2014/12 88694 k nKonw A A weldegdeg e ol n oNtoet e s eSrei r e ise s f ofro r p r&a c t hteh e nEenregryg y Etx itcrea c t i v e s G l o b a l P r a c t i c e The bottom line Promoting Renewable Energy through Auctions Auctions in various forms are being used to promote the generation of electricity from Why is this issue important? This note singles out auctions as an important mechanism that has been implemented in a growing number of countries in recent renewable sources. Properly Experience with the use of auctions to promote decades. structured auctions can avoid renewable energy can guide future efforts the disadvantages feed-in tariffs and renewable purchase Among the examples of the benefits to be obtained from generating What has been the conventional wisdom? obligations. Moreover, they electricity from renewable sources are (i) increasing countries’ Feed-in-tariffs and renewable purchase obligations offer the best of both of these energy security by reducing their dependency on fossil fuel imports, (ii) reducing greenhouse gas emissions as part of a worldwide were the first approach taken early mechanisms, providing stable revenue guarantees for effort to mitigate climate change, (iii) promoting electrification while Historically, the most common means of promoting renewable investors while also avoiding the reducing the need for isolated applications such as diesel generators, energy in the electricity sector have been feed-in tariffs (FITs) and risk of overbuilding. They do this and (iv) minimizing local pollution. renewable purchase obligations (RPOs, also known as renewable by determining both price and Eager to take advantage of these positive effects, policy makers portfolio standards, RPS). While usually supplemented by other quantity in advance. in developed and developing countries alike have sought to promote official policies, such as government-mandated renewable energy the development of renewable energy at the international level, targets or tax reductions, these mechanisms are similar to auction through initiatives such as the United Nation’s “Sustainable Energy schemes in the sense that they can be adjusted flexibly to regulate for All” (SE4ALL) project, and at the national level. At the beginning of incentives and to ensure that some amount of renewable energy 2013, 127 countries had renewable energy support policies in force capacity will be built. The most important characteristics of both (REN21 2013), an indicator of global interest in promoting renewable types of policies are presented below. energy. FITs. A FIT fixes the price that will be paid for renewable energy On the other hand, an analysis of current policies reveals great fed to the grid. Open access to the grid is usually also guaranteed diversity in the mechanisms adopted by governments to meet under FIT schemes, thus minimizing barriers to market entry and Gabriela Elizondo this common goal. In addition, as the renewable energy sector preventing utilities from using their market power or power of incum- Azuela is a senior has matured, policy revisions have become increasingly common. bency to limit development of renewable energy. After the pioneering energy specialist in the Therefore, an in-depth analysis of individual countries’ experience U.S. Public Utility Regulatory Policies Act (PURPA) of 1978, the FIT World Bank’s Energy Practice. can be useful in guiding future regulatory action by providing detailed approach rapidly gained popularity both for its simplicity and for the information on the pros and cons of particular policies. A large body long-term revenue certainty that it offered to developers and investors. Luiz Barroso is a of literature has grown up around the features and performance of A challenge of FIT schemes, however, has been determining managing director at PSR in Brazil. various policies to promote renewable energy. the tariff level that will stimulate the desired investment. In an 2 Promoting Renewable Energy through Auctions environment of rapidly changing equipment costs and information What is the new evidence? asymmetry, there is a risk that the FIT may be set above market costs. When the FIT exceeds the levelized costs of energy1 by too Auction mechanisms tested in several countries have much, investors rush to the market and additions to capacity quickly been performing remarkably well exceed the official target, with the result that consumers end up pay- The schemes described in the previous section show an interesting ing too much for energy. (Situations like this have occurred in Spain symmetry. FITs control the price paid for renewable energy, leading “FITs control the price and Germany, for example.) So-called feed-in premium mechanisms to uncertainties with respect to the quantity of renewable capacity; paid for renewable energy, have recently been proposed as a way around this problem by mak- whereas RPOs control the quantity of renewable energy, resulting in leading to uncertainties ing investors sensitive to market price signals—at the cost, however, price uncertainties that must be managed by investors. Faced with of diminishing the revenue stability that helps attract investors. this conundrum, policy makers began to see in auction mechanisms with respect to the quantity RPOs. RPOSs basically require electricity suppliers to include an alternative that might yield the best of both worlds, providing of renewable capacity; a minimum amount of renewable energy in their supply. They are stable revenue guarantees for investors while avoiding the risk of whereas RPOs control often supplemented by a scheme for trading renewable energy overbuilding. Auction schemes do this by determining both price and the quantity of renewable certificates. The most important precursor of this sort of mechanism quantity in advance, using a public bidding