1 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : The Case of Rwanda 2014/22 88703 A KNOWLEDGE NOTE SERIES FOR THE ENERGY PRACTICE THE BOTTOM LINE Scaling Up Access to Electricity: Rwanda’s rapid achievements in expanding access to electricity The Case of Rwanda after 2009 were made possible by one of the first applications of a sector-wide approach Why is this case interesting? • Strong government ownership and the capacity to harmonize (SWAp) in the electricity sector. efforts of line ministries and other stakeholders in the sector. The World Bank played a pivotal Rapid scale-up of access is possible from a • A single-digit baseline electrification rate that suggests role in the operationalization very low base opportunities to pick low-hanging fruit and so achieve rapid of the SWAp, first by assisting Rwanda’s experience with electrification is an interesting case of growth in access. in the formulation of an how access to electricity can be quickly scaled up despite deficits • Multiple donors with mutually agreed goals. investment prospectus that laid in infrastructure and institutional capacity. The magnitude and pace the groundwork for technical, • Geographical attributes that support rapid scale-up. Although of the successes achieved under the country’s Electricity Access financial, and implementation coordination and evidence-based planning should improve Rollout Program (EARP) surpassed even the ambitious targets set by planning. The Rwandan implementation in every setting, Rwanda’s rapid successes were the government. Those achievements were made possible by one of experience is instructive for also helped by the fact that it is small and relatively densely the first applications of a sector-wide approach (SWAp) in the elec- countries considering the populated. tricity sector. Begun by the national government in 2009, EARP was adoption of a similar approach, designed to increase access to electricity from 6 to 16 percent of the particularly those starting from population over a five-year period. Using the SWAp, the Rwandan What challenges did they face? a low base. electricity utility, the Energy, Water, and Sanitation Authority (EWSA), Need to scale up rapidly despite infrastructure and met the 16 percent target in 2012 (ahead of schedule) through rapidly capacity constraints Paul Baringanire is a scaled-up implementation. The current target under the Economic Development and Poverty Reduction Strategy for 2013–18 (EDPRS Rwanda (box 1) has made great strides in the past 20 years to move senior energy specialist in the World Bank’s 2) is 70 percent of households by 2017 (Republic of Rwanda 2013). forward from conflict and fragility. Over the past decade, the country Africa Energy Practice. Effective coordination among stakeholders in planning, financing, has made robust progress on both social and economic indicators. and implementation—a result of the SWAp—has been central to the Between 2004 and 2012, the average annual rate of growth in GDP Kabir Malik is a Young Professional rapid successes achieved under the program. was 8.1 percent, which brought the poverty rate down from 59 in the World Bank’s The Rwandan experience is instructive for countries considering percent in 2001 to 45 percent in 2011. Africa Energy Practice. the adoption of a similar approach, particularly those starting from a To maintain a robust rate of economic growth, the government Sudeshna Ghosh low base. The Rwandan approach is likely to work best in countries has emphasized private sector investment and improved its gover- Banerjee is a senior with the following characteristics: nance and regulatory capacities, in part by building accountability economist in the World Bank’s Energy Practice. 2 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f R w a n d a Box 1. Key facts about Rwanda Box 2. Members of the SWAp • Population: 11.46 million (2012) • Energy, Water, and Sanitation Authority (EWSA), the organization responsible for all power-sector operations • Per capita GDP: $620 (2012) • Ministry of Infrastructure (MININFRA) • Electrification rate: 6 percent (2009); 16 percent (2013) “A SWAp is a country- • Ministry of Finance and Economic Planning (MINECOFIN) • Installed generation capacity: 110 MW (2013) led, results-focused • Rwanda Utilities Regulatory Agency (RURA) • Other line ministries, including the Ministry of Local Government approach that provides a (MINALOC), Ministry of Health (MINISANTE), and the Ministry of framework for coordination mechanisms. In 2014, the country ranked 32 (of 189) on the IFC/ Education (MINEDUC) World Bank ease-of-doing-business index, a huge leap from its 2005 between development • Local governments position of 139. Despite these favorable trends, infrastructure and partners and country • Development partners, including the African Development Bank, private-sector growth remain bottlenecks in the quest for social and the World Bank, the International Finance Corporation, and the stakeholders to develop economic prosperity. Improving access to electricity is one way to governments of Belgium and the Netherlands a coherent strategy for deal with those bottlenecks. sector development The Rwandan government established the EARP to achieve goals set under the Economic Development and Poverty Reduction through integrated technical, financial, and implementation planning. through integrated Strategy (2009–12).1 That strategy included aggressive targets to Individual projects are embedded within the SWAp framework. technical, financial and increase electricity connections from 110,000 in 2008 to 350,000 in Although SWAps have been used to coordinate investments in the implementation planning.” 