Transcript Subsidies - green lotus

Financing renewable
energies in Myanmar
COMMIT TEE 2 ON RENEWABLE ENERGIES AND CLIMATE CHANGE
ADAPTATION
Worldwide eagerness towards renewable
energies
Global New Investment in RE and
Fuels, Developed and developing
countries, 2004, 2013
Source : REN 21- Global status
report 2014
Worldwide eagerness towards renewable
energies
Solar PV total capacity,
2004, 2013
Source : REN 21- Global
status report 2014
Worldwide eagerness towards renewable
energies
Wind Power Total World
Capacity, 2000-2013
Source : REN 21- Global
status report 2014
Worldwide eagerness towards renewable
energies
Some countries considerably invested in renewable energy
China, India or Nepal at a smaller scale
 Real growing market
 Strategic sector for green economy
 Unique opportunity for Myanmar
… But the competition is not fair
Fossil fuels subsidies are still huge
- World fossil industries receive
550 billions USD/year
(4 times more than renewable energy
sector (WEO 2011))
- Inefficient
energy use
- The costs of environmental and
social harm is not integrated in
business and investment
activities
- Hinder
investment in RE
Global financial mechanisms are
emerging…
New sources of investment on green projects
Creation of green fund/climate funds
Role of development financial institutions to support green investment (WB, ADB, KfW …)
Traditional investors interested in competitive market
… But high investment is still needed
Address the growing demand of energy
Meet climate change mitigation target
What about Myanmar ?
Focus on Myanmar context
Facing the main energy challenges …
… Offers solutions for context-related issues
Improving energy
security
Mitigating and
adapting climate
change
Reduction of the tensions over
large projects (dams, coal plants)
Increase rural energy access
Create jobs and new markets
How to finance
renewable energy
deployment ?
Unlocking financial constraints depends
on many factors
Market
development
Delivering financing is
higly context-specific
Domestic
financing
institutions
Policy and
regulatory
framework
Enterprise’
need for
funding
End users
Public sector has a critical role at early
stages …
Define policy and regulatory frameworks
feed-in-tariffs, direct subsidies, tax credits …
Public-private partnership to share risky investment
… But private sector role will be also
important
High capital in investment
Expertise and technical knowledge
Neccessary to scale-up renewable energy
Three scales
of financing tools
National scale
• Government decision
level
Minigrids
• Agglomerated
consumers in a village
Micro scale
• One or two
households
Financing tools
National scale
Tax
cuts
Feedin
tariffs
Crosssubsidies
Multilateral
financial
institutions
Financing tools
National scale
Tax
cuts
Feedin
tariffs
Crosssubsidies
Multilateral
financial
institutions
Tax cuts
Reduction on imported parts for solar
panels, wind turbines and other renewable
energy technologies to encourage the private
sector to use these renewable energy
sources
Financing tools
National scale
Feed-in tariffs
Tax
cuts
Feedin
tariffs
Crosssubsidies
Multilateral
financial
institutions
Governments set prices for different types of
renewable power to compensate producers for
the higher cost of producing clean energy.
This system guarantees for a company the
payment of a fixed amount per unit of
electricity produced on a defined time frame.
Financing tools
National scale
Cross-subsidies
Tax
cuts
Feedin
tariffs
Crosssubsidies
Multilateral
financial
institutions
Cross-subsidize energy access programmes with
some of its revenues from the fossil energy sector
to finance subsidies program for renewable
energies
Ex. The Brazilian Alcohol Program, for the purpose
of reducing oil imports by producing ethanol from
sugarcane
Financing tools
National scale
Tax
cuts
Feedin
tariffs
Crosssubsidies
Multilateral
financial
institutions
Partner with multilateral
financial institutions
Assistance on country studies and funding to
launch large scale projects for renewable energies.
Ex. Sri Lanka Energy Services Delivery Project, with
the Government of Sri Lanka, the World Bank and
the Global Environment Facility (GEF) between
1997 and 2002
Financing tools
Mini-grid and micro scale
Subsidies
Empower
CBOs
Microcredit
PAYGO
Financing tools
Mini-grid and micro scale
Subsidies
Subsidies should either be oriented towards:
Subsidies
Empower
CBOs
 The households, to help them buy their equipment
or pay their electricity package,
 The companies, to help them sell their products to
households which wouldn’t be able to afford it
Microcredit
PAYGO
Ex. China’s Golden Sun Policy, which provides
subsidies for 500 MW of photovoltaics projects until
2012 to temporarily support the domestic solar
industry
Mini-grid and micro scale
Subsidies
Empower
CBOs
Microcredit
PAYGO
Empower community-based
organizations
Couple energy access programmes with
community development funds (CDFs), to
promote non-lighting uses of electricity
(agriculture, business …) and increase income to
purchase renewable energy systems
Ex. CFD in Nepal for microhydro diffusion
Mini-grid and micro scale
Micro-credit institutions
(especially for micro scale)
Subsidies
Empower
CBOs
Microcredit
PAYGO
A rate at 15% per year (common rate), can help
pay systems within a few years
Renewable energy shops in villages themselves
can implement a credit system to help their
customers pay by several instalments
Ex. Grameen Shakti (Grameen Bank), which
provides electrification to rural communities in
Bangladesh through microcredit
Mini-grid and micro scale
Subsidies
Empower
CBOs
Microcredit
PAYGO
Pay as you go
Especially known for solar kits, customers can pay
an up-front fee for energy when they need it, on
their net meter (or mobile phone)
Thank you !