2014/15 88698 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: India’s national- and state-level experience with auctions of The Case of India solar energy products both large and small attests to the flexibility and adaptability Why is this case interesting? much of the capacity expansion was to be decentralized to the of auction mechanisms. state level. Motivated to design their own solar policies and targets, Under the National Solar India’s National Solar Mission led to concurrent many of the state governments adopted auction mechanisms as a Mission, auctions have been implementations of renewable auction schemes central scheme to achieve their goals, inspired largely by the central implemented with good results government’s initiatives. Because the Indian experience was varied, Although India is the fifth-largest electricity consumer of the world, in a variety of settings. Lessons with implementation tailored to local circumstances, It is a valuable with an installed capacity of 211 GW as of the end of 2011, the include the importance of case study for the use of auctions to promote renewable energy. country’s energy sector still has immense potential for growth. A clear ideas about key goals quarter of the country’s population lack access to electricity, and and objectives—and about yearly electricity consumption per capita stands at just 684 kWh, less What was the major challenge? areas where sacrifices can be than a third of Brazil’s and around a fifth of China’s. Solving India’s Auction designs had to take into account local made. Experience in several significant supply-side problems would open major opportunities for states has also underlined load growth, and renewable generation could be an important part of peculiarities as well as national objectives the importance of regulatory such a scenario. Auctions were to play a central role in the early stages of devel- stability. Renewable energy—notably wind and solar—has played an opment of the NSM. In the NSM mission statement (MNRE 2012), important role as a complement to India’s coal-based electricity competitive bidding schemes were singled out as important generation mix. Attractive fiscal and financial incentives introduced in supporting mechanisms specifically for research and development the 1990s favored the growth of the Indian wind energy sector, to the initiatives, ensuring adequate price discovery in contracting for pilot point that by the end of 2012 the country ranked fifth in the world in and demonstration projects. In Phase 1, encompassing the years installed wind power capacity (19 GW). When India decided to launch 2010 to 2013, the NSM aimed to build between 1,000 and 2,000 Ashish Khana its Jawaharlal Nehru National Solar Mission (NSM) in January 2010, MW of grid-connected solar power. Of that amount, 1,000 MW (that is lead energy specialist policy makers aimed to do for solar power what the previous policies is, between 50 percent and 100 percent of the target) was to be in the sustainable had done for wind, enabling the Indian solar power sector to become contracted through centralized auctions. development and an important international player. However, solar energy was not as Increasingly, the NSM scheme has relied on decentralized energy unit of the South Asia Region close to competitiveness in the Indian context as was wind power, implementations. The NSM mission document states that the keys at the World Bank. requiring greater efforts from policy makers to reach the expansion to promoting solar power over the longer term (culminating in 20 Luiz Barroso is a target. GW of installed capacity by 2022) should be a renewable purchase managing director at Under the NSM, the central government initially organized obligation (RPO) scheme and state-level initiatives. In a policy PSR in Brazil. energy auctions to procure new solar capacity. For the longer term, document produced for NSM’s Phase 2 (2013–17) (GERC 2012), the 2 P r o m o t in g Rene w a b le E ne r g y t h r o u g h Au c t i o ns : T h e C a se o f I n d i a government estimated that state policies Figure 1. Procurement prices for solar PV projects worldwide would be responsible for 60 percent of solar PV procurement price capacity additions during these years. States India batch 1 average 25 were given a large degree of autonomy to India batch 2 average set and implement local policies, and many 20 Global average Indian rupees per kWh have chosen auction schemes to ensure “In Phase 1, the solar capacity expansion at minimum cost. 15 government placed The greater involvement of the states during 10 equal emphasis on Phase 2 has posed new challenges of coordination, harmonization of policies, and 5 large-scale concentrated sharing of best practices among states. solar power (CSP) and Reducing the impact of