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INTERNATIONAL SUPPORT TO PROMOTE TECHNOLOGY

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INTERNATIONAL SUPPORT TO PROMOTE TECHNOLOGY Powered By Docstoc
					INTERNATIONAL SUPPORT TO PROMOTE
    TECHNOLOGY TRANSFER AND
DEPLOYMENT, FOR RENEWABLE ENERGY
          AND EFFICIENCY
             IN GHANA

              BY

         WILLIAM GBONEY
    INTERNATIONAL INSTITUTE OF
 INFRASTRUCTURAL ECONOMICS AND
        MANAGEMENT (I3EM)
          ACCRA, GHANA.

                      April 8, 2009.   1
                Presentation Format

1.   Summary of Phase 1:
•    Objectives
•    Policy Description
•    Barriers

2. Phase II
•   Study Objective
•   Link between Phase I and II
•   Suggested Approach
•   Key Issues to be addressed
                                      2
1.0 Phase 1 of Case Study: Analysis of existing policy,
Legal and Regulatory Frameworks for Renewable
Energy (RE) and Energy Efficiency (EE) Sectors in
Ghana


(a) Objectives:
(i) Identify key domestic polices which are SLOW –
      MOVING, and would require international support and
      cooperation
(ii) Identify domestic barriers affecting Renewable
      Energy (RE) and Energy Efficiency (EE) development
(iii) Explore how international cooperation and support,
      can be used to increase the scale and scope of RE
      and EE

                                                          3
2.0 Summary: Policy Description
(a)    Resource Capacity Development:
(i)    Expand exploitation and development of RETs
(ii)   Achieve at least 10% RE in overall energy mix by 2020

(b)    Increase Thermal Plant Efficiency:
(i)    Convert existing single-cycle oil-fired plants to combined cycle,
       gas fired plants
(ii)   Fuel switching: Light crude oil (LCO) to natural gas: West African
       Gas Pipeline Project

(c ) Energy Efficiency in energy intensive industries:
(i)   Undertake energy audit projects
(ii) Power Factor (PF) enhancement projects for industries to
      achieve 0.90



                                                                            4
2.0 Summary of Policy Description: Continued

(d) Energy efficiency labeling and standards:
For equipment and appliances

(e) Market Development:
-     Create and expand market for RE Service
-     Promote use of solar PV, solar water heater and solar crop drying

(f) Renewable Energy Law:
(i)    Establish conducive enabling environment (i.e. policy, legal regulatory
       frameworks (etc) to promote:
(ii)   Grid-connected RE systems
(iii)  Stand-Alone systems

(g) Bio-fuel development:
      Encourage cultivation of Jatropha plant
      Bio-diesel production

                                                                                 5
3.0 SUMMARY OF BARRIERS FROM PHASE 1

a.   Policy
b.   Legal and Regulatory
c.   Economic and Financial
d.   Market expansion and technology deployment
e.   Barrier analysis was done with respect to:
•    Grid Connected systems
•    Mini-grid systems
•    Stand-Alone systems
•    Energy Efficiency


                                                  6
3.1 Barriers: Grid Connected Systems

(a)   Policy Barriers:
•     Lack of coherent and comprehensive policy
•     The electricity structure can act as a barrier
•     Lack of regulatory framework to support private sector
      participation

(b) Economic Barriers:
(i)   Subsidizing of fossil – fuelled electricity (direct or indirect) Types
      of subsides: Direct Financial transfer, energy services at less
      than full cost etc.
(ii) Not accounting for the socio – environmental cost of fossil fuels
(iii) Not accounting for risks associated with future fossil – fuel price
      fluctuations


                                                                               7
3.1 Barriers: Grid connected System – cont’d

(c) Legal and Regulatory:
(i)   Lack of legal and regulatory framework for renewables
(ii) Lack of basic laws and regulations. Example: Lack of transparent
      pricing principles lack of access pricing rules, technical standards
(iii) RE do not receive full credit for the “value” of power generated

(d) Financial Barriers:
(i)   High up – front capital requirement, high interconnection costs
      and lack of financing structures for small projects
(ii) Lack of access to credit
(iii) Perception: That RETs are relatively new, not sufficiently field
      proven and expensive to purchase, install and maintain
(iv) High transaction costs
(v) Lack of appropriate skills
(vi) Information on cost is imprecise.

