promoting renewable energy through auctions: the case of …...mechanism, for the development of...

The boTTom line

India’s national- and state-level experience with auctions of solar energy products both large and small attests to the flexibility and adaptability of auction mechanisms. Under the National Solar Mission, auctions have been implemented with good results in a variety of settings. Lessons include the importance of clear ideas about key goals and objectives—and about areas where sacrifices can be made. Experience in several states has also underlined the importance of regulatory stability.

Ashish Khana is lead energy specialist in the sustainable development and

energy unit of the South Asia Region at the World Bank.

Luiz Barroso is a managing director at PSR in Brazil.

Promoting Renewable energy through Auctions: The Case of india

Why is this case interesting?

india’s national Solar mission led to concurrent implementations of renewable auction schemes

Although India is the fifth-largest electricity consumer of the world, with an installed capacity of 211 GW as of the end of 2011, the country’s energy sector still has immense potential for growth. A quarter of the country’s population lack access to electricity, and yearly electricity consumption per capita stands at just 684 kWh, less than a third of Brazil’s and around a fifth of China’s. Solving India’s significant supply-side problems would open major opportunities for load growth, and renewable generation could be an important part of such a scenario.

Renewable energy—notably wind and solar—has played an important role as a complement to India’s coal-based electricity generation mix. Attractive fiscal and financial incentives introduced in the 1990s favored the growth of the Indian wind energy sector, to the point that by the end of 2012 the country ranked fifth in the world in installed wind power capacity (19 GW). When India decided to launch its Jawaharlal Nehru National Solar Mission (NSM) in January 2010, policy makers aimed to do for solar power what the previous policies had done for wind, enabling the Indian solar power sector to become an important international player. However, solar energy was not as close to competitiveness in the Indian context as was wind power, requiring greater efforts from policy makers to reach the expansion target.

Under the NSM, the central government initially organized energy auctions to procure new solar capacity. For the longer term,

much of the capacity expansion was to be decentralized to the state level. Motivated to design their own solar policies and targets, many of the state governments adopted auction mechanisms as a central scheme to achieve their goals, inspired largely by the central government’s initiatives. Because the Indian experience was varied, with implementation tailored to local circumstances, It is a valuable case study for the use of auctions to promote renewable energy.

What was the major challenge?

Auction designs had to take into account local peculiarities as well as national objectives

Auctions were to play a central role in the early stages of devel-opment of the NSM. In the NSM mission statement (MNRE 2012), competitive bidding schemes were singled out as important supporting mechanisms specifically for research and development initiatives, ensuring adequate price discovery in contracting for pilot and demonstration projects. In Phase 1, encompassing the years 2010 to 2013, the NSM aimed to build between 1,000 and 2,000 MW of grid-connected solar power. Of that amount, 1,000 MW (that is, between 50 percent and 100 percent of the target) was to be contracted through centralized auctions.

Increasingly, the NSM scheme has relied on decentralized implementations. The NSM mission document states that the keys to promoting solar power over the longer term (culminating in 20 GW of installed capacity by 2022) should be a renewable purchase obligation (RPO) scheme and state-level initiatives. In a policy document produced for NSM’s Phase 2 (2013–17) (GERC 2012), the

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2 P r o M o t I N g r E N E w a b L E E N E r g y t h r o U g h a U c t I o N S : t h E c a S E o f I N d I a

“In Phase 1, the

government placed

equal emphasis on

large-scale concentrated

solar power (CSP) and

solar photovoltaics (PV);

whereas more recent

implementations have

emphasized the PV

technology for its shorter

construction period,

lower prices, and greater

success in most early

implementations.”

government estimated that state policies would be responsible for 60 percent of solar capacity additions during these years. States were given a large degree of autonomy to set and implement local policies, and many have chosen auction schemes to ensure solar capacity expansion at minimum cost. The greater involvement of the states during Phase 2 has posed new challenges of coordination, harmonization of policies, and sharing of best practices among states.