renewable 0 Switzerland Ontario France Italy Israel Slovenia Malaysia Germany solar photovoltaics (PV); energy development on electricity tariffs has whereas more recent been a major concern of both the central Source: Deloitte. implementations have and state governments. In general, the higher costs of solar power must ultimately choices. That said, the implicit focus of central and state policies has emphasized the PV changed over the years. In Phase 1, the government placed equal be passed through to final consumers. Auction schemes are useful technology for its shorter in this sense, because they tend to minimize costs to consumers emphasis on large-scale concentrated solar power (CSP) and solar construction period, (Bridge to India 2012–14), and the NSM has taken further steps to photovoltaics (PV); whereas more recent implementations have dilute the tariff impact of contracting more expensive solar power. emphasized the PV technology for its shorter construction period, lower prices, and greater In Phase 1 of the NSM, a so-called “bundling” scheme was used lower prices, and greater success in most early implementations. success in most early to dilute these costs in a cheaper generation portfolio, whereas in Another shift in focus has been the more recent development of implementations.” Phase 2 a mechanism known as viability gap funding (VGF) was used mechanisms aimed at smaller-scale rooftop implementations, follow- to dilute solar costs over time. In a VGF scheme, the government ing the successful commissioning of the first large-scale PV plants. pays a part of the plant’s capital cost up front and ensures a fixed payment per unit of energy delivered for the contract’s duration. What results were achieved? Introduction of the VGF scheme in Phase 2 was made necessary Both national- and state-level auctions have led to by the nonavailability of a cheaper pool of thermal generation for bundling, and made possible by the National Clean Energy Fund’s successful projects approval of VGF as a funding source. The Indian central government’s experience with auction implemen- India also set the goal of achieving a global leadership role in tations can be split into three main segments. solar manufacturing. This objective was very prominent in the NSM Phase 1 auctions. The first centralized auctions for procuring documents, which discussed the financial and fiscal benefits to be utility-scale solar plants were carried out in August 2010 and August gained, the development of human capital, and other underlying 2011. Extremely important in breaking new ground, these auctions infrastructure and ecosystem enablers. Policy design mechanisms resulted in impressive price discounts that made India one of the were chosen with these concerns in mind. It was expected that cheapest places for solar power in the world (figure 1). The auction demand for solar equipment stimulated by the NSM would spur the demand was split into 500 MW of PV and 500 MW of CSP implemen- Indian solar manufacturing sector. tations. CSP plants, which usually involve larger capacities and longer The technological routes to the NSM targets were left open, with construction times, were seen at the time as an attractive alternative the NSM aiming to maintain neutrality with respect to technology to PV, which had historically been more common worldwide. At least 3 P r o m o t in g Rene w a b le E ne r g y t h r o u g h Au c t i o ns : T h e C a se o f I n d i a five of the seven CSP projects that were commissioned, however, absence of CSP technology, as the auction called only for 750 MW suffered serious delays. As a result, more recent policies have of PV projects; (ii) the application of the VGF scheme as a substitute focused on PV implementations. Among PV plants, delays have been for bundling; and (iii) the separation of demand into a “domestic relatively manageable: 125 MW out of the 140 MW sold in the August content requirement” (DCR) portion and an “open” portion (375 MW 2010 auction were operational in March 2012; and the entire 310 MW each). The issue of DCR had been a major point of contention in the sold in the August 2011 auction was operational in May 2013. previous two years, as the United States filed an official complaint “In 2013, the central Prices and quantities of the most important national- and state- with the World Trade Organization against India’s DCR. At the same government conducted level auctions for solar PV are summarized in figure 2. time, the Indian government had been disappointed by the fact that a auctions for rooftop The rooftop auctions. In April, July, and December 2013, the large fraction of the Phase 1 auction’s demand was met by thin-film central government conducted auctions for rooftop solar generation solar cells, which were exempt from DCR obligations (since