Transcript SE4A Working Group 1 – Universal Energy Access S. Vijay Iyer, World Bank Vijay Modi, Columbia University.

SE4A Working Group 1 – Universal
Energy Access
S. Vijay Iyer, World Bank
Vijay Modi, Columbia University
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
Context
Top 10 countries with largest number of people
without electricity (million)
350
300
289
IEA 2011
250
200
Account for over 850 million people
150
100
50
0
96
82
76
69
64
59
44
38
33
Context
Highest proportion of people without
electricity access among top 10 countries
100%
89%
86%
90%
80%
87%
83%
IEA 2011
84%
70%
60%
59%
49%
50%
36%
40%
30%
38%
20%
25%
10%
0%
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.
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Context
Top 10+1 countries with largest number of
people using solid fuels for cooking (million)
900
836
IEA 2011
800
700
600
500
Account for over 2 billion people
423
400
300
200
100
0
143
124
122
104
77
62
48
41
33
Context
Highest proportion of people without access to
modern energy among top 10+1 countries
95%
94%
94%
IEA 2011
88%
93%
83%
72%
67%
72%
54%
32%
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.
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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
Sustainable Energy for All – An
Approach
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
Period
Electricity Target
Modern Energy
2012-17
300 million
600 million
2018-25
600 million
1200 million
2026-30
400 million
800 million
18 years
1300 million
2600 million
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)
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
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
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
Example from East Asia
Path for Electricity Access in East Asia
Level of electricity
access (% HH)
High (>95)
Grid
Finalize “last-mile” issues
Implement innovative energy
solutions for remote HH
Maintain momentum of
effective programs; jumpstart
stagnant programs.
Solidify existing efforts and
commit to pass necessary
reforms to serve remote HH
and communities.
China, Thailand, Vietnam
Medium (50–95)
Indonesia, Lao PDR,
Mongolia, Philippines
Get started and make a
Cambodia, Myanmar, most serious commitment to
Pacific Island countries
expand national grid for HH
(PICs), and Timor-Leste
benefits.
Low (<50)
Off-Grid
Develop the institutional and
regulatory framework for off–
grid solutions
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Example from East Asia
Two “Fronts” for Universal Access
The First Front is 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.
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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)
Sector Wide Approach for Expanding Energy
Access
Rwanda case study
Project Preparation, Senegal
Vijay Iyer* and Vijay Modi^
*Sector Director, Energy and Mining, World Bank
^Earth Institute, Columbia University
Vienna, November 18, 2011
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
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
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
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
The Programmatic or Sector-Wide Approach (SWAp)

A country-led, results focused, longterm 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
Government
Developmen
t Partners
Consumers
Private
Stakeholder
s
SWAp
Stakeholders
Sector
Ministries
Utility
Regulatory
Authority
Local
Government
Shift from aid delivery project-by-project and donor-by-donor
to SECTOR-WIDE DEVELOPMENT FOCUSED ON RESULTS
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
Decision-making thru data (WB Report)
Rural and
national
linked
multi-sectoral
Prioritized &
monitored
roll-out
with verifiable
service delivery
Least cost spatial planning
•
•
•
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
2009
2012
2020
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 preSWAp 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.
Programme Connections (Target and
Actual)
2008
Actual
2009
2010
2011
(August)
•
New connections
< 5,000
32,995
43,733
40,419
•
Households connected to electricity
110,896
143,891
187,624
228,043
2014
Target
350,000
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
Thank you