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White Paper
Renewable Energy Future
for the Developing World

Written by Dieter Holm, D.Arch

under contract to the International Solar Energy Society
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Executive Summary 3

Summary of Policies 6

Renewable Energy Defined: Energy from the Sun 7

Aim, Scope, Delimitations 8

Introduction: The Developing World in the Global Energy Transition 9

Why it is Essential to Transform the Developing

World Energy Systems Now 13

Renewable Energy Resources: Technology Status

and their Sustainable Potential 16

National and International Drivers of Renewable Energy Application:

Setting National targets within Global Guard Rails 24

Policies to Accelerate the Application of Renewable Energy

Resources in Developing Countries 30

The Need for Research and Demonstration 45

Examples of National Policy Models 48

Conclusions 54

Acknowledgements and References 55

Annexure A 57

Abbrevations 58

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Executive Summary
For the hasty reader:
The essence of the White Paper is contained in the section on "Policies to Accelerate the Application of
Renewable Energy Resources in Developing Countries".

This White Paper presents a rationale The Introduction – The Developing as suggested in this White Paper.
for apposite and effective governmental World in the Global Energy Transition
policies on renewable energies in the explains that developing nations have Why it is Essential to Transform the
developing world. It also provides ade- underdeveloped energy infrastructures, Developing World Energy Systems Now
quate scientific information to make but need not follow the western pattern treats the new key drivers: energy
rational and accountable energy policy of centralised power stations with exten- poverty and poverty eradication, risk
choices within this context, in support sive, costly and vulnerable networks. avoidance and energy volatility, as well
of sustainable development. as the protection of the natural life sup-
While the developing world has uneven porting systems. Government policy
While fully acknowledging the substantial fossil resources, it is blessed with more options include the creation of a sup-
barriers restraining the developing world, evenly distributed underdeveloped (and portive climate for the necessary policies
the paper also highlights the momentous largely unmapped) renewable energy and legislation by creating more energy
and unique window of opportunity, as sources. awareness, energy labelling of applian-
well as the concomitant grave responsi- ces, using the Kyoto Protocol, and
bility this places on the shoulders of pre- This offers a unique opportunity of ensuring the national and regional secu-
sent energy policy decision-makers. A technological leapfrogging, using the rity of supply through renewables.
potential role of the industrialised nations Kyoto Protocol’s Clean Development
in our common future is indicated. Mechanism where advanced and tech- Renewable Energy Resources: Tech-
nical know-how and resources of the nology, Status and their Sustainable
The paper endorses the thesis of the industrialised nations can facilitate the Potential provides essential information
earlier global ISES White Paper titled growth of domestic work opportunities, for policy purposes. About two thirds
“Transitioning to a Renewable Energy thereby helping to achieve sustainable of the global hydropower potential is
Future”, stating that “a worldwide effort development and the millennium goals located in the developing world. How-
to generate the renewable energy transi- in the developing world. ever, there are serious caveats, as docu-
tion must emerge at the top of national mented by the World Commission on
and international political agencies, star- Artificial and persistent market distor- Dams (WCD 2000). The technology is
ting now”. tions ignore the social, environmental mature.
and military costs of fossils. Where
A Summary of Policies is presented, developing countries indulge in nuclear Bio-energy is the energy mainstay of
followed by Renewable Energy Defined: adventures, the costs always by far many developing countries, and is in-
Energy from the Sun describing that exceed public tax monies invested in creasingly being harvested in an environ-
essentially all energy derives from the sustainable energy. Their insurance is mentally unsustainable way. Convention-
sun, including the fossil fuels that have not covered by private companies, but al bio-energy use is mostly inefficient,
been the base of a short-lived and ener- by the unsuspecting citizens. socially inequitable and detrimental to
gy-flagrant period in our history. health.
A combination of energy conservation,
The Aim, Scope and Delimitations sets energy efficiency and renewable energy Wind energy has become cost competi-
the definitions and context of the develo- seems to be indicated in a world of tive with conventional energies in leading
ping world in the global village, which is material want where it is not always easy countries. It has shown rapid develop-
illustrated by the worldwide reaction to to practise global solidarity. The inevita- ment and cost reductions. The interme-
the Tsunami catastrophe of December ble transition to renewable energies has diate term potential in the developing
2004. Our common future has not rea- to be immediate, rapid, orderly and world is considerable.
ched that level of newsworthiness – yet. sustained. This requires suitable policies

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Executive Summary

Of all renewables, solar thermal energy Geothermal energy can be used in near- National and International Drivers of Re-
is considered to be practically unlimited surface applications through the mature newable Energy Application: Setting
in the long-term, and is a very abundant heat-pump technology. Underground National Targets within Global Guard
resource in the developing world. Con- heat below 100 °C is applicable in space Rails highlights poverty alleviation through
centrated solar thermal power plants heating, and – at higher temperatures – job creation as a primary policy driver.
produce most of the world’s energy for electricity generation. Considerable Renewable energies produce consider-
derived from direct radiation. The pro- waste heat streams occur. ably more jobs than fossil energies.
spect for these technologies and solar Solar cooling of buildings, agricultural
upwind chimneys are good. products, food and medicine is critical in Distributed generation is more cost-
the developing world. Yet, the technolo- effective, more environmentally benign,
Grid-connected application is the fastest gy is underdeveloped. more secure and more energy-efficient
growing sector of photovoltaics (PV). because it reduces line losses and uses
While the service life is more than twen- Solar buildings are of great importance both electricity and rejected heat. Solar
ty-five years, its modularity renders it because of their long life cycles (longer Rural Enterprise Zones can facilitate
suitable for incremental applications. than power plants) and the combined sustainable development.
Further cost reductions are projected. effect of urban and global warming on
The fact that PV systems are currently inefficiently designed air-conditioned National renewable energy and energy
not cost-competitive with subsidised buildings can be dramatic. productivity targets should be challen-
grid electricity has led some developing ging as to attract academics, entrepre-
countries to introduce stand-alone PV The landlord dilemma and inadequate neurs and investors. They must also
systems in impoverished remote rural building regulations (codes) aggravate be of sufficient long-term scope for the
areas where service, maintenance of this problem. Regulations should stipula- inertia ofbureaucracy and the educa-
batteries and social acceptance must be te CO2 emissions. Integrated resource tional system.
expected to be difficult. planning balances the supply, storage
and consumption (demand-side mana- Market liberalisation and privatisation of
Solar water heating is an established gement) of resources like water, material national energy systems is not the pan-
technology that can be manufactured and energy services. The old wasteful acea.
in the developing world, provided stan- paradigm of government-driven energy
dards are maintained. The capital costs supply is still prominent in many develo- National transition paths to sustainable
are higher than conventional gas and ping countries. energy should be bounded by Global
electric push-through or storage geysers, Guard Rails or limits of socio-economic
but the life cycle costs are lower. Com- Transport energy consumption in dis- and environmental damage that should
bined solar water and space heating persed developing countries is mostly not be exceeded. An illustrative road-
(combi) systems are not yet established supplied by imported fossil fuels with a map highlights eradication of energy
in the developing world. notable impact on national economies. poverty, revision of World Bank policy,
Policy options are domestic fuel produc- promotion of socio-economic develop-
tion, technology improvements, informa- ment, combined regulatory and private
tion technology, mode switching and initiatives, protection of life-supporting
energy conscious spatial planning of systems, improved energy productivity,
towns and regions. 20 % renewable energy by 2020, and
phasing out nuclear by 2050.

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Policies to Accelerate the Application of Standards for renewable energy genera-

Renewable Energy Resources in Devel- tion sites and for buildings are a
oping Countries are drawn from appro- necessity. Government can and should
priate international experience. This facilitate the transition by its own procu-
section represents the core of this White rement programmes.
Paper to which the reader’s attention is
directed with special reference to imple- Education, training, information and
mentation. Long-term stability of targets demonstration should be increased,
and transparent, simple policies endor- preferably with international partner-
sed by a White Paper are highlighted as ships.
success factors. Where electric power is
mostly derived from fossil fuels, the Buy-in of stakeholders (individuals, coo-
renewable energy pricing systems (grid- peratives, business) enhances progress
feeder law) is a proven success and and obviates time-consuming and costly
more suitable for developing countries delays.
than the quota system because of their
achievement of targets, investor friendli- The need for Research, Development
ness, job creation in domestic industry, and Demonstration motivates the urgen-
geographic and ownership equity, diver- cy of renewable energy R&D, which had
sity of technology, diversity of supply, more than halved from 1980. Seventy
costs, prices and competition, financial percent went to nuclear fission and
security, ease of implementation and fusion research, yielding disproportion-
flexibility. However, the pricing system ably low outputs. The budget share of
has not been applied to off-grid energy renewables was less than 10 %, and
technologies. was only a fraction of the budget for fos-
sil fuel R&D. The funding for renewable
The Kyoto Protocol is an opportunity to energy R&D has to be increased by one
be grasped by developing nations. order of magnitude. Non-technical and
technical research themes are identified,
Financial support in the form of pay- including cooperative priorities.
ments, tax credits, low interest loans,
lowered import duties should preferably Examples of National Policy Models
focus on energy production rather than illustrates the German and Chinese
subsidies to investments on the supply renewable energy laws, with comments.
side. They should be tied to technology
standards. The playing field should be Conclusions, Acknowledgements and
levelled for renewable energies. References conclude the paper.

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Summary of Policies

Key stakeholders have to be aware of extension and equitable access to suming systems should lead by
the interactions of energy with poverty, renewable energy services in off- example.
the environment and peace. Campaigns grid areas, supporting development Government should encourage and
prioritising energy conservation, energy in production, health and education legislate obligatory site reservations
efficiency and renewable energy need should be planned and implemen- for renewable energy installations,
to be addressed to energy decision- ted. grid connection, and low carbon
makers. Developing countries have spe- Integrated resource planning, inclu- building codes.
cific policy priorities and options. After ding the subsets of Integrated Government should introduce reve-
having assessed the national renewable Regional, National, Provincial and nue neutral environmental taxes,
and non-renewable energy resources, Local Energy Planning are necessa- replacing income tax in an orderly
as well as the energy services needed, ry stepping-stones in the energy long-term plan.
including the traditional ways of satisfy- transformation.
ing these needs, the following policies 4. Research, Development and
are applicable: 2. Financial interventions and Demonstration, and education.
incentives The greatest part of public energy
1. Establishment of transparent, con- Governments have the power and reasearch, development & demon-
sistent long-term targets and obligation of building domestic stration (RD & D) should be alloca-
regulatory frameworks capacity and job creation through ted to energy efficiency and rene-
The Kyoto Protocol offers unique renewable energy production pay- wable energy, with special empha-
opportunities of integrating deve- ments, rebates, low-interest loans sis on opportunities of leapfrogging
lopment and energy aims. and guaranties fixed to technology with respect to building new long-
A national and regional Renewable standards.The playing field bet- term infrastructure, e.g. transport,
Energy and Energy Efficiency White ween entrenched and emergent buildings and distributed cogenera-
Paper guides other stakeholders in renewable energies should be tion.
the public and private sectors, and levelled.
attracts both national and interna- 5. Encouragement of stakeholder/
tional energy investors. 3. Government supported renewable public ownership, participation
It is important to obtain buy-in from energy technology and pride
the key stakeholders, and publicise Government and regional authori- The transition to sustainable energy
the White Paper widely, using the ties should encourage renewable systems needs to be understood
most appropriate communication energy technology standards and and implemented on a broad base.
media for the local and international energy efficiency appliance This requires the sustained buy-in
audience. labelling. of all key stakeholders, and their
Orderly rural energisation through Governments as prominent owners commitment and pride.
integration of cost-effective grid of buildings and other energy con-

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Renewable Energy Defined:

Energy from the Sun

Ever since we first saw earth from space, On the other hand, man has devised When we talk about coal, oil and gas
our mind-set changed fundamentally: methods to extract energy that is not “production” we tend to mislead oursel-
We now appreciate our beautiful and derived from the sun. Currently, nuclear ves because energy cannot be produ-
fragile blue planet floating in hostile energy contributes about 6.8 % to the ced. Removing these finite resources
space, precariously balanced in orbit world’s primary energy, and geothermal from the earth’s crust is “exploiting” or
by our life-supporting sun. 0.112 %. For ages, humankind lived “robbing”, as the coal miners say more
by the daily rhythm of the sun. The dis- honestly.
The sun’s energy is THE energy source. covery of fire brought a revolutionary
It is certainly not an alternative energy. way of using the sun’s energy stored in Our current commercial energy system
All terrestrial life, and most marine life, firewood. Today, this is the dominant uses concentrated and finite resources,
depends on the sun’s generous energy. form of conveniently concentrated sun which are in the hands of a few. The
energy used in many developing coun- technology to exploit these diminishing
It also drives the gigantic energies of the tries. resources has become cheaper during
ocean currents. All wind energy is really the course of the last century through
solar energy. The immense energy of all The beginning of the industrial revolution economies of scale, supported by go-
rivers and waterfalls comes from the sun was energised by solar energy in the vernment protection and infrastructure
driving the great evaporation cycle to form of mechanical power from wind- investments.
form rain clouds, which are transported mills and water wheels, later replaced
by solar energy driven winds. The reple- by wood-fired steam. Coal, oil and gas With solar energies, the natural resour-
nishing source of hydropower is solar have become the main primary energy ces are diffuse, and more evenly spread
energy. So is tidal, wave and future carriers during the last century and are over the world. The resources are freely
ocean current power. concentrated forms of solar energy that available to all and sundry. But the capi-
has been stored over 500 million years. tal costs of the technologies to harness
Photosynthesis is energised by solar It took only about one century for human- the free energies are currently often a
energy and plants are at the base of our kind to spend the easily accessible part barrier because the economies of scale
food chain, supporting all levels of life, of this finite resource in a rather ineffi- have generally not yet taken effect.
including our own. All organic or bio- cient way. A significant dependent infra-
mass materials derive from solar energy. structure has been built around this, The pressing challenge and top priority
from the oil exploration to extraction, to humankind is to move away from
The sun has been, and will be, the pri- refineries, pipelines, filling stations and squandering the sun’s stored energy by
mary energy source on earth and our engines. transitioning to the universal use of re-
solar system. newable energy from the sun.

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Aim, Scope, Delimitations

This White Paper is inspired by the ethic Many are former colonies, speaking Terminology, units, and conversion
of the responsibility placed on the deci- English, French, Portuguese and Spanish factors
sion-makers of the developing nations. next to their indigenous languages.
In a world of present material want, it is The International Standard Organisation’s
not always easy to practice global soli- This White Paper is written for an inter- (ISO) Système International (SI) units have
generally been used. In energy parlance,
darity on issues about the future. national organisation, and builds on
work performed at a rate of 1 Joule/second
experience gained in both worlds.
(J/s) is one Watt (W) of power. One Watt
The purpose is to highlight the growing over one hour is one Watt-hour (Wh). One
worldwide momentum in renewable The paper is mainly addressed to the thousand Watt-hours is one kilowatt-hour
energy policies and application, to share energy policy decision-makers, but also (kWh). While this is the familiar unit of electri-
the lessons learned that are applicable to stakeholders interacting with them. city, the SI consistently uses the Joule, in
to the developing countries, to identify Therefore, technical details have been increments of thousands:
the benefits already known to accrue kept to the essentials needed for infor-
from these early steps, and to assess med debate and decision-making. kilo = 103
Mega = 106
the most appropriate policies to guide
Giga = 109
the transitioning of developing countries. While great care has been taken to pre-
Tera = 1012
The scope of the White Paper pertains sent objective data obtained from many Peta = 1015
exclusivwely to developing countries. scientific sources, the style deliberately Exa = 1018
avoids overkill with references. Essential
There are various ways of defining these. sources have been given at the end of One kWh is 3.6 MJ or 3.414 Btu (British
The World Bank (2003) uses world de- this paper. thermal unit).
velopment indicators, one of which is One kWhe is one kWh of electrical energy.
the annual gross national income per One kWht is one kWh of thermal energy.
One Quad (1015 Btu) converts to 1.055 EJ.
capita. This indicator is then used to Structure of what follows
One Million-tonnes-oil equivalent (Mtoe)
group nations into “low income”, “lower
is 41.868 PJ.
middle income”, “upper middle income” The introduction is followed by contextu-
and “high income” categories. alising the developing world in the global Temperatures are measured in degrees
energy transition, and the motivation of Celsius (°C); temperature differences in
The United Nations Development Pro- its urgency. This is followed by an outli- Kelvin (K).
gramme (2003) categorises 137 “De- ne of the relevant technologies and their Where United States dollars (US$) are men-
veloping Countries”, 49 ”least developed current status, as well as an explanation tioned, the values relate to the context time.
countries”, 27 “central and eastern of the drivers towards renewable ener- UK spelling is used.
Abbreviations have been reduced to a mini-
Europe and the Commonwealth of gies and the need to set national targets
mum and are found at the end of the White
Independent States” (CIS), 30 “OECD within global guard rails.
countries”, and 24 “high-income OECD
countries”. For the purpose of this White The main part of the text pertains to
Paper the UNDP term “developing and policy options and market based incenti-
least developed countries” will be used ves. The contribution of research, deve-
(Annexure A). The term “developing lopment and demonstration is indicated,
world” is used to describe a total group, followed by examples of national renew-
while “developing nations” is understood able energy policies.
as a synonym. Some writers also refer
to the “third world”.

Geographically, the developing countries

are concentrated in Latin America, Africa
and southern Asia, where about three
fifths of the world’s population live.

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Introduction: The Developing World

in the Global Energy Transition

The majority of the global population lives The economies of developing countries Infrastructure is often elementary, with a
in the developing world. It is in the direct are heavily dependent on agriculture – scarcity of skills in engineering and tech-
global interest that the renewable energy often at the subsistence level, with mining nical or professional skills to execute its
transition be immediate, rapid and orderly. where mineral resources have been design, building and maintenance.
This requires shouldering the responsibili- explored. Beneficiation through seconda-
ty of both national policies and internatio- ry industries is rarely found, but tourism
nal cooperation. plays an important role.

It has often been stated that if the de- Renewable Energy Markets in Developing Countries
veloping world were to follow the energy Application Indicators for existing installations and markets
profligate example set by some industria- (as of 2000)
lised nations, the global impact would Rural residential & Over 50 million households are served by small-hydro
be devastating. The developing nations community lighting, village-scale mini-grids.
accuse the industrialised nations of de- TV, radio & telephony 10 million households receive lighting from biogas.
stroying the environment by over-con- 1.1 million households have solar PV home systems or
sumption, while the industrialised nations solar lanterns.
accuse the developing nations of destroy- 10 000 households are served by solar, wind and diesel
ing the environment by over-population. hybrid mini-grids.
Both are right. There are 200 000 household wind generators in China.
Rural small industry, Up to 1 million water pumps are driven by wind turbines,
Biomass Supply as a Percentage
agriculture, and other and over 20 000 water pumps are powered by solar PV.
of Total Primary Energy Supply,
productive uses Up to 60 000 enterprises are powered by small-hydro
1971 and 2001
village-scale mini-grids.
Region 1971 [%] 2001 [%] Thousands of communities receive drinking water from solar
OECD 2 3 PV powered purifiers and pumps.
Non-OECD Europe 4 5 Grid-based bulk 48 000 MW installed capacity produces 130 000G Wh
Latin America 31 18 power per year (mostly small hydro and biomass, with some
Asia 48 25 geothermal and wind).
Africa 62 49 More than 25 countries have regulatory frameworks for
(IEA, 2003 in Karekezi, 2004) independent power producers.
Residential & 220 million households have more efficient biomass stoves.
Commercial cooking 10 million households have solar hot water systems.
As the world moves towards the global & hot water 800 000 households have solar cookers.
village in terms of modern communica- Transport fuels 14 billion litres per year ethanol vehicle fuel is produced
tion, the sense of sharing one planet from biomass.
increases, as illustrated by the worldwide 180 million people live in countries mandating mixing of
reaction to the recent Tsunami catastro- ethanol with gasoline.
phe. Concerns about our common future (Adapted from: Martinot et al, 2002 in Johansson, 2004)
have not reached that level of newswor-
thiness yet.

There are very pronounced dissimilarities

between developing countries with
respect to prosperity and stability resul-
ting from foresight, methodical planning,
initiative, tenacity, responsibility, entre-
preneurship and discipline. There are
such large dissimilarities in the rate and
direction of change that the term develop-
ing countries becomes questionable. On
the other hand, there are similarities:

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Introduction: The Developing World

in the Global Energy Transition

The human cultural aspects and arts of poses a huge challenge to the develop- The insight that the developing world
language, crafts, politics, religion are ing world – and the industrialised world. does not necessarily have to follow
often more appreciated and nurtured. down the energy route of the industriali-
This includes the fine art of manipulating It should be stressed that the developing sed nations, but can learn from their
potential donors. world is not simply a poor man’s version experience and mistakes, offers a uni-
of the industrialised world. It is not a que opportunity. This is enhanced by
Unsurprisingly, statistics and data in world predominantly driven by the belief the Kyoto Protocol’s Clean Development
the developing world are problematic. in the protestant work ethic, entrepre- Mechanisms.
Agricultural products are often bartered; neurship and personal responsibility or
income statistics of the secondary eco- by the money value of time. It does not Combining the rapid advancement of
nomy are hard to come by. Surveys are believe that all human issues can ultima- renewable energy technologies in the
infrequent and discontinuous, since tely be solved in a technological manner. industrialised world with the largely
small businesses have no incentive to In general, women are the maintainers of untapped renewable energy resources,
respond to surveys, let alone report their traditional culture values where the weal while building local capacity in the deve-
incomes. of the family in the household plays the loping world, will demand a concerted
central role. effort of both parties.
While the primary energy source for many
millions in the developing world is fire- In stable communities, the religious The neo-colonial treatment meted out by
wood and biomass, it is increasingly grouping or the tribe is often the ultimate some of the industrialised nations to the
being used unsustainably. The transition reference and authority, while the house- developing nations has led to growing
to sustainable energies and the simulta- hold with the extended family is the last bitterness. In this framework the
neous elimination of material poverty resort when things fall apart. one–sided interpretation of “liberalised

Women in the South Energy and women in the developing world

Women carry a physical and metaphorical burden in energy provision. Of the 1.3 billion people who live in poverty, 70 % are women; and
In rural areas, it can mean spending several hours a day collecting fuel- approximately one third of households in rural areas have female
wood loads of 20kg or more. In urban areas, it can mean juggling with heads. Many of these women are more disadvantaged than men in
tight household incomes to buy charcoal or kerosene. Many of these similar circumstances, for example women’s access to and control
tasks are demanding of both human energy and time, and they dispro- over resources such as land, cash and credit is more limited than
portionably affect women’s health compared to men’s. For example, men’s. Women’s technical skills are often less than men’s, for example
the higher level of lung and eye diseases suffered by women as com- compared to men, women’s reading levels are lower and they have
pared to men are attributed to the longer hours of exposure to smoke less experience with hardware. This means that when making energy
in kitchens (Smith, 1999). Fuel collection also reduces the time women interventions to help people move out of poverty, the ability of women
have available for contributing to other aspects of livelihood strategies. to respond is more restricted than men, and special elements need to
be included in projects and programmes to address these gender dif-
Women in the South are also responsible for a number of other survival ferences to ensure that anyone who wishes to participate and benefit
tasks needed to sustain the household, such as water collection and is not excluded on the grounds of lack of assets.
food processing. Again, many of these tasks are demanding of both (Clancy, 2004)
human energy and time. Energy interventions, many using renewable
energy, are available that would do much to reduce the drudgery invol- Energy Project Contributes to Women’s Empowerment
ved in these daily household activities. A number of the tasks would in Kenya
easily be served by diesel engines for example; the preparation of
many staple root crops takes an hour of vigorous pounding, which Thirteen women’s groups (200 people) have been trained in making
could be simply replaced by milling. The renewable energy community stoves in the Rural Stoves West Kenya project, and many have also
needs to play more attention to the promotion of bio-fuels, such as benefited from business management training. Production is estimated
biogas and vegetable oil, as a diesel substitute. The whole issue of at 11 000 stoves annually; the profit generated by the stoves is com-
women’s time and effort saving (that is, the reduction of drudgery) parable to wages in rural areas. As a result, the women potters have
seems not receive the attention it deserves. Reducing women’s drudg- gained in status, self-confidence, and financial independence.
ery by providing improved access to energy services for lighting, cook- (ITDG, 1998 in Clancy 2004)
ing and productive activities should have a significant positive effect on
women’s education, literacy, nutrition, health, economic opportunities,
and involvement in community affairs which, in turn, will benefit all
family members.
(Clancy, 2004)

