2015/48 97848 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 Supporting Transmission and Distribution Projects: The World Bank is responding well to its clients’ demand for World Bank Investments since 2010 financing of transmission and distribution projects. By helping Why is this issue important? in demand. Without such investments, the T&D system can quickly to reduce losses, encouraging become a bottleneck to efficient power operations and quality of ser- the integration of renewable Universal access to electricity and sustained vice. Because India’s southern regional grid is poorly connected to the energy, and expanding networks economic growth depend on vast investments in the rest of the country, electricity prices in the south are often much higher to increase supply, supported transmission and distribution of electricity than in the rest of the country, even when spare electricity is available projects will improve the financial in the north.2 The situation is expected to improve significantly once health of utilities, service for The United Nations’ Sustainable Energy for All (SE4ALL) initiative envi- three major transmission lines become operational in the south during consumers, and economic sions a world in which access to electricity will be universal, renewable the second half of 2015. Constraints in the distribution network can growth. Regional interconnection energy will play a much greater role, and energy will be used much affect the quality and reliability of power supply to consumers, making projects, in particular, are more efficiently (World Bank and IEA 2014). The transition to that world it more difficult for utilities to attract new customers. lowering the cost of power, will be built on policy and regulatory changes, strong institutions, In some markets, transmission constraints can exclude new boosting reliability and shrinking and significant investments in infrastructure, including enormous players and reduce competition, greatly increasing energy prices. the reserve requirements investments in the transmission and distribution (T&D) of electricity. During a drought in Brazil in 2001, major congestion on tie-lines imposed on generation systems. The International Energy Agency (IEA) estimates in its “New Policies between the south and southeast regions pushed energy spot prices Private sector participation and Scenarios” that more than 40 percent of investments in the power sec- in the southeast up to the regulated price ceiling of about $300/MWh systemwide analysis will be the tor will go toward building and refurbishing 62 million kilometers (kms) compared with a price of about $2/MWh in the south (Barroso and keys to the success of future of T&D networks, enough to circle the earth 1,500 times (IEA 2014).1 others 2004). projects. There is a strong link between electricity access, poverty The growing share of renewable energy in the generation mix reduction, and economic development, but, beyond access, reliable requires investments in T&D networks not only because it affects Samuel Oguah is an energy supply is an essential driver of economic growth. As an power flows on the grid, but also because renewable energy plants energy specialist in the example, the use of backup generators as a hedge against unreliable are built where resources are abundant, which tends to be away World Bank’s Energy and supply is estimated to cost African economies between 1 percent from major settlements and load centers. Although distributed or Extractives Global Practice. and 5 percent of GDP each year (IRENA 2012). In South Asia, firms embedded generation is often beneficial to power grids and can Debabrata lose nearly 6 percent of sales to power outages and face an average reduce grid investment costs,3 the remote location of many renew- Chattopadhyay is a of 26 power outages in a typical month (World Bank and IFC 2013).  senior energy specialist in able energy plants may well require new transmission infrastructure Regular and planned investments in T&D networks are needed the same practice. to connect power plants to load centers. The information and to keep up with the expansion of generating capacity and growth Morgan Bazilian is a 2 http://www.business-standard.com/article/economy-policy/one-nation-one-grid-plan- lead energy specialist in hurts-power-supply-in-the-south-115040600901_1.html. the same practice. 1 Decentralized solutions will need to be combined with the expansion of T&D grids to meet 3 Embedded generation is located at the point of consumption, eliminating the need to the goal of global access. construct long lines to transmit and distribute power. 2 W o r l d B a n k I n v e s t m e n t i n P o w e r T r a n s m i s s i o n a n d Di s trib u ti o n P r o j e c t s Si n c e 2 0 1 0 Figure 1. Countries in which the World Bank made T&D investments between FY2010 and FY2014 “The growing share of renewable energy in the Not shown: generation mix requires Cabo Verde Micronesia, Fed. of investments in T&D Solomon Islands West Bank and Gaza networks not only because it affectspower flows on the grid, but also because renewable energy plants are built where resources are abundant, which tends Source: World Bank. to be away from major settlements and load communication technologies that have made “smart grids” possible allowing for grid reconfiguration or grid isolation so that damaged centers.” are also needed to plan the T&D network and manage flows. T&D segments are quickly separated from the grid and then resynchro- investments must therefore include the deployment of suitable nized after normal conditions are