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Published by the
International Institute for Sustainable Development (iisd)
Vol. 95 No. 03
Thursday, 3 June 2004
RENEWABLES HIGHLIGHTS:
WEDNESDAY, 2 JUNE 2004
The second day of
renewables 2004 began with a Plenary session on policies for renewable
energy market development, focusing on electricity, heat and transport.
In the afternoon, the Plenary addressed financing options for renewable
energy, as well as strengthening capacities, research and technology
development, and institutions. A senior officials meeting took place in
the afternoon. In addition, several side events were held throughout the
day, including the “Day of Geothermal Power.” The final day of the
Sustainable Energy Finance event also took place.
PLENARY SESSIONS
POLICIES FOR RENEWABLE ENERGY MARKET
DEVELOPMENT
In the morning, delegates met in Plenary to consider policies for
renewable energy market development. The first part of the session
focused on the electricity sector, followed by presentations and
discussions on heating and transport.
Electricity: Session Co-Chair Carlos Magariños, Director General
of the UN Industrial Development Organization (UNIDO), outlined UNIDO’s
work to ensure universal energy access for the poor. He expressed
confidence that renewables 2004 would provide clear guidance on the
development of renewables.
Ma Shenghong, Beijing Jikedian Renewable Energy Development Center,
briefed participants on China’s Brightness and Township Electrification
Programme, which aims to bring modern energy to thousands of remote
rural communities. While indicating that renewable energy is a least
cost option for remote villages, he noted that government grants and
support remain essential, as costs are still relatively high.
Aloys Wobben, Enercon GmbH, explained that wind farms add value by
providing a second income for farmers, as well as a range of employment
opportunities.
Jayantha Nagendran, DFCC Bank, briefed participants on an energy
services delivery project in Sri Lanka that provides both on-grid and
off-grid hydro and solar home systems. Nagendran noted that
public-private partnerships and a multi-stakeholder approach have
contributed to high quality service.
Steve Westwell, BP Solar, highlighted that solar energy would become
competitive with mainstream grid-supplied electricity on a price per
kilowatt hour basis within 15-20 years if cost reduction trends
continue. However, he added that ongoing government support will be
required if the solar energy business is to become self-sustaining.
In the ensuing discussion, BUSINESS AND INDUSTRY noted its support for
internalizing external costs. Responding to a question on local
opposition to wind farms, Wobben noted ongoing progress in reducing
noise and other causes of complaints.
Heat and transport: Freddie Mothlatlhedi, Southern African
Development Community (SADC), presented the SADC Programme for Biomass
Energy Conservation. He highlighted that the Programme raises awareness
among biomass energy users, and improves business opportunities for
suppliers of more efficient stoves. He recommended that renewables 2004
recognize sustainable biomass energy as a critical component of
renewable energy, and that countries integrate traditional biomass
energy into all energy policies and strategies.
Jürg Hofer, City of Basel, Switzerland, briefed participants on
municipal policies for the promotion of renewable energy and energy
efficiency, including a renewable energy and energy efficiency promotion
tax for energy providers, a consumption tax, and a solar power exchange
programme.
Felix ter Heegde, Netherlands Development Organization, and Sundar
Bajgain, Nepal’s Biogas Support Programme, spoke about domestic biogas.
Ter Heegde noted that biogas substitutes for firewood, coal, dung cake
and kerosene, and highlighted a variety of benefits, including
reductions in air pollution, deforestation and greenhouse gas emissions.
Bajgain outlined Nepal’s domestic biogas support programme, which
resulted in the installation of 115,000 biogas units.
Emílio la Rovere, Federal University of Rio de Janeiro, briefed
participants on the Brazilian Ethanol Programme that supports biofuels
derived from sugar cane and used for transport. He noted significant
technological progress since the Programme was launched in the 1970s,
adding that the Programme has also created 720,000 direct jobs, reduced
reliance on oil imports and vulnerability to oil price fluctuations, and
helped mitigate climate change.
FINANCING OPTIONS FOR RENEWABLE ENERGIES
In the afternoon, delegates examined financing options for renewable
energy. Dipal Barua, Grameen Shakti (a not-for-profit rural power
company in Bangladesh) noted that 70% of people in Bangladesh lack
access to the electricity grid. He reported on Grameen Shakti’s work to
promote affordable solar home systems in rural and remote off-grid areas
by providing four different financing models with varying down payments
and interest rates. He explained that the organization also provides
additional support, including a warranty system and the training of
local engineers.