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trade”, where powerful nations see A global race towards renewable energy long-term risks and opportunities. It will
themselves as being above the interna- (RE) has already started. Some nations be shown that the long-term risks of
tional law, unilaterally abrogate inter- and some international corporations are renewable energy policies are signifi-
national conventions and regard the positioning themselves to take advanta- cantly lower than policies built on fossil
world’s natural resources as their birth- ge of the inevitable transition, and of the fuels. Since renewable energy technolo-
right, has undermined the esteem that concomitant new technologies. There is gies have been tested for feasibility in
the industrialised world used to enjoy. In no time to be lost, since the peak of oil the world markets, and since apposite
this vein, the question arises what production is most likely to occur within policies have been tried and tested, the
developmental benefit will remain in the the current decade (Heinberg, 2003). near-term risks of adoption are lower
developing oil rich countries once the The later the transition, the more painful than those of procrastination. Laggards
precious black gold has been exploited. it will be. in the transition are not retarded by
The irony is that these countries happen techno-economic or resource barriers,
to have exceptional renewable energy The cycle of change in energy technolo- but by a lack of awareness, information
potential. gies has been shown to last about half a and political vision or will.
century, or two human generations. That
Fortunately, the governments of a few is the planning horizon of wise govern- Initially, the visible growth of a new ener-
industrialised nations have taken the ments. Long-term thinking is what sets gy technology seems imperceptively
lead of the inevitable energy transforma- the true statesman apart from the mere slow. When it reaches about 16 % mar-
tion that is likely to bring sustaining bene- politician. ket penetration, development happens
fits to the developing nations. The early in leaps and bounds until saturation is
birds will not be sorry. In contrast with the private sector, go- reached. By 2030 we can expect to
vernments think of both the short- and observe renewable energies in the main-

Women’s Time and Physical Energy, not Fuelwood, are the Kenya Ceramic Jiko (Improved Charcoal Cookstove)
Key Needs

A study by Mehretu and Mutambira (1992) measured the time and The Kenya Ceramic Jiko (KCJ) is one of the most successful African
energy used by different family members in transport connected with stove projects. It is made up of a metal cladding with a wide base and
regular household activities. Chiduku Communal Area in eastern a ceramic liner. At least 25 percent of the liner base is perforated with
Zimbabwe is a resource deficient area with a high population density. holes of 15mm diameter to form the grate. The stove has three pot
There is no electricity, and kerosene, which is used only for lighting, is rests, two handles, three legs and a door controlling the airflow. The
very expensive. standard model weighs about 6kg, which means it can be carried
around easily (KENGO, 1991; Karekezi and Kithyoma, 2002).
Seven routine trip-generating household activities were This stove is used for cooking and space heating. The KCJ directs 20
considered: to 40 percent of the heat from the fire to the cooking pot, replacing
stoves with only 10 - 20 percent efficiency. Open cooking fires, yield
Activity Total week’s Female Female Energy
efficiencies as low as 10 percent (Kammen, 1995). The cost of the
household share of Contribu-
stove is about US$ 2, which makes it accessible to the majority of the
[kWh] time [h] tion [%] [kWh]
urban population in Kenya, although this cost does not include fuel
Fetch water 10.3 9.3 91 2.15
costs (charcoal).
Do laundry 1.3 1.1 89 0.26
Manufacturing the KCJ is now a relatively mature cottage industry. As
Fetch firewood 4.5 4.1 91 0.92
expected, the level of specialisation in the manufacture of the stove
Graze livestock 7.7 3.0 39 1.44
has increased, as has the level of mechanisation. A division of labour is
Water livestock 6.9 2.3 39 1.28
now discernable. Shauri Moyo is the principal artisan production centre
Visit local market 15.0 9.5 63 3.08
in Nairobi, where there are artisans who purchase clay liners and metal
Visit regional market 0.3 0.2 61 0.07
claddings, assemble and retail complete stoves to customers. There
(Clancy, 2004)
are mechanised manufacturers and semi-mechanised producers in
Nairobi. It is estimated that mechanised producers are manufacturing
close to 3 200 liners a month. Semi-mechanised producers are now
producing an estimated 10 600 liners per month.
Based on achievements to date, the KCJ is considered to be a suc-
cess story. However, there are constraints, with quality control being
one. It is estimated that the market penetration in Nairobi is 50 %.
(Karekezi, 2004)

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Introduction: The Developing World

in the Global Energy Transition

When coal fired steam engines were in Most developing countries are situated Where developing nations indulge in
general use, the first petrol driven machi- in areas with high renewable energy nuclear ventures, their costs to the tax-
nes were met with ridicule. Powerful resources, notably wind and solar payer always by far exceed public
vested interests in the established tech- radiation. monies invested in sustainable energies.
nology tried to influence public opinion Solar radiation and other renewable Nuclear energies can never hold their
and government decision-makers to energy resources are more equally own in free energy markets. Meanwhile,
believe that future will be very much like distributed than oil, coal, gas or urani- the serious accidents of Three Mile
the present, only more so. um. This means that by transitioning Island and Chernobyl have happened in
to renewable energy, developing supposedly sophisticated countries,
Today, we know that the tide is turning nations are less exposed to imported where levels of technological and safety
inexorably towards renewable energies. energy costs. Renewable energies awareness are said to be higher than in
There will be winners and losers, and also reduce the pressure on fossil developing countries - not to mention
the major losers will be the ones domi- fuels and are therefore less exposed the risks of terrorism and unresolved
nant today. to armed conflicts over scarce problems with decommissioning and
resources. spent fuel storage. The insurance of
To the developing nations – too often at such venture is not carried by private
the receiving end of global trends – this Developing nations generally have insurance companies, but by the unsu-
transition offers unique opportunities. invested little in energy R&D. This specting citizens.
represents a disadvantage because
Significant population or business patents and royalties have to be paid Nuclear hydrogen production used to be
growth happens in many parts of the for. Many contending patents that will proffered as a future possibility. However,
developing world, but relatively low shape the next decades have already less expensive methods through renew-
investments have been sunk in infra- been developed and registered. But ables have been found.
structure. Instead of now investing in the developing nations do benefit from
the technology of the past, developing mature technologies without having It seems that nuclear not only has a bad
nations can leapfrog to the application contributed to the R&D costs. press but also has rather limited justifi-
of the most modern renewable energy cation in the developing world where it is
technologies (RETs). Using cellular The transition to renewable energies unsuitable for rural energisation. Rural
telephones instead of expensive and has been retarded by the inertia of energization is linked to poverty eradica-
vulnerable old copper wired landlines, established systems and by artificial tion, the major priority of the developing
illustrates the point. The concept of government endorsed market distortions world.
big centralised coal or gas-fired power persistently subsidising the fossil and
stations is likely to be outmoded for nuclear industries. Today’s fossil based A combination of energy conservation,
the developing world, regardless of energies appear to be cheap because energy efficiency and renewable energies
what their pundits may say. they do not account for the real social, presents a much more environmentally,
environmental or military costs of these socially and economically sustainable
Developing countries stand to benefit energies. Accounting for these factors energy path in the developing world.
from the Kyoto Protocol and Clean would double fossil energy prices in
Development Mechanism (CDM). It many parts of the world (van Horen,
is still too early days to see how this 1996).
agreement unfolds in reality, but it is
to be expected that CDM projects will Furthermore, governments routinely
increase the use of renewable ener- grant massive direct as well as indirect
gies. The downside is that govern- subsidies through protecting monopo-
ments might hesitate to implement lies, granting financial backups, ignoring
sustainable energy policies for fear of the value of chemical feed-stocks and
falling prey to the “additionality “ the value to future generations.
clause of CDM.

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Why it is Essential to Transform the Developing

World Energy Systems Now

The key drivers of the transformation in According to the World Health Organ- A rapid and sustained transformation to
the developing world are poverty eradi- ization, air pollutants and emissions from energy efficiency and renewable energy
cation, risk avoidance and protecting of burning biomass and coal cause the is an absolutely essential stabilising step
natural life supporting systems. These death of 1.6 million people annually, towards development and the improve-
concerns are shared with the industri- significantly more than the number of ment of the quality of life.
alised world, but the priorities differ rad- deaths ascribed to malaria.
ically. In the developing world the most
pressing issue of poverty overshadows Women, who have to bear the house- Risk reduction
other considerations. hold chores of firewood gathering, forfeit
the opportunity of education and the Conventional energies and systems
potential of gainful employment. Better have associated risks. These may relate
Energy and poverty education of women and higher house- to pricevolatility, economic and socio-
hold incomes are powerful factors in political instability, security, development
Improved access to clean modern stabilising the number of children born and technical failure.
energy in developing countries is a fund- into the poverty trap.
amental step to poverty reduction and Most developing nations are coal and
key to attaining the United Nations Mill- The unsustainable use of firewood is oil importers, exposed to the volatility
ennium Development Goals. About 2.4 a contributing factor to desertification, of markets. The risk of price volatility
billion people, notably in rural areas of which again accelerates the downward to macro-economies is considerable
Asia and Africa depend, on traditional poverty spiral. and can destabilise whole regions
biomass in the form of firewood, charco- (Awerbuch, 2003).
al, harvest residues and dung used for Poverty in rural areas hampers access to
cooking and heating. electricity that is associated with modern There are currently no reasons to believe
communication and information tech- that the prospects for lower oil price vol-
About 35 % of the energy typically der- nology. It also constrains the productive atilities and prices are auspicious.
ives from these sources. In parts of application of energy, especially in the Therefore, developing countries produ-
Africa, it reaches 90 %. As a rule, this secondary and tertiary value adding cing their own renewable fuels are better
biomass is burned with low efficiencies sectors. buffered.
of only 10 to 15 %, while high levels of
indoor pollution from open fires lead to Renewable energy has been demonstra- In addition, imported fossil fuels (or
health problems of the persons exposed, ted to deliver clean, sustainable and nuclear energies) entail money flows
mostly women, children and the elderly. cost-effective energy services, providing leaving the country. A primary reason for
a necessary - albeit insufficient - base the national debt of developing countries
for poverty reduction and development. is attributable to imported fuels, which

Large Cardamon

Researchers at The Energy and Resources tonnes of fuelwood is wasted every year The results of this new technique are
Institute (TERI), New Delhi, have now per- for drying large cardamom in Sikkim alone, astounding:
fected an entirely new way of drying and owing to the primitive curing technique,
curing the spicy Large Cardamom cash which involves burning of big logs of wet Rich natural colour (reddish) to the fruit,
crop. Presently, over 250 systems could be wood in traditional ‘bhatti’ – brickwork or 35 % more oil content, absolutely no burnt
found in the fields of Sikkim. Used widely in masonry ovens – and passing the resulting smell, large batches, and an incredible
India as a main spice ingredient in Mughal smoke through a thick bed of cardamom 50 - 60 % saving of the fuelwood. Using
cuisine and other non-vegetarian dishes placed on a mesh structure made of bam- similar low cost gasifier-based systems for
throughout the country, large cardamom is boo lattice. Apart from consuming large thermal applications in rural agro-based
currently priced around Rs 70 000 a ton. amounts of fuel wood, the traditional tech- industries like ginger, tobacco, cashew, can
Pakistan, Afghanistan and the middle east nique results in non-uniform drying, leading go a long way in alleviating the problem of
are the main export markets. to poor quality cardamom that has a rapid deforestation caused by inefficient use
charred and smoky appearance, low oil con- of fuelwood. It can also create additional
The traditionally, popular large cardamom tent, and burnt smell. Besides, the primitive income in these sectors.
curing techniques result in inordinate am- smoking method, the risk of raw material (Karekezi, 2004)
ounts of wastes of both raw material and catching fire is high, as flame control is
fuelwood. An estimated 20 000 metric very poor.

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 14

Why it is Essential to Transform the Developing

World Energy Systems Now

effectively amounts to job opportunity This reduces the risk of NIMBY (Not Protection of natural life supporting
losses to the national economy. Un- In My Back-Yard) or BANANA (Build systems
employment deepens poverty and often Absolutely Nothing Anywhere Near
adds to social and political instability. Anything) objections to independent Subsistence and commercial agriculture,
power producers. Where local farmers, as well as (eco)tourism are the economic
Those developing nations that are rich cooperatives and individuals are encou- life-blood of most developing countries.
in fossil energy resources have often raged to feed renewable energy into the
made the bitter experience that their grid, local resistance is much reduced. According to the world’s most know-
national security is at risk. Political and Mini PV power stations on consumers’ ledgeable scientists of the Intergovern-
military interventions by powerful inter- roofs do not expose utilities to the risk of mental Panel on Climate Change (IPCC),
ests present an undeniable threat to prolonged, acrimonious and very costly the bulk of global warming of the last
smaller nations, and to world peace. land acquisition and approval procedu- 50 years is attributed to human activities
Reducing dependency on regionally res. and is strongly fossil energy related.
concentrated oil reserves represents a
contribution towards reducing the risk While many developing nations may have The impact of climate change on agri-
of local and global armed conflicts. Iron- aspired to the “ideal” of the nineteenth culture, tourism, health (tropical disea-
ically, such armed conflicts are extreme- century technical approach of the elec- ses) will be more severe in developing
ly energy intensive and eventually have tricity grid, the dramatic blackouts in the countries than on the rest of the world.
to be paid for. United States on 14 August 2003 made This was illustrated by the recent floods
people aware of the risks involved. Within highlighting how rising water levels and
Conventional centralized power stations, about 150 minutes five key transmission sudden climate events can take develo-
especially nuclear power stations, trans- lines, three coal-fired power plants, nine ping countries by surprise. Such climate
mission lines and substations present nuclear power plants, and an important changes will cause large-scale uprooting
the risk of easy targets to terrorism. switching station, were not functioning. and migration of entire regions’ popula-
Developing nations are not immune to Eventually over 100 power plants (inclu- tions.
such attacks. Distributed energy genera- ding 22 nuclear) in the US and Canada
tion through renewable energy is practi- were off line. No less than 50 million While of the worst global polluters situa-
cally invulnerable, since potential targets Americans and Canadians were without ted in the northern hemisphere might
are distributed, small, modular and easily power, leaving a wake of US$ 5-6 billion even benefit from a warmer climate, they
replaced. damage. An investment of US$ 6 billion will find themselves swamped by climate
in renewable energy would not only have fugitives who literally have nothing to
Many dispersed renewable energy avoided the loss, but also would proba- lose.
power producers not only reduce the bly have put the US on the map as a
risk of terrorism but also ensure buy-in renewable energy nation. Barely one The long phase delay of the global cli-
of numerous small-scale stakeholders month later it was Italy’s turn, leaving mate system conceals its insidious natu-
who directly benefit from feeding energy 58 million Italians without power. Both re. By the time the voting citizens realise
into the grid. the USA and Italy are highly industriali- the irreversible impact of climate chan-
sed countries with excellent renewable ge, it is much too late for political action.
energy resources. Technical failures of Therefore the precautionary “no regrets”
prolonged blackouts and brownouts are principle imposes an obligation on
commonplace in the developing world, governments to act without delay. It is
adding an element of frustration and risk not inconceivable that neglecting this
to grid power users and potential obligation today may lead to litigation in
investors. future.

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 15

Government policy opportunities As energy awareness increases, people For governments in the developing world
become more discerning buyers of ener- there is a distinctive advantage in having
Developing countries enjoy unique policy gy consuming products. The fuel con- objective baseline figures of external
opportunities of using the Kyoto Protocol sumption of motor vehicles illustrates the costs, including carbon dioxide equiva-
and the growing global energy aware- point: Energy efficient vehicles success- lent emissions, as this greatly expedites
ness to implement their own develop- fully take market share from gas-guzz- CDM procedures.
mental and security of supply agendas. lers.
The above instrument can be used to
The Kyoto Protocol officially came into Energy labelling of appliances, motors enhance the national security of energy
force on 16 February 2005. It is desi- and even buildings contributes to lowe- supply through renewables.
gned as a mechanism, which can help ring the national energy intensity, and
industrialised nations to achieve their hence improves the international compe-
agreed Greenhouse Gas (GHG) reduc- titiveness of those proactive nations.
tion targets by buying into relatively che- Governments have an opportunity to
aper carbon reduction initiatives in the enhance their international competitive-
developing world, thereby also making a ness by introducing mandatory CO2
contribution to much needed develop- ratings on energy consuming systems.
ment. This improves efficiency while ensuring
It is not intended to replace Development the national growth of work opportuni-
Aid of Direct Foreign Investment. A ties.
Designated National Authority (DNA) has
to be appointed by the host country to The production of all commodities and
ensure that the Clean Development consumables, from bricks to tomatoes,
Mechanism (CDMs) does satisfy the requires energy. This is called the embo-
national sustainable development crite- died energy content. Products that are
ria. Local Non-Government Organ- made energy efficiently, using locally
isations (NGO) normally play a crucial produced renewable energy, or recycled
role in representing civil society’s voice. materials obviously contribute to the
An important further aspect is the national energy stability and economic
“Additionality” condition, stating that it growth.
must be shown that the project is addi-
tional, meaning it would not have happe- The prices of conventional fuels do not Energy efficiency improvements
ned without CDM support. However, the tell the truth, because they do not reflect
understanding is that this clause should the “external” costs. These are the long- In the near future, the amount of primary
not discourage developing nations from and short-term health costs, environ- energy required for a given energy service
introducing renewable energy policies. mental costs and lost opportunity costs could be cost-effectively reduced by 25 to
The current phase needs to be renewed borne by all society, whether they bene- 35 percent in industrialised countries (the
in 2012, and the expectation is that the fit from the energy consumption or not. higher figure being achievable by more
effective policies). In transitional economies,
scope will have to be enlarged if it is to Currently we choose to ignore this real
reductions of more than 40 percent will be
make a significant impact. While there is cost. Ironically, a society that could put
cost-effectively achievable. And in most
presently not much experience to learn men on the moon contended that exter- developing countries – which tend to have
from, it seems that transaction costs are nal costs are too difficult to calculate. high economic growth and old capital and
high. This initiative has the potential to Governments have an opportunity to vehicle stocks – the cost-effective improve-
become a major driver of change establish and update the externality ment potential ranges from 30 to more than
towards renewable energy and energy costs of conventional energies. If the 45 percent, relative to energy efficiencies
efficiency. true external costs are included in fossil achieved with existing capital stock.
fuel prices on a net present cost basis, However, when this potential is made use of
there will still remain 20 to 40 percent in 20
then even more renewable energy tech-
years time due to technological progress.
nologies are cost competitive than the
(Johansson et al, 2004)
current ones.

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 16

Renewable Energy Resources:

Technology Status and their Sustainable Potential

This section provides an overview of The potential in the industrialised world Unfortunately, large dams do have neg-
renewable energy technology options has mostly been utilized, delivering 19 % ative side effects: Land and ecosystems
and their potential contribution to energy of the world’s electricity and the lion’s are lost, drainage systems and sedimen-
sustainability, as well as their impacts. share of today’s commercial renewable tation are radically altered. Annually,
The German Advisory Council of Global energy. This constitutes about one third 0.5 - 1 % of capacity is lost through
Change (WBGU 2004) recently publis- of the global potential of 150 EJ, whilst siltation, which is also lost downstream,
hed a detailed global analysis, which is the remainder is untapped in the develo- impacting significantly on its biodiversity
used in the following: ping world, mainly South America, Asia and estuary stability. Organic material,
and Africa. rotting in shallow reservoirs of warm
regions, releases GHGs. Modern dams
Hydropower Hydroelectric technology is mature and have a failure rate of 0.5 %, excluding
extremely reliable, but requires very high the effects of climate change, war and
Worldwide, about 45 000 large dams initial investments, with low maintenance terrorism. In warm climate areas, dams
have been built for electricity generation, cost. Its design life is more than a cent- lead to a tenfold increase in bilharziosis.
flood protection, water storage, agricul- ury. Natural and pumped storage dams Other increased health risks are malaria,
tural irrigation, navigable waterways are suitable for peak electricity demand. encephalitis, Rift Valley fever, filariosis,
and recreation. As a result of economies Hydropower is cheap – if calculated in blue-green algae and mercury leachate
of scale, approximately 97 % of hydro- the conventional manner. poisoning.
electric plants have a capacity in excess
of 10 MW. Other renewable energy sources
producing the same energy output, like
Strategic Principles in the Construction of Dams
wind and solar energy, would cover less
land than the Assuan Dam in Egypt.
1. Gaining Public Acceptance
Wide public acceptance of key decisions is imperative for equitable and sustainable water During the last century, 30 - 80 million
and energy resources development. people were adversely affected by large
2. Comprehensive Options Assessment dams. More than 1.1 million people will
Alternatives to dams do often exist. Needs for water, food and energy should be assessed be evicted by the Three Gorges Dam in
and objectives clearly defined. Furthermore assessments should involve a transparent and China. Awareness of the social and eco-
participatory process, applying economic, social and ecological criteria. logical risks of large dams and the politi-
3. Addressing Existing Dams
cal resistance to them has increased.
Opportunities exist to improve existing dams, address remaining social issues and The World Commission on Dams (WCD
strengthen environmental and restoration measures. 2000) highlights the sustainability pro-
blems and preconditions.
4. Sustainable Rivers and Livelihoods
Understanding, protecting and restoring ecosystems is important to protect the welfare
of all species and foster equitable human development. Dams with a capacity of less than
10 MW are considered to be less pre-
5. Recognising Entitlements and Sharing Benefits
carious. Given the above considerations,
Negotiations with adversely affected communities can result in mutually agreed and legally
the current hydropower could be increa-
enforceable mitigation and development provisions. However, affected people need to be
among the first to benefit from the project.
sed sustainably by 12 EJ/a by 2030 and
15 EJ/a by 2100 (WBGU 2004).
6. Ensuring Compliance
Public trust and confidence requires that the governments, developers, regulators and ope-
rators meet all commitments made for the planning, implementation and operation of dams.

7. Sharing Rivers for Peace, Development and Security

Dams with a trans-boundary impact require constructive cooperation and good faith negotia-
tion among riparian states.

