The Challenge of Low-Carbon Development - World Bank Internet ...

Figure 2.4Amount ($ millions)Figure 2.5Amount ($ millions)3,5003,0002,5002,0001,5001,0005005,0004,0003,0002,0001,000Growth in Low-Carbon Portfolio byCountry Income Class02003 2004 2005 2006 2007 2008YearHigh incomeLower middle incomeRegionalBreakdown of Non-Low-CarbonWBG Energy Investments02003 2004 2005 2006YearTransmission anddistributionOil, gas, and coalLow incomeUpper middle incomeSource: IEG.Note: Unit of analysis is the project component. Excludes freestandingWBG analytic and advisory activities, IFC advisory services, andspecial financing.and blended low-carbon and access projects account for37 percent of all energy portfolio financing in 2003–09.Figure 2.5 shows the growth of the remainder.Hydropower is by far the largest subcomponentof the recent renewable energy portfolio.Figure 2.6 shows how total new energy generation capacitywas divided between fossil fuels and renewable sources.Large hydropower dominated power investments in IDAcountries. In IBRD and blend countries, coal accounted fora third of new capacity, gas 28 percent, and large hydropower18 percent.2007 2008Thermal generationOther energyAccessSource: Investment Framework for Clean Energy and Development,2003–08.Note: WBG = World Bank Group.Coal accounted for one-third of new generatingcapacity supported in IBRD countries.The WBG’s on-grid renewable energy portfolioHydropower is the renewable energy technology with thelongest and largest record within the WBG and the onewith the greatest predicted potential scale-up over comingdecades. However, there has been a rapid increase in “newrenewable energy”: wind, geothermal, biomass/ biogas/landfillgas, and solar (table 2.4) Although this chapter devotesspecial attention to hydropower, a discussion of barriers andinterventions in this chapter also draws on recent experiencewith wind projects, and lessons from these barriersand interventions apply to other forms of renewable energy.Grid-connected solar power is discussed in chapter 6.The WBG’s off-grid renewable energy portfolioIn remote areas with low population densities, it can becheaper to provide decentralized renewable power throughhome systems or mini-grids than to extend the main electricgrid. 6 This has raised hopes of fighting both climatechange and poverty with a single instrument, or using climatefinance to promote rural access.Those hopes are manifest in the large investments in solarhome photovoltaic systems (SHS), the off-grid technologywith which the WBG has the longest record and thefocus of the discussion of off-grid renewable energy in thischapter. However, in the recent portfolio, SHS projects havebeen overtaken by small hydro and biomass (see table 2.5).Biomass projects include efficient cookstove projects as wellas power projects.Among off-grid renewable energy technologies,solar home photovoltaic systems havethe longest record at the WBGFigure 2.6Power sourceWBG-Supported Grid-ConnectedGeneration Capacity by Technology,2003–08GasOilCoalGeothermalWind and solarLarge hydropowerSmall hydropower0 2,000 4,000 6,000 8,000 10,000MegawattsIDA countriesIBRD/Blend countriesSource: IEG component database.Note: Includes privatization and asset purchase in addition togreenfield investments.16 | Climate Change and the World Bank Group