WBCSD Access to Energy Initiative - Summary presentation

2,218 views

Published on

Addressing the lack of access to clean, reliable and affordable energy services for billions of people is one of the world’s most critical development challenges and is becoming increasing prominent on the international agenda. The WBCSD Access to Energy Initiative helps business and other key stakeholders understand how the business contribution to access to energy can be maximized. The Initiative is co-chaired by GDF SUEZ, Schneider Electric and ERM, and has 21 member companies actively engaged in its core group. The Initiative focuses on the key opportunity areas to scaling the business contribution: innovative business models, enabling policy frameworks and financing mechanisms. Collaboration and partnerships are key cross-cutting enablers.

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,218
On SlideShare
0
From Embeds
0
Number of Embeds
831
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

WBCSD Access to Energy Initiative - Summary presentation

  1. 1. Business solutions to enable energy access for allThe WBCSD Access to Energy Initiative January 2012
  2. 2. Presentation overview • Energy poverty • Business opportunities & challenges • The WBCSD Access to Energy Initiative • New publication highlighting:  Role of business  Business model innovation  Enabling policy frameworks  Financing  Collaboration & partnerships • Conclusions • Advocacy & engagement 2
  3. 3. Energy poverty: a major globaldevelopment challenge • The „Missing Millennium Development Goal‟ – essential to economic and social development • Current status:  No access to electricity – 1.3 billion  Poor-quality electricity – 1 billion more  Cooking with traditional biomass – 2.7 billion • Business-as-usual 2030 projections:  Percentage improvement  Absolute numbers remain approximately the same 3
  4. 4. Energy poverty by regionMillion people without electricityMillion people without clean cooking facilities Sub-Saharan Africa China 8 423 Rest of Latin America 585 653 developing India Asia 31 85 289 379 836 661 Source: IEA World Energy Outlook 2011 4
  5. 5. The health implications of a lack of access to clean cooking facilities 2.5PrematureDeaths 2.0(millions) 1.5 1.0 0.5 0 2008 2030 2008 2030 2008 2030 2008 2030 Malaria Tuberculosis Smoke from HIV/AIDS biomass Source: IEA World Energy Outlook 2011 5
  6. 6. Universal energy access is possiblewithout major increases in CO2 Billion tonnes of oil equivalent 20 40 Gigatonnes 0.7% 1.1% Additional energy 15 30 demand 10 20 Additional CO2 emissions 5 10 0 0 World energy World CO2 demand emissions 2030 2030 Source: IEA World Energy Outlook 2011 6
  7. 7. Business opportunities… • Key feature of many emerging & low income country energy markets. • „Base-of-the-pyramid‟ (BoP) market for energy services - USD +500 billion per year. • Provision of infrastructure & management services. • Competitive advantage for utility service providers. • Deployment & commercialization of new technologies. 7
  8. 8. …But significant challenges • Fragmented & immature markets. • Lack of intermediaries & information. • Poor-quality of existing infrastructure. • Dispersed (and often very poor) rural populations. • Solutions vary with the local context. • Lack of political will and public investment. • Weak regulatory and investment climate in many countries. 8
  9. 9. WBCSD Access to Energy Initiative• Maximizing the business contribution to expanding access to clean, reliable & affordable energy.• Leading global energy companies:  Co-Chairs: ERM, GDF Suez, Schneider Electric  Core-Group: ABB, AEP, Alstom, Chevron, DNV, eni, E.ON, EPM, Eskom, GE, Nov ozymes, Philips, Shell, Siemens, Statkraft, Statoil, Vattenfall, Veolia Environment, BCSD Argentina• Providing a business voice in the international dialogue on how to achieve universal energy access effectively and efficiently. 9
  10. 10. New publication: Business solutionsto enable energy access for all 19 member company case studies 10
  11. 11. KEY LARGE COMPANIES & UTILITIES STAKEHOLDERS 1. Efficient deployment of existing solutions at scale Regulatory 2. Innovation and new Agencies solutions Development 3. Efficiency & reliability ofGovernment Agencies the energy system 4. Knowledge & skills transfer EXPANDING 5. Financial resources ACCESS TO Financing CONTRIBUTION 6. CSR programs CLEAN, Institutions OF BUSINESS 7. Linkages with local firms RELIABLE & AFFORDABLE Partnering, supply ENERGY chain, joint ventures etc. Consumers/ CommunitiesHouseholders LOCAL FIRMS & SOCIAL NGOs ENTREPRENEURS •Localized solutions to meet local customer needs •Last mile service delivery •Key producers and 11 distributors