(World Commission on Dams, 2000 in Johansson et al, 2004))

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 17

Bioenergy energy technologies like biodiesel, bio- The sustainable potential is about
ethelene, wood pellets, municipal and 100 EJ/a, of which 40 % would come
Only one percent of the radiation falling industrial waste gas, biogas, methane from wood, and 36 % from energy
on plants is used in photosynthesis. Yet, and energy crop agriculture. crops. A notable 38 % of the global
this is the basis of the food chain on potential is already being utilized.
earth and the enormous source of Of the global potential land area, deserts (Table 3.2.9 WBGU: 60)
bioenergy. (19 %) and sloped land areas steeper
than 30° (11 %) as well as agricultural Biomass is being used unsustainably
A major part of the developing world land (12.5 %) must be excluded. This when consumption is higher than the
survives on freely collected traditional effectively leaves 322 million hectares natural replacement rate. In Asia the
bioenergy in the form of firewood, har- (2.5 %), yielding 6 - 7 t/a dry weight on non-sustainable use is 20 %, in Africa
vest residues and dung. This is a far cry average (WBGU: 60). 30 %, and in Latin America 10 %. This
from the sustainable use of modern bio- destroys forests, degrades soils, reduces
biodiversity and harms watercourses,
Potential Energy Savings in Developing Countries from Improved Cookstoves the destruction of which impacts on
natural life-supporting systems, including
Rural household Efficiency Energy Maximum fuel- human existence.
bioenergy use Improvements savings wood savings
[Mtoe] [%] [Mtoe] [Mtoe] Indoor air pollution from open fires cau-
China 198 20-30 40-59 180 ses intolerable health effects on about
India 168 20-35 34-59 178 half the world population, mostly women
Latin America 28 10-40 3-12 36 and children. About 1.6 million die annu-
Africa 116 30-40 35-46 141 ally. For every child that dies as a result
(IEA, 2001 in Karekezi, 2004) of air pollution in Europe 270 die in
Southern Africa.
Biomass-based Power Generation in Developing Countries

1995 2010 2020 The global longer-term production

China potential of traditional biomass is
Biomass-based power generation (TWh) - 0.4 0.7 estimated at 5 EJ/a.
% of total electricity generation - 1.7 % 1.8 %
Biomass used in power generation (Mtoe) - 0.1 0.2
East Asia
Biomass-based power generation (TWh) 0.3 0.6 1.5
% of total electricity generations 0.0 % 0.0 % 0.1 %
biomass used in power generation (Mtoe) 0.3 0.7 1.7
South Africa
Biomass-based power generation (TWh) - 4.6 7.3
% of total electricity generation - 0.4 % 0.4 %
Biomass used in power generation (Mtoe) - 2.0 3.1
Latin America
Biomass-based power generation (TWh) 9.6 13.1 17.1
% of total electricity generation 1.2 % 0.9 % 0.8 %
Biomass used in power generation (Mtoe) 3.3 4.5 5.8
Biomass-based power generation (TWh) 0.3 0.6 0.6
% of total electricity generation 0.1 % 0.1 % 0.1 %
Biomass used in power generation (Mtoe) 0.4 0.8 0.8
Total developing countries
Biomass-based power generation (TWh) 10.2 19.3 27.1
% of total electricity generation 0.3 % 0.3 % 0.3 %
Biomass used in power generation (Mtoe) 4.0 8.1 11.7
(IEA, 1998 in Karekezi, 2004)

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 18

Renewable Energy Resources:

Technology Status and their Sustainable Potential

Electricity production from biomass Wind energy

Bagasse is the by-product from sugarcane crushing; It corresponds to around 30 % (in weight, In the developing world, very good wind
50 % wet, LHV=1 800 kcal/kg) of sugarcane. This is used for cogeneration (thermal/electric sites are found in the Southern tip of
energy) in the sugar/alcohol mill. Because bagasse production is high (for an average Brazilian Latin America, with good coastal sites
production of 300 million tonnes of sugarcane, 90 million tonnes of bagasse are produced), its
elsewhere. Many wind sites in the deve-
use has always been inefficient. Low-pressure (20 bar) boilers and low efficiency steam turbi-
loping countries have not been asses-
nes are common in most Brazilian mills. Also, both thermal and electric energy consumption in
the sugar/alcohol process are high: Around 500 kg of steam (at 2.5 bar) and 15 - 20 kWh of sed. In some cases weather stations’
electricity per tonne of crushed cane. data are unreliable as a result of sur-
rounding urbanisation, or lack of calib-
Until the end of the 1990s there was no interest from the owners of sugar mills in selling sur- ration.
plus electricity generation to the grid. Local utilities also did not consider this option seriously.
Despite the commercial availability of more efficient cogeneration systems, cultural aspects and Small wind speed differences make a
the lack of an institutional framework hampered implementation. Today the situation in Brazil very big difference because the energy
has changed. The Brazilian Development Bank (BNDES) launched a programme, allowing
contained in the wind increases with
special credits for biomass power plants selling electricity to utilities or engage in its direct com-
the cube of the wind speed. A maximum
mercialisation, encouraging the introduction of more efficient technologies.
of about 59 % of the energy can be
In the interlinked system, the energy sector’s reformulation process, conceived at Federal level, extracted (Betz number). For this reason,
has accorded special status to renewable energy sources. A recently approved Federal Law good wind sites are important, and
10438/02 creates incentives for alternative electricity generation (PROINFA - Programa de this has contributed to the interest in
Incentivo a Fontes Alternativas). offshore wind parks. Modern horizontal
axis machines have thin aeroplane type
The PROINFA plan is divided into two phases. In the first two-year phase, long-term contracts blades whose tips are moving faster
(of 15 years) are supposed to be made over 3 300 MW by the Eletrobrás (Holding of the
than wind speed. The nacelle contains
Brazilian Power System). The fixed amount is supposed to be achieved equally by the following
the generator, with some designs nee-
energy sources: wind power, small hydropower projects and biomass. Acquisition of this ener-
gy will be defined by the economical value for each specific technology. This value is set by the
ding no gearbox. Their mean rated
Ministry of Mines and Energy, but has to represent at least 80 % of the average national tariff to capacity has grown within three deca-
the end user. des from 30kW to 3MW, with 5MW
units in the offing. Owing to wind fluctu-
After the first 3 300 MW, the second phase will begin. A programme is designed so that the ations, the average annual output is
wind energy, small hydropower and biomass will achieve 10 % of the Brazilian power produc- 20 - 25 % of the rated power on land
tion. This goal is aimed to be reached within the next 20 years, as in the first phase with sites, and 30 % offshore. Operating
contracts over 15 years. The price of the purchased energy is determined by the economic
wind speeds are from 3 - 25m/s, and
value of the reference competing energy source, defined by the average costs of owner pro-
the average service life is twenty years.
duction by new hydropower projects with an installed capacity over 30 MW and new gas
power stations. Again, the Ministry of Mines and Energy determines the price. The regulation of
the PROINFA has been established in December 2003, and presents some inconsistent points, Other, more familiar, branches of wind
such as the definition of the economical value and environmental issues. (Coelho et al, 2003) energy technology are the American
windmill and small-scale wind chargers.
In Argentina there is a similar programme, which aims at a target of 8 % renewable energy in The former has enabled agricultural acti-
the national mix by 2013. It includes wind, solar, geothermal, tidal, small hydro (up to 15 MW) vities, wild life conservation and human
and biomass. (Salvatori, 2003) habitation in many areas of the develo-
(Karekezi, 2004)
ping world.

The footprint land-use of this technology

is minimal since the land can be used
for agriculture, often providing welcome
local incomes. Modern turbines have
already greatly reduced noise pollution,
which is less than traffic noise. The
impact on birds has been studied exten-
sively, and is significantly less than that
of existing transmission lines and motori-
sed traffic. Opponents have objected to

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 19

the visual intrusion of large scale moving Parabolic dish power plants grid-connected or stand-alone, where
objects in the landscape. Shadows and they can also be used for water pum-
reflections have also been regarded as Parabolic dishes track the sun and focus ping or other mechanical work. A
visual interference. the radiation on, say, a sterling engine storage battery is normally optional for
that drives a pump or generator. Most grid-connected systems, but is a neces-
Even under current distorted market current units are stand-alone systems of sity for stand-alone systems that need
conditions, wind generated electricity is 10 kW nominal capacity. This capacity autonomy. No battery is required for
cost competitive in many areas and its represents a useful size for remote rural water pumping and other daytime work.
energy payback period is short. Despite applications and farms. Currently, units
a stagnant phase of the world economy, cannot yet be bought off the shelf. PV arrays do not emit vibrations, noises
the wind industry showed very strong and pollutants during their operation.
growth. This means they can be integrated into
Solar power towers new and existing buildings, which then
Of the global technical wind energy become energy exporters instead of
potential (1 000 EJ) about 140 EJ may An extensive field of three-dimensionally consumers.
be sustainable. movable mirrors (heliostats) concentra-
tes solar radiation onto a central receiver PV cells are made of silicon, the second
situated on top of a tower. There the most abundant material on earth. How-
Solar energy heat exchange medium (air, water, salt) ever, scarce indium and tellurium are
is heated to 500 - 1 000 °C, driving a used in some cells. In sunny developing
In contrast with the previous technolo- gas turbine or combined cycle plant. countries the embodied energy payback
gies, direct solar energy is regarded as Molten salt is envisaged as a heat period is 18 months – an extremely
being practically unlimited. It is also storage medium in some cases. Typical short time in view of its proven service
abundant in the developing world, where grid-connected units would be 200 life.
its distributed nature is a bonus, given MWe.
the underdeveloped state of the service It is relatively easy to add PV units to an
infrastructure and man-made energy existing system, as demand grows (high
distribution networks. Solar chimneys/Green Towers modularity).

A large greenhouse surrounding a high The fact that PV systems are not cost-
Concentrated solar heat (CSH) chimney heats air that moves up the competitive with subsidised grid electri-
chimney, driving a wind turbine at the city has lead some developing countries
The largest existing centralized systems base. to introduce stand-alone PV systems,
use parabolic troughs that focus sunlight also called solar home systems (SHS) in
onto evacuated glass tubes carrying the In the Green Tower variant the green- impoverished remote rural areas where
heat to conventional steam turbines via house doubles up as an agriculturally system maintenance and social accep-
a heat exchanger. They produce chea- productive unit. Thermal storage enables tance must be expected to be proble-
per centralised power than photovoltaic- 24-hour energy delivery. The units would matic. By contrast, excellent market
systems (PV). Other variants directly be 200 MWe, grid-connected. penetration is being achieved internatio-
generate steam in the focal pipes. nally in grid-connected applications of
Another variant uses flat mirrors in a less sunny countries, where government
Fresnel arrangement, focussing sunlight Photovoltaics policy provides an enabling environment.
on passive absorber units. Yet another In the developing world with frequent
has static primary troughs with mobile Photovoltaic (PV) cells make up modu- grid brownouts and blackouts, PV unin-
secondary reflectors achieving very high les, are placed in arrays and convert terrupted power systems (UPS) make
solar concentration ratios. All these sunlight into direct current electricity sense.
systems are imminently suitable for without any moving parts. The semicon-
combined heat and power generation ductor materials are encapsulated and
(CHP) and take advantage of the esta- sealed hermetically. A long service life of Solar Water Heating
blished mass market of the conventional more than 25 years and usually equal
steam cycle. Supplementary power can warranty periods make this modern In developing countries, water heating
be provided by gas or, preferably, by technology increasingly attractive. With constitutes 30 - 40 % of the household
any suitable renewable energy. suitable electronics, PV systems can be energy consumption. In most cases, this

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Renewable Energy Resources:

Technology Status and their Sustainable Potential

is achieved by inefficient wood fires, gas General

or fossil fuel generated electricity. Ins-
tantaneous (“push through”) water Direct or open loop glazed flat plate
heaters are more efficient, but add con- systems can be used in thermosyphon,
siderable peaks to the municipal distri- pumped and integral units. With direct
bution system. Many electrical storage systems the water in the collector and
heaters in developing countries have the storage unit is the same. This is
high annual energy standing losses in cheaper, but may cause frost, corrosion
excess of 25 %. Such poor performance and scaling problems, unless suitable
is tolerated where energy prices are precautions are taken.
cheap or subsidised, where there is no
energy labelling, or where users do not In indirect systems a closed fluid loop
pay for the value of hot water. circulates through the collector, preven-
ting frost, clogging and erosion, but its
Solar Water Heaters (SWHs) normally initial capital cost is higher.
consist of a collector and a water stora-
ge unit. There are various established With solar combi systems the services of
types: domestic hot water and space heating
are rolled into one. This innovation re-
Unglazed collectors consist of simple duces the need for summer backup
black plastic absorbers through which water heating, but this is not yet esta-
water flows, driven by a thermosyphon blished in the developing world.
or a circulation pump. In low temperatu-
re applications of swimming pools, agri- All water heaters, including solar water
cultural applications and space heating, heaters, require maintenance of varying
such systems achieve high efficiencies degrees.
of 70 % for low temperature rises at low
cost. Unglazed collectors can also be The technology is mature and standards
used for night cooling. are available, yet conventional plumbers
may not be familiar with them.
Glazed flat plate collectors have a
slightly lower efficiencies than unglazed Although the availability of piped hot
collectors at low temperature, but with water is often thought to be a low
higher temperature differences between priority in low-income households, the
the inlet and outlet temperatures, they hygiene implications should not be
perform significantly better. If the collec- underestimated. Clean hot water for clo-
tor surface is treated with a selective thes washing and food preparation can
coating, radiation losses are reduced. hardly be classed as luxuries.
The average nominal efficiency of collec-
tors is 67 %.

Evacuated tube collectors are collec-

tors with an outer glass mantle maintai-
ning a vacuum. The inner collector may
be a single blackened tube containing
the heated medium (wet tube), two
tubes (feed and return) or an adjustable
selective fin with a heat pipe. Evacuated
tubes can reach the boiling point of
water and have almost constant efficien-
cies of 67 % across all temperature
differences between inlet and outlet

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 21

Geothermal of at least 3.6 if coal fired electricity is scenarios postulate that the developing
used in order to make up for the energy nations will follow the same route.
Underground heat below 100 °C can be transformation losses. In addition, the
used for water and space heating pur- environmental impact of extracting/ Solar space cooling would offer the
poses. At higher temperatures steam adding heat to the environment should attraction of the maximum cooling
can be used to generate electricity, but be considered carefully. The global demand coinciding with the maximum
considerable waste heat streams occur. geothermal potential is estimated at solar radiation. Regrettably, the techno-
Alternatively, cold water can be pumped 30 EJ/a. logy is underdeveloped. Solar cooling for
into hot rocks or into deep mines, when- food and medicine would satisfy an
ce it returns as hot water. Where steam urgent need in hot and tropical coun-
or hot water emerges naturally, the used Solar cooling tries. Cooling of food and medicines
water should be returned, since it often requires little energy, but has a signifi-
contains CO2 and other contaminants. A high cooling load triggered the peak cant impact. A heat pump must reject
Some of these technologies are under demand problem in California. The space heat to the environment. Therefore the
development. cooling demand grows as income levels machine must be driven at a higher tem-
and comfort demands increase, and is perature than the ambient temperature
Another approach uses near-surface compounded by global warming and (the condensers of fridges emit heat). If
heat through heat pumps, whose tech- urbanization. It is not unusual that fairly the same heat pump is used for heating,
nology is mature. These systems should inefficient air conditioners are used to then there is no heat rejection.
have a Coefficient of Performance (COP) cool thermally inefficient buildings. Many Therefore, cooling by one degree Kelvin
requires about three times more energy
Modern Biofuel Use in the Latin America Transportation Sector than heating by one degree Kelvin.

Examples of the use of biofuels for transportation sector in Latin America Countries can be
found in Brazil (with the alcohol programme) and in Argentina (with the biodiesel programme).
Brazil’s alcohol programme has recorded notable successes.
Solar in Buildings

The Brazil programme was initiated in 1975 with the purpose of reducing oil imports by produ- From cradle to the grave, buildings are
cing ethanol from sugarcane. It now delivers significant environmental, economic and social responsible for a significant proportion of
benefits. It has become the leading biomass energy programme in the world. Ethanol is used in the international energy consumption
cars as an octane enhancer and oxygenated additive to gasoline (blended in a portion of 20 to and peak demand. The procurement of
26 % anhydrite ethanol in a mixture called gasohol), or in dedicated hydrated engines. Since raw materials, production of building
1999, the Brazilian government eliminated control on prices, and hydrated ethanol is sold for
materials, transport, cutting to size, pla-
60 to 70 percent of the price of gasohol at the pump station, due to significant reductions in
cement, maintenance, demolishment
production costs. These results show the long-term economic competitiveness of ethanol fuel
when compared to gasoline (Goldemberg et al, 2002).
and recycling all consume energy. Some
building materials/components are inor-
The world leader on alcohol production continues to be Brazil, where alcohol prices are com- dinately energy intensive, like aluminium,
petitive, and the development of the new flexible fuel cars (FF) promotes greater ethanol use by plastics, cement and clay products.
providing flexibility to consumers. Ethanol has made a valuable contribution to the development Other materials like wood, thatch and
of the country’s agro-industry. Moreover, the increased use of alcohol as a transport fuel appe- earth are environmentally and energy-
ars to have contributed to the reduction of air pollution in mega-cities such as Sao Paulo wise more neutral.
(Coelho, 2003).

Buildings are energy consumers with

The Brazilian initiative experienced ups and downs as a result of the world oil and sugar mar-
longer life cycles than most power
kets. This seems to indicate that it would be prudent to diversify the alcohol feedstock into
non-food producing plants. According to the Bariloche Foundation, there are four biodiesel stations. Edifices constructed up to
plants in Argentina using sunflower, cotton and soybean as feedstock two thousand years ago are still in use
( today. The energy and maintenance
cost incurred during a building’s life
A Federal Law in Columbia requires the addition of 10 % of ethanol to standard gasoline. By are many times more than the initial
2006, the seven largest cities in Colombia are expected to switch to gasohol. Gasohol fuel will erection costs.
be introduced in other cities of the country in tandem with the development of sugar-alcohol
agro-industry. About 700 million litres of ethanol will be required per year, corresponding to 150
With the advent of artificially cheap, fos-
thousand hectares of sugarcane crops (Campuzano, 2003).
sil generated electricity in the developed
(After Karekezi, 2004)
world, architects started designing envi-

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Renewable Energy Resources:

Technology Status and their Sustainable Potential

ronmentally questionable buildings that Town planning and industrialization Solar water heaters and combi systems,
had to be made habitable by mechanical mind-sets of the previous century led combining water and space heating can
and lighting engineers. They found these to energy intensive urban settlements reduce the national peak electricity de-
interesting and lucrative business oppor- with ineluctable long-term fossil fuel mand by 18 %. The resultant GHG
tunities. There was neither chance nor driven commuting built in. saving is substantial.
incentive for the engineering fraternity to
enlighten the architects because the Today, building tradesmen and energy Using renewable energy and energy effi-
professional fee structure and the pro- intensive building materials are transpor- ciency in buildings is techno-economi-
fessional risk minimization both reward ted to remote building sites to erect buil- cally feasible, and significantly cheaper
over-design of artificial lighting and air dings that are cheap to build but expen- than building new power stations. New
conditioning plant, instead of rewarding sive to run. The problem is deepened glazing and insulation materials are ente-
energy efficiency and the use of renew- through the landlord-tenant dilemma, ring the market. Daylighting produces
able energy. where the tenant suffers the consequen- less unwanted internal heat than most
ces of energy-inefficient buildings. electric lighting. The unwanted reject
This way of designing prestigious buil- heat of inefficient appliances and machi-
dings was transferred to the developing Informal or illegal settlements like shan- nes like printers and photocopiers has to
world, symbolising progress and moder- tytowns or favelas typically have buil- be removed by air conditioners in office
nity. Consequently, we find the same dings of poor thermal performance. buildings in warm climates. Town plan-
inappropriate building design from the Residents resort to highly polluting ning and integrated resource planning
sub-artic to the tropical regions. wood, coal, dung fires, or stolen electri- offers great opportunities, especially in
city. Such “non-technical losses” also countries with underdeveloped infra-
Traditional rural houses in warm and add to high electrical peak demand pro- structures.
cold regions incorporate the climatic blems. Curitiba in Brazil has demonstra-
building knowledge of generations. ted attractive and energy efficient alter-
These buildings require a minimum of natives.
energy over their life cycles.

Ethanol Production in Africa

In Africa, ethanol production from maize crops, called SATMAR, was However, this ratio has not maintained due to differences between
undertaken in South Africa during the 1940s. Sasol’s coal-to-synfuel ETHCO and the oil industry concerning acceptable market shares and
production, later, superseded this production. Experimental biodiesel pricing of ethanol in relation to imported gasoline. Available evidence
production from sunflower seeds by the SA Department of Agricultural demonstrates that the plant has helped to reduce use of scarce con-
Engineering was not followed up. vertible currency revenues on oil imports and assisted in solving the
sugar company problem of safe disposal of molasses, which was pre-
Large-scale ethanol production has also been implemented in viously a hazard to the environment (Kafumba, 1994; Gielink, 1991).
Zimbabwe, Malawi and Kenya, countries that do not have indigenous
oil reserves and rely on oil imports. Ethanol production in Zimbabwe Kenya’s interest in ethanol was spurred by the oil crisis in the early
started in 1980 at Triangle Ltd, a sugar company located in the northe- 1970s, when the country was keen to exploit locally available energy
astern Zimbabwe with an annual production capacity of 40 million sources. Consequently, the Agro-Chemical and Food Cooperation
litres. On commissioning, the blending target of ethanol/gasoline for the (ACFC) was established in 1978, with the objective to utilise the surplus
country was 15:85. But by 1993, the blending ratio stood at 12:88. molasses. Located in Murohoni, near three sugar factories, ACFC had
The ethanol production programme has contributed significantly to the an installed capacity of 60 000 litres a day with a daily average output
Zimbabwean economy. Benefits include reduced gasoline imports by of 45 000 litres. The target blending ratio was 10:90. The plant created
about 40 million litres, increased incomes of about 150 cane farmers both direct and indirect employment for about 1 200 people. In addi-
and availability of a market for molasses, which was formerly a waste tion, it partially reduced dependence on imported fuel supplies. Major
product (Scurlock et al, 1991b; Hall et al, 1993) challenges that have faced the programme include drought and poor
infrastructure, affecting yield and transportation of the cane to proces-
In Malawi, the Ethanol Company Limited (ETHCO) is the sole producer sing points. Above all, lack of government commitment and absence of
and distributor of ethanol. Commissioned in 1982, ETHCO has a distill- clear-cut production, blending and marketing policies eventually led to
ery capacity of 17 million litres annually, producing 13 million litres a the cessation of ethanol use for transportation purposes (Omondi,
year. Originally, it was mandatory for all the gasoline used in the coun- 1991; Kyalo, 1992; Okwatch, 1994; Baraka, 1991).
try to be blended with ethanol. In 1993, the blending ratio was 15:85. (Karekezi & Ranja, 1997; Karekezi, 2002 in Karekezi, 2004)

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 23

Transport Fuel cell vehicles will reduce emissions Summary

by nearly 100 %. Hydrogen produced by
Worldwide, few nations produce their renewables is the ultimate goal. The cur- The technologies of hydropower, sugar
own transport fuels. This has significant rent production of hydrogen is energy cane ethylene, landfill gas, passive solar
impacts on national economies, notably intensive. building design, solar water heating,
in the developing world. In principle, one wood pellets and wind energy have
can focus on the improvement of current Natural gas is a cleaner fuel than coal, been demonstrated to be cost competi-
vehicle technologies, development of petrol and diesel. This just might buffer tive, even with the current skewed mar-
new technologies, harnessing of infor- a transition to sustainability. Leaking ket. Concentrating solar power, tidal
mation technology, mode switching and gas pipes may be more than a mere wave and ocean power, green tower,
spatial planning. theoretical risk in the developing world. biodiesel and innovative renewable ener-
Harnessing of information technology gy driven vehicles are in intermediate
Improvement of current vehicle tech- has already produced better traffic flows development stages. The renewable
nologies through more efficient drive and can also enhance goods handling energy based hydrogen technology is
technologies is a standard planning stra- logistics. There is the chance that better still under development. Photovoltaics
tegy of all European motor-vehicle traffic efficiency will lead to an increase are cost competitive in rural areas, but
manufacturers (optimised combustion, of road traffic. the largest current market penetration
ceramic components, refined ignition, and growth is in urban grid-connected
valve management, turbo chargers). A Effective mode switching and integration applications. Building integrated PV
further enhancement of 50 % is consi- should lead to a higher market share of (BIPV) offers opportunities of Balance of
dered techno-economically feasible. the more energy efficient rail mode, as a System (BOS) cost reductions.
Reductions of mass and rolling resi- national policy. Spatial planning and Global renewable energy resources are
stance may produce CO2 reduction of modern settlement planning offers practically inexhaustible. While current
6 % and 1 % respectively. Some of opportunities to pedestrianise use bicy- techno-economics are generally less of
these technology gains may be lost by cles, efficient public transport, densifica- a constraint than socio-political issues, it
a snap-back, in that people would be tion and mixed land-use. is expected that the eventual resource
limitation of some technologies, together
inclined to drive more kilometres becau- with environmental considerations may
se the costs per kilometre have been lead to ceilings of renewable energy
lowered. technologies, except solar energy and,
perhaps, ocean energy which are unlimi-
Development of new technologies is ted for all practical purposes.
evident in hybrid drives and batteries
already appearing on the market, poten-
tially doubling the fuel efficiency. These
are important stepping-stones to the full
fuel cell technology.