process. energy, resulting in price was the Alternative Energy Law adopted in Iowa (United States) in Simply defined, an auction is a selection process designed to 1983. Because RPOs work by predetermining the amount of renew- procure (or allocate) goods and services competitively, wherein the uncertainties that must be able capacity to be built (and then allowing the market to determine allocation is determined based on financial offers from prequalified managed by investors.” how that capacity will be remunerated), the possibility of overshoot- bidders. Where competition is feasible and desirable, auctions have ing the desired capacity is not an important risk to consumers, as it proven very effective in attracting new players to the market and in is with FITs. efficiently matching supply and demand. Auctions also increase the On the other hand, RPO schemes offer less assurance to competiveness and transparency of the procurement process, making investors about future cash flows. In essence, the risk of overbuilding the resulting obligations less likely to be challenged when the political is transferred from consumers to investors. In addition, renewable or institutional landscape changes (Maurer and Barroso 2011). energy certificates presuppose the existence of a competitive Auction-based schemes to foster generation from renewable market. There is a risk, moreover, that their pricing may be manip- sources were first explored under the United Kingdom’s Non–Fossil ulated by an incumbent utility or a small group of large utilities. Fuel Obligation (NFFO) scheme, introduced in 1989. The results of this Another characteristic of this type of scheme is that it tends to favor first implementation were not very promising. The NFFO was seen as more mature technologies, since investors will seek the cheapest much more complex than alternative FIT schemes, and there were opportunities for the development of renewable generation. All of major concerns with underbuilding. In fact, of a total of 2,659 MW of these factors limit the magnitude, diversity, and pace of investment wind capacity rights awarded through auction, only 391 MW were under RPO schemes. effectively built. As a consequence, the United Kingdom switched to an RPO mechanism in 2002 (Pollitt 2010). Despite this early setback, auction-type mechanisms surged in popularity over the ensuing decade (del Río Gonzalez and Linares 1 The levelized cost of energy is the price of electricity required for a project to make the 2014). Between 2005 and 2013, while the number of countries imple- net present value of all revenues and costs equal to zero at a discount rate equivalent to the menting FIT or RPO schemes roughly doubled in size, the number required rate of return. It provides a convenient way of summarizing all relevant costs of energy in a single measure that is easily comparable across different types of technologies. implementing auction schemes increased sixfold (table 1). Much of 3 Promoting Renewable Energy through Auctions (expressed in terms of units of energy, capacity, or some other Table 1. Countries with active renewable energy policies of specific ancillary service) must be determined. Sophisticated mech- various types anisms in which the demand is allowed to vary with the auctioned Number of countries price are also possible. On the supply side, the auction mechanism with active policies may restrict bids to particular types of technologies or sites, and Mechanism 2005 2013 this restriction may be applied at several levels (technology-neutral, “Between 2005 and 2013, technology-specific, location-specific, or even project-specific). Feed-in tariff/feed-in premium payment (FIT) 34 71 while the number of Process for selecting winners. Typically, the winner of the Electric utility quota obligation (RPO/RPS) 11 23 countries implementing auction is determined by the lowest bid. However, other decision Public competitive bidding/tendering (auctions) 7 45 criteria are not uncommon, such as a compound index that ranks FIT or RPO schemes All renewable promotion policies (includes the the candidates. The process for selecting winners also defines 48 127 roughly doubled in size, support mechanisms listed above, plus others) whether the auction will include a price cap (which may be disclosed the number implementing Source: REN21 Renewable Energy Policy Network 2005; REN21 2013. or undisclosed) and how the ultimate remuneration of bidders will auction schemes increased Note: FIT = feed-in tariff; RPO = renewable purchase obligations; RPS = renewable portfolio be determined (first price, second price, and pay-as-bid are some standard. RPO and RPS are alternative names for the same basic instrument. sixfold.” common implementations) (Maurer and Barroso 2011). Another important component of the auction scheme is the the renewed interest in auction mechanisms was led by developing so-called price-discovery mechanism. The choice between sealed- countries (Lucas, Ferroukhi, and Hawila 2013). By contrast, RPO bid auctions and descending-clock auctions, in which bidders schemes were concentrated in high-income countries (figure 1). respond iteratively to earlier bids, often hinges on whether the Auction mechanisms can differ greatly from one implementation more effective price discovery of the descending-clock auction to the next, as features are adjusted to suit a particular country’s offsets the increased risk of strategic or collusive behavior among needs. While this characteristic can be a plus (auctions are very participants. Some countries (Brazil, in particular) have implemented adaptable instruments), it also makes it harder to draw cross-country comparisons and distill policy recommendations. However, some of Figure 1. Countries with policies to foster renewable energy in 2013, the most important elements at the core of by income category auction schemes are the following: 100 Specification of supply and demand. This part of the auction process determines 80 High-income countries who can participate in the auction and how Upper-middle-income countries 60 much product—in this case, contracts for the Lower-middle-income countries Percent supply of electricity produced from renewable Low-income countries 40 sources—will be contracted. Typically the recipients of the auctioned product are power 20 distribution companies or a government-con- 0 trolled entity that can offer reasonable financial Electric utility quota Feed-in Public competitive guarantees to bidders. The auction demand obligation/RPS tariff/premuim payment bidding/tendering Source: REN21 2013. 