2016 REGULATORY INDICATORS FOR SUSTAINABLE ENERGY A Global Scorecard for Policy Makers © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org i 2016 REGULATORY INDICATORS FOR SUSTAINABLE ENERGY A Global Scorecard for Policy Makers Sudeshna Ghosh Banerjee, Alejandro Moreno, Jonathan Sinton, Tanya Primiani, Joonkyung Seong RISE report, customized analyses, datasets, and library of legal and regulatory documents are available in: http://RISE.worldbank.org ii FOREWORD Access to clean, modern energy is a cornerstone of growth and human development, leading to better education and health, more jobs and safer communities. Knowing these benefits makes it all the more urgent to accelerate our efforts to reach the 1.1 billion people who still live without electricity and the 3 billion without access to clean cooking. We need more than $1 trillion in annual investments by 2030 to reach those goals. Clearly we cannot get there alone. Development organizations, governments and the private sector each have a crucial role to play in this endeavor. It is in each country’s hands to provide the right set of policies and regulations to attract private investments in the energy sector. But what supporting policy frameworks are needed to ensure there is sufficient financing for sustainable energy and that investors’ concerns are kept in check and their returns are adequate? And where can investors find comprehensive/in-depth information about policies and regulations that create the right investment climate for sustainable energy? RISE sets out to provide just that. It is a global scorecard with an exhaustive set of indicators that rank national policy and regulatory frameworks for sustainable energy. It offers a critical, objective overview of what is happening in 111 countries, allowing policymakers and investors to benchmark progress across countries through its databases that provide access to a treasure trove of primary policy and regulatory information at the national level. The good news is that many countries are already committed to the sustainable energy agenda and have put in place the fundamental measures needed to reach those goals. These range from plans that chart the path to universal electricity access, to laws that enable scaling up energy efficiency and renewable energy. Still, much more is needed to translate these commitments into robust policy frameworks, particularly in lower income countries. The data in RISE highlights the strong progress and broad uptake in advancing renewables policy across many countries, but also notes that critical areas—such as grid integration—need strengthening. RISE puts a spotlight on the untapped opportunities for energy efficiency and suggests an important role for utilities in meeting efficiency as well as access objectives. By regularly taking stock of where we are through its two-yearly updates, RISE also helps leaders to stay on track for a clean energy transition that offers growth and job-rich development. It is our hope that leaders will use and learn from the data in this report and focus their efforts on where action is needed most to extend affordable, reliable, sustainable and modern energy to people who need it most. With greater action and determination, we can go further and faster towards a better world—for all. Riccardo Puliti Rachel Kyte Senior Director CEO of Sustainable Energy for All and Special Head of Energy & Extractives Representative of the UN Secretary-General for World Bank Group Sustainable Energy for All iii ACKNOWLEDGMENTS The Regulatory Indicators for Sustainable Energy (RISE) project is a collaboration between the Global Energy and Extractives Practice and the Development Economics Global Indicators Group of the World Bank Group. It benefited from the support and guidance of Senior Director Riccardo Puliti and (former) Directors Anita Marangoly George and Charles Feinstein (Energy & Extractives) and Director Augusto Lopez-Claros (Development Economics). RISE was managed by a core team led by Sudeshna Ghosh Banerjee and comprising Alejandro Moreno, Jonathan Sinton, Tanya Primiani, and Joonkyung Seong. Specifically, the work was coordinated by the following staff and consultants: Energy access: Sudeshna Ghosh Banerjee, Juliette Besnard, with support from Doug Barnes. Energy efficiency: Jonathan Sinton, Daron Bedrosyan, with support from Therese Murphy and Lisa Ryan. Renewable energy: Alejandro Moreno, Yao Zhao, with support from Adam Brown. Cross-cutting data (carbon pricing and utility performance): Joonkyung Seong, Mallory LeeWong, Samantha Witte, with support from Taylor Sloane. Administrative procedures: Tanya Primiani, Jayashree Srinivasan, Julia Heckmann, and John Rennie. The core team also received valuable support from Fernando Anaya, Andres Baquero, Slavena Georgieva, and Melissa Taylor at various stages of the project. The team would especially like to acknowledge the advice and leadership of Vivien Foster, Rohit Khanna, Gevorg Sargsyan, Wendy Hughes, and Melissa Johns. The team is grateful for the constructive feedback provided by the peer reviewers Pierre Audinet, Malcolm Cosgrove- Davies, Marianne Fay, Adrian Gonzalez, Ashok Sarkar, Rita Ramalho, and Stratos Tavoulareas. Many World Bank colleagues and external partners provided formal and informal guidance throughout its development. The full list of internal and external advisors is in appendix 5. The team would also like to express its gratitude to the staff of World Bank’s Energy and Extractives practice, which contributed to validating information and data, country by country. RISE is underpinned by individual data collection efforts in each of the 111 countries covered. The full list of data collectors is in appendix 6, and the list of those who provided information in each country is on the RISE website. The team would like to particularly recognize the project managers for each of the firms that led data collection across multiple countries: Prabaljit Sarkar (Castlerock Asia); Sylvana Bohrt, Stephen Casey, Alexander LaBua, and Patrick Longmire (Greenmax Capital Advisors); Michel Layec, Costina Timofte, and Valentina Villoria (MWH); Akram Al Mohamadi, Hind Il Idrissi, Maged Mahmoud, and Nurzat Myrsalieva (Regional Centre for Renewable Energy and Energy Efficiency); and Analía Marsella and Sebastien Raoux (Transcarbon International). An editorial and design team comprising Bruce Ross-Larson and Steven C. Francis significantly elevated the quality and visual presentation of the final report. The online platform (http://rise.worldbank.org) was developed by Sreejith K.S., Narayanan R., and Ram Prasad of Advanced Software Systems Inc., with input and guidance from Aarthi Sivaraman, Jonathan Davidar, Anita Rozowska; and Marjorie Araya. The team gratefully acknowledges the funding support of the Energy Sector Management Assistance Program and Climate Investment Funds. iv TABLE OF CONTENTS Abbreviations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiv Executive Summary  ................................................................................... xv Overview  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Concept and aims of the Regulatory Indicators for Sustainable Energy project  .............................. 1 Evolution  ............................................................................................... 1 Global rollout of RISE   ................................................................................... 2 RISE methodology  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Interpreting RISE  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Key findings: RISE aggregate score  ....................................................................... 6 Key findings: RISE energy access pillar  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Key findings: RISE energy efficiency pillar  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Key findings: RISE renewable energy pillar  ................................................................ 17 Looking ahead  .......................................................................................... 20 Chapter 1. Indicators and scoring methodology  ................................................... 23 Scoring principles  ....................................................................................... 24 Calculating scores  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Traffic lights  ........................................................................................ 24 Geographic coverage  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Selection of countries  ............................................................................... 26 Location of analysis  ................................................................................. 26 Deep dive pilot  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Data collection and validation  ........................................................................... 28 Grouping variables  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Region  ............................................................................................. 28 Income   ............................................................................................ 29 High-impact and fragile countries  .................................................................... 29 Renewable energy capacity additions  ................................................................. 30 Energy access indicators  ................................................................................ 30 Indicator 1. Existence and monitoring of officially approved electrification plan  ........................... 31 Indicator 2. Scope of officially approved electrification plan  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Indicator 3. Framework for grid electrification  ......................................................... 33 Indicator 4. Framework for minigrids  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Indicator 5. Framework for stand-alone systems  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Indicator 6. Consumer affordability of electricity  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Indicator 7. Utility transparency and monitoring  ....................................................... 37 Indicator 8. Utility creditworthiness  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 v Energy efficiency indicators  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Indicator 1. National energy efficiency planning  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Indicator 2. Energy efficiency entities  ................................................................. 41 Indicator 3. Information provided to consumers about electricity usage  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Indicator 4. Energy efficiency incentives from electricity rate structures  ................................. 45 Indicator 5. Mandates and incentives: Large consumers  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Indicator 6. Mandates and incentives: Public sector  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Indicator 7. Mandates and incentives: Utilities  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Indicator 8. Financing mechanisms for energy efficiency  ............................................... 50 Indicator 9. Minimum energy performance standards  .................................................. 51 Indicator 10. Energy labeling systems  ................................................................. 52 Indicator 11. Building energy codes  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Indicator 12. Carbon pricing and monitoring   .......................................................... 54 Renewable energy indicators  ............................................................................ 55 Indicator 1. Legal framework for renewable energy   .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Indicator 2. Planning for renewable energy expansion   .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Indicator 3. Incentives and regulatory support   ........................................................ 58 Indicator 4. Attributes of financial and regulatory incentives  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Indicator 5. Network connection and access  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Indicator 6. Counterparty risk  ........................................................................ 63 Indicator 7. Carbon pricing and monitoring   .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Chapter 2. Energy access pillar results  ............................................................. 67 Pillar overview and key messages  ........................................................................ 67 Indicator scores  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Indicator 1. Existence and monitoring of officially approved electrification plan  ........................... 71 Indicator 2. Scope of officially approved electrification plan  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Indicator 3. Framework for grid electrification  ......................................................... 76 Indicator 4. Framework for minigrids  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Indicator 5. Framework for stand-alone systems  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Indicator 6. Consumer affordability of electricity  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Indicator 7. Utility transparency and monitoring  ....................................................... 90 Indicator 8. Utility creditworthiness  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Chapter 3. Energy efficiency pillar results  ......................................................... 95 Pillar overview and key messages  ........................................................................ 95 Indicator scores  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Indicator 1. National energy efficiency planning  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Indicator 2. Energy efficiency entities  ................................................................. 101 Indicator 3. Information provided to consumers about electricity usage  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Indicator 4. Energy efficiency incentives from electricity rate structures  ................................. 106 vi Indicator 5. Mandates and incentives: Large consumers  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Indicator 6. Mandates and incentives: Public sector  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 Indicator 7. Mandates and incentives: Utilities  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Indicator 8. Financing mechanisms for energy efficiency  ............................................... 120 Indicator 9. Minimum energy performance standards  .................................................. 123 Indicator 10. Energy labeling systems  ................................................................. 126 Indicator 11. Building energy codes  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Indicator 12. Carbon pricing and monitoring  ........................................................... 131 Chapter 4. Renewable energy pillar results  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Pillar overview and key messages  ........................................................................ 135 Indicator scores  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Indicator 1. Legal framework for renewable energy  ..................................................... 138 Indicator 2. Planning for renewable energy expansion  .................................................. 142 Indicator 3. Incentives and regulatory support   ........................................................ 146 Indicator 4. Attributes of financial and regulatory incentives  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Indicator 5. Network connection and access  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 Indicator 6. Counterparty risk  ........................................................................ 159 Indicator 7. Carbon pricing and monitoring   ........................................................... 162 Chapter 5. Administrative procedures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Description of indicators  ................................................................................ 167 Key results   ............................................................................................. 168 Energy access indicator: Establishing a new household electricity connection in urban and rural areas  .. . . . . . . . 168 Energy access indicator: Permitting a new minigrid   .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Energy efficiency indicator: Obtaining energy efficient appliance certification  ............................ 179 Renewable energy indicator: Permitting a new renewable energy project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Types of renewable energy procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 Interconnection approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 Environmental permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 Power purchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 Generation licenses and energy concessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 References and Appendices .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 References  ............................................................................................. 195 Appendix 1. Indicator results by country  .................................................................. 196 Appendix 2. Example of full country dataset: Kenya  ....................................................... 213 Appendix 3. Selected utilities and cities in each country  .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Appendix 4. Deep dive results  ........................................................................... 230 Appendix 5. RISE advisory groups   ....................................................................... 235 Appendix 6. RISE data collectors  ......................................................................... 237 Appendix 7. Sustainable energy indicator initiatives  ....................................................... 239 vii LIST OF FIGURES Figure O.1. Guiding principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure O.2. RISE consultation process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure O.3. RISE indicators—scored and nonscored—for the 2016 global rollout .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Figure O.4. RISE data collection and validation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Figure O.5. Overall RISE scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Figure O.6. Country distribution for energy access, renewable energy, and energy efficiency . . . . . . . . . . . . . . . . . . . . . 8 Figure O.7. Aggregated RISE indicator scores for all indicators, by number of countries scoring green . . . . . . . . . . . . . 9 Figure O.8. Aggregated RISE indicator scores for all indicators, by number of countries scoring green .. . . . . . . . . . . . 10 Figure O.9. RISE energy efficiency and renewable energy scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Figure O.10. Association between RISE score and Doing Business ranking .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure O.11. Average indicator scores on energy access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure O.12. Association between RISE energy access score and electrification rate .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Figure O.13. Cost and time to get a household electricity connection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Figure O.14. RISE renewable energy score compared with renewable energy capacity added in 2000–15 . . . . . . . . . . 18 Figure O.15. Procedure types (percentage of countries) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Figure 1.1. RISE indicators .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Figure 1.2. Guiding Principals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Figure 1.3. RISE countries by regional and income groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Figure 1.4 Number of RISE countries with renewable energy capacity installed, 2000–15 .. . . . . . . . . . . . . . . . . . . . . . . . 30 Figure 2.1. Distribution of energy access pillar scores, 55 countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Figure 2.2. Distribution of energy access scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Figure 2.3. Score distribution by indicator, number of countries, and average score . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Figure 2.4. Association between RISE energy access score and electrification rate .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Figure 2.5. Distribution of Indicator 1 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Percentage of 55 energy access countries answering yes to questions about the existence Figure 2.6.  and monitoring of officially approved electrification plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Figure 2.7. Distribution of Indicator 2 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75  ercentage of 55 energy access countries answering yes to questions about the scope Figure 2.8. P of officially approved electrification plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Figure 2.9. Distribution of Indicator 3 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Percentage of 55 energy access countries answering yes to the questions about Figure 2.10.  the framework for grid electrification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Figure 2.11. Distribution of Indicator 4 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Figure 2.12. Percentage of 55 energy access countries answering yes to the questions about the framework for minigrids . 81 Figure 2.13. Distribution of Indicator 5 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83  ercentage of 55 energy access countries answering yes to the questions about Figure 2.14. P the framework for stand-alone systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Figure 2.15. Distribution of Indicator 6 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 viii Figure 2.16. Cost of subsistence consumption .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88  ercentage of 55 energy access countries answering yes to the questions about Figure 2.17. P the consumer affordability of electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Figure 2.18. Distribution of Indicator 7 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Figure 2.19. Utility transparency and monitoring: Information disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Utility transparency and monitoring: Auditing by an independent Figure 2.20.  third-party and reliability monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Figure 2.21. Distribution of Indicator 8 scores .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92  tility creditworthiness: Percentage of countries meeting Figure 2.22. U the specified thresholds for each subindicator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Figure 3.1. Distribution of energy efficiency pillar scores, 111 countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Figure 3.2 Distribution of energy efficiency scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Figure 3.3. Energy efficiency score distribution by indicator, number of countries and average score . . . . . . . . . . . . . . 97 Figure 3.4. Distribution of Indicator 1 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 National energy efficiency planning: Shares of countries Figure 3.5.  with progressively more complete coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Figure 3.6. Shares of countries with different combinations of sectoral energy efficiency targets .. . . . . . . . . . . . . . . . . 100 Figure 3.7. Distribution of Indicator 2 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Energy efficiency entities by function: Overall share of countries surveyed Figure 3.8.  and share of independent (nongovernmental) entities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Figure 3.9. Energy efficiency entities: Entities and indicators related to standards and labels . . . . . . . . . . . . . . . . . . . . . 104 Figure 3.10. Distribution of Indicator 3 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Figure 3.11. Information provided to consumers about electricity usage, all sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Figure 3.12. Distribution of Indicator 4 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Figure 3.13. Types of electricity rate structures by sector .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Figure 3.14. Time-of-use tariff structures by sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Figure 3.15. Distribution of Indicator 5 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Figure 3.16. Types of energy efficiency mandates to large consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Figure 3.17. Mandates and implementing measures for large consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Figure 3.18. Mandates and incentives for large consumers: Performance recognition programs . . . . . . . . . . . . . . . . . . . 