                                                                         8
(a)     Policy:

(i)    Policies to promote rural electrification not effectively
       linked to promotion of mini – grid systems


(b) Legal and Regulatory:
(i)   Lack of transparent pricing policy
(ii)  Lack of knowledge on how to regulate mini – grid
      systems
(iii) Lack of support to incentivise private sector rural
      electricity systems
(iv) Lack of technical skills by maintenance staff
(v) Absence of appropriate administrative controls

                                                                   9
3.2 Barriers for Mini-Grid Systems – cont’d

(c) Financial and Economic:
(i)   High investment and transaction costs
(ii) Lack of access to capital
(iii) Inability to make accurate resource supply projections
(iv) Absence of incentives to support RETs for mini-grids

(d) Market risk as a barrier:
(i)   Inability of rural customers to pay the tariff
(ii) Uncertainty about customer demand
(iii) Lack of technical and business skills, and in regulating the
      systems
(iv) De – coupling of community involvement and responsibility


                                                                     10
3.3 Barriers for stand – alone systems

(a)    Policy:
(i)    Policy for stand-alone systems do not form part of country’s rural
       electrification policy

(b)    Legal and Regulatory:
(i)    High upfront costs for both end-users and service providers
(ii)   Inability to access capital

(d) Market Performance
(i) Lack of understanding on stand-alone systems by stakeholders




                                                                        11
3.4 Energy Efficiency Barriers
i.    Financing Barriers:
•     High upfront cost
•     Payback period
•     Unfamiliarity of EE with financing institutions
ii. Information Barriers:
•     Targeted information absent
•     Lack of awareness of EE benefits
iii. Market organization and price distortion
iv.   High Transaction cost
v.    Lack of appropriate Institutions
vi.   Lack of adequate technical skills
                                                        12
4.0 Phase II: International Support and Cooperation to
promote RE/EE technology development.

(a) Objective:

    To overcome the barriers identified in phase I
    Investigate how international support and cooperation
    can be used to build on domestic policy, to promote
    technology transfer and deployment in Ghana.




                                                         13
5.0 What is technology transfer?
i.     It means more than just providing the hardware

ii.    Involves knowledge sharing and ability to adapt
       technology to local environment

iii.   Technology transfer also involves:
•      Building human and institutional capacity
•      Raising awareness among users/stakeholders

iv.    Technology transfer is also about the structures,
       institutions and organizations

v.     Ability to adapt the technology to fit into the country’s
       local and political institutions
                                                              14
Technology assistance and transfer – cont’d

i.  Phase II to explore:
(a) South-South technology transfer
(b) North-South technology transfer

ii.    Identify mechanisms for large scale transfer of
       technology. Example: Promote International
       cooperation with equipment suppliers. Requires
       dealing with Intellectual Property Right (IPR)

iii.   Technology transfer should also build upon sound and
       existing local polices (i.e. bottom-up approach)

                                                          15
6.0 Link between Phase I and II
(a)    Phase I: Identified the following as being necessary:
•      Credible Policy. Legal and regulatory frameworks:
i.     Grid-connected RE systems
ii.    Mini-grid RE Systems
iii.   Stand-Alone Re systems

(b)    International cooperation, technical and financial support for:
i.     Large-scale grid-connected RE systems
ii.    Mini-grid RE and ESCOs
iii.   Stand-Alone RETs
iv.    Intensification of Energy Efficiency activities

(c )   Capacity building:
       For policymakers, regulators, technicians, financing institutions




                                                                           16
7.0 Approach to Phase II of study

i.     To identify actions and mechanisms for international support,
       which will enable Ghana overcome the barriers:
ii.    Key Issues to be addressed include:
a.    Technical Assistance:
•      Policy and regulatory frameworks
•      Human and institutional capacity building for: Financial Intuitions,
       policymakers and regulators, Technical

b.     Bilateral Policy Implementation and Financial Support
       (Grid Connected, Mini-grid and stand-alone systems, EE)
c.     The concept of “regional innovation centres”
d.     Discussion with stakeholders
e.     Attempt to quantify the scale of support


                                                                          17
8.0 Financial Support
(i)     Even if credible regulatory regimes exist and good policies are in place,
        FINANCING would still be required.

(ii)    Innovative financial instruments therefore need to be explored in Phase
        II for grid-connected, mini-grid, stand-alone systems and energy
        efficiency

(iii)   Direct government investment required; incentives required to leverage
        private investment

(iv)    Financing mechanisms should be compatible with country’s local
        circumstances

(v)      Key features of financial support to be considered:
•       Should comprise a mix of grants and carbon finance
•       Should buy down cost of new technologies
•       Support pilot projects
•       Should Mitigate financing and technology risks
•       Must be able to finance incremental costs of moving to high efficiency
        technologies
                                                                                 18
9.0 Monitoring & Evaluation: Indicators

i.   Required:
•    To measure a programme’s progress towards
     achieving short- and long-term objectives
•    To indicate the direction in which a programme or
     policy is moving
•    As a source of feedback to improve performance
•    To facilitate understanding of a programme to
     stakeholders or external audience

ii. Can be quantitative or qualitative

                                                         19
10.0 Indicator Types

i.    Output-based Indicators
ii.   Outcome-based Indicators:
•     Intermediate outcome indicators: measure short – tem outcomes,
      easily quantifiable
•     Impact indicators: measure long-term results
iii    Indicators can be qualitative or quantitative
iv    A good indicator should meet the ‘SMART’ LITMUS TEST:
•     S: Specific; M: Measurable; A: Achievable; R: Reliable;
      T: Time-bound
v     In addition , the indicator:
•     Should be robust to ‘gaming’
•     Should generate self-reporting interest
•     Be cost effective

                                                                  20

				
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