2012 and called for considerable increases in electricity connections education and health sectors, the Rwandan SWAp was one the first to schools, health centers, and other social infrastructure. In 2008, applications in the infrastructure sector. the country’s rate of electricity access was just 6 percent, with In 2006, in the run-up to the SWAp rollout, the national govern- connected households concentrated in and around the capital, Kigali. ment adopted an aid policy aimed at harmonization and alignment. The available generation capacity was 50 MW, with heavy reliance In 2008, the government began implementing the EDPRS—the on imported automotive diesel oil, making electricity supply both strategy relied on a Common Performance Assessment Framework unreliable and expensive. (CPAF) that used SWAps for various sectors, including energy. The energy SWAp was implemented by a Sector Working Group What approach was taken? made up of key stakeholders and development partners (box 2). The The SWAp allowed development partners working group provided a forum for joint planning and coordination among all key stakeholders. Traditionally, a SWAp also streamlines to coalesce behind a strong government vision finances by employing basket or pooled funding, where all develop- In contrast to traditional, project-focused development aid, a SWAp ment partners pledge their funds into a joint account managed by is a country-led, results-oriented approach that provides a frame- the government or a sector utility. In the case of Rwanda, however, work for coordination between development partners and country funding was not pooled during the first phase of the program. At the stakeholders to develop a coherent strategy for sector development time, Rwanda’s government did not have adequate tracking mech- anisms for or experience with joint funding. Instead, development 1 The government’s action was also spurred by a severe drought in 2004 that resulted in se- partners were asked to pick activities to fund from a mutually agreed vere supply shortages. The drought highlighted the urgent need to invest in reliable and resilient generation and distribution infrastructure. 3 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f R w a n d a list. The intent was that the collaboration would gradually grow to a financial, and implementation planning. This document, presented point where pooling of funds was possible, which is now the case. to a donor financing roundtable in 2008, provided a transparent and Over the years, many development partners have supported targeted implementation strategy for the least-cost achievement of the program—among them the African Development Bank (AfDB), Rwanda’s electrification goals for the period 2009–12. The plan laid the Arab Bank for Economic Development in Africa (BADEA), the out clear roles for sector stakeholders, detailed funding requirements Belgium Technical Cooperation (BTC), the European Union (EU), the for proposed activities, and a robust framework for monitoring and “When expanding access Netherlands, Japan, the OPEC Fund for International Development evaluation. Based on financial analysis, it set clear financing targets to electricity, accurate (OFID), the Saudi Fund, and the World Bank. As of 2013, donor con- for all partners: 80 percent from the national government and its monitoring helps maintain tributions of $273 million have been complemented by a Rwandan development partners, 10 percent from the utility, and 10 percent government contribution of $126 million. from consumer connection fees. The prospectus was the main the momentum to achieve Tracking systems are integral to any SWAp. When expanding instrument used in leveraging stakeholder funding and informing the targets by identifying and access to electricity, accurate monitoring helps maintain the momen- implementation strategy. building on successes and tum to achieve targets by identifying and building on successes and As the co-chair of the Sector Working Group, the World Bank dis- by addressing bottlenecks by quickly addressing bottlenecks. In the case of Rwanda energy played a strong commitment to the program and helped attract other quickly.” SWAp, the monitoring and evaluation system is aligned with the donors. As the lead development partner, the Bank has contributed a EARP , which in turn is part of the CPAF. The EARP results framework total of $130 million, $70 million in zero-interest financing followed by and key intermediate indicators encompass the entire program, as another $60 million in additional financing. opposed to project-specific investments. Reporting on the CPAF Drawing on its global and regional experience in supporting indicators is done primarily at the sector level through biannual joint governments in expanding