This paper studies the optimal transition from existing coal power plants to gas and renewable power under a carbon budget. It solves a model of polluting, exhaustible resources with capacity constraints and adjustment costs (to build coal, gas, and renewable power plants).
... See More + It finds that optimal investment in renewable energy may start before coal power has been phased out and even before investment in gas has started, because doing so allows for smoothing investment over time and reduces adjustment costs. Gas plants may be used to reduce short-term investment in renewable power and associated costs, but must eventually be phased out to allow room for carbon-free power. One risk for myopic agents comparing gas and renewable investment is thus to overestimate the lifetime of gas plants -- e.g., when computing the levelized cost of electricity -- and be biased against renewable power. These analytical results are quantified with numerical simulations of the European Commission's 2050 energy roadmap.
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Policy Research Working Paper WPS6985 JUL 01, 2014
Ratings for the 29.7 MW Karnataka Wind Power Carbon Finance Project for India was as follows: outcomes were satisfactory, the Bank performance was satisfactory, and the project entity performance was also satisfactory.
... See More + Some lessons learned included: carbon finance through Certified Emission Reduction (CER) sale is not an adequate incentive for investors to undertake wind power projects in India on a commercial basis, unless global negotiations have resulted in agreements and thereby the market for CERs becomes predictable. Improving the responsiveness of the CDM process to changes in domestic and global environments is necessary. Changes in policy and global negotiations which are beyond the control of project entities and resultant delays in resolution of such matters placed an unnecessary financial burden and uncertainty on projects, especially where the CER revenues make the project viable. Specifically for the World Bank Group, it is advisable to take up carbon finance projects along with investment operations, otherwise it becomes very difficult to enforce Bank's policies, especially safeguards, even when the project entity might be diligent and has its own robust procedures. The investment helps in accounting for the expenditure likely to accrue to enforce additional measures required to comply with the Bank's policies and hence, easier to enforce the same on the ground.
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Implementation Completion and Results Report 89045 JUN 23, 2014
The development objective of the Wind Power Development Project for Egypt is to develop transmission infrastructure and business models for scaling-up wind power in Egypt.
... See More + This restructuring will bring the following changes: (i) two new sub-components under component A (transmission infrastructure) will be financed from the loan savings under sub-component A1; (ii) the project development objective (PDO) will be amended and the results framework be revised to improve measurability; and (iii) the project closing date will be extended by 24 months from December 31, 2015 to December 31, 2017 to ensure the full achievement of the revised PDO.
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This knowledge note singles out auctions as an important mechanism that has been implemented in a growing number of countries in recent decades.
... See More + It features a case study of auctions designed to promote the generation of electricity from renewable sources in Brazil. The Brazilian experience with wind energy auctions illustrates that even carefully designed policies often must be reconsidered in the light of a complex and changing environment. Many considerations need to be taken into account to ensure competitive prices while also delivering the required renewable energy supply. This case study is interesting, because Brazil's initial success with developing wind capacity had unforeseen consequences. Challenges introduced in the first stage of wind power development had to be solved in the second. The chief challenges were (i) the Brazilian system had to be able to balance supply and demand more accurately; (ii) investors were overoptimistic about the amount of electricity able to be generated; and (iii) the government's arrangements for coordinating the planning of generation and transmission left too little room for error. The benefits offered to the auctioned plants were reduced, as was government involvement in planning and coordinating transmission expansion. The key lesson from this case study is that existing policies should be challenged and revised in response to a changing environment.
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Brief 88695 JUN 13, 2014
Azuela, Gabriela Elizondo; Barroso, Luiz; Cunha, Gabriel
The Executive Directors approved the establishment of the fund as described in the President's memorandum entitled proposal to establish a bio-carbon fund (BioCF).
... See More + The reasons the United States (U.S.) 200 million dollars limit was no longer relevant was due to the change of the carbon market environment and the innovative activities envisaged under tranche 3 of the BioCF, for which the World Bank is currently the only market player that possesses the capacity to pilot these. These reasons are: (a) change of carbon market environment; and (b) activities envisaged under the initiative for sustainable forest landscapes (ISFL) (tranche 3 of the BioCF). The World Bank is the only player that has the capacity to drive this innovation. In order to do this, scaling up to larger levels of fund capital is needed. The Bank will continue to lead by innovation and bridge the gap before new climate negotiations fuel renewed demand for land use credits; the latter is not expected till after 2020 when an international climate agreement may be reached. While tranches 1 and 2 of the BioCF committed U.S. 83.3 million dollars to over 20 projects, tranche 3 is expected to commit U.S. 280 million dollars to up to four programs. Tranche 3 will close by December 2030.
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Memorandum & Recommendation of the President P7766 JUN 09, 2014
This report describes efforts by the ClimateWorks Foundation and the World Bank to quantify the multiple economic, social, and environmental benefits associated with policies and projects to reduce emissions in select sectors and regions.