restored (Council of Economic equipment such as communication-enabled power equipment, Advisers and US DOE 2013). intelligent devices, and smart meters to manage those devices. It is clear, then, that varying types and levels of investments in The resilience of grids to increasing climate variability is another T&D networks are required to support the policy goals of reducing important issue. The U.S. Department of Energy estimates that poverty and boosting shared prosperity in a sustainable and resilient weather-related power outages between 2003 and 2012 cost the manner. U.S. economy an inflation-adjusted annual average of $18–33 billion This rest of this note considers the World Bank’s T&D investment (Council of Economic Advisers and US DOE 2013). Developing portfolio for the fiscal years 2010 to 2014,4 highlighting where and countries often find it more difficult than industrialized countries to how commitments have been focused. The Bank’s investments are recover from climate-related events and therefore should ensure driven by client demand, so understanding the portfolio provides that their T&D networks are as robust as possible. evidence of where demand exists, how it has changed over time, Methods for improving the resilience and reliability of the grid and what support clients need to meet their policy goals. Figure 1 include both high- and low-tech solutions—among them (i) evaluat- illustrates the countries in which the Bank has made loans for T&D ing policies, plans, and actions with an eye to reducing the impact of projects. a given hazard on people, property, and the environment; (ii) burying cables where possible and upgrading poles and structures with 4 July 1, 2009–June 30, 2014. The World Bank is composed of the International Bank for Re- stronger materials in areas prone to storms; (iii) cultivating appropri- construction and Development and the International Development Association. The investments ate vegetation to help prevent damage to T&D infrastructure; and (iv) reviewed here are from the World Bank, except as otherwise noted. The World Bank Group also includes IFC and two other entities. 3 W o r l d B a n k I n v e s t m e n t i n P o w e r T r a n s m i s s i o n a n d Di s trib u ti o n P r o j e c t s Si n c e 2 0 1 0 How has the Bank supported T&D? These investments are expected to add more than 10,400 circuit kilometers of transmission lines and to rehabilitate more than Bank funding has been focused on transmission 4,000 circuit kilometers of T&D lines at various voltage levels in 51 projects in areas where access deficits are highest different countries. The length of the lines constructed and rehabili- Between fiscal 2010 and 2014, the World Bank committed $8.4 billion tated in these five years is nearly twice the length of South America. “Between fiscal 2010 and to 69 projects with transmission and/or distribution components. Beyond constructing and rehabilitating lines and substations, 2014, the World Bank These commitments ranged from a million to $1 billion. Half of the several projects have helped finance the deployment of smart-grid T&D projects individually received less than $50 million, and only a elements such as advanced metering solutions to reduce com- committed $8.4 billion very few received more than $250 million. mercial losses, system control centers, and so-called SCADA/EMS to 69 projects with (supervisory control and data acquisition with energy management Sixty-three percent of the supported projects occurred in Sub- transmission and/or Saharan Africa and South Asia, where access deficits are the most systems). A total of $595 million was committed to smart grids in distribution components.” significant (figure 2). The total commitment includes the use of the distribution systems; $220 million to smart grids in transmission World Bank’s guarantee mechanisms, which help attract more capital systems (figure 5). for project implementation by mitigating risks. The 44 transmission In most projects, the Bank has partnered with other development components in which the Bank invested (against 29 distribution institutions. World Bank financing accounted for approximately 72 components) made up 68 percent of total T&D lending, reflecting percent of the total costs of the T&D projects in which it invested higher unit investment costs and a larger number of projects. The over the review period. Other development institutions contributed lowest commitment to T&D projects in the range examined occurred 14 percent with borrowers and clients supplying the rest (figure 6). All in 2012, but the dip reflects a general reduction in energy sector T&D activities in this review were funded as standard public sector projects in that year. projects with no private sector participation in financing. The top three recipients of lending for T&D projects were in South Although this note focuses on the investment portfolio, the Bank Asia, where India and Bangladesh were the two largest beneficiaries also uses other instruments to support the expansion of power (figure 3). On average, T&D accounted for 27 percent of the Bank’s systems. Over the review period, nearly $1.5 billion in “development energy sector portfolio over the past five years (figure 4). policy lending” was delivered to clients to help create the enabling Figure 2. World Bank lending for transmission and distribution projects, FY2010–14 2014 2013 2012 US$8.4 billion 2011 2010 0 500 1,000 1,500 2,000 2,500 3,000 US$ million Sub-Saharan Africa: $2.39 billion (28%) Transmission: $5.686 billion (68%) East Asia and Pacific: $1.22 billion (15%) Distribution: $2.255 