access to electricity, the World Bank also sector reviews in advance of the country’s joint budget support contributed critical knowledge in the implementation of the SWAp. review. Both types of review provide a forum for dialogue around the With funding from the World Bank, a GIS-based spatial network plan performance of both the government and its development partners was developed to optimize expansion. The plan was based on a in pursuit of the EARP goals. In addition, a comprehensive impact spatial optimization of expansion through the year 2020, factoring in evaluation to assess the benefits of the program is in progress. The financial and economic considerations. With the population divided baseline survey was completed in 2014; an update is planned in into 9,300 sublocations (cells), demand forecasts were developed for 2016. each sublocation and compared with the costs of electricity supply The EARP Coordination Unit is responsible for monitoring and from alternative sources (grid and off-grid). Geospatial prioritization reporting on program progress. In addition, the SWAp secretariat of network rollout was based on population, existing infrastructure, is responsible for producing the joint annual sector performance and estimates of what households in each location could afford. The review and the quarterly program monitoring reports discussed at affordability analysis, which was based on secondary household meetings of the Sector Working Group. The collection and analysis expenditure data, helped estimate the likely take-up of electricity of data from the various reports and reviews not only improves connections in each location. It estimated a range of between 19 and the effectiveness of the SWAp, but also increases the quality and 51 percent take-up by households that were offered connections. availability of data on the Rwandan electricity sector, which can be Drawing on the experience of other countries (including Tunisia), used for future planning and operations. changes were made in design and technical features that lowered The World Bank played a pivotal role in the operationalization capital costs related to distribution infrastructure. For example, of the SWAp, first by assisting in the formulation of the EARP wooden and concrete poles replaced more expensive lattice-framed investment prospectus, which laid the groundwork for technical, steel towers in rural areas. 4 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f R w a n d a What were the results? What challenges remain? The rapid scale up of electricity access exceeded the Low demand and costly supply are squeezing government’s original targets utility finances New grid connections. Progress in the four years since the rollout Household electricity demand. Demand for electricity among of the SWAp has been rapid. Household connections were increased newly connected households has been lower than anticipated. This “The World Bank played from 110,000 to 390,000 (about 16 percent of the nation’s house- has sapped EWSA’s revenues and threatens the sustainability of a pivotal role in the holds) as of December 2013 (figure 1). The goal of the second phase the project. The program currently provides compact fluorescent operationalization of the of EARP is to connect 1.7 million households by 2017—a 70 percent lamps to newly connected households to promote energy efficiency SWAp, first by assisting in connection rate. The program has also increased connections to and affordability. Because most such households use electricity the formulation of the EARP social infrastructure such as schools, health centers, and administra- only for lighting, the use of the energy-efficient lamps has kept tive offices. Although the targets in this respect were not achieved, electrical consumption very low. Experience from other countries investment prospectus, more than half of Rwanda’s health centers and roughly 40 percent of shows that connected households in all income brackets tend to which laid the groundwork its schools had access to electricity as of December 2013. The new acquire domestic appliances over time (see, for example, Khandker for technical, financial, and target is to reach 100 percent of health centers and administrative and others 2009), gradually boosting electricity consumption, but implementation planning.” offices and 80 percent of schools by 2017. the fast pace of Rwanda’s electrification efforts has meant that a Reduced costs of connections. Before the EARP , the cost large number of low-consumption households has been added at of a household electrical connection was in the range of $2,000. the same time. It may take several years before a meaningful rise in The SWAp was instrumental in bringing it down to $880 in the first consumption occurs. phase of the EARP through technical changes inspired by network With planned reductions in government support for the utility, expansion in Tunisia and elsewhere. The program focused on the long-term sustainability of the EARP hinges on the ability to connecting households within 5 kilometers of the existing grid (which increase operating revenues. Reducing supply costs and ensuring was estimated to cover 60 percent of all households). That choice that