... See More + The report has three objectives: 1) to develop a holistic, adaptable framework to capture and measure the multiple benefits of reducing emissions of several pollutants; 2) to demonstrate how local and national policymakers, members of the international development community, and others can use this framework to design and analyze policies and projects; and 3) to contribute a compelling rationale for effectively combining climate action with sustainable development and green growth worldwide. By using a systems approach to analyze policies and projects, this work illustrates ways to capitalize on synergies between efforts to reduce emissions and spur development, minimize costs, and maximize societal benefits. This report uses several case studies to demonstrate how to apply the analytical framework. Three simulated case studies analyzed the effects of key sector policies to determine the benefits realized in the United States, China, the European Union, India, Mexico, and Brazil. The sector policies include regulations, taxes, and incentives to stimulate a shift to clean transport, improved industrial energy efficiency, and more energy efficient buildings and appliances. Also presented are results of four simulated case studies that analyzed several sub-national development projects, scaled up to the national level, to determine the additional benefits over the life of each project, generally 20 years. By applying the framework to analyze both types of interventions, this report demonstrates the efficacy of this approach for national and local policymakers, international finance organizations, and others. These case studies show that climate change mitigation and air quality protection can be integral to effective development efforts and can provide a net economic benefit. Quantifying the benefits of climate action can facilitate support from constituencies interested in public health and food and energy security; it can also advance the international discussion of effective ways to address climate change while pursuing green growth. In this report, the chapter 1 provides background information on the pollutants covered in this report and identifies opportunities to achieve both local socioeconomic and global climate objectives by reducing emissions. It also introduces new modeling tools that enable broader economic analysis of emissions-reduction programs. Chapter 2 explains how these tools can be combined to develop an effective framework to analyze policies and projects. Chapter 3 demonstrates the framework, using several policy- and project-based case studies to estimate the multiple benefits of emissions reductions from a regional or national level. Finally, Chapter 4 explores the challenges to operationalizing the framework and presents conclusions from the study.
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The kinetic energy in wind is converted into mechanical power in specialized propeller-driven turbines mounted on towers. A generator inside the turbine converts the mechanical power into electricity.
... See More + Utility-scale wind turbines range in size from 100 kilowatts to as large as several megawatts. Turbines can be built on land or offshore and are grouped into 'wind farms' that provide bulk power to the electrical grid. Smaller turbines are used for homes, telecommunications dishes, and water pumping, sometimes in connection with diesel generators, batteries, and photovoltaic systems. Such hybrid wind systems are typically used in remote, off-grid locations, where a connection to the utility grid is not available. This note focuses on onshore wind energy, which is more widely established and has lower risks than offshore wind.
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This report covers the carbon funds, facilities, and financial instruments managed by the World Bank between January 1, 2013 and December 31, 2013.
... See More + The Carbon Finance unit at the World Bank Group supports putting a price on carbon by providing assistance on and piloting innovative cost-effective climate change mitigation approaches in World Bank client countries. Such approaches include international mechanisms, emissions trading schemes, carbon taxes, and results- based finance. 2013 saw the continuation of two emerging trends in the global carbon pricing landscape: 1) with credits from the Clean Development Mechanism (CDM) worth no more than a few cents and the coverage of the Kyoto Protocol shrinking to 12 percent of global greenhouse gas (GHG) emissions, there was an increasing number of domestic initiatives that are putting a price on carbon; and 2) the Carbon Finance unit continued to develop and deepen innovative financial instruments that support results-based mitigation. In 2013 staff worked with 90 countries, including donors and recipients, to deliver results. The Carbon Finance unit raised $643 million for next generation carbon market initiatives: the Forest Carbon Partnership Facility (FCPF), the Carbon Partnership Facility (CPF), the Partnership for Market Readiness (PMR), the BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL), and the Carbon Initiative for Development (Ci-Dev). These carbon initiatives have a total fund allocation of $1.5 billion, including $0.5 billion committed for technical assistance. Carbon finance has been a valuable instrument in helping to put a price on carbon. While scaling up mitigation activities for maximum impact continues to be a challenge, carbon initiatives such as the CPF, FCPF, and the ISFL are pioneers in supporting large-scale interventions. It is also a matter of putting the right price on carbon. Carbon markets are one way of achieving this. The World Bank Group is moving towards expanding the use of results-based payments and developing the next generation of innovative financial instruments.
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Annual Report 88283 MAY 13, 2014
Hagbrink, Isabel [editor]; Ekman, Maria [editor]; Pakulski, Inge [editor]
This report follows the evolution of carbon pricing around the world. Last year's report mapped the main carbon pricing initiatives. This year the report presents the status of each of these developing initiatives and explores the emerging trends of carbon pricing.
... See More + The focus is on the recent highlights from around the world and on key lessons that can be drawn from the growing experience. Despite the difficult ongoing international climate negotiations, there is an increased focus on climate change policy and several economies are planning, implementing or refining domestic mitigation actions. These activities take careful note of past experiences, mirroring successes and dealing with weaknesses. About 40 national and over 20 sub-national jurisdictions are putting a price on carbon. Together these carbon pricing instruments cover almost 6 gigatons of carbon dioxide equivalent (GtCO2e), or about 12 percent of the annual global GHG emissions. Cooperation remains a key feature of success The international market has been struggling for some time. However, the current spate of domestic action has been buoyed by growing cooperation among regional, national and sub-national stakeholders. Piloting and scaling up carbon pricing on an international level and increasing climate finance through market-based mechanisms is an important first step. The next challenge will be to create a product that is greater than the sum of its parts by converting fragmented initiatives into internationally integrated carbon pricing approaches.