Andrea Kuhlhava, Czech Energy Agency, briefed delegates on the Czech
Republic’s energy efficiency and renewable energy activities, including
its Joint Implementation (JI) projects. She observed that JI projects
increase energy efficiency and facilitate achievement of national
targets to source 8% of total energy consumption from renewables by
2010.
Christine Eibs-Singer, E+Co, and Abeeku Brew-Hammond, Kumasi Institute
of Technology and Environment, explained that their organizations
provide services and capital to small- and medium-sized enterprises (SMEs)
working on renewable energy. Cayetano Hernández, Spain’s Institute for
Energy Diversification and Energy Efficiency, reported on the benefits
of third party financing. He suggested that this financing approach
overcomes barriers for potential investors, including high initial
capital outlays, problems securing external financing, and difficulties
in evaluating a project’s technical feasibility.
Reflecting on the session, Jamal Saghir, World Bank, highlighted the
critical importance of financing for scaling-up renewables. While
stressing the importance of subsidies and support, he suggested that it
was necessary to start moving towards a market-based approach.
STRENGTHENING CAPACITIES, RESEARCH AND TECHNOLOGY DEVELOPMENT, AND
INSTITUTIONS
On Wednesday afternoon, Alberto Calcagno, UNEP-Dams and Development
Project (DDP), and Brian Hollingworth, a consultant on South Africa’s
World Commission on Dams (WCD) follow-up process, spoke about
stakeholder dialogues on dams. Calcagno presented several dialogue
initiatives in relation to the WCD, while Hollingworth focused on South
Africa’s multi-stakeholder initiative, which he said sets out a clear
process for addressing a sensitive issue.
Jean-Louis Bal, Application of Solar Thermal Energy in the Mediterranean
Basin, and Mohamed Ezzedine Khalfallah, Tunisia’s National Agency for
Renewable Energy, briefed participants on a project to provide solar
water heating installations in several Mediterranean countries.
Frederick Morse, US Solar Energy Industry Association, introduced the
Concentrating Solar Power Global Market Initiative, which concentrates
solar power in a dish to produce steam or electricity directly.
Ingvar Fridleifsson, UN University Reykjavik, described a geo-thermal
energy training programme in Iceland for professionals from developing
countries.
Joachim Luther, Fraunhofer Institute for Solar Energy Systems, briefed
participants on research and development on photovoltaics in Germany,
highlighting the positive cooperation between government, industry, and
research and development institutes.
Summarizing the presentations, Stephen Karekezi, African Energy Policy
Research Network, noted the benefits of an open process that involves as
many stakeholders and countries as possible.
SENIOR OFFICIALS MEETING
This meeting was chaired by Michael Hofmann (Germany), Co-Chair
of the renewables 2004 International Steering Committee (ISC). Mohamed
El-Ashry, Conference Facilitator, briefed delegates on the process of
drafting the political declaration. He explained that the first draft
had been circulated to governments and stakeholders in April 2004, with
a revised draft text circulated on 17 May. Based on comments submitted
both orally and in writing during
renewables 2004, he said he would prepare a third draft to be presented
to the Plenary on Thursday, 3 June. He expressed hope that ministers
would adopt the declaration on 4 June.
Following his presentation, many delegates provided comments on the
draft declaration. Several developing countries expressed concerns
regarding the: concept of internalizing the external costs of energy
generation; selective use of language from the Johannesburg Programme of
Implementation (JPOI); assumptions regarding future discussions to take
place during the 14th and 15th sessions of the Commission on Sustainable
Development; proposed international review and reporting processes to
follow-up renewables 2004; and proposals to direct a percentage of
financial flows from International Financial Institutions for renewable
energy. Noting that the majority of renewable energy technologies are
owned by industrialized countries, developing countries expressed
concern that this could lead to a dependence on foreign-owned
technology. Some developing countries also proposed additional language
referencing the principle of common but differentiated responsibilities,
and emphasizing the need for industrialized countries to fulfil their
existing commitments for financial assistance and technology transfer to
developing countries on concessional terms.
Regarding targets, several developed countries expressed disappointment
that the draft fails to specify renewable energy targets and that it
does not go beyond the language agreed to in the JPOI. These delegations
proposed language that the setting of targets is a prerequisite for
successful renewable energy expansion strategies at national, regional
and global levels. They also expressed support for retaining language on
the internalization of external costs as an important measure in
promoting renewable energy. One developed country said it was sufficient
that the issue of targets was addressed in the Policy Recommendations
document, while several developed and developing countries opposed text
on targets. In order to facilitate consensus, a developed country
proposed that the declaration recognize the utility of targets, without
making them a prerequisite for all countries.