  12. 12. The diverse role of business in the transformation of the energy system• Efficient delivery of existing solutions as well as innovation for new solutions.  Numerous member WBCSD cases highlighted in this presentation.• Also improvements in system efficiency and reliability, knowledge and skills transfer, linkages with local firms etc.  Alstom. Skills development and improving plant efficiency in South Africa; R&D for tailored local hydropower solutions in India.  Eni. Partnerships to build local skills and capacity in the Congo. 12
  13. 13. Maximizing the Business Contribution DELIVERY OF GOODS & SERVICES 1. BUSINESS MODEL INNOVATION • Grid extension • Decentralized/renewableMAXIMIZING THE energy systems 4. COLLABORATION BUSINESS • Products & appliances & PARTNERSHIPS CONTRIBUTION (Governments, IFIs, TO PROVIDING Development ACCESS TO Agencies, SocialCLEAN, RELIABLE ENABLING ENVIRONMENT entrepreneurs, NGOs & AFFORDABLE etc.)ENERGY SERVICES 2. ENABLING POLICY FRAMEWORKS 3. FINANCING MECHANISMS 13
  14. 14. Business model innovation • More affordable and reliable products and services. • Overcoming or circumventing market barriers/failures. • Increasing profitability and scalability of servicing poor customers. 14
  15. 15. Grid extension • Key innovations:  Cost reductions through technical innovation.  Connection costs paid in installments.  Pre-pay technology to reduce losses and increase convenience.  Working through community associations.  Complementary businesses (e.g. sale of appliances). • Challenges:  Cost of servicing many rural communities.  Affordability for poorest consumers. 15
  16. 16. WBCSD member cases (I)• Eskom. Improving the electrification rate in South Africa by 36 to 83%, targeting universal coverage by 2020.• GDF Suez. Improving access to electricity and other utility services for 500 000 people in Greater Casablanca.• Eni. Reducing gas flaring and providing electricity for 700 000 people on the Congo. 16
  17. 17. WBCSD member cases (II)• Chevron. Clean and reliable hydropower from geothermal power in Indonesia for 4 million households.• Energy Access Partnership (incl. Eskom, Vattenfall & the WBCSD). Effective models for rural electrification in Africa.• BCSD Argentina. Innovations by members (EDENOR, Gas Natural Fenosa) for energy access in Greater Buenos Aires. 17
  18. 18. Distributed/renewable systems • Key innovations:  Established as a local enterprise.  Locally-appropriate technologies.  Servicing household and productive uses.  Financial model - balancing affordability and operational sustainability. • Challenges:  Mobilizing capital costs.  Sufficient local capacity to manage, operate and maintain systems.  Cost v‟s reliability trade-offs. 18
  19. 19. WBCSD member cases• ABB. Access to Electricity Program.• Schneider Electric. Distributed solutions for remote communities in Vietnam.• Osram. “Umeme Kwa Wote” Off-Grid Lighting Project. 19
  20. 20. Products & appliances • Key innovations:  Localizing R&D.  Systematic market identification and product development.  „Aspirational‟ branding.  Distribution channels and marketing relationships with non-traditional partners.  CDM finance to reduce costs for consumers.  Local capacity to provide after-sales and maintenance services. • Challenges:  Difficult markets with low margins.  Complex distribution partnerships/relationships.  Affordability and access to finance. 20
  21. 21. WBCSD member cases• Bosch & Siemens Home Appliance Group. Protos cookstove.• Shell/Shell Foundation. Market based solutions for clean cooking• Schneider Electric. In-Diya LED lighting system.• Novozymes. An integrated model for providing clean cooking fuels in Africa. 21
  22. 22. Maximizing the business contribution DELIVERY OF GOODS & SERVICES 1. BUSINESS MODEL INNOVATION • Grid extension • Decentralized/renewableMAXIMIZING THE energy systems 4. COLLABORATION BUSINESS • Products & appliances & PARTNERSHIPS CONTRIBUTION (Governments, IFIs, TO PROVIDING Development ACCESS TO Agencies, SocialCLEAN, RELIABLE ENABLING ENVIRONMENT entrepreneurs, NGOs & AFFORDABLE etc.)ENERGY SERVICES 2. ENABLING POLICY FRAMEWORKS 3. FINANCING MECHANISMS 22
  23. 23. Enabling environment: how do youscale up business investment? STRATEGIC ALIGNMENT: Alignment with business strategy & investment priorities PRIORITY ACTIONS: • Removing investment barriers • Enhancing return on investments • Lowering the risks on investment 23