tariffs cover an increasing share of costs are the first steps; accounts for a good part of Rwanda’s success in bringing down long-term financial sustainability will also require an increase in connection costs and increasing connection rates. This prioritization consumers’ ability to pay for electricity driven by productive uses of of relatively low-cost connections has helped improve EWSA’s the electricity to which they have recently gained access, as well as connection capacity and experience in advancing expansion to more by economic growth. remote areas. Generation. The EARP agenda includes expansion of generation as well as access. As noted, access is expanding rapidly and is Figure 1. Growth in household connections to the electrical grid, projected to continue to do so. As demand for electricity rises with 2008–13 the addition of more households to the grid and economic growth, generation capacity will have to increase apace if access targets 390,000 400,000 337,324 through 2017 are to be met. Currently, Rwanda has an installed 350,000 300,000 capacity of about 110 MW. According to the energy sector strategic 265,881 250,000 plan for 2013–17, the government foresees a five-fold increase in Number 200,000 187,596 143,863 capacity, to 563 MW, by 2017–18, with 80 MW coming online by 150,000 110,868 100,000 mid-2014. Most of the increase will come from hydropower, peat, 50,000 methane, and geothermal and solar energy. Rwanda is quickly gain- 0 2008 2009 2010 2011 2012 2013 ing experience with solar photovoltaic (PV) technology. The country’s Source: Authors. first utility-scale solar PV facility will contribute 8 percent (8.5 MW) 5 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f R w a n d a Figure 2. Institutional changes in the Rwandan electricity sector Law passed to encourage IPP entry into electricity sector, Electrogaz Government reclaims breaking Electrogaz’s management contracted ownership of RECO and RWASCO monopoly to German company Electrogaz remerged into EWSA “Geospatial prioritization of network rollout was RURA created to Plans to separate based on population, independently regulate Electrogaz split into electricity and government utilities two corporations— water/sanitation existing infrastructure, including electricity RECO and RWSC functions and estimates of what households in each location could afford. The affordability analysis ... helped estimate the 1999 2000 2002 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 likely take-up of electricity connections in each Source: Authors. location.” of Rwanda’s total generation once it is installed in 2014. Increases in connection costs. Coupled with low demand for electricity among supply from lower-cost sources will reduce EWSA’s dependence on newly connected households, the imminent rise in connection costs expensive thermal generators, thus helping to improve its financial makes off-grid options the most viable alternative in some settings. situation. Achieving national targets over the next few years, therefore, will Utility finances. Though the EARP has achieved outstanding require an effective strategy to promote suitable off-grid alternatives results in terms of customer connections, EWSA’s financial situation such as solar home systems, lanterns, and micro-grids. worsened in 2013 owing to growing reliance on thermal power and Staffing and donor funds. Although evidence-based planning delays in key generation projects. Despite an increase in electricity and multistakeholder coordination under the SWAp resulted in tariffs, the utility’s projected loss for the year ending in June 2013 achievement of goals ahead of schedule, implementation problems was $11.7 million. The government is considering steps to improve did occur. For example, the difficulty of finding qualified staff for the the utility’s performance by introducing cost-reflective tariffs and EARP Coordination Unit led to delays in the deployment of monitor- reducing the cost of generation through the use of cheaper energy ing and evaluation systems. Also, though the financing needs of the sources, accompanied by steps to reduce system losses and to SWAp program were met by the stakeholders and their development increase energy efficiency. It is also planning to corporatize EWSA partners, difficulties were encountered in ensuring a consistent flow and make other institutional changes. of funds at various stages of implementation, thus emphasizing the Off-grid options. Under the first phase of the EARP , new importance of working out ahead of time how finances are to be connections were concentrated within a 5-km radius of the existing made available over the course of implementation. grid. To meet the targets set for 2017, connections will have to be Institutional capacity and coordination. EWSA underwent extended into more remote areas of the country. This will increase significant managerial and restructuring changes in the first decade 6 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f R w a n d a of the 2000s (figure 2). Those changes affected the utility’s ability to traditional SWAp uses a basket funding approach to consolidate build adequate institutional capacity to undertake its mandate. In resources and increase