this type solar generation in in specific cities. The product awarded in these auctions involves a of cell is not manufactured in India). The DCR subauction received specific cities… While capital subsidy for part of the plant’s investment cost. The generator half as many bids as its open counterpart (700 MW vs. 1470 MW) and the awarded capacities is entitled to sell the electricity in the market. While the awarded resulted in significantly higher bids. have been small, the use capacities have been small (a total of 25.5 MW in the three auctions Regarding state-level implementations, the state of Gujarat of bidding processes to combined), the use of bidding processes to procure smaller-scale stands out both as being the first state to develop a solar policy projects is an interesting departure. (even earlier than the NSM) and as the most prominent state to procure smaller-scale The Phase 2 auction. No centralized auctions for large-scale implement a feed-in tariff (FIT) mechanism, as opposed to an auction projects is an interesting solar generation were conducted in 2012 or 2013, leaving state mechanism, for the development of solar power. Gujarat’s state departure.” policies to fill this gap, as discussed below. The first centralized policy has been responsible for the development of nearly 850 MW auction under Phase 2 was held in February 2014. The main inno- of installed solar capacity as of April 2014 (Bridge to India 2012–14), vations of the new bidding process applied in Phase 2 were (i) the and the state’s FIT has tailed the price reductions coming out of NSM Figure 2. Schematic overview of some of the most important solar PV auctions in India, 2010–14 Capacity (state auctions) 1,200 Capacity (national auctions) 250 US$203 Unmet demands 1,000 Contracted capacity (MW) 200 Prices Price (US$/MWh) US$146 US$148 800 US$140 US$134 US$139 US$115 US$125* 150 US$114 600 US$108 US$108 US$108 US$96 100 400 50 200 0 0 NSM I–1 NSM I–2 Karnataka1 Nadta P. 1 Tamil Nadu Andhra P. Rajasthan Karnataka2 Punjab Uttar P. Madya P. 2 NSM II–DCR NSM II– Aug. 2010 Aug. 2011 Apr. 2012 May 2012 Jan. 2013 Feb. 2013 Feb. 2013 Mar. 2013 Apr. 2013 Mar. 2013 Feb. 2014 Feb. 2014 Open Source: Authors. Notes: Prices are calculated assuming an exchange rate of 60 INR/US$. The Tamil Nadu data depict the state’s “L1” auction results rather than the results obtained after the state’s “workable tariff” was disclosed. For the NSM Phase 2 auction, an “equivalent” nominal levelized tariff has been computed from the VGF (viability gap funding) amount. The subsequent fixed payments are based on an assumed discount rate of 13 percent and a plant capacity factor of 18 percent. Auctions of less than 50 MW of demand (which includes rooftop auction schemes and auctions from the state of Odisha) have been omitted. 4 P r o m o t in g Rene w a b le E ne r g y t h r o u g h Au c t i o ns : T h e C a se o f I n d i a auctions. Gujarat’s success in promoting capacity additions relative have muddied the waters. In Tamil Nadu, the state regulatory to most other states can be attributed both to earlier implementation commission has contested the “workable” tariff that was determined and relatively higher prices paid for solar power. (outside any bidding process) by the state’s Energy Development Among the states adopting auction-based mechanisms, most Agency. No PPAs are active right now, and there are no indications have had some amount of success, despite a few setbacks. Madhya of how the stalemate might be resolved. In Andhra Pradesh, the Pradesh currently has the most successful state-level auction government decided to apply a “traditional” L1 bidding scheme to “The Indian experience scheme, with 175 MW already operational (Bridge to India 2012–14). all auctioned projects, even though it had originally promised that with auctions, from the Several states have had trouble attracting the desired number it would allow price differences between different substations (to CSP segment to procuring of bidders. The auctions carried out by the states of Tamil Nadu, account for different irradiation levels and land costs). The state Punjab, and Uttar Pradesh have all been undersubscribed, meaning subsequently reduced its capacity target from 1000 MW to 350 MW. rooftop solar power, that they were unable to meet the desired capacity additions even Leniency with project delays has been the norm. According to attests to the flexibility and by contracting the entire amount of solar power bid. One important announced schedules, the capacity contracted in the state auctions adaptability of auctions.” reason for this result is the low bankability of distribution companies in Karnataka, Madhya Pradesh, and Rajasthan should be fully oper- in these states, with high perceived risk dampening the private ational by now, yet