Presentation Transcript

1. SE4A Working Group 1 – Universal Energy Access

   S. Vijay Iyer, World Bank Vijay Modi, Columbia University
2. Context Background 1.3 billion people without electricity access 2.66 billion people rely on solid biomass for cooking and heating = 2 m deaths/year Additional $40-50 billion/year required for universal access to energy by 2030. September 2011 – UNSG lays out three goals for 2030
3. Context Top 10 countries with largest number of people without electricity (million) IEA 2011 Account for over 850 million people
4. Context Highest proportion of people without electricity access among top 10 countries IEA 2011
5. Context Access to Electricity Three country categories of electricity access: low, medium and high. Access rates are not always correlated to poverty levels, e.g. Lao PDR.
6. Context Top 10+1 countries with largest number of people using solid fuels for cooking (million) IEA 2011
7. Context Highest proportion of people without access to modern energy among top 10+1 countries IEA 2011
8. Context Access to Modern Cooking Fuels Access to modern cooking fuels remains low, even in countries with high to med electricity access rates (China, Thailand). Populations without access to modern cooking fuel are much higher that for electricity.
9. Context Rapid Urbanization – An Emerging Access Challenge Trends in Sub-Saharan Africa 40% of Africa’s one billion people currently live in cities; urban will overtake rural by 2030 SSA is the fastest urbanizing region in the world - 4.5% p.a. Most African cities will have increased their populations by at least 50% by 2025. 40% of people living in SSA cities lack access to electricity About 50% of slum dwellers are illegally connected to electricity Lose-lose situation for consumers, utilities, legal customers Biomass (charcoal and wood) is the primary cooking fuel for slum dwellers. Kerosene and candles are secondary source of lighting. Trends are similar in many South and East Asian countries
10. Sustainable Energy for All – An Approach
11. Possible Approach Setting Targets Disaggregate 2030 targets to have accelerated targets over time with a dynamic approach to specific strategies (i.e. revisit and revise in each period) An Illustration
12. Possible Approach Electricity for All – A Two-pronged Strategy An opt-in program and toolkit for all countries that step up (country leadership key) Accelerated program for ‘high target’ countries (push necessary given sheer numbers)
13. Possible Approach Opt-in Program for All Stock-taking Establish current status and need Data collection systems Lessons learnt from past experiences Assistance for program preparation Resource mapping Institutional mapping Development of national/regional plans (incl. targets and timelines) Capacity building Mobilization of financing – use prospectus/marketing Support for execution Assist in policy/regulatory framework Facilitate institutional design (e.g. public-private partnerships) Monitoring and evaluation framework (e.g. results-based approach) Have x countries with y funding ready to declare at Rio+20
14. Possible Approach Accelerated Program for ‘High Target’ Countries Political outreach and buy-in Focused dialog and political commitment Consortium approach for preparation and funding Pooling resources (government, donors, private sector, special funds) – SWAp could be a model in this regard Develop partnership with entities with real stakes (e.g. oil/gas companies, telecom operators, consumer product leaders) Customized design to address country and in-country specificity Program design with specific and time-bound targets Aim to achieve ‘early successes’ to ensure sustainability of the approach Have x high-target countries ready to take on program at Rio+20
15. Possible Approach Special Funding for ‘High Performance’ Countries Countries on sound electrification path – Ghana, Bangladesh, Ethiopia, Indonesia , Mali for example Secure additional funding for doubling rates of electrification, RE, EE, including Assistance for scaling up generation and transmission investments Other off-grid and stand alone approaches that address remote communities and special areas, last mile issues Program design with specific and time-bound targets Have x countries ready to take on accelerated program at Rio+20
16. Example from East Asia Path for Electricity Access in East Asia
17. Example from East Asia Two “Fronts” for Universal Access The First Frontis in urban and dense rural areas. These are expected to be covered by network-based solutions and existing utilities and service providers will play key role. The Second Front focuses on people in poor and remote areas outside the reach of network (grid) based delivery solutions. Both fronts should be pursued simultaneously … households in remote areas should not have to wait until all those in easier-to-reach areas have been served.
18. Possible Approach Modern Household Energy for All Undertake market segmentation to have differentiated strategies Urban/peri-urban and dense rural areas Dispersed rural populations away from markets Customized solutions for different segments Menu of solutions based on specific potential (LPG, improved/advanced stoves/biogas digesters) Regional market development and quality assurance approach (e.g. Lighting Africa, Africa Clean Cooking Initiative) Smart incentive systems to promote enterprise (esp. local businesses a la E+Co) Develop packages that address household needs, community services and productive applications to improve affordability Direct subsidy delivery mechanisms for poor households (lifeline protection)