4 Promoting Renewable Energy through Auctions hybrid systems in an attempt to combine the best features of the India. Those case studies are part of the Live Wire series, as noted at two price-discovery processes. The greater complexity of the hybrid the end of this brief. mechanism is its chief disadvantage. Some highlights of the three countries’ auction design are Product characteristics. Typically, the product offered to the presented in table 2. winners is a long-term power purchase agreement. Among the important components of such agreements are duration, escalation How does this affect our thinking? “The choice between and indexation clauses, and the liabilities of the contracting parties. sealed-bid auctions and Depending on how the generator’s obligations are defined, an The right auction scheme for a given country depends descending-clock auctions accounting or settlement mechanism to deal with the intermittency on close analysis of production must usually be defined as well. An attractive prod- Choosing the best instrument to promote the development of often hinges on whether uct—that is, an agreement that protects investors from multiple renewable energy in a particular country hinges on multiple factors, the more effective price sources of risk (inflation risk, exchange rate, and resource availabil- but auction-based schemes are an alternative that policy makers discovery of the ity)—will tend to increase the number of participants in the auction should consider. Auctions appear as an effective way to stimulate descending-clock auction at the cost, of course, of transferring those risks to consumers. competition among investors, provide price disclosure while eliciting offsets the increased risk of Requirements and penalties. These terms are designed to the right amount of investment, and offer revenue stability via long- ensure that the winners of the auction will fulfill their obligations. term contracting. It is important, however, that policy makers have strategic or collusive Some standard practices include bid bonds (to be executed if bidders a clear understanding of the strengths and weaknesses of various behavior among do not meet their obligations), completion bonds (to be executed if auction schemes. participants.” project milestones are not met), and the possibility of contract ter- Auctions offer stable guarantees to both investors and mination after a predetermined period of delay. Sometimes, in order consumers. Auction winners are assured a stable, long-term reve- to prevent “adventurous” bidding, participants are asked to provide nue stream. Consumers have the security of knowing that the right guarantees of their financial health before they are allowed to bid. amount of renewable energy capacity will be built. This two-sided Strategy and coordination. Staging an auction implies prior benefit of the auction process is especially valuable when there work to coordinate the renewable capacity to be acquired through is reason to believe that the environment may be technologically, the auction with the expansion of the transmission grid and of the economically, politically, or institutionally unstable. generation system as a whole. At an even higher level, it may also Well-designed auction schemes can kick-start a country’s make sense to coordinate the expansion of renewable generation renewable energy program. Because organized auction pro- capacity with the manufacturing of required equipment for which cesses tend to attract attention from international players, they can the country has a relative comparative advantage. To further this be an interesting alternative for countries in which the energy market goal, domestic content requirements have been added to the terms lacks a mature renewable energy segment. In fact, this may be one of power purchase agreement in several cases. Even more subtle reason why auctions have been popular in emerging economies, measures, such as a long-term strategy involving periodic auctions, where the risk of a few firms exerting too much market power has can implicitly promote coordination by allowing industries to plan for been a barrier to RPO schemes. The three countries surveyed by the the longer term. World Bank have exploited the opportunity to develop their domestic National experience with renewable energy auctions has been capacity to produce renewable energy equipment as well as other quite diverse, reflecting the flexibility inherent in auction design. The supporting industries and services. Although domestic content World Bank has analyzed the current state of auction-based mecha- requirements have been challenged in international trade forums, nisms for the development of renewable energy in Brazil, China, and 5 Promoting Renewable Energy through Auctions Table 2.  