transparency of resource use, the first addition, the multiplicity of stakeholders in the Rwandan electricity phase of the Rwandan program showed that flexibility in the funding sector made coordination challenging. Coupled with lack of clarity mechanism can help attract a diverse set of donors with differing but on roles and responsibilities, the profusion of stakeholders has kept complementary interests and abilities. “As demand for electricity private sector investments lower than anticipated, especially in the Investment prospectus. The main tool used in the Rwandan rises with the addition of area of generation. SWAp was the investment prospectus. This document put forth a credible program framework for electricity sector development and more households to the What lessons have been learned? provided rigorous technical and financial analyses to aid implemen- grid and economic growth, tation. It helped leverage donor funding by providing a clear plan of generation capacity will An investment prospectus grounded in sound action and by reducing the due diligence that donors had to conduct have to increase apace sector planning can be very effective if certain before approving funds. if access targets through conditions are present Data collection. The collection of data from various sources was critical to developing a spatial network expansion plan based 2017 are to be met.” Strong government buy-in. Ownership by the government is on demand assessment and affordability. The data-collection key to the success of any SWAp. Recognizing the need for a rapid effort formed the basis of credible estimates of program costs and scale-up of electricity access to fuel the economy, the Rwandan outcomes, improving the quality of planning and the speed of imple- government played a lead role in enabling the success of the SWAp mentation. Further, with the focus on results, the program’s monitor- by aligning it with national priorities and policies. Since the SWAp ing and tracking systems generate key data on the electricity sector relies on existing institutions, the regulatory groundwork laid by the as well as on the progress of implementation. This helps identify government and continued commitment by the various stakeholders successful components and address bottlenecks quickly. As a result, were instrumental to the successes achieved. the overall quality and availability of data in the Rwandan electricity Strong commitment from a lead partner. The access sector has improved and will be very useful in future planning. program in Rwanda (which is applicable to similar postconflict and Least-cost planning. The transfer of experiential knowledge on low-income countries) benefited greatly from the World Bank’s ability cost-lowering design and implementation features is always import- to drive the process, convene development partners, and mobilize ant, especially when affordability is a barrier. As highlighted above, grant funds for the upstream analytics that resulted in the SWAp the adoption of technical changes based on the experience of Tunisia prospectus. The presence of a strong partner leading the process helped lower the capital costs of distribution. In addition, the use of is essential, especially in countries where the government lacks ready boards reduced the costs of readying households for con- requisite experience. nection. The program design also allowed for staggered connection Coordination facilitated through the Sector Working payments to lower the amount that households had to pay up front. Group. The primary mechanism under the SWAp is centralized Financial sustainability. While subsidies are often needed management and planning though the Sector Working Group. By when increasing access to the poor, it is important to assess the providing a platform for developing a joint, harmonized strategy, financial sustainability of any access program by realistically fore- the SWAp reduces the coordination costs of stakeholders in the casting loads based on consumers’ ability to pay. Doing so makes sector. Development partners are able to engage the sector as a possible an accurate estimate of the additional support needed from whole through the working group, thus streamlining their efforts to government (in the form of subsidies or transfers) and donors. While achieve mutually agreed goals. Strategies optimized at the sector estimates were produced in the case of Rwanda, actual household level, as opposed to the project level, can exploit complementarities demand has been lower than expected, thus constraining the utility’s in investment and thus deliver greater overall benefits. Although the revenues. A greater programmatic emphasis on income-enhancing 7 S c a l i n g U p A c c e ss t o E l e c t r i c i t y : T h e C a s e o f R w a n d a productive uses of electricity could be one of the lessons learned in SE4ALL (Sustainable Energy for All Initiative). 