This is the first handbook to provide a global policy perspective on energy, bringing together a diverse range of international energy issues in one volume.
Global outreach effort by electricity giants fosters bottom-up approach to strong Public-Private Partnerships; ‘Golden Rules’ draw on lessons worldwide
The first hybrid wind-diesel electricity park in Ecuador’s famed Galápagos World Heritage Site, built by the private sector in partnership with the national and local governments, has for the past five years successfully reduced costly diesel imports to San Cristóbal Island by a third while mitigating oil spill risks in a priceless, fragile marine ecosystem.
Half a world away in the Philippines, a mini-hydro project — also built through a Private-Public Partnership — not only provides constant and reliable electricity to local communities, it is helping rehabilitate and conserve the Ifugao Rice Terraces World Heritage Site through a fund financed by the plant’s power sales.
These are among many examples of how developing country governments are rewriting their rule books to foster innovative partnerships the private sector and civil society to deliver cleaner, reliable, affordable electricity to their citizens.
The private sector partners are members of the Global Sustainable Electricity Partnership (GSEP), a non-profit organization created by 14 of the world’s largest power utilities from 12 countries (USA, Canada, Mexico, France, Italy, Spain, Germany, Russia, Japan, China, Brazil, South Africa) dedicated to creating sustainable energy development and human capacity building in developing and emerging economy nations.
GSEP will launch its new Public-Private Partnerships (PPPs) for Sustainable Electricity Development Program in Warsaw, Poland, November 19 at the 19th Conference of the Parties to the UN Framework Convention on Climate Change (COP19).
The program has been developed with support from the UN Economic Commission for Europe and its International PPP Centre for Excellence.
GSEP Executive Director Martine Provost said this new global program is one of several concrete commitments the major electricity companies made in support of UN Secretary General Ban Ki-Moon’s Sustainable Energy for All (SE4ALL) initiative.
Other examples of successful electricity public-private partnership projects involving GSEP worldwide:
Argentina: In the Patagonia region, an 86-kilowatt hydroelectric station provides power to the tiny rural community of Cochico, while a wind and diesel hybrid system of the same size supplies the isolated village of Chorriaca, both replacing inadequate and polluting diesel generators that operate sporadically. The new electricity sources resulted from co-operative efforts between the communities, Patagonia’s provincial government and members of the GSEP.
Uruguay: A biogas micro-generation system being developed in the town of San Joséwill produces enough electricity to supply local dairy farmers while reducing the environmental impact of the waste from their farms. This project is expected to be replicated at a larger scale elsewhere in Uruguay and Latin America.
Maldives: A grid-connected photo-voltaic system on Kaafu Dhiffushi Island will not only accelerate the shift away from full reliance on diesel generation, it will also enable the efficient use of solar energy for an ice-making machine that will help the island’s resident preserve fish for sale, their main economic activity.
“Dealing with climate change mitigation and adaptation is a challenge confronting all countries, one that is greatest in the developing world, which also faces the pressing priority of meeting a growing demand for modern electricity services,” said Ms. Provost.
“Neither the public nor the private sector alone is able to meet these ambitious goals. We strongly believe that well-designed PPPs are critical to accelerate the deployment of sustainable electricity technologies and, in turn, foster economic development, raise standards of living and develop human capital.”
The new program builds also on the findings of global surveys in 2011 and 2012 of 119 national and international public and private sector stakeholders and looks to create a forum that will empower decision makers in developing countries to define the best strategies and practices for the successful implementation of PPPs in the sustainable electricity sector.
Drawing heavily on the results of these surveys, as well as on the practical experience gained by GSEP in the planning and execution of sustainable electricity demonstration projects in more than 10 countries over the past 20 years, a set of “golden rules” for the successful implementation of PPPs emerged. These will serve as a framework throughout the conferences so that stakeholders can adapt them to their own contexts and include them in their local and national energy development and use plans.