Reducing the impact of renewable energy development on electricity tariffs has been a major concern of both the central and state governments. In general, the higher costs of solar power must ultimately be passed through to final consumers. Auction schemes are useful in this sense, because they tend to minimize costs to consumers (Bridge to India 2012–14), and the NSM has taken further steps to dilute the tariff impact of contracting more expensive solar power. In Phase 1 of the NSM, a so-called “bundling” scheme was used to dilute these costs in a cheaper generation portfolio, whereas in Phase 2 a mechanism known as viability gap funding (VGF) was used to dilute solar costs over time. In a VGF scheme, the government pays a part of the plant’s capital cost up front and ensures a fixed payment per unit of energy delivered for the contract’s duration. Introduction of the VGF scheme in Phase 2 was made necessary by the nonavailability of a cheaper pool of thermal generation for bundling, and made possible by the National Clean Energy Fund’s approval of VGF as a funding source.

India also set the goal of achieving a global leadership role in solar manufacturing. This objective was very prominent in the NSM documents, which discussed the financial and fiscal benefits to be gained, the development of human capital, and other underlying infrastructure and ecosystem enablers. Policy design mechanisms were chosen with these concerns in mind. It was expected that demand for solar equipment stimulated by the NSM would spur the Indian solar manufacturing sector.

The technological routes to the NSM targets were left open, with the NSM aiming to maintain neutrality with respect to technology

choices. That said, the implicit focus of central and state policies has changed over the years. In Phase 1, the government placed equal emphasis on large-scale concentrated solar power (CSP) and solar photovoltaics (PV); whereas more recent implementations have emphasized the PV technology for its shorter construction period, lower prices, and greater success in most early implementations. Another shift in focus has been the more recent development of mechanisms aimed at smaller-scale rooftop implementations, follow-ing the successful commissioning of the first large-scale PV plants.

What results were achieved?

both national- and state-level auctions have led to successful projects

The Indian central government’s experience with auction implemen-tations can be split into three main segments.

Phase 1 auctions. The first centralized auctions for procuring utility-scale solar plants were carried out in August 2010 and August 2011. Extremely important in breaking new ground, these auctions resulted in impressive price discounts that made India one of the cheapest places for solar power in the world (figure 1). The auction demand was split into 500 MW of PV and 500 MW of CSP implemen-tations. CSP plants, which usually involve larger capacities and longer construction times, were seen at the time as an attractive alternative to PV, which had historically been more common worldwide. At least

25

20

15

10

5

0

Ind

ian

ru

pee

s p

er k

Wh

Switzerland

PV procurement price

India batch 1 average

India batch 2 average

Global average

SloveniaIsraelItalyFranceOntario Malaysia Germany

Figure 1. Procurement prices for solar PV projects worldwide

Source: Deloitte.


“In 2013, the central

government conducted

auctions for rooftop

solar generation in

specific cities… While

the awarded capacities

have been small, the use

of bidding processes to

procure smaller-scale

projects is an interesting

departure.”

five of the seven CSP projects that were commissioned, however, suffered serious delays. As a result, more recent policies have focused on PV implementations. Among PV plants, delays have been relatively manageable: 125 MW out of the 140 MW sold in the August 2010 auction were operational in March 2012; and the entire 310 MW sold in the August 2011 auction was operational in May 2013.

Prices and quantities of the most important national- and state-level auctions for solar PV are summarized in figure 2.

The rooftop auctions. In April, July, and December 2013, the central government conducted auctions for rooftop solar generation in specific cities. The product awarded in these auctions involves a capital subsidy for part of the plant’s investment cost. The generator is entitled to sell the electricity in the market. While the awarded capacities have been small (a total of 25.5 MW in the three auctions combined), the use of bidding processes to procure smaller-scale projects is an interesting departure.