A group of developing countries, announced that they had a detailed
proposal based on the outcomes of a regional preparatory meeting for
renewables 2004. A developing country said the conference outcomes
should not weaken the agreements reached in the JPOI. Another developing
country suggested introductory text stating that the declaration was
neither prescriptive nor binding. A developed country suggested that in
the event of no consensus on the declaration, its endorsement could be
made optional. Several delegations raised concerns of a procedural
nature, such as the need for sufficient time to comment on the third
draft, and the process for taking into account written and oral
comments.
Rainer Hinrichs-Rahlwes (Germany), Co-Chair ISC, then introduced the
Policy Recommendations document, explaining that it contained a
non-prescriptive menu of options. He also introduced the International
Action Programme, which currently lists over 123 voluntary actions and
commitments announced by governments and other stakeholders.
SIDE EVENTS
Is the World Commission on Dams Report a
suitable tool for assessing the sustainability of hydropower?
Presented by UNEP - DDP
Alberto Calcagno, UNEP-DDP, explained that the UNEP-DDP aims to promote
dialogue on how to improve the planning and management of dams and their
alternatives, based on the WCD’s core values and strategic priorities.
David Grey, World Bank, said the Bank was opposed to any requirement to
“comply” with the WCD Report, but noted that it uses the Report as
guidance. He stated that there has been a major decline in World Bank
lending for all hydropower infrastructure, including dams and
hydropower.
Patrick McCully, International Rivers Network, urged the exclusion of
large hydropower from renewables initiatives, stressing that large
hydropower fails to provide the poverty reduction benefits of
decentralized renwables. He also warned that including large hydropower
in such initiatives would divert much-needed funds away from new
renewables.
Richard Taylor, International Hydropower Association (IHA), said
hydropower issues were inadequately addressed in the renewables 2004
programme. Describing the WCD Report as an “embarrassingly one-sided
review,” he highlighted the IHA’s sustainability guidelines, which he
said are rigorous and pragmatic.
George Mpombo, Zambia’s Minister of Energy and Water Development,
expressed support for dam construction in Africa, and said application
of the WCD’s recommendations would present a severe setback to economic
advancement in his country.
Link to more information:
http://www.unep-dams.org
http://www.irn.org
http://www.hydropower.org
Contact:
Alberto Calcagno:
alberto.calcagno@unep.org
Patrick McCully: patrick@irn.org
Richard Taylor: rmt@hydropower.org
Day of Geothermal Power
Organized by UNEP Energy, the Federal Institute for Geosciences and
Natural Resources, Rödl & Partner, German Geothermal Union, Center of
Geo-Research Potsdam, International Geothermal Association and KfW
Bankgroup
This side event included four sessions, during
which participants reviewed the latest advances in geothermal power
technology, considered the potential for market development, outlined
project implementation, and identified actions for moving forward.
The meeting opened with a keynote speech by John Lund, Oregon Institute
of Technology, who noted that geothermal energy is currently produced by
23 countries, serving 60 million people and supplying 1% of world energy
needs. During the first session, participants heard presentations
reviewing available technologies for harnessing geothermal power and
outlining their distribution and applicability.
Presentations on market development covered a range of issues, including
what determines insurance costs, how to develop legal frameworks that
support geothermal energy projects, and how to minimize risk for
investors. Participants were briefed about Germany’s Renewable Energy
Act, which sets tariffs, provides priority access and secures
distribution for renewable electricity, including geothermal. A World
Bank representative introduced the Bank’s GEO-Fund, which seeks to
guarantee the geological risks associated with geothermal development
projects.
The afternoon session opened with briefings on lessons learned from the
implementation of geothermal projects in Iceland, Kenya, Guatemala,
Nicaragua, the Russian Federation and Hungary. Participants identified
several drivers for geothermal energy including: local availability,
inexhaustibility of supply, energy source diversification, fluctuating
oil prices, and reduced environmental impacts compared with conventional
energy sources. Barriers identified included high exploration and
initial investment costs, and a lack of private finance and
institutional will.
On moving forward, speakers presented national and regional plans for
the development of geothermal projects. One presenter described the
intention of the Philippines to become the world’s largest consumer of
geothermal energy. Participants heard of a project in the eastern
Caribbean that aims to foster local legal, technical and financial
expertise and generate comprehensive data-sets as a basis for attracting
commercial investment. One speaker described the Federal Institute for
Geosciences and Natural Resources’ GEOTHERM-Programme, which aims to
remove the barriers to the development of geothermal energy in
developing countries. Highlighting the “vast untapped potential” of
geothermal energy in Eastern Africa, the final speaker described the
African Rift Geothermal Energy Development Facility that seeks to
provide a risk-sharing tool for partial risk guarantee to reduce
uncertainty.