The Golden Rules include:
- Adopt a clear, stable, and enabling regulatory and policy framework
- Establish a national energy strategy that includes long-term goals and evaluates available energy resources
- Set up open and transparent communications to ensure predictability and social acceptance of the national energy strategy and ensuing PPP
- Set clear and transparent criteria for selecting private partners
- Draft clear partnership agreements that reflect the strengths and capabilities of each partner and allocates the risks and responsibilities to the partner most suited to bear them
- Establish and undertake a transparent and objective procurement policy and process to ensure competition and lower costs
- Allow an adequate return on investments to attract the private sector
- Ensure long-term income streams and reduce risk using instruments such as Power Purchasing Agreements
- Cooperate with the private sector to facilitate Research, Development, Demonstration, and Deployment (RDD&D) to allow the development of innovative tailor-made sustainable solutions, by for example combining existing technologies, increasing efficiencies and lowering costs
- Use a mix of funding sources to reduce costs and mitigate risks
One program conference will be completed this year – in Belgrade (November 12-13, for participants from Eastern and Central Europe and Central Asia). A conference targeting Latin America will take place next year in Buenos Aires (April 11-12). Others are planned for Asia and Africa.
GSEP and its partners will draw on extensive experience in designing and delivering international conference programs, most recently with its Financing Electrification Dialogues, which involved energy and finance policymakers from over 100 countries.
“Public-private partnerships (PPPs) are crucial for achieving the goals set down by the UN Secretary-General in his ‘sustainable energy for all’ initiative. A key task is to identify the best practice models for public-private cooperation that can help achieve the three objectives of the global initiative,” said Geoffrey Hamilton, Chief of Cooperation and Partnerships Section of the UN Economic Commission for Europe.
“This constitutes a double-edged challenge: finding out what has been successful in past sustainable energy PPPs and encouraging the public and private sectors—with their very different perspectives—to enter into long term agreements defined by the life cycle of energy projects. The UNECE-GSEP collaboration is designed to address these challenges and showcase some practical solutions that can be followed globally.”
Top leaders from major international organisations in the field of sustainable energy development have endorsed the catalytic program designed to bring key people around a table for open discussions on how to implement PPPs practically and successfully.
Said Isabel Marques de Sa, Chief Investment Officer and the International Finance Corporation (IFC), member of the World Bank Group: “Well designed PPPs – capturing the best the private sector can offer in terms of innovation and transfer of skills, efficient operation and mobilization of capital – need to be at the center of governments’ strategies to achieve universal access goals and reliable power to foster economic development. To this end, the new GSEP/UNECE conference program constitutes a valuable contribution.”
“The World Energy Council’s ‘World Energy Trilemma’ analysis reveals that there is little agreement between investors and governments on the nature, price, and value of risks related to energy infrastructure,” said Christoph Frei, Secretary General of the WEC. “Delivering sustainable electricity to the world’s seven billion people requires the public and private sectors to better align their understanding of the implied risks and the strategic balance of the sometimes opposing objectives of energy security, environment, and energy equity. This new initiative on ‘Public Private Partnerships for Sustainable Electricity Development’ helps improve such alignment and supports the goals of the UN Secretary General’s Sustainable Energy for All.”
Tags: Public/social/private partnership, Climate change mitigation, public private partnership, Government procurement, sustainable energy
Understanding the role of government policies in promoting the introduction of renewable technologies can help to catalyze the transition toward a more sustainable energy system. The literature on technological transitions using a multi-level perspective suggests that the co-evolution of the niche market (the new technology) and the complementary regime may have an important role to play in shaping this transition. This paper provides a quantitative analysis of the interactions between different types of solar photovoltaic (PV) networks at the niche level, the complementary semiconductor sector at the complementary regime level, and the solar PV policies in 14 different countries.
What’s usually considered old garbage might be a promising asset for our energy supply, according to University of Cincinnati researchers.
For many of us, it’s the fuel that wakes us up and gets us started on our day. Now, University of Cincinnati researchers are discovering that an ingredient in our old coffee grounds might someday serve as a cheaper, cleaner fuel for our cars, furnaces and other energy sources.
