1 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y 2014/25 90775 A KNOWLEDGE NOTE SERIES FOR THE ENERGY & EXTRACTIVES GLOBAL PRACTICE THE BOTTOM LINE Doubling the Rate of Improvement of Energy Efficiency Efficiency gains pushed down the energy intensity of the global economy between Why is this issue important? note is based on chapter 3 of the framework (World Bank 2014). SE4ALL will publish an updated version of the framework in 2015. 1990 and 2010. Most of the Global demand for energy continues to rise, but Because energy efficiency data are not reported in many savings occurred in East improvements in energy efficiency have brought countries, and because methods of aggregation and cross-country Asia (primarily China) and the developed countries. The substantial energy savings comparisons are imperfect, energy intensity was selected as the indicator for monitoring progress. Globally, energy intensity global goal of doubling the Over the 20-year period between 1990 and 2010, strong demo- decreased at a compound annual growth rate (CAGR) of –1.3 percent rate of improvement of energy graphic and economic growth around the world caused global over the 20 years between 1990 and 2010 (figure 2a). The SE4ALL efficiency by 2030 hinges on primary energy consumption to grow at a compound annual rate of global objective is thus a CAGR in energy intensity of –2.6 percent the energy use patterns of the 2 percent annually. Even so, falling energy intensity (the amount of for the period 2000–30. That goal is even more challenging when largest consuming countries. energy used to produce a unit of economic output) meant that global recent developments are considered; in 2000–10, the rate of decline energy demand in 2010 was more than 20 percent lower than it in energy intensity slowed to a CAGR of –1.0, compared with –1.6 for otherwise would have been. Jonathan Sinton is a 1990–2000. The energy intensity of the global economy fell during the period senior energy specialist in the Energy and Extractives from 10.2 to 7.9 megajoules per U.S. dollar (2005 dollars at PPP). Figure 1. Improvements in energy intensity (“negajoules”) Global Practice at the The reduction was driven by cumulative improvements in energy substantially reduced growth in world energy World Bank. efficiency, partially offset by growth in activity, resulting in energy consumption from 1990 to 2010 Ashok Sarkar is a senior savings of nearly 2,300 exajoules over the 20-year period (figure 1). 900 energy specialist in the Doubling the rate of improvement of global energy efficiency is 800 World Bank’s South Asia one of the three complementary objectives of the Sustainable Energy region. for All (SE4ALL) initiative. Launched in the UN General Assembly in 700 Ivan Jaques is a senior September 2012 and co-chaired by the president of the World Bank 600 Negajoules energy specialist in the Group and the UN Secretary-General, SE4ALL calls on governments, exajoules 500 Energy Sector Manage- businesses, and civil society to address urgent energy challenges, 400 ment Assistance Program including energy efficiency, by 2030 (SE4ALL 2012). (ESMAP) of the Energy 300 To support achievement of the SE4ALL energy efficiency goal, a and Extractives Global Practice at the 200 Primary energy consumption starting point must be set, indicators developed, and a framework World Bank. established to track those indicators until 2030. The World Bank and 100 Irina Bushueva is an the International Energy Agency led a consortium of 15 international 0 investment analyst with 1990 2000 2010 agencies to establish the SE4ALL Global Tracking Framework, includ- the Blended Climate Finance Unit at IFC. ing data and methods for tracking progress in energy efficiency. This Source: Based on World Development Indicators, World Bank; IEA 2012; UN Energy Statistics Database. 2 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y Figure 2. The rate of improvement in global energy intensity has been slowing (1990–2010, PPP terms) a. Energy intensity, CAGR b. Adjusted energy intensity, CAGR 1990–2000 2000–10 1990–2010 1990–2000 2000–10 1990–2010 “Globally, energy intensity decreased at a compound annual growth rate (CAGR) of –1.3 percent over the 20 -1.0% years between 1990 and -1.4% 2010, setting the starting -1.3% -1.6% point for measuring future -1.6% progress under SE4ALL.” -1.9% Source: Based on World Development Indicators, World Bank; IEA 2012; UN Energy Statistics Database. Note: PPP = purchasing power parity; CAGR = compound annual growth rate. How is energy efficiency tracked? Statistical techniques that make it possible to strip out some of the confounding effects of factors other than energy efficiency, such Because of missing data, energy efficiency must be as structural change in the economy, reveal that the adjusted trend measured indirectly in terms of energy intensity in energy intensity may be more favorable than the unadjusted CAGR Energy intensity is a measure of the efficiency with which a given of –1.3 (figure 2b). The effect of this adjustment is