World Bank Group Toward a New Energy Strategy

Transcription

1 The World Bank Group World Bank Group Toward a New Energy Strategy Jamal Saghir Director Energy, Transport, and Water The World Bank The World Bank Group May 2010

2 TOWARDS A NEW ENERGY STRATEGY Timeline for Development of Strategy Oct Feb- Jun Jul- Sept Nov Dec Feb or March Energy Strategy Approach Paper available on-line First Round Consultations web-based face-to-face Drafting of Strategy Second Round Consultations Web-based Board of Executive Directors

3 SEEKING YOUR INPUT About This Consultative Meeting As a basis for discussion, the Energy Strategy Approach Paper, available online, outlines the proposed approach. Input from consultation meetings and from people who comment via the Web site will be documented and used as an input to the strategy. We will prepare a summary of the comments received today, post it on the web, and accept additional written comments. By the end of July, we will prepare a summary of all of the feedback received during the consultation process with a response by the World Bank Group on how it is being considered.

4 SEEKING YOUR INPUT Structure of the Presentation Context and challenges World Bank s role in the energy sector Lessons learned Objectives Proposed areas of engagement

5 CHALLENGES New and Old Challenges Energy access, energy poverty: 1.5 billion lack access to electricity, and many more use solid fuels for cooking and heating. Climate change: Meeting the energy needs of developing countries and arresting climate change will require global action and cooperation. Managing uncertainties: The recent oil price volatility pointed to the need to diversify the energy portfolio, conserve energy, and improve energy efficiency. The global financial crisis has increased uncertainty in investments, while reducing available resources for development assistance and investment flows.

6 CHALLENGES CHINA SPECIFIC China is part of the solution to key global energy issues Climate Change High energy consumption High carbon content of energy use Largest total CO 2 emissions Large population, low per capita CO 2 Consumption to double Energy Security Rapid increase in oil and gas imports

7 CHALLENGES CHINA SPECIFIC Possible Future Trends Driving Demand in China Maintaining rapid economic growth while rebalancing the country s economic structure and shifting toward a less energy- and carbonintensive economy Achieving greater urbanization while shifting toward less energy-and carbon-intensive cities Improving quality of life while shifting to a less energy-intensive and sustainable lifestyle

8 CHALLENGES CHINA SPECIFIC Government Actions Government targets Energy intensity to be reduced by 20% between 2005 and 2010 Non-fossil fuel share in energy mix to rise to 15% by 2020 Carbon intensity to be reduced by 40 45% between 2005 and 2020 Recent performance Energy conservation key policy objective across all levels of government Upward trend in energy intensity reversed, energy intensity cut by 14.4% between 2006 and 2009 according to official statistics Doubling of installed wind capacity each year between 2005 and 2009 Remaining Challenges Industry s share in primary energy consumption still very high (70%), coal share in energy mix remains at 69%, and renewable energy use faces challenges (e.g. wind power connections to grid)

9 WORLD BANK GROUP S ROLE IN ENERGY Energy Sector Milestones New Energy Sector Strategy 2011 Strategic Framework for Development and Climate Change 2008 (Climate Investment Funds) 2009 Investment exceeds Bonn promise by more than three-fold 2005 Clean Energy Investment Framework developed at G8 s request (Low-carbon development strategies) 2004 Bonn RE Conference (commitment of 20% annual increase between 2005 and 2009) Key Instruments Project Investments Financial Intermediation Development Policy Lending Technical Assistance

10 WORLD BANK GROUP S ROLE IN ENERGY Working in a Wide Range of Areas

11 Sectoral Distribution (FY ) WORLD BANK GROUP S ROLE IN ENERGY 40% energy lending was for RE/EE in FY09 a 24%increase from FY08 Nearly $4.5 billion invested in programs directly dealing with energy access Bonn commitment of 20% annual increase exceeded two-fold