At the end of the event Klaus Töpfer, UNEP Executive Director and
Heidemarie Wieczorek-Zeul, Germany’s Federal Minister for Economic
Cooperation and Development, signed a collaborative agreement for
financial and technical support of the African Rift Geothermal Energy
Development Facility.
Link to more information:
http://www.uneptie.org/energy
http://www.geothermie.de
Contact:
Tom Hamlin: tom.hamlin@unep.fr
RELATED EVENT
Sustainable Energy Finance
Presented by UNEP and the Basel Agency for Sustainable Energy
On the second day of the Sustainable Energy
Finance event, Andrew Dlugolecki, Andlug Consulting, presented the CEO
Briefing on Renewable Energy, which calls for the development of clear
policies to help build confidence in the long-term future.
In parallel breakout sessions, participants discussed how carbon finance
and export credit finance can foster investments in renewable energy.
Several speakers underscored that the levels of carbon finance are
insufficient to catalyze renewable energy projects at current carbon
prices, while it creates a hard-currency revenue stream that can
leverage private funding. Veronique Bishop, World Bank, suggested that
projects co-funded by ODA be allowed to generate carbon credits.
Participants called for improved clarity on various issues relating to
the Clean Development Mechanism, including the use of ODA, the linkage
to the EU Emissions Trading Scheme, host country approval processes, and
rules for methodologies. The group on export credit finance called on
export credit agencies to address barriers to renewable energy projects.
Participants also discussed public-private partnerships (PPPs), SME
finance, and infrastructure finance. Youba Sokona, ENDA, underscored the
need for PPPs for energy projects in rural regions in the South.
Participants agreed that SMEs are critical for delivering clean energy
in developing countries, while noting that the services and capital
needed to increase the number of SMEs is lacking. Meanwhile,
participants of the infrastructure finance group heard presentations on
project finance for renewable energy, renewable energy funds under
development, and innovative financing structures.Tom Murley, Hg Capital,
underscored that renewable energy can be an attractive alternative for
institutional investors, even though they seldom fit traditional private
equity return targets.
In the evening, UNEP Executive Director Klaus Töpfer opened the
executive panel discussion. Jürgen Trittin, Germany’s Federal Minister
for the Environment, Nature Conservation and Nuclear Safety, stressed
the need to bring down production costs of renewable energy
technologies, create a stable legal framework, define national targets,
and identify additional funding for renewable energy. Lucien Bronicki,
Omat, said renewable energy could provide a hedge against oil price
fluctuation. Leonard Good, GEF CEO/Chairman, addressed the challenges
related to off-grid renewable energy in developing countries, outlining
several risk mitigation measures. Peter Woicke, World Bank Managing
Director, emphasized the importance of grants for training on
implementation and operation of renewable energy technologies.
Links to more information:
http://www.sefi.unep.org/sef_bonn
http://carbonfinance.org/
http://www.enda.sn
Contact:
Andrew Dlugolecki:
andlug@btopenworld.com
Veronique Bishop:
vbishop@worldbank.org
Youba Sokona: ysokona@enda.sn
Tom Murley: tom.murley@hgcapital.net
THINGS
TO LOOK FOR TODAY
PLENARY: The opening of the Ministerial
Segment will take place from 9:00 am-12:00 pm. Gerhard Schröder,
Chancellor of the Federal Republic of Germany, will make the opening
address, followed by keynote speeches from UNEP Executive Director Klaus
Töpfer and other dignitaries. Further statements will be heard from
Margot Wallström, European Commissioner for the Environment, Peter
Woicke, Managing Director of the World Bank, and several ministers.
Participants will also hear reports from the Multi-Stakeholder Dialogue
and the International Parliamentary Forum.
Plenary will reconvene from 5:00-8:00 pm to discuss the renewables 2004
outcomes, including the reports from the Ministerial Roundtables, as
well as the draft Policy Recommendations, International Action Programme,
and political declaration.
MINISTERIAL ROUNDTABLES: Three Ministerial Roundtables will
convene from 2:30-4:30 pm. The Roundtable on Policies for Renewable
Market Development will take place in the Plenary Hall. The Roundtable
on Financing Options for Renewable Energy will meet in the Bundesrat.
The Roundtable on Strengthening Capacities, Research and Technology
Development, and Institutions will convene in the Wasserwerk.
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