particularly evident country converts energy into production. It is expressed as the ratio for the period 2000–10, when globalization led to a major shift in of energy consumption per unit of economic output. Countries with a industrial activity toward emerging economies, partially eclipsing high level of energy intensity use more energy to create a unit of GDP their parallel efforts to improve energy efficiency. than countries with lower levels of energy intensity. Energy efficiency, by contrast, is the ratio of energy input per unit of output, typically How have trends in energy intensity evolved? measured in physical terms, such as kilowatt hours per ton of steel Changes in energy intensity have varied widely by produced or liters of fuel per 100 passenger kilometers. The rate of change of energy intensity may over- or understate sector and world region the progress made in underlying energy efficiency. Energy intensity Broadly speaking, energy consumption takes place in five major is affected by other factors, such as shifts in the structure of the economic sectors: agriculture, industry, households, transport, economy over time, typically from agriculture, which is less ener- and services. For the purpose of initial global tracking, residential, gy-intensive, to industry, and then back toward less energy-intensive transport, and services are aggregated into a single category of services. Energy resource endowments, balance of trade in ener- “other sectors” owing to data limitations. In economic terms, industry gy-intensive goods, and exchange rates also play parts. Some of the is by far the most energy-intensive of these sectors, consuming methodological issues in measuring energy efficiency are reviewed around 6.8 MJ per 2005 US dollar in 2010, compared with 5.5 for in box 1. “other sectors” and 2.1 for agriculture. 3 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y Box 1. Methodological challenges in defining and measuring energy efficiency Energy efficiency is the ratio between energy inputs and outputs of goods or services. Rigorous measurement of this relationship is possible only at the level of individual technologies and processes, and the data needed for such measures at a national level are available only for a handful of countries. Where data are available, they result in hundreds of indicators that cannot be readily used to summarize the situation at the national level. “The most rapid progress in For these reasons, energy intensity, typically measured as energy consumption per dollar of GDP , has long been used as a proxy for energy efficiency when making international comparisons. Energy intensity is an imperfect measure of energy efficiency because it is affected not only by changes in reducing energy intensity the efficiency of underlying processes, but also by other factors such as changes in the volume and sectoral structure of GDP and annual variations in weather. International comparisons are further complicated by fluctuations in exchange rates, international trade in energy-intensive goods, and has come in agriculture, often large differences in energy resource endowments. These concerns can be partially addressed by statistical decomposition methods that allow which recorded a CAGR confounding effects to be stripped out. Complementing national energy intensity indicators with sectoral ones also helps to provide nuance and an understanding of where opportunities lie. of –2.2 percent during Calculation of energy intensity metrics requires suitable measures for GDP and energy consumption. GDP can be expressed either in terms of the market 1990–2010.” exchange rate or in terms of purchasing power parity (PPP). Market-exchange-rate measures may undervalue output in emerging economies because of lower prevailing domestic price levels and therefore may overstate the energy intensity of the economy. PPP measures are not as readily available as market exchange rates, however, because correction factors are updated only every five years. Energy consumption can be measured either in terms of primary or final energy consumption. While it may make sense to use primary energy demand for highly aggregated measures of energy intensity (relative to GDP) because it captures intensity on both the supply and demand sides, it is less meaningful to use it when measuring energy intensity at the sectoral level or below, where final energy use is more relevant. Based on a careful analysis of these issues and of global data constraints, the treatment of energy efficiency in the SE4ALL Global Tracking Framework: • Relies primarily on indicators of energy intensity • Complements national energy intensity indicators with indicators for four key consuming sectors • Uses PPP measures for GDP and sectoral value-added • Uses primary energy demand for national indicators and final energy consumption for sectoral indicators • Complements those indicators with indicators of the energy intensity of supply and of the major consuming sectors • Provides a decomposition analysis to at least