113 Figure 3.19. Distribution of Indicator 6 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Figure 3.20. Mandates and incentives for the public sector: Shares by income group . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 Figure 3.21. Public sector indicator, labeling, and codes: Average scores by income group . . . . . . . . . . . . . . . . . . . . . . . . 130 Figure 3.22. Distribution of Indicator 7 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Figure 3.23. Mandates and incentives for utilities: Countries with mandates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Figure 3.24. Mandates and incentives for utilities: Obligations and compliance measures . . . . . . . . . . . . . . . . . . . . . . . . 119 Figure 3.25. Distribution of Indicator 8 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Financing mechanisms for energy efficiency: Shares Figure 3.26.  of countries by mechanism (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 ix Shares of market-based and government mechanisms among Figure 3.27.  all energy efficiency financing mechanisms (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 MEPS: Average scores by product category for each zone Figure 3.28.  of energy efficiency overall pillar scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Figure 3.29. Distribution of Indicator 9 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Figure 3.30. Ordered country scores on national energy efficiency planning and MEPS . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Figure 3.31. Compliance systems in countries with MEPS, average scores by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Figure 3.32. MEPS and compliance systems, average scores by product category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Figure 3.33. Distribution of Indicator 10 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127  hares of surveyed countries with MEPS, energy efficiency labels, Figure 3.34. S or both, by product category .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Figure 3.35. Distribution of Indicator 11 scores. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Percentage of countries with measures to improve the energy performance Figure 3.36.  of residential and commercial buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Figure 3.37. Distribution of Indicator 12 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 Figure 3.38. Carbon pricing and monitoring indicator scores vs. overall energy efficiency pillar scores . . . . . . . . . . . . 133 Figure 4.1. Distribution of renewable energy pillar scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Figure 4.2 Distribution of total renewable energy scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Figure 4.3. Renewable energy score distribution by indicator, number of countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 New renewable energy capacity and total investment as a share Figure 4.4.  of GNI versus RISE renewable energy score . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Figure 4.5. Distribution of Indicator 1 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Figure 4.6. Percentage of countries answering yes to each Indicator 1 question .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Figure 4.7. Percentage of countries answering yes to each Indicator 2 question .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 Figure 4.8. Wind and solar maps and their common characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Figure 4.9. Zoning and strategic planning, by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Generation and transmission planning in countries with over Figure 4.10.  5 percent of wind and solar power in the generation mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Figure 4.11. Distribution of Indicator 2 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Figure 4.12. Distribution of Indicator 3 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 Figure 4.13. Competitive bidding and feed-in tariff mechanism, by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 Figure 4.14. Percentage of countries answering yes to each Indicator 3 question . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Figure 4.15. Percentage of countries answering yes to Indicator 4 questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 RISE renewable energy scores for countries without project timelines, indexation of power payments, Figure 4.16.  and at least partial pass-through of costs (left) versus those with each (right) .. . . . . . . . . . . . . . . . . . . . . . 151 Figure 4.17. Pass-through of costs by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Figure 4.18. Distribution of Indicator 4 scores .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Figure 4.19. Distribution of Indicator 5 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Figure 4.20. Network policies distribution by region .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 x Figure 4.21. Percentage of countries answering yes to each Indicator 5 question . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157  ercentage of countries answering yes to each question, Figure 4.22. P by MW of renewable energy installed since 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Figure 4.23. Distribution of Indicator 6 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 Percentage of countries with each type of payment risk reduction Figure 4.24.  mechanism measured by RISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Figure 4.25. Utility transparency and monitoring: Percentage of countries by question .. . . . . . . . . . . . . . . . . . . . . . . . . . 161 Figure 4.26. Utility creditworthiness, percentage of countries by four financial metrics . . . . . . . . . . . . . . . . . . . . . . . . . . 162 Figure 4.27. Distribution of Indicator 7 scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Figure 4.28. Scores on Indicator 7 vs. overall RISE renewable energy scores .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 Figure 5.1. Deriving the common list of procedures and average project size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Figure 5.2. Number of procedures and time required to get a grid connection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Connection time for the 10 countries with lowest electrification rate Figure 5.3.  and highest access deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Figure 5.4. Distribution of connection charges for urban and rural customers (percentage) . . . . . . . . . . . . . . . . . . . . . . 173 Distribution of number of procedures for a minigrid developer Figure 5.5.  to set up a new facility, 17 countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Figure 5.6. Days to obtain a generation license .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Figure 5.7. Days to obtain an environmental clearance .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Figure 5.8. Distribution of average time to set up a minigrid facility, 17 countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Figure 5.9. Total cost to set up a minigrid facility in the 17 surveyed countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Figure 5.10. Frequency of number of procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Figure 5.11. Procedure types by frequency (percentage of countries) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 Figure 5.12. Interconnection approval (days required) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 Figure 5.13. Environmental permits by technology group (days required) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Figure 5.14. Power purchase agreements (days required) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Figure 5.15. Generation licenses (days required) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 xi LIST OF TABLES Table O.1. List of 111 RISE countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Table O.2. The number of scored indicators, subindicators, and questions for each RISE pillar . . . . . . . . . . . . . . . . . . . . 4 Table O.3. Overall scores for the 10 highest access-deficit countries and the 10 highest energy consumers and suppliers .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Table O.4. Top scorers by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Table O.5. Correlation between RISE and investment climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Table O.6. Energy access scores per indicator for top 10 countries with the highest access deficit . . . . . . . . . . . . . . . . 13 Table O.7. Energy access scores per indicator for top 10 countries with the lowest electrification rate . . . . . . . . . . . . . 13 Table O.8. Time and cost of setting up a minigrid, 16 countries .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Table O.9. Regional average traffic light scores by energy efficiency indicator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Table O.10. Regional average traffic light scores by renewable energy indicator .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Overall renewable energy and indicator scores for countries by level Table O.11.  of renewable energy capacity installed since 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Table O.12. Procedure time (days) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Table 1.1. The 111 countries in RISE, 2016 edition .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Table 1.2. The three large and diverse countries assessed by RISE’s deep dive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Table 1.3. RISE high-impact and fragile and conflict-affected countries .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Table 1.4. Energy access pillar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Table 1.5. Energy efficiency pillar .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Table 1.6. Renewable energy pillar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Table 1.7. Attributes measured by RISE for each renewable energy resource map for each technology .. . . . . . . . . . . . 57 Table 2.1. Score distribution by indicator for the top 10 and the bottom 10 countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Table 2.2. Existence and monitoring of electrification plan in the top 10 access-deficit countries . . . . . . . . . . . . . . . . . 73 Share of countries with officially approved electrification plan Table 2.3.  and good practice characteristics on scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Table 2.4. Framework for grid electrification in the top 10 access-deficit countries .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Table 2.5. Framework for minigrids in the top 10 access-deficit countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Table 2.6. Framework for stand-alone systems in the top 10 access-deficit countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Table 3.1. Energy efficiency entities by function: Averages and top scorers by income group . . . . . . . . . . . . . . . . . . . . . . 103 Financing mechanisms available in any sector: Table 3.2.  Share of countries in each income group (percentage) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Countries with mandatory energy efficiency labeling programs Table 3.3.  but without mandatory MEPS for regulated products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Table 3.4. Countries with carbon pricing mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Countries without primary legislation governing renewable energy Table 4.1.  and overall RISE renewable energy score . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Table 4.2. Responses of highest scoring countries, by region .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 xii Table 5.1. Administrative procedures: Questions and interviewees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Table 5.2. Procedures and time to obtain a new electricity connection in urban and rural households . . . . . . . . . . . . . 170 Table 5.3. Connection charges for urban and rural households . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Table 5.4. Number of procedures, 17 countries .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Table 5.5. Authorizations from ministries, public agencies, local entities, and municipalities . . . . . . . . . . . . . . . . . . . . . 178 Table 5.6. Time to obtain common permits to set up a minigrid facility, 17 countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Table 5.7. Compliance mechanisms for appliance energy efficiency standards .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Table 5.8. Prevalence of product registration systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 Third-party testing of appliances for energy efficiency certification, as reported by manufacturers . . . . . . 184 Table 5.9.  Table 5.10. Distribution of costs based on entry requirements .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 Table 5.11. Overview of RISE data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 Table 5.12. Number of procedures by technology and size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 Table 5.13. Procedure time by technology and size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 xiii LIST OF BOXES Box O.1. Traffic light system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Box 1.1. Calculating indicator scores: three examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Box 1.2. Retail price of electricity .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Box 1.3. Definitions of rate structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Box 1.4. Fossil fuel subsidy for power generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Box 1.5. Affordability of renewable energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Box 2.1. Long-term supporting policies boost electrification: South Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Box 2.2. Successful minigrid development in the Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Box 2.3. A legal framework as a necessary step to effectively develop minigrids: Tanzania . . . . . . . . . . . . . . . . . . . . . . . 80 Box 2.4. Initiatives and mechanisms to support the development of stand-alone systems in Pakistan . . . . . . . . . . . . . 84 Lighting Global quality assurance framework: Box 2.5.  A world quality standard for clean off-grid lighting products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Box 2.7. Lifeline tariffs: Crossubsidies make subsistence electricity consumption affordable .. . . . . . . . . . . . . . . . . . . . . 88 Box 3.1. Utility energy efficiency obligations in the EU Energy Efficiency Directive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Box 3.2. Electricity tariff levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Box 3.3. The factors in Vietnam’s success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Box 3.4. Sweden’s energy-intensive industries program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Box 4.1. Draft laws and regulations .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Box 4.2. Priority dispatch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 Box 4.3. Curtailment policies in China .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Box 4.4. Renewable energy prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 Box 5.1. Examples of cumbersome procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Box 5.2. Challenges in Myanmar’s unelectrified rural areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 Box 5.3. Details on the urban-rural discrepancy for obtaining a connection in Bangladesh .. . . . . . . . . . . . . . . . . . . . . . . 172 Box 5.4. Regulation for minigrids exists but is not implemented in Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Box 5.5. Minigrid regulatory requirements can vary depending on size .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Box 5.6. Monitoring, verification, and enforcement of appliance standards and labeling programs . . . . . . . . . . . . . . . . 180 Box 5.7. U.S. EPA Energy Star labeling program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 Box 5.8. Market surveillance in the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 Box 5.9. Japan’s Top-Runner program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 Box 5.10. How policy change is reducing Greece’s permitting time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Box 5.11. Pioneering solar power in Chad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 Box 5.12. Streamlining the permitting process in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 Box 5.13. Definitions of procedure types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 Box 5.14. Non-OECD countries process environmental permits faster than OECD countries .. . . . . . . . . . . . . . . . . . . . . 191 Box 5.15. Renewable energy incentives and subsidies .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 xiv ABBREVIATIONS AEPC Alternative Energy Promotion EU European Union PPA power purchase agreement Center (Nepal) EU-ETS EU emissions trading system RE renewable energy AKRSP Aga Khan Rural Support Program GIZ Deutsche Gesellschaft für REC renewable energy certificate ASSYST Advanced Software Systems Inc. Internationale Zusammenarbeit REFIT Renewable Energy Feed-in CAIDI customer average interruption GNI gross national income Tariff (Zambia) duration index IEC International Electrotechnical RESP-2 Rural Electrification Strategy CC climate change Commission and Plan CE Conformité Européenne (EU energy ILAC International Laboratory RGGI Regional Greenhouse Gas Initiative efficiency standards certification Accreditation Cooperation mark) RISE Regulatory Indicators for IRENA International Renewable Sustainable Energy CLASP Collaborative Labeling and Energy Agency Appliance Standards Program ROC renewable obligation certificate JEMA Japanese Electrical Manufacturer’s CNIS China National Institute Association RSC regional service centers of Standardization KEA Korean Energy Agency S&L standards and labelling COC certificate of compliance kt kiloton SAIDI system average interruption CODOA power purchase obligation duration index certificate, France kVA volt amps SAIFI system average interruption COE certificate of endorsement kWh kilowatt hour frequency index CSA Canadian Standards Association LAC Latin America and Caribbean SAR South Asia DDUGJY Deendayal Upadhyaya Gram LCOE levelized cost of energy SCADA/EMS supervisory control and data Jyoti Yojana acquisition/energy management LEED Leadership in Environmental Energy system DOE Department of Energy, Department & Design of Environment SEforALL Sustainable Energy for All LV low voltage DSM demand-side management SEAD Super-efficient Equipment and MENA Middle East and North Africa Appliance Deployment EA energy access MEPS minimum energy performance SREP Scaling Up Renewable Energy EAP East Asia and Pacific standards Program EBITDA earnings before interest, tax, METI Ministry of Economy, Trade, SSA Sub-Saharan Africa depreciation, and amortization and Industry T&D transmission and distribution ECA Europe and Central Asia MSA market surveillance authority TANESCO Tanzanian Electric Supply Co. EE energy efficiency MV medium voltage TEC tax exemption certificate EEO Energy efficiency obligation MV&E monitoring, verification, and enforcement UN United Nations EESL Energy Efficiency Services Limited MW mega watts US$ U. S. dollar EIA environmental impact assessment NIAF Nigeria Infrastructure Advisory USc U.S. cent EPA Environmental Protection Agency Facility VAT value-added tax ERB energy regulation board (Zambia) NYSERDA New York State Energy Research and Development Authority VEC Village Electricity Committee ESCOM Malawi electricity utility OECD high income/OECD high-income Wabo Dutch all-in-one permit for ESCOs energy service companies countries developers ESE Electricity Supply Enterprise OECD Organisation for Economic WGI Worldwide Governance Indicators Co-operation and Development ETS emissions trading system xv EXECUTIVE SUMMARY Energy is at the forefront of the development (SEforALL)—universal access to electricity agenda? Where is further action most criti- agenda. Recognizing energy’s vital role in and clean cooking fuels, doubling the rate cally needed? development and prosperity, the world has of improvement of energy efficiency, and committed to Sustainable Development Goal doubling the share of renewable energy— 7 to “Ensure access to affordable, reliable, requires an unprecedented scale-up of both WHAT IS RISE? sustainable and modern energy for all” as one public and private finance. Investment in of 17 goals for 2030, as well as to dramatically sustainable energy is affected by many increase energy efficiency and the use of factors, including market size, country risk, and RISE is a set of indicators to help compare renewable energy. The historic climate change financial markets, to name but a few. But a national policy and regulatory frameworks agreement in Paris in 2015 also draws country’s policies and regulations also matter, for sustainable energy. RISE assesses attention to the essential scale-up of clean and they are directly under the control of countries’ policy and regulatory support energy to attain a 2°C world, with energy government. This report—based on a new and for each of the three pillars of sustainable featuring prominently in many countries’ comprehensive global policy scorecard called energy—access to modern energy, energy Nationally Determined Contributions. Regulatory Indicators for Sustainable Energy efficiency, and renewable energy. With (RISE) (box 1)—answers two important 27 indicators covering 111 countries and Achieving these global energy goals questions. Are policymakers around the world representing 96 percent of the world calls for more than a trillion dollars of truly rising to the challenge population—RISE provides a reference investment annually.1 Reaching the 2030 posed by the new global sustainable energy point to help policymakers benchmark their targets set by Sustainable Energy for All sector policy and regulatory framework Box 1 Regulatory Indicators for Sustainable Energy è RISE, a product of the Sustainable Energy for All initiative’s è RISE covers 111 countries across the developed and developing Knowledge Hub, aligns with the targets of Sustainable world, which together account for more than 90 percent of Development Goal 7 and SEforALL global population and energy consumption. è RISE classifies countries into a green zone of strong performers è RISE provides information on how a country’s regulatory in the top third, a yellow zone of middling performers, and a environment compares with its peers and identifies priorities red zone of weak performers in the bottom third. for improvement going forward. è RISE is underpinned by a vast public information base of primary policy and regulatory documents available to users è RISE reports on 27 indicators and 80 subindicators to at rise.worldbank.org. capture the quality of policies and regulations for energy è RISE indicators will be published bienially, with the next access, renewable energy and energy efficiency (see the box report due in 2018. figure). BOX FIGURE: Capturing the quality of the policy environment Administrative Policies and Regulations Procedures* Existence and monitoring Framework for grid electrification Consumer affordability of electricity Establishing a new household of officially approved grid connection Energy Framework for minigrids Utility transparency and monitoring electrification plan Access Scope of officially approved Framework for stand-alone systems Utility creditworthiness Permitting a new minigrid electrification plan National energy efficiency Mandates & incentives: Minimum energy Securing energy efficiency planning large consumers performance standards appliance standards Mandates & incentives: Energy labeling systems certification Energy efficiency entities Energy public sector Efficiency Information provided to Mandates & incentives: Building energy codes electricity consumers utilities Incentives from electricity Financing mechanisms for Carbon pricing and monitoring rate structures energy efficiency Legal framework for Incentives & regulatory support Network connection and access Permitting a new renewable renewable energy for renewable energy energy project Renewable Energy Planning for renewable Attributes of financial and Counterparty risk energy expansion regulatory incentives Carbon pricing and monitoring Source: RISE team. *Not scored xvi against those of regional and global peers, countries, long engaged on this agenda, energy rests disproportionately on a fairly and a powerful tool to help develop policies tend to have stronger policy and regula- small group of countries with the largest and regulations that advance sustainable tory frameworks, although there are some populations and economies. The good energy goals. Each indicator targets an exceptions. The 24 countries making limited news is that many of these highest impact element of the policy or regulatory regime or negligible progress toward supporting countries have a supportive policy agenda. important to mobilizing investment, such sustainable energy development present a Of the world’s ten largest energy consum- as establishing planning processes and call for action to the international com- ers, seven score in the top tier of RISE institutions, introducing dedicated incen- munity (figure 1). countries for renewable energy, offering tives or support programs, and ensuring strong policy frameworks. Of the top ten financially sound utilities. Together, they Numerous countries are emerging as energy suppliers, eight provide a similar high provide a comprehensive picture of the sustainable energy leaders across the level of support for energy efficiency. But of strength and breadth of government sup- developing world. About half of the 45 the world’s ten countries with the largest port for sustainable energy and the actions countries with strong policy environments number of people without electricity, only they have taken to turn that support into across all three pillars of sustainable energy five provide widespread policy support for reality. are emerging economies, with examples energy access (figure 3). in all regions and every peer group. They can be found in Africa (South Africa), Asia The basics of renewable energy QUESTION 1: (China, India, Malaysia, Thailand, Vietnam), policy frameworks have been very widely ARE POLICYMAKERS Europe and Central Asia (Armenia, Belarus, adopted. The spread of renewable energy RISING TO THE Kazakhstan, Russia, Turkey, Ukraine, regulations has been remarkable. Almost CHALLENGE? Uzbekistan), Latin America (Brazil, Chile, all countries surveyed have a renewable Colombia, Mexico), and the Middle East energy target, and about three-quarters of Across the globe, countries are embracing (Algeria, Egypt, Iran, Jordan, Morocco, them have adopted legislation and strategic the sustainable energy policy agenda. Tunisia) (figure 2). . plans and assigned responsible institutions Almost 80 percent of the 111 countries to achieve those targets. There is also a very scored by RISE have begun to implement Larger economies—with the greatest strong consensus that the private sector elements of supportive policy frameworks, impact on global targets—tend to be should participate in renewable energy and over a third—some 45 in all—are among the top performers in putting development, now allowed in more than 90 already at a reasonably advanced stage. in place a robust policy framework. percent of countries. Unsurprisingly, high-income OECD Achieving the global targets for sustainable FIGURE 1 RISE overall scores Score: 67-100 Score: 34-66 Score: 0-33 No Score IBRD 42731 | FEBRUARY 2017 IBRD 42731 | FEBRUARY 2017 This map was produced by the Cartography Unit of the World Bank Group. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of the World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Source: RISE database and Doing Business, World Bank. xvii FIGURE 2 Most of the top RISE performers in each region have high scores (green dots) Developing world High income OECD East Asia & Europe and Latin America & Middle East & South Asia Sub-Saharan Pacific Central Asia Caribbean North Africa Africa Energy Philippines Guatemala India Kenya accessa Cambodia Not applicable Nicaragua Not applicable Bangladesh Uganda Not applicable Indonesia Peru Sri Lanka Tanzania Renewable China Kazakhstan Mexico Jordan Pakistan South Africa Denmark energy Malaysia Romania Brazil UAE India Malawi Netherlands Philippines Turkey Dominican Egypt Sri Lanka Kenya Germany Republic Energy Vietnam Romania Mexico Tunisia India South Africa United States efficiency China Russian Ecuador Iran, Sri Lanka Kenya Denmark Federation Islamic Rep. Thailand Colombia Pakistan Ghana Canada Turkey UAE Source: RISE database, World Bank. a. Does not include countries whose energy access policies were not assessed because of high electrification rates. FIGURE 3 Most of the highest-impact countries for energy efficiency and renewable energy perform well in RISE (green dots); but for energy access, many see scores in the middle or lower ranges (yellow and red dots, respectively) Top 10 countries Energy Top 10 countries Renewable Top 10 countries Energy with highest access with highest energy with highest efficiency electricity access primary energy primary energy deficit demand supply India China China Nigeria United States United States Ethiopia Russian Federation Russian Federation Bangladesh India India Congo, Dem. Rep. Japan Japan Tanzania Canada Germany Kenya Germany Brazil Uganda Brazil Korea, Rep. Sudan Indonesia Canada Myanmar Iran, Islamic Rep. France Source: RISE database, World Bank. xviii QUESTION 2: access indicators except the adoption of overall, there has been less enthusiasm WHERE IS FURTHER an officially approved electrification plan for policy measures to facilitate uptake of ACTION MOST CRITICALLY (figure 4). stand-alone solar home systems. A few NEEDED? notable exceptions are Cambodia, Ghana, Policy frameworks for grid densification Kenya, and Uganda. In fact, the top RISE While progress is encouraging, there and expansion, the mainstay of electrifica- scorers in energy access do well across all remain significant gaps in policy and tion efforts, lag substantially behind and three possible energy supply solutions— regulatory frameworks. The RISE scorecard still need much progress. As many as 60 grids, minigrids, and stand-alone systems— helps to pinpoint the places and issues percent of access deficit countries score in suggesting they are being pursued not as where policies are lagging (box 1). the lowest tier for grid-based electrification substitutes but as complements. (figure 5). Widespread problems are lack of Sub-Saharan Africa—the least electrified capital subsidies to fund high up-front costs Reaching universal access is more likely continent and home to about 600 million of household connection or expansion into to be constrained by financially unviable people without electricity—has one of the rural areas, as well as lack of performance utilities—limiting investments in grid least developed policy environments to standards for new connections. expansion—than prices that are too high support energy access. Of particular con- to be affordable. RISE finds that the afford- cern are Ethiopia, Nigeria, and Sudan—three By neglecting enabling policies for ability of electricity is not as significant a of the most populous energy deficit coun- stand-alone solar home systems, too barrier to energy access as some might tries, with a total unserved population of 116 many countries are missing out on the think. In part due to effective “lifeline” tariffs million people. And as many as 70 percent solar revolution’s access dividend. Grid for those who consume the least amount of of Africa’s least electrified nations—each extension has been the mainstay of almost electricity, even the poorest 20 percent of with access rates below 20 percent of the all countries that have already achieved households in the vast majority of countries population—have barely begun to establish universal electrification today. But tech- can meet basic energy needs—for lighting, an enabling environment for energy access. nological change and the rapidly declining phone charging, and radio—with less than Even so, some good performers have costs of solar PV now offer the possibility 5 percent of the family budget (figure 6). A strong policy frameworks in place, such as of complementing grid expansion with bigger problem for access expansion may Kenya, Uganda, and Tanzania. In contrast, decentralized off-grid solutions, potentially be that utilities are not collecting enough countries in South Asia—specifically India accelerating the pace of electrification, revenue in order to expand the distribution and Bangladesh—are emerging as leaders particularly in remote areas. While countries grid and offer electricity to new customers. in the access agenda with an innovative mix —such as Madagascar, Nicaragua, the In over three-quarters of countries, the of grid and off-grid solutions. Sub-Saharan Philippines and Tanzania—score relatively utility is not a creditworthy entity, and Africa trails South Asia in all RISE energy well on the policy framework for minigrids; most likely unable to fund new investments from its own balance sheet. Balancing affordability and financial viability requires FIGURE 4 South Asian countries score higher on nearly all aspects of energy access policymakers to set tariffs (or allow them policies than their counterparts in Sub-Saharan Africa to be set) high enough that a utility’s total revenue base—across all its consumers— 1. Existence and monitoring allows for full cost-recovery, while ensuring of officially approved that low-income customers are not asked to electrification plan 100 pay more than they can bear. Such a balance 90 should be possible in many countries, 80 2. Scope of officially 8. Utility creditworthiness 70 approved electrification plan although some small-island (Solomon 60 50 Islands), fragile (Liberia), and landlocked 40 (Burkina Faso) states face such high costs 30 20 of electricity—often above US$0.30 per 10 7. Utility transparency 0 3. Framework for grid kilowatt-hour—that affordability and and monitoring electrification cost recovery may prove very difficult to reconcile. 6. Consumer affordability With the expansion of renewable energy, 4. Framework for mini-grids of electricity the practicalities of integrating wind and solar power into the grid become more 5. Framework for stand-alone systems important. As renewable energy costs fall and the share of renewable energy in power South Asia Sub-Saharan Africa Overall average systems rises, understanding and planning for the integration of variable renewable Source: RISE database and Doing Business, World Bank. xix FIGURE 5 Many RISE countries see low scores for support to grid electrification and stand-alone systems. The number of countries with high scores are in green, medium in yellow, and low in red Framework for grid electrification Framework for minigrids Framework for stand-alone systems 18 countries 12 countries 33% 15 countries 22% 14 countries 27% 27 countries 25% 49% 33 countries 60% 29 countries 13 countries 4 countries 24% 53% 7% ≥67 33 0.5 - ≤ 1% 13% < 5 cents - ≤ 15 cents 31% > 1 - ≤ 5% 44% < 15 cents - ≤ 50 cents 31% > 5 - ≤ 10% 13% > 50 cents 5% > 10% 15% 0 10 20 30 40 0 5 10 15 20 25 30 35 40 45 50 Percent Percent Source: RISE database, World Bank. energy becomes essential (figure 7). Most Energy efficiency is too often overlooked Many countries that have engaged on the countries have not yet conducted studies to in the policy agenda. Although countries energy efficiency agenda tend to do so understand the implications of bringing that pursue renewable energy policies are at a relatively superficial level. Around variable renewable energy into the grid, nor more likely to also pursue energy efficiency the world, many of the basic elements of a do they have technical codes in place that policies, the former seems to lag the latter regulatory framework for energy efficiency specify how renewable energy generators systematically across a wide range of remain to be developed. Barely a third of can connect to the grid. Elements such countries. The average score for efficiency is countries have made serious progress in as these that are critical to the scale-up more than ten points below that for renew- labeling energy-efficient appliances—or of renewables are far more likely to be in ables, and far more countries have few or establishing building energy codes for place in countries with significant shares no policies in place to support it (figure 8). construction or minimum energy perfor- of variable renewable energy already in the Given that energy efficiency measures are mance standards for industry. system. Of countries where wind and solar among the most cost-effective means of power account for at least 5 percent of total reducing a country’s carbon footprint, this is electricity generated in 2014, more than another missed opportunity. 80 percent have completed an integration study. xx FIGURE 7 Most countries have renewable energy targets, plans and incentives; far fewer have grid codes that address RE or renewable energy integration studies The percentage of countries answering yes to each question Does an o cial renewable 93% energy target exist? Is there a grid code that 41% includes variable RE? Does a renewable energy action plan or strategy 76% to obtain the target exist? Does an electricity generation Has a variable RE integration 39% plan that includes renewable 72% study been conducted? energy development exist? Is there at least one scheme to support renewable energy per unit of electricty generated (e.g., feed-in Is there compensation to RE 73% tari , competitive bidding/auction, mandates, generators for lost generation 29% generation premiums, production tax credits)? due to curtailment? 0 10 20 30 40 50 60 70 80 90 100 0 5 10 15 20 25 30 35 40 45 50 Percent Percent Source: RISE database, World Bank. FIGURE 8 High renewable energy and energy efficiency scores are often found together (left), but far more countries have limited or no policy support for efficiency than the other two pillars (right) 100 Energy efficiency pillar (average score = 41) Average Average Average 80 score 73 score 52 score 41 60 34 22 Number of countries 70 40 43 51 20 24 0 46 26 0 10 20 30 40 50 60 70 80 90 100 17 Renewable energy pillar (average score = 52) Energy Renewable Energy Low income Lower middle income Upper middle income High income Access Energy E ciency Source: RISE database, World Bank. Critical aspects of energy efficiency, However sound the sustainable energy poverty line (on less than US$1.90 a day). including the role of utilities, remain in policy framework, progress may remain Obtaining permits to expand energy access their infancy. Utilities are one of the major slow without efficient administrative through a minigrid can take between 2 actors in the power sector, but given their procedures. Critical to the enabling months (Madagascar) and 52 months (Sri commercial incentive to sell power they environment are both the policies on Lanka), with an average lapse of 14 months. are not always naturally aligned with the the books and the effectiveness of their Setting up a grid-connected renewable energy efficiency agenda. This tension can implementation. It really matters how much energy project, such as a wind farm, takes be overcome by altering the regulatory consumers pay and how long they wait for 17 months on average, but again ranges incentives under which utilities operate. a grid connection, or how long it takes a between 1 month (Ukraine) and 60 months Although the utilities face conflicts of developer to get all the permits to start-up (Honduras). So to get the full benefit of interest with their commercial incentive to a minigrid, establish a wind farm, or certify good policies enacted, it is necessary to sell power and accrue more revenues, these an energy efficient appliance. The full cost improve the administrative procedures that can be corrected through suitable regulatory of connecting to the grid, which varies from go with them. measures. Yet only half of countries require US$22 in Bangladesh to US$500 in several their utilities to undertake energy efficiency African countries, exceeds US$100 in the measures (figure 9). vast majority of countries—well beyond the means of a family living below the xxi FIGURE 9 Utilities have at least some form of energy efficiency obligation in half of RISE countries, but tracking or compliance mechanisms are often not in place The percentage of countries answering yes to each question Is there an EE obligation for utilities? 49% Does the obligation have some form of veri cation or performance tracking? 40% Is the obligation veri ed and enforced with penalties for non-compliance? 22% Is the tracking and enforcement carried out by a third party? 12% 0 10 20 30 40 50 60 Percent Source: RISE database, World Bank. LOOKING FORWARD This is just the beginning. New, fully updated editions will be published bienni- This first global edition of RISE provides ally, with the next scheduled for 2018. It a snapshot in time, with all scores is expected that the value of RISE and the and information as of the end of 2015. quality of underlying data will increase over Encouragingly, many of the countries with time, as the indicators have been designed the greatest impact on global sustainable to allow for comparability not only across energy outcomes are developing, or have regions but year-on-year, and future editions developed, strong policies and regulations. will be able to consider the evolution of Yet policy frameworks on energy access are sustainable energy policies and, eventually, seriously lagging behind, especially in popu- evaluate the effectiveness of different types lous countries of Sub-Saharan Africa and of government support to the sector. At the those with particularly low electrification same time, RISE is also intended to be flex- rates. Accelerating performance on access ible: appropriate policy approaches in any will require setting tariffs high enough to sector will evolve as technologies mature allow for new investments to expand the and new challenges arise, and the RISE distribution grid while making sure the indicators will be re-evaluated and updated poorest populations can afford basic service, as needed in each subsequent edition. as well as improving the policy environment both for grid and off-grid technologies. NOTES Although progress on renewable energy 1. 2015 Global Tracking Framework, the World Bank. and energy efficiency go together, the latter lags systematically behind. And while many countries have taken basic policy support measures for clean energy, these are still lacking in depth. For example, renewable energy policies need to give greater atten- tion to the pressing issue of grid integration of variable renewable energy. OVERVIE W 1 OVERVIEW OVERWIEW CONCEPT AND AIMS OF THE between investment needs and available EVOLUTION REGULATORY INDICATORS funding is highest for energy access. FOR SUSTAINABLE ENERGY Investments of this size cannot be realized RISE originates from a request from member through public funds alone, so private countries of the Climate Investment Fund’s The Sustainable Development Goal on investment must step up, but not all aspects Scaling Up Renewable Energy Program energy to “ensure access to affordable, of sustainable energy are equally attractive (SREP), which wanted to assess their policy reliable, sustainable, and modern to the private sector. readiness to attract investments in sustain- energy for all” by 2030 is a recognition able energy. The SREP secretariat provided of the power of energy to transform RISE shows a snapshot of policies and regu- the initial funding to develop a methodology lives, economies, and the planet. This lations in the energy sector encapsulated and test. RISE therefore drew on a previous important milestone is a culmination in a suite of indicators across each of the World Bank Group initiative focusing on of efforts by the Sustainable Energy for three pillars of energy (electricity) access,4 renewable energy, the Climate Investment All (SEforALL) initiative co-led by the energy efficiency, and renewable energy. Readiness Index,7 which evaluated the envi- United Nations (UN) Secretary General It builds on the empirical understanding ronment for private investment in climate and the World Bank President. SEforALL that policies and regulations matter in mitigation and low-carbon technologies in has brought multiple stakeholders to attracting investment to sustainable energy South Asian countries. commit to achieving three objectives and captures this facet of the investment by 2030: assuring universal access to climate.5 RISE is premised on the fact that RISE has been underpinned by a multi- modern energy services, doubling the good practices in policies and regulations stakeholder consultation process. The rate of improvement in energy efficiency, exist, but must be customized to the local starting point in developing RISE in 2013–14 and doubling the share of renewable context. They can be particularly important was a long list of indicators, developed from energy in the global energy mix. The five in the power sector, which can require a literature review that was filtered down SDG targets1 correspond closely to these heavy upfront capital investments and pose using guiding principles (figure O.1). They three SEforALL objectives and emphasize potentially steep risks for investors. The were then presented in consultations with the role of technology and international Organisation for Economic Co-operation an internal advisory group (comprising partnerships. and Development (OECD), in its principles World Bank Group experts) and an external for private sector participation in infrastruc- advisory group (of eminent experts), The World Bank serves as a knowledge hub ture,6 underscores the need for an enabling especially constituted for each of the three for SEforALL, and the Regulatory Indicators policy framework for investment. RISE pillars (appendix 5) and private sector for Sustainable Energy (RISE) is one of its consultations in Washington, DC, Delhi, flagship products2 focusing on the question: RISE is inspired by the Bank’s flagship Dubai, Kathmandu, and Nairobi (figure O.2). How can policies and regulations contribute report on Doing Business and builds on its Following these various levels of screening, to investments needed to achieve SEforALL methodology. Doing Business is recognized 28 indicators were formulated to be tested objectives? The finance committee3 for its track record in measuring countries’ as a pilot exercise. constituted by SEforALL estimated in 2014 laws and regulations for small and medium that US$1.16 trillion annually is required to domestic enterprises and in leveraging A pilot comprising 17 countries8 was carried achieve the three objectives—way beyond reforms. While Doing Business measures out in 2014 and a final report was launched current spending of about US$400 billion. countries’ overall investment climate, RISE in November 2014 in an SREP subcommit- For energy access, the public sector has focuses only on the sustainable energy tee meeting. The selection of countries was historically played the dominant role and sector. In this way, relationships can be predisposed toward those participating in will continue to do so in the near future, drawn to see if a country’s results on RISE SREP. Non-SREP countries such as Chile, although the opportunities for private are better or worse than on its overall Denmark, India, and the United States activity are expanding. The two clean energy investment climate. were included for wider representation. objectives (energy efficiency and renewable The report allowed for a validation of the energy) constitute the overwhelming share methodology, and presented lessons from of investment needs, although the ratio developing and implementing the suite of 2 OVERVIE W FIGURE O.1 Guiding principles O.1) since the rest (those with asterisks) have universal electrification. STAGE I Objective Comparable Actionable Context Neutral RISE scores are grounded in 27 indicators Indicators should reflect The method of measurement Indicators should Indicators should track facts and not opinions. for an indicator should be measure aspects of the characteristics of the across the three pillars, underpinned by They should also be based easily replicable in each policy and regulatory enabling environment on repeatable analysis of country. environment that are that would be beneficial 80 subindicators and 158 questions (table laws, regulations and under the control of in nearly every country. practices. policymakers and can inspire clear reform. O.2). Every country therefore has at least 158 unique data points. Most subindicators and questions are formulated in a binary yes or no form to ensure objectivity, but aggregating them enables an overview of a country’s achievement on the indicator. STAGE II Available Cost Effective Consensus There are 8 indicators in energy access, Data for an indicator Data for an indicator can There should be a consensus should be available on be collected at a that each indicator 12 in energy efficiency, and 7 in renewable a global scale. reasonable cost. contributes to achieving results in each pillar. energy. RISE indicators are designed to measure policy actions to address barriers to scaling up sustainable energy across Source: RISE database, World Bank. the three pillars (figure O.3). The policies and regulatory indicators cover an entire gamut of actions on planning, incentives, indicators across countries (which had vary- encompassing 111 countries that cover all mandates, and policies that directly support ing data availability and quality). It served as World Bank Group regions and incomes sustainable energy. They represent the a starting point by allowing for refinements and that represent 96 percent of the global vision of governments translated into plans in the methodology and interpretation of population, 91 percent of global energy at the national level and their attributes indicators. Most important, it formed a solid consumption, and 97 percent of the global for good practice, as well as policies and base for consultation for the global rollout of electricity access deficit. The economies incentives focusing on appropriate price RISE in 2015–2016. selected were the top 50 SEforALL high- signals to markets and subsidy mechanisms impact countries for each pillar as reported to facilitate the development of sustainable in the 2015 Global Tracking Framework,9 all energy. All countries’ indicator results are in GLOBAL ROLLOUT OF RISE SEforALL opt-in countries with a population appendix 1. above 5 million, and all 17 RISE pilot coun- This report presents the methodology tries. For energy access, only 55 countries and results of a global rollout of RISE, are relevant (those without asterisks in table FIGURE O.2 RISE consultation process Presentations SREP Sub- World Future Delhi Hague SREP SEforAII to large Committee Energy Summit Sustainability Workshop Conference audiences (Nov ‘14) (Jan ‘15) Week (Feb ‘15) (Feb ‘15) (May ‘15) Internal EA RE EE CC advisory (Apr ‘14 / Mar ’15) (Apr ‘14 / Mar ’15) (Apr ‘14 / Feb ’15) (Apr ‘14 / Apr ’15) groups External EA RE EE advisory (Oct ‘13 / May ’14 / (Oct ‘13 / May ’14 / (Oct ‘13 / /May ’14 / groups Mar ‘15 / Feb ’16) Mar ‘15 / /Feb ’16) Mar ‘15 / Feb ’16) Online survey Washington, DC Delhi (Jun ‘13) Jun ‘13 / Apr ’15 Jul ‘13 / Apr ’15 Private sector consultations Dubai Kathmandu Nairobi (Apr ‘15) (Aug ‘13) (Aug ‘13 / Apr ’15) Source: RISE database, World Bank. OVERVIE W 3 TABLE O.1 The 111 countries in RISE, 2016 editiona OVERWIEW Sub-Saharan Africa East Asia & Pacific Latin America & the Caribbean Angola Cambodia Argentina* Benin China* Bolivia* Burkina Faso Indonesia Brazil* Burundi Lao PDR Colombia* Cameroon Malaysia* Dominican Republic* Central African Republic Mongolia Ecuador* Chad Myanmar Guatemala Congo, Dem. Rep. Philippines Haiti Congo, Rep. Solomon Islands Honduras Côte d’Ivoire Thailand* Mexico* Eritrea Vanuatu Nicaragua Ethiopia Vietnam* Peru Ghana South Asia Venezuela, RB* Guinea Afghanistan Middle East & North Africa Kenya Bangladesh Algeria* Liberia India Bahrain* Madagascar Maldives* Egypt, Arab Rep.