billion (27%) Sub-Saharan Africa Latin America and the Caribbean Europe and Central Asia: $1.06 billion (13%) Implementation support and East Asia and Pacific Middle East and North Africa Latin America and the Caribbean: $0.61 billion (7%) capacity building: $0.470 billion (5%) Europe and Central Asia South Asia Middle East and North Africa: $0.15 billion (2%) South Asia: $2.98 billion (35%) Source: World Bank. 4 W o r l d B a n k I n v e s t m e n t i n P o w e r T r a n s m i s s i o n a n d Di s trib u ti o n P r o j e c t s Si n c e 2 0 1 0 Figure 3. Top 25 recipients of T&D lending, FY2010–14 (US$ million) 1,660 971 “Almost all investment 660 653 600 projects include a technical 530 519 495 288 assistance component to 237 172 171 126 112 105 103 90 87 80 80 69 60 50 48 48 support the use of software India Africa (various) South Asia (various) Vietnam Bangladesh Indonesia Turkey Brazil Uzbekistan Ethiopia Tanzania Kenya Kazakhstan Uganda Zambia Egypt Botswana Haiti Senegal Nigeria Ghana Georgia Guinea Malawi Mozambique to review investment plans, third-party quality assurance and contract management, reviews of Note: “Africa (various)” and “South Asia (various)” refer to multicountry projects, including interconnection lines. organizational structure, Source: World Bank. and reengineering of business processes to support efficient utilization environment for T&D projects. Also, almost all investment projects Figure 4. Lending for transmission projects as a share of total of investment.” include a technical assistance component to support the use of lending of the Energy and Extractives Global Practice, FY2010–14 software to review investment plans, third-party quality assurance and contract management, reviews of organizational structure, and reengineering of business processes to support efficient utilization of investment. And World Bank–managed trust funds continue to complement other forms of development assistance. As an example, the North East Power Sector Improvement Project, now under prepa- US$31.6 billion ration in India, has used trust funds to carry out sector diagnostic studies and to develop a plan for capacity building and institutional strengthening that is being used to design the technical assistance component of the project. The Bank has also provided stand-alone technical assistance to utilities to help them to develop a long-term business plan following unbundling and corporatization or to award and manage large contracts to develop critically needed infrastruc- T&D (investment and guarantees): $8.4 billion (27%) Energy sector (other investment and guarantees): $16.8 billion (53%) ture. It also supported a new employee-performance-management Energy sector development policy lending: $6.3 billion (20%) system. Further, funds such as the Clean Technology Fund and the Bank’s carbon fund have channeled nearly $197 million to various countries to integrate renewable energy generation. Source: World Bank. 5 W o r l d B a n k I n v e s t m e n t i n P o w e r T r a n s m i s s i o n a n d Di s trib u ti o n P r o j e c t s Si n c e 2 0 1 0 Figure 5. Focus of T&D projects supported by the World Bank, FY2010–14 Implementation support and capacity building Sub-Saharan Africa Smart grid East Asia and Pacific Europe and Central Asia Distribution Substation rehabilitation Latin America and the Caribbean Middle East and North Africa “Projects supported over Line rehabilitation South Asia the review period are New substation expected to help expand New line T&D systems, improve Smart grid reliability, reduce losses, Substation rehabilitation Transmission promote cross-border Line rehabilitation trade of energy, and New substation connect power plants to New line the grid, including plants 0 500 1,000 1,500 2,000 using renewable energy US$ million sources.” Source: World Bank. Figure 6. Sources of financing for T&D projects receiving support What are the expected benefits of T&D investments? from the World Bank, FY2010–14 Substantial benefits will flow from greater reliability, integration, smart grids, efficiency, and trade Projects supported over the review period are expected to help expand T&D systems, improve reliability, reduce losses, promote cross-border trade of energy, and connect power plants to the grid, US$11.9 billion including plants using renewable energy sources (figure 7). Reliability. A total of $5.5 billion was committed to constructing and rehabilitating T&D networks with the primary, secondary, or ter- tiary objectives of removing bottlenecks or improving the reliability of supply (see figure 7). Reliability is often affected by aging equipment, including transformers, switchgear, and line insulators. Changing system conditions, such as increased fault levels, can also reduce IBRD/IDA (focus of this note): 70% World Bank Trust/Carbon Fund: 2% reliability, necessitating new equipment having higher short-circuit Borrower/recipient: 14% ratings, which also increases the capacity of the grid. Others: 14% Source: World Bank. 6 W o r l d B a n k I n v e s t m e n t i n P o w e r T r a n s m i s s i o n a n d Di s trib u ti o n P r o j e c t s Si n c e 2 0 1 0 Figure 7. Objectives of World Bank T&D projects worldwide, FY2010–14 procurement, financial management, safeguard manage- ment, and technical expertise for the establishment of Transmission Distribution state-of-the-art SCADA systems and a communication network to manage the power system (and serve various commercial purposes). The later projects have focused on building strong transmission networks to transfer power “Integrating high levels from generating stations