2012. In Support of the MAKE FURTHER this regard. Objective to Achieve Universal Access to Modern Energy Services CONNECTIONS In all, the SWAp in Rwanda delivered tremendous improvements by 2030. Technical Report of Task Force 1: New York. http://www. in electricity access over a relatively short period of time. Although sustainableenergyforall.org/about-us. Live Wire 2014/9. “Tracking challenges remain, the program is on its way to achieving even the World Bank. 2013. “Project Documents for Electricity Access Scale-up Access to Electricity,” by ambitious targets set for 2017 under the EARP II. Rwanda’s experi- and Sectorwide Approach Development Project (EASSDP).” Sudeshna Ghosh Banerjee and ence has showed that with government ownership and alignment Washington, DC. November. Elisa Portale. with national priorities, using SWAps in the electricity sector is a World Bank. 2014. World Development Indicators. http://data. viable and attractive alternative to traditional project-based support. worldbank.org/country/rwanda. Accessed May 2014. Live Wire 2014/20. “Scaling Up Rwanda’s positive experience with the SWAp has inspired other Access to Electricity: The Case countries. Some elements of the approach, such as least-cost The peer reviewers for this note were Erik Magnus Fernstrom (lead energy of Lighting Africa,” by Daniel planning and the investment prospectus, have recently been applied specialist, Africa Energy Practice, World Bank) and Venkata Ramana Putti Murphy and Arsh Sharma. (senior energy specialist, Energy Sector Management Assistance Program). in Ethiopia and Kenya. In Kenya, in particular, the investment pro- spectus has helped mobilize various development partners around a Live Wire 2014/21. “Scaling government proposal to develop geothermal energy. Lessons learned Up Access to Electricity: The from Rwanda’s planning process are also being applied in many Case of Bangladesh,” by Zubair countries that are now readying their plans for universal electricity Sadeque, Dana Rysankova, access under the Sustainable Energy for All (SE4ALL) initiative. Raihan Elahi, and Ruchi Soni. References EARP (Electricity Access Rollout Program). 2013. Presentation to World Bank Supervision Mission. October 2013. ESMAP (Energy Sector Management Assistance Program). 2013. “Rwanda: Extending Access to Energy, Lessons from a Sector- Wide Approach (SWAp).” Knowledge Series 013/02. World Bank, Washington, DC. ———. 2013. “Lessons from a Sector-Wide Approach (SWAp),” Impact no. 1. World Bank, Washington, DC. May. EWSA (Energy, Water and Sanitation Authority). 2012. “Mid-term Review: Rwanda Electricity Access Roll-out Program.” Kigali. Khandker, Shahidur R., Douglas F. Barnes, Hussain Samad, and Nguyen Huu Minh. 2009. Welfare Impacts of Rural Electrification: Evidence from Vietnam. Policy Research Working Paper 5057, World Bank, Washington, DC. Republic of Rwanda. 2013. “Economic Development and Poverty Reduction Strategy, 2013–18: Shaping Our Development.” Kigali. http://www.minecofin.gov.rw/fileadmin/General/EDPRS_2/ EDPRS_2_FINAL1.pdf. 8 Get Connected to Live Wire Get Connected to Live Wire Live Wires have been designed for easy reading on the screen and for The Live Wire series of online knowledge notes is a new initiative of the World Bank Group’s downloading and self-printing “Live Wire is designed Energy Practice, reflecting the emphasis on knowledge management and solutions-oriented in color or black and white. knowledge that is emerging from the ongoing change process within the Bank Group. for practitioners inside Professional printing can and outside the Bank. Each Live Wire delivers, in 3–6 attractive, highly readable pages, knowledge that is immediately also be undertaken on relevant to front-line practitioners. 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Once a year, the Energy Practice takes stock of all notes that appeared, reviewing their quality and identifying priority areas to be covered in the following year’s pipeline. https://openknowledge.worldbank.org 1 U n d e r s ta n d i n g C O 2 e m i s s i O n s f r O m t h e g lObal energy seCtOr 2014/5 A KNOWLEDGE NOTE SERIES FOR THE ENERGY PRACTICE THE BOTTOM LINE Understanding CO2 Emissions from the Global Energy Sector the energy sector contributes about 40 percent of global 2014/4 emissions of CO2. three- Why is this issue important? xas The Case of Te renewable ene rgy T o T h eof quarters r i d : emissions gthose Mitigating climate change requires knowledge of the Figure 2. energy-related CO2 1 TransmiTTing come from six major Figure 1. CO2 emissions sources of CO2 emissions by sector emissions by country economies. although coal-fired LICs plants account for just Identifying opportunities to cut emissions of greenhouse gases 0.5% 40 percent of world energy requires a clear understanding of the main sources of those emis- Other Residential were S F O R T H E Esions. NERG Y PRA Carbon CTICE dioxide (CO2) accounts for more than 80 percent of 6% sectors Other MICs production, they LEDGE NOTE SERIE 10% 15% A KNOW total greenhouse gas emissions globally, primarily from the burning 1 China responsible for more than Other HICs 30% 70 percent of energy-sector of fossil fuels (IFCC 2007). The energy sector—defined to include Energy 8% Grid: 41 41% Japan 4% Energy to the fuels consumed for electricity and heat generation—contributed Industry emissions in 2010. if warming is Transmitting Renewable 20% Russia to be limited to two degrees percent of global CO2 emissions in 2010 (figure 1). Energy-related 7% USA THE BOTTOM LINE CO2 emissions