Sustainable Energy Roadmaps

Sustainable Energy Roadmaps
Sustainable Energy Roadmaps Alexander Ochs – Worldwatch Institute December 4th 2012 – COP18 – Doha, Qatar
Ongoing projects •DR wind & solar roadmap (EEP, 2012 - finalized) •Greater Antilles (ICI, 2013) •Caribbean regional roadmap (CARICOM, 2013) •Central America (CDKN/EEP, Phase 1: 2013) Future plans •Zero-carbon Islands •Pacific islands •Suriname •Africa: Burundi & Rwanda; Nigeria •India •China
Goal •An energy system that is socially, economically and environmentally sustainable Our role •Provide the supporting research •Help government define goals, design strategy •Advise on implementation
Theory of change •Overall strategy and individual recommendations only successful if they get buy-in from key drivers of change –Decision-makers in policy, business (entrepreneurs, project developer) and finance (investors, banks, international funders) –Media, NGOs and civil society as important communicators and pressure groups •Necessitates a paradigm shift •Requires that we demonstrate that –the outcome is in the clear interest of the people; allow for greater prosperity, security, integrity, happiness –the pathway is technically, socially, economically, politically and financially feasible
Sustainable Energy Roadmaps Policy Recommendations Vision & Long-Term Goals Concrete Policy Mechanisms Governance & Administrative Efficiency Technical Assessment Energy Efficiency Potential Renewable Energy Potential Grid Solutions Finance & Policy Assessment Gap Analysis International Support & Cooperation Domestic Reform and Capacity Building Socio- Economic Analysis Levelized Cost of Energy + Energy Scenarios Macroeconomic Effects
Financial investment barriers and enablers Barriers Finance Barriers Cost of capital Unavailability of public financing Unavailability of private loans Unmanageability of small projects for development banks and international funders High upfront capital costs Cost Barriers Higher Levelized Cost of Energy (LCOE) Unaccounted external benefits and costs Market and currency fluctuations Policy Misplaced incentives Policy and regulatory uncertainty and complication Enablers National renewable energy targets Vision Regulatory policies (Feed-in tariff, RPS, etc.) Concrete Policies Fiscal incentives (tax incentives, subsidies, grants) Public financing (public investment, loans, grants) Energy market regulations Trade agreements Streamlining processes (planning, permitting) Gov. & Admin. Socio-economic Assessments Knowledge Barriers Knowledge gap Worldwatch provides the information that important decision-makers at national, sub-national, and international levels often lack in terms of technical knowledge Deficient dissemination of information Worldwatch disseminates gathered knowledge to stakeholders, enabling them more effectively and efficiently develop renewable energy projects Capacity building Technical assessments can be used to more smartly develop the capacity needed to implement renewable energy projects International knowledge sharing Results of technical assessments are available to a wide range of international stakeholders in the public and private sectors Technical Assessments Socio-economic Impacts of RE Energy Priorities Security Economic Priorities Industry development Jobs Social Development Energy access Health Education Redistribution/Equality Environmental Integrity Climate change Natural resources Barriers Cost Barriers Unaccounted external benefits and costs Higher Levelized Cost of Energy (LCOE) Political Political challenges Public Acceptance Public opposition Knowledge Barriers Knowledge gap Capacity development REMOVE Barriers Systemic Vision Energy sector and industry vision Policy and Regulatory Misplaced incentives, policy/regulatory uncertainty Cost High LCOE, unaccounted costs, market and currency fluctuations Finance Cost of capital, unavailability of financing, unmanageability for banks, upfront costs Political Politicization of key issues, short-term priorities Entrenched Interest Monopoly/vertical integration, anti-RE lobby Infrastructure Unsuitability of infrastructure, high cost of development, intermittency/storage Innovation Patent protection, lack of R&D Public Acceptance NIMBY, cost of RE to consumers Knowledge Knowledge gap, capacity building, deficient and uncoordinated dissemination of information Trade Tariffs, trade disputes Enablers Long-term Vision Policies (policy toolkit) RE support policies Climate Policies Energy Market Regulation Int’l. Cooperation Effective Governance and Administration Policy Analysis and Recommendations Financial Analysis and Recommendations
Sustainable Energy Roadmaps Technical Assessment Energy Efficiency Potential Renewable Energy Potential Grid Solutions
Grid Assessments: DR • One of the highest rates of distribution losses in the world • Electricity instability costs the country $1 billion every year (3.4% GDP) • Population resorts to inefficient small-scale fossil fuel-based units
RE Maps
The Need for Integrated Planning Seasonal Variation Daily (Diurnal) Variation
•Great similarities & divergences among countries •All Caribbean countries can be powered 100% carbon-free •Enormous wind, solar, biomass, hydro potentials •Enormous potential for energy efficiency •Need to build and/or renovate grid Selected Highlights Technical Assessments
Sustainable Energy Roadmaps Socio-Economic Analysis Levelized Cost of Energy + Energy Scenarios Macroeconomic Effects
The Need for LCOE+ Modeling societal costs and benefits LCOE+ Jamaica •Energy pricing does not reflect the true costs of different generation options •LCOE+ modeling adds societal costs and benefits on top of generation costs to help governments make more informed choices in the energy sector 0 5 10 15 20 25 30 35 40 45 USc/kWh Generation Pollution Climate Change
