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

18.5 percent in 2008. This was done primarily by usingadvanced metering infrastructure for the 30,000 majorconsumers, who collectively represent 3 percent of the customersbut 60 percent of the power sales (Antmann 2009).WBG portfolio, 2003–08The Bank has a long history of investment in T&D projects.Over 2003–08, the WBG committed $3.45 billion to44 T&D projects that are expected to lead to significant carbonreduction benefits or technical loss reductions, thoughemission reduction was not an explicit goal for many ofthem. (Table C.2 summarizes impacts and appendix Dpresents lessons from completed projects).The Bank’s portfolio demonstrates recognition of the importanceof improving the financial state of utilities in orderto improve long-term impacts. Among the low-carbonT&D projects, 60 percent addressed nontechnical losses,and 82 percent of projects that specifically aimed at lossreduction included nontechnical loss-reduction measures.Projects have been aimed at the regions with the highestpower losses (particularly Europe and Central Asia andSouth Asia).Projected economic gains from these projects are oftenlarge. Many projects calculate high ERRs on a large investmentbase (often 20–60 percent; see tables C.1 and C2).Projected benefits are even higher if the project is expectedto boost access or reduce outages. One project in theDominican Republic projects a net present value of $428million on a $122 million investment.The projected economic gains from theseprojects are often very large, but thedisparate methodologies used make itdifficult to validate or compare projections.Unfortunately, it is difficult to validate or compare theseex ante projections, because Bank projects do not use acommon methodology when valuing loss reduction, outagereduction, or other benefits. It is not always apparentwhether loss reduction forecasts come from formal engineeringstudies or are rough estimates. Many projectionsare contingent on assumptions that loss reductions willbe sustained across many years after project completion,presuming successfully institutionalized change in maintenanceand operations.Efficient Light BulbsElectric lighting represents 19 percent of global electricityconsumption (IEA 2006). In many developing countries,lighting is the largest use of power in the residential sector,particularly in the poorest countries, where householdshave few electrical appliances. For example, in Ethiopia,lighting constitutes 74 percent of power consumption fora typical household that has electricity access (Maurer andNonay 2009). Because lighting demand is concentrated inthe early evening hours, utilities must build additional generationcapacity that is only used during this period.Switching from standard incandescent lamps to CFLs reducesenergy consumption (saving fuel costs) and capacitycosts while mitigating CO 2emissions. CFLs draw only20–30 percent as much power as equally bright incandescentlights and last much longer. Households benefit fromlower energy consumption, and CFL adoption can pay foritself in 2–14 months. Utilities benefit from lower powersales (when generation cost exceeds supply cost) and fromreduced capacity costs.Replacement of all of Sub-Saharan Africa’sincandescent lights would effectivelyboost power availability by 23 percent,at a fraction of the cost of peaking dieselgenerators.A recent ESMAP review (ESMAP 2009) finds that a “representative”CFL program, under optimistic assumptions,would have a benefit-cost ratio of nearly 28:1, based on energyand capacity savings, or nearly 30:1 if CO 2abatementwere valued at $10/ton. A Bank study for Sub-SaharanAfrica (de Gouvello, Dayo, and Thioye 2008) estimated thatregionwide replacement of all 476 million inefficient lights(60 percent of these are in South Africa) with CFLs wouldreduce peak power demand by 15,200 MW, representingabout 23 percent of installed capacity for the region.Recent estimates of CFL bulk purchase projects (ESMAP2009) suggest that one-shot replacement can be achievedat roughly $2 per bulb. Although full phase-out for Africacould cost $950 million, significant gains could be achievedwith a much smaller investment targeting residential usersor countries with high emission factors, expensive power,or supply shortages.Barriers and interventionsDespite the large benefits, private households have beenslow to adopt CFL technology. Where electricity prices areartificially low due to subsidies, consumers have low incentiveto adopt. Other adoption barriers include the higherupfront price of CFL bulbs, distaste for the color or qualityof the illumination, skepticism about the bulbs’ lifespan,and poor consumer knowledge.Although the potential benefits are large,households have been slow to adopt CFLtechnology.Energy Efficiency | 41