19. Sector Wide Approach for Expanding Energy AccessRwanda case studyProject Preparation, Senegal

    Vijay Iyer* and Vijay Modi^ *Sector Director, Energy and Mining, World Bank ^Earth Institute, Columbia University Vienna, November 18, 2011
20. Presentation Overview Project Preparation Some similarities to Sector Wide approach (SWAp) What is a SWAp? Challenges in applying SWAp to energy sector operations Rwanda case Why SWAp approach The process The outcomes Lessons learned Expanding energy SWAp approach to other countries
21. Project Preparation Process leads to ownership in line ministries Process trumps a “blueprint” Allows adjustments and rolling forward Reveal uncertainties and risks early Otherwise all “risks” get priced as it certain Leverage deep global technical expertise/costing Data continuity thru “open data platforms” Easier to implement in preparation phase Trained cadre with “integrative” knowledge capacity building in planning/monitoring/execution
22. A key feature of a sector wide approach A country led effort and prospectus Possible to integrate into a “regional” effort Why? An “electric grid” is a NETWORK- so longer term thinking impacts choices today Rural and urban are “interlinked”, and hence disaggregation is artificial Difficult to separate generation investments from “last mile delivery” of services that clearly identify revenue stream
23. Rwanda: A Country-led Programmatic Approach for Expanding Energy Access S. Vijay Iyer Sector Director Sustainable Energy Group, The World Bank Energy for All Oslo, September 12, 2011
24. The Programmatic or Sector-Wide Approach (SWAp) A country-led, results focused, long-term program Process aligned with national priorities and targets Sustainable, predictable funding Initially adapted to the social sector (health and education), then transport, water and agriculture Difficult to adapt to the energy sector (investment-intensive), but necessary to support access scale up Shift from aid delivery project-by-project and donor-by-donor to SECTOR-WIDE DEVELOPMENT FOCUSED ON RESULTS
25. Rwanda adopted SWAp for electricity access Background Rwanda 6% electricity access in 2008, 65,000 connections Avl. generation capacity only 41 MW; peak hour load shed 50% Government established Energy Sector Working Group (SWG) with development partners July 2008 A 5-year investment and implementation plan (a “bankable” prospectus), was developed: Spatial least-cost national rollout program (grid and off-grid) Integrates most promising RE supply sources Adopts cost reduction strategies Connection costs based on affordability Scalable, matches scope with available financing Used syndication approach to mobilize and pool financing Subsequent investment conference for private sector projects
26. Decision-making thru data (WB Report) Rural and national linked multi-sectoral Prioritized & monitored roll-out with verifiable service delivery
27. Least cost spatial planning 200920122020 Identifies the best way for electricity to be extended over the next 20 years (focused on the next 5 years), based on social and economic characteristics of different locations within the country, and supply and demand conditions Chosen by the sector working group as a better approach than traditional master planning – visually appealing, clear criteria, dynamic process Technical assistance in place to regularly update spatial planning results
28. SWAp has led to practical results in Rwanda Donors Round Table April 2009 - successful syndication (financing) pledges of US$225 million for first slice of the program (2009-2013) National Electrification Program Management Department established within the Electrogaz’s corporate structure to oversee planning, design, and implementation, pooling of all funds, monitoring and evaluation, and reporting accountability. Commitment to staged reductions in average unit connection cost - In the first two years of implementation, the program achieved a unit cost of less than the estimated US$1000/connection, Substantially lower than pre-SWAp project averages Program implementation early results – Access rate has improved from 6% nationwide to 10% by 2011. Firmly on track to achieve objective of 16% electrification by 2013.
29. Lessons and key success factors from Rwanda Strong country ownership and leadership up and down the chain of accountability Cabinet , Key Ministries, Other Line Ministries – Health, Education, Environment , Utility Linkages to National Priorities Ensured that program is aligned with the policy direction of the Government Key stakeholders buy-in from the outset Ownership and consensus built through the SWG led by the Minister of Energy Consultation process, workshops, retreats 5-year investment and implementation plan (Prospectus) Prepared stakeholders well for the Donor Round Table South-South Cooperation Built local capacity - technical designs, planning, logistics, training GIS data capture GIS information through coordination across ministries Affordability surveys Connection charges set at affordable levels Transition from planning to implementation Needs to be part of strategy
30. Thank you