* Malawi Nepal Iran, Islamic Rep.* Mali Pakistan Jordan* Mauritania Sri Lanka Kuwait* Mozambique OECD High Income Lebanon* Niger Australia* Morocco* Nigeria Austria* Qatar* Rwanda Belgium* Saudi Arabia* Senegal Canada* Tunisia* Sierra Leone Chile* United Arab Emirates* Somalia Czech Republic* Yemen, Rep. South Africa Denmark* Europe & Central Asia South Sudan Finland* Armenia* Sudan France* Belarus* Tanzania Germany* Kazakhstan* Togo Greece* Kyrgyz Republic* Uganda Italy* Romania* Zambia Japan* Russian Federation* Zimbabwe Korea, Rep* Tajikistan* Netherlands* Turkey* Poland* Ukraine* Spain* Uzbekistan* Sweden* Switzerland* United Kingdom* United States* Source: RISE team. *Denotes countries not evaluated on the energy access pillar, where the access rate is above 90 percent or fewer than 1 million people are without access. a. Energy access pillar does not include evaluation of countries where the access rate is above 90 percent or fewer than 1 million people are without access. 4 OVERVIE W TABLE O.2 The number of scored indicators, subindicators, and questions for each RISE pillar and over time. They ensure that RISE can offer a base of comparison across regions, RISE score incomes, and energy sector structures, and that the indicators are focused on those Indicators Subindicators Questions measures that energy sector policymakers —the primary RISE target audience—can Energy access 8 29 59 directly affect. They also ensure that a Energy efficiency 12 32 48 country’s answers are not dependent on the subjective perspective of any individual and Renewable energy 7 19 51 that any differences or changes over time in answers reflect changes to policy. Total 27 80 158 RISE is a valuable source of information to private investors and developers—of RISE has also collected a wealth of non- RISE can help national policymakers bench- sustainable energy projects, products, scored information. There are two categories mark their energy sector framework against and services—who ultimately make the of such data points. First, administrative those of regional and global peers. By high- decision on where to invest. From this procedures for sustainable energy (figure lighting global and regional trends across perspective, RISE is one element of a O.3), which collect data on the realized time, all types of sustainable energy policies and much larger toolkit to assess the risks and cost, and procedures required to implement making available detailed information on rewards of investment, and can help direct key sustainable energy activities (such as best practices or successful approaches companies to countries where the govern- getting a new household connection, setting in comparable countries, RISE can provide ment prioritizes the types of investments up a minigrid facility, establishing an on-grid a structured platform for comparison. they provide, or where certain regulations renewable energy project, and certifying an Focusing on actions within policymakers’ or incentives are in place. appliance for EE). Second, metrics in the control, RISE will contribute to domestic energy sector that provide a context for policy debates by providing a global RISE’s significance is amplified when its understanding how and why countries have reference point on measures to facilitate the information base is complemented with adopted certain practices, including power environment needed to support sustainable other initiatives. RISE’s value rests on design sector structure, key companies and institu- energy investments and to inform country attributes that build on initiatives measuring tions, generation data, and tariff schedules. interventions under SEforALL. The indicators the enabling environment for sustainable A snapshot of these metrics for a selected aim to balance depth of information with energy worldwide. For example, the group of countries is presented in annex 3. relevance and comparability across countries International Energy Efficiency Scorecard FIGURE O.3 RISE indicators—scored and nonscored Administrative Policies and Regulations Procedures* Existence and monitoring Framework for grid electrification Consumer affordability of electricity Establishing a new household of officially approved grid connection electrification plan Framework for minigrids Utility transparency and monitoring Energy Access Scope of officially approved Framework for stand-alone systems Utility creditworthiness Permitting a new minigrid electrification plan National energy efficiency Mandates & incentives: Minimum energy Securing energy efficiency planning large consumers performance standards appliance standards certification Energy efficiency entities Mandates & incentives: Energy labeling systems Energy public sector Efficiency Information provided to Mandates & incentives: Building energy codes electricity consumers utilities Incentives from electricity Financing mechanisms for Carbon pricing and monitoring rate structures energy efficiency Legal framework for Incentives & regulatory support Network connection and access Permitting a new renewable renewable energy for renewable energy energy project Renewable Counterparty risk Energy Planning for renewable Attributes of financial and energy expansion regulatory incentives Carbon pricing and monitoring Source: RISE database, World Bank. *Not scored OVERVIE W 5 of the American Council for an Energy- Box O.1 Traffic light system Efficient Economy ranks energy efficiency OVERWIEW policies and programs in the world’s 16 Green zone: Scores between 67–100. Most elements of a strong policy largest economies. Climatescope—an Inter- framework to support sustainable energy are in place. American Development Bank/Bloomberg Scores between 34–66. Significant opportunities exist to Yellow zone:  New Energy Finance publication—assesses strengthen the policy framework. the investment climate and policies for clean energy investments in 55 emerging Red zone: S  cores between 0–33. Few or no elements of a supportive markets in Africa, Asia, and Latin America policy framework have been enacted. and the Caribbean (appendix 7). RISE METHODOLOGY The unit of analysis in RISE is a country. that could, in large federal countries, affect Many of its questions therefore address RISE scores (appendix 4). All indicators are scored between 0 and 100 national sustainable energy policies. In and are weighted equally to reach a score some instances, however, these policies RISE data represents the situation as of for the pillar. This approach is not intended are set at the state or even municipal level. December 2015. RISE has drawn on the to imply that all indicators are equally To address this inconsistency, RISE has World Bank’s global reach to collect data important, as a policy decision measured by adopted the methodology developed by the with an identical questionnaire for each RISE may often be critical to support invest- World Bank’s Doing Business Report. RISE country. Energy experts were hired in ment while another might only provide a measures and scores questions from the each of the 111 countries to collect data minor incentive. But, the relative importance perspective of the state where the largest and the data collection phase spanned of each indicator often differs by country business city is located. For some questions, from August to December 2015. Filling (based on factors like the size and maturity it also allows for differentiation between out the questionnaire in each country took of the market for sustainable energy, the national, state, and municipal policies. For about three months, with a cutoff date of strength and structure of the power sector, questions pertaining to a utility, the largest December 31, 2015 for making changes. The and external political and economic risks) utility in the largest business city is consid- comprehensive process involved numerous and among stakeholders within a country.10 ered. In some cases, however, results from steps (figure O.4). The questionnaire needs one state might still be misleading in large to be completed and each answer requires A traffic light system conveys a country’s federal countries. RISE therefore is piloting validation, a step ensuring that the data aggregate score in sustainable energy a deep dive component that aims to better are accurate and credible. An answer is on each pillar and indicator, categorizing represent the policy and regulatory variance validated either through providing a public countries into green, yellow, and red document (for example, an official legal or zones (box O.1). A green light for a pillar, for example, indicates that the policy FIGURE O.4 RISE data collection and validation framework addresses many of the key areas that will help attract the type of investments the government seeks, and is a Advisory Groups RISE Team Country Teams strong indication that the government has prioritized that pillar and devoted resources Provide suggestions for high- Select country experts Provide suggestions for high- quality country experts quality country experts to support its growth. But a green light does not necessarily mean that the country lacks Data Collection Review preliminary data: Meet selected country provide guidance to experts: support meetings attributes to improve on, and instead signals country experts with key client counterparts (as needed) the government has made good-faith efforts to support investment instead and instead Verify data is internally signals its current policy readiness for Review data and preliminary consistent, suported by Review data and preliminary scores: identify factual errors, laws/regulations, and scores: identify factual errors, investment. For the investor, this provides suggest changes to representative of reality: important clarifying evidence of the commitment and credibility scoring methodology highlight areas of uncertainty; information calculate preliminary scores of government policymaking to create an Data Validation attractive enabling environment. A country Final review and scoring with a red light usually has enormous scope for improving its policy space. Such a diagnostic of gaps could be used by the international community to assemble resources to help create an enabling environment. Source: RISE database, World Bank. 6 OVERVIE W policy document) that demonstrates the they appear today, with an eye to how they on good practices also progresses, and the answer, or through interviews with at least will affect investment in the future. This ability to establish a robust relationship with two energy experts in the country. The RISE means that policies implemented recently investment flows matures. team reviewed every answer and its sup- will have the same value as those that have porting documentation. The data were then been in place for years, and RISE does not reviewed and validated by the World Bank incorporate into its scoring whether policies KEY FINDINGS: RISE country teams and checked for consistency have proven effective. In future editions, AGGREGATE SCORE by the internal and external advisory groups. once RISE has established a baseline, certain retrospective measures may be Most countries around the world are making The RISE data platform hosts a wealth of imported. For example, RISE will be able to some effort to build a sound policy environ- data on sustainable energy, beyond policies track policy changes over time, and may ment for sustainable energy. Aggregating and regulations. While the report focuses on be able to gauge the effectiveness of some scores across the three pillars of RISE gives regional and income trends, highlighting and individual support mechanisms by looking a high-level overview of the overall quality of identifying the key messages for each pillar, at, for example, whether projects awarded a country’s policy environment for sustain- the platform contains all the raw data disag- at auction were eventually built. able energy. Of a possible maximum of 100, gregated at the question level. It allows users scores range from more than 90 in Denmark to search for specific information and to RISE is limited in its ability to capture imple- to less than 10 in Somalia. Rather than download the dataset for their own analysis. mentation outcomes of policies. Though focusing on individual scores, however, RISE The website also allows users to view the indicators on administrative procedures classifies countries according to whether overall data for each pillar on a map, offering attempt to measure effectiveness of policy they score in the green zone (67–100), numerical scores and other information for implementation, RISE does not yet offer a yellow zone (34–66), or red zone (0–33). each country. The details of the indicators are comprehensive assessment of how policies, What is striking is that nearly 80 percent available in indicator pages where users can as designed, are implemented. For instance, of countries worldwide score in either the see the description of each indicator, the list the capacity of sector entities—regulatory green or yellow zone—roughly half in each; of subindicators, and the scoring distribution. agencies, ministries, utilities, and the private close to 20 percent score in the red zone The results page displays each country’s sector—is important. But government and (figure O.5). About half the countries with score for each pillar, with the ability to sort private sector staff numbers and budgets, more appropriate policy environments for by country name, region, score, and so on. for instance, are hard to collate—in absolute sustainable energy are emerging economies, Users can manipulate the weighting of the or relative terms—in ways that have the even if it is hardly surprising that OECD indicators to change the overall scores for same significance in every country. And countries feature prominently among those each country. The page also has a custom even where such information is measur- in the green zone and dominate the top 20 chart feature that allows users to compare able, channels of reporting may limit how RISE scorers. Nevertheless, it is noteworthy countries. easily it is aggregated and made available that about half of the countries located in to the surveyor. Even if staff numbers are the green zone are from the developing known, factors that substantially affect world. All continents are in that zone: Africa INTERPRETING RISE staff performance (such as technical (South Africa), Asia (China, India, Malaysia, capability or degree of authority) may not Thailand, and Vietnam), Europe and Central RISE measures only one facet of the be easily accounted for. A small department Asia (Armenia, Belarus, Kazakhstan, investment climate for sustainable energy. of energy specialists in one country could Romania, Russian Federation, Turkey, and It measures how far a country is from offer- be equivalent in effect to an untitled (and Ukraine), Latin America (Brazil, Chile, ing an attractive policy environment, not therefore uncounted) individual in an Colombia, Ecuador and Mexico), and the how much investment is likely under cur- influential position in another. Middle East (Algeria, the Arab Republic of rent conditions. Investment in renewable Egypt, the Islamic Republic of Iran, Jordan, energy is heavily influenced by factors well While the RISE indicators point to good Morocco, and Tunisia, and United Arab beyond what energy sector policies can practices in building an attractive enabling Emirates). govern. For this reason, RISE should not be environment, it is not designed as a policy interpreted as a comprehensive evaluation prescription nor as a roadmap for reforms. The quality of the policy environment for of whether a country is attractive for With this first global rollout, RISE is still not sustainable energy drops markedly between investment. Successive editions of RISE at a point to explain a relationship between upper-middle and lower-middle-income will, however, make it possible for users to enabling environment and its relationship with country groupings. The quality of the policy estimate how increments in RISE scores investments; thus the selection of indicators environment for sustainable energy is affect increments in investments through has been based on current (and available) strongly associated with country income an econometric assessment. understanding of what might work in a robust group, as might be expected. High-income investment climate. RISE is a live initiative and upper-middle-income countries RISE does not internalize the time element housed within the SEforALL knowledge hub, score almost equally well, but there is a of policies. It assesses policy frameworks as and so will continue to evolve as consensus very steep decline in scores between the OVERVIE W 7 FIGURE O.5 Overall RISE scores OVERWIEW Overall scores by country Overall scores and average scores by region Average Average Average Average Average Average Average Denmark score score score score score score score United States Canada 53 71 57 62 85 50 33 Netherlands 100 15% Germany 8% 14% United Kingdom 90 25% Romania 80 30% Italy 38% 54% Czech Republic 70 France 60 54% 42% Percent Switzerland 100% 71% Korea, Rep. 50 Belgium 40 70% Mexico Austria 30 43% Finland 20 33% 31% 54% Spain Sweden 10 14% Japan 0 3% Australia China East Asia Europe & Latin Middle East & OECD South Asia Sub- Greece & Pacific Central Asia America North Africa high Saharan Turkey & Caribbean income Africa Poland Vietnam Kazakhstan Russian Federation ≥67 33 1,000 MW 78 98 69 75 82 81 84 58 Source: RISE database, World Bank. ≥67 33 180 – 0 in between – scale ≤ 90 – 25 The indicator on the financial health and the existing consumers. This indicator assesses cost of its obligations or will have to liqui- performance of power companies can provide the financial health of the selected utility date other assets or borrow from elsewhere. a basis for investors and project developers or utilities through a suite of four financial Days payable outstanding estimates the for assessing investment opportunities when metrics that are calculated and evaluated average number of days the selected utility utilities are significant counterparts. based on financial statements. takes to pay its accounts payable. The operating margin—EBITDA—is a measure For assessment on this indicator, the largest The current ratio provides a snapshot of of a utility’s operating profitability. Because utilities in generation, T&D, and retail sales a utility’s short-term liquidity: whether it excludes financing cost, depreciation, and in the country are selected.10 the utility has sufficient current assets to amortization as well as non-operating profit meet current liabilities due within a year. and losses, EBITDA provides investors with Financially healthy and creditworthy The debt-service coverage ratio measures a clear view of a utility’s profitability on its utilities are better able to invest from their the cash flow available to pay current debt core business. own resources and through borrowing, obligations. A utility, or any company, must enabling them to expand the number of have sufficient cash flow to meet its debt connections and provide better service to service, or it will not be able to pay the full M E T H O D O LO GY 39 ENERGY EFFICIENCY INDICATORS There are 12 scored indicators in energy efficiency encompassing multi-dimensional aspects of policies and regulations. The scores are analyzed in chapter 3. One nonscored administrative procedures indicator is described in chapter 5. METHODOLOGY TABLE 1.5 Energy efficiency pillar Policies and Regulations National energy efficiency planning  Mandates & incentives: Large consumers  Minimum energy performance standards  • Existence of legislation/action plan • Mandates for large consumers • Range of product types covered • National targets • Incentives for large consumers • Verification and penalties for • Sector targets • Performance recognition noncompliance Energy efficiency entities  Mandates & incentives: Public entities  Energy labeling system  • Functions covered by dedicated entities • Obligations for public buildings • Range of product types covered • Obligations for other public facilities • Mandatory vs. voluntary system Information provided to electricity consumers  • Public procurement of energy • Reports on electricity use efficient products Building energy codes  • Quality of information • Ability to retain energy savings • New residential/commercial buildings • Comparisons with other users • Renovated buildings • Energy saving information Mandates & incentitives: Utilities  • Compliance system • Mandates for utilities • Building energy information Types of electricity rate structures  • Cost recovery mechanisms for utilities • Building energy efficiency incentives • Electricity rate structure • Demand charges (large customers) Financing mechanisms for energy efficiency  Carbon pricing and monitoring  • Time of use tariffs • Type of mechanism in each sector • Carbon pricing mechanism • Monitoring, reporting and verification (MRV) system 40 M E T H O D O LO GY Indicator 1. National energy efficiency planning Questions Scoring Traffic light I. National energy efficiency planning X = Sum and divide by 3 1. Energy efficiency legislation/action plan 1.1 Is there legislation or a national action plan that aims to increase EE? Yes – 100, No – 0 National energy efficiency targets 2.  2.1 Is there an energy efficiency goal or target at the national level? Yes – 100, No – 0 If the score X is: X ≥ 67 3. Sub-sectoral targets 33 < X < 67 3.1 Are there targets defined for any of the following sectors? 33 ≤ X a) Residential sector Yes – 25, No – 0 b) Commercial services sector Yes – 25, No – 0 c) Industrial sector Yes – 25, No – 0 d) Power sector Yes – 25, No – 0 Establishing a national energy efficiency supporting legislation or action plans to plan, especially one with specific, time-bound reach those targets, as the mere act of targets and supporting laws and plans enunciating a target is rarely sufficient to to meet them, is crucial for providing achieve it. Any action plan explicitly stating direction to all stakeholders making the goal of increasing energy efficiency is decisions on energy efficiency investments. accepted. Plans for reducing greenhouse This indicator reflects whether there is a gas (GHG) emissions qualify if efficiency national target for energy efficiency and is explicitly mentioned. Such plans and whether there are targets for sectors that targets often are a reference point or in most countries account for the majority foundation for the policies and regulations of energy consumption—households, aimed at sectoral implementation, and they commercial services (including transport), provide a means of measuring progress. industry, and power generation. This indicator also scores for the presence of M E T H O D O LO GY 41 Indicator 2. Energy efficiency entities Questions Scoring Traffic light II. Energy efficiency entities X = Sum and divide by 7 Energy efficiency entities in place 4.  