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Green industrial policy inGreen industrial policy inGreen industrial policy inGreen industrial policy in
emerging countrie...
Agenda
Green industrial policy: why and how
How the emerging countries manage
– India
– South Africa
© 2014 German Develop...
Green industrial policy:
why and how
© 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE)...
Green industrial policy: how
Need for government intervention
Fast and radical transformation of our economy
Economy react...
Renewable energy support:
how the emerging countries manage
© 2014 German Development Institute/ Deutsches Institut für En...
Solar irradiation
© 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 6
Source: SolarGIS
Preferential tariffs, effective and efficient
Success factors:
Tariff auctioning (as opposed to
pre-determining, as in Ger...
Electricity sector South Africa
Eskom
95%
IPPs 5%
© 2014 German Development Institute/ Deutsches Institut für Entwicklungs...
Solar irradiation
© 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 9
Source: SolarGIS
Support: planning (IRP 2010)
~18 GW renewables until 2030,
wind and solar PV: 8.4 GW each, CSP 1 GW.
© 2014 German Develop...
Support: from FIT to ABT
Renewable energy feed-in tariff (2009):
– Emulated ‘German model’
– Fixed feed-in rates for sever...
Cost development renewable energy
100
120
140
Cost of solar PV modules (USD/Watt) Wind bids South Africa, round 1-3(SAc/kW...
Wrap up
Emerging countries will be central players in environmental
protection (or degradation) in the coming decades
Gree...
Wrap up
– Introduce systematic learning cycles: from suitable other
countries (no blueprints) and over time. Maintain
inve...
Thank you!
© 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE)
Thank you!
anna.pegels@di...
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Green Industrial Policy in Emerging Countries

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Green Industrial Policy in Emerging Countries

Presentation by Anna Pegels, Senior Researcher, German Development Institute (DIE)

Energy Day, Stockholm School of Economics, SITE December 2014

Published in: Economy & Finance
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Green Industrial Policy in Emerging Countries

  1. 1. Green industrial policy inGreen industrial policy inGreen industrial policy inGreen industrial policy in emerging countriesemerging countriesemerging countriesemerging countries © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) emerging countriesemerging countriesemerging countriesemerging countries The case of renewable energy support 02/12/2014 Dr. Anna Pegels
  2. 2. Agenda Green industrial policy: why and how How the emerging countries manage – India – South Africa © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) Lessons learned 2
  3. 3. Green industrial policy: why and how © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) why and how 3
  4. 4. Green industrial policy: how Need for government intervention Fast and radical transformation of our economy Economy reacts to profit Governments need to shape profit opportunities (‚rents‘): create and withdraw © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) create and withdraw Risk of capture! Policy efficiency is key 4
  5. 5. Renewable energy support: how the emerging countries manage © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) how the emerging countries manage 5
  6. 6. Solar irradiation © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 6 Source: SolarGIS
  7. 7. Preferential tariffs, effective and efficient Success factors: Tariff auctioning (as opposed to pre-determining, as in Germany, Spain) Continuous built-in policy revisions Support: auctioning and systematic learning © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 7 Continuous built-in policy revisions Effects: Triggered large investments, capacity growth from 0.1 to > 1 GW in first 18 months PV tariff offers decreased from 0.27 to 0.14 €/kWh in first year Retail grid parity now to be achieved in 2017 (original plan: 2022)
  8. 8. Electricity sector South Africa Eskom 95% IPPs 5% © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 8 Sources: DoE 2010, 2012
  9. 9. Solar irradiation © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 9 Source: SolarGIS
  10. 10. Support: planning (IRP 2010) ~18 GW renewables until 2030, wind and solar PV: 8.4 GW each, CSP 1 GW. © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 10
  11. 11. Support: from FIT to ABT Renewable energy feed-in tariff (2009): – Emulated ‘German model’ – Fixed feed-in rates for several RE technologies Treasury intervened, 2 years stalemate and confusion Conversion to auction-based tariffs 2011 © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 11 Conversion to auction-based tariffs 2011 Market has taken off since then – Increasing interest in bidding rounds – Falling tariffs, high investments (nationally and FDI)
  12. 12. Cost development renewable energy 100 120 140 Cost of solar PV modules (USD/Watt) Wind bids South Africa, round 1-3(SAc/kWh) New coal LCoE © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) 12 0 20 40 60 80 1 2 3
  13. 13. Wrap up Emerging countries will be central players in environmental protection (or degradation) in the coming decades Green industrial policy as part of the solution Lessons learned from India, South Africa,… – Create a credible long-term strategy with short and mid-term © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) – Create a credible long-term strategy with short and mid-term targets – Ensure ‚embedded autonomy‘: co-design of policies and co- funding with private sector without capture – Introduce competitive elements in support (IF technology is mature enough and project developers accept additional risk) 13
  14. 14. Wrap up – Introduce systematic learning cycles: from suitable other countries (no blueprints) and over time. Maintain investment certainty! – Consider required technocratic management capacities for planned measures © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) – Build reform coalitions, e.g. by keeping benefits local. Don‘t underestimate risk of capture – but BAU is the greatest risk! 14
  15. 15. Thank you! © 2014 German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE) Thank you! anna.pegels@die-gdi.de 15

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