New inequalities and development policyCarbon, connections, capacity
Dr Arunabha Ghosh
UN Committee for Development PolicyOpen Session UN Headquarters, New York25 February 2020
© Council on Energy, Environment and Water, 2020
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Energy Access Renewables
Low‐Carbon Pathways
Technology, Finance & Trade
Industrial Sustainability &
Competitiveness
Risks & Adaptation
Power Sector
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CEEW Centre for Energy Finance
3|IMAGE: Business Standard
WHAT WILL THE PLANET DO TO US?
A tale in three charts
SOURCE: King et al (2015); Figure by Jeremy Shakun, data from Lu ̈thi et al., 2008 and Jouzel et al., 2007; Berkeley Earth (2019); NOAA (2019)
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Last 800,000 yearschanges in Antarctic air temperatures and atmospheric CO2 concentrations
Mean sea levels have risen 3.7 inches in 25 years; 8 inches since 1880
Average temperatures are 1 degree Celsius above pre‐industrial era
Not everyone’s vulnerability looks the same
IMAGE: istock; Down to Earth
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Carbon budget get consumed by the biggest polluters
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SOURCE: Carbon Tracker; CEEW analysis
‐40
‐20
0
20
40
60
80
100
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Gig
a‐To
nnes
of C
O2‐
eqGlobal GHG emission trajectories across scenarios
Current policy NDC 2 DegC 1.5 DegC
USA (79)
China(186)
EU (49)Japan
(15)
Significant decline in emissions required for moving from the NDC trajectories to the 2 DegC trajectory……
… and even more for achieving the 1.5 DegC targets
Based on their NDC trajectories, China, USA, EU and Japan will appropriate 49% of global carbon space between 2018 and 2030
Climate sceptics are also climate culprits
7|SOURCE: Financial Times (2019)
8|IMAGE: CEEW/ Jaun Rizvi
CLEAN ENERGY ACCESS FOR ALL?
118 million have moved out of absolute electricity poverty in 3 years(Past decade 350 million)
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64%
42%37%
84%74%
62%
Connected to the grid Grid as the primary source oflighting
Tier 1 or above
Prop
ortio
n of
rura
l hou
seho
lds
Access to electricity in six states
2015 2018
SOURCE: CEEW (2018)
But long way to go; only 20% of rural households in top two tiers
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63%
27%
7%3%
2015
38%
43%
14%
6%
2018
Tier 0 Tier 1 Tier 2 Tier 3
Evolution in Electricity Access
SOURCE: CEEW (2018)
Duration of supply has improved, but reliability remains a concern
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5%
21%
50%
30%
21%
40%
5%8%
52%
29%
22%
42%
0%
10%
20%
30%
40%
50%
60%
Capacity Duration Reliability Quality Legality Affordability
Prop
ortio
n of
rura
l hou
seho
lds
Bottlenecks in electricity access faced by Tier 1 households
2015 2018
SOURCE: CEEW (2018)
160 million have gained access to clean cooking energy in 3 years(Past decade, 700 million)
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Tier 078%
Tier 115%
Tier 25%
Tier 32%
2015
Tier 044%
Tier 135%
Tier 215%
Tier 36%
2018
Tier 0 Tier 1 Tier 2 Tier 3
SOURCE: CEEW (2018)
LPG is the driver for all the change, but a long way to go
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LPG connection and its use as a primary fuel has increased two‐fold
22%14%
5%
58%
37%
19%
LPG use LPG as primary fuel LPG as only fuel
Prop
ortio
n of
rura
l hou
seho
lds
LPG adoption and use in rural areas of six major states
2015 2018
SOURCE: CEEW (2018)
Affordability remains the biggest challenge to adopt and use LPG
SOURCE: CEEW (2018)
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95%88%
72%
42%
92%87%
45%
28%
High connection cost High monthlyexpenses
LPG distributor notavailable in the
vicinity
Lack of Awareness
Prop
ortio
n of
hou
seho
lds n
ot
havi
ng a
n LP
G c
onne
ctio
n
Reasons for not having an LPG connection in 2015 and 2018
2015 2018
SOURCE: CEEW (2018)
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1/4thhave come our of absolute electricity poverty, but only 20% in top two tiers
1/3rdhave gained clean cooking energy access, but only 6% in top tier
Reliability and quality of supply remain the big concerns
Affordability of LPG and fuel stacking continue to be the biggest challenges
IMAGES: CEEW
Solar-powered paddle loom, Gondal, Gujarat
Energy-efficient dal mill, Wardha, Maharashtra
Solar-powered amber charkha, Gondal, Gujarat
Energy-efficient sugarcane juicer, Rajkot, Gujarat
Solar-powered refrigerator, Chitradurga, Karnataka Solar-powered flour mill, Jawhar, Maharashtra
Solar-powered milking machine, Chitradurga, Karnataka
Solar-powered sewing machine, Chitradurga, Karnataka
Clean energy access for livelihoods: a $50 billion opportunity
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SOURCE: CEEW (2020)
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Identify and on‐board enterprises with field‐tested
technology
Support commercial deployment (‘00—’000)