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The objective of the Renewable Energy Integration Project for Turkey is to assist Turkey in meeting its increased power demand by strengthening the transmission system and facilitating large-scale renewable energy generation.
... See More + The project has four components. (1) Development of transmission infrastructure to facilitate faster development of Wind Power Plants (WPPs) component will develop three 380kV 500 MVA highly digitalized sub-stations with associated grid connection structures for evacuation of wind power in the areas of Can, Izmir and Vize. The proposed structures will include high voltage (HV) substations, HV grid interfacing equipment, smart-metering systems, feeders (underground cables), tele-metered dispatch systems, digital protection systems, supervisory systems, and automatic voltage control systems. (2) Smart-grid investments component will strengthen grid operation and management in face of higher wind energy generation. (3) Lapseki 2-Sutluce 2 380 kV Submarine Power Cable component will insure a better inter-connect wind energy locations with other parts of Turkey. (4) Strengthening of transmission networks component will cater the investment needs for 380kV bulk-transmission and 154 kV sub-transmission network expansions to meet rapidly increasing demand and supply.
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The development objective of the Mocha Wind Park Project for Yemen is to increase the supply of cost-effective renewable wind electricity. The project has two components.
... See More + The first component physical investment will support the construction of a wind farm at Mocha of approximately 60 megawatt (MW) generation capacity. This component will initially be implemented by a project management unit (PMU) established under the Ministry of Electricity and Energy (MOEE). The second component consulting services and market development consists of the following sub-components: (i) an international engineering consulting firm employed to assist the PMU in the procurement and contracting of the supply and installation contractor and in the construction supervision of the project throughout the construction phase and the initial operation stage; (ii) an international consulting firm employed to assist MOEE to design tendering procedures and documents for competitive procurement of private-public partnership (PPP) wind projects and to assist MOEE with the tendering process; (iii) advisory service for special purpose company (SPC) which will operate commercially with clear contractual arrangement with the electricity off-taker; (iv) advisory service and instruments for the implementation of regional long-term wind measurement program in three to five wind development zones; (v) consulting service for preliminary environmental and social impact assessments, grid connection planning for promising wind sites; and (vi) other consulting services as needed and capacity building activities, including external audit fees.
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The development objective of the Mocha Wind Park Project for Yemen is to increase the supply of cost-effective renewable wind electricity. The project has two components.
... See More + The first component physical investment will support the construction of a wind farm at Mocha of approximately 60 megawatt (MW) generation capacity. This component will initially be implemented by a project management unit (PMU) established under the Ministry of Electricity and Energy (MOEE). The second component consulting services and market development consists of the following sub-components: (i) an international engineering consulting firm employed to assist the PMU in the procurement and contracting of the supply and installation contractor and in the construction supervision of the project throughout the construction phase and the initial operation stage; (ii) an international consulting firm employed to assist MOEE to design tendering procedures and documents for competitive procurement of private-public partnership (PPP) wind projects and to assist MOEE with the tendering process; (iii) advisory service for special purpose company (SPC) which will operate commercially with clear contractual arrangement with the electricity off-taker; (iv) advisory service and instruments for the implementation of regional long-term wind measurement program in three to five wind development zones; (v) consulting service for preliminary environmental and social impact assessments, grid connection planning for promising wind sites; and (vi) other consulting services as needed and capacity building activities, including external audit fees.
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Ukraine's residential gas and district heating tariffs are among the lowest in Europe, with several negative consequences, such as more subsidies going to the rich, deteriorating quality of services because of underinvestment in gas and district heating companies, high fiscal burden, and energy inefficiency.
... See More + In Ukraine, gas and heating subsidies are mainly captured by well-off people because they tend to use more energy. Low residential gas and district heating tariffs are thus not pro-poor. This brief examines the dichotomy of low tariffs and high costs in Ukraine, and sets forth the following recommendations: 1) increase average residential gas tariffs to equal the price district heating companies pay for gas to produce residential heat; 2) increase residential district heating tariffs to cover full financial cost of service; and 3) improve targeting of social assistance programs.
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Ukraine's residential gas and district heating tariffs are among the lowest in Europe, with several negative consequences, such as more subsidies going to the rich, deteriorating quality of services because of underinvestment in gas and district heating companies, high fiscal burden, and energy inefficiency.
... See More + In Ukraine, gas and heating subsidies are mainly captured by well-off people because they tend to use more energy. Low residential gas and district heating tariffs are thus not pro-poor. This brief examines the dichotomy of low tariffs and high costs in Ukraine, and sets forth the following recommendations: 1) increase average residential gas tariffs to equal the price district heating companies pay for gas to produce residential heat; 2) increase residential district heating tariffs to cover full financial cost of service; and 3) improve targeting of social assistance programs.
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