12 WORLD BANK GROUP S ROLE IN ENERGY Evolution of WB Energy Sector Support in China Gas, 5% Other, 8% EE Power Sector Development, 52% EE, 7% RE, 4% RE-H, 24% RE RE-H Power Sector Development Gas Portfolio History IBRD, IDA, GEF, Carbon Finance $8.2 billion EE & RE $2.8 billion Other Power Sector Development, 4% RE-H, 36% Gas, 6% EE, 30% EE RE RE-H Last Decade: shift to RE and EE IBRD, GEF, carbon finance $1.6 billion RE, 23% Power Sector Development Gas 90% renewablesand energy efficiency, $1.4 billion

13 WORLD BANK GROUP S ROLE IN ENERGY China Portfolio Power Sector Development, 4% Gas, 6% EE, 30% RE-H, 36% RE, 23% IBRD, GEF, carbon finance $1.6 billion 90% renewable and energy efficiency, $1.4 billion

14 WORLD BANK GROUP S ROLE IN ENERGY Highlights of Portfolio World Bank has been privileged to be asked to support the Government s energy sector development programs, including Rural access 2 million persons gained access, 400,000 through off-grid solar PV units, 9.2 MW Innovation in power generation country s 1 st 300, 600, and 900 MW coal power plants Innovation in renewable energy one of 1 st large-scale wind farms, domestic PV industry development, large-scale hydropower, biomass power Innovation in energy efficiency 1 st three energy service companies (focusing on energy performance contracting) in China established, now one of the largest ESCO markets in the world

15 WORLD BANK GROUP S ROLE IN ENERGY Potential Current and Future Directions Cooperation depends on local circumstances and central government directions. Innovation, scale up, & cost reduction are some key benefits of WB lending support Current Program Advanced power generation technologies, with CCS compatibility Renewable Energy Development onshore wind farms, biomass, solar PV, and small hydropower Energy Efficiency through new mechanisms ESCOs, financial intermediaries, provincial lending and advisory support platforms District energy and building energy efficiency

16 WORLD BANK GROUP S ROLE IN ENERGY Highlights of Current Portfolio: Renewable Energy China Renewable Scale Up Project (CRESP) IBRD loan and GEF grant supported Wind, small hydropower, biomass demonstration (IBRD) Policy studies (supporting regulations for renewable energy law), capacity building and wind/biomass/small hydro technology improvement (GEF) Wind Huitingxile & Fujian Pintan(IBRD, CRESP) Hydropower Zhejiang new and rehabilitation of small hydropower (IBRD, CRESP) Hubei Hydropower Development in Poor Areas Project (IBRD) Biomass Power Jiangsu Rudong Biomass Power Generation (IBRD, CRESP) Storage Yixing Pumped Storage Project (IBRD)

17 WORLD BANK GROUP S ROLE IN ENERGY Highlights of Current Portfolio: Energy Efficiency Industrial energy efficiency IBRD Financial Intermediary Lending China Energy Efficiency Financing 1,2 Global Environment Facility (GEF) grant National Energy Efficiency Center, commercial bank training GEF Energy Conservation 2 Loan Guarantees for energy service companies Provincial-level policy support and program development (active preparation) IBRD Shandong Energy Efficiency Project (Energy efficiency leasing, biomass combined head and power) & Shanxi Energy Efficiency Project GEF Provincial Energy Efficiency Scale Up Program (Shandong, Shanxi, Jiangxi) Low-carbon cities, integrating energy efficiency/renewable energy at city level Beijing (proposal), Tianjin (Eco2 Cities GEF), Shanghai (under discussion) District energy: Liaoning, Urumqi, Changchun Buildings: Heat Reform & Building EE (GEF), Government Buildings (preparation)

18 WORLD BANK GROUP S ROLE IN ENERGY Highlights of Current Portfolio: New Technologies GEF financed Technology Needs Assessment (active preparation) Carbon capture and storage (CCS) technical assistance (active preparation) Coal Bed Methane Project in Shanxi, IBRD

19 WORLD BANK GROUP S ROLE IN ENERGY Potential Future Directions Continuing Scale up of Renewable Energy and Energy Efficiency applications in industrial, commercial, residential sectors EE through new mechanisms to support energy savings performance contracting, including government procurement of EE services, trading Financial intermediary lending at national & provincial levels Urban Energy (integrated solutions using RE and EE technologies for building, public infrastructure and transportation needs, district heating) Power System Technologies Advanced generation technologies, CCS & IGCC Efficiency improvements in generation, T&D, pilot smart grid, smart metering Renewable Energy Pilot offshore and scale up onshore wind farms Rooftop solar PV, tidal energy, biomass, off-/on-grid small hydro Trading Policy research and support across EE, RE and New Technology adoption, i.e. energy pricing, trading, grid interconnection, energy efficiency funds, EE monitoring, etc.