located in the north and east of of variable renewable India to the industrialized but power-poor regions in the energy into power south and west, including links that are part of a 765 kV “highway” being constructed to increase reliable power system operations is exchanges between regions and states of the country. A always challenging, report on the latest project indicates that it has already but by enabling digital exceeded its targets for power exchange. communication among System expansion: $3.601 billion System expansion: $0.862 billion Integration of variable renewable energy. Reliability improvement: $3.687 billion Reliability improvement: $1.831 billion grid components and thus Loss reduction: $2.008 billion Loss reduction: $1.872 billion Investments in generating facilities are accompanied by Regional integration: $1.335 billion interconnection or reinforcement projects necessary for increasing the efficiency, Integration of renewables: $0.442 billion the reliable delivery of power. These include the integration flexibility, and intelligence of renewable energy plants. Over the review period, five Note: Projects often have multiple objectives and the numbers cannot be added. of power systems, “smart projects were directly associated with the delivery of power grids” facilitate the from variable renewable energy plants, one being a project The energy access project in Kenya approved in 2010 is pro- to develop wind power in Egypt (table 1). integration onto the grid viding additional finance to eliminate operational problems caused Smart grids. Integrating high levels of variable renewable of energy from renewable energy into power system operations is always challenging, but by by aging and poorly functioning equipment. The objective is to sources.” reduce fault frequency, locate and restore faults more quickly, and enabling digital communication among grid components and thus intensify connections in both urban and rural areas. The upgrading increasing the efficiency, flexibility, and intelligence of power systems, and rehabilitation of the communication and protection systems is “smart grids” facilitate the integration onto the grid of energy from expected to enhance system monitoring and control and to increase renewable sources, as well as delivering other benefits (Madrigal and the capacity of substations in the project area from 669 MVA to Uluski 2015). 1,443 MVA. Beyond replacing equipment, the project includes “soft” Over the five-year period, the World Bank invested $816 million measures such as master plans and standard design and construc- in projects devoted solely to incorporating smart grid elements tion manuals for distribution. The reduction in fault frequency and into T&D networks. These projects include SCADA/EMS systems to duration, coupled with the increased number of customers, will raise improve monitoring and control and advanced metering solutions to the utility’s revenue. reduce commercial losses. To support the integration of increasing In India, the Bank has a partnership of more than two decades amounts of wind power, the Bank is supporting Turkey’s effort to with the country’s Central Transmission Utility. The partnership upgrade the hardware and software of its national power control has undertaken five power system development projects since center, national emergency control center, and nine regional control the utility’s inception in the early 1990s. It also has resulted in the centers, as well as to establish a “renewable energy resource emergence of a strong central institution that successfully manages operator desk” that will have a SCADA/monitoring function to one of the largest transmission grids in the world. The partnership’s accommodate variable renewable energy. early projects focused on building institutional capacity related to 7 W o r l d B a n k I n v e s t m e n t i n P o w e r T r a n s m i s s i o n a n d Di s trib u ti o n P r o j e c t s Si n c e 2 0 1 0 Table 1. Projects to support the integration of renewable energy financed from World Bank resources (FY2010–14) Commitment RE Country (US$ million) Activity Technology Objectives Egypt 70 Transmission infrastructure Wind To develop business models and transmission facilities for scaling up wind power, and to increase transmission capacity in targeted areas. “Learning from past Turkey 215.15 Various transmission Wind To increase the reliability and capacity of the power transmission system in Turkey projects, the Bank will infrastructure and improve its ability to integrate renewable energy into the system screen transmission 25 500 MVA substation Wind To assist Turkey in meeting its increased power demand by strengthening the transmission system and facilitating large-scale renewable energy generation projects ... using 32.5 Smart grid investments Wind To strengthen grid operation and management, enabling it to accommodate larger a software-based amounts of wind energy transmission planning tool 67.2 4.35 km submarine Wind To better connect wind energy locations with other parts of Turkey power cable that takes a systemwide Source: World Bank. view. Availability of data is the main challenge, but, with increasing automation Reducing losses. In Uzbekistan, smart grids are being used in Ukraine is expected to save 430 GWh annually, the equivalent of of transmission systems, for a different purpose: to reduce commercial losses by improving more than 2.8 million tons of carbon dioxide. the data deficit will shrink metering, billing, and management systems. This is to be achieved by Some of the activities in loss-reduction projects include