Features of auctions designed to promote the generation of electricity from renewable sources in Brazil, China, and India Brazil India China Case study Wind: 11.7 GW awarded in 10 auctions, Solar: 4.4 GW awarded in 15 auctions, Wind: 3.5 GW awarded in 5 auctions, 2009–13 2011–13 (but only around 2.7 GW 2003–07 expected to materialize) “Auctions appear as an Solar: 0.3 GW awarded in 2 auctions, 2009–10 effective way to stimulate Offshore wind: 1.0 GW awarded in 1 competition among auction in 2011 investors, provide price Country renewable policy Target: No official target for renewable Target: 20 GW of solar by 2022 (National Target: 200 GW of wind, 50 GW of solar by disclosure while eliciting energy Solar Mission) 2020 (five-year plans) the right amount of Main fostering mechanism: sporadic Main fostering mechanism: RPO-based Main fostering mechanism: policy based technology-specific auctions; fiscal and in the long term, supported by auctions on FIT scheme investment, and offer financial benefits and FITs revenue stability via Auction types Regular auctions and reserve auctions, National-level auctions (large-scale Centralized tenders only, differing by long-term contracting.” both centrally organized but differing in and rooftop) and state-level auctions; technology type allocation of responsibilities decentralized implementation Main goals of auctions To exploit synergies between wind and To procure solar capacity at low cost Price-discovery mechanism to determine hydro, to correctly assess wind power’s in the scale-up phase of solar power benchmarks for setting FITs contribution to the system development Basic auction design Technology-neutral or technology-specific Technology-specific auction Project-specific tender for concession auctions sites Sealed bids Hybrid price discovery Sealed bids PPA without escalation Inflation-indexed PPA PPA without escalation Clear obligations and penalties Clear obligations and penalties Unclear obligations and penalties Unique design Yearly and 4-year settlements to Pricing based on the lowest bid received Multi-criterion winner selection innovations protect investors from wind generation (in some state-level auctions) “Average-price” criterion substituting the uncertainty Capital subsidy schemes (in some lowest-price criterion Attempts at generation-transmission national-level auctions) coordination Domestic content “Indirect” DCR, required to apply for DCR not implemented in many DCR of 50–70 percent was enforced up attractive loans from state bank (BNDES) state auctions; mixed signaling to to 2009. Domestic industry is currently manufacturers competitive Source: Authors. DCR = domestic content requirement; FIT = feed-in tariff; PPA = power purchase agreement; RPO = renewable purchase obligation. 6 Promoting Renewable Energy through Auctions a well-designed auction scheme can take advantage of existing Discouraging overoptimistic behavior has been a major Make further competitive and comparative advantages in the manufacturing of challenge of past implementations. Common problems, such as connections renewable energy equipment and in the provision of services in both delays in construction and underperformance, have been identified domestic and international markets. in systems using multiple auctions to foster renewable energy. Live Wire 2014/13. “Promoting Auction mechanisms should be fully integrated with Although these problems can be dealt with to a degree by stiffening Renewable Energy through other regulatory, planning, and economic strategies. Auctions penalties for failing to meet the original objectives, it does seem that Auctions: The Case of Brazil,” by do not operate in a vacuum. The interdependence between an the winning bid too often represents a best-case scenario rather Gabriela Elizondo-Azuela, Luiz auction scheme and a country’s regulatory structures and practices than a reasonable expectation. Policy makers should be aware of Barroso, and Gabriel Cunha. can be an asset or a liability to the auction’s success. Despite the this risk and seek to build a mechanism that can accommodate guarantees that auction mechanisms offer to investors, their success deviations in a robust way. Incentives to provide early warning of Live Wire 2014/14. “Promoting is likely to be limited if they are not supported by an environment of potential problems should be built in, so that mitigation measures Renewable Energy through regulatory stability, transparency, and fairness. On the other hand, can be taken at the earliest possible stage. Auctions: The Case of China,” by auction mechanisms that are deeply integrated with a country’s Xiaodong Wang, Luiz Barroso, energy planning can be very effective in expanding the generation and Gabriela Elizondo-Azuela. and transmission systems in a coordinated way, for the simple rea- References son that auctions signal what projects are to be built well in advance. Live Wire 2014/15. “Promoting Lucas, H., R. Ferroukhi, D. Hawila. 2013. “Renewable Energy Auctions Auction mechanisms can be very effective in reducing Renewable Energy through in Developing Countries.” International Renewable Energy prices. In Brazil, China, and India, auction mechanisms have been Auctions: The Case of India,” by Agency, Abu Dhabi, UAE. successful in bringing energy prices down, compared to levelized Ashish Khana, Luiz Barroso, and Maurer, L. T., and L. A. Barroso. 2011. Electricity Auctions: An Overview cost benchmarks calculated on the basis of “reasonable” assump- Gabriela Elizondo-Azuela. of Efficient Practices. Washington, DC: World Bank. tions (which are generally used to determine an auction’s cap price Pollitt, M. G. 2010. “UK Renewable Energy Policy Since Privatisation.” and price levels for FIT programs). In part, the price reductions can Electricity Policy Research Group Working Paper 1002, University be attributed to the development of industries and services that of Cambridge. support renewable energy generation, as described above. And, of REN21. 2013. Renewables 2013 Global Status Report. Paris: REN21 course, lower energy costs represent gains for consumers. Attracting Secretariat. additional bidders tends to be a more effective strategy for driving REN21 Renewable Energy Policy Network. 