Are there governmental and/or independent bodies that carry out formulation and implementation 4.1  of EE strategy, policy and regulation for each of the roles listed below? a) Setting EE strategy Yes – 100, No – 0 If the score X is: METHODOLOGY b) Setting EE standards Yes – 100, No – 0 X ≥ 67 c) Regulating EE activities of energy suppliers Yes – 100, No – 0 33 < X < 67 d) Regulating EE activities of energy consumers Yes – 100, No – 0 33 ≤ X e) Certifying compliance with equipment EE standards Yes – 100, No – 0 f) Certifying compliance with building EE standards Yes – 100, No – 0 g) Selecting and/or approving third party auditors tasked with certifying EE standards Yes – 100, No – 0 Legislation, action plans, and targets Functions that have proven important efficiency standards for buildings and are empty without agencies or entities include setting energy efficiency policies equipment, certifying compliance with dedicated to their development and and standards, regulating energy efficiency the set standards, and where necessary, implementation. Energy efficiency is a activities (on the supply side and among managing a third-party auditor system of diffuse and varied field, so such bodies need end users), and monitoring compliance with compliance. For example, a regulatory body specialized functional competencies and energy performance standards. Government may commission an independent agency may need to be located at different levels of legislation or action plans on energy to perform audits of industrial facilities to government jurisdiction, depending on local efficiency generally are best developed and verify the accuracy of self-reported data. circumstances. Additionally, they may be implemented by a dedicated planning entity. Such entities ensure that the correct steps either governmental or independent bodies. Regulatory entities are needed to oversee are taken to meet targets in the national RISE does not attempt to judge the best energy suppliers and consumers, though energy efficiency planning indicator. approach or level of jurisdiction, but due to this responsibility may be divided among the need for specialization, scores are based more than one organization. Dedicated on the number of functional areas covered. entities are essential for setting energy 42 M E T H O D O LO GY Indicator 3. Information provided to consumers about electricity usage Questions Scoring Traffic light III. Information provided to consumers about electricity usage X = Sum and divide by 4 Reports on electricity usage 5.  Is it mandatory for the selected utility to provide the following customers with reports 5.1  of their energy usage, in a bill or by other means for a) Residential customers (R)? Yes – 33.3, No – 0 b) Commercial services customers (C)? Yes – 33.3, No – 0 c) Industrial customers (I)? Yes – 33.3, No – 0 Quality of information in report 6.  6.1 At what intervals do they receive these reports (times per year)? ≤ 1 month – 100 1–6 months – 75 6–12 months – 50 > 12 months – 0 Divide by 3 If the score X is: 6.2 Do the reports include the price levels customers pay for energy usage? Yes – 33.3, No – 0 X ≥ 67 6.3  Does the regulator track the utility’s compliance with laws for providing energy Yes – 33.3, No – 0 33 < X < 67 usage information to customers? 33 ≤ X Comparison with other users 7.  7.1  Do customers receive a bill or report which compares them to other users in the same region Yes – 100, No – 0 and/or usage class? Information related to energy savings 8.  8.1  Do customers receive a bill or report that shows their energy usage compared to previous Yes – 33.3, No – 0 bills or reports over time? 8.2  Does the selected utility offer customers access to real-time feedback on energy usage Yes – 33.3, No – 0 (for either prepaid or post-paid systems)? 8.3  Does the selected utility offer customers the ability to manage energy usage levels remotely Yes – 33.3, No – 0 (through apps or other technology mediums that can track real time usage)? It is a truism that consumers need to know in the same class or information on available control their energy usage as it is consumed. how much energy they use before they can efficiency measures. Scores include Such a mechanism can be implemented in economize on it. Beyond that, however, the information on residential, commercial, and prepaid or postpaid systems, provided that information they receive, how often, and industrial consumers. consumers have access to the information against what it is compared can make a about their consumption. Mechanisms can difference in motivating them to adopt the This indicator also measures whether involve a computer program or mobile app right measures. Thus, among the energy consumers receive comparisons to their that shows energy use in a specific location efficiency indicators included in RISE is one previous levels of consumption and with instantly, and over past intervals. This gives on the information that consumers receive other, similar consumers. Such comparisons consumers information to base decisions regarding their electricity use—how much can be powerful motivators. This indicator about adjusting their consumption, they use, how much they pay, how often also measures the use of real-time particularly when demand is high. they receive this information, and whether feedback—a mechanism giving consumers they are given comparisons with other users the option to access information and to M E T H O D O LO GY 43 Box 1.2 Retail price of electricity Retail price of electricity is an important driver of investment in each type of sustainable energy, while not part of the RISE score. The level of the retail price relates differently to each of the RISE pillars. While higher electricity prices incentivize customers to seek energy efficiency measures, lower prices with cross-subsidization allow for better expansion of services into new areas. By contrast, renewable energy investors will look toward wholesale or contract prices granted by offtakers, rather than retail prices. Given the complexity of the relationship between retail electricity prices and investments in energy access, renewable energy, and energy efficiency, this indicator is presented separately for information purposes. METHODOLOGY Methodology Calculating the average level of retail prices is based on total revenue from sales of electricity and amount of electricity sold from the selected utility, which is the utility offering power distribution and retail services to the largest amount of customers in the largest business city metropolitan area. The average retail electricity tariff across all customer classes is calculated as: revenue from sales of electricity to end-users (US$) amount of electricity consumed by end-users (kWh) The retail electricity tariff for residential, commercial and industrial customer classes is calculated as: revenue from sales of electricity to end-users within given customer class (US$) amount of electricity consumed by end-users within given customer class (kWh) The actual average retail price can be determined regardless of the structure of tariff schedules or different consumption profile by customer. But this methodology may not be able to capture sales tax and other levies if they are accounted separately from revenue. In a liberalized market where utilities can offer different prices, this estimate from the selected utility may not represent the entire market. Results LIST OF COUNTRIES BY INCOME GROUP BY RETAIL PRICE RANGE Regardless of income, countries are distributed among different price Tariff Countries by income group (USc/kWh) ranges (box table). A larger number of countries are in the range of 5 to 15 High Qatar; Saudi Arabia; Venezuela Upper-middle Angola U.S. cents per kWh, while a handful of 0–5 Lower-middle Egypt, Arab Rep.; Kyrgyz Republic; Sudan; Uzbekistan countries are in the lowest range. Low — Small island developing states in High Korea, Rep.; Netherlands; Russian Federation Upper-middle China; Ecuador; Kazakhstan; Malaysia; South Africa; Tunisia; general have a relatively high level of Turkey retail price given high costs of elec- 5–10 Lower-middle Armenia; India; Indonesia; Lao PDR; Mongolia; Vietnam; tricity supply due to their geography. Yemen, Rep. Bahrain, the Dominican Republic, Low Afghanistan; Bangladesh; Burundi; Ethiopia; Guinea; Myanmar; Haiti, Maldives, Papua New Guinea, Nepal; Zimbabwe Solomon Islands, and Vanuatu are High Australia; Belgium; Chile; Denmark; United States included in RISE, with the highest Upper-middle Argentina; Brazil; Mexico; Peru; Romania; Thailand 10–15 average price close to US$1.0/kWh Lower-middle Cameroon; Côte d'Ivoire; Pakistan; Sri Lanka in Vanuatu. Low Malawi; Tanzania; Zambia High Greece; Switzerland Upper-middle Colombia; Dominican Republic 15–20 Lower-middle Ghana; Philippines; South Sudan Low Cambodia; Kenya; Madagascar; Mali; Niger; Uganda High Japan; Spain; United Kingdom Upper-middle — > 20 Lower-middle Nicaragua; Senegal; Solomon Islands; Vanuatu Low Benin; Burkina Faso; Haiti; Rwanda; Sierra Leone; Togo (continued) 44 M E T H O D O LO GY Box 1.2 Retail price of electricity (continued) An analysis by dominant fuel type RETAIL PRICE BY DOMINANT FUEL TYPE (USc/kWh) shows that (box figure) countries where hydropower plants supply more 0.35 than 90 percent of electricity have the 0.30 lowest range of average retail prices due to low cost of generation, including 0.25 operation and maintenance. These USc/kWh 0.20 countries include the Democratic Republic of Congo, Ethiopia, Kyrgyz 0.15 Republic, Malawi, Mozambique, Nepal, 0.10 Tajikistan, Venezuela, and Zambia. 0.05 Countries dominated by oil products, including diesel and heavy fuel oil, 0.00 show the highest range of prices, Coal dominated Gas dominated Oil products Hydro dominated countries countries dominated countries reflecting the high cost of generation, countries including fuel supply. Coal and gas fall in between. Median Source: RISE Team. M E T H O D O LO GY 45 Indicator 4. Energy efficiency incentives from electricity rate structures Questions Scoring Traffic light IV. EE incentives from electricity rate structures X = Sum and divide by 3 Electricity rate structure 9.  9.1  What types of electricity rate structure do the (R) residential, (C) commercial services If a country selects more than and (I) industiral customers face? one option, the highest score is selected. METHODOLOGY a) Flat fee (per connection) 33 b) Constant (uniform) block rates 67 c) Declining block rates 0 d) Increasing block rates 100 Sum and divide by the 3 sectors Demand charges (large customers) 10.  Which of the following charges do electricity customers pay in the (R) residential sector, 10.1  If the score X is: (C) commercial services sector and (I) industrial sector (only industrial and commercial will be scored)? X ≥ 67 Yes – 33.3, No – 0 a) Energy (kWh) 33 < X < 67 Yes – 33.3, No – 0 b) Demand (kW) 33 ≤ X Yes – 33.3, No – 0 c) Reactive power (kVAr) Sum and divide by 2 sectors Time of use tariffs 11.  Are any of the following time-of-use (TOU) rate structures applied to the (R) residential sector, 11.1  (C) commercial services sector and (I) industrial sector? For each sector a) Real-time pricing Yes to 1 or more – 100 b) Variable peak pricing No to all – 0 c) Critical peak pricing Sum and divide by the 3 sectors d) Seasonal rate e) Peak-time rebates Source: Definitions of each rate structure are in box 1.3. The retail price of electricity is of prime as they consume more, is considered the site of use, but may improve efficiency on importance in motivating efficiency. Beyond best price structure to incentivize efficient the supply side. Time-of-use tariffs also may retail prices, electricity rate structures can electricity use. Other possible structures lead to gains in end-use or power system have a powerful effect. Unlike average retail include uniform block rates, declining block efficiency. These tariffs include real-time price levels, which are difficult to determine rates, and flat fees. pricing, variable peak or critical peak pricing, and even more troublesome to compare seasonal rates, and peak-time rebates, all across countries in a context-neutral For larger industrial and commercial of which are scored on this indicator. The manner, rate structures can be categorized end-users, charges for demand and reactive effectiveness of such mechanisms depends as providing more or less incentive to adopt power alongside charges for energy con- on close communication between utilities energy efficiency. Increasing block tariffs, sumption can induce load shifting. This may and educated consumers able to take through which consumers pay higher prices not have a large effect on efficiency at the advantage of these opportunities. 46 M E T H O D O LO GY Box 1.3 Definitions of rate structures Electricity rate structure Flat fee: Flat rate to gain access to electricity, independent of the amount of electricity consumed. The fee may vary by customer type, such as sector or size. Constant (uniform) block rate: Single rate per kWh consumed, regardless of amount consumed. Declining block rate: Progressively lower rates per kWh as consumption increases above thresholds or blocks, such as 1–250 kWh, 250–500 kWh. Increasing block rate: Progressively higher rate per kWh as consumption rises above thresholds or blocks. May be used to incentivize conservation by customers. Demand charges (large customers) Demand charge: Billed as a fixed rate per kilowatt of peak demand during a billing cycle, regardless of when the peak demand occurred. Reactive power charge: In addition to net consumption, loads (like electric motors) in AC power circuits require reactive power (kVAr), which is absorbed and returned. Reactive power is higher for customers with a higher power factor, typically from less efficient motors and transformers. Charges are levied as for demand charges, but per kVAr, the unit of measurement of reactive power. Time-of-use tariffs Real-time pricing: Tariff linked to the hourly market price for electricity. Customers are made aware of hourly prices on either a day-ahead or hour-ahead basis, providing the incentive to reduce consumption at the most expensive times. Critical peak pricing: Customers are given advance notice that they will pay higher prices during days when wholesale prices are the highest or when the power grid is severely stressed, typically up to 15 days per year during the season(s) of the system peak. Variable peak pricing: Similar to critical peak pricing, with the exception that the window of critical peak hours is not fixed. The specific hours of the event are provided to participants at the same time that they are notified of the upcoming critical peak event (typically one day in advance). Seasonal rates These vary by time of year but not by time of day. This provides a greater incentive for load shifting according to seasonal consumption patterns. Peak-time rebates: Peak-time rebates are rates that vary according to the time of day, or rebates that typically are offered as an alternative to critical peak pricing. Rather than charging a higher rate during critical peak events, participants are paid for load reductions. M E T H O D O LO GY 47 Indicator 5. Mandates and incentives: Large consumers Questions Scoring Traffic light V. Incentives & mandates: large consumers X = Sum and divide by 3 Mandates for large consumers 12.  12.1 Are there any of the following energy-efficiency mandates for large energy users? a) Targets (e.g., kWh savings of lower energy intensity or carbon dioxide reductions, etc.) Yes to 1 or more – 33.3 b) Mandatory audits No to all – 0 METHODOLOGY c) Progress/tracking reports d) Energy-management system (computer technologies to optimaize energy use) 12.2 Are there penalties in place for noncompliance with regulatory obligations for EE? Yes – 33.3, No – 0 12.3  Is it required for the consumption and/or savings of large-scale energy users to be tracked and Yes – 16.7, No – 0 documented on a regular basis? If the score X is: 12.4 Is there a measurement and verification program in place? Yes – 16.7, No – 0 X ≥ 67 33 < X < 67 Incentives for large consumers 13.  33 ≤ X 13.1  Are energy efficiency incentives in place for large-scale users that have achieved significant Yes – 100, No – 0 energy savings measures? 14. Performance recongnition 14.1  Is there a program to publicly recognize large-scale users that have achieved significant energy Yes – 33.3, No – 0 savings measures? 14.2 Are energy savings and/or financial savings publicized? Yes – 33.3, No – 0 14.3  Does the program offer assistance (from a government or independent entity) to large-scale Yes – 33.3, No – 0 users to identify energy savings investments opportunities? Large consumers are an important segment of threshold. (For example, all facilities that to penalties for noncompliance. In most the energy market, and in many countries they consume over 500 kWh per day, or all circumstances, such systems are best account for a significant portion of total energy facilities that emit over 25 kt CO2e per managed by an independent third party. consumption and a similar share of efficiency year.) The indicator next measures whether Voluntary measures can positively influence potential. This indicator measures the extent efficiency mandates are in place for this class large consumers towards energy efficiency. to which policies and regulatory measures are of consumer, and whether these include Financial and tax incentives for demonstrating in place and known to be effective in creating requirements to track energy consumption well-defined efficiency improvements can and enforcing incentives to increase efficiency on a regular basis—an important basic step spur energy efficiency investment. Public of large consumers—typically factories, toward achieving energy efficiency gains. recognition programs, such as awards and but potentially also large commercial and The indicator also covers targets, mandatory certifications for energy-efficient practices, institutional facilities. (Government facilities audits, and energy management systems, all also serve as a call to action and have the are covered by the next indicator.) of which are well-documented contributors to added benefit of raising awareness of energy energy efficiency. efficiency solutions among consumers. The definition of large varies by country, so this indicator first determines whether the As for other classes of consumers, mandates government has identified priority consum- are most effective if supported by a system ers that consume energy above a certain of monitoring and verification and subject 48 M E T H O D O LO GY Indicator 6. Mandates and incentives: Public sector Questions Scoring Traffic light VI. Incentives & mandates: public sector X = Sum and divide by 4 Obligations for public buildings 15.  15.1 Are there building energy savings obligations for public buildings? Yes – 50, No – 0 15.2  Are energy savings from efficiency activities at public buildings tracked (either in-house Yes – 50, No – 0 or by a third party)? Obligations for other public facilities 16.  16.1 A  re there building energy savings obligations for other public facilities (may include water supply, Yes – 50, No – 0 wastewater services, municipal solid waste, street lighting, transportation, and heat supply)? 16.2 Are energy savings from efficiency activities at other public facilities tracked? Yes – 50, No – 0 If the score X is: Public procurement of energy efficient products 17.  X ≥ 67 Is there a specific policy or mandated guidelines for public procurement of energy-efficient 17.1  products and services at the following levels? 33 < X < 67 a) National level Yes to 1 or more – 100 33 ≤ X b) Region/state/province level No to all – 0 c) Municipal/city/county level Ability to retain energy savings 18.  Do public budgeting regulations and practices allow public entities to retain energy savings at 18.1  the following levels? Tick all applicable levels: a) National level Yes to 1 or more – 100 b) Region/state/province level No to all – 0 c) Municipal/city/county level Public sector energy efficiency measures at different levels of government. Public the prospect of a shrinking budget rarely greatly affect overall energy savings given procurement guidelines are graded for inclu- spurs investment. This indicator does not the large share of infrastructure assets typi- sion of standards for energy efficiency in the consider the stringency of energy efficiency cally owned and operated by governments. tendering of works, goods, and services. standards that may be used since such Public programs offer opportunities for values are highly context specific. governments to provide leadership and to This indicator also considers the quality of foster nascent markets for energy-efficient energy savings obligations and incentives products and services. for public buildings and energy-intensive facilities such as water supply, wastewater For public entities, such as government services, municipal solid waste, street offices and public services, rules requiring lighting, transportation, and heat sup- the procurement of energy efficient devices ply. Regulations should set minimum and systems combined with budgetary rules standards for energy use in well-defined allowing retention of energy cost savings areas for each facility. As an incentive, the have proven fundamental to implementing overseeing public entity of a given facility energy efficiency measures. Several ques- or department should be allowed to retain tions in the survey capture such provisions budgetary savings from efficiency gains, as M E T H O D O LO GY 49 Indicator 7. Mandates and incentives: Utilities Questions Scoring Traffic light VII. Incentives & mandates: utilities X = Sum and divide by 2 Mandates for utilities 19.  For each area: (i) generation, (ii) transmission and distribution networks Sum and divide by the 3 areas and (iii) demand-side management: 19.1 Are utilities required to carry out energy efficiency activities in this area? Yes – 25, No – 0 METHODOLOGY 19.2  Are there penalties in place for noncompliance with EE requirements? Yes – 25, No – 0 19.3  Are energy savings or other target indicators measured to track performance in Yes – 25, No – 0 meeting EE requirements? 19.4 Are the requirements measured/validated by an independent third party? Yes – 25, No – 0 If the score X is: X ≥ 67 Cost recovery for utilities 20.  20.1  Are any of the following mechanisms available for utilities to recover costs associated 33 < X < 67 with or revenue lost from mandated energy efficiency activities? 33 ≤ X a) Public budget financing Yes to 3 or more – 100 b) Compensation for revenue losses from EE activities via a tracking account Yes to 1 or 2 – 50 c) Revolving funds and/or credit lines for EE activities No to all – 0 d) Partial risk guarantees e) Program cost recovery f) ESCOs g) On-bill financing/repayment For electricity supply utilities, expanding extent to which there are mechanisms for into energy efficiency involves mandates to utilities to recover the costs associated with achieve savings and changes in regulations energy savings. For mandates to be effec- allowing the recovery of costs and the tive, utility performance should be tracked ability to profit from customers’ efficiency and verified, ideally by a third party, with investments. Many consider mandates and well-defined penalties for noncompliance. incentives an important pathway to achiev- Proven cost-recovery mechanisms include ing significant end-use energy savings, but public financing, compensation for lost their use is not universally adopted among revenue via tracking accounts, agreements high-scoring countries. Several European with energy service companies, credit lines, countries with well-developed energy on-bill financing or repayment, and partial efficiency programs have opted out of the risk guarantees. As with the other indica- European Union (EU) directive calling for tors, only the availability of cost-recovery member states to adopt energy efficiency mechanisms is measured, as the effective- obligations on utilities operating within their ness of each would differ depending on the borders, choosing instead to adopt other circumstances of each country, such as the measures with equivalent effects. degree of electricity privatization. This indicator measures whether energy efficiency requirements are applied to the generation, T&D, and demand-side management operations of utilities, and the 50 M E T H O D O LO GY Indicator 8. Financing mechanisms for energy efficiency Questions Scoring Traffic light VIII. Financing mechanisms for energy efficiency* X = Sum and divide by 3 sectors Financing mechanisms available in each sector 21.  Are any of the following financing mechanisms for energy efficiency activities available 21.1  in the (R) residential sector, (C) commercial services sector and (I) industrial sector? For each sector a) Tax duties/incentives Yes to 3 or more – 100 b) Discounted “green” mortgages Yes to 1 or 2 – 50 If the score X is: c) On-bill financing/repayment No to all – 0 X ≥ 67 d) Credit lines and/or revolving funds with banks for energy efficiency activities 33 < X < 67 e) Energy services agreements (pay-for-performance contracts) 33 ≤ X f) Green or energy efficiency bonds g) Vendor credit and/or leasing for energy efficiency activities h) Partial risk guarantees i) Other * Market/government mechanism information was tracked but not incorporated into the scoring. Financing initial investment costs is one of the early stages of market development and such as private banks, financial institutions, the most challenging hurdles to improving is phased out as markets mature. No survey or utility companies do not require energy efficiency. This indicator measures can objectively measure how well such government approval and are considered the extent to which specialized financing mechanisms perform for those countries market driven. Such transactions typically mechanisms for energy efficiency invest- that have them, but in general, more are subject to regulatory oversight and ments in the residential, commercial, and mechanisms are better than fewer. reporting requirements, but not direct industrial sectors are offered by public and government intervention. private entities. These include mortgage This indicator does not distinguish discounts, utility prepayment, credit lines the source of financing in the scoring By contrast, government-driven mecha- or revolving funds, pay-for-performance because the best-practice context varies nisms require approval, authorization, or energy savings contracts, and vendor by economy, but such information is other form of direct participation by govern- credits. This indicator is scored higher the tracked for future analytical purposes. ment bodies. Thus, government bonds more mechanisms are available in each sec- Market-driven mechanisms are defined and risk guarantees for energy efficiency tor up to a threshold of three mechanisms. as financial transaction mechanisms that investments require agencies to acquire and The effectiveness of public support for proceed without any direct government disburse funds, even though the agencies energy efficiency financing depends on the approval, authorization, or other mediation may not enter directly into transactions with particular circumstances of a given market. procedure. As such, discounted mortgages project hosts. Typically, public support is most effective at or credit terms offered by market entities M E T H O D O LO GY 51 Indicator 9. Minimum energy performance standards Questions Scoring Traffic light IX. Minimum energy efficiency performance standards X = Sum and divide by 2 Have minimum energy performance standards been adopted for: 22.  