20 WORLD BANK GROUP S ROLE IN ENERGY Observations and Lessons Learned An efficient, reliable, and low-cost energy sector is critical for equitable economic development Sound operational and financial performance is essential Improved capacity and governance are needed for better sector performance and ability to address climate change For the very poor, the most important determinant of access to and use of modern energy is their cash income

21 PROGRAM CASE STUDY 1 Lighting Africa WB-IFC joint initiative to mobilize the private sector to develop and disseminate modern lighting solutions using LED and other technologies Program target is to facilitate sales of 500,000 off-grid lighting products by 2012, serving more than 2.5 million people Technical assistance and seed funding is made available to entrepreneurs to develop low-cost, high-quality lighting products Lighting Africa s vision is to build a commercial platform for the lighting sector that can serve 250 million people in Sub-Saharan Africa by 2030

22 PROGRAM CASE STUDY 2 Large-scale Solar Power The World Bank is scaling up support for large-scale solar thermal and PV systems in a number of countries. In Egypt and Morocco, WB is supporting demonstration projects on integrated solar combined cycle (ISCC) power generation technology. WB is mainstreaming PV deployment for off-grid rural electrification (e.g. project in Bangladesh deploying more than one million solar home systems) WB is developing a large-scale program in the Middle East and North Africa region for concentrating solar power technology using CTF and other instruments.

23 PROPOSED APPROACH The challenge is to balance the twin objectives of greater access and sustainability Improve operational and financial performance Improve access and reliability of energy supply & Facilitate shift to more environmentally sustainable energy sector development Strengthen governance

24 Across All Countries PROPOSED APPROACH Supply-side and demand-side energy efficiency improvement Increased investment renewable energy including large hydro projects Building institutional capacity to identify and implement affordable low-carbon projects Policy and institutional reforms Accelerating technology transfer Transmission and distribution Cross-border energy trade Thermal generation in accordance with the criteria outlined in the Strategic Framework for Development and Climate Change Selective investments in extractive industries in accordance with WBG management response to Extractive Industries Review

25 Across All Countries (continued) Six criteria for financing coal-fired power plants 1.There is a demonstrated development impact, including reducing power shortage or increasing access for the poor. 2.Assistance is being provided to identify and prepare low carbon projects in the country. 3.Steps are being taken to optimize energy sources through energy efficiency (both supply and demand) and conservation. 4.Additional financing from donors for incremental cost relative to lowest-cost option with higher GHG emissions is not available. 5.The best appropriate available technology that minimizes GHG emissions will be used. 6.An approach to incorporate environmental externalities in project analysis will be developed. PROPOSED APPROACH

26 Low-Income, Fragile, Post-Conflict, and Middle-Income Countries with Low Access Access to reliable modern energy services will remain the top priority Explore all options: off-grid, cooperatives, pro-poor financing methods, affordable lifeline rates Hydropower with focus on integrated water resources management Cross-border trade Improve affordability by increasing supply efficiency and passing efficiency gains to consumers Help build capacity to access financing to make low-carbon alternatives affordable PROPOSED AREAS OF ENGAGEMENT

27 PROPOSED AREAS OF ENGAGEMENT Middle-Income Countries Help address local and emerging global challenges and increase support to innovation and transformation Support commercial-scale renewable energy, supply-and demand-side energy efficiency, and emerging clean technologies and related infrastructure facilities Help leverage climate finance, private sector financing, and other financing opportunities

28 ERROR: stackunderflow OFFENDING COMMAND: ~ STACK: