Access to Modern Electricity from GridBased Programmes: Measuring Inferred. Access

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1 Access to Modern Electricity from GridBased Programmes: Measuring Inferred Access Florian Ziegler & Johannes Baake Climate & Energy Policy Unit, KfW Development Bank Vienna Energy Forum, 9th May 2017 Bank aus Verantwortung

2 KfW s Green Finance Domestic and International Activities by KfW Group 35,3 bn of total of 81,0 bn 44% 2016 Domestic International Privatkundenbank Mittelstandsbank Kommunalbank KfW IPEX-Bank DEG KfW Development Bank Support for Environment and Climate 28,4 bn International 7,3 bn 1,8 bn 0,6 bn 4,8 bn 66% 2

3 Energy Access Relevance of Inferred Access Impact Typical Energy Access Projects Other Energy Projects In the past, mostly only typical access projects were considered to create peoples / household access to modern energy other energy projects also have impact on improving access win-win-situation Project Type Grid Electrification Mini-Grid Electrification Off-Grid & Solar Lanterns Generation & X-Border T/M Transmission & Distribution Rural Feeder Segregation Energy Efficiency Regulations & Market Reform Grid Connections Legality Peak Capacity (W) Duration (Hrs) Evening Supply Quality (Voltage) Reliability (Outages) Affordability Positive impact of energy interventions on energy attributes Source: M. Bathia / World Bank 3

4 Key Methodological Questions Harmonisation process Starting point: Institutions have to report on the expected access impact (ex-ante, prior to project implementation, e.g. in application/approval phase), e.g., for monitoring political commitments, etc. Up to now, different institutions use either different models (incl. different assumptions) or they even do not have a specific methodology yet. Deviations in methodology can lead to very different results (e.g., the amount of kwh attributable for new household grid-connections, the average consumption of the newly connected households, taking into account a safety margin and financing shares) The last workshop in Sept recommended to: use a harmonised, transparent and ready-to-use tool to ex-ante calculate intended energy access impacts based on easy accessible data avoid double counting whenever feasible in order to minimise deviations from ex-ante derived numbers from ex-post impacts measured on the ground organise a workshop to reach consensus on open methodological questions tools should be assessed against experiences and should be refined as necessary 4

5 Methodology

6 Calculation Method Overview Installed Capacity Part 1 Electricity for Residential Consumption Part 2 Electricity for New Consumers Part 3 Allocation to Households Part 4 Attribution and Checks 6

7 Calculation Method Overview Part 1 Installed Capacity Technology Specific Capacity Factor Generated Power in GWh Transmission Losses After Transmission Losses Consumption of other Sectors Electricity for Residential Consumption 7

8 Calculation Method Overview Installed Capacity Part 1 Electricity for Residential Consumption Part 2 Electricity for New Consumers Part 3 Allocation to Households Part 4 Attribution and Checks 8

9 Estimating the Allocation Overview Part 2 Consumption by Already Electrified Households Electricity for Residential Consumption?? Grid Network (Spatial Planning) Current Electrification? Additional Electricity is Allocated Power Price &? Affordability Existing Consumers Electricity for New Consumers 9

10 The World Bank s Approach Current Method Calculating the factor which allocates the net annual electricity to existing and/or new consumers Based on the project country s level of residential consumption per electrified capita and rate of electrification Country C 100% Threshold % to existing consumers / 0 % to new consumers Electrification (%) Country A Country B 50 % / 50 % 100 % to new connections Threshold 2 Residential consumption per capita (kwh/a) 10

11 The World Bank s Approach Adjusted Method (under discussion) Country specific factor 100% 0% - Iraq 90% 80% 24% - Nicaragua 56% - South Africa 70% 28% - Ghana Electrification (%) 60% 50% 40% 30% 20% 10% 49% - Togo 56% - Angola 54% - Congo, Dem. Rep. 49% - Liberia 58% - Tanzania 95% - Zambia 0% Residential consumption per capita (kwh/a) 11

12 Calculation Method Overview Installed Capacity Part 1 Electricity for Residential Consumption Part 2 Electricity for New Consumers Part 3 Allocation to Households Part 4 Attribution and Checks 12

13 Consumption per Household Tier II of SE4ALL Multi-Tier Framework Assumption: Newly connected households consume less then already connected households Electricity for New Consumers Using TIER II value from the SE4All Multi-Tier Framework Divide by TIER II consumption Number of New connected Households 13

14 Calculation Method Overview Installed Capacity Part 1 Electricity for Residential Consumption Part 2 Electricity for New Consumers Part 3 Allocation to Households Part 4 Attribution and Checks 14

15 Checks, Haircut & Attribution Overview Checks Back testing results with historical electrification Back testing allocation factor with historical data Haircut / Adjustment Factors Conservative approach to reflect various uncertainties Attribution Calculate contribution of organizations (Financing Share) Avoid double counting 15

16 Next steps Release of the beta version of the calculation tool (KfW & WB) Continue the discussion on the methodology and assess the tool against experiences (evidence from the MTF / monitoring exercise) 16

17 Disclaimer This document is provided for information purposes only. This document may not be reproduced either in full or in part, nor may it be passed on to another party. It constitutes neither an offer nor an invitation to subscribe or to purchase securities, nor is this document or the information contained herein meant to serve as a basis for any kind of obligation, contractual or otherwise. In all legal systems this document may only be distributed in compliance with the respective applicable law, and persons obtaining possession of this document should familiarise themselves with and adhere to the relevant applicable legal provisions. A breach of these restrictions may constitute a violation of US securities law regulations or of the law applicable in other legal systems. The information contained in this document is historical and speaks only as of its date. KfW disclaims any intention or obligation to update or revise the information contained in this document. By accessing this document you acknowledge acceptance of these terms. Financial Cooperation in the Energy Sector 17

18 Thank you for your attention! Bank aus Verantwortung