22.1 Refrigerators? For each category 22.2 Air conditioners? Yes – 100, No – 0 22.3 Lighting equipment? Sum and divide METHODOLOGY 22.4 Industrial electric motors? by the 6 categories 22.5 Other industrial equipment? If the score X is: 22.6 Light vehicles (heavy duty transport vehicles were tracked but not included in the scoring)? X ≥ 67 33 < X < 67 Verification and penalties for noncompliance 23.  For each category 33 ≤ X 23.1 Is there a verification program in place? Yes – 33.3, No – 0 23.2 Is it carried out by a third party? Yes – 33.3, No – 0 23.3 Is there a penalty for noncompliance with energy efficiency standards? Yes – 33.3, No – 0 Sum and divide by the 6 categories Well-designed minimum energy perfor- This indicator covers the adoption of a third party, and penalties for noncompli- mance standards (MEPS) are among the MEPS for refrigerators and air conditioners ance. MEPS may be domestically developed most effective policy interventions for (representing domestic appliances), lighting or adapted from standards developed improving energy efficiency. They can be equipment, industrial electric motors (the elsewhere, so the credit can be given to set at levels and phased in to yield benefits equipment category that consumes more importing countries that have neither their that far outweigh the costs for consumers, electricity worldwide than any other), other own appliance and equipment manufactur- manufacturers, and suppliers. Mandatory industrial equipment (credit is given for any ers nor the resources to build their own minimum standards set a floor, and prod- of a variety of categories), and light- and standards from scratch. ucts failing to meet that minimum standard heavy-duty vehicles. Credit is given only for cannot legally be sold. Other approaches to mandatory standards; voluntary programs standards setting are possible, like Japan’s are not scored. Top Runner program that sets a standard in accordance with the best available model on As with other indicators, there is no attempt the market and other products are labeled to compare the relative stringency of accordingly. However, because minimum standards, but such data is collected for standards are more widely applied and informational purposes. Credit is given if have been shown to work, the survey countries have monitoring and verification measures them. systems in place, ideally implemented by 52 M E T H O D O LO GY Indicator 10. Energy labeling systems Questions Scoring Traffic light X. Energy labeling systems X = Sum and divide by 2 Have energy efficiency labeling schemes been adopted for: 24.  24.1 Refrigerators? For each category 24.2 Air conditioners? Yes – 100, No – 0 24.3 Lighting equipment? Sum and divide 24.4 Industrial electric motors? by the 6 categories If the score X is: 24.5 Other industrial equipment? X ≥ 67 24.6 Light vehicles (heavy duty transport vehicles were tracked but not included in the scoring)? 33 < X < 67 33 ≤ X Mandatory vs. voluntary labeling system 25.  For each category 25.1  Are any of the above labeling schemes mandatory? Yes – 100, No – 0 Sum and divide by the 6 categories Alongside mandatory (and occasionally voluntary) standards, energy labels are complementary tools that ensure market players have appropriate information for decision-making. Requiring energy labels has proven to have substantial behavioral effects with respect to manufacturing and purchasing energy-intensive products. This indicator measures whether energy labels are applied to each key product category and whether these labels are mandatory or voluntary. Mandatory labeling systems are the most effective means of incentivizing market suppliers to meet energy efficiency standards. Similar to the energy perfor- mance standards indicator, the original source of the labeling system—external or domestic—is tracked but not scored. M E T H O D O LO GY 53 Indicator 11. Building energy codes Questions Scoring Traffic light XI. Building energy codes X = Sum and divide by 5 New residential and commercial buildings 26.  26.1 Are there energy efficiency codes for new residential buildings? Yes – 50, No – 0 26.2 Are there energy efficiency codes for new commercial buildings? Yes – 50, No – 0 METHODOLOGY 27. Compliance system 27.1 Is there a system to ensure compliance with building energy efficiency codes? Yes – 50, No – 0 27.2 Is it carried out by a third party? Yes – 50, No – 0 28. Renovated buildings For each sector 28.1  Are renovated buildings required to meet a building energy code, in (R) residential Yes – 50, No – 0 If the score X is: and (C) commercial sectors? X ≥ 67 33 < X < 67 Building energy information 29.  33 ≤ X 29.1  Is there a mandatory standardized rating or labeling system for the energy performance Yes – 33.3, No – 0 of existing buildings? 29.2  Are commercial and residential buildings required to disclose property energy usage Yes – 33.3, No – 0 at the point of sale or when leased? 29.3  Are large commercial and residential buildings required to disclose property energy Yes – 33.3, No – 0 usage annually? Building energy efficiency incentives 30.  30.1  Are there mandates or targets for new building stocks to achieve high quality energy efficiency Yes – 100, No – 0 certifications, such as LEED (Leadership in Energy & Environmental Design) (e.g., percentage of new building stocks that must be LEED certified)? Energy-efficient buildings are more This indicator measures the existence voluntary programs to meet high-quality prevalent thanks to a growing number and stringency of energy efficiency codes efficiency standards have proven to be as of building efficiency standards, often in residential and commercial buildings, effective or even more effective of an influ- based on international platforms and newly developed and renovated. Creating ence on building developers, this indicator adapted to local circumstances. Investing in a standardized rating system for buildings also considers the existence of incentives energy efficiency should be considered with according to their energy use is an effective and recognized certification programs for renovations to existing buildings and during way to implement building energy codes. energy-efficient buildings. initial development and construction of new The codes should have a verification system, buildings. Major efficiency improvements ideally carried out by a third party. Buildings have been achieved with mandatory codes should be required to disclose energy usage and voluntary programs. information annually and at the point of sale or lease of any of their units. Because 54 M E T H O D O LO GY Indicator 12. Carbon pricing and monitoring Questions Scoring Traffic light XII. Carbon pricing and monitoring X = Sum Carbon pricing mechanisms 31.  If the score X is: 31.1  For any carbon pricing mechanism (e.g., carbon tax, emission trading system), 100% coverage – 50, what is the portion of national GHG emissions covered? < 100% – scaled X ≥ 67 31.2 Is there a monitoring, reporting and verification system for greenhouse gas emissions in place? Yes – 50, No – 0 33 < X < 67 33 ≤ X Putting a price on carbon has long been Other policies that implicitly price GHG The first subindicator measures the propor- held as an efficient way to internalize the emissions, such as the removal of fossil tion of national GHG emissions14 covered external costs associated with carbon fuel subsidies, energy taxation, support for under carbon-pricing mechanisms, if any. emissions from energy use, thus helping renewable energy, and energy efficiency Countries without such a mechanism are mitigate the threat of climate change, and to certificate trading are not included. Nor automatically evaluated at 0 percent. This encourage a faster transition to low-carbon does this indicator regard international information indicates the effectiveness of economies. The latest report from the flexible mechanisms, such as the clean the mechanism regardless of price level. For United Nations Intergovernmental Panel on development mechanism of the United example, if a country has a comprehensive Climate Change11 recognizes the importance Nations framework convention on climate mechanism that is applied to all sectors of carbon pricing to help limit the increase in change or similar regional agreements, as and entities emitting carbon, the coverage the global mean temperature. In developing national carbon-pricing mechanisms. is close to 100 percent. A country impos- sustainable energy, an adequate price ing a carbon tax only on large electricity on GHG emissions helps mobilize the Coverage of the carbon pricing regime mat- producers has lower coverage. RISE does financial investments required to support ters for the energy efficiency and renewable not assess the carbon price as there is no diverse actions, such as renewable energy energy pillars. A price on carbon signals to globally accepted standardized methodol- deployment, adoption of energy efficiency investors the true relative price of the con- ogy to determine the appropriate level. measures, and use of low-carbon technolo- sumption of fossil fuels, thus making power gies in industry.12 generation from renewable energy sources The second subindicator measures the pres- somewhat more competitive (holding ence of a mandatory reporting requirement This indicator assesses the status of everything else constant). Aside from creat- of GHG emissions by emitters on a regular carbon pricing and the monitoring ing a more level playing field for renewables basis. It allows transparent and accurate regimes’ ability to track these emissions relative to conventional fuels, carbon pricing information on GHG emissions through a reliably. For this report, carbon pricing mechanisms can raise revenues to provide bottom-up approach from the individual refers to initiatives that put an explicit additional incentives to potential renewable entity level. This information provides a price on GHG emissions, expressed as a energy investors. A carbon price also makes robust foundation to monitor and quantify value per ton of carbon dioxide, which is use of fossil fuels more expensive to use, the mitigation effect of investment in low- aligned with the latest report of the World so the pursuit of greater efficiency in the carbon technologies, including renewable Bank on carbon pricing.13 These initia- supply and utilization of energy becomes energy and energy efficiency, thus attracting tives include emissions trading systems, more attractive from a financial standpoint. international private or public financing for carbon taxes, offset mechanisms, and Such pricing would reinforce the regulatory the deployment of sustainable energy and, results-based finance linked directly to and administrative mechanisms necessary more broadly, low-carbon technologies. GHG emissions that result in an explicit to a successful portfolio approach to valuation of carbon dioxide emissions. encouraging greater energy efficiency. M E T H O D O LO GY 55 RENEWABLE ENERGY INDICATORS There are seven scored indicators in renewable energy encompassing multi- dimensional aspects of policies and regulations. The scores are analyzed in chapter 4. One nonscored administrative procedures indicator is described in chapter 5. METHODOLOGY TABLE 1.6 Renewable energy pillar Policies and Regulations Legal framework for renewable energy  Incentives & regulatory support  Counterparty risk • Primary legislation • Financial and regulatory incentives • Payment risk reduction • Legal private ownership of generation • Grid access and dispatch • Utility creditworthiness • Utility transparency and monitoring Planning for renewable energy expansion  Attributes of financial and regulatory incentives  • Renewable energy targets and plans • Predictabillity and efficiency (policy-neutral) Carbon pricing and monitoring  • Renewable energy in generation planning • Predictability and efficiency (policy-specific) • Carbon pricing mechanism • Renewable energy in transmission planning • Long-term sustainability • Monitoring, reporting and verification • Resource data and siting (MRV) system Network connection and use  • Connection cost allocation • Network usage and pricing • Renewable grid integration Indicator 1. Legal framework for renewable energy Questions Scoring Traffic light I. Legal framework for renewable energy X = Sum and divide by 2 1. Primary legislation If the score X is: 1.1  Does a legal framework for renewable energy development exist? Yes – 100, No – 0 X ≥ 67 33 < X < 67 Legal private ownership of generation 2.  2.1  Is private sector ownership of renewable energy generation legally authorized? Yes – 100, No – 0 33 ≤ X Primary legislation providing a clear and renewable energy and allow public institutions or management contracts. Ideally, the well-designed legal framework for renew- and private actors to understand their roles. private sector’s right to own and operate able energy is a fundamental signal of a plants should be stated explicitly in the government’s commitment to harnessing its RISE considers whether the private sector primary legislation, communicating to private renewable resources. Importantly, it provides can legally own renewable energy generation developers their expected role in the sector, legally binding authorization to develop the capacity. Private ownership refers to any minimizing regulatory risk, and ultimately sector, and often provides guidance on how arrangement where a private operator retains reducing financing costs. But other instru- such development will be undertaken and the revenue from power sales, such as build- ments demonstrating equivalent de facto steps the government will take to support it. own-operate or build-own-operate-transfer legal approval, such as regulations or permits The legal framework can be part of a broader arrangements. It does not refer to private designed specifically for private projects, also energy or power sector law or a stand-alone participation limited to project operation such can provide potential investors with sufficient measure, but it must enshrine the vision for as engineering, procurement and construction, certainty to proceed. 56 M E T H O D O LO GY Indicator 2. Planning for renewable energy expansion Questions Scoring Traffic light II. Planning for renewable energy expansion X = Sum and divide by 4 Renewable energy targets and plans 3.  3.1 Does an official renewable energy target exist? Yes – 25, No – 0 3.2 Does a renewable energy action plan or strategy to attain the target exist? Yes – 25, No – 0 3.3 Does the plan or strategy define the amount of investment necessary to meet the RE target? Yes – 25, No – 0 3.4 Is there an institution responsible for tracking progress in renewable energy development? Yes – 25, No – 0 Renewable energy in generation planning 4.  4.1 Does an electricity generation plan that includes renewable energy development exist? Yes – 50, No – 0 4.2 Is the generation plan based on a probabilistic approach? Yes – 50, No – 0 5.  Renewable energy in transmission planning If the score X is: 5.1 Does the current transmission planning consider renewable energy scale-up? Yes – 50, No – 0 X ≥ 67 5.2 Has the country conducted a variable renewable energy integration study? Yes – 50, No – 0 33 < X < 67 33 ≤ X Resource data and siting 6.  For each relevant RE technology:* 6.1  Does the government publish or endorse a resource atlas or other data on the abundance and Yes – 25, No – 0 quality of the resource? 6.2  To what extent does the map follow best practices of data quality and availability 0–25 – scale (criteria defined in table 1.4)? 6.3  Has the country carried out strategic planning or produced zoning guidance to inform the Yes – 25, No – 0 commercial development of the resource? 6.4.  Has the planning or zoning guidance been carried out according to best practice by 1) being 0–25 – scale undertaken as part of a strategic environmental and social assessment or equivalent process; Sum and divide by number and 2) making the outputs publicly available? of relevant technologies * A relevant technology is one for which the country has a specific resource target or, if no resource targets exist, has high resource potential according to IRENA country profiles. Setting a concrete renewable energy target to meet the target; and to track progress both to ensure that a country can realize the and communicating that target publicly toward the target. benefits of renewable energy and that the signals to the public and potential investors renewable generation plants that are built that the government is committed to devel- Long-term planning exercises—from provide the greatest long-term value. oping renewable energy in order to support national least-cost development plans critical developmental objectives, including to individual utilities’ integrated resource The level at which this planning occurs energy security, energy access, environmen- planning—map out the infrastructure differs based on the structure of the tal sustainability, and economic develop- needed to meet future electricity demand. power sector. In many countries, it will be ment. The level or type of target does not These typically are designed to minimize undertaken at least in part by a government affect the score, as the ideal amount or costs while guaranteeing sufficient entity (such as an energy ministry or state- share of renewable energy in a country is supply and reliability. But renewable energy owned utility). In more competitive markets specific to its circumstances. A target itself, resources often are not included in such there may be an independent planning body, however, typically is not enough, as even the plans, either because their potential (and or planning exercises may be conducted most ambitious goals have little meaning cost) is not understood or, as with wind and by private utilities. In either case, RISE without a realistic plan for implementation solar power, their generation characteristics assesses whether renewables have been or at least a clear understanding of what (in particular variability and the steps explicitly incorporated in the most recent needs to be done. Thus, a full score requires a that can be taken to reduce it) are not generation planning,15 and whether that government to communicate how the target easily incorporated into traditional models. planning considers the probabilities of key will be met, for example through a strategy or However, including renewable energy in the inputs when determining the best long-term action plan; to define the required investment long-term planning process is important, investments.16 M E T H O D O LO GY 57 As with generation, planning for the dispatchable generation, storage systems, resources that governments have prioritized expansion of a national transmission system or demand-response measures) and the through national targets or, if no resource- must incorporate potential future renewable necessary future steps to increase flexibility specific targets exist, that otherwise offer energy development to avoid constraints on at an acceptable cost and without strong potential for power generation.18 generation and to ensure that the strongest sacrificing reliability. resources can be developed and utilized. Based in part on resource maps, an appro- Unlike conventional generation, most To understand how best to develop a priate strategic planning or zoning guidance renewable power plants can be developed country’s renewable energy resources, it systematically and publicly identifies sites or only in certain locations, where the resource is important to understand the extent of zones for development of renewable energy METHODOLOGY is strongest. This requires the deliberate such resources. While developers take as well as routes for the efficient transmis- design of a transmission system to reach detailed measurements at a site before sion of electricity to load centers. Such those areas, rather than passively allowing deciding a project’s viability, national or maps are important sources of information generation to be developed around existing regional data indicating the strength and for renewable energy developers because or planned transmission lines. Transmission locations of renewable resources provides they provide guidance on where and how plans that explicitly incorporate renewable critical input to sector planning and helps each renewable energy resource should be energy also allow an existing network potential investors decide whether or not developed. Ideally, siting or zoning is carried to accept more electricity or maximize to look more closely at a country or region. out as part of a broader strategic environ- flexibility to integrate electricity from The best resource maps maximize accuracy mental and social assessment, ensuring that variable renewable resources. Integration and communicate their methodology. Table renewable energy development happens in studies identify the flexibility of an existing 1.7 shows the characteristics measured by a coordinated, economical, sustainable, and power system to accommodate variable RISE for maps of each resource.17 For scoring socially inclusive way. renewables (for example, through existing purposes, RISE considers only maps for TABLE 1.7 Attributes measured by RISE for each renewable energy resource map for each technology Biomass Hydropower • Includes an explanation of the methodology • Includes an explanation of the methodology • Includes publicly available source data • Includes publicly available source data • Is validated by ground-based survey or officially reported data •Is validated by ground-based water run-off data and/or site surveys from potential sites Solar/wind Marine • Has a spatial resolution of 5km or less • Includes an explanation of the methodology • Includes an explanation of the methodology • Includes publicly available source data • Includes publicly available source data •Is validated by at least 5 ground-based measurements taken for at least a year • Is based on modeling inputs of at least 10 years Geothermal • The government has produced a national geological map or atlas •T he government has carried out test drilling at one or more potential •The government has carried out surface exploration (geological, geochemical, geothermal sites (slim bore or full well) temperature gradient) at potential geothermal sites •T he government has supported the creation of a reservoir model in at least •The government has collected and recorded well data at potential one site geothermal sites • Includes publicly available source data 58 M E T H O D O LO GY Indicator 3. Incentives and regulatory support Questions Scoring Traffic light III. Incentives and regulatory support for renewable energy X = Sum and divide by 2 7. Financial and regulatory incentives for renewable energy 7.1  Is there at least one scheme to support renewable energy per unit of electricity generated? Yes – 50, No – 0 (e.g., feed-in tariff, competitive bidding/auction, mandates, generation premiums, production tax credits)? 