2005. Renewables 2005 prices down than choosing a lower price cap. Global Status Report. Washington, DC: Worldwatch Institute. Auctions are complex, and transaction costs can be sig- del Río Gonzalez, P., and P. Linares. 2014. “Back to the future? nificant. A criticism of auction schemes is that they are significantly Rethinking auctions for renewable electricity support.” more complex and more costly than either FIT or RPO mechanisms. Renewable and Sustainable Energy Reviews 35 (July): 42–56. Besides requiring more public resources to design, analyze, and carry out the selection procedure, this complexity (which is the downside The peer reviewers for this note were Luiz Maurer (principal industry special- of their flexibility) also makes it more difficult for smaller players to ist for climate strategy and business development, IFC) and Katharina Gassner participate because it is more difficult for them to dilute transaction (senior investment climate economist, World Bank Group). The authors thank costs in their portfolios. The cost of complexity must be kept in Gabriel Cunha (consultant) for his contributions to this note. mind when considering sophisticated auctions. Brazil’s auctions are an example of a high-complexity mechanism that had unforeseen consequences. Get Connected to Live Wire Live Wires are designed for easy reading on the screen and for downloading The Live Wire series of online knowledge notes is an initiative of the World Bank Group’s Energy and self-printing in color or “Live Wire is designed and Extractives Global Practice, reflecting the emphasis on knowledge management and solu- black and white. tions-oriented knowledge that is emerging from the ongoing change process within the Bank for practitioners inside Group. For World Bank employees: and outside the Bank. Professional printing can Each Live Wire delivers, in 3–6 attractive, highly readable pages, knowledge that is immediately It is a resource to relevant to front-line practitioners. also be undertaken on a customized basis for share with clients and specific events or occasions Live Wires take a variety of forms: counterparts.” • Topic briefs offer technical knowledge on key issues in energy and extractives by contacting GSDPM Customer Service Center at • Case studies highlight lessons from experiences in implementation (202) 458-7479, or sending a • Global trends provide analytical overviews of key energy and extractives data written request to cgsdpm@ • Bank views portray the Bank Group’s activities in the energy and extractives sectors worldbank.org. • Private eyes present a private sector perspective on topical issues in the field Each Live Wire will be peer-reviewed by seasoned practitioners in the Bank. Once a year, the Energy and Extractives Global Practice takes stock of all notes that appeared, reviewing their quality and identifying priority areas to be covered in the following year’s pipeline. Please visit our Live Wire web page for updates: http://www.worldbank.org/energy/livewire e Pa c i f i c 2014/28 ainable energy for all in easT asia and Th 1 Tracking Progress Toward Providing susT TIVES GLOBAL PRACTICE A KNOWLEDGE NOTE SERIES FOR THE ENERGY & EXTRAC THE BOTTOM LINE Tracking Progress Toward Providing Sustainable Energy where does the region stand on the quest for sustainable for All in East Asia and the Pacific 2014/29 and cenTral asia energy for all? in 2010, eaP easTern euroPe sT ainable en ergy for all in databases—technical measures. This note is based on that frame- g su v i d i n had an electrification rate of Why is this important? ess Toward Pro work (World Bank 2014). SE4ALL will publish an updated version of 1 Tracking Progr 95 percent, and 52 percent of the population had access Tracking regional trends is critical to monitoring the GTF in 2015. to nonsolid fuel for cooking. the progress of the Sustainable Energy for All The primary indicators and data sources that the GTF uses to track progress toward the three SE4ALL goals are summarized below. consumption of renewable (SE4ALL) initiative C T I V E S G L O B A L P R A C T I C E ENERGY & EXTRA • Energy access. Access to modern energy services is measured T E S E R I E S F O R T H EIn declaring 2012 the “International Year of Sustainable Energy for energy decreased overall A KNO W L E D G E N Oand 2010, though by the percentage of the population with an electricity between 1990 All,” the UN General Assembly established three objectives to be connection and the percentage of the population with access Energy modern forms grew rapidly. d Providing Sustainable accomplished by 2030: to ensure universal access to modern energy energy intensity levels are high to nonsolid fuels.2 These data are collected using household Tracking Progress Towar services,1 to double the 2010 share of renewable energy in the global surveys and reported in the World Bank’s Global Electrification but declining rapidly. overall THE BOTTOM LINE energy mix, and to double the global rate of improvement in energy e and Central Asia trends are positive, but bold Database and the World Health Organization’s Household Energy for All in Eastern Europ efficiency relative to the period 1990–2010 (SE4ALL 2012). stand policy measures will be required where does the region setting Database. The SE4ALL objectives are global, with individual countries on that frame- on the quest for sustainable to sustain progress. is based share of renewable energy in the their own national targets databases— technical in a measures. way that is Thisconsistent with the overall of • Renewable energy. The note version energy for all? The region SE4ALL will publish an updated their ability energy mix is measured by the percentage of total final energy to Why is this important ? spirit of the work