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 24

National and International Drivers of Renewable

Energy Application: Setting National Targets
within Global Guard Rails

Poverty alleviation through renew- costlier and less secure. Main barriers to In the US the potential employment of
able energy jobs higher market penetration in the develo- 300 000 people by 2025 in PV alone is
ping world are lacking awareness of comparable to major computer indu-
Reducing poverty and unemployment policy makers, plumbers and end users; stries like Dell Computer of Sun Micro-
are high priorities in the developing world. lack of trained installers/service crafts- systems.
It is beyond dispute that the rising tide men; lack of national standards/test faci-
of renewable energies offers more new lities, and lack of means to overcome If the US State of Wisconsin bought
work opportunities than the fossil and the initial cost barrier. fossil fuel energy it would be forfeiting
nuclear technologies. The full implications 45 000 local jobs – a severe blow to the
of this fact still have to be realised by the CDM financing at US$5/ton CO2 would state economy. By producing local
developing nations. reduce the cost by only 10 %, which renewable energy, 2.5 US cents kWh
seems disappointingly little. Replacing would be ploughed back.
By definition, developing nations have conventional all-electrical geysers with
underdeveloped energy infrastructures, combi SWHs would typically reduce the With each direct new job that is created,
offering a golden opportunity to create national peak demand by 18 %. Since there is an economic multiplier that
new sustainable jobs in the modern re- SWHs are cheaper than building new reflects the induced spin-off by indirect
newable energies technologies, rather highly mechanised generation capacity, jobs created. A study by the US Depart-
than investing in sunset technologies or it is in the national economic interest to ment of energy revealed that a 10 MWp
accepting cheap discarded technologies implement this least cost job creating PV fabrication plant near San Francisco
from the developed world. option. would produce a multiplier effect of
500 %. These multipliers also bring
Potentially, creating jobs in new renewa- Ironically, the best-publicised examples regional developmental benefits as well
ble energy infrastructure in the develo- of renewable energy job creation come as tax incomes to state coffers.
ping world can be combined with the from the developed world where natural
Clean Development Mechanism of the resource conditions are less favourable.
Kyoto Protocol. In Germany about 40 000 new renew-
able energy electricity jobs have been
Locally manufactured water heaters cre- created in only 12 years to 2002, while
ate low capital and low risk work oppor- the nuclear industry supplying 30 % of
tunities, with the greater job creation op- that country’s electricity only employed
portunities being situated in the business 38 000 people. Germany expects to
side of selling, installing and servicing create 250 000 to 350 000 new renew-
SWHs. Jobs in manufacturing SWHs are able energy jobs by 2050.

If South Africa generated just 15 % of the Summary of direct and indirect jobs from renewable sources in 2020
total electricity use in 2020 by using renew-
Technology Direct Jobs Indirect Jobs Total Jobs
able energy technologies, it would create
Solar thermal (10 % of target) 8 288 24 864 33 152
36 400 direct jobs, without taking any work
Solar Photovoltaic (0.5 % of target) 2 475 7 425 9 900
away from the coal-based electricity industry.
Wind (50 % of target) 22 400 67 200 89 600
Biomass (30 % of target) 1 308 3 924 5 232
Over 1.2 million direct and indirect new jobs
Landfill (5 % of target) 1 902 5 706 7 608
would be generated, if a portion of South
Africa’s total energy needs, including fuels,
Where 150 000 residential biogas digesters 1 150 2 850 4 000
were sourced with renewable energy tech-
are installed in rural areas
nologies by 2020.
Solar Water Heaters
Includes the manufacture and installation 118 400 236 800 355 200
of the equivalent of a 2.8 m2 solar water
heater on each house in the country
Includes 15 % ethanol and diesel substitution 350 000 350 000 700 000
TOTAL 505 923 698 769 1 204 692
(Banks & Douglas, 2005)

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 25

New energy infrastructure Distributed generation plant can be built losses dramatically. These line losses
in smaller increments, closely following typically range from 10 % to as much as
Developing nations may soon find that the demand profile. By contrast, this is 50 %, not counting “non-technical los-
renewable energy powered Distributed impossible with conventional power ses” (euphemism for power theft).
Generation (DG) and Combined Heat plants, which come in big chunks, tying
and Power (CHP) Plants Cogeneration down big chunks of capital, long before This concept aims to adapt available
create local jobs, are environmentally it is actually needed. National resources modern technology of distributed gene-
more benign, and are not dependant on that have not been sunk in useless sur- ration to the needs of the developing
the weaknesses (maintenance, theft, plus generation capacity can be used for nations instead of trying to convince
sabotage, terrorism, political manipula- much-needed development programmes. developing nations to buy ready-made
tion) of a centralised generation system western world technology models. In
with a network that becomes prohibitive- By developing DG in rural areas it is this way, renewable energy contributes
ly expensive as it moves into remote possible to start secondary industries in towards sustainable development and
rural areas. rural areas, thereby assisting beneficia- the democratisation of power in both
tion, adding value to local products and senses of the word.
The typical energy conversion chain los- creating local jobs. This, in turn, may
ses of conventional systems (from mined stem the tide of rural depopulation and Solar Enterprise Zones (Nicklas, 1998)
coal to water heated by an electric sto- urban squatters – both serious social integrate technical, social and environ-
rage geyser) are significant: only about issues with developing nations. mental benefits. Such Solar Enterprise
10 % of the coal’s original energy ends Zones start with Distributed Generation
up in the hot water as useful energy. DG systems generate heat and power Systems, and then link these by mini-
With conventional incandescent lighting at, or close to, the point of consumption grids, which eventually are interlinked
the useful percentage may be less than and are much more efficient than the with national or regional networks,
2 % in light energy service. All the rest is old centralised fossil-fired power plants adding diversity of supply.
pollution in the form of ash, SOx, NOx, because they use the electricity as well
CO2 and other greenhouse gases, as as the heat that is normally rejected
well as reject heat. at fossil plants. They also reduce line

Cogeneration in Mauritius

The Mauritanian experience in cogeneration is a success story in Africa. Through extensive

use of cogeneration in Mauritius, the country’s sugar industry is self-sufficient in electricity and
sells excess power to the national grid. In 1998, almost 25 % of the country’s electricity
was generated largely using bagasse, a by-product of the sugar industry (Deepchand, 2001).
By 2002, electricity generation from sugar estates stood at 40 % (half of it from bagasse) of
the total electricity demand in the country (Veragoo, 2003).

Government support and involvement has enabled the development of a cogeneration pro-
gramme in Mauritius. The Sugar Sector Package Deal Act (1985) was enacted to encourage
the production of bagasse for the generation of electricity, while the Sugar Industry Efficiency
Act (1988) provided tax incentives for investments in electricity generation, and encouraged
small planters to provide bagasse for electricity generation. Three years later, the Bagasse
Energy Development Programme (BEDP) for the sugar industry was initiated. In 1994, the
Mauritanian Government abolished the sugar export duty, which served as an additional
incentive to the industry. A year later, foreign exchange controls were removed and the con-
solidation of the sugar industry was accelerated. These measures have resulted in the steady
growth of bagasse-based electricity in the country’s electricity sector.

This has reduced dependence on imported oil, enhanced diversification in electricity generation
and improved efficiency in the power sector in general. Using a wide variety of innovative reve-
nue sharing measures, the cogeneration industry has worked closely with the Government of
Mauritius, ensuring that substantial benefits flow to all key stakeholders of the sugar economy,
including the poor smallholder sugar farmer. The equitable revenue sharing policies of Mauritius
may provide a model for ongoing and planned modern biomass energy projects in Africa.
(Veragoo, 2003; Deepchand, 2001 in Karekezi, 2004)

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National and International Drivers of Renewable

Energy Application: Setting National Targets
within Global Guard Rails.

National Renewable Energy Targets International organisations with energy agendas

within Global Guard Rails
The Global The GEF (through implementing agencies) operates more than 100 pro-
Environmental grammes for the promotion of energy production and consumption from
Responsible governments consider our Facility (GEF) RE (backed by private sector development and sometimes by energy sector
common future - and have a strong reform), mainly with a domestic scope. Projects do not address issues such
hand in shaping it. as taxation, subsidies or trade law on a global scale.
The UN system The Un Regional Economic Commissions play an important capacity building
A sign of good leadership is the gift of role in the respective regions (e.g. United Nations Economic Commission for
setting inspiring long-term goals. These Europe (UNECE) or the United Nations Economic and Social Commission for
determine the framework, challenging Asia and the Pacific (UNESCAP). Globally, the United Nations Development
Programme (UNDP) is an important actor (cf. the Global Network on Energy
the best national forces to come for-
for sustainable Development, the UNDP Initiative for Sustainable Energy
ward. Targets must be sufficiently
(UNISE), and the World Energy Assessment. Many other specialised UN
demanding to justify long-term commit- agencies have addressed
ments of entrepreneurial person power, RE within their niche (for example the United Nations Department of
resources and money by industry and Economic and Social Affairs (UNDESA), the World Health Organisation
academia. They must also be of such (WHO), the United Nations Educational, Scientific and Cultural Organisation
duration as to allow the educational and (UNESCO), and the Food and Agriculture Organisation of the United Nations
bureaucracy systems to adapt. (FAO)). UNDESA has developed RE projects in the context of Agenda 21,
and signed an agreement with e7, founded by global electricity companies,
and dedicated to develop rural energy. The Commission on Sustainable
It seems that in the past many develo-
Development (CSD) includes energy as a major component of its work plan
ping nations were inclined towards
for the coming years. The recently established Global Village Energy
centralist, rather than decentralised deci- Partnership (GVEP) focuses on access to modern energy services by the
sion-making models. This tended to go poor. The UN considered energy as one of five key areas for particular focus
along with centralist government utility (“WEHAB”): Water, Energy, Health, Agriculture and Biodiversity) for the
monopolies that were forced to deliver Johannesburg World Summit on Sustainable Development (WSSD).
electrical power at non-sustainable pri- The World Summit The WSSD Plan of Implementation, while not binding, is the international
ces, serving political expediency. on Sustainable instrument with the most extensive references to renewable energy and
Inevitably, ends did not meet and cor- Development energy efficiency yet produced by the world community. It focuses on
(WSSD) development, implementation, technology transfer and rapid commerc-
ners were cut, leading to brownouts and
and its Plan of ialisation of RE. It sees energy as key to the eradication of world poverty,
blackouts at great national costs.
Implementation and to change of unsustainable consumption and production patterns.
(and the An example of a governmental initiative coming out of WSSD is the
Interestingly, the alternative model of Resulting “type II” Johannesburg Renewable Energy Coalition. More than 20 type II (public-
radical market liberalisation and privati- partnerships) private) partnerships are active in RE, for example the Renewable Energy
sation forced down the throat of many and Energy Efficiency Partnership (REEEP). Another multi-stakeholder organi-
developing nations, while initially produ- sation is the International Sustainable Energy Organisation (ISEO).
cing cheaper energy and discouraging Non-Governmental The NGO community ranges from green advocates (most environmental
end-user frugality, did not seem to fare Organisations NGOs have a work programme on energy and climate change), to NGOs
(NGOs) focusing specifically on energy, to consumer interest groups. Examples are
much better in the long run. It is not the
the International Solar Energy Society, the World Energy Council, the World
Council for Renewable Energies, the World Wind Energy Association, the
International Network for Sustainable Energy. Some charitable foundations
also support RE activities.
The research This group includes a wide variety of actors, ranging from fundamental
community research at universities to applied research to technology development spe-
cifically for commercial purposes.
The private sector Individual companies involved in energy supply (utilities, increasingly working
in more than one country), technology supply and research and develop-
ment (R&D), but also groups such as industry associations (e.g. Eurelectric)
and the World Business Council on Sustainable Development.
(After Steiner et al, 2004)

WP_2005.qxd 01.08.2005 11:32 Uhr Seite 27

Global guard rails for sustainable energy policy The international context: Global
Guard Rails
Socio-economic guard rails
Access to advanced energy for all
It is essential to ensure that everyone has access to advanced energy. This involves ensuring National targets are not set in a vacuum,
access to electricity, and substituting health-endangering biomass use by advanced fuels. but are informed by the international
Meeting the individual minimum requirement for advanced energy context.
The Council considers the following final energy quantities to be the minimum requirements
for elementary individual needs: By the year 2020 at the latest, everyone should have at least The German Advisory Council on Global
550 kWh final energy per person and year, and by 2050 at least 700 kWh. By 2100 the level Change (WBGU) produced a compre-
should reach 1 000 kWh*.
hensive report “World in Transition –
Limiting the proportion of income expended for energy
Towards Sustainable Energy Systems”
Poor households should not need to spend more than one tenth of their income to meet
(2004), introducing the innovative con-
elementary individual energy requirements.
Minimum Macroeconomic development cept of Guard Rails bounding the paths
To meet the macroeconomic minimum per-capita energy requirement (for energy services towards global energy sustainability.
utilised indirectly) all countries should be able to develop a per-capita gross domestic pro- “Guard Rails” are those levels of dama-
duct of at least about US$ 3 000, in 1999 values. ge, which can only be crossed at intole-
Keeping risks within a normal range rable cost, so that even short-term utility
A sustainable energy system needs to build upon technologies whose operation remains wit- gains cannot compensate for such
hin the “normal range” of environmental risk. Nuclear energy fails to meet this requirement, damage. There are six economic and
particularly because of its intolerable accident risks and unresolved waste management, but
five ecological guard rails. These are
also because of the risks of proliferation and terrorism.
readily understood (see box).
Preventing disease caused by energy use
Indoor air pollution resulting from the burning of biomass, and air pollution in towns and
cities resulting from the use of fossil energy sources causes severe damage worldwide. Global guard rails are not goals. They
The overall health impact caused by this should, in all WHO regions, not exceed 0.5 per cent represent minimum requirements that
of the total health impact in each region (measured in DALYs = disability adjusted life years). need to be met if the principle of sustai-
nability is to be adhered to.
Ecological guard rails

Climate protection A test run demonstrates that turning

A rate of temperature change exceeding 0.2 °C (0.2 K) per decade, and a mean global energy systems towards sustainability is
temperature rise of more than 2 °C (2 K) compared to pre-industrial levels are intolerable technically and economically feasible.
parameters of global climate change.
Sustainable use Independently of the WBGU, Donald W
10 - 20 per cent of the global land surface should be reserved for nature conservation.
Aitken, PhD, of the Union of Concerned
Not more than 3 per cent should be used for bioenergy crops or terrestrial CO2 sequestra-
Scientists (2005) comes to the same
tion. As a fundamental matter of principle, natural ecosystems should not be converted to
bioenergy cultivation. Where conflicts arise between different types of land use, food security
must have priority.
Protection of rivers and their catchment area His suggested pace is 10/20/50 % of
In the same vein as terrestrial areas, about 10 - 20 % of riverine ecosystems, including renewable primary energy by 2010/20/
their catchment areas, should be reserved for nature conservation. This is one reason why 30. This has also been corroborated
hydroelectricity – after necessary framework conditions have been met (investment in by the European Renewable Energy
research, institutions, capacity building, etc.) – can only be expanded to a limited extent. Council, stating that renewable energy
Protection of marine ecosystems could supply even 50 % of the global
It is in the view of the Council that the use of the oceans to sequester carbon is not
energy by 2040.
tolerable, because the ecological damage can be major, and knowledge about biological
consequences is too fragmentary.
Prevention of athmospheric air pollution
Critical levels of air pollution are not tolerable. As a preliminary quantitative guard rail, it could
be determined that pollution levels should nowhere be higher than they are today in the
European Union, even though the situation there is not yet satisfactory for all types of pollu-
tants. A final guard rail would need to be defined and implemented by national environmental
standards and multilateral environmental agreements.
(WBGU, 2004)

* Comment: This may be on the high side for warm Latin American Countries,
if improved energy efficiency is accounted for

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National and International Drivers of Renewable

Energy Application: Setting National Targets
within Global Guard Rails.

Key findings of the WBGU study are: In a system with a long time lag, Promoting socio-economic develop-
the next two decades offer a rapidly ment,
The transition will only work with in- closing window of opportunity.
tensified capital and technology trans- Procrastinating will cost disproportio- Combining regulatory and private sec-
fer from industrialised to developing nately much more and cause more tor initiatives,
countries. Market maturity of renew- social, political, economic and envi-
able energy (RE) and energy efficiency ronmental problems. We can only Protecting natural life-supporting
(EE) needs to be accelerated in the guess what irreversible damage the systems. This means reduced global
industrialised countries for instance. current decision-makers will have to CO2 emissions by at least 30 % from
answer for. 1990 levels by 2050. For industrialised
through raising and redirecting R&D nations this entails a reduction of
resources, demonstration and imple- The currently most cost-effective tech- 80 %, while developing and newly
mentation strategies. This aims to nologies like wind and biomass have industrialised countries’ emissions
reduce the entrance barriers to all, to be used to the hilt in the short and should rise by no more than 30 %,
especially the developing nations. medium term.
Improving energy productivity (GDP
Worldwide cooperation and conver- Efficient use of fossil fuels is part of to energy input ratio) of initially 1.4 %
gence of living standards are likely to the transition, in particular the efficient annually improvements is required,
facilitate rapid technology develop- use of natural gas. followed by 1.6 %, to reach triple cur-
ment and dissemination. rent productivity by 2050 from 1990
A certain amount of carbon seque- levels. This requires international stan-
Binding CO2 reduction commitments stration in geological caverns will be dards of fossil-fuelled power stations,
are a prerequisite. necessary during this century. and 20 % renewable energy based
electricity in the EU by 2012; manda-
Further GHG reduction policies by A roadmap with goals and policy options tory labelling; phased-out non-renew-
other sectors (e.g. NOx and NH4 from for the transformation highlights the able energy subsidies and primary
agriculture) are required. following energy targets for buildings,
Eradicating energy poverty and esta-
450ppm of CO2 may not be sufficient blishing minimum global supply, Expanding renewable energy substan-
for climate stabilisation, and should tially from the current 12.7 % to 20 %
not be taken as a safe stabilisation Establishing a new World Bank policy by 2020, and
level. to integrate energy in poverty reduc-
tion strategies as well as strengthe- Phasing out nuclear by 2050, with
An alternative reduction path by fossil ning regional development banks, stricter monitoring of all sites.
and nuclear energy entails substantial-
ly higher risks and environmental
impacts, and is more costly, mainly
because of CO2 sequestration costs.

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 29

Land availability for Food and Fuel

The availability of land for the production of biomass in developing countries is determined
by the demand on land for food production. With increasing population, food production and
consumption in developing regions is expected to increase (FAO, 1995). Estimates by the
Response Strategies Working Group of the IPCC indicate that the use of land for food produc-
tion in developing regions (Asia, Africa and Latin America) will increase by 50 % by the year
2005 (IPCC, 1996). In addition, the demand for biomass energy is also expected to increase
with population increase. Estimates by the WEC indicate that by 2100, about 1 700 million
hectares of additional land will be needed for agriculture, while about 690 - 1 350 million
hectares of additional land would be needed to support biomass energy requirements (UNDP,
2000). The challenge, therefore, is sustainable biomass supply to meet growing energy
demand, without taking up land for food production. Some of the options for avoiding the com-
petition for land between food and fuel are: increasing food production on current agricultural
lands; the establishment of large tree plantations; and, the use of modern forestry practices
(IPPC, 1996). (Sudha & Ravindranath, 1999 in Karekezi, 2004)

International actor organisations in RE

Intergovernmental Examples include the International Energy Agency (IEA, affiliated with the
organisations, whose OECD), the Organizacion Latinoamericana d’ Energia (OLADE) and the
primary activity is energy Charter Conference and Treaty. On the one hand, these organ-
energy related isations have expertise, a governmental support base, and in some case
the authority to make binding rules. On the other hand, membership of
most of these organisations is limited geographically or otherwise (though
their activities and studies undoubtedly influence also non-members), and
none have RE as a main focus.
The World Bank These are significant players, with an important RE impact in developing
Group (including countries. They finance a significant number of RE projects throughout the
the International world, ranging from technological assistance to energy sector reform,
Finance Corporation), sometimes with private sector co-financing. A well-known project of the
and the Regional International Bank for Reconstruction and Development (IBRD) is ESMAP
Development (Energy Sector Management Assistance Programme), promoting an
Banks environmentally responsible role of energy in poverty reduction and eco-
nomic growth.
Regional Examples include the European Union (EU), the Association of Southeast
organisations Asian Nations (ASEAN), the Southern African Development Community
(SADC), and Asia-Pacific Economic Cooperation (APEC).
(Steiner et al, 2004)

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Policies to Accelerate the Application

of Renewable Energy Resources in
Developing Countries

Our current global and national energy a national energy market sub-system. Production Tax Credit has been allowed
situation is the result of past energy In turn, the national energy market sets to expire several times, creating cycles
policies and subsidies that largely persist the boundary conditions to its sub- of boom and bust. This sent ripple
into the present. Fossil fuel and nuclear system, the sustainable energy market. effects of worker lay-offs and loss of
prices are not the result of free market Conversely, each sub-system feeds its institutional memory down the system.
mechanisms, nor do they reflect their supra-system with resources, energy Potential investors tend to shun such
true costs. and information. uncertainties (Gipe, 1998).

