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

small-scale hydropower projects had yields of less than60 percent, compared with 18 percent of non-WBG projects.IFC’s Development Outcome Tracking System showedthat four of six reporting projects exceeded planned productionon average. One did not report a baseline.A review of project evaluations points to several recurrentfactors that affect project success (table C.4). Planning andexecution of resettlement is a key factor for success or failure.Planning for water rights has been critical. In the TanzaniaPower IV Project, failure to define water rights up front ledto environmental problems and implementation delays; anArmenian project, in contrast, was able to extend water rightsvalidity to a 40-year term. In several cases, lack of a regulatoryframework or failure of the borrower to implement expectedreforms was a factor in performance. In sum, and not surprisingly,thorough project preparation is critical to success.Energy Access and Low-CarbonDevelopmentA billion and a half people lack electricity. An IEG review(IEG 2008) showed that poor people place an extraordinarilyhigh value on electricity. Even with their extremelylimited income, people are willing to pay up to $1/kWh topower lights, televisions, and cell phone chargers. Improvingaccess to household electricity is particularly importantfor women, who often have the greater work burden for domestictasks (box 2.4). Access is a critical development goalfor both reducing poverty and fostering growth. How canlow-carbon activities support energy access?Box 2.4An IEG evaluation of gender issues in World Bankinvestment projects from 2002 to 2008 (IEG 2010c)identified 890 (of 1,183) projects where genderwas relevant. Nineteen of these were energyprojects containing low-carbon components,primarily energy access expansion through gridpower extension, off-grid hydropower, or SHS.These projects had a range of differential genderimpacts, including labor savings for women fromaccess to electric appliances, health benefits forwomen and girls from substituting electrical powerfor kerosene or wood fuel, and high vulnerabilityfor female-headed households from reservoirhydropower resettlement policies. Project designdocuments were rated by degree of gender analysis,consultation, activities, and monitoring. Of thelow-carbon energy projects, seven were rated low,five moderate, eight substantial, and none highfor their treatment of these criteria.Source: IEG.Gender and Low-Carbon EnergyMost increases in energy access will happen through expansionof the grid, rather than expansion of off-grid power.A World Bank study (World Bank 2010) notes that in mostcountries 80–95 percent of unserved communities are targetedto receive electricity supply through grid extension.Cost estimates of grid expansion vary widely; however, forall but the lowest density or most remote areas, the lowercost of grid-based generation tends to outweigh the highcost of transmission and distribution extension.Though there are many barriers to electrification, key issuesinclude the high costs of supplying rural and peri-urbanhouseholds, a lack of appropriate incentives or financial capabilityfor utilities, and a shortage of electricity generationrelative to demand from existing customers (World Bank2010). Some actions can address these barriers while alsoreducing carbon emissions.Supply constraints can be alleviated through either generationincrease (renewable or not) or energy efficiency. Efficiencyimprovements can be cheaper. Moreover, to meet anend user’s demand, new generation has to allow for transmissionlosses. With technical losses of 11 percent, 12 a kWhsaved is worth 1.11 kWh generated.Though energy shortages have traditionally been alleviatedlargely through generation increases, energy efficiency canplay a key role. For example, Bank projects in Vietnam havereduced supply shortages through a mix of transmissionand distribution (T&D) capacity expansion and efficiencyimprovements, demand side management, and on-gridand off-grid renewable energy. Energy efficiency and demand-sidemanagement projects have led to a combinedreduction in peak load of 1,997 MW at far lower cost thanconstruction of new generation; at the same time this leadsto lifetime emission reductions of 130 million tons.Technicallosses fell from 15 percent in 2000 to 9 percent in 2009because of Bank projects and other Vietnamese investments,easing the need for new power generation. In addition,distribution of CFLs has proved to be a highly effectivetool in reducing peak demand to alleviate urgent supplyconstraints both in Vietnam and in Sub-Saharan Africa.Energy efficiency can play a key role inalleviating power supply shortages and thusexpanding access.Most access improvements have been accomplished throughgrid expansion. Early pilot projects in Vietnam with rehabilitatingmicro-hydropower to increase off-grid accesswere initially successful and connected 5,000 households.But these projects were not expanded, in part because ofgreater-than-expected success in rapid grid expansion. Incontrast, grid-expansion projects have provided access topower for roughly 2.5 million people. But with connection26 | Climate Change and the World Bank Group