Last week, Panama hosted the XXII Energy and Environment Partnership (EEP) Central American Regional Forum, an event designed to present examples of EEP-funded projects that show productive uses of energy in the Central America region.

Created in 2002 during the United Nations World Summit on Sustainable Development in Johannesburg, South Africa, the EEP aims to contribute to sustainable development and climate change mitigation in Central America through the promotion of renewable energy. The effort is supported by Finland’s Ministry of Foreign Affairs, in coordination with the Central American Integration System and the Central American Environment and Development Commission, and by the Austrian Development Cooperation.

Presenters at the XXII EEP Central American Regional Forum in Panama (Source: EEP).

Over the last decade, the EEP has supported more than 280 projects in Central America with a total of €13.9 million, 80 percent of which was used exclusively for project funding. At the recent Forum, Dr. Salvador Rivas, regional coordinator of the EEP, summarized the projects implemented to date and noted that the EEP’s strategy model is grounded on four pillars: pilot projects, energy and environmental policy, capacity building, and market development.

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Central America, renewable energy, renewable energy investment, renewable energy policy, small hydropower, solar power, wind power

Solar and wind continue to dominate investment in new renewable capacity. Global use of solar and wind energy grew significantly in 2012. Solar power consumption increased by 58 percent, to 93 terrawatt-hours (TWh), while wind power increased by 18.1 percent, to 521.3 TWh.

Global investment in solar energy in 2012 was $140.4 billion, an 11 percent decline from 2011, and wind investment was down 10.1 percent, to $80.3 billion. Due to lower costs for both technologies, however, total installed capacities still grew sharply.

Solar and wind energy investments were down slightly in 2012, though installed capacities still grew sharply (Source: BNEF).

Solar photovoltaic (PV) installed capacity grew by 41 percent in 2012, reaching 100 gigawatts (GW). Installed PV capacity has grown by 900 percent since 2007. The countries with the most installed PV capacity today are Germany (32.4 GW), Italy (16.4 GW), the United States (7.2 GW), and China (7.0 GW). Concentrating solar thermal power (CSP) capacity reached 2.55 GW, with 970 megawatts (MW) alone added in 2012.

Europe remains dominant in solar, accounting for 76 percent of global solar power use in 2012. Germany alone accounted for 30 percent of the world’s solar power consumption, and Italy added the third most capacity of any country in 2012 (3.4 GW). Spain added the most CSP capacity (950 MW) in 2012 as well. However, Italy reached the subsidy cap for its feed-in tariff (FIT) program in June 2013, while Spain recently made a retroactive change in its FIT policies, meaning that growth in solar energy will likely slow in these countries in the near future.

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China, feed-in tariff, Germany, Italy, japan, renewable energy, renewable energy investment, renewable energy policy, solar power, Spain, United States, wind power

While the Jamaican government’s efforts to increase renewable energy production have yet to produce significant results, some private enterprises are forging ahead on their own. Due to the prohibitively high cost of purchasing electricity from the national grid operator (around 40 cents per kilowatt-hour), many companies have found it is cheaper to generate their own electricity – often with renewable energy sources.

The Jamaica Broilers "Best Dressed Chicken" mascot looks forward to solar power. (Source: Facebook, Best Dressed Chicken)

The Jamaica Broilers "Best Dressed Chicken" mascot looks forward to solar power. (Source: Facebook, Best Dressed Chicken)

The Jamaica Broilers Group, the largest poultry producer in the Caribbean, is one of the companies pioneering the transition to renewable energy. As with many other industries and services in Jamaica, electricity is the largest single cost in chicken farm operations. In order to reduce this expense, Jamaica Broilers is currently installing solar photovoltaic (PV) systems – along with efficient LED lighting – at its chicken houses. The first phase of the project will install 15 kW systems at about 40 chicken houses by the end of March, for a total capacity of approximately 600 kW.

The project will cost an estimated US$10 million over two years. Rather than require that chicken farmers leverage their farms as collateral to purchase the solar equipment, Jamaica Broilers will facilitate obtaining supplies and financing to allow farmers to lease the equipment. Each participating farmer applies for the loan, which is financed by the Development Bank of Jamaica (DBJ) through the PanCaribbean Bank at 8.5 percent interest – a relatively low rate for the country. The expected payback period – that is, the amount of time it takes for reduced electricity costs to make up for the solar panel investment costs – is five to six years.