delays of up to a year have occurred. All three sector’s interest. (In the national-level auctions, the financial situation states seem to have accepted the delays, extending deadlines with of the contract counterparty was much more stable.) Rajasthan no penalties or requiring only minor justifications from the devel- has been able to avoid this issue for the most part by changing the opers. Such practices set bad precedents, giving investors an extra contract counterparty to the state’s nodal agency (RRECL) rather than incentive to be unrealistically aggressive on their planned schedules. the distribution company. Some state governments have introduced the “L1” lowest-bid What are the key lessons? pricing scheme. Under this scheme, adopted in Rajasthan, Tamil Nadu, and Andhra Pradesh, developers must meet the lowest offer Auctions should be part of a coherent strategy that of all the auction’s participants in order to be awarded the power meets clear policy objectives purchase agreement. The economic rationale for the scheme is questionable: It could be successful in depressing prices if most Auctions have been implemented in a variety of settings, bidders were behaving strategically, but in a competitive market it with good results. The Indian experience with auctions, from the would simply result in most bidders refusing the power purchase CSP segment to procuring rooftop solar power, attests to the flexi- agreement (PPA). Out of 180 MW bid for in the Rajasthan auction, bility and adaptability of auctions. While India’s CSP implementations winners of only 75 MW (less than the state’s target of 100 MW) are far from trouble-free, the program can be described as a qualified accepted the L1 tariff. Similarly, in Tamil Nadu supply was reduced success, given the many obstacles encountered (Stadelmann, Frisari, from 499 MW to 226 MW. Here again auctions have allocated less and Konda 2014). India’s rooftop auction scheme is so new that than the targeted capacities. On the other hand, states implementing plants have not yet been commissioned, but expectations are high. L1 auctions have indeed been able to achieve lower prices. The right policies can further the nation’s long-term Regulatory and policy instability has undermined state programs goals. It is sometimes unclear whether India’s strategic policy in Tamil Nadu and Andhra Pradesh. While these two states declared goals are being met. The L1 schemes used in some state auctions, the most ambitious auctions-based policies in India, with each aim- for example, seem overly focused on short-term price reductions, ing to contract 1,000 MW of new solar capacity, expectations for both rather than on ensuring continued capacity additions and investors’ states are now very low, as unclear policies and multiple changes participation in future auctions. Likewise, leniency with PPAs that 5 P r o m o t in g Rene w a b le E ne r g y t h r o u g h Au c t i o ns : T h e C a se o f I n d i a are delayed or ultimately cancelled can negatively affect bidders’ References Make further incentives. MNRE (Ministry of New and Renewable Energy). 2010. “Jawaharlal connections The country’s core goals for renewable energy should be Nehru National Solar Mission – Towards Building Solar India.” made clear. Because most policy implementations involve trade- Mission Document, New Delhi. January. Live Wire 2014/12. “Promoting offs, it is important to have clear ideas about key goals and objec- ———. 2012. “Jawaharlal Nehru National Solar Mission – Phase II Renewable Energy through tives and about areas where sacrifices can be made. One interesting Policy Document.” New Delhi. December. Auctions,” by Gabriela Elizondo- topic in this regard relates to local manufacturing and job creation, GERC (Gujarat Electricity Regulatory Commission). 2012. “Order 1 of Azuela and Luiz Barroso. both of which require a careful analysis of the country’s comparative 2012: Determination of Tariff for Procurement by the Distribution advantage in specific solar technologies. Establishing a clear set of Live Wire 2014/13. “Promoting Licensees and Others from Solar Energy Projects.” Gujarat, India. priorities for the NSM would help to ensure a coherent long-term Renewable Energy through January 27. http://www.gercin.org/. plan and elucidate whether the higher cost paid for domestic content Auctions: The Case of Brazil,” Stadelmann, M., G. Frisari, and C. Konda. 2014. “The Role of Public in the NSM Phase 2 auctions has been a good investment. by Gabriela Elizondo-Azuela, Financing in CSP – Case Study: Rajasthan Sun Technique, India.” Regulatory stability and trustworthiness are crucial. Luiz Barroso, and Gabriel Climate Policy Initiative. March. http://climatepolicyinitiative. Several instances of erratic behavior on the part of the Indian Cunha. org/wp-content/uploads/2014/03/SGG-Case-Study-The-Role-of- national and state governments and regulators have likely hurt the Public-Finance-in-CSP-Rajasthan-Sun-Technique-India.pdf. country in the long run by reducing investors’ confidence. Last- Live Wire 2014/14. “Promoting Bridge to India. 