Economic And Social Commission For Western Asia

Dr. Dhamir MANNAI

Regional Director for Africa and the Middle East

Parliamentary Advisor / Climate Parliament

The Dynamics of Renewable Energy

Policy Development: Key stakeholders,

process and barriers

7TH INTERNATIONAL FORUM ON ENERGY FOR SUSTAINABLE DEVELOPMENT

Baku, Azerbaijan - (18-21 OCTOBER 2016)

INTERNATIONAL CONFERENCE ON RENEWABLE ENERGY / REGIONAL SEMINAR ON:

«Enabling Policies to Promote Financing Renewable Energy Investments»

19-20 October 2016

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Outline of presentation

1. Levels of Renewable Energy Policies (National, Regional, and

International)

2. Strategic reasons for pursuing effective renewable energy policies

3. Role of effective policies in market initiation and development

4. Policy making: the Process, the Tools, the Goals, and Expected

Outcomes

5. Impact of Strategic National Plans and National Priorities on Policy

Development

6. The complex process of designing / making national Renewable Energy

Policies:

The stakeholders and the main actors

The issues and the stakes

The dynamics between stakeholders

The challenges and the barriers

7. lessons learned from effective and non-effective processes of making

national RE policies

8. Key messages

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What can good policy do for

renewable energies?

A lot more than what we think

Without good policies, nothing

happens !

With good effective policies,

many good things can happen

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Good Renewable Energy

policies can trigger tremendous

private investments and growth

in renewable energies

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Good Energy Efficiency

legislation and regulation can

save a lot of wasted energy

Energy saved is

energy we do not have to produce

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A Policy is

the highest-level of governance

for Renewable Energy and

Energy Efficiency

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Renewable Energy Policies …

A Policy is the highest-level of governance for renewable energy

A Policy is a Complex High-Level Horizontal Decision

A Renewable Energy Policy is composed of a set of declared objectives, basic guiding principles of action, and statements of intent. It sets long term goals for Renewable Energies in a particular country

A Renewable Energy Policy is to be implemented, according to a clear strategy and action plans (quantified goals), through procedures undertaken by the different actors and stakeholders

Policy Implementation is a set of shared compatible and complementary actions (programs) undertaken by the various stakeholders within an institutional & legislative framework

Direct Stakeholders of a policy are all parties involved in financing, producing, distributing, consuming, and regulating Renewable Energies

Indirect Stakeholders are Civil-society entities, international agencies (UN, EU,OECD, WB, Etc.)

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Levels of Renewable Energy Policy considerations …

National, Regional, and International

National considerations for Renewable Energy Policies

Strategic National Security considerations: Energy Security and Geopolitical Situation

Nature and potential of national natural energy resources (Fossil fuels, Hydro, Wind, Solar, Biomass, etc.)

National economy considerations (Subsidies, imports /exports of energy, employment and green economy, urban/rural electrification, etc.)

Energy use and efficiency standards

Production, distribution and use of Renewable Energies (Who can do what?)

Fiscal measures in support of Renewable Energies

Emissions and Environmental considerations (Air Quality, etc.)

Business environment (laws, regulations, etc.)

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Levels of Renewable Energy Policy Considerations …

National, Regional, and International

International considerations for Renewable Energy Policies

International Politics and Stability of Supply Climate issues and International Engagements (CPDN & Paris Accord) Green Energy Technologies and Industries Discretionary contribution to, and participation in, international green

energy initiatives (UN, EU, OECD, etc.) Availability of international financing opportunities

Regional considerations for Renewable Energy Policies

Laws, regulations and directives of Economic Regions/Communities of Countries

Regional Interconnections and Energy Exchanges/Trading Green Energy Regional Markets

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Strategic reasons for pursuing effective renewable

energy policies

In terms of social & economic development a country that does not have an adequate supply of energy is a country that has no future

Sustainable Development needs Sustainable Energy

A balance between Security of Energy Supply and Climate Concerns;

Energy Security (Reliably-Available, Affordable, Sustainable)

Economic & Social Development Social and Economic Rural Development Technology and Industrial Development Green Energy, Green Economy, and Green Jobs (Lever of

economic development)

Smooth transition from Existing Situation to New Desired Energy Landscape

Energy Poster : Importer vs Exporter of Energy

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Role of effective policies in market initiation and

development

Generating/Attracting Investments

Creating an economic advantage for the country

Facilitate regional electricity market integration

Developing a New Segment of the economic activities: technologies, industries, and services yielding economic growth and jobs

Good policies are key catalysts for renewable energy development (Germany, Jordan, Switzerland, Morocco, etc.)