Capital support Technical assistance
Market & Policy assessment
Evidence generation Dissemination
Create sectoral momentum
Market & Policy advocacy
Key sector stakeholder engagements
Investors FinanciersPolicymakers
To understand what evidence do
stakeholders need to unlock support
To disseminate evidence and to
advocate for unlocking support
Powering Livelihoods: Clean energy access for productive uses
18|IMAGE: Abhishek Jain/ CEEW
CHEAPER FINANCE, EFFECTIVE TECHNOLOGY
Establishing the mismatch: Capital circulating in capital‐rich regions
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• In 2018, global energy investment stood at more than USD 1.8 trillion• Only a third of that, USD 620 billion, was invested in low carbon energy
• 15% of the world’s population, got 40% of the world’s energy investment in 2018 – in high‐income countries
• Energy consumption in developing countries has doubled in the last 15 years, and will growanother 30% in the next fifteen years
SOURCE: Chawla and Ghosh, 2019
94%
60% 61%81% 81%
67%
35% 45%62% 58%
4%
38% 32%
18% 14%21%
63% 46%32% 41%
0%
20%
40%
60%
80%
100%
120%
Perc
enta
ge S
hare
Asset Financing by Funding Origin (Domestic v/s Foreign)Domestic Foreign unknown
Understanding the mismatch: evidence from India
20|SOURCE: Chawla et al, 2019
• Financing costs constitute 50‐65% of Indian RE tariffs
• PV module/wind turbine costs account for only around 20% of RE tariffs
• Interest rate spreads for lending to RE projects have declined by 75‐125 bps from 2014‐2018, tariffs from USD 9 cents to 4 cents/kWh
225200
150
0
50
100
150
200
250
300
2014 & 2015 2016 2017 & 2018
Bas
is p
oint
s
Interest rate spreads - solar PV and wind
Understanding the mismatch: perceived and real risks
21|SOURCE: CEEW‐CEF analysis
India
South Africa
Indonesia
• Offtake risk and power sector design • Curtailment risk• Forex risk
• Political and macroeconomic risk • Demand risk • Curtailment risk
• Demand risk • Policy and regulatory risk • Execution risk
Correcting the mismatch: Innovation and information
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SOURCE: CEEW, TWI, TCX (2017)
(In)effective tech partnerships
23|SOURCE: Ghosh, Vijayakumar, Ray (2015)
PartnershipKnowledge sharing and coordination
Research, development and demonstration
Technology transfer
Deployment mandates,
standards and incentives
Forums for research and policies
Asia‐Pacific Partnership on Clean Development and Climate
X (Project implementation)
X
Climate Technology Initiative under the International Energy
Agency (Soft transfer)X
Economic Community of West African States Centre for
Renewable Energy and Energy Efficiency
X(Soft transfer)
Global Green Growth Institute X X X
International Renewable Energy Agency X
(Soft transfer)X
Renewable Energy Policy Network for the 21st Century X
(Soft transfer)X
Forums with a regional focusAsia‐Pacific Economic
Cooperation Energy Ministerial X X XBaltic Sea Region Energy
Cooperation X X
European Green Cities Network X(Demonstration)
X
Latin American Energy Organisation X X
Regional Centre for Renewable Energy and Energy Efficiency X
Renewable Energy Support Program for ASEAN X X X
US‐Asia Pacific Comprehensive Energy
Partnership (Soft transfer)X
Forums for city‐level action
C40 X(Soft transfer)
X
Cities Development Initiative for Asia X X X
Local Governments for Sustainability X X X
Forums with specific focusCarbon Sequestration Leadership Forum X
(Soft transfer)X
Clean Technology Fund of the World Bank X X X
Climate and Clean Air Coalition X
(Soft transfer)
Climate Technology Centres and Networks (Soft transfer)
X
EC‐ASEAN COGEN Programme
X X (Demonstration)
Global Bio‐energy Partnership X
(Soft transfer)X
International Framework on Nuclear Energy Partnership X X
International Low Carbon Energy Technology Platform X X X
International Partnership for Energy Efficiency Cooperation X X
Renewable Energy and Energy Efficiency
PartnershipX X
PartnershipKnowledge sharing and coordination
Research, development
and demonstratio
n
Technology transfer
Deployment
mandates,
standards and
incentives
Effective tech partnerships
24|SOURCE: Ghosh, Chaturvedi, Bhasin (2019); Biswas, Ganesan and Ghosh (2019)
Guiding principles
• Objectives matter• Prices matter• Pooling resources• Innovative finance• Risk and responsibility• Voice in governance
Alternative modalities
• Enterprise‐driven R&D for tech applications
• Innovation Fund for Low‐Carbon Tech
• G20 Platform for Horizon Tech
Transport• Electric Vehicles• Hybrid Vehicles• Hydrogen Vehicles
Buildings• Material
Electricity• Renewables• Nuclear• Storage• CCS
Industry• Electrification• CCS• Hydrogen
Geoengineering• Solar
Radiation Management
Locking into long‐term investments
Imperfect policy decisions
Dimensions of Uncertainties
REDUCE
AVOID
TECHNOLOGY COOPERATION
Speedand
Scale of Transformation
An Existing Paradigm for a 2o C
World
A New Paradigm for a 1.5o C World
Thank youceew.in | @CEEWIndia
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