initiative. (World Bank Because2014). countries differ greatly in has near-universal access consumption that is derived from renewable energy resources. of trends is critical to monitoring to pursue thetheGTF in 2015. three objectives, some will make more rapid progress GTF uses to Data used to calculate this indicator are obtained from energy electricity, and 93 percent Tracking regional othersindicators primary will excel and data sources that elsewhere, depending on their the while the population has access le Energy for All in one areaThe goals are summarized below. balances published by the International Energy Agency and the the progress of the Sustainab respective track starting progress pointstowardand the three SE4ALL comparative advantages as well as on services is measured to nonsolid fuel for cooking. access. Accessthat they modern to are able to energy marshal. United Nations. despite relatively abundant (SE4ALL) initiative the resources and support Energy with an electricity connection Elisa Portale is an l Year of Sustainable Energy for To sustain percentage of by the momentum forthe the population achievement of the SE4ALL 2• Energy efficiency. The rate of improvement of energy efficiency hydropower, the share In declaring 2012 the “Internationa energy economist in with access to nonsolid fuels. three global objectives objectives, andathe means of charting percentage of the population global progress to 2030 is needed. is approximated by the compound annual growth rate (CAGR) of renewables in energy All,” the UN General Assembly established the Energy Sector surveys and reported access to modern universalAssistance The World TheseBank and data are the collected International using household Energy Agency led a consor- of energy intensity, where energy intensity is the ratio of total consumption has remained to be accomplished by 2030: to ensure Management Database and the World of theenergy intium of 15 renewable international in the World Bank’s Global agencies toElectrification establish the SE4ALL Global primary energy consumption to gross domestic product (GDP) energy the 2010 share of Program (ESMAP) relatively low. very high energy services, to double Database. measured in purchasing power parity (PPP) terms. Data used to 1 t ’s Household provides Energy a system for regular World Bank’s Energy the global rate of improvemen and Extractives Tracking Framework Health (GTF), which Organization in the energy intensity levels have come and to double the global energy mix, Global Practice. (SE4ALL 2012). based on energy. of renewable The sharepractical, rigorous—yet energy given available calculate energy intensity are obtained from energy balances to the period 1990–2010 global reporting, Renewable down rapidly. The big questions in energy efficiency relative setting by the percentage of total final energy consumption published by the International Energy Agency and the United evolve Joeri withde Wit is an countries individual mix is measured Data used to are how renewables will The SE4ALL objectives are global, economist in with the overall from renewable energy when every resources. person on the planet has access Nations. picks up a way energy that is consistent 1 The universal derived that isaccess goal will be achieved balances published when energy demand in from energy their own national targets through electricity, clean cooking fuels, clean heating fuels, rates the Bank’s Energy and countries differ greatly in their ability calculate this indicator are obtained to modern energy services provided productive use and community services. The term “modern solutions” cookingNations. again and whether recent spirit of the initiative. Because Extractives Global rapid progress and energy for Energy Agency and the United liquefied petroleum gas), 2 Solid fuels are defined to include both traditional biomass (wood, charcoal, agricultural will make more by the refers to solutions International that involve electricity or gaseous fuels (including is pellets and briquettes), and of decline in energy intensity some t of those of efficiency energy and forest residues, dung, and so on), processed biomass (such as to pursue the three objectives, Practice. depending on their or solid/liquid fuels paired with Energy efficiency. The rate stoves exhibiting of overall improvemen emissions rates at or near other solid fuels (such as coal and lignite). will excel elsewhere, rate (CAGR) of energy will continue. in one area while others liquefied petroleum gas (www.sustainableenergyforall.org). annual growth as well as on approximated by the compound and comparative advantages is the ratio of total primary energy respective starting points marshal. where energy intensity that they are able to intensity, measured in purchas- the resources and support domestic product (GDP) for the achievement of the SE4ALL consumption to gross calculate energy intensity Elisa Portale is an To sustain momentum terms. Data used to charting global progress to 2030 is needed. ing power parity (PPP) the International energy economist in objectives, a means of balances published by the Energy Sector International Energy Agency led a consor- are obtained from energy The World Bank and the SE4ALL Global Energy Agency and the United Nations. Management Assistance agencies to establish the the GTF to provide a regional and tium of 15 international for regular This note uses data from Program (ESMAP) of the which provides a system for Eastern Tracking Framework (GTF), the three pillars of SE4ALL World Bank’s Energy and Extractives on rigorous—yet practical, given available country perspective on Global Practice. global reporting, based has access Joeri de Wit is an will be achieved when every person on the planet The universal access goal heating fuels, clean cooking fuels, clean energy economist in 1 