2015/45 97845 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 Permitting and Licensing Regimes for Permitting, licensing, and other authorization procedures are Renewable Energy Projects an integral part of investing in renewable energy. For private Why is this issue important? Because the financial viability of many RE projects today still companies, the quality of these depends on some form of public support, rational and transparent procedures can drastically Investor-friendly permitting regimes can drastically regulatory procedures allow potential investors to gauge what affect transaction costs and reduce transaction costs and project risk support will be available at what point in the development cycle project risk. Optimal regimes and what risks will remain with the developer. Without such ex ante When building and operating a renewable energy (RE) plant, project are tailored to country specifics visibility, projects cannot secure commercial financing. The bankabil- developers must obtain many different licenses, permits, authoriza- and depend on the way in which ity of a project is critically enhanced when legally binding regulations tions, approvals, rights, and clearances from national, regional, and private investors access the govern tariff levels, grid access, and other key contractual details, local authorities. This is necessarily time-consuming, although there market in the first place—from providing certainty early in the project development process. are significant differences between countries when it comes to the auctions to site-specific tenders By lowering uncertainty, well-designed procedures mean better number, length, and sequence of procedures. One common obser- to standardized contracts on a returns for investors and lower tariffs or smaller subsidies for vation is that procedures usually differ depending on technology and first-come, first-served basis. governments. In addition, they reduce conflicts among stakeholders. the size of the plant. Although there is no single Therefore, it is important to analyze different permitting regimes and Permitting regimes are typically embedded in an overall regula- best practice when it comes identify best practices that can help countries improve their regula- tory framework for the RE sector, which often contains incentives for to authorizing renewable tory frameworks where necessary. RE including feed-in tariffs, tax benefits, mandatory offtake agree- energy projects, common ments, guaranteed connection to the grid, and priority dispatch of principles exist that signal an generated power. The entirety of the incentive framework, together What are the characteristics of current practice? investor-friendly and socially with resource availability, country risk, the nature of demand, and Permitting and licensing systems differ by country and environmentally responsible other factors, determines the attractiveness of a country to private regime. investors in RE. and by “entry regime,” but some features are Although simplified permitting regimes on their own are not common to most sufficient to attract investments, making necessary procedures As a general rule, a project developer must complete the following Elena Merle-Beral is investor-friendly and efficient can drastically reduce transaction steps to obtain authorization for an RE project. Each of these steps a senior energy specialist with IFC Cross Cutting costs and cut project preparation time, especially for small projects. may involve several procedures, and some steps and procedures Advisory Services, Energy The sequence and design of regulatory procedures should provide may run in parallel. and Resource Efficiency. maximum ex ante transparency for investors about available support • General procedures for starting a business. Katharina Gassner is a schemes and residual risks. senior economist with the • Site acquisition and land-use rights (e.g., consent from planning same unit. authority). 2 P e r m i t t i n g a n d L i c e n s i n g R e g i m e s fo r R e n e w a b l e E n e r g y P r o j e c t s • Natural resource permits and environmental approvals. Figure 1.  Permitting procedures are part of the overall policy • Grid-connection agreement (for on-grid projects). It may be framework for RE necessary to ensure compliance with the national energy strategy or sector master plan (affecting generation and transmission). Overall policy/support framework “Best-practice regimes • Power purchase agreement for offtake by a single buyer (usually the utility) or third parties. are clear and transparent, • Technology-specific clearances, e.g., approvals from aviation “Entry regime” for stable and predictable; the authorities for wind projects. renewable generators sequencing of different • Procedures to qualify for subsidies or other forms of public procedures is logical and support. These may involve registering as a “qualified/privileged/ ensures maximum ex ante special” generator and in certain cases complying with local Licensing and visibility; key regulatory content requirements. permitting decisions are determined • Construction permits and authorizations, including approval of procedures project design by a public authority; safety-related clearances early in the process so as from planning, sanitary, emergency, fire, and other authorities; Source: Authors. to facilitate rather than and certification of the equipment used to build and operate