Yang Liu, a graduate student in environmental engineering in UC’s College of Engineering and Applied Science (CEAS), presents a summary of early-but-promising discoveries on his team’s research at the American Chemical Society’s (ACS) 246th National Meeting & Exposition this week in Indianapolis.
Liu and fellow researchers Qingshi Tu, a UC doctoral student in environmental engineering, and Mingming Lu, a UC associate professor of environmental engineering, used a three-pronged approach to converting waste coffee grounds into energy sources including biodiesel and activated carbon by:
- Extracting oil from the waste.
- Drying the waste coffee grounds after oil removal to filter impurities in biodiesel production.
- Burning what was left as an alternative energy source for electricity, similar to using biomass.
The researchers launched the project in 2010, gathering waste coffee grounds in a five-gallon bucket from a Starbucks store on UC’s campus. After collection, they removed the oil from the waste coffee grounds and converted triglycerides (oil) into biodiesel and the byproduct, glycerin. The coffee grounds were then dried and used to purify the biodiesel they derived from the waste coffee grounds.
The preliminary results showed that the oil content in the waste coffee grounds was between 8.37-19.63 percent, and biodiesel made from coffee oil meets the ASTM International D6751 standard. The efficiency of using the waste coffee grounds as a purification material to remove the impurities in crude biodiesel, such as methanol and residual glycerin, was slightly lower compared with commercial purification products. However, the researchers report that results still indicate a promising alternative, considering the cost of purification products. Future research will continue to focus on improving the purification efficiency of waste coffee grounds-derived activated carbon.
Compared with petroleum diesel, the cleaner-burning biodiesel reduces the emission of carbon monoxide, hydrocarbons and particular matters (PM).
Waste coffee grounds that result from brewing one of the world’s most popular beverages is estimated to result in more than one million tons per year in the U.S. alone, with the majority of that waste getting dumped into landfills.
The researchers say the method they’re exploring to produce biodiesel would not only open landfill space, but it also holds promise in creating biodiesel from a natural product that’s not also in high demand as a food source, such as corn and soybean crops that are used to manufacture biodiesel.
The project was among four proposals selected for a $500 grant last spring from the UC Invents initiative, an enterprise led by UC Student Government and the UC student chapter of the Association for Computing Machinery to share ideas and encourage innovation in campus life.Tags: Applied Science, Coffee preparation
This article reviews the concept of an energy technology innovation system (ETIS). The ETIS is a systemic perspective on innovation comprising all aspects of energy transformations (supply and demand); all stages of the technology development cycle; as well as all the major innovation processes, feedbacks, actors, institutions, and networks.ETIS, energy technology innovation system
The phrase “smart grid” connotes an alluring, wired, high-tech future. A future pulsing with the promise of a better tomorrow slickly packaged in cutting-edge technology—technology that seems to offer something advantageous for everyone.
The smart grid promises to transform our country’s hodge-podge of aging electrical infrastructure into a sleek twenty-first-century entity, one complete with computerization, communications, and sensors to regulate and monitor the production, transmission, and consumption of electricity. The anticipated benefits are magnetizing: consumers expect the smart grid will free them from fears of blackouts and sky-high electrical bills through improved reliability and real-time feedback about their energy use. Electricity producers and distributors expect to see costs shrink while efficiency and profits swell. Even environmentalists are happy with the expectation that the smart grid will more easily accommodate renewable energy sources like wind and solar.
Sounds like everyone will win, right? Not so fast. A new study predicts that the shift to the smart grid may generate some losers—some of which may surprise you.
Luciano de Castro, an assistant professor of managerial economics and decision sciences at the Kellogg School of Management, and his co-author Joísa Dutra, an economist with the Getulio Vargas Foundation in Brazil, say demand response initiatives—key components of the smart grid—may not benefit some consumers and may even harm some electricity producers.