partially strip out confounding effects • Uses a five-year moving average for energy efficiency trends to smooth out extraneous fluctuations. Data for 1990–2010 were compiled from energy balances for 181 countries published by the International Energy Agency and the United Nations. These are complemented by data on national and sectoral value-added from the World Bank’s World Development Indicators. Looking ahead, producing more meaningful measures of energy efficiency requires significant efforts to improve the availability of data on energy consumption and the output of goods and services resulting from that consumption across economic sectors. Ultimately, it is up to national governments to collect, report and analyze these data through their statistical agencies, but international organizations and donors can play an important role in building capacity and harmonizing methods to foster comparability in data reported from different countries. The most rapid progress in reducing energy intensity has come By contrast, the ratio of final to primary energy consumption, in agriculture, which recorded a CAGR of –2.2 percent from 1990 which provides a measure of the overall efficiency of conversion in to 2010 (figure 3a). Although progress was significantly slower in energy supply, actually deteriorated from 1990 to 2010, falling from industry and the other sectors, they made far larger contributions to 72 to 68 percent, due in part to a rising share in the power genera- global energy savings because of their much higher levels of energy tion mix of the least efficient source, coal. That structural factor was consumption (figure 3b). partly counterbalanced by a slight improvement in the technical 4 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y Figure 3. Energy intensity fell in all sectors (1990–2010, PPP) a. Energy intensity trends at PPP by sector b. Share of cumulative energy savings by sector Industry Agriculture Other sectors 0 10 “Overall, 85 percent of the MJ/$2005, PPP energy savings achieved CAGR (%) 5 between 1990 and 2010 Industry—40% -1.4% -1.4% Agriculture—4% were contributed by Other sectors—56% Eastern Asia and the CAGR 1990–2010 (left) -2.2% El in 1990 (right) developed countries.” -3 El in 2010 (right) 0 Source: Based on World Development Indicators, World Bank; IEA 2012; UN Energy Statistics Database. Note: CAGR = compound annual growth rate; EI = energy intensity; PPP = purchasing power parity. “Other sectors” include residential, transport, and services. Figure 4. Energy intensity trends vary greatly by region (1990–2010, PPP) a. Energy intensity trends by region (PPP terms) b. Share of cumulative energy savings by region CAGR 1990–2010 (left) El in 1990 (right) El in 2010 (right) 0.8% 30 0 EA—58% -0.1% NAM—17% -0.5% -0.5% EU—10% 20 MJ/$2005, PPP -1.1% -1.3% -1.1% EE—6% -1.3% -1.5% CAGR (%) -1.7% SA—4% -2 CCA—2% -2.3% 10 LAC—1% -3.2% SSA—1% Oceania—<1% SEA—<1% -4 0 NAM EU EE CCA WA EA SEA SA OCEANIA LAC NAF SSA Source: Based on World Development Indicators, World Bank; IEA 2012; UN Energy Statistics Database. Note: Data in 4b total to more than 100 percent because of rounding. PPP = purchasing power parity; CAGR = compound annual growth rate; EI = energy intensity. World regions: CCA = Caucasus and Central Asia; EA = Eastern Asia; EE = Eastern Europe; EU = Europe; LAC = Latin America and the Caribbean; NAF = North Africa; NAM = North America; SA = Southern Asia; SEA = South-Eastern Asia; SSA = Sub-Saharan Africa; WA = Western Asia. 5 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y efficiency of fossil generation (that is, the percentage of the energy distribution losses remained almost stagnant at around 9 percent of content of fossil fuels converted to electricity during power gener- energy produced. Gas supply losses fell a little more steeply, from 1.4 ation), from 38 to 39 percent. At the same time, transmission and to 0.9 percent. “Energy consumption Figure 5. The world’s 40 largest energy users will have the most effect on achieving the SE4ALL energy efficiency goal is distributed unequally (energy intensity in PPP and energy consumption per capita, 2010) across countries, almost Primary energy supply/GDP to the same degree as Uzbekistan income. The 20 largest HICs energy consumers account UMICs for 80 percent of primary LMICs Ukraine energy consumption, with the two largest consumers Kazakhstan (the United States and China) together accounting Iraq for 40 percent of the total.” Nigeria South Africa Russian Federation Saudi Arabia China Iran Vietnam Venezuela Canada Primary energy consumption Indonesia Czech Republic Korea, Rep. per capita Pakistan Malaysia Thailand Egypt Belgium Poland United Arab Emirates India Mexico Sweden United States Japan France Algeria Australia Philippines Brazil Netherlands Argentina Spain Germany Turkey Italy United Kingdom Source: Based on World Development Indicators, World Bank; IEA 2012; UN Energy Statistics Database. Note: Values are normalized along the average. Bubble size represents volume of primary energy supply. PPP = purchasing power parity. GDP = gross domestic product; PPP = purchasing power parity; HICs = higher-income countries; UMICs = upper-middle-income countries; LMICs = lower-middle-income countries; UAE = United Arab Emirates. 