RE discourage commercial power plants—all prior to commissioning the plant. financing.” • Licenses or other approvals required to generate electricity and for certification of electricity generated from RE sources. Only in advanced markets where RE technologies can be deployed at The sequencing and design of procedures within these general or below grid parity will the absence of this feature not represent a categories will depend on a country’s overall legal framework and handicap for RE development. institutional setup (figure 1). Key project development steps—such The size and potential number of RE projects within a given plant as securing a site, a grid connection, and an offtake agreement—are category play an important role in determining the type of entry often linked to the broader support mechanisms and preferential regime adopted. Two or more different entry regimes can co-exist in treatment offered to RE developers that qualify for them. the same country—for example, auctions for large on-grid projects Specific characteristics of licensing and permitting procedures and standard applications coupled with light-handed regulations for often depend on the type of “entry regime”—that is, the manner in unsolicited small projects (stand-alone or connected to the grid). which private investors enter into RE generation. Entry options range Although the type of entry regime has a big impact on the from auctions to tenders of specific sites to standardized procedures sequence and the design of permitting and licensing procedures, the for handling unsolicited applications to build small plants (table 1). regulatory burden on project developers is not necessarily heavier A key feature that determines the attractiveness of an entry or lighter under one regime or another, with the deliberate exception regime is whether the RE plant will benefit from a long-term offtake of light-handed regulation for small projects expected to have minor agreement at a price guaranteed for the duration of the agreement, environmental impact. thereby lowering the risk associated with recovery of the investment. 3 P e r m i t t i n g a n d L i c e n s i n g R e g i m e s fo r R e n e w a b l e E n e r g y P r o j e c t s Table 1. Overview of most common entry regimes worldwide (with guaranteed long-term offtake) Entry regime Characteristics Approval of project Approval of all applications that meet screening criteria applications according • Developers select their own sites and obtain required permits and available support payments in return for compliance with regulatory requirements. to prespecified • The exclusive right to develop a site is granted to any qualified developer for a predetermined period over which the developer must demonstrate that the project is screening criteria moving forward. (three options) • Suitable for small- and medium-sized projects to which standard screening criteria can be applied. • Recommended where the preselection of sites by a central authority does not make sense because of the large number of possible projects. • Most effective if combined with standard-term power purchase agreements, offtake conditions (including price), and connection agreements. Selective approval of applications • Similar to above, except that support is not offered to all qualified projects. • Additional screening occurs when the number of applications exceeds the number of projects that can obtain public support because of capacity caps or grid-access limitations. • Sufficient institutional capacity for stage-two screening is required, and the process has to be transparent and verifiable at each stage. • Selective approval substantially increases risk for developers preparing initial proposals; in most cases, competitive procurement (last option below) would be preferable in terms of transparency and predictability. Simplified licensing regime for small-scale or off-grid projects • Similar to universal approval but with reduced bureaucratic and administrative burden. • Fewer procedures and requirements (e.g., less rigorous environmental clearance requirements). • Increased use of standardized documents such as standard contracts, application forms, and so on. • Fast-track procedures compared with larger projects. • Simple registration rather than licensing as an option; implementation at local level can be considered. • Appropriate for rural electrification, off-grid, and isolated mini-grid projects. Negotiated contracts • Unsolicited proposals to government or utility and direct negotiation of offtake price and other key contract terms between project developer and relevant authority, often on the basis of an initial memorandum of understanding. • Reliance on private sector for identification of market opportunities, particularly for large, unique projects that lack comparators or replicability. • Significant governmental capacity (in-house or imported) is required to negotiate balanced contract terms. • Licenses and permits are obtained case by case. • Risk of nontransparency / corruption. Tendering of specific • Call for bids for rights to develop one or more preselected RE sites at least cost. sites • Site and technology selection done upfront by government or utility. • Due to high transaction costs, this option is most suitable for medium-size and large projects. • Licensing and approval process may be packaged with the winning bid (assuring winning bidder land-use and