at the point of combustion make up the bulk of such Other transport Road India 19% Celsius, therefore, steep 7% EU The Case of Texas states emissions and are generated by the burning of fossil fuels, industrial 6% transport 11% Texas leads the United reductions will have to be made 16% waste, and nonrenewable municipal waste to generate electricity with 9,528 mw of installed in the use of coal to generate face? and leakage emissions What challenge did they and heat. Black carbon and methane venting Notes: Energy-related CO2 emissions are CO2 emissions from the energy sector at the point wind power capacity—a electricity in the larger bunkers, domestic note. of combustion. Other Transport includes international marine and aviation ? are not included in the analysis presented in this level exceeded by only four Why is this case interesting economies. t was contingent on aviation and navigation, rail and pipeline transport; Other Sectors include commercial/public Transmission investmen yet needed to precede it tion, and other emissions not specified elsewhere; Energy = fuels consumed for electricity and and heat genera- services, agriculture/forestry, fishing, energy industries other than electricity countries. The state needed and accelerate more infrastructure to transmit Texas needed to prioritize Where do emissions generation come ents commitm from? HIC, MIC, and LIC refer to high-, middle-, ent of remote wind sites tremendous needs for trans-heat generation, as defined in the opening paragraph. electricity generated from developm the challenge of meeting are concentrated in a handful of countries and low-income countries. producerEmissions Texas faced of generation fromSource: IEA 2012a. renewable sources, but the century, Texas was a major e triggered by the scale-up During much of the twentieth advantage infrastructur from burning and come primarily Transmission infrastructure can mission coal take longer to regulator could not approve States. The Vivien is now stateFoster istaking sector of petroleum in the United leads renewable sources. expansion projects resource: wind. manager It currently for the Sus- The geographical pattern of energy-related CO 2 emissions closely transmission of a major renewable energy power capacity middle-income countries, and only 0.5 percent by all low-income in the absence of financially 9,528 MW of installed wind Depart- tainable Energy mirrors the distribution of energy consumption (figure 2). In 2010, To solve the United States with ment at the World rank Bank fifth in wind two zones energy with the countries put together. committed generators. were a country, would almost half of all such emissions were associated competitive renewable a (ERCOT 2011) and, if it (vfoster@worldbank.org). Figure 1. Texas’s five Coal is, by far, the largest source of energy-related CO2 emissions the problem, Texas devised largest global energy consumers, and more than three-quarters quickly generation worldwide. Daron program in 1999, it vowed to were associated with the top six emitting countries. Of the remaining Bedrosyan globally, accounting for more than 70 percent of the total (figure 3). planning process that When Texas reformed its energy works energy mix. It now uses a energy-related CO2 emissions, about 8 percent were contributed for London This reflects both the widespread use of coal to generate electrical connects energy systems increase the role of renewables in its energy Toronto. to increase Economics in utilities another 15 percent by other power, as well as the exceptionally high CO2 intensity of coal-fired to the transmission system. renewable portfolio standard to require by other high-income countries, the Previously, he was renewable sources. To an minimize power (figure 4). Per unit of energy produced, coal emits significantly The system is based on their energy generation from eligible energy analyst with the energy program created more CO2 emissions than oil and more than twice as much as natural designation of “competitive costs to the taxpayer, the state’s World renewable Bank’s Energy Practice. 1 United Nations Framework Convention on Climate Change, Greenhouse Gas Inventory on the private sector gas. renewable energy zones. energy zones that rely Data—Comparisons By Gas (database). http://unfccc.int/ghg_data/items/3800.php competitive renewable and trans- e and operations for generation to provide infrastructur and regulation provides planning, facilitation, mission, while the state (figure 1). electricity pro- standard mandated that The renewable portfolio energy by 2009. MW of additional renewable viders generate 2,000 and was followed Marcelino Madrigal met in just over six years (mmadrigal@worldbank This 10-year target was and mandated 20, which raised the targets .org) is a senior energy up in 2005 by Senate Bill reach 5,880 energy generation must specialist in the World that the state’s total renewable Furthermore, the 2015 and 2025 respectively. Bank’s Energy Practice. MW and 10,000 MW by energy target 500 MW of the 2025 renewable With Rhonda Lenai Jordan legislation required that sources other than wind. (rjordan@worldbank.org) be derived from renewable in is an energy specialist Source: ERCOT 2008. the same practice.