Energy users benefiting from current It follows that an intervention at only one In India, conflicting and inconsistent state
cheap energy prices typically do not level working in only one direction (either policies, aggravated by state electricity
bear the cost and consequences of only bottom-up or top-down) is doomed board regulations, delayed renewables
externalities and modern warfare. to failure. The developing world bears development (CSE, 2002).
witness to many well-intended local bot-
Such market distortions built up serious tom-up NGO-driven grassroots project By way of contrast, Germany has learn-
and pervading barriers to renewables. failures, and as many abandoned top- ed to develop more consistent policies.
Further cost barriers lie in their relatively down government-driven restructuring These were rewarded with remarkable
higher capital cost, import duties, current programmes – often advised by interna- market development, in spite of less
lack of economies of scale, lack of tional interests. Countries that are trans- auspicious environmental and world
access to affordable credit, selective forming successfully have enabling economy conditions. Consistent policies
punitive grid connection costs, lack of policies at many levels (IIEC). A sustain- foster domestic industries and job
standards, and lack of training and able renewable energy market prospers growth. This, in turn, contributes to poli-
awareness. when there is not only a renewable tical stability and to the national econo-
energy push from the supply side, but my. Consistent policies are also cheaper
In developing countries the barrier of also a demand pull from the energy con- to administer. Both savings eventually
perceived investor risk is even higher sumers’ side. Sawin (2004) prepared an accrue to stakeholders in the national
due to political, regulatory and market authoritative paper on lessons learned. economy.
stability uncertainties.
With the globalization of the economy,
In addition, well-intended donor projects, Lessons learned investors have a large choice where to
inconsistent short-term government be involved. They invariably buy where
interventions, poor technology and Before discussion details of policies, it they perceive long-term stability and
maintenance, and unrealistic promises should be noted that there is a substan- consistent government policies.
of universal grid access have also dis- tial body of knowledge that has been
torted markets for renewables in many accumulated by the world leaders in For developing countries that are often
developing countries. renewable energy. Developing nations perceived to be politically less than sta-
can profit from that experience by ad ble, the important lesson is to counter-
Policies and measures have to cope justing it to their own local contexts. act this reputation by unequivocal, firm
with these realities and must not only policy commitments.
overcome the barriers, but also provide Long-term commitment, targets
an enabling environment for the sus- and consistency Good laws and consistent enforce-
tained growth of renewable energies. The renewable energy transition does ment
Such an enabling environment entails not happen automatically once a policy Good intentions are not good enough.
the conditions of the macro-level natio- has been formulated. Experience has The effectiveness of positive interven-
nal market, the meso-level energy mar- shown that considerable, consistent tions depends on whether they are
ket and the micro-level sustainable ener- interventions of all types into energy taken seriously. If a developing nation
gy market. markets were needed before meaningful does not have the political will and capa-
renewable energy results started to be in city to implement them, then the best
Each supra-system sets the boundary evidence. policy models are of no value. Therefore,
conditions for its sub-systems. For ex- renewable energy policies should be
ample the legal, political, financial, infra- There are several case studies in the easy to understand and implement,
structural, bureaucratic and economic developed and developing world illustra- otherwise they will harm more than help.
macro-economic supra-framework ting the harmful effect of on-again-off- While there is a certain degree of agree-
determines the boundary conditions to again renewable energy policies. The US ment on the desirability of sustainable

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 31

energies, the individual means of moving By contrast, quota systems have been 1. Regulations governing market/
toward that goal are legion. more volatile, tending to boom and bust electric grid access and quotas
markets where foreign industries, back- mandating capacity/generation
Develop reliable, predictable ed by steady policies in their home
market conditions countries, have an edge over the locals. Preferential access to the grid is as
Denmark, Germany, Japan, Spain, and Quota systems could not achieve important as initial incentives to the
Brazil have demonstrated that the secret cheaper energy prices. introduction of renewables. There are
to steady and meaningful renewable two general types of regulatory policies
energy price reductions lies in the crea- Feed-in systems most suitable for for grid access: One mandates the price,
tion of transparent and steady markets. developing countries the other mandates quotas.
Under such conditions, small and medi- While quota systems demand intricate
um enterprises can afford to enter the tendering procedures and are not im- 1.1 Feed-in tariffs or pricing systems
arena. These enterprises provide the mune to corruption, feed-in systems are According to the feed-in law, electri-
core of employment, and invest in signi- characterized by simple, transparent and city grid operators (or utilities) are
ficant research and development. They cost-effective procedures most suitable obligated to accept electricity gener-
also represent the drivers that lower the for developing countries. These trans- ated by renewable energy, and pay
domestic price-learning curve, which parent systems effectively combat the fixed minimum tariffs (prices). Prices
may differ from international markets. reputation of political instability and fraud are related to the specific renewable
that developing countries often have to energy production costs that gener-
Redress market failures contend with. ally are higher than current fossil fuel
Energy markets never have been fully generated power.
open or competitive. “Liberalizing the Prices are differentiated according
national energy market” as propagated Policy mechanisms to technology, size and location.
by some quarters, is often a way of sel- This avoids that only the currently
ling national assets to larger international There are five categories of relevant cheapest technology (e.g. wind
players. Typically, the result has been policy mechanisms. energy) is promoted. It also pre-
a temporary drop in energy prices until vents that only certain areas (e.g.
the surplus generating capacity was 1. Regulations governing market/elec- sunshine belts) are developed.
eroded, while “sweating the assets”. tric grid access and quotas manda- Finally, it also encourages equitable
Then system collapses or price shocks ting capacity/generation access to all investors, ranging from
threaten – not to mention the local work the poor single parent household
places lost – a clear sign of market fail- 2. Financial interventions and with PV on the roof, to the multi
ure. At that late stage, government has incentives megawatt offshore wind farm devel-
to intervene to control the damage – oper.
often in a crisis management mode. 3. Industry standards, planning Payments are guaranteed over typi-
permits and building regulations cally twenty years, declining annu-
Renewable energy supportive policies (codes) ally, and are adjusted bi-annually to
are not only justified because of social new entrants. The declining price
and environmental benefits, but also to 4. Education and information reflects the price-learning curve,
redress other market distortions favour- dissemination keeping industry on their toes. This
ing fossils and nuclear in the past attracts long-term investors and
century. 5. Public ownership and stakeholder also encourages participants to join
involvement early – a decisive developmental
Renewable Energy Feed-in (pricing) consideration.
systems most successful These will now be considered in more Utilities also qualify for the grid-fee-
To date, feed-in policies have achieved detail. der prices.
the greatest market penetrations of There is a standard contract bet-
renewable energy, produced the most ween the grid-feeder and the grid
cost-effective renewable energy, estab- distributors, who then simply distri-
lished local industries, built domestic bute the extra cost over all national
markets, created work places, and end users.
attracted small and big private investors
as well as bankers.

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Policies to Accelerate the Application

of Renewable Energy Resources in
Developing Countries

This pricing system is in use in placed on producers, distributors or lowest one upwards until the quota
many countries including Denmark, end consumers. is filled. Government subsidises the
Germany, Spain, Austria, Portugal, Quotas can be applied to grid-con- difference between the market refer-
Greece, France, Ireland, South nected and off-grid electricity, as ence and the winning tender. Both
Korea, Brazil, Czech Republic and well as other renewable energies RPS and tender systems are of
is in the process of being imple- like biofuels or solar thermal energy. shorter duration than the typical
mented in a modified form in China. Compared to the feed-in system, twenty-year pricing system. Quota
By far the best renewable energy there is relatively less experience systems are in use in Japan, the
market successes have been a- with electricity quotas, and none in UK, Italy and Australia.
chieved where pricing systems are the developing world.
in place. Pricing systems did not There are two variants for electricity 1.3 Discussion of systems
take off where the duration of con- generation: Some of the discussions about the
tracts was too short, the tariffs were obligation/certificate/Renewable pricing and quota systems seem to
too unattractive, the site conditions Portfolio Standards (RPS) systems be more of an ideological nature,
were too restrictive or the connect- and tendering systems. The RPS with capitalistic-minded protagonists
ing charges were exorbitant. system is used in 13 US States punting for the quota system in the
“Net metering” or “reverse metering” whereby generators are obligated belief that the market is the final
is a variant of the above, whereby to produce a target (quota) of arbiter, while socio-environmentally
excess renewable power is fed into renewable energy-based electricity, orientated ones tend towards the
the grid at the going retail price, either leaving the choice of techno- pricing (grid-feeder) system, in the
which is less than the renewable logy to the producer or by prescrib- belief that the market fails to recog-
energy feed-in prices. In some ing specific renewable energy tech- nise the common good. Developing
cases, producers receive payment nology shares. Producers receive nations cannot always afford the
for each kilowatt-hour, in others credits “Green Certificates (CERTs)”, luxury of such debates. The question
they are only paid up to the point “Green Labels” or “Green Energy is rather what fits and what works in
where their production equals con- Credits (RECs)” for the renewable the real world.
sumption. energy produced. Credits have to
Understandably, the net metering be verified independently and may 1.3.1 Renewable energy capacity and
system without other financial incen- be tradable or sellable to even out generation
tives, does not suffice for significant deficits/surpluses of obligations. If a Seen from the government per-
market penetration, and could be producer does not meet his obliga- spective, it appears that prices are
considered a transitional phase to tion at the end of the period, he has determined with pricing systems,
the full grid-feeder pricing system. to pay a penalty. This leaves the while energy output is said to be
Japan, Thailand, Canada and many option to the producer of either pro- uncertain. Conversely, quotas are
US States use net metering. ducing the green power or of paying determined with quota systems
If the system peak demand coin- the penalty, if this costs less. He while prices are said to be uncer-
cides with the maximum production can also choose to go out of busi- tain. To governments of develo-
of grid-connected PV systems, for ness at the end of the period. ping nations, steady energy prices
example, it would be more attractive Governments will only see what are more important than precisely
to base net metering tariffs on time- happened at the end of the period. achieving predetermined renew-
of-use. With the tendering system, govern- able energy quotas at a predeter-
ment sets targets as well as a maxi- mined date. In addition, policies
1.2 Quotas - mandating capacity/ mum electricity price. Tenderers can be adjusted if governments
generation (bidders) submit offers for these wish to adjust the pace of renew-
This is the reverse of pricing sys- contracts. The abandoned Non- able energy market transformation
tems. Instead of government fixing Fossil Fuel Obligation (NFFO) of the through a pricing system.
the price, it fixes the target and UK was such a system. Govern- With quota systems there is a risk
trusts that the market will determine ments may set separate tenders for that the politically determined pace
the price. A government may man- various renewable energy technolo- of renewable energy introduction
date a minimum share (quota) of gies, if they do not wish to propa- might be grossly unrelated to the
capacity or energy to come from gate an energy monoculture. Norm- techno-economic state of the
renewables. This mandate can be ally, tenders are assigned from the technology in a given country.

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 33

Fact is, that countries with pricing achieve a level of income, they foreign bidders and stopped the
systems have regularly outperfor- start investing in R&D to enhance system. The fact that pricing laws
med the national targets. their competitive edge and increa- lower the market entry barriers to
Furthermore, governments are not se profits, thereby furthering radi- small producers, while at the same
the only participants in the energy cal innovation. This happens at no time welcoming large investors, is
game. National and international cost to government – that is the of immense interest to developing
investors, developers and entre- taxpayer. countries wishing to attract foreign
preneurs are needed in the devel- Under quota systems, the surplus investors while fostering the smal-
oped, and even more so in the – if any - tends to accrue to the ler domestic industries.
developing world. These people end-user, with the producer not Pricing laws also enhance the par-
remain in business because they having sufficient margin to invest in ticipation of local farmers and
understand how to assess risks. the uncertain future inherent in communities. This grows local
Pricing systems are less risky to the quota and tender systems. ownership and buy-in, while redu-
entrepreneurs than quota systems. Even worse, overseas companies cing the NIMBY syndrome.
Since the developing world tends that have grown strong on pricing
to have poor risk ratings, it makes systems at their home base, com- 1.3.4 Technology and diversity and
sense to opt for a system that is pete successfully in foreign coun- diversity of supply
also favoured by developers and tries with quota systems. Because quota systems focus on
investors. The transaction costs and stop- the cheapest technology, there is
Even in developed countries this and-go nature of quota systems little or no diversity of energy sup-
is the case. While more than 45 discourage the establishment of ply. This implies that learning
countries built wind turbines – national industries and limit the curves of other technologies
some in very good wind regimes – growth of jobs within the country. remain static. It also means that a
during the 1990s, just three of Of the persons working in wind nation is exposed to vagaries of
these, with pricing systems (Ger- energy worldwide, approximately the climate. An over-reliance on
many, Denmark, Spain) accounted 75 % live in the EU, and about half wind energy may entail a serious
for nearly two thirds of the new are in Germany. risk if there happens to be a poor
additions during the decade. After wind year. Similarly, an over-expo-
the introduction of the price 1.3.3 Geographic and ownership equity sure to hydropower bears great
system in 1994, Spain raced to Under quota systems the cheap- risks, as has repeatedly been illu-
the second position in world rank- est projects dominate, gravitating strated in a number of cases with
ing by 2002. to the geographic areas where the African hydropower schemes. This
Interestingly, PV was not as suc- cheapest renewable energy sour- exposure is increasing with the
cessful in Spain, although the ces and renewable energy techno- effects of climate change in the
grid-feeder law was similar to Ger- logies are available. It also tends developing world. There is not
many’s, but major barriers of utility towards the momentarily most enough experience with diversified
grid-connections and an obstruc- cost effective technology, leaving quota systems to justify their use
tive law demanding PV owners to other potentially better future tech- by developing nations.
register as generating businesses nologies under-capitalised.
added enough bureaucracy to sty- The RPS also favour large, capital- 1.3.5 Costs, prices and competition
mie progress. Likewise, onerous intensive companies who can In theory one would expect a lack
building approval procedures, tur- afford to manipulate the market in of competition and higher energy
bine spacing rules and capacity order to eliminate smaller competi- prices with the feed-in law system.
ceilings hampered development in tors. However, in real life the economies
France. These are serious issues in devel- of scale and the better predictab-
oping countries with weak and ility of the market led developers to
1.3.2 Innovation, domestic industries nascent industries. invest in R&D, enhancing competi-
and benefits accrued The price system does not have tiveness and cost reductions. In
It has repeatedly been argued that these disadvantages. The Nether- addition, the declining tariffs of the
price systems discourage innova- lands started a voluntary quota feed-in law ensure lowering electri-
tion and competitiveness. In reality system, but soon found that the city prices. Several studies confir-
it appears that, once companies lion’s share of contracts went to med this: a BET-study estimates

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Policies to Accelerate the Application

of Renewable Energy Resources in
Developing Countries

that the extra cost to German pricing systems inherently more this means moving towards the
electricity consumers attributable costly (Sawin, 2004:13). A more pricing system. It also increases
to the pricing law was only 0.11 recent comparison by Cambridge the complexity and cost of the
€cent/kWh in 2000, and is predict- University (Butler and Neuhoff, system.
ed to be only 0.19 €cent/kWh in 2004) in the wind energy sector In summary, it appears that pricing
a decade if the renewables share between the UK quota system systems provide greater security
doubles (Lackmann, 2003). with the German pricing system than quota systems, particularly in
This amounts to € 8 annually per (RE feed-in law) - allowing for the developing countries, because
household (EoG, 2003). A third better wind regime in the UK - there is greater doubt about future
study (Uh, 2003 & 2004) estimates conclusively found the German pri- markets in renewable energy certi-
the additional costs at 0.25 € ces to be lower. ficates (Frost, 2003). Targets set
cent/kWh in 2001. These are figu- under the quota system are too
res that disappear in the noise. 1.3.6 Financial security dependent on political stability,
Environment Daily (2003) analysts Under the pricing system, the adding to the perceived and real
find that feed-in renewables are long-term certainty resulting from investor hazard in developing
cheaper than those produced by guaranteed prices (typically 20 countries. With pricing systems the
quota or green-certificate systems. years) causes companies to invest future price and terms are known.
Nitsch et al (2001/02) present evi- in technology R&D, to train staff,
dence that national initiatives like and maintain resources and servi- 1.3.7 Ease of implementation
the feed-in law reduce prices more ces with a longer-term perspec-
rapidly through the national learn- tive. This in turn makes it more Pricing laws are easy to administer
ing curves. This encourages local attractive to financiers. For exam- and enforce, and they are highly
manufacturing, competition and ple, in Germany banks lobbied the transparent. For obvious reasons,
secondary business. It also avoids Bundestag for a continuation of this is absolutely crucial to develo-
the need for a plethora of subsi- the pricing laws in 2000. ping nations. In Germany, inde-
dies, e.g. in agriculture. By spread- By contrast, quota systems har- pendent research institutes facili-
ing the costs over all national elec- bour political and procedural tated the setting of tariffs for each
tricity consumers, the light burden uncertainties. The stop-go renew- renewable energy technology and
is carried equitably. able energy politics of many coun- their future decrements over time.
The rapid reductions of bid prices tries are disruptive to industry and Government only has to oversee
ascribed to the quota system unnerve potential investors. Pre- the process.
(from US$ 0.189/kWh to US$ paring tenders adds an element of Under the quota system, the
0.043/kWh [Wiser et al, 2000]) risk and cost that many potential requirements are much more
must, in part, be ascribed to the developers cannot afford (Menant- demanding. First, realistic target
feed-in policies in other countries eau et al, 2003). This is of great have to be established. This re-
were costs were driven down by concern in developing countries quires detailed market surveys, re-
R&D (Moore & Ihle, 1999) and in where the local industries are newable energy resource assess-
part, because the NFFO condi- underdeveloped and often cannot ments, future energy demand and
tions were improved, including compete with established global price analyses and scenario plan-
longer project periods (Kleiburg, players in a capital-intensive envi- ning. Developing nations typically
2003). Also, using the NFFO bids ronment. The fact that government do not have the data, expertise,
as a gauge may be misleading officials in developing countries resources and time for these exer-
because many bids never material- are often challenged by tender cises.
ised, either because of local resis- procedures, exposes local bidders The risk of setting the quota target
tance, or bidders found projects and developers to additional too low is that local economies of
less attractive as more detail uncertainty. scale will not be attained, meaning
emerged. Certificates can fluctuate signifi- that national industries never reach
Quota systems tend to reduce cantly with the volatility of the mar- critical mass. Jobs are lost and the
participation to a limited number of ketplace, the stock market or the costs to the national economy are
players, which can lead to cartels vicissitudes of weather conditions. consequential.
and abuse of market power (Epey, Adding floor and ceiling prices to If the target is too high, prices will
2000). Quota-based systems are certificates may help to stabilize be pushed up dramatically while
not inherently cheaper, nor are prices (Meyer, 2003). But then, long-term investors will not neces-

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 35

sarily be attracted because they 1.4 Summary

know that the next round will be
Pricing systems
much lower. Setting quota targets
demands knowledge of cost and Positive Negative
learning curves of various techno- Most successful at developing renew- Tariffs need adjustment to reflect
logies for developing renewable able energy markets & domestic in- learning curve
energy technologies – not a mean dustries with social, economic, envi- Not applied for non-electrical renew-
feat (Barry & Jaccard, 2001). ronmental and security benefits able energies
After this, governments, or their Encourages establishment of large –
agencies, must certify producers, as well as small – and medium-scale
issue certificates, monitor compli- participants
ance, institute penalties and act in Low transaction costs
case of non-compliance, including Ease of entry
concomitant litigation. This sup- Low cost to government
ports the argument that quota/cer- Ease of financing
tificate systems, by their nature, Flexible to changes in technology
are more complex, difficult to and market
administer, and open to manipula- Appropriate for developing countries
tion – and that such problems
could even be more pronounced
in developing countries (Frost, Quota system
2003). Positive Negative
On the other hand, the cost-equal- Favours currently cheapest technology High risk and low margins retards
izing aspects of the grid-feeder law only innovation
have also been attacked as being Aims for definite renewable energy Favours big global players, disadvant-
neither transparent nor simple market share ages small domestic participants
(Saghir, 2003). Attractive to established global market Misses opportunities for domestic job
In summary, bidding processes players creation, equitable economic develop-
are bureaucratic, cause high trans- Applicable to all renewable energies ment in rural areas and local environ-
action costs, and are time-con- mental improvement
suming for both developers and Concentrates on areas of best resour-
public authorities (Wagner, 2000; ces, missing out on distributed
Goldstein et al, 1999). This makes access, and evoking NIMBY
them inappropriate for developing Tends to stop-and-go cycles, dama-
nations. ging domestic development
Target sets upper limit for develop-
1.3.8 Flexibility ment
Pricing systems fix prices of new Complex design, administration and
entrants into the market. This default enforcement
means that new entrants have cer- High transaction costs
tainty about the price over the Poor flexibility in short-term changes
contract duration. Should a Unsuitable for developing nations
government find that the price was
too high/low, it can easily adjust
the price to new entrants.
With the quota system it is not as
easy to tamper with targets and
timetables because lead-times of
several years are required.

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Developing Countries

2 Financial incentives technologies until domestic indus- Such schemes tend to be country
Financial incentives are one way in tries are sufficiently established, and culture specific. Vendor driven
which governments can address the but have to be within WTO lines. lay-byes or credits normally have no
energy market failures, thereby attempt- quality assurance or product quality
ing to level the playing field. 2.2 Rebates and payments guaranties. Regular monthly cash
These incentives may take the form of Japan has provided rebates on the instalments cannot be expected in
tax credits, rebates, investment or pro- price of PV capacity installed, com- agricultural and fishing communities
duction support as implemented in most bined with low interest loans and where the income is seasonal.
developed countries. public education. These must be The fee-for-service system driven by
tied to technology standards. government appointed concession-
2.1 Tax relief California initiated production pay- aires in South Africa received a
2.1.1 Investment and production ments per kWh output. Provided mixed reaction from government.
tax credits (PTC) such payments are high enough and
These can cover either the total are guaranteed over a sufficiently 2.4 Addressing subsidies and prices of
installed costs or the plant costs long period, these payments have a conventional energy
only. They are designed to en- similar effect as pricing systems During the mid 1990s, US$ 250 - 300
courage investment in renewable (Sawin, 2003). billion of subsidies were paid each
energy technologies. Payments and rebates are prefer- year to the fossil fuel and the nuclear
Reductions of the income tax bur- able to tax breaks because they industries of the world (UNDP, 2000).
den are only interesting to those accrue to all income levels. They Even current global subsidies for
with a relatively high income – produce a more even growth than conventional energies remain many
hardly the dominant problem in the sudden income tax reduction/ magnitudes higher than those for
the developing world. evasion driven end-of-tax cycle in- renewable energies (Geller, 2003).
In the USA (1980s) and India vestments. Rebates and payments Surprisingly, about 80 to 90 percent
(1990s) investment tax breaks on their own do not suffice to stim- of these global subsidies to the fossil
helped to jump-start the wind ulate the market (Haas, 2002). fuel and nuclear industries are paid
industry, but also lead to fraudu- Rebates and payments should also out by the developing world (Sawin,
lent practices and the use of sub- be output related. 2004). Those countries that can
standard design. The tax cycle – least afford it thus keep their energy
and not the renewable energy 2.3 Low-interest loans and guaranties price unrealistically below the true
market demand – tends to in- It has been argued that finance, costs of production and delivery.
fluence the flow of investments in rather than technology innovation Eight developing countries that
renewable energy. PTC only drives down the renewable energy account for one quarter of the
worked in those US States with cost curve. In Germany long-term world’s energy use, subsidize fossils
additional incentives (Sawin, low-interest bank loans are refi- by US$ 257 billion, equalling 11 %
2001). As a result of this exper- nanced by the Federal Government of their combined economic output
ience there has been a general (Twele, 2000). (OECD/IEA, 1999).
move towards production incen- In the developing world many, many Even small subsidies for petroleum
tives, which are output-related, more poor people could have ac- products in developing countries can
rather than input-related. Output- cess to renewable energies, if they send out the wrong signals and
related incentives also tend to had access to reasonable loans. direct nations down unsustainable
ensure better performance and Renewable energy loans are feasible energy paths, eventually trapping the
maintenance. if the monthly loan repayments are poor. Subsidies, if at all granted,
The exception may be technology comparable to the current monthly should have sunset clauses and
innovation where PTC seems expenditure on candles, paraffin should enable the recipients to a
appropriate. (kerosene) and appliances. Without transition to renewable energies.
such finance only two to five percent The developing world spends US$
2.1.2 Other forms of tax relief of the population in the Dominican 20 billions each year on high-risk
Relief of environmental taxes or Republic, India, Indonesia and South paraffin lamps, candles and batter-
carbon taxes is a more impact Africa could have access to modern ies. Of the diesel transported to
related incentive, as is accelerated energy, while it would be 50 % with remote regions, two thirds to three
depreciation. Import duties can be suitable loans (Eckart et al, 2003). quarters is spent on transport
reduced on renewable energy This is a tenfold increase. (Perlin, 1999). US$ 50 to 60 billion

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are projected to be spent on subsi- renewable energies. Instead of trying 3. Industry standards, planning per-
dised power projects in the develop- to find new money streams to subsi- mits and building codes
ing world until 2030 (UNEP, 2000). dise established sunset technolo-
Even if all subsidies on fossils were gies, the existing streams should be Developing nations have reasons for
to be stopped forthwith, the inertia reallocated to renewables. their fear of becoming dumping sites of
of the government subsidies in exist- Governments in developing coun- inferior energy technologies. The essen-
ing infrastructure is still biased tries are large energy consumers tial standards for promoting renewable
towards nuclear and fossils. through their energy inefficient build- energies are technology standards and
Mostly it would be better policy to ings, vehicles, transport systems, certification, siting and permit standards,
channel resources towards energy military and infrastructure. It follows grid connection standards, and building
efficiency, energy conservation and that they could lead by example. regulations (codes).