replacing over time.” installing some 1.2 million advanced meters, equipping distribution old, inefficient, or overloaded transformers; installing capacitor companies with systems to manage metering data, and installing banks and other flexible alternating-current-transmission devices; a centralized system for managing energy data and customer and replacing conductors. Measures to reduce losses often improve relationships. In India, the Bank is supporting one of the largest terminal voltages and therefore the quality of service. advanced-metering-infrastructure (AMI) packages in the country, Regional trade in energy. The Bank committed a total of $1.3 involving around 80,000 high-value consumers of low-voltage power. billion to 17 cross-border power or regional interconnection projects Although the main purpose of this project is to reduce losses, it also during the review period. Those projects included transmission lines, includes a data analytics tool to improve operational efficiency. substations, and smart grid elements. In Africa, the Bank is involved Utilities in countries such as Haiti and the Republic of Congo, in the West African Power Pool (WAPP) and the Eastern Africa Power where aggregate technical and commercial losses are 55 percent Pool, which allow the countries of each region to pool resources for and 46 percent, respectively, are losing significant amounts of greater operational flexibility and commercial benefits. For example, revenue. Utilities in Germany, by contrast, report aggregate losses of the 500 kV HVDC Eastern Electricity Highway Project under the First only about 4 percent (World Bank 2015). Phase of the Eastern Africa Power Integration Program will allow During the period under review, the Bank committed $3.9 billion Kenya to purchase relatively cheaper hydropower energy from to projects aimed at reducing technical and commercial losses. Ethiopia and support Ethiopia’s system when water is scarce. These projects not only improve the financial health of utilities but Such interconnection projects allow utilities to share reserve also, by reducing carbon emissions, have a positive impact on the margins across a wider operating area, thus reducing the need for climate. Additionally, loss-reduction projects are well aligned with the installed capacity to meet reserve requirements. Regional intercon- sustainable development goal of increasing the rate of energy effi- nection becomes even more important as the penetration of variable ciency. By the fifth year of its implementation, a transmission project renewable energy grows. 8 W o r l d B a n k I n v e s t m e n t i n P o w e r T r a n s m i s s i o n a n d Di s trib u ti o n P r o j e c t s Si n c e 2 0 1 0 Table 2. New regional transmission lines financed by World Bank resources (FY2010–14) Length Voltage Capacity Countries Region (km) AC/DC (kV) (MW) Objectives Ghana, Burkina Faso Sub-Saharan 210 AC 225 To reduce the cost and improve the security of electricity Africa supply to Burkina Faso, while increasing Ghana’s electricity “Recognizing the important export capacity. role of skilled manpower in Côte d’Ivoire, Liberia, Sierra 1,349 AC 225 145 To reduce the cost and increase the supply of electricity; Leone, Guinea to increase the export capability of Côte d’Ivoire; and to the sustainable operation increase the technical integration of the WAPP network. and maintenance of Ethiopia, Kenya 1,045 DC 500 To increase the volume and lower the cost of electricity supply in Kenya and to provide revenues to Ethiopia. T&D systems, the Bank Nepal, India South Asia 415 AC 400 1,000 To establish cross-border transmission capacity to facilitate regularly supports capacity electricity trade and increase the supply of electricity in building through technical Nepal. assistance.” Tajikistan, Afghanistan, Pakistan 750 DC 500 1,300 To create the conditions for sustainable electricity trade between the Central Asian countries of Tajikistan and Kyrgyz Kyrgyz Republic, Tajikistan 475 AC 500 Republic and the South Asian countries of Afghanistan and Pakistan. WAPP = West African Power Pool. Source: World Bank. Recognizing the important role of skilled manpower in the large AMI package in the country. Because distribution of electricity sustainable operation and maintenance of T&D systems, the Bank is the link in the value chain where revenues are generated, and regularly supports capacity building through technical assistance. In given the huge losses faced by India’s power distribution sector, the nearly 60 percent of projects reviewed, the World Bank provided 100 building of the distribution utility’s capacity and the automation of percent of the financing for capacity building and project manage- billing are vitally needed. ment even though a number of other partners were involved in Although optimal technical solutions for a transmission system financing the infrastructure. cannot be determined without reference to the system’s plan, not all For example, the WAPP Interconnection Project between Côte projects are subjected to detailed planning analysis. This could affect d’Ivoire, Liberia, Sierra Leone, and Guinea is strengthening WAPP’s the choice of future projects. For example, even though the need to Planning, Investment Programming, and Environmental Safeguards rehabilitate a substation may be obvious, some analysis will be nec- Department and its Information and Coordination Center. Technical essary to determine the capacity, type, and ratings of new equipment assistance will support the process of certifying network operators to be used, based on forecasted demand and sector goals (to align and the development of standardized market operating rules for with a smart grid roadmap, for example). Learning from past projects, the WAPP zone. In the Indian state of Haryana, the Haryana Power the Bank now intends to screen transmission projects, to the extent System Improvement Project is supporting the plan for capacity possible, using a software-based transmission planning tool that building and institutional strengthening adopted by T&D utilities. The takes a systemwide view. Availability of data is the main challenge, plan emerged through Bank-supported workshops involving a large but, with increasing automation of transmission systems, the data number of stakeholders. The same project is also supporting the first deficit will shrink over time. 9 W o r l d B a n k I n v e s t m e n t i n P o w e r T r a n s m i s s i o n a n d Di s trib u ti o n P r o j e c t s Si n c e 2 0 1 0 What challenges lie ahead? References Make further Barroso, L. A., J. M. Bressane, L. M. Thomé, M. Junqueira, and Future projects should focus on attracting connections many others. 2004. “Transmission Structure in Brazil: private participation Organization,Evaluation and Trends.” Retrieved from http://www. Live Wire 2014/1. The review summarized here shows that the World Bank is psr-inc.com.br/app/publicacoes.aspx#. “Transmitting Renewable responding well to clients’ demand for financing for T&D projects. By Council of Economic Advisers and US DOE (U.S. Department of Energy to the Grid,” by helping to reduce technical and commercial losses, supporting the Energy). 2013. Economic Benefits of Increasing Electric Grid Marcelino Madrigal and integration of renewable energy, and expanding networks to increase Resilience to Weather Outages. Washington, DC. http://energy. Rhonda Lenai Jordan. supply, these projects are expected to help improve the financial gov/sites/prod/files/2013/08/f2/Grid percent20Resiliency health of utilities. Regional interconnection projects are raising percent20Report_FINAL.pdf. Live Wire 2014/6. “Measuring revenue for exporting countries and providing much-needed energy IEA (International Energy Agency). 2014. World Energy Investment the Results of World Bank for importing countries, resulting in a lower overall cost of supply, Outlook (Special Report). Paris. https://www.iea.org/publications/ Lending in the Energy Sector,” increased reliability and security, and smaller generation reserve freepublications/publication/WEIO2014.pdf. by Sudeshna Ghosh Banerjee, requirements for individual systems. Overall, supporting critical IRENA (International Renewable Energy Agency). 2012. Prospects Ruchi Soni, and Elisa Portale. infrastructure such as T&D helps governments meet their policy for the African Power Sector. Abu Dhabi. https://www.irena.org/ Live Wire 2014/17. goals and provides much needed support for economic growth and DocumentDownloads/Publications/Prospects_for_the_African_ “Incorporating Energy from social well-being. PowerSector.pdf. Renewable Resources into Between fiscal 2010 and 2014, the World Bank committed $8.4 Madrigal, M., and R. Uluski. 2015. Practical Guidance for Defining Power System Planning,” billion to 69 projects with transmission or distribution components a Smart Grid Modernization Strategy: The Case of Distribution. by Marcelino Madrigal and across the institution’s six regions. An additional $1.5 billion was World Bank Studies. Washington, DC: World Bank. Rhonda Lenai Jordan. delivered to clients in the form of development policy lending to help World Bank. 2015. “Electric power transmission and distribu- improve the enabling environment for T&D projects. tion losses (% of output).” Retrieved on April 5 from World Live Wire 2015/38. “Integrating While the T&D activities reviewed were funded as standard Development Indicators: http://data.worldbank.org/indicator/ Variable Renewable public sector projects with no private participation, governments EG.ELC.LOSS.ZS?order=wbapi_data_value_2011+wbapi_data_val- Energy into Power System around the world are showing growing interest in private sector ue+wbapi_data_value-last&sort=asc. Operations,” by Thomas partnerships in infrastructure, reflecting the fact that huge needs World Bank and IFC. 2013. Enterprise Surveys (Nepal Country Profile, Nikolakakis and Debabrata for infrastructure cannot be met with public funding alone. There is 2013). Washington, DC: World Bank Group. Chattopadhyay. ample evidence that, given the right conditions, the private sector World Bank and IEA (International Energy Agency). 2014. Sustainable can and will provide capital to improve the efficiency and quality of Energy for All 2013–2014: Global Tracking Framework. Live Wire 2015/44. “Mapping service in a cost-effective manner. For these reasons, future projects Washington, DC: World Bank. https://openknowledge.worldbank. Smart-Grid Modernization in should explore the possibility of involving the private sector in raising org/handle/10986/16537. Power Distribution Systems,” finance for T&D projects. by Samuel Oguah and It will also be increasingly important for the Bank to draw on The authors acknowledge comments and support received from Vivien Debabrata Chattopadhyay. Foster, Kavita Saraswat, Surbhi Goyal, and Vladislav Vucetic at the World Bank. systemwide analysis to reduce the risk of investing in projects that The authors also appreciate the support of Ruchi Soni of the World Bank’s are quickly overwhelmed by rapid growth in demand or that become Energy and Extractives Global Practice. bottlenecks in system operations. Get Connected to Live Wire Live Wires are designed for easy reading on the screen and for downloading The Live Wire series of online knowledge notes is an initiative of the World Bank Group’s Energy and self-printing in color or “Live Wire is designed and Extractives Global Practice, reflecting the emphasis on knowledge management and solu- black and white. tions-oriented knowledge that is emerging from the ongoing change process within the Bank for practitioners inside Group. For World Bank employees: and outside the Bank. 