agricultural provided through electricity, biomass (wood, charcoal, to modern energy services The term “modern cooking solutions” to include both traditional and briquettes), and Solid fuels are defined the Bank’s Energy and use and community services. biomass (such as pellets 2 and energy for productive petroleum gas), and so on), processed fuels (including liquefied and forest residues, dung, involve electricity or gaseous at or near those of Extractives Global refers to solutions that overall emissions rates other solid fuels (such as coal and lignite). with stoves exhibiting Practice. or solid/liquid fuels paired (www.sustainableenergyforall.org). liquefied petroleum gas Get Connected to Live Wire Live Wires are designed for easy reading on the screen and for downloading The Live Wire series of online knowledge notes is an initiative of the World Bank Group’s Energy and self-printing in color or “Live Wire is designed and Extractives Global Practice, reflecting the emphasis on knowledge management and solu- black and white. tions-oriented knowledge that is emerging from the ongoing change process within the Bank for practitioners inside Group. For World Bank employees: and outside the Bank. Professional printing can Each Live Wire delivers, in 3–6 attractive, highly readable pages, knowledge that is immediately It is a resource to relevant to front-line practitioners. also be undertaken on a customized basis for share with clients and specific events or occasions Live Wires take a variety of forms: counterparts.” • Topic briefs offer technical knowledge on key issues in energy and extractives by contacting GSDPM Customer Service Center at • Case studies highlight lessons from experiences in implementation (202) 458-7479, or sending a • Global trends provide analytical overviews of key energy and extractives data written request to cgsdpm@ • Bank views portray the Bank Group’s activities in the energy and extractives sectors worldbank.org. • Private eyes present a private sector perspective on topical issues in the field Each Live Wire will be peer-reviewed by seasoned practitioners in the Bank. Once a year, the Energy and Extractives Global Practice takes stock of all notes that appeared, reviewing their quality and identifying priority areas to be covered in the following year’s pipeline. Please visit our Live Wire web page for updates: http://www.worldbank.org/energy/livewire e Pa c i f i c 2014/28 ainable energy for all in easT asia and Th 1 Tracking Progress Toward Providing susT TIVES GLOBAL PRACTICE A KNOWLEDGE NOTE SERIES FOR THE ENERGY & EXTRAC THE BOTTOM LINE Tracking Progress Toward Providing Sustainable Energy where does the region stand on the quest for sustainable for All in East Asia and the Pacific 2014/29 and cenTral asia energy for all? in 2010, eaP easTern euroPe sT ainable en ergy for all in databases—technical measures. This note is based on that frame- g su v i d i n had an electrification rate of Why is this important? ess Toward Pro work (World Bank 2014). SE4ALL will publish an updated version of 1 Tracking Progr 95 percent, and 52 percent of the population had access Tracking regional trends is critical to monitoring the GTF in 2015. to nonsolid fuel for cooking. the progress of the Sustainable Energy for All The primary indicators and data sources that the GTF uses to track progress toward the three SE4ALL goals are summarized below. consumption of renewable (SE4ALL) initiative C T I V E S G L O B A L P R A C T I C E ENERGY & EXTRA • Energy access. Access to modern energy services is measured T E S E R I E S F O R T H EIn declaring 2012 the “International Year of Sustainable Energy for energy decreased overall A KNO W L E D G E N Oand 2010, though by the percentage of the population with an electricity between 1990 All,” the UN General Assembly established three objectives to be connection and the percentage of the population with access Energy modern forms grew rapidly. d Providing Sustainable accomplished by 2030: to ensure universal access to modern energy energy intensity levels are high to nonsolid fuels.2 These data are collected using household Tracking Progress Towar services,1 to double the 2010 share of renewable energy in the global surveys and reported in the World Bank’s Global Electrification but declining rapidly. overall THE BOTTOM LINE energy mix, and to double the global rate of improvement in energy e and Central Asia trends are positive, but bold Database and the World Health Organization’s Household Energy for All in Eastern Europ efficiency relative to the period 1990–2010 (SE4ALL 2012). stand policy measures will be required where does the region setting Database. The SE4ALL objectives are global, with individual countries on that frame- on the quest for sustainable to sustain progress. is based share of renewable energy in the their own national targets databases— technical in a measures. way that is Thisconsistent with the overall of • Renewable energy. The note version energy for all? The region SE4ALL will publish an updated their ability energy mix is measured by the percentage of total final energy to Why is this important ? spirit of the work initiative. (World Bank Because2014). countries differ greatly in has near-universal access consumption that is derived from renewable energy resources. of trends is critical to monitoring to pursue thetheGTF in 2015. three objectives, some will make more rapid progress GTF uses to Data used to calculate this indicator are obtained from energy electricity, and 93 percent Tracking regional othersindicators primary will excel and data sources that elsewhere, depending on their the while the population has access le Energy for All in one areaThe goals are summarized below. balances published by the International Energy Agency and the the progress of the Sustainab respective track