7.2  Does the government offer other direct fiscal incentives for renewable energy (e.g., capital Yes – 50, No – 0 subsidies, grants or rebates, investment tax credits, tax reductions)? If the score X is: X ≥ 67 8. Grid access and dispatch 33 < X < 67 8.1 Does the country provide guaranteed access to the grid for RE? Yes – 25, No – 0 33 ≤ X 8.2 Do RE projects receive priority in dispatch? Yes – 25, No – 0 8.3 Are there provisions to compensate seller if offtake infrastructure is not built in time? Yes – 25, No – 0 8.4  Are there mechanisms to compensate RE projects for lost generation due to certain Yes – 25, No – 0 curtailments after project commissioning? Financial and regulatory incentives refer to can be set at the utility’s avoided cost, access for power plants based on renewable measures to improve the financial returns or an auction can result in prices below resources, and the latter through measures or reduce the risk of private renewable those paid to fossil-fuel generators. In such that increase the likelihood renewable generation projects and usually clarify cases, the incentive is in the stability of a energy will be dispatched and that costs precisely how such projects may enter guaranteed price rather than the level it to generators will be reduced if offtakers the market. RISE looks first at those acting is set, as well as a clear articulation of the are unable to accept electricity due to directly on the price or revenue received steps required to enter the market. Each weaknesses in the network or other reasons by the renewable energy generator for option operates differently and with its own outside the generator’s control. RISE does each unit of energy provided, then at other pros and cons, depending on its design.19 not, however, judge which interruptions common government-support mechanisms. should be compensated. Some, such as These include some of the most well-known Another key element of renewable energy those for regular maintenance, typically and common programs such as feed-in support is to give confidence to potential would not be. tariffs and renewable energy auctions. investors that their projects can connect to Combined, these incentives offer policy- the grid and sell power, assuming a reason- makers a range of choices for how to most able and transparent threshold for technical effectively—and cost effectively—support performance and safety is met. The former private investment. Not all incentives imply is typically achieved through regulatory a subsidy. For example, a feed-in tariff mechanisms that guarantee or prioritize grid M E T H O D O LO GY 59 Box 1.4 Fossil fuel subsidy for power generation Subsidies for fossil fuels can undermine the competitiveness of renewables. If the primary fuel source of the country is subsidized, it artificially lowers the cost of service for both the utilities and consumers. This can make any clean energy investment in either renewable energy or energy efficiency less competitive, and can make it harder to mobilize finance. Fossil fuel subsidies are prevalent, estimated at about US$600 billion annually and concentrated in a handful of countries. Particularly problematic, and all too common, are universal price subsidies that distort market signals, drain government budgets, encourage wasteful energy consumption, disproportionately benefit the better off. These subsidies encourage firms to overproduce and METHODOLOGY consumers to use more fossil fuels, with heavy environmental implications. In the RISE pilot, it was attempted to present countries that provide subsidy to fossil fuel consumed for electricity production by indicating the proportion of electricity that is generated by subsidized fossil fuel regardless of the magnitude of subsidy provided. In the RISE global rollout, data was collected to estimate the scale of fossil fuel subsidy for the power sector, i.e., electricity generation. Methodology The equation below shows that the difference between the adjusted reference unit price and the local price paid is multiplied by the total units of the fuel consumed locally to obtain the price gap: Price gap = (adjusted reference unit price – local unit price) x (units consumed). The price gap value does not reflect all subsidies for power generation. It measures only economic input subsidies provided to lower the price of fossil fuels used for power generation. A positive price gap value represents the situation where the local fuel price is less than the traded price on competitive international markets. This gap is seen as an economic loss that would otherwise not have occurred in an efficiently operating market. It can be caused by some forms of government intervention, such as a budget or off-budget subsidy, cross-subsidy, price ceiling, or export or import restriction. However, the price gap approach would be unlikely to capture other forms of government intervention such as tax credit, direct revenue support, below-market provision of loans, loan guarantees, or grants for energy-related activities. Results The methodology was applied to FOSSIL FUEL SUBSIDY FOR POWER GENERATION (PERCENTAGE OF GOVERNMENT make a preliminary estimation in REVENUE) FOR SELECTED COUNTRIES (2013–14) some sample countries (box table), Country Fossil fuel subsidy normalized by government revenue to compare the scale across countries. Angola 4.27 The indicator was not included in RISE Bangladesh 2.96 global rollout due to challenges in apply- ing this methodology consistently across Haiti 17.20 all RISE countries. In some cases the required data set was unavailable or hard Myanmar 2.18 to collect, including shipping or inland transportation costs of fossil fuel. There Saudi Arabia 14.09 were also many cases where generation Uzbekistan 26.10 companies faced different situations for fuel supply, so a single generation Source: RISE database, World Bank, Argus. company was unlikely to represent the entire market of the country. 60 M E T H O D O LO GY Indicator 4. Attributes of financial and regulatory incentives Questions Scoring Traffic light IV. Attributes of financial and regulatory incentives X = Sum and divide by 3 Predictability and efficiency (policy-neutral) 9.  9.1 Is the market entry mechanism for private RE projects defined (e.g., 1st come 1st served, tenders)? Yes – 33.3, No – 0 9.2 Are projects subject to development timelines or milestones? Yes – 33.3, No – 0 9.3 Are tariffs indexed (in part or in whole) to an international currency or to inflation? Yes – 33.3, No – 0 Predictability and efficiency (policy-specific) 10.  10.1  If there is a guaranteed tariff, is there a mechanism to adjust the level of the tariff for Yes – 100, No – 0 new entrants (e.g., declination)? If the score X is: 10.2  If there is a guaranteed tariff, is there a mechanism to differentiate tariffs based Yes – 100, No – 0 X ≥ 67 on the size of the generation plant? 33 < X < 67 10.3  If there is competitive bidding/auctions, are there provisions to ensure full and timely Yes – 100, No – 0 33 ≤ X project completion (e.g., bid-bonds, project milestones, eligibility requirements)? 10.4  If there is a renewable energy mandate, can it be met with tradable certificates Yes – 100, No – 0 (e.g., RECs, ROCs, TECs)? Divide by number of relevant incentives in place 11. Long-term sustainability 11.1  Is the price subsidy/benefit implied by a renewable energy incentive program passed through Yes – 100, No – 0 in full or in part to the final electricity consumer? The likelihood that any given financial or developers can reliably gauge their future or to inflation, so investors are certain regulatory incentive will attract investment costs and revenue) and efficient (leading their revenue will cover their costs at an acceptable cost depends on the to well-performing projects at low cost). regardless of currency fluctuations. measure’s design. Key risks inherent in RISE assesses predictability through three developing private power projects must be measures applicable in the context of any Policy-specific allocated fairly and to parties that can best financial or regulatory incentive (and to the � There are rules governing the price absorb them. The risks and appropriate risk market alone when none is in place), and level modification and frequency, to allocations differ widely by country, as does four measures specific to different ensure that governments benefit from the choice of instruments and their support schemes: technology cost reductions and that design characteristics. developers know in advance the price Policy-neutral they will receive for their power Still, certain key features are universally � There is a defined market entry (feed-in tariff only). important, including whether policies are mechanism for private renewable � Tariff levels differ by the size of clear, predictable, and financially sustain- energy projects, providing clear generation plant to benefit from the able in the long term. These attributes are guidance to potential developers economies of scale for large plants only a small sample of the types of design and investors on the steps to enter while still providing support for smaller elements that affect whether government the market. An example could be a ones (feed-in tariff only). support for renewable energy will work as generation license available in a first- � Tenders or auctions have provisions intended, and their presence (or absence) come-first-served basis or a public to discourage unrealistically low bids will not guarantee success (or failure). tender explicitly requesting bids. (such as bid bonds), to help ensure that Together, however, they can provide insight � Project development timelines winning bidders can deliver projects at into whether a country’s approach to or milestones are a condition for the bid price (competitive bidding only). attracting renewables has been designed retaining renewable energy generation � Any renewable purchase obligation can carefully and is likely to be effective, licenses to ensure that new generation be met with tradable certificates (RECs, efficient, and sustainable. can come on line when promised and ROCs, TECs) to encourage the most that high-quality resources are not efficient renewables projects (purchase Critical to the success of any renewable blocked by stalled projects. obligation only). energy support instrument is that its provi- � Tariffs are indexed (in part or in sions are predictable (ensuring that private whole) to an international currency M E T H O D O LO GY 61 Equally important is that the cost of price paid—particularly any subsidy—is discussed in box 1.5. Another way to ensure renewable energy incentives does not pose the primary determinant of whether the sustainability is to include at least part of an unsustainable burden on public sector cost is sustainable. What specific price is any subsidy given to renewable energy finances. If it does, it is not likely a wise sustainable depends on the current and producers in the final bills paid by consum- policy choice for the country and may deter future finances of a country, however, and a ers. This sends accurate price signals to potential investors if they question whether universally sustainable price does not exist. consumers and makes it more likely that proposed payments will materialize in the The treatment of the levels and prices of utilities can recover their costs. later years of the project. Of course, the renewable energy support mechanisms is METHODOLOGY Box 1.5 Affordability of renewable energy One important attribute of any renewable energy incentive or support scheme that RISE does not score is the price or level the incentive is set. While price may play a larger role than any other attribute in determining if an incentive attracts investment and meets its objectives, the appropriate price of a given incentive depends on individual characteristics of a country and the specific objectives of the incentive itself. Even for the same technology in the same country, an incentive targeted on smaller projects may need to be set higher than one focused on larger projects that enjoy greater economies of scale. While setting incentives higher may attract more investment, policymakers must pay attention to long-term budget implications. If incentives are too expensive, they may represent poor use of resources and—critical to investors—may not be sustainable over the projected lifetime of the policy or program. When this happens, incentives can be reversed retrospectively, denying projects future subsidies that previously had been guaranteed. The RISE pilot attempted to account for the downside of excessively high incentive levels by calculating the subsidy implied by each incentive (the difference between the price received by renewable energy generators and the wholesale price of conventional fossil fuels) and comparing it with the country’s per capita income. In the RISE global rollout, reliable data could not be collected to estimate a subsidy level in all countries, but it was deemed important to display incentive levels where possible to compare them with a relevant benchmark. Thus RISE has compared the prices of each feed-in tariffa and the winning bids of each competitive tender with the levelized cost of energy (LCOE) for that technology in the country, as estimated by the IRENA. The results for wind and solar projects are displayed in the box figure in box 4.4 of chapter 4; all incentive prices are available on the RISE website (rise.worldbank.org). The comparison is for informational purposes only, as prices that fall outside the LCOE range are not necessarily too high or too low. In particular, the IRENA LCOE estimates are based on costs reported by actual projects in the same geographic region; however, as certain regions have very few projects, they should be interpreted as estimates only. For more information on the IRENA cost calculation program, see www.irena.org. a When feed-in tariff levels differ by project size, RISE uses the level offered to the largest plants. 62 M E T H O D O LO GY Indicator 5. Network connection and access Questions Scoring Traffic light V. Network connection and access X = Sum and divide by 3 Connection cost allocation 12.  12.1 Are there rules defining the allocation of connection costs? Yes – 50, No – 0 12.2 What is the type of the connection cost allocation policy (i.e., shallow/deep)? Shallow – 50, Deep – 0 Network usage and pricing 13.  13.1  Are there rules that allow electricity customers to purchase power directly from Yes – 50, No – 0 a third party (i.e., an entity other than the designated utility in a service area)? 13.2  Do the rules define the size and allocation of costs for use of the transmission Yes – 50, No – 0 If the score X is: and distribution system (e.g., wheeling charges, locational pricing)? X ≥ 67 33 < X < 67 Renewable grid integration 14.  33 ≤ X 14.1  Does the country have a grid code that includes measures or standards addressing Yes – 33.3, No – 0 variable renewable energy? 14.2  Are there rules for exchanging power between balancing areas that penalize variable Yes – 0, No – 33.3 renewable energy (e.g., through imbalance penalties)? 14.3 Are there provisions in the power exchange rules that allow for plant forecasting? Yes – 33.3, No – 0 Note: questions 14.2 and 14.3 only scored in countries with multiple balancing areas. For a private renewable energy project to RISE also looks at whether generators are project developers and investors to account be financially viable, the costs of physically allowed to use existing T&D networks for them in their financial calculations. connecting to the grid must be understood to sell power to parties other than the before project development and not so owner of the lines or another single, A legally binding grid code is important so high as to render the project unprofitable. authorized offtaker (single buyer). renewable energy project operators know Connection provisions often are negoti- Allowing nondiscriminatory access the technical specifications that must be ated directly in PPAs, but explicit rules to T&D lines encourages additional met by power entering the T&D networks. It governing the connection process and costs generation options by increasing the should explicitly consider the effect on the reduce uncertainty and the possibility that range of potential projects and allowing system of variable generation. In countries individual utilities will impose arbitrary or customers to negotiate mutually accept- with multiple balancing areas or wholesale costly connection procedures. RISE assesses able prices directly with generators. Of power markets, rules allowing for flexibility whether such rules exist and whether they course, allowing third parties to use their in meeting balancing requirements—that is, require the generator to pay solely for the system imposes costs on the network ensuring the amount of power delivered at connection (shallow) or also for general operators, who can charge for the ser- a given time is comparable with what was upgrades to the transmission system to vice. The design of those charges varies, promised—may reduce disincentives to absorb the additional power (deep). but they must be defined clearly to allow purchasing variable renewable generation. M E T H O D O LO GY 63 Indicator 6. Counterparty risk Questions Scoring Traffic light VI. Counterparty risk X = Sum and divide by 3 Payment risk mitigation 15.  15.1  Does the government offer or allow backing of utility power purchase payments (e.g., through Yes – 100, No – 0 a letter of credit, escrow account, payment guarantee, or other)? METHODOLOGY Utility transparency and monitoring 16.  16.1. Are the financial statements of the largest utility publicly available? a) Generation Yes – 25/8, No – 0 b) Transmission Yes – 25/8, No – 0 c) Distribution Yes – 25/8, No – 0 d) Retail sales Yes – 25/8, No – 0 If yes, are they audited by an independent auditor? e) Generation Yes – 25/8, No – 0 f) Transmission Yes – 25/8, No – 0 g) Distribution Yes – 25/8, No – 0 h) Retail sales Yes – 25/8, No – 0 Are the following metrics published in a primary official document (by the utility, 16.2.  regulator or ministry and/or government)? a) Transmission — Transmission loss rate Yes – 25/4, No – 0 If the score X is: b) Distribution — Distribution loss rate Yes – 25/4, No – 0 c) Retail sales — Bill collection rate X ≥ 67 Yes – 25/4, No – 0 d) Retail sales — Amount of electricity available for sale to end-users Yes – 25/4, No – 0 33 < X < 67 16.3.  Is the utility operating an incidence/outage recording system (or SCADA/EMS with such 33 ≤ X functionality)? Yes – 25, No – 0 16.4. Is the utility measuring the SAIDI and SAIFI or any other measurements for service reliability? a) Are the measurements reported to the regulatory body? Yes – 25/3, No – 0 b) Are the measurements available to public? Yes – 25/3, No – 0 Yes – 25/3, No – 0 17. Utility creditworthiness 17.1. Current ratio <1–0 in between – scale ≥ 1.2 – 25 17.2. EBITDA margin <0–0 in between – scale ≥ 15% – 25 17.3. Debt service coverage ratio <1–0 in between – scale ≥ 1.2 – 25 17.4. Days payable outstanding > 180 – 0 in between – scale ≤ 90 – 25 64 M E T H O D O LO GY In many countries, a key barrier to renew- escrow accounts, or a sovereign guarantee able energy investment (and all private of the payment itself. power generation) is the risk that the buyer may not be able to follow through on Utility transparency and monitoring contractual obligations and may not pay evaluates whether key information about for its power purchases in a timely manner. the financial and technical performance of This typically is a concern in countries with the selected utility company is collected, limited options for potential counterparties reported to the regulator, and made publicly and where those in place may not have a available. This information can provide steady, reliable revenue stream to cover a basis for investors and developers in costs. RISE estimates this risk by assessing assessing investment opportunities where the transparency and creditworthiness utilities are critical counterparts. Thus, of the selected utility, and whether the a lack of transparency in disclosing this government provides mechanisms to reduce information may damage the business the risk of non- or delayed payment. environment for private renewable energy development. Moreover, utilities’ capacity to Such risk is uncommon in countries where monitor the reliability of electricity services international investors trust the financial is important to maintain high operating and legal systems, reporting requirements efficiency and financial viability of their core are robust, and economy-wide laws and business. For assessment on this indicator, regulations offer protections for investors. the largest utilities in generation, transmis- RISE uses a country’s sovereign credit rating sion, distribution, and retail sales in the as a proxy for overall investor confidence country are selected, as listed in appendix and does not independently calculate 3. Detailed questions look at the disclosure this indicator in countries where two and auditing of key financial and technical of the three international credit ratings information, whether financial reports have agencies—Standard and Poor’s, Fitch, and been independently audited, and the utility’s Moody’s—consider national long-term risk capacity for monitoring the reliability of its to be low (defined as an A- rating or above services. from Standard and Poor’s and Fitch, and A3 or above from Moody’s).20 Scores for all Utility creditworthiness assesses the other countries are calculated as described financial health of the selected utility in on page 63. each country21 through a suite of four financial metrics: current ratio, debt-service The most valuable long-term solution to coverage ratio, days payable outstanding, utility performance issues is to undertake and EBITDA. Since the selected utility in reforms improving governance and most RISE countries is a buyer of power, its accountability and to ensure that utilities’ creditworthiness directly affects the risk of annual revenue (usually from retail power non- or late payment to independent power sales) covers their costs. Reaching this producers, and low creditworthiness can be equilibrium may be a long-term process a barrier to private investment in the sector. in many countries, entailing major reform of the power sector. But there are steps a government can take in the interim to reduce the risk of non- or delayed payment. Payment risk mitigation measures whether the government provides at least one mechanism to reduce the risk that the offtaker (or other counterparty) does not pay the private generator in full and on time. Such measures include letters of credit and M E T H O D O LO GY 65 Indicator 7. Carbon pricing and monitoring Questions Scoring Traffic light VII. Carbon pricing and monitoring X = Sum 18. Carbon pricing and monitoring If the score X is: 18.1  For any carbon pricing mechanism (e.g., carbon tax, emission trading system), 100% coverage – 50, X ≥ 67 what is the portion of national GHG emissions covered)? < 100% – scaled 33 < X < 67 18.2  Is there a monitoring, reporting and verification system for greenhouse gas emissions in place? Yes – 50, No – 0 33 ≤ X METHODOLOGY Putting a price on carbon increasingly is emphasized as an effective tool to internalize the environmental externality of carbon emission and transition toward low-carbon economies. This indicator assesses the status and extent of a carbon pricing and monitoring regime. (See Indicator 12 under energy efficiency above for further discussion.) NOTES 7. World Bank 2010. 17. For geothermal energy the provision of information 8. Banerjee et al. 2008; Banerjee et al. 2014; goes beyond maps, reflecting the very high 1. Development of indicators for modern cooking Fankhauser and Tepic 2007. degree of resource uncertainty associated solutions has been excluded in this report and 9. Largest generation company in the country by with geothermal surface exploration and the could be considered for the next edition of RISE. installed capacity; largest transmission company generally accepted need for test drilling to 2. Apart from questions on topics where new in the country by amount of electricity transmitted; attract investment. entrants are irrelevant, such as monopoly utilities largest distribution company in the largest 18. As determined by the IRENA Country Profile and or government bodies. For example, an incentive business city by amount of electricity sold to Global Atlas. that expired but is received by projects built before retailers in the largest business city’s metropolitan 19. In its scoring, RISE does not consider the type of a certain date is excluded; a mandate written to area; and largest retail company in the largest incentive in place, because the correct financial specifically cover the one and only distribution business city by number of customers served in or regulatory incentive depends entirely on the company in a country is scored. the largest business city’s metropolitan area. characteristics of a particular country and the 3. For energy access, these are defined as the groups 10. Largest generation company in the country government’s priorities. Financial incentives can be of countries with the highest number of people by installed capacity; largest transmission calculated based on electricity generated over time without access to modern energy services and company in the country by amount of electricity or the costs of equipment or project development; countries with the lowest rates of electrification. transmitted; largest distribution company in the aim to increase revenue, lower costs, or reduce For energy efficiency and renewable energy, they largest business city by amount of electricity risk; be paid directly by the government or passed are the countries with the greatest primary and sold to retailers in the largest business city’s through to consumers; target a desired amount final electricity consumption. metropolitan area; and largest retail company of development (or a specific project); or set an 4. One interviewee was accepted in certain limited in the largest business city by number of overall price for the market. More details are on cases where the sole interviewee was speaking as customers served in the largest business city’s the RISE website (www.rise.worldbank.org). an official representative of the government or was metropolitan area. 20. For full definitions of each agency’s ratings, see: otherwise considered authoritative. 