The Phase 2 auction. No centralized auctions for large-scale solar generation were conducted in 2012 or 2013, leaving state policies to fill this gap, as discussed below. The first centralized auction under Phase 2 was held in February 2014. The main inno-vations of the new bidding process applied in Phase 2 were (i) the

absence of CSP technology, as the auction called only for 750 MW of PV projects; (ii) the application of the VGF scheme as a substitute for bundling; and (iii) the separation of demand into a “domestic content requirement” (DCR) portion and an “open” portion (375 MW each). The issue of DCR had been a major point of contention in the previous two years, as the United States filed an official complaint with the World Trade Organization against India’s DCR. At the same time, the Indian government had been disappointed by the fact that a large fraction of the Phase 1 auction’s demand was met by thin-film solar cells, which were exempt from DCR obligations (since this type of cell is not manufactured in India). The DCR subauction received half as many bids as its open counterpart (700 MW vs. 1470 MW) and resulted in significantly higher bids.

Regarding state-level implementations, the state of Gujarat stands out both as being the first state to develop a solar policy (even earlier than the NSM) and as the most prominent state to implement a feed-in tariff (FIT) mechanism, as opposed to an auction mechanism, for the development of solar power. Gujarat’s state policy has been responsible for the development of nearly 850 MW of installed solar capacity as of April 2014 (Bridge to India 2012–14), and the state’s FIT has tailed the price reductions coming out of NSM

1,200

1,000

800

600

400

200

0

Co

ntr

acte

d c

apac

ity

(MW

)

NSM I–1Aug. 2010

Capacity (state auctions)

Capacity (national auctions)

Unmet demands

Prices Price (U

S$/M

Wh

)

NSM I–2Aug. 2011

Karnataka1Apr. 2012

Nadta P. 1May 2012

Tamil NaduJan. 2013

Andhra P.Feb. 2013

RajasthanFeb. 2013

Karnataka2Mar. 2013

PunjabApr. 2013

NSM II–DCRFeb. 2014

Madya P. 2Feb. 2014

Uttar P.Mar. 2013

NSM II–Open

US$203

US$125*US$114

US$148US$139

US$108

US$115

US$108US$96

US$134US$140US$146

US$108

250

200

150

100

50

0

Figure 2. Schematic overview of some of the most important solar PV auctions in India, 2010–14

Source: Authors.

Notes: Prices are calculated assuming an exchange rate of 60 INR/US$. The Tamil Nadu data depict the state’s “L1” auction results rather than the results obtained after the state’s “workable tariff” was disclosed. For the NSM Phase 2 auction, an “equivalent” nominal levelized tariff has been computed from the VGF (viability gap funding) amount. The subsequent fixed payments are based on an assumed discount rate of 13 percent and a plant capacity factor of 18 percent. Auctions of less than 50 MW of demand (which includes rooftop auction schemes and auctions from the state of Odisha) have been omitted.


“The Indian experience

with auctions, from the

CSP segment to procuring

rooftop solar power,

attests to the flexibility and

adaptability of auctions.”

auctions. Gujarat’s success in promoting capacity additions relative to most other states can be attributed both to earlier implementation and relatively higher prices paid for solar power.

Among the states adopting auction-based mechanisms, most have had some amount of success, despite a few setbacks. Madhya Pradesh currently has the most successful state-level auction scheme, with 175 MW already operational (Bridge to India 2012–14).

Several states have had trouble attracting the desired number of bidders. The auctions carried out by the states of Tamil Nadu, Punjab, and Uttar Pradesh have all been undersubscribed, meaning that they were unable to meet the desired capacity additions even by contracting the entire amount of solar power bid. One important reason for this result is the low bankability of distribution companies in these states, with high perceived risk dampening the private sector’s interest. (In the national-level auctions, the financial situation of the contract counterparty was much more stable.) Rajasthan has been able to avoid this issue for the most part by changing the contract counterparty to the state’s nodal agency (RRECL) rather than the distribution company.

Some state governments have introduced the “L1” lowest-bid pricing scheme. Under this scheme, adopted in Rajasthan, Tamil Nadu, and Andhra Pradesh, developers must meet the lowest offer of all the auction’s participants in order to be awarded the power purchase agreement. The economic rationale for the scheme is questionable: It could be successful in depressing prices if most bidders were behaving strategically, but in a competitive market it would simply result in most bidders refusing the power purchase agreement (PPA). Out of 180 MW bid for in the Rajasthan auction, winners of only 75 MW (less than the state’s target of 100 MW) accepted the L1 tariff. Similarly, in Tamil Nadu supply was reduced from 499 MW to 226 MW. Here again auctions have allocated less than the targeted capacities. On the other hand, states implementing L1 auctions have indeed been able to achieve lower prices.