starting progress pointstowardand the three SE4ALL comparative advantages as well as on services is measured to nonsolid fuel for cooking. access. Accessthat they modern to are able to energy marshal. United Nations. despite relatively abundant (SE4ALL) initiative the resources and support Energy with an electricity connection Elisa Portale is an l Year of Sustainable Energy for To sustain percentage of by the momentum forthe the population achievement of the SE4ALL 2• Energy efficiency. The rate of improvement of energy efficiency hydropower, the share In declaring 2012 the “Internationa energy economist in with access to nonsolid fuels. three global objectives objectives, andathe means of charting percentage of the population global progress to 2030 is needed. is approximated by the compound annual growth rate (CAGR) of renewables in energy All,” the UN General Assembly established the Energy Sector surveys and reported access to modern universalAssistance The World TheseBank and data are the collected International using household Energy Agency led a consor- of energy intensity, where energy intensity is the ratio of total consumption has remained to be accomplished by 2030: to ensure Management Database and the World of theenergy intium of 15 renewable international in the World Bank’s Global agencies toElectrification establish the SE4ALL Global primary energy consumption to gross domestic product (GDP) energy the 2010 share of Program (ESMAP) relatively low. very high energy services, to double Database. measured in purchasing power parity (PPP) terms. Data used to 1 t ’s Household provides Energy a system for regular World Bank’s Energy the global rate of improvemen and Extractives Tracking Framework Health (GTF), which Organization in the energy intensity levels have come and to double the global energy mix, Global Practice. (SE4ALL 2012). based on energy. of renewable The sharepractical, rigorous—yet energy given available calculate energy intensity are obtained from energy balances to the period 1990–2010 global reporting, Renewable down rapidly. The big questions in energy efficiency relative setting by the percentage of total final energy consumption published by the International Energy Agency and the United evolve Joeri withde Wit is an countries individual mix is measured Data used to are how renewables will The SE4ALL objectives are global, economist in with the overall from renewable energy when every resources. person on the planet has access Nations. picks up a way energy that is consistent 1 The universal derived that isaccess goal will be achieved balances published when energy demand in from energy their own national targets through electricity, clean cooking fuels, clean heating fuels, rates the Bank’s Energy and countries differ greatly in their ability calculate this indicator are obtained to modern energy services provided productive use and community services. The term “modern solutions” cookingNations. again and whether recent spirit of the initiative. Because Extractives Global rapid progress and energy for Energy Agency and the United liquefied petroleum gas), 2 Solid fuels are defined to include both traditional biomass (wood, charcoal, agricultural will make more by the refers to solutions International that involve electricity or gaseous fuels (including is pellets and briquettes), and of decline in energy intensity some t of those of efficiency energy and forest residues, dung, and so on), processed biomass (such as to pursue the three objectives, Practice. depending on their or solid/liquid fuels paired with Energy efficiency. The rate stoves exhibiting of overall improvemen emissions rates at or near other solid fuels (such as coal and lignite). will excel elsewhere, rate (CAGR) of energy will continue. in one area while others liquefied petroleum gas (www.sustainableenergyforall.org). annual growth as well as on approximated by the compound and comparative advantages is the ratio of total primary energy respective starting points marshal. where energy intensity that they are able to intensity, measured in purchas- the resources and support domestic product (GDP) for the achievement of the SE4ALL consumption to gross calculate energy intensity Elisa Portale is an To sustain momentum terms. Data used to charting global progress to 2030 is needed. ing power parity (PPP) the International energy economist in objectives, a means of balances published by the Energy Sector International Energy Agency led a consor- are obtained from energy The World Bank and the SE4ALL Global Energy Agency and the United Nations. Management Assistance agencies to establish the the GTF to provide a regional and tium of 15 international for regular This note uses data from Program (ESMAP) of the which provides a system for Eastern Tracking Framework (GTF), the three pillars of SE4ALL World Bank’s Energy and Extractives on rigorous—yet practical, given available country perspective on Global Practice. global reporting, based has access Joeri de Wit is an will be achieved when every person on the planet The universal access goal heating fuels, clean cooking fuels, clean energy economist in 1 agricultural provided through electricity, biomass (wood, charcoal, to modern energy services The term “modern cooking solutions” to include both traditional and briquettes), and Solid fuels are defined the Bank’s Energy and use and community services. biomass (such as pellets 2 and energy for productive petroleum gas), and so on), processed fuels (including liquefied and forest residues, dung, involve electricity or gaseous at or near those of Extractives Global refers to solutions that overall emissions rates other solid fuels (such as coal and lignite). with stoves exhibiting Practice. or solid/liquid fuels paired (www.sustainableenergyforall.org). liquefied petroleum gas