11. IPCC 2014. https:/ /www.moodys.com/sites/products 5. More information about the CPIA methodology is 12. Kossoy et al. 2015. /AboutMoodysRatingsAttachments at: http://web.worldbank.org/WBSITE 13. Kossoy et al. 2015. /MoodysRatingSymbolsandDefinitions.pdf /EXTERNAL/EXTABOUTUS/IDA/0,,contentMDK 14. National GHG emissions used in RISE exclude (Moody’s); https:/ /www.fitchratings.com/site :21378540~menuPK:2626968~pagePK:51236175 emissions from land use, land-use change, /definitions/nationalratings (Fitch); and https:/ / ~piPK:437394~theSitePK:73154,00.html. and forestry. www.standardandpoors.com/en_US/web/guest 6. The International Renewable Energy Agency 15. Ideally, renewable energy planning expansion /article/-/view/sourceId/504352 (Standard (IRENA). (MASDAR CITY, 2015) “Renewable involves two tiers: incorporation of the specific and Poor’s). Power Capacity Statistics 2000-2014.” IRENA characteristics of renewable energy into long- 21. The list of selected utilities is in appendix 3. Tableau Dashboard Extract, November 2015. term expansion planning; and use of other Accessed May 2, 2016. The renewable power complementary tools to assess the contribution of capacity data shown here represents the renewable energy to individual or multiple policy maximum net generating capacity of power plants objectives. For practical reasons and as a first and other installations that use renewable energy stage, RISE assesses good practices by whether sources to produce electricity. Data has been renewable energy is integrated into long-term obtained from a variety of sources, including: the expansion planning. IRENA questionnaire; official statistics; industry 16. Planning is counted as probabilistic if it includes association reports; consultants reports; and news a probability distribution for at least one input to articles. The data reflects the capacity installed the planning model, for example load forecasts, and connected at the end of the calendar year. generator reliability, hydrological flows. EN ERGY ACCE SS 67 CHAPTER 2 ENERGY ACCESS PILLAR OVERVIEW AND KEY FIGURE 2.1 Distribution of energy access pillar scores, 55 countries MESSAGES India 84 Philippines 82 The RISE scores range from 84 in India Kenya 82 Uganda to 3 in Somalia, with an average of 46. 78 Tanzania 75 More than half the countries have scores South Africa 71 below the halfway mark. Almost half of the Cambodia 70 countries are clustered in the yellow zone Cameroon 69 (figure 2.1). With only 14 of 55 countries Senegal 69 Guatemala 68 having established a policy environment Bangladesh 68 ENERGY ACCESS to put them in the green zone, the majority Nicaragua 68 are a work in progress, representing an Sri Lanka 67 opportunity for stakeholders, including Peru 67 Malawi 64 donor partners. Ghana 63 Indonesia 61 The 55 countries where access deficits Zambia 61 exist are overwhelmingly represented by Pakistan 59 Myanmar 59 low-income countries, of which far more Guinea 57 are in the red zone than lower-middle- and Benin 49 upper-middle-income countries. There is Angola 48 extensive overlap between the low-income Vanuatu 48 Lao PDR 47 group and Sub-Saharan Africa, the region Côte d'Ivoire 46 with the most countries in the red zone and Congo, Dem. Rep. 46 the fewest in the green zone. In South Asia, Burundi 45 the only other region with a substantial Nepal 43 access deficit, the RISE scores are impres- Zimbabwe 42 Rwanda 41 sive: half the countries are in the green Burkina Faso 40 zone (figure 2.2). Solomon Islands 40 Mali 39 India, the Philippines, Kenya, Uganda, Mongolia 39 Mozambique 38 and Tanzania are the top five scorers Honduras 37 (table 2.1). In Sub-Saharan Africa, the Sudan 35 three East African countries are leading, Togo 32 followed by South Africa, Cameroon and Niger 29 Eritrea 29 Senegal—all are in the green zone. In South Ethiopia 28 Asia, Bangladesh, India, and Sri Lanka are Madagascar 27 trailblazers. In East Asia and the Pacific, Congo, Rep. 26 Cambodia and the Philippines are doing Afghanistan 24 Nigeria 22 well in adopting good practices to scale-up Liberia 20 energy access. Thus every region and peer Yemen, Rep. 19 group has good examples of countries Mauritania 19 whose experiences can be customized South Sudan 18 and emulated. Sierra Leone 17 Chad 14 Haiti 13 The 10 high-impact countries—those with Central African Republic 11 the highest access deficit—report mixed Somalia 3 results, with higher than the global average score of 58 (figure 2.2). Bangladesh, India, 0 20 40 60 80 100 Energy access pillar score Kenya, Tanzania and Uganda all are in the ≥67 330.5%– E.g., Afghanistan; E.g., Cameroon; ≤1% 13% Ethiopia; India; Myanmar; >5 cents– ≤15 cents 31% Eritrea; Mali; Nicaragua; Zimbabwe Pakistan; Peru E.g., >1%– ≤5% 44% Cambodia; Guinea; Honduras; >15 cents– E.g., Bangledesh; 31% Guatemala; Haiti; Senegal ≤50 cents >5%– E.g., Benin; Eritrea; Niger; Madagascar; Niger; 13% Solomon Islands Nigeria; Philippines ≤10% E.g., Liberia; Solomon Islands; E.g., Haiti; Liberia; Madagascar; >50 cents 5% Somalia >10% 15% Somalia; Togo 0 10 20 30 40 0 10 20 30 40 50 Percent Percent Source: RISE database, World Bank. FIGURE 2.17 Percentage of 55 energy access countries answering yes to the questions about the consumer affordability of electricity Is the annual cost of subsistence consumption (30kWh/month) less 73% than or equal to 5 percent of GNI per household for lowest 20%? Is there a mechanism to support low-volume consumers, for 55% instance, social or lifeline tariff? 0 10 20 30 40 50 60 70 80 90 100 Percent Source: RISE database, World Bank. Box 2.6 Lifeline tariffs: Cross-subsidies make subsistence electricity consumption affordable Refining the design of increasing block tariffs, lifeline (or social) tariffs are targeted subsidies that improve the affordability of basic electricity needs. Any block above that should be charged at a commercial rate. The definition of a lifeline customer is critical, and varies widely depending on countries’ incomes (box table). This instrument has limits, however. Cross-subsidies can create distortions and deteriorate the utility’s financial performance. Moreover, as seen in countries with high energy subsidies, quantity-based consumption subsidies do not target low-income consumers well, since such households do not necessarily have access to the service or are not metered. Thus the reduction of cross subsidies, or tariff rationalization, has been the main driver of tariff reforms, with subsidies limited to promoting basic consumption and making service access easier. Lifeline tariffs do not systematically mean affordable connection fees, even if high connection fees discriminate against low-income households. (continued) EN ERGY ACCE SS 89 Box 2.6 Lifeline tariffs: Cross-subsidies make subsistence electricity consumption affordable (continued) LIFELINE TARIFFS TARGETING RESIDENTIAL LOW-VOLTAGE END-USERS, DECEMBER 2015a Country Local currency US c/kWhb Monthly threshold, up to (kWh)c Angola 1.156 Kz/kWh 1.2 50 Bangladesh 3.33 Tk/kWh 4.0 50 Benin 78 FCFA/kWh (no VAT) 15.6 (no VAT) 20 Burundi — 3.7 100 Cameroon 50 FCFA/kWh 9.7 110 Côte d’Ivoire 36.05 FCFA/kWh (no VAT) 7.1 (no VAT) 40 Congo, Dem. Rep. — 2.7 100 Ghana 21.0795 GHp/kWh 8.3 50 ENERGY ACCESS Guatemala 1.142176 Q/kWh 14.2 300 Guinea 90 GNF/kWh 1.2 60 Haiti 4.80 Gourdes/kWh 5.7 30 India 0.65 Rs/kWh 1.1 30 Indonesia 169 IDR/kWh 1.5 30 Kenya 50 Ksh/kWh 54.5 50 Lao PDR 348 KIP/kWh 4.3 25 Madagascar 141 Ariary/kWh 5.9 25 Mali 59 FCFA/kWh (no VAT) 11.7 (no VAT) 50 Mozambique 1.07 MT/kWh 3.5 50 Myanmar 35 KYAT/kWh 3.9 100 Nepal 4 Rs/Kwh 4.2 20 Nicaragua — 2.36 (no VAT) 25 Nigeria 4 R/kWh 2.4 50 Pakistan 2 Rs/kWh 1.9 50 Peru 31.95 Sc/kWh 11.5 100 Philippines Lifeline discount—100% of generation, transmission, system loss, distribution, supply, and metering charges 20 South Africa Affordability subsidy charge payable on utility-related active energy sales to non-local authority tariffs — Sri Lanka 2.50 LKR/kWh 1.8 30 Tanzania 100 TZS/kWh 5.9 75 Togo 63 FCFA/kWh 12.7 40 Uganda 150 Shs/kWh 5.7 15 VAT = Value-added tax. Source: RISE database, World Bank. a. Monthly fixed charges not specified: end-users benefiting from lifeline tariffs can be exempted of service charge as in Nigeria or Pakistan or have a reduced service charge as in India. b. Atlas conversion rate (LCU/US$)—2015. c. Beyond a monthly threshold, other criteria for eligibility can be enforced (voltage, household revenue, etc.). 90 EN ERGY ACCE SS Indicator 7. Utility transparency public. Among the four key performance vertically integrated and thus covered by the and monitoring metrics, the transmission loss rate is the same accounting standards. Almost half the countries are in the green least available, with about half of the utilities zone, with fairly robust mechanisms for providing this metric through an official On the reliability monitoring subindicator, 18 information disclosure, information auditing, source. All other metrics are made public countries have utilities with all the required and reliability monitoring (figure 2.18). on average by 70 percent of utilities. Twelve attributes, that is, operating an incidence Bangladesh, Ghana, Indonesia, and Senegal countries make publicly available both their outage system, measuring service reliability, have all of these mechanisms in place. Haiti, utility financial statements and the four key making data available to the public, and Nigeria, and Somalia have none of them. performance metrics. reporting data to a regulatory body (figure 2.20). Among them, Bangladesh is the only For information disclosure, several countries Forty-seven percent of utilities (22 countries) country where the selected utility did not report a high degree of information have their financial statements audited by an report SAIDI or SAIFI, but instead reported a transparency (figure 2.19). Across all four independent third party (figure 2.20). These similar metric, the length of power inter- segments (retail, distribution, transmission, statements are equally likely to be audited ruption due to trouble in the transmission and generation), around 50 percent of the among the four power sector segments, system. In 10 countries, the selected utility utilities make their financial statements because the majority of sampled utilities are neither monitors nor reports the quality FIGURE 2.18 Distribution of Indicator 7 scores 55 access-deficit countries Top 10 access-deficit countries 18 countries 5 countries 3 countries 26 countries 47% 33% 50% 30% 2 countries 11 countries 20% 20% ≥67 3390 and ≤180 ≥0 and <15% Lower Bracket <1 <1 >180 <0 Source: RISE database, World Bank. at least 1.2, making this the highest scoring Twenty-seven percent of the 55 energy access exceptions in this grouping are the utilities in subindicator. The highest ability to service countries meet or exceed the minimum Burundi and Malawi, which score in the green principal repayment was identified in recommended thresholds for all four key zone. Fragile and conflict-affected countries Malawi, while the utility in Madagascar metrics. For all key metrics except days exhibit a lowest average utility creditworthi- showed the worst debt-service coverage payable outstanding, at least 38 percent ness score, 32. In this group, Burundi, Mali, due to a large income loss in the years of Sub-Saharan African countries that Myanmar, and the Solomon Islands stand of analysis. The debt-service coverage report this indicator exceed the top recom- out as utilities in the green zone by passing ratio was excluded from the analysis for mended threshold. In this region, 14 percent the thresholds on at least three out of the the following seven countries since the of countries meet or exceed the minimum four financial ratios. The top 10 access-deficit principal repayment is considered too low recommended thresholds for all four key countries earn the highest average score to cover the estimated debt repayment due: metrics. Nine percent of selected utilities in of 45, with India, Kenya, and Myanmar the Bangladesh, Benin, Central African Republic, the region pay suppliers in 90 days or less, best scorers. All three countries in the green the Democratic Republic of Congo, Ghana, compared with 17 percent of selected utilities zone have a current ratio of at least 1.2 and Liberia, and Nepal. These countries among all countries. an EBITDA margin of at least 15 percent, therefore appear in the category of countries suggesting low leverage and sufficient cash where data are not available. Out of the six energy access countries in flow from operating activities. the South Asia region, only India exceed the The current ratio and EBITDA margin fall in top recommended threshold for all four key NOTES between, with 43 percent of the 37 coun- metrics. All selected utilities in the region 1. Global Tracking Framework 2015. tries for which this ratio could be calculated reporting data exceeded the minimum 2. Harmonized list of fragile situations FY15, having a current ratio of at least 1.2, and 44 recommended threshold for the EBITDA World Bank. percent of 36 countries having an EBITDA margin against 83 percent of all countries 3. Sadeque et al. 2015. 4. Data as of December 2015. The tariff reform in margin of at least 15 percent. The best and reporting data. Somalia introduced early 2016 will be taken into worst scoring utilities on the current ratio, account during the next RISE rollout. respectively, are in the Solomon Islands and The countries reporting the lowest electrifica- 5. Millennium Challenge Account Malawi (2013) [http://www.mca-m.gov.mw/index.php/resource]. Nepal, and on the EBITDA margin, Malawi tion rate exhibit the same share of countries 6. Ibid. and Madagascar. in the red zone as in the yellow zone (4). The EN ERGY EFFICIEN C Y 95 CHAPTER 3 ENERGY EFFICIENCY PILLAR OVERVIEW AND KEY FIGURE 3.1 Distribution of energy efficiency pillar scores, 111 countries MESSAGES United States 88 Denmark 86 Romania 86 Canada 85 Korea, Rep. All 111 surveyed countries show at least some Mexico 79 83 Germany 77 accomplishment in one or more of the areas Belgium United Kingdom 77 77 surveyed, but not even the highest-scoring Netherlands France 76 76 Austria 73 countries achieve full marks. Even advanced Italy Australia 72 72 countries have room for improvement. About Vietnam Czech Republic 71 70 Russia 70 one-fifth of the countries earned scores in the South Africa 69 Tunisia 69 top third of the range. A nearly equal number China Japan 68 68 Spain 68 of countries were scored in the middle and Switzerland 66 Turkey 65 lower thirds (figure 3.1). Finland Iran 63 63 United Arab Emirates 63 Thailand 63 Belarus 62 Examples of good practice in institutions, Sweden India 60 62 Kazakhstan policies, and mechanisms to promote Poland 58 57 Greece 57 energy efficiency are found across regions Jordan Algeria 57 56 and income groups (figure 3.2), as well as Ecuador Sri Lanka 55 54 Malaysia 52 levels of energy consumption. Better scorers Uzbekistan 51 ENERGY EFFICIENCY Colombia 51 tend to be wealthier, larger countries, but Brazil Qatar 51 50 Chile there is no strict one-to-one correlation Saudi Arabia 50 50 Egypt, Arab Rep. 49 between income and energy efficiency Kenya Tajikistan 45 48 Argentina 44 scores. While the highest scorers tend to Philippines 42 Morocco 42 be wealthier and the lowest ones poorer Venezuela, RB Armenia 42 42 Nicaragua (as with the renewable energy pillar), there Ghana 41 41 Pakistan 38 is considerable overlap. The high-income Cameroon Kyrgyz Rep. 38 38 Guinea group, for instance, has members that score Ukraine 37 37 Bolivia 37 in the red zone, while the lower-middle- Lebanon Ethiopia 35 35 income group has a member in the green Indonesia Uganda 34 34 Peru 31 zone. Moreover, countries scoring the high- Kuwait Tanzania 30 28 est on energy efficiency are not necessarily Mongolia Dominican Republic 27 27 Malawi 26 the wealthiest or those that have pursued Togo Bahrain 25 25 energy efficiency policies the longest, Benin Bangladesh 24 23 Guatemala with Vietnam providing an example of this Côte d'Ivoire 22 22 Honduras 22 (box 3.3). Still, low-income countries, and Rwanda Eritrea 21 21 Cambodia Sub-Saharan Africa as a region, had very Zambia 21 21 Congo, Dem. Rep. 20 low average scores for all indicators, barring Burkina Faso Nepal 20 20 Sudan the two concerned with high-level targets Senegal 19 19 Sierra Leone 18 and entities and the two utility-mediated Afghanistan Angola 18 18 indicators. Madagascar South Sudan 17 16 Zimbabwe 14 Haiti 14 Maldives 14 Most countries are encouraging consumers Myanmar Burundi 12 13 Yemen 12 to use electricity more efficiently, and are Solomon Islands Vanuatu 12 11 establishing basic structures to promote Liberia CAR 11 11 Niger energy efficiency. Two of the highest- Nigeria 11 11 Congo, Rep. 10 scoring indicators—information provided Mauritania Mali 8 9 Lao PDR to electricity consumers and electricity Chad 7 8 Mozambique 6 rate structures—are mediated by electric Somalia 6 0 20 40 60 80 100 utilities. The two other indicators with the RISE energy efficiency score highest scores, national energy efficiency ≥67 33=1000MW Connection cost rules Third-party access Grid code that addresses renewable energy Source: IRENA. Note: Exlcluding large hydropower and pumped storage. R EN E WAB L E EN ERGY 159 Indicator 6. Counterparty risk and the high-income OECD group, and a for all questions in 37 percent of countries. Counterparty risk, as measured by RISE, is similar ratio of generation and transmission This does not mean that these utilities are a minor issue for high-income countries but companies (but just half of the distribution not creditworthy, but simply that RISE does more so for lower-middle- and low-income utilities) in Europe and Central Asia and not have enough information to make a countries. Unsurprisingly, high-income Latin America and the Caribbean. But determination. Such missing information countries score highest on this indicator financial statements for companies in each likely will not deter investment in countries (figure 4.23). The majority of high-income subsector are publicly available in only 42 where investors have history of being paid countries are considered low risk due to percent of countries in Sub-Saharan Africa on time and there is little risk of default, but their high credit rating,6 but of those where and only three of the 13 RISE countries in for other countries, such missing informa- scores are calculated (Argentina, Bahrain, Middle East and North Africa (the Kingdom tion may deter investment as much as Chile, Greece, Italy, Spain, and Venezuela), of Saudi Arabia, Jordan, and Tunisia). information revealing a company on shaky all but Bahrain and Venezuela score in Technical performance measures are more ground might. the green zone based on the performance likely to be made public, with T&D loss of the selected utility. Among low- and rates and total electricity available for sale middle-income countries, the story is quite numbers publicly accessible for about 70 different: only 19 percent of middle-income percent of selected utilities. Public disclo- and 11 percent of low-income countries sure of bill collection rates is somewhat score in the green zone, and 44 percent of less common, influenced by a low rate of the latter score in the red zone. 33 percent in high-income countries, where it may be less relevant to their operations Mechanisms to reduce payment risk are because of higher consumer credibility and not particularly common, but are present effective revenue collection. in some low- and lower-middle-income countries that have high RISE scores. Most utilities monitor reliability, but Thirty-six countries offer some form of many do not make this data public. Of publicly financed mechanism to reduce the the selected distribution and retail sales risk of payment delays or defaults (figure utilities, 79 percent operate a SCADA/EMS 4.26). These include sovereign guarantees, or other system to record incidents and escrow accounts, letters of credit, and other outages of electricity service. Among those, mechanisms. At least one mechanism is 88 percent use SAIDI and/or SAIFI, while present in only 35 percent of lower-middle- 10 countries use other metrics, such as income and 37 percent of low-income the customer average interruption dura- countries—about on par with the overall tion index (Solomon Islands and Sudan), RENEWABLE ENERGY RISE sample, though these shares include frequency of interruptions for installed kVA some of the highest-scoring countries in (Ecuador and Guatemala), or minutes per each region. For example, risk reduction interruption (Benin). Whatever the metric, mechanisms are reported in each of the 70 percent of utilities report the resulting five highest-scoring countries in the Middle measurement to the regulatory body, while East and North Africa: Egypt, the Islamic only 55 percent disclose this information to Republic of Iran, Jordan, Morocco, and the the public (figure 4.25). United Arab Emirates. Few utilities score well on all aspects Utility information typically is audited and of creditworthiness, although data are made public, except in Sub-Saharan Africa limited in many countries. While 54 and Middle East and North Africa. The percent of the selected utilities surpass selected power sector utilities (including recommended thresholds for at least one generation, transmission, distribution, and of the four financial metrics that constitute retail sales functions, whether combined the creditworthiness subindicator, only 8 in one or multiple companies) make their percent exceed the recommended thresh- financial statements publicly available in olds (see chapter 3) for all four metrics. 58–63 percent of RISE countries, depend- Selected utilities score the lowest on their ing on the function, and the statements days payable outstanding and current ratio, are audited by an independent auditor in as only 25 percent and 26 percent of the 54–59 percent of RISE countries (figure countries receive the full score. However, 4.25). This includes a majority of countries RISE was unable to collect data for at least in East Asia and the Pacific, South Asia, one question in 44 percent of countries, and 160 R EN E WAB L E EN ERGY FIGURE 4.23 Distribution of Indicator 6 scores All countries High-impact countries 1 country 38 countries 33 countries 5% 34% 30% 10 countries 9 countries 50% 45% 40 countries 36% ≥67 3390 and ≤180 >180 Days payable outstanding 39% 34% 27% ≥15% ≥0 and <15% <0 EBITDA margin 49% 40% 11% 0 10 20 30 40 50 60 70 80 90 100 Percent Source: RISE database, World Bank. 162 R EN E WAB L E EN ERGY FIGURE 4.26 Percentage of countries with at least one mechanism in place to back utility payments Does the government offer or allow backing of utility payments (e.g., through a letter of credit, escrow account, 32% payment guarantee, or other)? 49% 40% 11% 0 5 10 15 20 25 30 35 Percent Source: RISE database, World Bank. Indicator 7. Carbon pricing Carbon pricing typically is limited to for renewable energy. While carbon and monitoring developed countries. Of the 23 countries pricing mechanisms tend to be relatively Carbon pricing mechanisms are rare, and with a carbon pricing mechanism, 19 are uncommon in RISE countries, every country usually complement other forms of policy high-income—including 15 that subscribe that has such a mechanism scores in the support for renewable energy. Only 18 to the EU-ETS (table 4.2). Only two OECD green zone for its overall renewable energy percent of RISE countries score in the green high-income countries do not put a price policies, and many are among the highest zone for this indicator (figure 4.27), having on carbon (Australia and Chile). China, global RISE renewable energy scorers adopted carbon pricing mechanisms that Kazakhstan, Mexico, and Romania are the (figure 4.28). Many countries without cover at least 30 percent of national GHG only middle- or low-income countries with carbon prices nevertheless have established emissions and require regular reporting of such a mechanism, and all four are in the strong policy support for renewable energy, GHG emissions. Another 5 percent have a upper-middle-income bracket. Denmark including 11 countries with total renewable carbon pricing mechanism with only a small leads all RISE countries with the highest energy scores in the green zone—Chile, coverage of GHG emissions or no carbon coverage of its carbon pricing mechanism, Pakistan, Jordan, Vietnam, Malaysia, Kenya, pricing mechanism, but a mandatory report- 89 percent, by operating both the EU-ETS Sri Lanka, Malawi, South Africa, India, and ing scheme for GHG emissions by emitters. and the Danish carbon tax. The United the Philippines (in order of their renewable Seventy-seven percent are in the red zone, States has the lowest coverage, at 7 percent, energy score). having no carbon pricing mechanism or because only 10 out of 50 states are mandatory reporting of GHG emissions. participating in the Regional Greenhouse Australia and Turkey are the only countries Gas Initiative or the California Cap-and- that have introduced a mandatory reporting Trade Program. requirement of GHG emissions by emitters without a carbon pricing mechanism. Where carbon pricing exists, it almost always is part of a strong policy framework R EN E WAB L E EN ERGY 163 FIGURE 4.27 Distribution of Indicator 7 scores All countries High-impact countries 20 countries 7 countries 18% 35% 5 countries 8 countries 5% 40% 86 countries 5 countries 77% 25% ≥67 33