Industrial standards foster fair competi-

tion and build investor confidence. New
technologies like PV and wind turbines
demand new standards of performance,
durability, safety and compatibility with
existing systems. They also facilitate
export and import, which necessitates
Innovative Finance mechanisms and Partnerships for Energy Provision widespread agreement like the EU Solar
Keymark for solar water heaters or the
UNEP’s African Rural Energy Enterprise Development (AREED) initiative, funded by the United
ISO standards. Some cultures are less
Nations Foundation, seeks to develop sustainable enterprises that use clean, efficient and
keen on standardisation, arguing that it
renewable energy technologies to meet the energy requirements of the poor. AREED provides
enterprise development services to entrepreneurs and early-stage funding, in the form of debt stifles innovation by being too prescript-
and equity, to help build successful businesses that supply clean energy technologies and ser- ive. Hence the modern Nordic trend is
vices to rural African customers. towards the integration of performance
and deemed-to-satisfy standards.
The Renewable Energy and Energy Efficiency Fund (REEF), which became operational in March
2002, was launched by the World Bank together with support from the Global Environmental Siting standards and environmental
Facility and several other private and public sector groups. It is the first global private equity impact assessments can delay the pro-
fund devoted exclusively to investments in emerging market renewable energy and energy effi-
cess of establishing renewable energy
cient projects.
technologies. For instance, all kinds of
GEF funding for the Grameen Shakti organisation in 1998 enabled it to offer improved credit objections have been lodged against
terms, increasing the payment period for solar home systems from one to three years. This had wind turbines, some with ulterior moti-
a significant effect on demand between 1997 and 1998. Grameen Shakti sold 1 500 systems ves, and some with genuine concerns.
in 2000, it installed 2 000 to 2 500 systems. Grameen Shakti believes that after three or four In one country, the Government’s own
years of profitable growth, it will be able to obtain financing from commercial banks. Thus, use Wind Energy Demonstration Project was
of GEF financing to support a high risk project, which is unable to attract commercial financing delayed no less than four years, costing
on its own, can result in significant growth and provide the means by which organisations can about € 3 M. To avoid repetitive and fru-
obtain commercial financing.
itless efforts, of both protagonists and
opponents, standard procedures have
The Public-Private Advisory Infrastructure Facility (PPIAF), a multi-donor technical assistance
facility aims at helping developing countries to improve the quality of their infrastructure through
been developed. Both Denmark and
the use of private sector resources. This has now been operational for three years and has Germany have required municipalities
attracted support from twelve donors, including the UK Department for International Develop- (local authorities) to identify renewable
ment (DFID). Current demand exceeds resources, and DFID is seeking to build on this success. energy sites – e.g. for wind turbines – in
advance, and have placed restrictions
DFID launched the Emerging Africa Infrastructure Fund (EAIF) in January 2002, with and initial on their proximity to buildings, lakes and
capital base of US$ 300 million, in order to provide long-term debt finance for infrastructure in other sensitive areas.
sub-Saharan Africa. The feasibility study for the facility showed an immediate need for US$ 11
billion of investment. There is obviously scope to increase the capital base of EAIF and to es-
These proactive policies have been a
tablish a similar mechanism to cover urgent needs in the poorer countries of Asia (and possibly
major positive factor in reducing uncer-
(DFID, 2002 in Christensen, 2004) tainty and fruitless expenditure of time
and money. The opposite happened in

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Policies to Accelerate the Application

of Renewable Energy Resources in
Developing Countries

the UK. A Code of Practice developed In the warmer developing countries, Governments often are embarrassed by
by the Australian Hydro Association may domestic water heating and food pre- informal settlements, which are seen to
also help. paration are predominant in housing, be hotbeds of crime as well as a visible
while space and water heating take the evidence of failed social programmes.
Grid-connection standards are needed first position in colder regions. It is a However, bulldozing such settlements
for safety and technical reasons, but common fallacy to assume that all low does not remove the reason for their
also because both the consumer and latitude areas are hot. In fact, average growth, which lies in the necessity of the
renewable energy producer loads can temperatures conceal the reality that low-income population to be close to
vary, if produced by intermittent sour- inland deserts are bitterly cold at night, work opportunities or surmised work
ces. Favourable renewable energy sites and high mountains within the latitudes opportunities. This is denied to them by
may not necessarily be located at the 30°N and 30°S even used to carry the dogmatic and out-moded town plan-
point of consumption. In the past, some snow. ning that forbids mixed land-use, pontifi-
utilities tried to block renewables by cating that you must not live near your
imposing onerous connection or wheel- Barcelona, Spain instituted an ordinance work.
ing conditions. Some had creative line requiring that all new or to be altered
charges for access, even if it is not buildings satisfy 60 % of their hot water Integrated resource planning optimises
used. Governments, acting in the nation- consumption by SWH. Alternatively, the long-term use of all resources, be
al and global interest must establish buildings must be wired for PV instal- they natural (water, earth, energy,
standards under which renewable ener- lations. waste), social (expertise, patents, com-
gy developers pay only the direct grid mitment) or economic (money, credit).
connection costs, not for the line upgra- The effects of this law are dramatic and Legislation aimed at integrated resource
des necessitated by the additional capa- carry no costs to the fiscus. planning in urban settlements and archi-
city. Feeders to the grid should also only Energy efficient appliance rating is a way tecture is a common good to be consi-
pay for the transmission service they of achieving efficiency, and enhancing dered at the local, municipal, provincial,
actually use. Finally, renewable energy energy awareness. In addition, this sim- national and international levels.
based electricity (except biofuel-based, plifies the introduction of renewable Energy is used in buildings to achieve
ocean current, geothermal hot dry rocks energies. Buildings represent invest- certain energy service levels (illumination,
(HDR) and – potentially – solar up-wind ments with a longer lifetime than most comfort). These target levels should be
chimneys) should always have priority power stations, and can be distributed climate and season adjusted, realistic for
grid-access because it cannot be defer- energy generators in their own right the given task, and not solely industry-
red. Other dispatchable sources like instead of being consumers. For this driven.
open cycle gas turbines, hydro and – purpose, it is necessary to have solar
possibly – compressed air as well as access regulations. In artificially conditioned buildings, the
gyroscopic dynamic storage can easily use of economy cycles and variable
be ramped down as required. Convent- The use of daylighting and energy effi- speed drives should be mandatory.
ional coal fired power stations have poor cient compact fluorescent lights (CFL) National building regulations should
load following characteristics. Good grid renders the use of PV significantly less
interconnectedness and better demand costly.
and supply prediction are required.

Building regulations (codes) should pro-
mote energy efficiency and the use of The New and Renewable Energy Agency (NREA) was established in 1998 as a government
renewables, calculated over the cradle- R & D body working under the Ministry of Electricity. The primary objectives in establishing
to-grave life cycle of all buildings. NREA were:
Energy intensive materials/components to contribute to Egypt’s need for increasing the share of renewables in the power supply mix
should be used with discrimination, and to conduct various research projects on issues pertaining to renewable energy technologies
should be recycled as far as practical. to act as a renewable energy focal point and counterpart agency for all international organi-
The use of local and natural low energy zations interested in the renewables sector in Egypt
to advise the Ministry of Electricity on renewable energy technologies and their applications
materials leads to buildings with lower
in the country
embodied energy, and should be en-
to collaborate with other government and non-government institutions in various research
couraged by policy, research, training projects.
and regulation. (Christensen, 2004)

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encourage performance-related designs 4. Education and information dissemi- Educational institutions have a task of
aimed at peak demand, and CO2 reduc- nation enlightening the new generation about
tion. This will enhance innovation in insu- energy’s role in socio-economic devel-
lation materials (vacuum insulation has The mere availability of renewable ener- opment and the environment. For ex-
ten times the thermal resistance of gy resources, incentives, technology, ample the Indian Solar Finance Capacity
conventional insulation), better glazing, capital, expertise and government policy Building Initiative enlightens Indian bank
phase change materials, thermal storage does not suffice if there is insufficient officials about solar technologies, encou-
and day-lighting, as well as energy effi- end-user awareness. Germany has less raging investment. Likewise, communi-
cient artificial lighting and appliances. sunshine than France, and less wind cation and information initiatives are in
The use of obligatory energy efficiency resource than the UK. But its application place.
labels of buildings creates energy aware- of renewable energies is so much more
ness, reduces fruitless consumption and because of the general awareness of The International Solar Energy Society
creates jobs. the German population (Hua, 2002). contributes to knowledge dissemination
through conferences, workshops, publi-
Solar rights (solar access) should be Initial failures have created negative cations, and summer schools. It also
legislated. perceptions in some countries. These maintains international electronic net-
can be overcome by concerted infor- works for the dissemination of informa-
The use of energy efficient transport like mation efforts by governments, NGOs tion. Finally, it recognises and awards
rail, efficient vehicles, speed limits and and industry. exceptional achievers in furthering the
multi-use planning must be regulated. science and application of renewable

Gender Approach Leads to Greater Project Efficiency: Case Study PV Solar Homes in 5. Public ownership, cooperatives
Guatemala and stakeholders

Fundación Solar, while operating a PV project in Guatemala, found that mostly men attended Many developing nations have a strong
the training sessions on equipment maintenance, and those women who did attend, merely
tradition of communal public ownership
stood by and watched while their husbands got involved in hands-on activities such as
and cooperative initiatives. This does
changing the batteries. As a consequence, when the PV system needed maintenance, such
as topping up the batteries, and the men were not at home, the women did not have the not yet seem to be the general trend
skills or confidence to take the appropriate action, which had a negative influence on with renewable energy generation in
the long-term durability of the system. Fundación Solar saw much better overall system care the developing world.
(and hence project performance) when they took specific action to train the women in system
maintenance. This was achieved at home while the men of the household were out. By taking In Denmark and Germany cooperatives
this approach to training, the NGO created an environment in which the women were not play an important role as owners and
afraid to make mistakes or to ask questions. developers of renewable energy. There
(Wides, 1998 in Clancy, 2004)
is even a woman cooperative called
“Windfang”. Local farmers pool resour-
India ces and obtain an additional harvest
from renewable energy. This greatly
The rising price of oil led to the revival of interest in renewable energy in India. In 1981, the enhances local buy-in and support.
Government of India established a Commission for Additional Sources of Energy (CASE) in
the Department of Science and Technology. In 1982, a separate Department of Non- At least 340 000 German individuals
Conventional Energy Sources (DNES) was created in the Ministry of Energy. Ten years later, invested about € 12 million in renewable
in 1992 a separate Ministry was founded, the only country in the world to have an exclusive
energy projects (PREDAC, 2002/03).
Ministry for Non-Conventional Energy sources (MNES). The primary role of MNES in the
Middelgrunden is co-financed by a utility
Renewable Energy sector is to
promote renewable energy technologies
and thousands of Danes.
create an environment conducive to promoting renewable energy technologies
create an environment conducive for commercialisation of RETs Munich’s large roof-mounted PV plant
renewable energy resource assessment was financed by enthusiastic private
research and development citizens (Maycock, 2003).
(Christensen, 2004)

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Policies to Accelerate the Application

of Renewable Energy Resources in
Developing Countries

Public buy-in engenders public pride and Local participation in solar mini-grid pro- Conclusions and recommendations
avoids obstruction or vandalism. It also jects in Nepal and Indian islands have
supports government renewable energy played a decisive role in avoiding theft Developing nations wish to occupy their
policies when these periodically come (BBC News, 2000). rightful place in the concert of nations.
under pressure from vested less environ- Renewable energies will play an impor-
mentally friendly energy lobbies. tant role in their transition path to sustai-
nable development.
To fulfil this role, apposite policies are
indicated. To date, pricing systems
Stakeholders in energy for sustainable development
(feed-in laws) have accounted for the
STAKEHOLDER FUNCTION/ACTIVITIES most rapid and sustained market trans-
1 Legislative Set national political priorities; social, economic, and environmental formations, while creating work places
authorities/ goals; legal framework conditions. and driving down the cost through tech-
elected officials
nology advancement, economies of
2. Government Define development goals and macro policy; general economic
scale and cost-effective finance. This
macroeconomic policies; crosscutting issues; subsidies and trade policy; sustainable
and develop- development goals, and frameworks. has triggered private investments, there-
ment planners by lightening the load on government.
3. Government Set sectoral goals; technology priorities; policymaking and standard- Quota systems have not fared as well,
energy authority setting functions; legal and regulatory framework; incentive systems; having a preponderance to stop-and-go
or ministry federal, state, and local level jurisdiction. markets. The two systems are not com-
4. Energy regula- Have monitoring and oversight functions; implement the regulatory patible.
tory bodies framework; administer fees and incentives. Complementary combinations of well-
5. Market coordi- Dispatch entities; have operational coordination functions, interface
matched policies are required. Reducing
nation agencies with industry investors; information brokers.
real and perceived risks is a crucial
6. Non-energy Sector policies; crosscutting issues; interrelation with energy
governmental policies; public sector energy consumers; require energy inputs component.
authorities/ for social services provision. Not all stereotypes of the developing
ministries nations are necessarily correct. For
7. Energy supply Private companies and public utilities; manage energy supply, instance, it cannot be assumed that all
industry electricity generation; fuels management and transport; finance developing nations inherently strive
some R&D. towards a current western value system.
8. Entrepreneurs Business development; economic value added; employment Nor can it be assumed that the provision
and productive generation; private sector energy consumers.
of electricity automatically leads to de-
velopment. Furthermore, there is wide-
9. Energy equip- Supply equipment for the energy industry and other industries, in-
ment and end- cluding vehicles and appliances; impact energy end-use efficiency;
spread confusion about energy and
use equipment adapt/disseminate technology; finance some R&D. electricity, which are assumed to be
manufactures synonyms. This confusion has been
10. Credit in- Financing options for large- and small-scale energy generation; deepened by expectations created by
stitutions capital provision for energy using enterprises; financing options populist political over-promises like the
for household energy consumers. slogan “electricity for all”.
11. Civil society/ Consumer participation and awareness; oversight and monitoring; In a developing country with a large,
non-govern- environmental and social advocacy; equity considerations.
highly dispersed and poor rural popula-
mental organi-
tion the political slogan “electricity for all”
12. Energy spe- Strategic advice, problem definition and analysis; systems develop-
is understood to mean “grid electricity
cialists and ment; specialist services delivery; options analysis; information shar- for all”. However, the realities of the cost
consultants ing. of grid extension, the low productive
13. Academia and R&D, knowledge generation, and sharing; formal and informal educa- consumption and low-income levels
research or- tion; technical training; technology adaptation, application, and inno- tend to render this a promise that can-
ganisations vation. not be fulfilled. Creating expectations
14. Media Awareness raising, advocacy; information sharing; journalistic inqui- that cannot be fulfilled is a dangerous
ry, watchdog functions; monitoring, public transparency.
game. Rural communities expecting
(Bouille & McDade, 2002 in Christensen, 2004)
“real grid power” tend to reject solar
home systems as an “inferior” option.
They do not see these being used by

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Rural Electrification

The two largest outside supporters of rural families who financially are able and inter- revenue will grow sufficiently to cover the
electrification (REL) programmes have been ested in obtaining the benefits of electrifi- initial capital expenses as well.
the World Bank (WB) and USAID. During the cation, appear to be much more sound For all other regions, develop off-grid utility
1970s and 1980s these two agencies lent or and far more sustainable. systems that are based on the use of PV
granted some US$ 1.9 billion for 40 REL equipment (both local battery loading sta-
projects in twenty countries, accounting for Given this conclusion, four issues must be tions and freestanding home PV units have
some 60 percent of the actual expenditures stressed: demonstrated favourable economics in
of US$ 11.5 billion for these projects. Be- Supplies should be prioritised* to those selected applications). Where warranted
cause of lingering doubts about their econo- families and households who both appreci- and where concentrated local demand is
mic soundness, the two agencies undertook ate the value of the services provided and high enough, small grid systems based on
a thorough review of these projects in the who are willing to pay for them from their PV, wind, biomass, small hydro or hybrid
early 1990s. While the rationale for this eval- own, discretionary income. This suggests units may offer cost-effective solutions.
uation and the detailed findings have been selectivity – rather than full area coverage. To increase market penetration, credit
published elsewhere, a number of useful les- To identify those selective potential users, systems should be developed (including
sons were drawn by this study: some form of “sacrifice” is needed as an extended leasing arrangements), that en-
Unfortunately, as it turned out, in the majority expression of interest on their part, i.e. a able households to participate in the pro-
of cases the various projections of beneficial significant down payment on or prior to gramme. These credit systems (minus
results were far too optimistic and, in addi- installation, to indicate their future willing- public subsidy contribution, if any) must be
tion, often based on faulty methodologies. As ness to pay for the services provided. This based on a rigorous assessment of the wil-
a result, even the far more modest net bene- principle holds regardless of the question lingness and ability to pay by each of the
fits identified after the event, compared with whether or not the installation is partially prospective users. This requires pre-electri-
predicted expectations, were subject to subsidised by the government, donor aid fication socio-economic surveys. It also
doubt and, in several important cases, agencies or development foundations, or means that the complete area coverage of
strongly negative. by other electricity users (through utility all households should be rejected as an
cross subsidies, for example). objective of off-grid electrification program-
Taking into account the experiences of the Where credit sales of equipment (or leasing mes. If this selectivity principle is not
past, as well as those of the present, such as arrangements) are part of the off-grid elec- adhered to, the chance of having many
the massive multi-million households South trification programme, means must be non-paying customers is very high, in-
African Electrification Programme, it is clear found to protect the supplier from non- creasing average system costs to unsus-
that electrification by network expansion into payment. The recent French and South tainable levels. This risk of non-payment is
low-density, rural areas faces severe cost African technological development of time independent of any theft protection devices
constraints and cannot be supported econo- dependent metering equipment and micro- or time related metering equipment that
mically. This is so because consumption by chip anti-theft devices hopefully will help to may be incorporated into the credit-finan-
these users is limited to the high-value spec- achieve this objective. ced equipment.
trum of electricity uses, which, by themselves, Needs for heat energy (e.g. cooling and/or A balance must be found, by experimenta-
cannot justify the high cost of network con- refrigeration), have to be met from other tion, of the required size of the initial down
nections. As a five-year longitudinal study of sources. The systematic development of payment, the type and timing of periodic
the Eskom electrification programme has LPG or kerosene distribution networks payment (which may be income related –
shown, “The most frequently bought applian- (including credit sales of respective appli- e.g. after harvesting in agricultural areas,
ce is a television set and entertainment equip- ances), preferably in conjunction with a but not monthly) and the credit duration.
ment, such as hi-fi, radio and tape recorder, systematic PV programme, should be able The objective should be to capture in a
whereas the switch to electrical cooking to satisfy these needs. given region as many households as possi-
appliances is very slow.” These uses of elec- ble that are willing and able to pay, in order
tricity, however, can be comfortably accom- Once the above development principles are to reduce average after-service and main-
modated by lower cost, freestanding Solar taken into account, a number of specific tenance costs.
Home Systems (SHS). They do not require policy approaches and directions become Where possible, PV developments should
network electricity supplies. apparent. be combined with household cooking
Limit system expansion by wire to those equipment programmes (LPG or kerosene,
These findings are of fundamental impor- (largely urbanised or urbanising areas) mainly) to provide cooking heat under the
tance for the planning of electrification where current income and expected in- same credit rules that apply to the PV
strategies for low income, low-density come growth of the population promise to equipment. This would provide a secondary
(or rural) regions of the world. Rather than cover at a minimum the operating costs of income source for the after-service, main-
proceeding with costly, and, in most the system, with strong indication that tenance and supply infrastructure that is
cases, non-economic strategies of net- within the life expectancy of the installed essential for the survival of the programme.
work-by-wire expansions, individual reticulation and house connection equip-
household installations, focussing on hose ment average demand and resulting (Schramm in Holm & Berger, 1998)

*This sensible recommendation may not be palatable to those populist politicians who like to go electio-
neering with “electricity for all”, while fully knowing that this is a false promise. 41
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the well-to-do population sector and technology leapfrogging. Leapfrogging 1.2 Renewable Energy and Energy
cannot provide the heating energy ser- has been successfully demonstrated by Efficiency White Paper
vices. If grid extension suddenly appears modern cell-phone technology that does A national White Paper demonstrates
in areas that had recently been provided not require the huge investment of the the intentions of government. It is an
with solar home systems after lengthy old-fashioned landlines. important document to other ministries
deliberations, the credibility of the autho- Once the potential resources and needs as well as to international and national
rities and their policies become question- are known, and given sufficient stake- players.
able. holder awareness and political support, Provide Motivation for White Paper
the priority policy recommendations for e.g.:
In developing countries the priority of developing nations are: a) Sustainable social development
electrification should be for productive – Poverty reduction through
uses (industry, business), health (clinics, 1. Establish transparent, consistent domestic job creation
hospitals), education (schools, training), long-term renewable energy tar- – Gender issues
with social and amusement and resident- gets and regulatory framework, – Health issues
ial provisionally last. preferably a pricing system (grid-fee- b) Sustainable economic develop-
der law), creating an investor friendly ments
People of the developed and developing environment. This could start with net – Diversity of energy supply
world require energy services like heat- metering. Internalise externalities in – Reduced price volatility of
ing, cooling, lighting, and/or moving the pricing system. Set targets, not imported energy
objects. The energy service of heating ceilings. – Security of domestic supply
may be provided by the sun, a fire or el- – Growth of domestic industry,
ectric heating. Of these, electricity is the 1.1 The Kyoto Protocol opportunity export and expertise
most highly ordered and most expensive Although the Kyoto Protocol can be – International competitiveness
form. Therefore it makes better sense to criticised in many ways, it offers an – Reduced risks of armed conflict
use other clean energy forms like solar opportunity to developing nations. and terrorism
and clean biofuels for energy services of c) Sustainable environmental
heating buildings, water and food. Accede to (sign) the Kyoto Protocol development
Establish a Designated National – Protection of tourism assets
Electricity by itself does not provide new Authority with dedicated, well-trained – Improvement of health (dis-
income sources. As has been shown staff and powerful linkages to the eases, air pollution)
repeatedly, electricity follows rather than ministries of energy and environment – Protection of water and agricul-
leads economic development (Schramm, Establish the Carbon Emission tural resources
1998). Baseline and disseminate to stake- – Contribution to global climate
holders stabilisation
While life without easy access to elec- Establish the National Development
tricity seems unthinkable today, we Criteria, avoiding political opportun- Set renewable energy targets, not
acknowledge that current civilisation is ism, and disseminate to stakeholders ceilings e.g.
but a short period in the course of the Encourage programmes rather than
human race of about a million years. The projects Minimum Minimum
renewable final energy
great past achievements of China, the Reduce the very high transaction year energy target per capita
Americas and the Mediterranean, includ- costs by facilitating and supporting 2010 10 % 100 kWh/a
ing North Africa, cannot be ascribed to national NGOs and consultancies, and 2020 20 % 500 kWh/a
the use of electricity. by enhancing competition 2050 50 % 700 kWh/a
Carefully consider “Additionalities”,
That much is certain: the developing and monitor it closely. Set targets and dates for improving
world cannot follow the energy path of Publicise results widely. national energy productivity (reducing
the USA, even if it wanted to. There are The window of opportunity of major national energy intensity).
simply not enough fossil resources, nor CO2 emitters like China, India and Set targets and dates for orderly
can the world absorb the environmental South Africa may be over by 2012. phase-in of revenue neutral environ-
impact. This insight, combined with the Use it now. mental tax.
fact that the energy infrastructure in Set targets and dates for fossil and
developing countries is presently under- nuclear phase-out – if any.
developed, gave rise to the concept of