resource rights). • Different degrees of specification of what exactly is put up for tender, from detailed specification of connection agreement and terms of power purchase agreement, to general rights for the use of the site (with bidders specifying key contractual terms in their bids). • Assessment can be done in several stages (prequalification and selection) and can be based on qualitative and quantitative criteria. Auctions, competitive • Competitive procurement of new capacity without preselection of sites. procurement, or public • Key objective is to procure new generation at the least possible cost while allowing for private initiative in site selection and project design. tendering of RE capacity • May be technology neutral or technology specific. • Auction may be designed in various ways, with weighting of both price and non-price factors. • Recommended in high-capacity environments with good availability of RE resources and the potential for a large number of RE projects. • Best results require coordinated grid planning to ensure interconnection of winning sites without delays. Source: Authors. 4 P e r m i t t i n g a n d L i c e n s i n g R e g i m e s fo r R e n e w a b l e E n e r g y P r o j e c t s Is there recognized best practice for As governments assess their permitting regime, each procedure should be viewed from the perspective of necessity (Is it really nec- permitting regimes? essary?), effectiveness (Does it achieve its purpose?), and efficiency Optimal solutions are case-specific but follow (Can it be streamlined, simplified, automated, or combined with other key common principles existing procedures?). Table 2 summarizes key characteristics of a good regulatory framework and of individual procedures. “As governments assess Because regulatory procedures differ from country to country, Adhering to these principles will create an investor-friendly and recognized good practice tends to be country-specific. For example, their permitting regime, socially and environmentally responsible regulatory framework for RE Tenenbaum and his colleagues (2014) describe Sri Lanka’s permitting each procedure should projects. regime as very transparent and well-designed. However the authors Recommended in all cases is that governments consider the be viewed from the acknowledge that Sri Lanka’s experience cannot necessarily be rep- publication of an investor guide that summarizes clearly the steps perspective of necessity licated in its entirety in other countries, warning that “it is dangerous necessary to obtain licenses and permits, sets out the sequence of (Is it really necessary?), to espouse a single best practice for all countries at all times.” procedures, specifies deadlines, and provides accurate, up-to-date Despite the need for flexibility at the country level, it is possible effectiveness (Does it contact information for responsible agencies.1 to identify permitting principles that provide certainty to investors achieve its purpose?), and project developers, thereby reducing their transaction costs and efficiency (Can it be while also allowing public authorities to make sure that renewable References resources are developed within the expected timeframe and in a Merle-Beral, E. 2014. “Improving Regulatory Procedures for streamlined, simplified, sustainable and fiscally responsible way. Licensing and permitting Renewable Energy Projects: Guidelines for IFC Advisory Teams.” automated, or combined Internal working document, International Finance Corporation, procedures under such best-practice regimes are designed to take with other existing into consideration the available capacity of approving authorities. Washington, DC. May. procedures?).” As a general rule, of course, the regulatory institutions should be Tenenbaum, Bernard, Chris Greacen, Tilak Siyambalapitiya, and as independent as possible from political and stakeholders’ interests. James Knuckles. 2014. From the Bottom Up: How Small Power Best-practice regimes are also clear and transparent, stable and Producers and Mini-Grids Can Deliver Electrification and predictable; they have enforceable processing deadlines and are Renewable Energy in Africa. Washington, DC: World Bank. free of retroactive changes. They contain a recourse mechanism Peter Meier, Maria Vagliasindi, and Mudassar Imran. 2014. The Design and avoid having the same information reviewed more than once and Sustainability of Renewable Energy Incentives: An Economic by different offices. The sequencing of different procedures is logical Analysis. Directions in Development 92224. Washington, DC: and ensures maximum ex ante visibility: key regulatory decisions World Bank. (on grid connection, offtake tariffs, etc.) are determined early in the The peer reviewers for this note were Efstratios Tavoulareas, IFC senior project-development process so as to facilitate rather than discour- operations officer, and Alejandro Moreno, energy specialist, Energy and age commercial financing. Extractives Global Practice, World Bank. This note is based on a more A permitting regime that does not meet best-practice criteria detailed working paper by Elena Merle-Beral. The authors acknowledge the and therefore is not attractive for private investors is marked by contributions of IFC colleagues Anatole Boute (Russia Renewable Energy inconsistencies between legal/regulatory requirements and de facto Program), Dimitar Dimitrovski (Balkan Renewable Energy Program), and Tigran practices. Application processes may be duplicative (for example, Parvanyan (Armenia Sustainable Energy Program). the same documents may require two different authorizations from the same institution), and tariffs may have to be negotiated with the national utility (or other offtaker) and approved by the regulator after 1 An example of such an online guide for Kenya can be found under www.renewableenergy. the plant is commissioned. go.ke and for Russia under http://russiagogreen.ru/ru/investorguide/. 