2012–14. “India Solar Compass.” Quarterly reports, minute policy revisions in Tamil Nadu and Andhra Pradesh are the Renewable Energy through October 2012 to April 2014. http://www.bridgetoindia.com/ most prominent examples, although the successive delays that were Auctions: The Case of China,” our-reports/india-solar-compass/. observed in the implementation of the NSM Phase 2 auction have by Xiaodong Wang, Luiz likely also had negative results. Investors need to feel secure before Barroso, and Gabriela Elizondo. The peer reviewers for this note were Luiz Maurer (principal industry special- they will establish a strong manufacturing or developer base. ist for climate strategy and business development, IFC) and Katharina Gassner (senior investment climate economist, World Bank Group). The authors thank Gabriel Cunha (consultant) for his contributions to this note. 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. 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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 Contribute to If you can’t spare the time to contribute to Live Wire, but have an idea for a topic, or case we should cover, let us know! 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ERGY PRACTICE work (World Bank 2014). E G E N O T E S E R I E S F O R T H E E N to electricity, and 93 percent of A K N O W L g regiona l trends is critical monitoring the GTF in 2015. data sources that the GTF uses to Trackin The primary indicator s and the population has access s of the Sustain able Energy for All the three SE4ALL goals are summari zed below. the progres track progress toward Understanding CO Emissions from the Global Energy Sector nonsolid fuel for cooking. is measured to modern energy services THE BOTTOM LINE to Your Name Here t (SE4ALL) initiativ e Energy access. Access connection despite relatively abundan 2 population with an electricity ional Year of Sustainab le Energy for by the percentage of the access to nonsolid fuels. 2 hydropower, the share the energy sector contributes In declaring 2012 the “Internat objectives percenta ge of the population with establish ed three global and the and reported about 40 percent of global of renewables in energy All,” the UN General Assembly using household surveys Why is this issue important? access to modern These data are collected 2030: to ensure universal and the World Become an author has remained emissions of CO2. three- consumption to be accomplished by of renewable energy in in the World Bank’s Global Electrification Database high energy knowledge the share of the 2010 . energy requires very relatively low. Mitigating climate change services, to 1 double ld Energy Database quarters of those emissions rate of improvement Organization’s Househo CO2 intensity levels have come and to double the global Figure 1. CO2 emissions Health Figure 2. energy-related The share of renewable energy in the energy come from six major the global energy mix, sources of CO question s2 emissions to the period 1990–201 0 (SE4ALL 2012). by sector Renewab le energy. emissions by country consumption down rapidly. The big economies. although coal-fired in energy efficiency relative countries setting percenta ge of total final energy mix is measured by the of Live Wire and global, with individual LICs evolve les will opportunities to cut emissions of greenhouse aregases used to plants account for just are how renewab Identifying The SE4ALL objectives le energy resources. Data 0.5% picks upunderstanding of the main sources ofin those a way that is consistent with emis- the overall that is derived from renewab energy balances published 40 percent of world energy when energy demand requires a clear their own national targets in their ability are obtained from calculate this indicator Other Carbonrates for more than 80 percent of differ greatly countries Residential production, they were again and whethersions.recent dioxide (CO2) accounts spirit of the initiative. Because 6% sectors progress Other MICs nal Energy Agency and the United Nations. will make more rapid 15% intensity gas emissions globally, 1 primarily from the burning s, some 10% by the Internatio China improvement of energy efficiency is contribute to your responsible for more than of decline in energytotal greenhouse to pursue the three objective on their Other HICs . The rate of energy sector—defined include toexcel elsewhere, depending Energy efficiency 30% growth rate (CAGR) of energy will continue. of fossil fuels (IFCC 2007). The will 8% in one area while others by