Regulatory and policy instability has undermined state programs in Tamil Nadu and Andhra Pradesh. While these two states declared the most ambitious auctions-based policies in India, with each aim-ing to contract 1,000 MW of new solar capacity, expectations for both states are now very low, as unclear policies and multiple changes

have muddied the waters. In Tamil Nadu, the state regulatory commission has contested the “workable” tariff that was determined (outside any bidding process) by the state’s Energy Development Agency. No PPAs are active right now, and there are no indications of how the stalemate might be resolved. In Andhra Pradesh, the government decided to apply a “traditional” L1 bidding scheme to all auctioned projects, even though it had originally promised that it would allow price differences between different substations (to account for different irradiation levels and land costs). The state subsequently reduced its capacity target from 1000 MW to 350 MW.

Leniency with project delays has been the norm. According to announced schedules, the capacity contracted in the state auctions in Karnataka, Madhya Pradesh, and Rajasthan should be fully oper-ational by now, yet delays of up to a year have occurred. All three states seem to have accepted the delays, extending deadlines with no penalties or requiring only minor justifications from the devel-opers. Such practices set bad precedents, giving investors an extra incentive to be unrealistically aggressive on their planned schedules.

What are the key lessons?

Auctions should be part of a coherent strategy that meets clear policy objectives

Auctions have been implemented in a variety of settings, with good results. The Indian experience with auctions, from the CSP segment to procuring rooftop solar power, attests to the flexi-bility and adaptability of auctions. While India’s CSP implementations are far from trouble-free, the program can be described as a qualified success, given the many obstacles encountered (Stadelmann, Frisari, and Konda 2014). India’s rooftop auction scheme is so new that plants have not yet been commissioned, but expectations are high.

The right policies can further the nation’s long-term goals. It is sometimes unclear whether India’s strategic policy goals are being met. The L1 schemes used in some state auctions, for example, seem overly focused on short-term price reductions, rather than on ensuring continued capacity additions and investors’ participation in future auctions. Likewise, leniency with PPAs that


are delayed or ultimately cancelled can negatively affect bidders’ incentives.

The country’s core goals for renewable energy should be made clear. Because most policy implementations involve trade-offs, it is important to have clear ideas about key goals and objec-tives and about areas where sacrifices can be made. One interesting topic in this regard relates to local manufacturing and job creation, both of which require a careful analysis of the country’s comparative advantage in specific solar technologies. Establishing a clear set of priorities for the NSM would help to ensure a coherent long-term plan and elucidate whether the higher cost paid for domestic content in the NSM Phase 2 auctions has been a good investment.

Regulatory stability and trustworthiness are crucial. Several instances of erratic behavior on the part of the Indian national and state governments and regulators have likely hurt the country in the long run by reducing investors’ confidence. Last-minute policy revisions in Tamil Nadu and Andhra Pradesh are the most prominent examples, although the successive delays that were observed in the implementation of the NSM Phase 2 auction have likely also had negative results. Investors need to feel secure before they will establish a strong manufacturing or developer base.

References

MNRE (Ministry of New and Renewable Energy). 2010. “Jawaharlal Nehru National Solar Mission – Towards Building Solar India.” Mission Document, New Delhi. January.

———. 2012. “Jawaharlal Nehru National Solar Mission – Phase II Policy Document.” New Delhi. December.

GERC (Gujarat Electricity Regulatory Commission). 2012. “Order 1 of 2012: Determination of Tariff for Procurement by the Distribution Licensees and Others from Solar Energy Projects.” Gujarat, India. January 27. http://www.gercin.org/.

Stadelmann, M., G. Frisari, and C. Konda. 2014. “The Role of Public Financing in CSP – Case Study: Rajasthan Sun Technique, India.” Climate Policy Initiative. March. http://climatepolicyinitiative.org/wp-content/uploads/2014/03/SGG-Case-Study-The-Role-of-Public-Finance-in-CSP-Rajasthan-Sun-Technique-India.pdf.