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 43

Establish pricing policy (feed-in law) Before Rural grid Electrification (REL) this was expected to:
for grid-connected renewable energy,
including future price reductions. Act as catalyst for agricultural, industrial and commercial development of rural areas, includ-
Establish energy (not investment) tax ing electricity for irrigation pumping;
Replace more costly and qualitatively inferior energy sources, such as kerosene for lighting,
credits with future reductions.
diesel for engines, irrigation pumps and generators;
Establish renewable energy produc-
Improve the standard of living of the rural poor;
tion tax rebates or refunds linked to Stem out-migration from rural to urban areas; and
technology standards. Redress urban/rural biases.
Facilitate/provide long-term low inter- (Schramm, 1998)
rest loans with government refinance
to renewable energy technologies,
tied to standards. After REL, it appeared that:
Equalise the subsidy playing field for
Electrification by itself had not been a catalyst to economic development. In fact, what could
grid-connected and non-connected
be deduced from a comparison of the more with the less successful REL schemes is that is
fossil and renewable energies, by redi-
that electrification should follow, rather than attempt to lead, regional economic develop-
recting funds to renewable energy.
Set technology standards, aligned The impact of REL on agricultural growth was often overestimated as it was, for example, in
with EU and ISO renewable energy Thailand, Indonesia, India and Bolivia.
standards. There was little evidence that electricity by itself resulted in new agro-industries, commercial
Mandate municipalities/local authori- or small-scale industrial activities.
ties to identify renewable energy sites The provision of network electricity was by far the most costly form of energy supply for low-
and to execute environmental impact density, low-demand rural areas, compared with other options. If its real costs would have
scoping studies. been charged to users, it would have been unaffordable to most of them, unless they al-
ready had a reasonable and growing income base of their own.
Establish energy efficiency and renew-
REL in general did not contribute to the alleviation of poverty. It benefited mainly the higher
able energy building regulations
income groups.
(codes) adapted to local climates. Electricity did replace more costly energy sources in some cases: however, this was only so
Streamline consultants’ professional because in almost all cases electricity was heavily subsidised, while the alternatives generally
fees based on CO2 reductions, not on were not. One result of this subsidisation was that observed demand growth was more rapid
mechanical plant expenditure than it would have been otherwise, making REL projects in physical terms (i.e. number of
Establish policy for all levels of govern- connections) appear to be more successful than they would have been without subsidies.
ment to lead by example in govern- The large subsidies for REL imposed a heavy financial burden on the utilities (or their other
ment procurement programmes, customers through cross subsidies) even in those cases in which projects were justified eco-
nomically. REL tariffs rarely covered more than 15-30 percent of estimated costs of supply.
based on life cycle energy use.
Real costs of electricity supplied through REL projects were very high, averaging 20 US
Commit to a renewable energy and
cents/kWh; in addition, in most cases these costs were still underestimated because the low
energy efficiency strategy, prioritising REL load factors, large distribution losses and the additional burden imposed during peak
local conditions. Do not attempt to periods which, as, for example, in supply-constrained systems such as in India and Pakistan,
introduce renewable energy technolo- contributed heavily to power rationing and outages. Such outage costs to other users were
gies in remote rural areas before they close to US$ 1/kWh or more in many cases.
have been thoroughly tested, promot- REL improved the perceived quality of life for those able to afford it.
ed, accepted and established in grid- There was no impact of REL on stemming migration from rural to urban areas; indeed, the
connected areas. opposite could well be true, largely because the increased access to information pointed to
greater opportunities elsewhere.
REL did not contribute to the conservation of fuelwood because electricity was rarely used
1.3 Publicise and workshop the draft
for cooking or heating; where it was (by a few higher income households) its use would pro-
White Paper widely, obtaining buy-in bably have been substantially reduced if tariffs had been adjusted to cover the actual costs
of the national stakeholders and of electricity supply.
drawing the attention of international
donors, investors and developers From that it was concluded that a disaggregation of rural energy into their sub-components
may well have shown that a mixture of other supply options (including a judicious, small
amount of electricity from decentralised sources for highly specific and limited uses) might have
been far more cost effective than network REL in regions with low population and at as low
stage of economic development.
(Schramm, 1998)

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 44

Policies to Accelerate the Application

of Renewable Energy Resources in
Developing Countries

2. Institute supportive finance mecha- Develop a Long-term National In rural areas, focus on energy serv-
nisms through production payments Integrated Energy Plan within the ices for income generation, health
rather than tax credits on invest- National Integrated Resource Plan, improvement and education. Extend
ments. Institute long-term, low inter- taking care not to confuse energy ser- mini-grids from workshops, clinics and
est loans rather than investment tax vice requirements with energy carriers schools. These are serviced by dedi-
credits. Fix rebates to output units, or energy technologies. cated resident staff.
not to cost percentages. All subsidies Prioritise energy awareness, energy Initially use the selective ownership
should be tied to standards and gra- saving measures and energy efficien- model for houses, assisted by subsi-
dual reduction/phase-outs. Introduce cy. They are more cost effective than dies equal to grid-connected ones,
revenue neutral environmental taxes providing new generation capacity. plus financial incentives listed under
according to a long-term plan, and Implement energy labelling for energy “policy priorities”.
adhere to it. consuming systems and buildings by Once the ownership market has been
using internationally established labels saturated, consider “fee for service”
3. Establish, maintain and enforce and proven campaign methods. model for energy services.
standards for technology, siting, Integrate grid-connected electrification Measure and GIS maps:
buildings and grid-connection. Lead with rural energisation strategies, Identify potential consumers
by example. rapidly introducing renewable energies Assess RE potential
through the grid-feeder law. This esta- – Tidal/wind map
4. Support Research, Development blishes renewables in a market sector – Hydro map
and Demonstration of renewables where the public can afford it and is – Solar map
as well as education and dissemina- more open to innovation. By associa- – Geo thermal map
tion. Acknowledge failures and learn tion, renewable energy technologies – Gas map
from them. Create centres of excel- become status symbols. Grid-connect- a) landfill
lence. ed installations require little back up, b) bio
and are within easy reach of installers c) natural biogas
5. Encourage stakeholder/public for repairs and maintenance. – bio fuels, woodlands, agriculture,
ownership, participation and pride Capacity, standards and reliability of peat and waste
in the process and products. industry are built faster and more Appoint independent evaluators, and
sustainably. feedback regularly at agreed intervals
Identify areas of grid extension and to policy makers. Admit mistakes and
Implementation strategy publicise, using GIS maps. recognise successes.
As soon as sufficiently confident capa- Promote local production.
The transition from policy to strategy is city has been established through
not always clear-cut. Many actions can grid-connected renewables, initiate
be developed in parallel: comprehensive rural energisation (not
only SHS) in concentrated solar enter-
Launch targeted awareness cam- prise zones.
paigns aimed at decision makers. Set and insist on proper technology
Conduct baseline study to establish standards and codes of practice of
energy usage, and benchmark with buildings, appliances and equipment.
comparable best practice Integrate education and research.
Involve grass-roots stakeholders and Implement financial incentives.
potential renewable energy cooperat- Initiate joint ventures.
ives. Their buy-in is crucial.
Include regional stakeholders of neigh-
bouring countries

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 45

The Need for Research,

Development and Demonstration

Research, Development and Demons- dual energy programmes. However, no steered and synchronised with the
tration (RD & D) are the foundation for evidence could be found of concerted markets because there is a considerable
progress and change toward sustainable multinational research programmes by time lag between laboratory and market.
energy systems that eradicate energy the developing world that reflect the Research and Development is needed
poverty in the developing countries, pro- strategic importance of renewables to on non-technological and on technologi-
tect the global life-supporting systems the developing world. cal aspects.
and reduce the risk of geopolitical con-
flicts over fossil fuel resources. Most developing nations are currently
not on a sustainable energy path and Non-technological aspects: e.g.
Countries with the most visionary RD & D are facing increasing energy and envi- economic, sociological, and political
initiative will be the future technology lea- ronmental pressures caused by popula-
ders. Motivated by the world oil shock of tions with growing energy demands. The market penetration of renewable
1973, the European Union saw energy energies is neither directly related to
as a high priority and dedicated the larg- Luther (2004) has presented an updated the availability of renewable energy
est investment block of the five-year overview of the RD & D challenges: resources, nor to the availability of
frameworks to energy research. The Since the price experience curves (or renewable energy technologies. Other,
energy research budget of 23 IEA mem- “learning curves”) of renewable energy partially undefined aspects seem to
ber countries reached a maximum of technologies are also driven by R&D, it play a role. Therefore priority should
US$ 13 billion in 1980, after which date is imperative to direct concerted funding be given to identify these drivers or
it sank to only 38.5 % of its peak. About towards these research initiatives. Two barriers including R&D on:
70 % of this budget was spent on nuclear main approaches need to be followed: – The way innovation processes work
fission and fusion research, representing – Development of sustainability in
an enormous subsidy to those indus- New technologies for the developing dicators
tries, which is in no relation to their out- world like biogenic bottled gas as de- – Model projects and dissemination
put. Strangely, when confronted with a centralised sustainable energy carrier, (e.g. strategic EU/North Africa part-
transport oil crisis, they went for nuclear low-cost energy efficient houses and nership, biogenic bottled gas infra-
electricity. Also, the budget allocated to buildings, additional storage schemes structure, energy efficient low-cost
fossil fu els has consistently been about for high quality energy, and techno- housing, rural energy, and one mil-
twice the renewable energy budget, illu- logy transfer. lion hut energisation in developing
strating the influence of entrenched Significant cost reductions of existing countries)
industry lobbies in the European Union renewable energy technologies: higher – Economics and financing
where environmental awareness is said efficiencies, longer lifetimes, less – Optimal CDM & JI applications
to be high and growing. Only 10 % went maintenance, reduced environmental – Externalities of nuclear and fossil
to renewables and energy efficiency. In impact. This RD & D work has to be energy
view of the strategic importance of re-
newables, this is disconcerting.
Renewable Energy Paradigms
The disaggregated budget for renew-
Old Paradigm New Paradigm
ables also shows a maximum in 1980,
Technology Market assessment
falling to 30 % in 1998, with the relative
share of biomass and PV growing. Un- Equipment supply Application, value-added, and user focus
derstandably, there was a strong call at focus
the Renewables 2004 Conference in Economic viability Policy, financing, institutional, and social needs and solutions
Bonn that the renewables R&D budget Technical demon- Demonstrations of business, financing, institutional and social models
should be increased by at least by an strations
order of magnitude. Donor gifts of Donors sharing the risks and cost of building sustainable markets
Programmes and Experience, results, and lessons
A few EU nations invest in the bulk of
renewable energy R&D. Information on
Cost reductions Competitiveness on the market place
R&D activities in developing countries
$/kWh Energy services
is quite limited. It appears that countries
like China, India, Brazil, South Africa, (Adapted from: Martinot et al, 2002 in Johansson, 2004)
Egypt and a few others do have indivi-

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 46

The Need for Research, Development

and Demonstration

– Effects of energy market liberalisa- upwind chimneys, wind energy in de- – Biomass: cogeneration, stirling
tion and globalisation veloping countries, biomass-based cycle, systems integration, food/
– Best practice benchmarking of synfuels) energy
national renewable energy policies, – New technologies with a view to long- – Geothermal: exploration, efficient
programmes, finance procedures term energy sustainability (RE hydro- low temperature converters, waste
– Accelerated capacity building gen, better batteries and other storage heat utilisation
– Awareness, acceptance, access systems, as well as ocean current, – Maritime: durability of tidal, wave,
and affordability wave and tidal power) current, thermal systems
– Data, statistics and resource
assessment The first two renewable energy catego- Heating, cooling, daylighting
– Energy and human health ries can be grouped under the headings – Solar water heating: long-term
– Income-generating energy services of electricity generation, heating, cooling storage
and daylighting, solar buildings, fuels, – Solar cooking: thermal storage,
and crosscutting technologies. price reduction
Technological aspects – Solar cooling: absorbents, systems,
Electricity generation hybrids
Since there is no single silver bullet, re- Existing renewable energy technolo- – Biomass: local species, alien in-
newable energy technology research gies require RD & D in specific areas: vaders, system integration
has to follow an integrated broad-spec- – Wind: off shore potentials, extreme – Geothermal: cogeneration, improv-
trum approach. Three categories are climates, developing world adapta- ed heat pumps, long-term storage
identifiable: tions
– Technologies that are currently appli- – PV: cost reductions, optical concen- Solar buildings
cable for world-wide cost-effective tration, innovation, building integra- – Embodied energy: cradle-to-grave
application (energy efficient buildings, tion energy content, reduce, recycle,
off-grid PV, biomass, commercial solar – Solar thermal: thermal storage, direct reuse
water heating in warm countries) evaporation, hybrids, automation – Shell insulation: vacuum insulation,
– Technologies in need of minor deve- – Hydro power: risk assessment, benign insulation
lopment for entry into new or larger environmental impacts – Solar optimised windows: daylight-
markets (solar thermal power stations, ing optimisation, improved insulation

Innovations on Brazilian charcoal production

Brazil has one of the best technologies for the implementation of de- On the other hand, the steel industry ACESITA developed a program-
dicated eucalyptus forests in the world. Large-scale industrial use of me to modernise charcoal production and consumption. This program-
eucalyptus includes pulp and charcoal production, and technologies me included the development of a continuous carbonisation retort, i.e.
were developed to reduce pulp and steel production costs. Due to a kiln in which heating is promoted by circulating gas. During testing,
favourable weather conditions, genetic selection, and improved plant- the measured yield was 35 percent, while the maximum yield for char-
ing technologies, average yields of about 22 t/ha.a (dry basis) are usual coal production – depending of the wood composition – is estimated
for eucalyptus. between 44 and 55 percent (dry basis). The same company developed
a rectangular kiln with a charcoal production cost 15 percent lower than
The forest division of the steel industry, Mannesmann – MAFLA in traditional kilns. As a part of the same R&D programme, a continuous
Brazil – has developed a rectangular kiln of high capacity. This kiln process of pyrolysis for charcoal production and liquids recovery was
has a tar condenser that allows recovery and further distillation of high- developed until the mid 1990s. Theoretically, continuous kilns allow
value by-products. Gases can also be recycled and used as fuel in the better control of the process and, as a consequence, production of
carbonisation process. In comparison with traditional kilns, the tech- better quality charcoal. Gases produced by pyrolysis are recovered
nology presents higher productivity, higher yields, improved charcoal and burned, supplying energy for the process, while liquids are also re-
quality and partial mechanisation. Most of the rectangular kilns develo- covered – including tar – and can be used in the production of chemi-
ped in Brazil are large enough to accommodate trucks inside, reducing cals. According to test results, the yield of charcoal was estimated as
time for loading and unloading. 33 percent (dry basis). It is important to mention that this R & D pro-
gramme was conducted while ACESITA was a state-owned company;
A conceptually similar kiln was developed by the steel industry Belgo the pyrolysis plant, for instance, was dismantled after the company’s
Mineira between 1991 and 1998. In comparison with traditional kilns, privatisation.
results of the R&D programme show that the new technology reduces (Coelho & Walter, 2003 in Karekezi, 2004)
initial capital costs and labour, while improving charcoal quality.

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 47

– Heat/cold storage: phase-change, Today, developing countries generally

air-ground heat exchangers, night are not strong in research and develop-
ventilation ment. There has been a tendency to rely
– Heating, ventilation, air conditioning: on imported technologies, patents and
efficient compact solar units expertise. This often brought along with
it a reliance on imported fuels. The
Fuels transport technology complex illustrates
– Biogenic fuels: cheaper biodiesel, the point.
biogas separation, fuel cell feed-
stock However, developing countries like Brazil
– Hydrogen: solar methane reforming, have managed to build their own indige-
advanced electrolyses nous renewable energy synfuel techno-
– Solar chemistry: photo-biological/ logy as well as its associated vehicle
chemical hydrogen and energies technology. South Africa continued to
develop the German Fischer-Tropsch
Cross-cutting technologies process for producing liquid fuels from
– Distributed generation/grid design: coal. This has now been extended to
advanced DSM, electronics, fluctuat- cleaner natural gas-to-liquid applications
ions, and also investigations into means and is extendable to renewable ener-
of adding high penetrations of intermit- gies.
tent RE generators into the electricity
distribution and transmission net- The Chinese solar water heating market
works. transformation with evacuated tube
– Off grid systems: advanced diagnos- technologies from Germany is another
tics, metering, maintenance illustration how research and develop-
– Energy meteorology: satellite prognos- ment partnerships can lead to resound-
is, smart pro-active buildings ing successes.
– Impact assessment: recycling techno-
logies, material resources The growth of research and develop-
– Energy storage: innovative batteries, ment capacity of renewable energies in
hydrogen storage, kinetic storage, the developing world can fortuitously be
superconductors integrated with CDM initiatives.
– Energy efficiency: labelling, improved
motors, LED lighting, testing
– Planning: solar access right, integrated
resource planning, solar cities
– Standardisation: international standards,
codes of practice
– Education: centres of excellence, re-
search partnerships, curricula, systems
– Cooperation: R&D partnerships, joint
programmes, internet fora

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 48

Examples of
National Policy Models

This section covers one regional and 19. Call upon Governments, as well as d) Combine, as appropriate, the increa-
two national policy models. relevant regional and international sed use of renewable energy resour-
organisations and other relevant sta- ces, more efficient use of energy, gre-
Latin America keholders, to implement, taking into ater reliance on advanced energy
account national and regional speci- technologies, and the sustainable use
Political Commitments ficities and circumstances, the re- of traditional energy resources, which
commendations and conclusions of could meet the growing need for ener-
The Latin American and Caribbean re- the Commission on Sustainable gy services in the longer term to
gion agreed in May 2002 on the follow- Development concerning energy for achieve sustainable development;
ing proposal for target and timeframes sustainable development adopted at e) Diversify energy supply by develo-
on renewables to: its ninth session, including the issues ping advanced, cleaner, more effi-
and options set out below, bearing in cient, affordable and cost-effective
“Increase in the region the use of renew- mind that in the view of the different energy technologies, hydro includ-
able energy to 10 % as a share of total contributions to global environmental ed, and their transfer to develop-
by 2010” (Draft of the Final Report of the degradation, States have common ing countries on concessional
7th Meeting of the Intersectional Com- but differentiated responsibilities. terms as mutually agreed. With
mittee of the Forum of Ministers of This would include actions at all a sense of urgency, substantially
Environment of Latin America and the levels to: increase the global share of re-
Caribbean, Sao Paulo, May 2002) c) Develop and disseminate alternati- newable energy sources with the
ve energy technologies with the objective of increasing its contri-
Paragraph 19 of the World Summit on aim of giving a greater share of bution to total energy supply,
Sustainable Development (WSSD) Plan the energy mix to renewable ener- recognising the role of national
of implementation adopted in Johannes- gies, improving energy efficiency and voluntary regional targets
burg reads as: and greater reliance on advanced as well as initiatives, where they
energy technologies, including exist, and ensuring that the energy
cleaner fossil fuel technologies. policies are supportive to develo-
ping countries’ efforts to eradicate
poverty, and regularly evaluate
available data to review progress
to this end.“
(Karekezi, 2004)

WP_2005.qxd 01.08.2005 11:33 Uhr Seite 49

The German Renewable Energy and technical processes used in con- Section 3: Obligation to Purchase and
Grid-Feeder Law nection with biomass fall within the Pay Compensation
scope of application of this Act; in addi- (1) Grid operators shall be obliged to
This Act has a proven and very success- tion, the ordinance shall lay down the connect to their grids electricity ge-
ful track record, and could be emulated relevant environmental standards. neration installations as defined in
with great benefit: Items in square Section 2 above, to purchase elec-
brackets pertain specifically to Germany. (2) This Act shall not apply to electricity tricity available from these installations
1. produced by hydro-electric power as a priority, and to compensate the
Act on Granting Priority o Renewable plants and installations fuelled by suppliers of this electricity in accor-
Energy Sources gas from landfills or sewage treat- dance with the provisions in Sections
(Renewable Energy Sources Act) ment plants with an installed el- 4 to 8 below. The obligation shall
ectrical capacity of over 5 MW, or apply to the grid operator, whose grid
Section 1: Purpose by installations in which electricity is closest to the location of the ele-
The purpose of this Act is to facilitate a is generated from biomass, with ctricity generation installation, provid-
sustainable development of energy supp- and installed electrical capacity of ing that the grid is technically suitable
ly [in the interest of managing global over 20 MW, and to feed in this electricity. A grid shall
warming and protecting the environment 2. produced by installations of which be considered to be technically suita-
and to achieve a substantial increase in over 25 per cent is owned by the ble even if – notwithstanding the pri-
the percentage contribution made by [Federal Republic of Germany or ority to be granted pursuant to the
renewable energy sources to power one of Germany’s federal states], first sentence above – a grid operator
supply in order at least to double the and needs to upgrade its grid at reasona-
share of renewable energy sources in 3. produced by installations for the ble economic expense to feed in the
total energy consumption by the year generation of electricity from solar electricity; in this case, the grid opera-
2010, in keeping with the objectives radiation energy, with an installed tor shall be obliged to upgrade its grid
defined by the European Union and by electric capacity of over 5MW. In without delay if this is requested by a
the Federal Republic of Germany.] the case of installations for the party interested in feeding in electrici-
generation of electricity from solar ty. Grid data and data of the electricity
Section 2: Scope of Application radiation energy which are not generation installation shall be disclo-
(1) This Act deals with the purchase of, attached to or built on structures sed where this is necessary for the
and the compensation to be paid for, which are primarily used for pur- grid operator and the party interested
electricity generated exclusively from poses other than the generation of in feeding in electricity to do their
hydrodynamic power, wind energy, electricity from solar radiation planning and to determine the techni-
solar radiation energy, geothermal energy, the upper capacity limit cal suitability of a grid.
energy, gas from sanitary landfills, specified in the first sentence
sewage treatment plants, mines, or above shall be 100 kW. (2) Pursuant to Sections 4 to 8 below,
biomass within the territorial scope of 4. New installations shall be instal- the upstream transmission grid
this Act or [within Germany’s exclusi- lations, which were commissioned operator shall be obliged to purcha-
ve economic zone], by utility compa- after [add: date of entry into force se, and pay compensation for, the
nies which operate grids for public of this Act]. Reactivated or mo- amount of energy purchased by the
power supply (grid operators). [The dernised installations shall be grid operator in accordance with
Federal Ministry for Environment, considered as new installations if clause (1) above. If there is no dome-
Nature Conservation and Nuclear major components of the installa- stic transmission grid in the area ser-
Safety] shall be authorised to lay tions were replaced. Modernisa- viced by the grid operator entitled to
down rules – in agreement with the tion work shall be deemed to be sell electricity, the next closest dome-
[Federal Ministry of Food, Agriculture major if the modernisation costs stic transmission grid operator shall
and Forestry as well as the Federal amount to at least 50 per cent of be obliged to purchase and pay
Ministry of Economics and Techno- the investment cost required to compensation for this electricity as
logy] – by adopting an ordinance. build a completely new installa- specified in the first sentence above.
Which shall be subject to approval by tion. Existing installations shall be
[the German Bundestag]. Said ordi- installations, which were commis-
nance shall specify what substances sioned prior to [add: date of entry
into force of this Act].

