. electrification. Barclays Bank (Kenya) will soon launch a solar lantern program targeted at youth entrepreneurship and employment. References Live Wire 2014/22. “Scaling With the initial market barriers now largely overcome, challenges IEA (International Energy Agency). 2013. World Energy Outlook 2013. up access to electricity: The and trade-offs for the next level include those discussed below. Paris. Case of Rwanda,” by Paul Building sustainable retail channels. Most of the sales in World Bank. 2013. Global Tracking Framework. Sustainable Energy Baringanire, Kabir Malik, and Kenya were through bulk purchases by nongovernmental organiza- for All Initiative. Washington, DC. http://documents.worldbank. Sudeshna Ghosh Banerjee. tions. Although a growing share of sales now moves through retail org/curated/en/2013/05/17765643/global-tracking-frame- channels and microfinance institutions, profitable retail channels that work-vol-3-3- can reach rural areas are still underdeveloped. Further development main-report. of these retail channels is necessary to ensure long-term sustainabil- Lighting Africa. 2010. Solar Lighting for the Base of Pyramid: Overview ity of off-grid lighting markets. of an Emerging Market. Washington, DC: International Finance Serving difficult markets. Lighting Africa is seeking solutions Corporation. http://www.lightingafrica.org. for so-called difficult markets, such as fragile states and remote SE4ALL (Sustainable Energy for All Initiative). 2012. In Support of the households that are expensive to serve and have a low ability to pay. Objective to Achieve Universal Access to Modern Energy Services There is a trade-off between the objectives of developing markets as by 2030. Technical Report of Task Force 1: New York. http://www. quickly as possible (by supporting manufacturers and distributors in sustainableenergyforall.org/about-us. the markets of their main interest) and ensuring that the populations most in need are served. The program must be pragmatic about how The peer reviewers for this note were Dana Rysankova (senior energy private players perceive difficult market destinations—for example, specialist, World Bank Energy Practice), Arthur Itotia Njagi (senior operations by providing adequate additional incentives. officer, IFC Sustainable Business Advisory practice), and Mohua Mukherjee Providing access to finance. Access to finance remains (senior energy specialist, World Bank South Asia Energy Practice). a major issue for local distributors and retailers. Experience in Kenya has shown that, as the program matures, the local financial 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