  24. 24. Enabling policy frameworks • Well-designed and stable policy and regulatory frameworks are critical:  Prioritization in national planning.  Private participation in the energy sector.  Appropriate tariff policies and payment collection.  Product standards for appliances.  Removing import tariffs on key components.  Provision of key public goods and supporting infrastructure.  Public-Private Partnerships (PPPs). • The quality of the policy and regulatory environment is a key factor in attracting private investment flows. 24
  25. 25. SIMPLIFIED POLICY FRAMEWORK FOR SCALING BUSINESS INVESTMENT PLANNING,COORDINATION & INVESTMENT CLIMATE PRIORITIZATION Enabling of private Improvement of the Prioritization in National participation & Public investment climate & Development Planning Private Partnerships removal of barriers (PPPs) Policy coordination & Capacity building & Public investments in coherence skills development core infrastructureSUPPORT TO Distributed/ KEY Products & renewable Grid extension appliances energySOLUTIONS systems
  26. 26. The importance of finance • Universal energy access will require $US 1.0 trillion additional investment. • Challenge: (often) weak private financial case but clear social benefits warranting public investment. • However, business role is critical and there is a financing gap to be filled. • Public and development finance can be designed to leverage additional business investment to maximize impact. 26
  27. 27. The financing gap… 50 Private financeBillion dollars (2010) 40 Developing country governments Multilateral development banks 30 Bilateral official development assistance 20 10 0 2009 Annual requirement for universal access by 2030 Source: IEA World Energy Outlook 2011 27
  28. 28. Enabling business investment• Public-Private Partnerships will be a key delivery model.• Financial incentives and support important for catalyzing and scaling business model innovation.• Larger investments based on project finance models:  Attract (affordable) equity finance  Affordable debt finance  Carbon finance can help but affordable equity/debt still essential• Addressing risks is therefore critical!  Risks: political, policy, technical, currency, carbon prices etc.  Key tools: insurances, guarantee facilities, strong/enforceable contracts, currency hedging/facilities  Fundamental importance of the policy and regulatory environment 28
  29. 29. Business is also supporting financeflows to local entrepreneurs• GDF SUEZ. Rassembleurs d‟Energies program.• Schneider Electric. Energy Access Fund• ERM. Low Carbon Enterprise Fund 29
  30. 30. Maximizing the business contribution DELIVERY OF GOODS & SERVICES 1. BUSINESS MODEL INNOVATION • Grid extension • Decentralized/renewableMAXIMIZING THE energy systems 4. COLLABORATION BUSINESS • Products & appliances & PARTNERSHIPS CONTRIBUTION (Governments, IFIs, TO PROVIDING Development ACCESS TO Agencies, SocialCLEAN, RELIABLE ENABLING ENVIRONMENT entrepreneurs, NGOs & AFFORDABLE etc.)ENERGY SERVICES 2. ENABLING POLICY FRAMEWORKS 3. FINANCING MECHANISMS 30
  31. 31. Collaboration & partnerships• Partnerships and cross-sector collaborative approaches between key stakeholders are essential to make all of these opportunity areas successful.• Effective public private partnerships (PPPs) will be particularly important drivers of progress toward universal access to energy.• Partnerships are also critical for:  Making new business models work.  Effective financing models.  Advocacy for global action (e.g. Global Alliance for Clean Cookstoves). 31
  32. 32. Conclusions• Lack of access to clean, reliable & affordable energy must be overcome to achieve the MDGs.• Business is the primary solution provider.• The business contribution can be scaled by focusing on key opportunity areas:  Business model innovation  Enabling policy frameworks  Financing mechanisms• Partnerships – especially PPPs – will be critical.• The WBCSD will work with key stakeholders to support effective action to deliver universal energy access. 32
  33. 33. Advocacy & engagement • Key partnerships:  Energy for All (Asian Development Bank)  Energy Access Partnership  Global Alliance for Clean Cookstoves  Energy+ Initiative • Activities in 2011:  Asia Clean Energy Forum (June)  IEA World Energy Outlook 2011 Special Chapter on financing energy access (October)  Oslo conference on financing energy access (October) • Upcoming in 2012:  International Year of Sustainable Energy for All  World Future Energy Summit (January)  Delhi Sustainable Development Summit (February)  Rio +20 (May/June)  UN General Assembly (September) 33
  34. 34. http://www.wbcsd.org/accesstoenergy.aspx Contact: Matthew Lynch lynch@wbcsd.org +41 (0) 22 839 31 94

×