the compound annual Energy 70 percent of energy-sector as well as on 41% approxim and heat generation—contributed and compara tive advantages 41 ated Japan 4% energy the ratio of total primary Industry emissions in 2010. despite fuels consumed for electricity respective starting points 20% Russia energy intensity is that they are able to marshal. in 2010 (figure 1). Energy-related intensity, where USA product (GDP) measured in purchas- improvements in some percent of global CO2 emissions the resources and support 7% gross domestic practice and career! up the bulk of such ent of the SE4ALL Other consump tion to India 19% intensity is an at the point of combustion make for the achievem calculate energy countries, the global CO2 Elisa 2 emissions COPortale To sustain momentum transport Road 7% EU terms. Data used to andinare generated by the burning of fossil is needed. global progress to 2030 6% transport fuels, industrial ing power parity (PPP) the International economist objectives, a means of charting balances published by emissions 11% emission factor for energy energy 16% EnergyandSector nonrenewable municipal waste to generate nal Energy Agency led electricity Internatio a consor- are obtained from energy The World Bank and the thewaste, generation has hardly changed United Nations. ent Assistance venting and leakage to establish the emissions SE4ALL Global Energy Agency and the sector at the point and over the last 20 years. and heat. Black carbon and methane Managem tium of 15 international agencies Notes: Energy-related CO2 emissions are CO2 emissions from the energy from the GTF to provide a regional of the for regular This note usesanddata domestic Program (ESMAP) are not included in the analysis presented in this rk note. which provides a system (GTF), of combustion. Other Transport includes international marine aviation bunkers, of SE4ALL for Eastern Extractives Tracking Framewo available Other Sectors rail and pipeline transport; perspect ive on the three include pillars commercial/public World Bank’s Energy and given aviation and navigation, country on rigorous—yet practical, services, agriculture/forestry, fishing, energy industries other than electricity and heat genera- Global Practice. global reporting, based elsewhere; Energy = fuels consumed for electricity and Where do emissions come from? tion, and other emissions not specified as has in the opening paragraph. HIC, MIC, and LIC refer to high-, middle-, access Joeri de Wit is an will be achieved when on the planet heat generation, every person defined The universal access goal of countries heating fuels, energy economistare Emissions concentrated in 1 in a handful to modern energy services provided through electricity, fuels, clean and low-income clean cooking countries. cooking solutions” to include both traditional biomass (wood, charcoal, agricultural The term “modern Source: IEA 2012a. Solid fuels are defined and briquettes), and the Bank’s Energy and use and community services. biomass (such as pellets 2 and come primarily from burning and energy coal for productive electricity or gaseous fuels involve (including liquefied petroleum gas), of and forest residues, dung, and so on), processed Vivien Foster is sector Extractives Global refers to solutions that overall emissions rates at or near those other solid fuels (such as coal and lignite). with stoves exhibiting or solid/liquid fuels paired emissions closely manager for the Sus- The geographical pattern of energy-related CO Practice. gas 2 (www.sustainableenergy forall.org). liquefied petroleum middle-income countries, and only 0.5 percent by all low-income tainable Energy Depart- mirrors the distribution of energy consumption (figure 2). In 2010, ment at the World Bank countries put together. almost half of all such emissions were associated with the two (vfoster@worldbank.org). Coal is, by far, the largest source of energy-related CO2 emissions largest global energy consumers, and more than three-quarters globally, accounting for more than 70 percent of the total (figure 3). Daron Bedrosyan were associated with the top six emitting countries. Of the remaining works for London This reflects both the widespread use of coal to generate electrical energy-related CO2 emissions, about 8 percent were contributed Economics in Toronto. power, as well as the exceptionally high CO2 intensity of coal-fired by other high-income countries, another 15 percent by other Previously, he was an power (figure 4). Per unit of energy produced, coal emits significantly energy analyst with the more CO emissions than oil and more than twice as much as natural 2 World Bank’s Energy Practice. Gas Inventory 1 United Nations Framework Convention on Climate Change, Greenhouse 0.php gas. Data—Comparisons By Gas (database). http://unfccc.int/ghg_data/items/380