6 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y Figure 6. Only one of the countries among those with the highest Figure 7. Those countries with the lowest energy intensities are energy intensity is a large consumer (MJ/$2005, PPP) also relatively small consumers (MJ/$2005, PPP) Liberia 59.8 St. Lucia 3.9 Congo, Dem. Rep. 47.6 Botswana 3.8 “Achievement of the global Burundi 33.3 Ireland 3.7 objective of doubling Trinidad and Tobago 28.8 Bahamas 3.7 the rate of improvement Sierra Leone 26.7 Switzerland 3.7 Turkmenistan 23.8 Malta 3.7 of energy efficiency will Uzbekistan 23.3 Grenada 3.6 therefore depend critically Guinea 22.2 Kiribati 3.6 on energy consumption Mozambique 22.2 Panama 3.6 patterns in the 20 largest Iceland 21.6 Albania 3.5 energy consumers.” Togo 20.8 Colombia 3.4 Ukraine 19.8 Antigua and Barbuda 3.4 Zambia 18.8 Peru 3.3 Uganda 18.2 Solomon Islands 3.0 Ethiopia 18.0 St. Vincent and the Grenadines 2.9 Kazakhstan 17.6 Afghanistan 2.9 São Tomé and Príncipe 16.3 Vanuatu 2.7 Guyana 16.3 Dominica 2.6 Bhutan 16.0 Hong Kong, SAR, China 2.0 Swaziland 15.9 Macau SAR, China 1.0 Source: Based on World Development Indicators, World Bank; IEA 2012; UN Energy Statistics Database. Note: PPP = purchasing power parity; Dem. Rep. = “Democratic Republic of.” By world region, the rate of progress on energy intensity varied What are the implications of recent experience with dramatically over the period 1990–2010. At one extreme, the energy consumption and intensity? Caucasus and Central Asia recorded a CAGR of –3.2 percent while remaining the region with the highest energy intensity. At the other Achieving the SE4ALL energy efficiency objective will end of the spectrum, Western Asia (also known as the Middle East) depend mainly on the performance of 20 countries was the only region to show a deteriorating trend in energy intensity, Energy consumption is distributed unequally across countries, with a CAGR of +0.8 percent. Overall, 85 percent of the energy almost to the same degree as income. The 20 largest energy con- savings achieved between 1990 and 2010 were contributed by East sumers account for 80 percent of primary energy consumption, with Asia and the developed countries (figure 4b). the two largest consumers (the United States and China) together accounting for 40 percent of the total (figure 5). Achievement of 7 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y Figure 8.  Small countries that experienced rapid reductions in energy intensity may hold lessons for larger energy consumers (CAGR, 1990–2010, PPP terms) a. Unadjusted b. Adjusted “In doubling the rate Bosnia and Herzegovina 11.9 Armenia 11.2 Estonia 8.4 Estonia 9.3 of energy efficiency Azerbaijan 7.9 Azerbaijan 8.5 improvement globally, it will Armenia 7.3 China 6.5 be important to learn from Afghanistan 6.8 Myanmar 5.6 those countries that made Timor-Leste 6.3 Uganda 5.5 the most rapid progress São Tomé and Principe 5.9 Dominican Republic 5.5 toward this goal in recent Belarus 5.3 Mongolia 5.2 Georgia 4.9 Lao PDR 5.0 years. While the global China 4.7 Georgia 4.8 CAGR of energy intensity Lithuania 4.6 Lithuania 4.7 was only –1.3 percent over Kyrgyz Republic 4.5 Belarus 4.6 the period 1990–2010, 20 Albania 4.4 Turkmenistan 4.5 countries achieved rates of Bhutan 4.3 Moldova 4.1 –4.0 percent or better.” Lao PDR 4.2 Swaziland 4.1 Eritrea 4.1 India 4.1 Romania 4.0 Romania 4.0 Turkmenistan 4.0 Uzbekistan 3.9 Moldova 3.9 Bulgaria 3.8 Uganda 3.9 Slovak Republic 3.7 percent percent Source: Based on World Development Indicators, World Bank; IEA 2012; UN Energy Statistics Database. Note: CAGR = compound annual growth rate. the global objective of doubling the rate of improvement of energy By contrast, the middle-income countries (with the exception of efficiency will therefore depend critically on energy consumption Russia and Kazakhstan) show much lower levels of per capita energy patterns in these countries. consumption but vary widely in the energy intensity of GDP. Energy As of 2010, among the 40 largest energy consumers (figure 5), intensities in Latin America are comparable to those found in Western the high-income countries (with the exception of Saudi Arabia) show Europe. Ukraine’s energy intensity is exceptionally high. the lowest energy intensity relative to GDP . Nevertheless, energy The gap between the world’s most and least energy-intensive consumption per capita varies hugely across this group, from 110 economies is more than tenfold. At one extreme, the most ener- gigajoules per capita in Western Europe to 300 in North America. gy-intensive countries—an incongruous mix of the countries of 8 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y Figure 9. Not all of the largest cumulative consumers of primary energy are among the largest cumulative energy savers (1990–2010, exajoules) a. Cumulative primary energy demand, 1990–2010 b. Cumulative energy savings, 1990–2010 “The countries making United States 1,904 China 1,320 the most rapid progress China 1,269 United States 369 Russia 595 India 114 on energy intensity often Japan 435 Germany 69 started out with particularly India 413 United Kingdom 47 high levels of energy Germany 297 Poland 46 intensity—notably China, France 221 Bosnia and Herzegovina 38 the former Soviet Union, Canada 214 Russian 35 and several countries in United Kingdom 190 Iraq 24 Brazil 168 Canada 23 Sub-Saharan Africa.” Korea, Rep. 155 Belarus 18 Italy 146 Romania 18 Ukraine 138 Estonia 16 Indonesia 134 Mexico 14 Mexico 131 France 14 Iran 118 Australia 13 Spain 103 Kazakhstan 12 South Africa 101 Argentina 11 Saudi Arabia 99 Nigeria 11 Australia 93 Czech Republic 10 Source: Based on World Development Indicators, World Bank; IEA 2012; UN Energy Statistics Database. the former Soviet Union and those of Sub-Saharan Africa—report Ukraine, Russia, Saudi Arabia, South Africa, and China to less than 5 intensities of 20 to 30 MJ per 2005 US dollar PPP (figure 6). At the in the United Kingdom, Spain, Italy, Germany, and Japan. other extreme, the least energy-intensive countries—predominantly Achieving the changes in behavior and investment needed to small island developing states with exceptionally high energy scale up energy efficiency will be very challenging. The approaches costs—report intensities of 2 to 4 MJ per 2005 US dollar PPP (figure to energy efficiency are as numerous and diverse as are the uses to 7). Even among the 20 largest energy consuming countries, energy which people put energy. In doubling the rate of energy efficiency intensities range from more than 12 MJ per 2005 US dollar PPP in improvement globally, it will be important to learn from those countries that made the most rapid progress toward this goal in 9 D o u b l i n g t h e R at e o f I m p r o v e m e n t o f E n e r g y E f f i c i e n c y recent years. While the global CAGR of energy intensity was only References –1.3 percent from 1990 to 2010, 20 countries achieved rates of –4.0 IEA (International Energy Agency). 2012. IEA World Energy Statistics percent or better (figure 8b shows the CAGR adjusted to reflect other and Balances. Paris. factors that affect energy intensity, as discussed in box 1). SE4ALL (Sustainable Energy for All Initiative). 2012. In Support of the The countries making the most rapid progress on energy Objective to Achieve Universal Access to Modern Energy Services “By far the largest absolute intensity often started out with particularly high levels of energy by 2030. Technical Report of Task Force 1: New York. http://www. energy savings were made intensity, notably China, the former Soviet Union (Commonwealth of sustainableenergyforall.org/about-us. Independent States), and several countries in Sub-Saharan Africa. By by China, where energy World Bank. 2014. Global Tracking Framework. Sustainable Energy for far the largest absolute energy savings were made by China, where efficiency efforts have All. Report 85415, Washington, DC. http://documents.worldbank. energy efficiency efforts have yielded savings equivalent in magni- org/curated/en/2014/01/19164902/global-tracking-framework. yielded savings equivalent tude to the energy consumed by the entire country over the same in magnitude to the energy time frame. Savings in the United States, the European Union, and India, although smaller, have also been globally significant (figure 9). consumed by the entire These countries and others will need to find ways to continue their country over the same time successes, and to do even better in the coming decades. frame.” 10 Get Connected to Live Wire Get Connected to Live Wire Live Wires are designed for easy reading on the screen and for downloading The Live Wire series of online knowledge notes is an initiative of the World Bank Group’s Energy and self-printing in color or “Live Wire is designed and Extractives Global Practice, reflecting the emphasis on knowledge management and solu- black and white. tions-oriented knowledge that is emerging from the ongoing change process within the Bank for practitioners inside Group. 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Once a year, the Energy and Extractives Global Practice takes stock of all notes that appeared, reviewing their quality and identifying priority areas to be covered in the following year’s pipeline. 