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Once a year, the Energy and Extractives Global Practice takes stock of all notes that appeared, reviewing their quality and identifying priority areas to be covered in the following year’s pipeline. Please visit our Live Wire web page for updates: http://www.worldbank.org/energy/livewire e Pa c i f i c 2014/28 ainable energy for all in easT asia and Th 1 Tracking Progress Toward Providing susT TIVES GLOBAL PRACTICE A KNOWLEDGE NOTE SERIES FOR THE ENERGY & EXTRAC THE BOTTOM LINE Tracking Progress Toward Providing Sustainable Energy where does the region stand on the quest for sustainable for All in East Asia and the Pacific 2014/29 and cenTral asia energy for all? in 2010, eaP easTern euroPe sT ainable en ergy for all in databases—technical measures. This note is based on that frame- g su v i d i n had an electrification rate of Why is this important? ess Toward Pro work (World Bank 2014). SE4ALL will publish an updated version of 1 Tracking Progr 95 percent, and 52 percent of the population had access Tracking regional trends is critical to monitoring the GTF in 2015. to nonsolid fuel for cooking. the progress of the Sustainable Energy for All The primary indicators and data sources that the GTF uses to track progress toward the three SE4ALL goals are summarized below. consumption of renewable (SE4ALL) initiative C T I V E S G L O B A L P R A C T I C E ENERGY & EXTRA • Energy access. Access to modern energy services is measured T E S E R I E S F O R T H EIn declaring 2012 the “International Year of Sustainable Energy for energy decreased overall A KNO W L E D G E N Oand 2010, though by the percentage of the population with an electricity between 1990 All,” the UN General Assembly established three objectives to be connection and the percentage of the population with access Energy modern forms grew rapidly. d Providing Sustainable accomplished by 2030: to ensure universal access to modern energy energy intensity levels are high to nonsolid fuels.2 These data are collected using household Tracking Progress Towar services,1 to double the 2010 share of renewable energy in the global surveys and reported in the World Bank’s Global Electrification but declining rapidly. overall THE BOTTOM LINE energy mix, and to double the global rate of improvement in energy e and Central Asia trends are positive, but bold Database and the World Health Organization’s Household Energy for All in Eastern Europ efficiency relative to the period 1990–2010 (SE4ALL 2012). stand policy measures will be required where does the region setting Database. The SE4ALL objectives are global, with individual countries on that frame- on the quest for sustainable to sustain progress. is based share of renewable energy in the their own national targets databases— technical in a measures. way that is Thisconsistent with the overall of • Renewable energy. The note version energy for all? The region SE4ALL will publish an updated their ability energy mix is measured by the percentage of total final energy to Why is this important ? spirit of the work initiative. (World Bank Because2014). countries differ greatly in has near-universal access consumption that is derived from renewable energy resources. of trends is critical to monitoring to pursue thetheGTF in 2015. three objectives, some will make more rapid progress GTF uses to Data used to calculate this indicator are obtained from energy electricity, and 93 percent Tracking regional othersindicators primary will excel and data sources that elsewhere, depending on their the while the population has access le Energy for All in one areaThe goals are summarized below. balances published by the International Energy Agency and the the progress of the Sustainab respective track starting progress pointstowardand the three SE4ALL comparative advantages as well as on services is measured to nonsolid fuel for cooking. access. Accessthat they modern to are able to energy marshal. United Nations. despite relatively abundant (SE4ALL) initiative the resources and support Energy with an electricity connection Elisa Portale is an l Year of Sustainable Energy for To sustain percentage of by the momentum forthe the population achievement of the SE4ALL 2• Energy efficiency. The rate of improvement of energy efficiency hydropower, the share In declaring 2012 the “Internationa energy economist in with access to nonsolid fuels. three global objectives objectives, andathe means of charting percentage of the population global progress to 2030 is needed. is approximated by the compound annual growth rate (CAGR) of renewables in energy All,” the UN General Assembly established the Energy Sector surveys and reported access to modern universalAssistance The World TheseBank and data are the collected International using household Energy Agency led a consor- of energy intensity, where energy intensity is the ratio of total consumption has remained to be accomplished by 2030: to ensure Management Database and the World of theenergy intium of 15 renewable international in the World Bank’s Global agencies toElectrification establish the SE4ALL Global primary