5 P e r m i t t i n g a n d L i c e n s i n g R e g i m e s fo r R e n e w a b l e E n e r g y P r o j e c t s Table 2. Characteristics of best-practice permitting regimes Make further connections Key principles of the regulatory framework Checklist to evaluate specific procedures Legal consistency Live Wire 2014/17. “Incorporating Energy from • Consistency of regulatory requirements with primary legislation • Is the procedure required by legislation? Are there any inconsistencies between different pieces of legislation? Renewable Resources into Transparency Power System Planning,” by Marcelino Madrigal and • Availability and reliability of information on required procedures (cost, • Does the procedure specify: (i) all documents required for the application; application process and timing, information requirements, prerequisites/ (ii) decision-making criteria; (iii) standard documents (e.g. application Rhonda Lenai Jordan. sequencing, decision criteria, etc.) forms) that are easily available and a timeline for when responses can be • Information on projects granted provisional and final authorizations, and expected; (iv) the cost for the investor? Live Wire 2015/38. “Integrating their expiry dates Variable Renewable • Information on the planned expansion of the national and regional grids • In auctions and tenders: quality and transparency on what is bid out Energy into Power System Operations,” by Thomas Institutional capacity Nikolakakis and Debabrata • Clear division of responsibilities between the authorities • Which body is responsible for the procedure? Does it have the capacity to • Adequate technical capacity in approving agencies conduct the procedure in the proper manner and within the established Chattopadhyay. • No overlap or duplication of procedures and verifications among different timeframe? Can this body rely on information and decisions from other authorities authorities? Clear time frame • Explicitly specified and enforceable deadlines for approving authorities and • Does the regulation specify a clear deadline for the whole procedure and project developers each of its individual steps? What ensures that the responsible authority • Clear provisions to convert a preliminary permit or resource license to a full meets the deadlines? Is the timeframe for the validity of the license/ permit where applicable authorization specified? When can a provisional license be revoked? Public consultation • Mandatory stakeholder consultation on key decisions with environmental • Is public consultation required by regulation? How is it to be conducted and and social impact (if not physical meetings, then good virtual mechanisms in what time frame? and public announcements) • Clearly defined rights of stakeholders and processes by which they can register opposition Monitoring and evaluation • Regular evaluation • Is there a monitoring system to review the implementation process and to • External reviews of the regulatory regime evaluate the effectiveness and efficiency of the procedure? Enforcement and recourse • Provisions to enforce compliance with laws/regulations • Are there any penalties for noncompliance (e.g., if someone builds a small • Existence of a recourse mechanism for investors power plant without getting all the required permits)? • Does a recourse mechanism exist, and is it clearly explained and accessible for investors? Source: Authors. 6 P e r m i t t i n g a n d L i c e n s i n g R e g i m e s fo r R e n e w a b l e E n e r g y P r o j e c t s 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. 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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 7 P e r m i t t i n g a n d L i c e n s i n g R e g i m e s fo r R e n e w a b l e E n e r g y P r o j e c t s 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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Morgan Bazilian, mbazilian@ worldbank.org) Live Wire aims to raise the profile of operational staff wherever they are based; those with hands-on knowledge to share. That’s your payoff! It’s a chance to model good uroPe and cenT ral asia 2014/29 all in easTern e ble energy for “knowledge citizenship” and participate in the ongoing change process at the Bank, v i d i n g s u s Ta i n a ess Toward Pro 1 Tracking Progr where knowledge management is becoming everybody’s business. A KNOWLEDGE NOT E SERIES FOR THE ENERGY & EXTRACT IVES GLOBAL PRAC TICE rgy Providing Sustainable Ene Tracking Progress Toward Or 2014/5 1 U n d e r s ta n d i n g C O 2 emissiOns frOm the glObal energy seCt THE BOTTOM LINE pe and Cen tral Asia for All in Eastern Euro stand where does the region on the quest for sustaina ble based on that frame- measures. This note is databases—technical updated version of energy for all? The region SE4ALL will publish an has near-universal access to WhyD is this important? 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