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 2014/26 Why is this issue important? emissions of CO2. three- ergy Mix the global en Share of rene wable e n e rof quarters gy i n emissions those Mitigating climate change requires knowledge of the Figure 2. energy-related CO2 1 Doubling the 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% requires a clear understanding of the main sources of those emis- 40 percent of world energy A L Pthan O Bmore R A C80 CE T Ipercent Other V E S G Lfor Residential Carbon & E A C 2T) Iaccounts X T R (CO dioxide of Other MICs production, they were T H Esions. E N E R G Y 6% sectors ES FOR WLEDGE NOTE SERI 10% 15% A KNO total greenhouse gas emissions globally, primarily from the burning 1 China responsible for more than Other HICs 30% of fossil fuels (IFCC 2007). The energy sector—defined to include Energy 8% 70 percent of energy-sector able Energy in the fuels consumed for electricity and heat generation—contributed 41 Industry 41% Japan 4% emissions in 2010. if warming is Doubling the Share of Renew 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 Global Energy Mix emissions and are generated by the burning of fossil fuels, industrial 6% transport 11% exists for reductions will have to be made Substantial potential 16% waste, and nonrenewable municipal waste to generate electricity by the further tapping of renewable in the use of coal to generate Global Tracking Framework, published and heat. Black4 chapter of SE4ALL’s carbon and methane venting and leakage emissions energy sector at the point version of the Notes: Energy-related CO2 emissions are CO2 emissions from the aviation bunkers, domestic energy sources. in fact, electricity in the larger ? SE4ALL will publish an updated Why is this issue important Bank in in the2013. analysis presented in this note. of combustion. Other Transport includes international marine and for are notWorld included the technical potential economies. commercial/public aviation and navigation, rail and pipeline transport; Other Sectors include important social GTF in 2015. services, agriculture/forestry, fishing, energy industries other than electricity and heat genera- Renewable energy promises around renewable energy use tion, and other emissions not specified elsewhere; Energy = fuels consumed for electricity and higher Where do emissions come from? of the globe is substantially and environmental benefits the current level and patterns LIC refer to high-, middle-, heat generation, as defined in the opening paragraph. HIC, MIC, and than projected global energy What are concentrated in a handful of countries and low-income countries. countries alike are increasingly motivated Emissions are energy? demand in 2050. the technical Developed and developing including production of renewable from burning coal Source: IEA 2012a. is the offered by renewable energy, and come primarily in importanc e, potential for solar energy by the social benefits Vivien Foster is sector s fade reduced greenhouse gas emissions and As traditional renewable highest among the renewable enhanced energy security, manager for the Sus- The geographical pattern of energy-related CO2 emissions closely is also increased economic and industrial modern forms surge (figure 2). In 2010, middle-income countries, and only 0.5 percent by all low-income energy sources, but there local environmental impacts, tainable Energy Depart- and modern energy mirrors the distribution of energy consumption since countries put together. options for mentreliable at the World Bank 1990 and 2010, andthe with particularly two substantial untapped potential development, and more almost half all such ofthe 20 years between emissions were associated hydro, countries—m ore than half of them devel- (vfoster@worldbank.org). Over fromthanrenewable sources for elec- Coal is, by far, the largest source of energy-related CO2 emissions for biomass, geothermal, access. Today, about 120 to renewable energy. 2000, energy largest global consumers, the production of energy and more three-quarters as renewable globally, accounting for more than 70 percent of the total (figure 3). Most a national target related Bedrosyan expandedOf ncountries. rapidly the remaining wind, and ocean energy. oping countries—have Daron or quantity-based were associated with the tricity, heating, and top six emitting transportatio widely adopted. This reflects both the widespread use of coal to generate electrical have introduced worksprice- for London about 8 and matured became percent were more contributed of this technical potential Moreover, 88 countries those countries are energyCO energy-related 2 emissions, technologies , energy. Just over half Economics inof Toronto. energy grew from 40 exajoules power, as well as the exceptionally high CO2 intensity of coal-fired by other incentives for renewable of renewable another 15 percent (in the form of hydropower high-income by other Global countries, consumption that is Previously, he was an in 2010 (figure 1)—an increase power (figure 4). Per unit of energy produced, coal emits significantly geothermal, and solar) developing. the energy in 1990 to almost 60 exajoules natural consumption of India and more CO2 emissions than oil and more than twice as much as energy analyst in the global with in the developing world. Doubling the share of renewable energy equivalent to the total final energy Inventory located World Bank’s Energy Practice. of the Sustainable United is 1 Nations Framework Convention on Climate Change, Greenhouse Gas rate (CAGR) of gas. complementary objectives compound annual growth mix is one of the three in