Moving Forward with Clean Energy Priyantha Wijayatunga Principal Energy Specialist, Asian Development Bank

Outline Current energy development challenges Issues and trends in clean energy development ADB response to energy sector development Issues Policy measures/interventions to address key issues 2

Current Challenges in Clean Energy Development Need to increase access and quality of supply rapidly – Demand outstripping supply Challenges in environmental and social safeguards Long running direct and indirect subsidies – Heavy burden on the government budget Inadequate financing to satisfy growing needs 3

Current Challenges in Clean Energy Development Energy security – Heavy import dependence on primary commercial energy sources – Single fuel dominance in most countries Adjusting sector environment for growing needs – Policy and regulatory regimes – Structural reforms Capacity development 4

Issues in Clean Energy Development Technical Difficulties in grid integration Quality of supply – decentralized systems Reserve capacity requirements Financial/Economic Perceived high costs – Economic cost vs overall cost Lack of access to low cost financing – Affordability 5

Issues in Clean Energy Development Inadequate policy environment – Lack of commitment on clean energy development Poor regulatory environment – Lack of enforcement capacity – Inadequate incentives for clean energy 6

Trends in Clean Energy Development Economic growth and energy-related emissions started decoupling – Economy grew by 3% in 2014; energy intensity dropped by 2.3% – Energy efficiency and structural changes in economies – Exponential growth in technologies Half of new generation capacity additions came from RE in 2014 – Grid parity reaching fast – Increased awareness 7

Trends in Clean Energy Development Advancements in storage and control technologies – Reducing cost of storage, EMS – Smart grids Countries increasingly adopting CE friendly investment environments – CE targets, FITs, Net-metering Expected economic growth 88% of 2013 by 2030 – Energy related CO2 emissions to grow only by 8% 8

Climate Change: What is Needed? To stay below 2 0 C temperature rise – Peak in global energy related emissions by 2020 – Can be achieved with proven technologies and policies – Increase energy efficiency in industry, buildings and transport sectors – Usage reduced and later banning of least efficient coal plants – Phasing out fossil fuel subsidies to end-users by

What is ADB doing? Energy Policy Help DMCs provide reliable, adequate, and affordable energy for inclusive growth in a socially, economically, and environmentally sustainable way 10

Three Pillars  Promoting energy efficiency and renewable energy –Reduced emissions  Maximizing access to energy for all, especially for the poor –Better living standards with less additional emissions  Promoting energy sector reform, capacity- building & governance –Conducive environment for efficiency gains 11

Policy and Regulatory Environment Policy dialogue on CE development Assist in drafting policies, laws, regulations and roadmaps Capacity building and experience sharing – Networking opportunities like study visits, conferences, workshops and meetings 12

Technology Innovation Distributed renewable – Supporting India’s Solar Rooftop Program Smart grid/smart meters - promoting renewable energy and energy efficiency – Uzbekistan Advanced Electricity Metering Project Mini grid with storage – providing affordable renewable energy – Maldives Renewable Based Hybrid Mini-Grid Project Cost Effective innovative transmission /distribution – Nepal Power Transmission Project/Myanmar Power Transmission Project (using aluminum compact core conductor)

Simpa Networks “Off Grid Pay-As-You-Go Solar Project”) in India Metering solution for off-grid solar home systems in rural India mobile phones technology to transform recurring energy expenditures into capital asset purchase New Business Models

Joint Public Sector – Private Sector Projects India Power Grid Green Corridor Development Project (up to $800 million by SARD and PSOD) India’s “Green Energy Corridor” facilitates the transfer of renewable energy to load centers Absorption and smoothing out of the RE intermittency

Knowledge Work Sustainable Energy Access Planning Framework Market Place for Low Carbon and Clean Energy Technology Transfer India-PRC Low Carbon Development Study Developing Wind Power and Rooftop PV Market in Indonesia CCS in China and Indonesia Energy Efficiency in Indonesia, Mongolia and Sri Lanka

ADB Continues to Help Awareness building on technologies and new approaches on energy services Piloting new technologies and approaches Facilitation energy cooperation for increased clean energy development – Both intraregional and interregional – South-South cooperation Investments for technology deployment Introducing innovative financing approaches 18

ADB Continues to Help Improving policy and regulatory environment – CE policies, laws and roadmaps Future pipelines – CE program support – Wind, solar and other RE – Energy efficiency – supply side and demand side 19

Way Forward Energy Efficiency and Renewable Energy both need to be vigorously pursued Integrated approach - co-benefits can be the driver – Health benefits – Reduce water use and land use, improved productivity, food security etc – Economic Advantage – Industrial growth in RE 20

Way Forward Improve policies, regulations and planning – Decisions outside the utilities – Internalize environmental and social costs Work closely with IFI’s to access international climate finance – Low cost funding South-South cooperation – Experience and knowledge sharing – Technology adoption 21