Demand response encompasses a system of sensors that alert consumers when peak energy demands are placed on the electrical grid. These sensors may display real-time or next-day pricing that informs the consumer as to the best time for running the laundry or dishwasher. Some sensors may even shut off unnecessary appliances during peak demand hours. This may not be a boon for everyone, though. Because consumers are not homogenous, they are not equally flexible when it comes to scheduling hot showers or turning on all their lights. As a result, some consumers will likely see no benefit from demand response initiatives, de Castro points out, and they will lose out.
In theory, demand response technologies will help shave the peaks off energy demand curves by shifting that demand to the valleys, or the times when energy needs are lower and the cost to produce energy is cheaper (Figure 1). But de Castro says this will also take away the most profitable part of energy producers’ income—electricity produced at peak demand is the priciest—while increasing demand for energy priced at its lowest.
Figure 1. Energy demand curve showing peak demand loads (top), and the shift of demand from peak to base with implementation of demand response technologies (bottom).
“With demand response, the shift in demand from peak to base energy is not enough to recapture what they lose from the reduction in peak demand energy consumption,” de Castro says. This means the energy-saving demand response sensors, which will be a boon to consumers, translate into lost profits for electricity producers.
“If you talk with people in the industry, they seem to expect to win with all this technology,” de Castro notes. “But what this result tells them is producers can gain more but only from increasing the general consumption.” For example, at a large enough scale, the addition of plug-in electric vehicles or hybrid cars that need to be charged would result in an overall increase of non-peak electrical consumption.
In other words, by shifting demand from the costliest to the least-costly generation times, electricity producers will need to increase overall demand, especially for their base electricity. This counterintuitive result surprised de Castro. He says that when he first saw the flattened curve under demand response technologies (Figure 1), he assumed that electricity generators operating during periods of lower loads would be better off because of increased demand—and sales—in the valleys. But because the price of this energy is lower, his calculations revealed that this transition lowered profits.
So while smart grids improve the entire system, not everyone is better off.
Who Benefits, and Who Pays?
Paying for a nation-sized upgrade to a smart grid presents still another hurdle. While all the stakeholders involved agree on the smart grid’s allure—they all want it—debates flare over who will foot the bill. To delve deeper, de Castro modeled costs and benefits for the major stakeholders: consumers, electricity distributors, electricity generators, and society.
He shows with his model that though most consumers desire the smart grid’s promise of increased reliability, they are willing to pay only so much. And what they are willing to pay is always lower than what is optimally needed to shift to a smart grid. The model also showed that for electricity distributors, providing reliable service is a public goods problem because consumers’ unwillingness to pay what is necessary clashes with the wider benefits that a reliable smart grid would yield.
Putting a dollar sign on reliability was quite difficult, de Castro found. Other studies have shown that the increased reliability of smart grid technologies is valued sixfold more than that of the smart grid’s perceived environmental benefits, and three times more than its perceived security benefits against cyberattacks. Clearly, reliability is highly valued. “But they need a mechanism for evaluating and pricing reliability,” de Castro said. Which points to another of the paper’s findings: that most of the perceived smart grid’s benefits do not translate easily into profits.
Some studies show that the largest investments will need to be made in systems that distribute electricity and that these could tally between $231 billion and $339 billion. Such a high price tag means that companies alone will not be able to pay, de Castro notes, which means public funds would be required. But regulators and policymakers have also long signaled that they will not allow all of the costs to be passed on to consumers.
“In the end, this is a public goods dilemma,” de Castro said. “It is a good thing that we would like to see happen, but we should watch out for the distribution of its benefits and costs.” Otherwise, the sexy future promised by the smart grid may turn out to be less seductive.
Related reading on Kellogg Insightconsumer, electricity producers, smart grid, de Castro
The purpose of this paper is to provide a conceptual framework stimulating a sustainable energy transition in developing nations. Based on the existing literature, we first index theoretical factors preventing deployment of low carbon technologies. Read moreTags: carbon, Renewable, developed nation, Technology, sustainable energy