the UN General Data—Comparisons Malaysia in (database). By Gas 2010. The http://unfccc.int/ghg_data/items/3800.php 1.5 percent during initiative. Formally launched renewable sources was Energy for All (SE4ALL) the president of the energy production from 2012 and co-chaired by during 2000–10. Assembly in September SE4ALL calls on 1990–2000 and 2.4 percent sources rose, the UN Secretary-General, of energy from renewable World Bank Group and to address urgent energy Yet as the consumption and civil society grew at a roughly comparable governments, businesses, consumption by global total final energy the use of renewable energy, 1990–2000 and 2.0 percent during challenges, including increasing pace of 1.1 percent during 330 exajoules in Gabriela Elizondo 2030 (SE4ALL 2012). 243 exajoules in 1990 to must 2000–10, increasing from Azuela is is a senior of this goal, a starting point is equivalent to the annual energy To support the achievement to track 2010. The boost in consumption energy specialist in the and a framework established As a result of the be set, indicators developed, India, and Japan combined. World Bank’s Energy and Energy consumption of China, global energy mix The World Bank and International renewable energy in the those indicators until 2030. to compile two trends, the share of 18.0 Extractives Global Practice. a consortium of 15 international agencies stable, growing from 16.6 percent in 1990 to Agency lead and to select remained relatively Irina Bushueva is an available by leading institutions investment analyst with and analyze data made the goal and monitor percent in 2010. progress toward the Blended Climate a set of indicators to track is based on and investment. This note Finance Unit at IFC. related policy, technology, 11 D o y o u h av e s o m e t h i n g t o s ay ? S ay i t i n L i v e W i r e ! 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 2014/26 Mix in the global energy “knowledge citizenship” and participate in the ongoing change process at the Bank, wable energy Share of rene 1 Doubling the where knowledge management is becoming everybody’s business. A KNOWLEDGE NOT E SERIES FOR THE ENERGY & EXTRACT IVES GLOBAL PRAC TICE ewable Energy in the Doubling the Share of Ren gy sector 2014/6 1 s u lt s o f W o r l d B a n k l e n d i n g i n t h e e n e r M e a s u r i n g t h e r eLINE THE BOTTOM Substantial potential further tapping of renewab exists for le Global Energy Mix Tracking Framework, published by the chapter 4 of SE4ALL’s Global version of the energy sources. in fact, nt? will publish an updated for Why is this issue importa World Bank in 2013. SE4ALL the technical potential A K N O W L E D G E N O T E S E R I E S F O R T Himporta E E N E R G YsocialPRACTICE around promis es nt GTF in 2015. renewable energy use Renew able energy higher the globe is substantially and environmental benefit s and patterns of projected global energy What are the current level Measuring the Results of World Bank gly motivated THE BOTTOM LINE than energy? Your Name Here g countries alike are increasin demand in 2050. the technical Developed and developin production of renewable by renewable energy, including importance, nal renewables fade in is the by the social benefits offered potential for solar energy Lending in the Energy Sector this note is the first report le reduced greenhou se gas emissions and As traditio of energy-sector indicators highest among the renewab enhanced energy security, modern forms surge industrial is also increased economic and Become an author reflecting the World Bank’s energy sources, but there local environmental impacts, energy potential ent, and more options for reliable and modern between 1990 and 2010, and particularly since broad lending patterns during substantial untapped developm half of them devel- countries—more than What challenges were Over the 20 faced the effort to measure inyears sources for elec- Why is al, this issue important? hydro, access. Today, about 120 energy from renewable fy 2000–13. to compile it, for biomass, geotherm to renewable energy. 2000, the production of as renewable national fortarget relatedresults? ation expanded rapidly energy projects back to fy 2000 wind, and oceanThe energy. Most accountability need for has made oping countries —have itacritical the d price- or quantity-based tricity, heating, and transport became more widely adopted. of Live Wire and of this technical potential Moreover, 88 countries have introduce Data back to FY 2000 energy are be retrieved had totechnolo and and gies matured aligned were manually screened for Energy Practice to measure results le energy. Just over half of those countries grew from 40 exajoules (in the form of hydropow er, incentives for renewab consump tion of renewable energy results data comparable with with the new CSIs Global in 2010 (figure 1)—an increase that Worldis Thesolar) Bank tracks the outcomes developing. of its projects in order to 1990 to almost 60 exajoules the standardized indicators geothermal, and energy in world. goals of of renewab in