Bridge to India. 2012–14. “India Solar Compass.” Quarterly reports, October 2012 to April 2014. http://www.bridgetoindia.com/our-reports/india-solar-compass/.

The peer reviewers for this note were Luiz Maurer (principal industry special-ist for climate strategy and business development, IFC) and Katharina Gassner (senior investment climate economist, World Bank Group). The authors thank Gabriel Cunha (consultant) for his contributions to this note.

mAke fuRTheR ConneCTionS

Live wire 2014/12. “Promoting renewable Energy through auctions,” by gabriela Elizondo-azuela and Luiz barroso.

Live wire 2014/13. “Promoting renewable Energy through auctions: the case of brazil,” by gabriela Elizondo-azuela, Luiz barroso, and gabriel cunha.

Live wire 2014/14. “Promoting renewable Energy through auctions: the case of china,” by Xiaodong wang, Luiz barroso, and gabriela Elizondo.

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

THE BOTTOM LINE

where does the region stand

on the quest for sustainable

energy for all? in 2010, eaP

had an electrification rate of

95 percent, and 52 percent

of the population had access

to nonsolid fuel for cooking.

consumption of renewable

energy decreased overall

between 1990 and 2010, though

modern forms grew rapidly.

energy intensity levels are high

but declining rapidly. overall

trends are positive, but bold

policy measures will be required

to sustain progress.

2014/28

Elisa Portale is an

energy economist in

the Energy Sector

Management Assistance

Program (ESMAP) of the

World Bank’s Energy and Extractives

Global Practice.

Joeri de Wit is an

energy economist in

the Bank’s Energy and

Extractives Global

Practice.

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

Tracking Progress Toward Providing Sustainable Energy

for All in East Asia and the Pacific

Why is this important?

Tracking regional trends is critical to monitoring

the progress of the Sustainable Energy for All

(SE4ALL) initiative

In declaring 2012 the “International Year of Sustainable Energy for

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

accomplished by 2030: to ensure universal access to modern energy

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

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

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

The SE4ALL objectives are global, with individual countries setting

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

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

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

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

respective starting points and comparative advantages as well as on

the resources and support that they are able to marshal.

To sustain momentum for the achievement of the SE4ALL

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

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

tium of 15 international agencies to establish the SE4ALL Global

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

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

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

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

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

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

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

liquefied petroleum gas (www.sustainableenergyforall.org).

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

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

the GTF in 2015.

The primary indicators and data sources that the GTF uses to

track progress toward the three SE4ALL goals are summarized below.

• Energy access. Access to modern energy services is measured

by the percentage of the population with an electricity

connection and the percentage of the population with access

to nonsolid fuels.2 These data are collected using household

surveys and reported in the World Bank’s Global Electrification

Database and the World Health Organization’s Household Energy

Database.

• Renewable energy. The share of renewable energy in the

energy mix is measured by the percentage of total final energy

consumption that is derived from renewable energy resources.

Data used to calculate this indicator are obtained from energy

balances published by the International Energy Agency and the

United Nations.

• Energy efficiency. The rate of improvement of energy efficiency

is approximated by the compound annual growth rate (CAGR)

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

primary energy consumption to gross domestic product (GDP)

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

calculate energy intensity are obtained from energy balances

published by the International Energy Agency and the United

Nations.

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

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

other solid fuels (such as coal and lignite).

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

THE BOTTOM LINE



energy for all? The region

has near-universal access to

electricity, and 93 percent of

the population has access


despite relatively abundant

hydropower, the share

of renewables in energy

consumption has remained

relatively low. very high energy

intensity levels have come

down rapidly. The big questions

are how renewables will evolve

when energy demand picks up

again and whether recent rates

of decline in energy intensity

will continue.

2014/29

Elisa Portale is an

energy economist in

the Energy Sector




Global Practice.

Joeri de Wit is an

energy economist in


Extractives Global

Practice.



for All in Eastern Europe and Central Asia




(SE4ALL) initiative


All,” the UN General Assembly established three global objectives

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

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

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

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






















the GTF in 2015.