LCOE – No External Costs 0 5 10 15 20 25 30 35 40 45 Oil Steam Oil Combustion Turbine Oil Combined Cycle Diesel Generator Natural Gas Combined Cycle Petcoke Cogeneration Wind Solar Hydro Bagasse USc/kWh Generation
LCOE+ with Low External Cost Assumptions 0 5 10 15 20 25 30 35 40 45 Oil Steam Oil Combustion Turbine Oil Combined Cycle Diesel Generator Natural Gas Combined Cycle Petcoke Cogeneration Wind Solar Hydro Bagasse USc/kWh Generation Pollution Climate Change
LCOE Projection 0 5 10 15 20 25 30 35 40 45 Oil Steam Oil Combustion Turbine Oil Combined Cycle Diesel Generator Natural Gas Combined Cycle Petcoke Cogeneration Wind Solar Hydro Bagasse Usc/kWh 2010 2015 2020 2025 2030
Generation Scenarios based on Reference Case Demand Growth 0 2000 4000 6000 8000 10000 12000 2012 2015 2020 2025 2030 2012 2015 2020 2025 2030 2012 2015 2020 2025 2030 2012 2015 2020 2025 2030 GWh Petroleum NG Petcoke Renewables Business As Usual 30% Renewable Energy 50% Renewable Energy 20% Renewable Energy
Cumulative Costs & Savings for Electricity Generation Scenarios: 2012-2030 0 2000 4000 6000 8000 10000 12000 14000 Total Investment Required to Meet Annual Demand Total Cost of Electricity Generation Total Savings Over Business As Usual USD (In Millions) Business As Usual 20% Renewable Energy 30% Renewable Energy 50% Renewable Energy
Job Creation Case Study: Direct Jobs in the Solar PV Value Chain Processing of raw materials Engineers Technicians Manufacture of cells and modules Engineers Technicians Installation and plant construction Project development analysis Wholesalers Solar PV system designers and installers Construction workers Meteorologists Operation and maintenance Technicians Maintenance staff Decommissioning Construction workers Materials recyclers
Jobs Creation Estimates per MW for Various Energy Sources over Lifetime of Facilities Energy technology Construction, installation, and manufacturing jobs Operations & maintenance and fuel processing jobs Total jobs Solar PV 0.29 – 1.48 0.12 – 1.00 0.41 – 2.48 Geothermal 0.10 – 0.44 1.67 – 1.79 1.77 – 2.23 Biomass 0.11 – 0.21 1.21 – 1.53 1.32 – 1.74 Solar Thermal 0.18 – 0.41 0.22 – 1.00 0.40 – 1.41 Small Hydro 0.14 1.14 1.28 Nuclear 0.38 0.70 1.08 Wind 0.10 – 0.44 0.14 – 0.40 0.24 – 0.84 Coal 0.21 0.59 0.80 Natural Gas 0.03 0.77 0.80
CO2e Emissions 0 1E+09 2E+09 3E+09 4E+09 5E+09 6E+09 7E+09 8E+09 9E+09 1E+10 2012 2015 2020 2025 2030 kg Business As Usual 20% Renewable Energy 30% Renewable Energy 50% Renewable Energy
•Islands pay astronomical price for fossil fuel dependency •Petroleum high share of electricity produced (Jamaica 2009 : 96%) •All imported (J: Oil import US$2.2 bn/2011, 14.9% of GDP; CARICOM: 23%) •Sustainable energy solutions lead to major cost savings & social benefits Selected Highlights Socio-economic Assessments
Sustainable Energy Roadmaps Finance & Policy Assessment Gap Analysis International Support & Cooperation Domestic Reform and Capacity Building
Sustainable Energy Finance •Gap analysis –Lack of finance –Access to finance, cost of finance etc. •International sources and cooperation –International climate funds; CDM –Multi-lateral development banks –Bilateral aid •Domestic reform and capacity building –Business and banking sector
Financial Barriers and Enablers Barriers Finance Barriers Cost of capital Unavailability of public financing Unavailability of private loans Unmanageability of small projects for development banks and international funders High upfront capital costs Cost Barriers Higher Levelized Cost of Energy (LCOE) Unaccounted external benefits and costs Market and currency fluctuations Policy Misplaced incentives Policy and regulatory uncertainty and complication Enablers National renewable energy targets Vision Regulatory policies (Feed-in tariff, RPS, etc.) Concrete Policies Fiscal incentives (tax incentives, subsidies, grants) Public financing (public investment, loans, grants) Energy market regulations Trade agreements Streamlining processes (planning, permitting) Gov. & Admin.
Sustainable Energy Roadmaps Policy Recommendations Vision & Long-Term Goals Concrete Policy Mechanisms Governance & Administrative Efficiency
Policy Recommendation •Vision & goals: ”Long, loud & legal” •Concrete policy mechanisms –EE, RE, grid reliability –Market mechanisms, regulatory policies, incentive systems, standards, education •Administrative efficiency & governance –Institutional capacity & interplay; mainstreaming –MRV; transparency; stakeholder participation –Working bureaucracy
Administrative Procedure to Obtain a RE Concession in the Dominican Republic Application for a provisional concession at CNE CNE publishes the concession request in a national newspaper CNE publishes the granting of the provisional concession Application to Electricity Supervision Board (SIE) CNE includes the applicant in the Special Regime Production Facilities Register Granting of provisional concession Application for a permanent concession Environmental Impact Study (SEMARENA) Resource and production analysis by a company authorized by CNE Grid study CDEEE guarantee of PPA Guarantee CNE receives the reports of the SIE and SEMARENA Definitive concession
•Long-term vision often exists, can be more ambitious •Policies & measures exist but often do not work to their full potential; additional policies needed •Governance & administration need to be strengthened; capacity-building, mainstreaming, simplification Selected Highlights Policy Assessments
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