the global le energy Previously, each project in the energy sector had ending poverty devised its ownconsumption India and final energy of developinghow theshare contribute to your well they are advancing Doubling the is equivalent to the total now used in the Bank’s located in theunderstand s of the Sustainable of of theyears onesome threenow complem those entary objective indicators of results, which made it difficult to report the Bank’s d annual growth rate (CAGR) corporate scorecard. in the and promoting shared prosperity. mix is For in the UN General Malaysia in 2010. The compoun 1.5 percent during Corporate Scorecard initiative. Formally launched terms that were both precise. With broad and renewable sources the was outcomes have been reported Bank-wide in a for All (SE4ALL) achievements in energy production from future, automation will make Energy and co-chaired by the president of the the clear advantages of based on a set of so-called core sector September inindicators 2012 (CSIs) that measure advent of the Corporate Scorecard, however, during 2000–10. it easier to collect, aggregate, Assembly SE4ALL calls on 1990–2000 and 2.4 percent rose, practice and career! Group and of the UN Secretary-General, standardized being able to demonstrate results led the Energy Practice ofto examine energy from renewable sources and analyze data on project impact at the project level and permit World Bankaggregation urgent energy Yet as the consumption ble is an indicator of outputes, and civil society to address or outcome the Bank’s energy projects back to FY 2000 and, to the extenttion grew at a roughly compara consump data across the Bank. Each CSI governm ents, business global total final energy outcomes. increasin or theme, the use gsuch as of renewable energy, by harmonize or align the indicators used in 1990–200 0 and 2.0 percent during is strategically relevant to a particular s, sector including possible, to retroactively during that challenge pace of 1.1 percent in Gabriela Elizondo those projects must with those devised for the Corporate Scorecard. 243 exajoules The in 1990 to 330 exajoules the energy sector. 2030 (SE4ALL 2012). starting point 2000–10, increasin g from energy Azuela is is a senior particularly central to the Three CSIs are To support the Energy achievem Bank’s ent of this goal, aresults Practice, “archaeological” of thisto exercise are reported in consump in this tion is equivalent to the annual note. ed track 2010. The boost result of the energy specialist in the s step developeof the and a framework establish d,energy reported here for the fiscal years 2000–13 are the India, and Japan combined. As a because they reflect its engagement in every The results World Bank’s Energy and be set, indicator nal Energy consumption of China, mix The World Bank and Internatio reflective of the broad energy in the global energy value chain—from generation Sudeshna Ghosh Extractives Global Practice. those and2030. indicators until to transmission distribution (T&D) first such to report of energy-sectortrends, compile two the share of renewable indicators in 1990 to 18.0 agencies 15 international lending patterns of the World Bank during this period. Agency Theleadthree indicators a consortiu m ofare: growing from 16.6 percent Banerjee is a senior to “last mile” customer connections. Irina Bushueva is an s and to select remained relatively stable, data made by leading institution availablethrough World Bank To compile the report, all percent projects approved in the energy specialist in the analyst with • The tnumber and analyze of people provided with access to electricity in 2010. investmen the goal and monitor s to track progress toward energy space between FY 2000 and FY 2013 (approximately 70–80 World Bank’s Energy household the Blended Climate connections a set of indicator nt. This note is based on gy, and investme projects per year on average) were screened to extract those Practice (sgbanerjee@ Finance Unit at IFC. related policy, technolo • T&D lines constructed or rehabilitated, measured in kilometers worldbank.org) that had adopted indicators similar enough to those used in the (km) Ruchi Soni (rsoni@ Corporate Scorecard that they could be mined for comparable data. worldbank.org) is an • Generation capacity constructed, measured in megawatts (MW). Information was extracted from two types of project documents: energy analyst in the More recently, additional indicators have been developed cov- the Implementation Completion and Results Report (ICR) for same practice. ering measurement of energy efficiency in heat and power (lifetime closed projects and the most recent Implementation Status and Elisa Portale (eportale@ savings, captured in MWh). Results Report (ISR) for active projects. In some cases, information worldbank.org) is an was referred back to project staff for confirmation or, where energy consultant, also discrepancies had been spotted, for correction. In a few cases in the Energy Practice. where indicators were not explicitly mentioned in the ICR or ISR,