Energy access. Access to modern energy services is measured

by the percentage of the population with an electricity connection

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

These data are collected using household surveys and reported

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

Health Organization’s Household Energy Database.

Renewable energy. The share of renewable energy in the energy

mix is measured by the percentage of total final energy consumption

that is derived from renewable energy resources. Data used to

calculate this indicator are obtained from energy balances published

by the International Energy Agency and the United Nations.

Energy efficiency. The rate of improvement of energy efficiency is

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

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

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

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

are obtained from energy balances published by the International

Energy Agency and the United Nations.

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

country perspective on the three pillars of SE4ALL for Eastern




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for practitioners inside

and outside the Bank.

It is a resource to

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counterparts.”

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

Understanding CO2 Emissions from the Global Energy Sector

Why is this issue important?

Mitigating climate change requires knowledge of the

sources of CO2 emissions

Identifying opportunities to cut emissions of greenhouse gases

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

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

total greenhouse gas emissions globally,1 primarily from the burning

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

fuels consumed for electricity and heat generation—contributed 41

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

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

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

waste, and nonrenewable municipal waste to generate electricity

and heat. Black carbon and methane venting and leakage emissions

are not included in the analysis presented in this note.

Where do emissions come from?

Emissions are concentrated in a handful of countries

and come primarily from burning coal

The geographical pattern of energy-related CO2 emissions closely

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

almost half of all such emissions were associated with the two

largest global energy consumers, and more than three-quarters

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

energy-related CO2 emissions, about 8 percent were contributed

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

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

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

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

countries put together.

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

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

This reflects both the widespread use of coal to generate electrical

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

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

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

gas.

2014/5

THE BOTTOM LINE

the energy sector contributes

about 40 percent of global

emissions of CO2. three-

quarters of those emissions

come from six major

economies. although coal-fired

plants account for just

40 percent of world energy

production, they were

responsible for more than

70 percent of energy-sector

emissions in 2010. despite

improvements in some

countries, the global CO2

emission factor for energy

generation has hardly changed

over the last 20 years.

Vivien Foster is sector

manager for the Sus-

tainable Energy Depart-

ment at the World Bank

([email protected]).

Daron Bedrosyan

works for London

Economics in Toronto.

Previously, he was an

energy analyst with the

World Bank’s Energy Practice.

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

Figure 1. CO2 emissions

by sector

Figure 2. energy-related CO2

emissions by country

Energy41%

Roadtransport

16%

Othertransport

6%

Industry20%

Residential6%

Othersectors

10%China30%

USA19%

EU11%

India7%

Russia7%

Japan 4%

Other HICs8%

Other MICs15%

LICs0.5%

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

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

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

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

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

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

and low-income countries.

Source: IEA 2012a.

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

THE BOTTOM LINE



energy for all? The region

has near-universal access to

electricity, and 93 percent of

the population has access


despite relatively abundant

hydropower, the share

of renewables in energy

consumption has remained

relatively low. very high energy

intensity levels have come

down rapidly. The big questions

are how renewables will evolve

when energy demand picks up

again and whether recent rates

of decline in energy intensity

will continue.

2014/29

Elisa Portale is an

energy economist in

the Energy Sector




Global Practice.

Joeri de Wit is an

energy economist in


Extractives Global

Practice.



for All in Eastern Europe and Central Asia




(SE4ALL) initiative


All,” the UN General Assembly established three global objectives

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

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

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

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






















the GTF in 2015.



Energy access. Access to modern energy services is measured

by the percentage of the population with an electricity connection

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

These data are collected using household surveys and reported

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

Health Organization’s Household Energy Database.

Renewable energy. The share of renewable energy in the energy

mix is measured by the percentage of total final energy consumption

that is derived from renewable energy resources. Data used to

calculate this indicator are obtained from energy balances published

by the International Energy Agency and the United Nations.

Energy efficiency. The rate of improvement of energy efficiency is

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

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

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

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

are obtained from energy balances published by the International

Energy Agency and the United Nations.

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

country perspective on the three pillars of SE4ALL for Eastern




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