Bad or inadequate policies are big obstacles to development of renewable energies; especially the legislative and regulatory frameworks

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Policy making: the Process, the Tools, the Goals, and

Expected Outcomes (1/3)

The Process

Gathering the Data, Knowledge, and Facts about the Energy Sector with Analysis as to how it pertains to Renewable Energy sources

Identifying the issues and problems to be resolved

Identifying the National, Regional, and International Experts that will support the Policy Development Process

Identifying the Stakeholders, understanding them, prioritizing them, and define relationships (responsibilities and collaborations)

Explicitly Assigning the Leadership Role for the National Effort of Policy Development

Validating the facts and building consensus around them

Develop Common understanding and appreciation of facts

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Policy making: the Process, the Tools, the Goals, and

Expected Outcomes (2/3)

The Process (continued)

Policy Formulation

Building Consensus around the Long-Term policy objectives

Building Consensus around the Medium-Term policy objectives

Establishing the high-level policy (Strategic Objectives, Goals)

Policy Gap Analysis in order to develop …

Common understanding of national objectives

Minimum level of consensus on national goals (essential for the policy)

Supporting Policies Identification

Budgeting and Agenda Setting

Policy Implementation Strategy / Action plans

Policy Evaluation and Review Process

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Policy making: the Process, the Tools, the Goals, and

Expected Outcomes (3/3)

The Tools

Legislative framework (Laws and implementation texts)

Institutional & Regulatory framework (Including implementation institutions)

Fiscal measures and incentives

Non-fiscal incentives

Monitoring compliance with the Policy

Public pressure and Civil Society support (Climate and Energy Access)

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Impact of Strategic National Plans and National Priorities

on Policy Development

Level of harmony with strategic national plans and national priorities will determine success or failure of a Policy

What makes Renewable Energies a good thing for the National Interest?

Is it economically attractive, politically attractive, or both

Energy Policy must support, and fit with, national economic and social development plans. Otherwise it will not be implemented.

Energy Policy must indicate target budget and timelines (i.e. resources) that are adequate with national priorities (urgency, value, and importance will determine priority)

Ensure adequate level of commitment to Policy from all Stakeholders to insure implementability

Gather social support and awareness on importance of the Policy

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The complex process of designing / making national

Renewable Energy Policies (1/2):

The Stakeholders and the main actors : Identify them, understand them, prioritize them

Law makers

Government bodies responsible for issuing implementation texts for the laws

Regulatory bodies (Key catalysts for implementation)

Implementers of the Policies

Project developers / Investors Government decision makers Businesses Consumers (corporate and citizens) Civil society influencers to gather support around the Policy

National utility companies

Opinion Leaders (Socializing the concepts and ideas behind the Policy, Participatory Approaches are key to effectiveness of Opinion Leaders)

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The complex process of designing / making national

Renewable Energy Policies (2/2):

Issues, Stakes, and Dynamics between Stakeholders

Inadequate Political Will

Differences in learning curve

Conflicting stakeholder interests

Lack of cooperation of some stakeholders (to each its reasons)

Protectionism of turf (utilities, concession holders, etc.)

Financing difficulties

Beware of technical arguments as pretext to avoid compliance with Policy

Resistance to change

Analysis-Paralysis, resulting in inadequate reactivity

Existing concessions and international agreements incompatible with new vision of the Policy

Existing complex legislative and regulatory frameworks

Public vs Private Infrastructure Ownership and Operations

Strong Political Will is the solution : Political will that is strong, committed and continuously-engaged

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The complex process of designing / making national

Renewable Energy Policies (2/2):

Challenges and Barriers to the Policy-Making Process

A Renewable Energy Policy development is a complex multi-criteria challenge that requires a delicate balance of trade-offs between the Stakeholders

Conflicting expectations due to perceived conflicting interests

Lack of leniency in making trade-offs (everyone has to give-in a little bit)

Not easy to identify the “champions of the cause” who have adequate political will and political influence to “make things happen” and “keep the momentum going”

Lack of adequate human & financial resources

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L e s s o n s l e a r n e d f r o m e f f e c t i v e a n d

i n e f f e c t i v e p r o c e s s e s o f m a k i n g n a t i o n a l

R E p o l i c i e s ( 1 / 2 )

Characteristics of Effective Policy-Making Experiences:

Clear and realistic goals (achievable)

Completeness of the legislative and regulatory frameworks

Assuring institutional feasibility

Measurable targets, clear mandates, adequately allocated resources

Clear controls for assessing effectiveness and efficiency of implementation measures

National awareness and Public Support

Adherence and true commitment of main stakeholders (perseverance)

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L e s s o n s l e a r n e d f r o m e f f e c t i v e a n d n o n -

e f f e c t i v e p r o c e s s e s o f m a k i n g n a t i o n a l

R E p o l i c i e s ( 2 / 2 )

Characteristics of Ineffective Policy-Making Experiences:

Lack of consensus amongst Stakeholders (Hinders implementability)

Lack of complete and adequate legislative and regulatory frameworks (this is the primary cause of failure to finance renewable energies)

Lack of adequate incentives (fiscal, etc.) in support of Policy

Weak ineffective Institutions and Institutional Feasibility

Lack of Identification of Financing Sources to Implement the Policy

Policy gaps and/or incomplete policies

Dragging out the process of developing the Entire Policy Framework results in process discontinuities, restarts, and loss of momentum

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Key messages

Situational awareness (Political/Economic/Geopolitics) Identify the supporters Support them and keep them

interested Identify the hesitants Convince them Identify the blockers Be sensitive to their concerns but do

not let them distract you

Comprehensive and Complete Framework that make economic sense (incomplete frameworks get nowhere).

Be swift with Policy Development (avoid dangerous uncertainty periods)

Simplify things for first projects. New policy frameworks need first implementation successes to be validated and accepted

Keep an eye on the Action Stakeholders : Investors and Project Leaders

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Thank you for your kind attention

Questions

Thank you !