energy consumption to gross domestic product (GDP) energy the 2010 share of Program (ESMAP) relatively low. very high energy services, to double Database. measured in purchasing power parity (PPP) terms. Data used to 1 t ’s Household provides Energy a system for regular World Bank’s Energy the global rate of improvemen and Extractives Tracking Framework Health (GTF), which Organization in the energy intensity levels have come and to double the global energy mix, Global Practice. (SE4ALL 2012). based on energy. of renewable The sharepractical, rigorous—yet energy given available calculate energy intensity are obtained from energy balances to the period 1990–2010 global reporting, Renewable down rapidly. The big questions in energy efficiency relative setting by the percentage of total final energy consumption published by the International Energy Agency and the United evolve Joeri withde Wit is an countries individual mix is measured Data used to are how renewables will The SE4ALL objectives are global, economist in with the overall from renewable energy when every resources. person on the planet has access Nations. picks up a way energy that is consistent 1 The universal derived that isaccess goal will be achieved balances published when energy demand in from energy their own national targets through electricity, clean cooking fuels, clean heating fuels, rates the Bank’s Energy and countries differ greatly in their ability calculate this indicator are obtained to modern energy services provided productive use and community services. The term “modern solutions” cookingNations. again and whether recent spirit of the initiative. Because Extractives Global rapid progress and energy for Energy Agency and the United liquefied petroleum gas), 2 Solid fuels are defined to include both traditional biomass (wood, charcoal, agricultural will make more by the refers to solutions International that involve electricity or gaseous fuels (including is pellets and briquettes), and of decline in energy intensity some t of those of efficiency energy and forest residues, dung, and so on), processed biomass (such as to pursue the three objectives, Practice. depending on their or solid/liquid fuels paired with Energy efficiency. The rate stoves exhibiting of overall improvemen emissions rates at or near other solid fuels (such as coal and lignite). will excel elsewhere, rate (CAGR) of energy will continue. in one area while others liquefied petroleum gas (www.sustainableenergyforall.org). annual growth as well as on approximated by the compound and comparative advantages is the ratio of total primary energy respective starting points marshal. where energy intensity that they are able to intensity, measured in purchas- the resources and support domestic product (GDP) for the achievement of the SE4ALL consumption to gross calculate energy intensity Elisa Portale is an To sustain momentum terms. Data used to charting global progress to 2030 is needed. ing power parity (PPP) the International energy economist in objectives, a means of balances published by the Energy Sector International Energy Agency led a consor- are obtained from energy The World Bank and the SE4ALL Global Energy Agency and the United Nations. Management Assistance agencies to establish the the GTF to provide a regional and tium of 15 international for regular This note uses data from Program (ESMAP) of the which provides a system for Eastern Tracking Framework (GTF), the three pillars of SE4ALL World Bank’s Energy and Extractives on rigorous—yet practical, given available country perspective on Global Practice. global reporting, based has access Joeri de Wit is an will be achieved when every person on the planet The universal access goal heating fuels, clean cooking fuels, clean energy economist in 1 agricultural provided through electricity, biomass (wood, charcoal, to modern energy services The term “modern cooking solutions” to include both traditional and briquettes), and Solid fuels are defined the Bank’s Energy and use and community services. biomass (such as pellets 2 and energy for productive petroleum gas), and so on), processed fuels (including liquefied and forest residues, dung, involve electricity or gaseous at or near those of Extractives Global refers to solutions that overall emissions rates other solid fuels (such as coal and lignite). with stoves exhibiting Practice. or solid/liquid fuels paired (www.sustainableenergyforall.org). liquefied petroleum gas Contribute to If you can’t spare the time to contribute to Live Wire, but have an idea for a topic, or case we should cover, let us know! Do you have something to say? We welcome your ideas through any of the following Say it in Live Wire! channels: Via the Communities of Those working on the front lines of energy and extractives development in emerging economies Practice in which you are have a wealth of technical knowledge and case experience to share with their colleagues but active seldom have the time to write for publication. By participating in the Energy Live Wire offers prospective authors a support system to make sharing your knowledge as easy as and Extractives Global possible: Practice’s annual Live Wire • Trained writers among our staff will be assigned upon request to draft Live Wire stories with series review meeting staff active in operations. By communicating directly • A professional series editor ensures that the writing is punchy and accessible. with the team (contact • A professional graphic designer assures that the final product looks great—a feather in your cap! 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