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 50

Examples of
National Policy Models

Section 4: Compensation to be Paid (2) As of [1January 2002], the minimum three nautical miles seawards from
for Electricity Generated from Hydro- compensation amounts specified in the baselines used to demarcate ter-
dynamic Power, Gas from Landfills, (1) above shall be reduced by one ritorial waters and if these installations
Mines, and Sewage Treatment Plants percent annually for new installations are commissioned no later than [31
The compensation to be paid for electri- commissioned as of this date; the December 2006], the periods speci-
city generated from hydrodynamic power amounts payable shall be rounded to fied in the first sentence and in the
and gas from landfills, mines and sewa- one decimal. second sentence above shall be nine
ge treatment plants shall amount to at years.
least [7.67 cent] per kilowatt-hour. In the Section 6: Compensation to be Paid (2) For existing installations, the date of
case of electricity generation installations for Electricity Generated from commissioning as defined in the first
with an electrical capacity of over 500 Geothermal Energy sentence of 1) above shall be [add:
kilowatts, this shall apply only to the part The following compensation shall be the date of the entry into force of this
of the total amount of electricity fed in paid for electricity generated from geo- Act]. For these installations, the peri-
during a given accounting year which thermal energy: od defined in the first 3 sentences of
corresponds to the ratio of 500 kilowatts 1. At least [8.95 cent] per kilowatt-hour if (1) above shall be reduced by half of
to the total capacity of the installation in the installation involved has an install- the operating life of an installation as
kilowatts; the capacity shall be calcula- ed electrical capacity of up to 20 of [add: the date of the entry into
ted as the annual average of the mean megawatts, and force of this Act]. If P-V curves are
effective electrical capacity measured in 2. At least, [7.16 cent] per kilowatt-hour not available for such installations, an
the various months of the year. The if the installation involved has an authorised institution as defined in
price to be paid for other electricity shall installed electrical capacity of over the Annex may perform the necessa-
be at least [6.65cent] per kilowatt-hour. 20 megawatts. ry calculations on the basis of the
The first clause of the second senten- design documents of the type of
Section 5: Compensation to be Paid ce in Section 4 above shall apply installation concerned.
for Electricity Generated from mutatis mutandis. (3) As of [1 January 2002], the minimum
Biomass compensation amounts specified in
(1) The following compensation shall be Section 7: Compensation to be Paid (1) above shall be reduced by 1.5 per
paid for electricity generated from for Electricity Generated from Wind cent annually for new installations
biomass: Energy commissioned as of this date; the
1. At least [10.23 cent] per kilowatt- (1) The compensation to be paid for amounts payable shall be rounded to
hour in the case of installations electricity generated from wind ener- one decimal.
with an installed electrical capacity gy shall be at least [9.10 cent] per (4) For the implementation of the provi-
of up to 500 kilowatts. kilowatt-hour for a period of five sions in (1) above, the [Federal minis-
2. At least [9.21 cent] per kilowatt- years, starting from the date of com- try of Economics and Technology]
hour in the case of installations missioning. Hence, the compensation shall be authorised to adopt an ordi-
with an installed electrical capacity to be paid for installations, which, nance laying down rules for the cal-
of up to 5 megawatts. during this period of time, achieve culation of the reference yield.
3. A least [8.70 cent] per kilowatt-hour 150 per cent of the reference yield
in the case of installations with an calculated for the reference installa- Section 8: Compensation to be Paid
installed electrical capacity of over tion, as described in the Annex to for Electricity Generated from
5 megawatts; however, this provision this Act shall be at least [6.19 cent] Radiation Energy
shall not be effective before the date per kilowatt-hour. For other installa- (1) The compensation to be paid for
of the entry into force of the ordinan- tions, the period mentioned in the electricity generated from radiation
ce specified in the second sentence first sentence above shall be prolon- energy shall be at least [50.62 cent]
of Section 2 (1). ged by two months for every 0.75 per kilowatt-hour. As of [1 January
The first clause of the second sentence per cent by which their yield stays 2002], the minimum compensation
in Section 4 above shall apply mutatis below 150 per cent of the reference paid shall be reduced by 5 per cent
mutandis. yield. If the electricity is generated by annually for new electricity generation
installations which are located at least installations commissioned as of this
date; the amounts payable shall be
rounded to one decimal.

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 51

(2) The obligation to pay compensation Section 10: Grid Costs (2) By 31 March of each year, the trans-
as specified in (1) above shall not (1) The costs associated with connecting mission grid operators shall determi-
apply to photovoltaic installations installations as specified in Section 2 ne the amount of energy purchased
which are commissioned after 31 above to the technically and econo- in accordance with Section 3 above
December of the year following the mically most suitable grid connecting and the percentage share which this
year in which photovoltaic installa- point shall be borne by the installation amount represents relative to the
tions, which are eligible for compen- operators. The implementation of overall amount of energy delivered to
sation under this Act, reach a total this connection must comply with final consumers either directly by the
installed capacity of 350 megawatts. the grid operator’s technical require- operator or indirectly via downstream
Prior to the discontinuation of the ments in a given case and with the grids. If transmission operators have
obligation to pay compensation as provisions laid down in [Section 16 of purchased amounts of energy that
specified in (1) above, the [German the Energiewirtschaftsgesetz (Energy are greater than this average share,
Bundestag] shall adopt a follow-up Management Act) of 24 April 1998 they shall be entitled to sell energy
compensation scheme which shall (Federal Law Gazette 1, p. 730)]. The to, and receive compensation from,
enable installation operators to mana- installation operator shall be entitled the other transmission grid operators
ge their installations cost-effectively, to have the connection implemented in accordance with Section 3 to 8
taking into consideration the decline either by the grid operator or by above, until these other grid opera-
of marginal unit cost achieved by qualified third party. tors have purchased a volume of
then in the field of system enginee- (2) The costs associated with upgrading energy which is equal to the average
ring. the grid exclusively in order to con- share mentioned above.
nect new installations in accordance (3) Monthly instalments shall be paid in
Section 9: Common Provisions with Section 2 for accepting and accordance with the equalisation
(1) The minimum compensation amounts transmitting energy fed into the grid amounts and payments to be expec-
specified in Sections 4 to 8 shall be for public power supply shall be borne ted.
payable for newly commissioned by the grid operator whose grid will (4) Utility companies which deliver elec-
installations for a period of 20 years have to be upgraded. The grid oper- tricity to final consumers shall be ob-
after the year of commissioning, ator shall specify the concrete inves- liged to purchase and pay compen-
except for installations which genera- tment required by presenting the sation for that part of the electricity
te electricity from hydrodynamic costs in detail. The grid operator shall which their regular transmission grid
power. For installations, which were be entitled to add the costs borne by operator purchased in accordance
commissioned prior to the entry into them when determining the charges with the provisions of (2) above. The
force of this Act, the year [2000] shall for the use of the grid. first sentence shall not apply to the
be considered to be the year of com- (3) Any disputes shall be settled by a utility companies if, relative to the
missioning. clearing centre, which shall be esta- total amount of electricity they deliver,
(2) If electricity generated from various blished within the [Federal Ministry of at least 50 per cent of the electricity
installations is billed via a common Economics and Technology], with the as defined in Section 2 (1) in conjunc-
metering device, the calculation of involvement of the parties concerned. tion with (2) above. The part of the
the amounts of the different rates of electricity to be purchased by a utility
compensation payable shall be based Section 11: Nation-wide Equalisation company in accordance with the
on the maximum effective capacity of Scheme first sentence shall be related to the
each individual installation. If electrici- (1) Transmission grid operators shall be amount of electricity delivered by the
ty is generated from several wind obliged to record any differences in utility company will receive a relatively
energy converters, the calculation of the amount of energy purchase and equal share. The compulsory amount
the compensation shall – notwith- compensation payments made under to be purchased (part) shall be calcu-
standing the first sentence above – Section 3 above and to equalise such lated as the ratio of the total amount
be based on the cumulative values differences amongst themselves as of electricity fed into the grid under
of these installations. specified in (2) above. Section 3 to the total amount of elec-
tricity sold to final consumers; further-
more, it is necessary to deduct from
this sum the amount of electricity

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 52

Examples of
National Policy Models

delivered by utility companies in ac- Annex which they apply is not initiated within
cordance with the second sentence 1. The reference installation shall be a the territorial scope of this Act after
above. The compensation as speci- wind energy converter of a specific 31 December 2001.
fied in the first sentence above shall type for which a yield at the level of 6. Measurements of the P-V curves and
be calculated as the average com- the reference yield can be calculated calculations of the reference yields of
pensation per kilowatt-hour paid by on the basis of P-V curve (power different types of wind energy conver-
all grid operators two quarters earlier wind speed curve) measured by an ters at reference sites shall be carried
in accordance with Section 3. Electri- authorised institution at the reference out for the purpose of this Act by
city purchased in accordance with site. institutions which are accredited for
the first sentence shall not be sold at 2. The reference yield shall be the the measurement of P-V curves as
the compensation paid in accordance amount of electricity which each spe- defined in 5) above in accordance
with the fifth sentence, if that electri- cific type of wind energy converter, with the [General Criteria for the
city is marketed as electricity pursu- including the respective hub heights, Operation of Test Laboratories (DIN
ant to Section 2 or as comparable would yield during five years operation EN 45001) of May 1990. The names
electricity. – calculated on the basis of measured of these institutions shall be published
(5) Each grid operator shall be obliged to P-V curves – if it were built at the in the [Federal Official Gazette by the
make available in good time to the reference site. Federal Ministry of Economics and
other grid operators the data required 3. The type of a wind energy converter Technology] for the information of
to perform the calculations referred to shall be defined by the model desi- interested parties.
in (1) and (2) above. Each grid opera- gnation, the swept rotor area, the
tor shall be entitled to request that rated power output and the hub height
the other grid operators have their as specified by the manufacturer.
data audited by a chartered accoun- 4. The reference site shall be a site
tant or a sworn auditor appointed by determined by means of a Rayleigh
mutual agreement. If no agreement distribution with a mean annual wind
can be reached, the chartered speed of 5.5 metres per second at a
accountant or sworn auditor shall be height of 30 metres, a logarithmic
appointed by the President of the wind shear profile and a roughness
Higher Regional Court, which has length of 0.1 metres.
jurisdiction at the seat of the grid 5. The P-V curve shall be the correlation
operator eligible to receive equalisa- between wind speed and power out-
tion payments. put (irrespective of hub height) deter-
mined for each type of wind energy
Section 12: Progress Report converter. P-V curves shall be deter-
By 30 June, every two years after the mined in accordance with the stan-
entry into force of this Act, the [Federal dard procedure defined in the [Tech-
Ministry of Economics and Technology] nische Richtlinien fuer Windenergiean-
shall submit a report – drafted in consul- lagen (Technical Guidelines for Wind
tation with the [Federal Ministry of Food, Energy Converters), rev. 13, as of 1
Agriculture and Forestry] – on the pro- January 2000, published by Foerder-
gress achieved in terms of the market gesellschaft Windenergie e.V. (FGW),
introduction and the cost development Hamburg, or in the Power Performan-
of power generation installations as spe- ce Measurement Procedure, version
cified in Section 2 to 8 and of their re- 1, published in September 1997 by
duction rates, in keeping with techno- the Network of European Measuring
logical progress and market develop- Institutes (MEASNET), Brussels/
ments with regard to new installations; Belgium], P-V curves which were
furthermore, the Ministry shall propose a determined by means of a compara-
prolongation of the period for calculating ble procedure prior to 1 January 2000
the yield of a wind energy converter as can also be used instead of P-V curv-
specified in the Annex, based on the es as specified in the second senten-
experience made with the period defined ce, providing that the construction of
in this Act. wind energy converters of the type of

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 53

The Promotion Law of Renewable heaters or piping must be installed on Comments

Energy Development and Utilisation all new or upgradings of residences, The implementation of the new law
of the People’s Republic of China hotels, restaurants, hospitals, schools manifests the awareness of the Peoples
Draft March 2005 and public buildings less than 11 sto- Republic of China. Responsibilities and
reys high. budgets have been assigned unequivo-
The State Council produced a compre- cally. Commitments to targets like “
hensive document, covering the applica- 5. Price Management 10 %, 20 %, 50 % RE by 2010, 2020,
tion of renewable energy for electric Government decides on feed-in re- 2050” are surmised to be in the offing.
power generation, liquid fuels, gas feed- newable energy prices by approving, A long-term renewable energy pricing
in and heat generation. bidding or designing a classified cata- structure system is probably being pre-
logue. pared. If these crucial dimensions are
1. General Principles Government approving pertains to integrated, the new law will be the most
The purpose, scope, rights and obli- government constructed and invested advanced renewable energy law in the
gations of using renewable energies projects. Bidding is applied to con- world. The impact on the People’s
are explained. This is followed by the ventional projects, while the classified Republic of China and the rest of the
principle of combined government catalogue is applied to renewable world could be trend-setting.
promotion and market orientation. energy projects. This is related to the
Rural Energisation, R&D, Dissemina- cost of comparable cost levels of the
tion & Education, Environmental Pro- same kind.
tection, Sector Guidance, Honouring
and Awarding and Responsibilities 6. Economic Incentive
are outlined. A Renewable Energy Development
Fund shall compensate for the mar-
2. Resource Management and ginal renewable energy costs and
Development Plan shall serve for subsidies in rural areas,
A comprehensive renewable energy biomass, liquid fuels, resource
resource plan and an integrated re- assessment, technological diffusion,
newable energy development plan R D & D, pilot projects, equipment,
including national, social, economic education, training, international co-
and environmental development are operation and communication are
to be prepared and be open to the supported.
public. Income for the Fund is to accrue from
electricity, sales, fiscus, profit, dona-
3. Industry Guidance and Technology tions, and others.
Advancement Commercial banks are expected to
Awareness, standardisation, testing offer favourable credits to renewable
and certification, education, R&D, energy projects.
renewable energy centres, publicity,
entrepreneurship and industry associ- 7. Legal Responsibility
ations shall be facilitated. Penalties for defaulting are set bet-
ween 500 000 (approx US$ 60 000)
4. Dissemination and Application and one million Yuan (approx US$
Grid-connected power from renew- 120 000) to power, grid and oil cor-
able energy must be accepted at full porations, and at 100 000 Yuan
price by utilities. Independent power (approx US$ 12 000) for defaulting
producers are encouraged. estate developers.
Likewise, remote renewable power
production for living or production is
supported, as is biomass, biogas and
heat, liquid fuels and solar thermal, as
well as cogeneration.
For areas with annual sunlight hours
exceeding 1 500 hours, solar water

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 54


It appears that in the future energy mix it Although the market is a strong driver,
is unlikely that a single renewable energy market failures do occur in the field of
technology will be dominant. It would be energy. Thus, governments avoid and
unwise to bet on one winner, although correct such market failures, knowing
proponents often would disagree. the price per kilowatt-hour does not
reflect the value of an energy service.
Renewable energy is not an end in itself.
It is one way of providing energy services By now, experience has also shown
in a socially and environmentally sustain- that one cannot rely on a single policy.
able way at least life cycle costs. An optimal system of complementary
Integrated energy planning is a subset of policies and measures is needed. Nor
integrated resource planning, where the can one expect that Federal or Central
supply of resources are matched with Government can do it alone. Various
the demand. levels of government as well as the pri-
vate sector have to work in concert, or
Competition for resources within nations at least in constructive competition.
and between nations does not exclude
cooperation. In nature, symbiosis and Even the best policies are of little use if
cooperation is more frequent than ex- they are not being applied consistently.
pected. Entities that are both flexible In the developing world capacities are
and energy efficient tend to be more severely limited. It follows that renewable
successful competitors. Therefore, de- energy laws should be easy to monitor
veloping nations can improve their well- and enforce.
being by being more energy efficient
and less reliant on fossil fuels. The use Many independent scientists confirmed
of renewable energies encourages this that the transition to renewable energy is
trend. In this way, it is possible to en- necessary, urgent and techno-economi-
hance one’s own benefit while making cally feasible, although this may seem as
a contribution to the common good. unlikely to some as it was unthinkable
not so long ago that man could walk on
It is not unconceivable that new energy the moon.
related accounting systems could deve-
lop in future. A first step might be the Times of transition are always turbulent
triple bottom line. times. In such times the most natural
human reaction is to panic and cling to
Governments have a longer planning the habitual, procrastinating in the fear
horizon than individuals and commercial of making the wrong decision. However,
interests. Their policies are – or should the decision to procrastinate is also a
be – built on long-term future visions. decision – most often the wrong one.
Their own investments in buildings and
other acquisitions should consequently As the world transitions to the new era,
reflect this perspective, based on least it will not wait for the developing world
life cycle cost calculations, including the to catch up. It is the own choice of indi-
full externality costs. viduals, families, communities, compa-
nies and nations whether they want to
Governments exist within regional, conti- be losers or winners in the dawning solar
nental and international contexts, which age. Some people will look back at our
bring with them mutual interactions and times and smile.
obligations. Some of these help the rapid,
orderly and sustained energy transition,
others hinder. In their interactions, wise
governments have to think of, and crea-
te, win-win situations.

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 55

and References

The author wishes to acknowledge the The Thematic Background Papers

help of Dr. Donald Aitken, author of the to the Renewables 2004 in Bonn
precursor ISES White Paper (2000), who ( have been
kindly offered critique, advice and sup- liberally used as examples in the boxes,
port. including J Goldenberg, J Pershing, V
Sonntag-O’Brien, J Luther, J
Input from colleagues of the ISES Board Christensen, A Steiner, T B Johansson,
and Headquarters are gratefully acknow- S Karekezi, J L Sawin, and J Clancy.
M Nicklas and G Schramm published
Dr Monica Oliphant initiated and wisely in D Holm and W Berger 1981. ISES
guided this White Paper in her capacity Utility Initiative for Africa – Selected
of Vice-president for Public Affairs of Proceedings.
ISES. Freiburg, Germany.
Henning Holm kindly shared his
experience in the developing world International Institute for Energy conser-
to the benefit of this White Paper. vation (IIEC) 2004. Global Issue Papers.
Prof Ricardo Rüther from Brazil is Transitioning to Renewable Energy. An
thanked for his constructive criticism. Analytical Framework for Creating an
Enabling Environment. H Böll Stiftung.
As usual, the author takes the responsi-
bility for errors. S. Awerbuch. 2003. Risk-Adjusted Cost
of Electricity Estimates Based on
Core sources used were Historic Fuel Price Risk. Renewable
Energy World. May/Apr: 58. James &
Refocus James: London.
(International Solar Energy Society
Journal published by Elsevier Science), D. Banks & J. Schäffler. 2005. Energy
Renewable Energy World (James & Sustainability: SA challenges and
James Science Publishers), opportunities. SECCP.

Solar Today C. van Horen. 1996. Counting the social

(Journal of the American Solar Energy costs. Electricity and the externalities in
Society), SA. UCT Press: CT.
R Heinberg. 2003. The Party’s Over –
Erneuerbare Energie Oil, War and the Fate of Industrial
(Zeitschrift für eine nachhaltige Energie- Societies.
zukunft: Arbeitsgemeinschaft Erneuer- New Society, Gabriola, Canada.
bare Energie, Gleisdorf, Austria),
L. Butler and K. Neuhoff. 2004.
The World in Transition – Towards Comparison of Feed in Tariff, Quota and
Sustainable Energy Systems by the Auction Mechanisms to Support Wind
German Advisory Council on Global Power Development. Cambridge
Change Working Papers in Economics CWPE
(WBGU, 2003) 0503. Cambridge, UK.

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 56

About the Author

Dieter Holm is a consultant in Sustainable He is secretary of ISES, director of ISES

Development in the Built Environment. Africa, president of the Sustainable
He and his family live at the Hartbees- Energy Society of Southern Africa, and
poort Dam near Pretoria in the first chairman of the Solar Water Heating
modern autonomous house in Africa Division of SESSA.
built before the first 1970s energy crisis.
Next to passive solar heating, heat re- His work in energy in low cost housing
jection and day lighting their home also received the prize for the residential
features rainwater harvesting, solar category with the Eskom Eta Award
water heating and recycling as well as Competition for Energy Efficiency.
solar cooking and baking. PV panels
power the household in addition to the Professor Dieter Holm is a regular spea-
office and his wife’s woodturning work- ker at international and local conferen-
shop. ces, radio interviews and TV specialist
Dieter is an enthusiastic teacher, having
been Head of the Department Architec-
ture and later of Research and Post-
graduate Studies at the University of
Pretoria, South Africa. As a director of
Holm Jordaan Holm Architects he co-
authored many prize-winning competi-
tion entries, the latest of which being the
new HQ for the Municipality of Pretoria.
He publishes mainly on the application
of passive design in buildings, and pro-
duced three books.

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 57

Annexure A

Developing and least Developed Gabon Paraguay

Countries (UNDP 2003 Human Gambia Peru
Development Report: Millennium Ghana Philippines
Development Goals: A compact among Grenada Qatar
nations to end human poverty. New Guatemala Rwanda
York, Oxford University Press) Guinea Saint Kitts and Nevis
Guinea-Bissau Saint Lucia
Developing countries and 49 least deve- Guyana Saint Vincent and the Grenadines
loped countries (in bold) Haiti Samoa (Western)
Honduras São Tomé and Principe
Afghanistan Hong Kong, China Saudi Arabia
Algeria India Senegal
Angola Indonesia Seychelles
Antigua and Barbuda Iran, Islamic Rep. of Sierra Leone
Argentina Iraq Singapore
Bahamas Jamaica Solomon Islands
Bahrain Jordan Somalia
Bangladesh Kenya South Africa
Barbados Kiribati Sri Lanka
Belize Korea, Dem. Rep. of Sudan
Benin Korea, Rep. of Suriname
Bhutan Kuwait Swaziland
Bolivia Lao People’s Dem. Rep. Syrian Arab Republic
Botswana Lebanon Tanzania, U. Rep. of
Brazil Lesotho Thailand
Brunei Darussalam Liberia Timor-Leste
Burkina Faso Libyan Arab Jamahiriya Togo
Burundi Madagascar Tonga
Cambodia Malawi Trinidad and Tobago
Cameroon Malaysia Tunisia
Cape Verde Maldives Turkey
Central African Republic Mali Tuvalu
Chad Marshall Islands Uganda
Chile Mauritania United Arab Emirates
China Mauritius Uruguay
Colombia Mexico Vanuatu
Comoros Micronesia, Fed. Sts. Venezuela
Congo Mongolia Viet Nam
Congo, Dem. Rep. of the Morocco Yemen
Costa Rica Mozambique Zambia
Côte d’Ivoire Myanmar Zimbabwe
Cuba Namibia (137 countries/areas)
Cyprus Nauru
Djibouti Nepal
Dominica Nicaragua
Dominican Republic Niger
Ecuador Nigeria
Egypt Occupied Palestinian Territory
El Salvador Oman
Equatorial Guinea Pakistan
Eritrea Palau
Ethiopia Panama
Fiji Papua New Guinea

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 58


Abbreviations GEF Global Environmental Facility PTC Production Tax Credit

°C degree Celsius GHG Greenhouse Gas PV Photovoltaics
BANANA Build Absolutely Nothing GIS Geographic Information R&D Research and Development
Anywhere Near Anything System
RD&D Research Development and
BIPV Building Integrated HDR Hot Dry Rocks Demonstration
IEA International Energy Agency RE Renewable Energy
BOS Balance Of System
IPCC Intergovernmental Panel on REC Renewable Energy Certificate
Btu British thermal unit Climate Change
REL Rural Electrification
CDM Clean Development ISES International Solar Energy
RET Renewable Energy
Mechanism Society
CERT Certificate ISO International Standards
RPS Renewable Portfolio
CFL Compact Fluorescent Light Standard
K Kelvin
CHP Combined Heat and Power SADC Southern African
KCJ Kenya Ceramic Jiko Development Community
CIS Commonwealth of
Independent States kWh kilowatt-hour SHS Solar Home Systems
COP Coefficient Of Performance LED Light Emitting Diode SWH Solar Water Heater/Heating
CSH Concentrated Solar Heat LHV Lower Heat Value TERI The Energy and Resources
DALY Disability Adjusted Life Year LPG Liquid Petroleum Gas
UNDP United Nations Development
DG Distributed Generation Mtoe Million tons of oil equivalent
DIN Deutsche Industrienorm MW Megawatt
WBGU Wissenschaftlicher Beirat der
DNA Designated National MWe Megawatt electrical Bundesregierung Globale
Authority Umweltveränderung (German
NFFO Non-Fossil Fuel Obligation
Advisory Council on Global
DSM Demand Side Management
NGO Non-Governmental Change)
EE Energy Efficiency Organisation
WCD World Commission on Dams
EJ Ekta Joule NIMBY Not In My BackYard
WWEA World Wind Energy
EU European Union OECD Organisation of Economic Association
Cooperation and
FAO Food and Agriculture WSSD World Summit on
Organisation Sustainable Development
PROINFA Programa de Incentivo a
FF Flexible Fuel
Fontes Alternativas

WP_2005.qxd 01.08.2005 11:34 Uhr Seite 59

The International Solar Energy Society

gratefully acknowledges
Prof Dr Dieter Holm, Secretary of ISES,
Director of ISES Africa, and President
of the Sustainable Energy Society of
Southern Africa, who drafted this White
Paper with input from expert resources
worldwide, and technical review and
input by the Headquarters and the ISES
Board of Directors.

© ISES & Prof Dr Dieter Holm 2005

All rights reserved by ISES
and the author

Produced by:
ISES Headquarters

Design: triolog, Freiburg

Printed on 100 % recycled paper

WP_2005.qxd 01.08.2005 11:31 Uhr Seite 2

"The developing world is not simply the poor

man's imitation of the industrialized world"

"Because of its underdeveloped energy

infrastructure and unique RE potential,
the developing world - in partnership with
the industrialized world - can leapfrog to
RE technologies while benefitting from the
Kyoto Protocol"

Solar Energy

Wiesentalstr. 50
79115 Freiburg

Phone: +49 – 761 – 45906-0

Fax: +49 – 761 – 45906-99