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Jamaica, renewable energy investment, renewable energy policy, solar power

There is ample reason to praise President Obama’s engagement with a diverse collection of world leaders; in particular, the administration’s “pivot to Asia” indicates recognition of an evolving geopolitical landscape, a recognition that will hopefully continue in his second term. But one region in particular has been noticeably absent from the administration’s agenda: sub-Saharan Africa. And this oversight could have long-term implications for the energy future of the sub-Saharan African region, and even the economic future of the United States.

No region suffers from energy poverty more than sub-Saharan Africa, where nearly seven out of ten people lack access to reliable and affordable electricity.

Sub-Saharan Africa is a region full of contradictions. On the one hand, it is home to six of the ten fastest growing economies between 2001 and 2010; on the other, 14 of the 20 states Foreign Policy’s Failed State Index deems “critical” are located in sub-Saharan Africa. Throughout the region, one of the largest obstacles towards widespread and equitable economic development is the crippling degree of energy poverty. The most recent data suggests that a lack of access to reliable and affordable electricity leaves nearly 70 percent of sub-Saharan Africans in the dark every day.

With the re-election of President Obama, the time is ripe for the administration to realize that, for all of the region’s struggles, reaching out to sub-Saharan Africa is within the United States’ self-interest. Prioritizing the alleviation of energy poverty is one way to strengthen efforts to improve the quality of education, reduce illness and disease, boost incomes across the region, and also to lay the groundwork for budding economic partnerships. 

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Africa, Brazil, China, renewable energy, renewable energy investment, sustainable development, United States

Renewable energy technologies are quickly cementing themselves as a key pillar of energy sector development and as an economic powerhouse in their own right. In 2011, a number of forces contributed to impressive growth in renewable energy markets around the world. The most recent installment of Worldwatch’s Vital Signs Online series analyzes the investment growth witnessed across the sector in 2011.

2011 saw total new investment in renewable power and fuel (excluding large hydropower) jump 17 percent over the previous all time high set the year before, setting a new single year record with US$257.5 billion invested in the sector. Net investments in new renewable power capacity outpaced that of fossil fuel capacity over the same period, further displaying the critical importance renewables now play in the global energy mix.

Distributed geographically, both industrialized and developing countries witnessed positive growth over investment totals in the previous year. Industrialized countries accounted for 65 percent of all global investment in 2011, attracting $168 billion overall. Of the 35 percent share invested in developing countries, nearly 80 percent was channeled to renewables in China, India, and Brazil.

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energy, finance, renewable energy, renewable energy finance, renewable energy investment

Last month, Farooq Abdullah, India’s Union Minister for New and Renewable Energy, announced that the planned Delhi-Mumbai Industrial Corridor (DMIC) would be “totally green”. The corridor is aimed at strengthening the region’s infrastructure to attract foreign and real estate investment and jump-start local commerce. Minister Abdullah’s commitment to making the project environmentally sustainable is a positive sign for India’s development path given the potential boom in industry, commercial activity, and power production if the corridor is successful.

source: MNRE

Wind turbines in Gujarat

The DMIC is a US$90 billion infrastructure project funded by the governments of India and Japan to connect the political and financial capitals of India through freight rail, roads, and new power facilities. Plans to implement the massive DMIC project have been underway since a 2006 Memorandum of Understanding between India and Japan, but progress to date has been slow. Recent large infrastructure projects have a mixed record in the country, with bureaucratic roadblocks, multiple permitting requirements, and in some cases corruption and bribery, sometimes blocking plans.

Many of the barriers to general infrastructure development are the same barriers that stand in the way of renewable energy projects, despite a strong demonstrated political will to promote investment in renewables. Just this October, reports emerged that one of India’s largest solar power projects, the 125 megawatt (MW) Shivajinagar Sakri solar plant being implemented by the Maharashtra State Power Generation Company, has been blocked by the Forest Department of Maharashtra, which has laid claim to 180 of the total 350 hectares set aside for the project. This major administrative hurdle demonstrates the lack of coordination between agencies responsible for approving renewable energy projects, especially at this late stage of project development when major certifications and loans for the project have already been granted.

The future of renewable energy in India, including its role in the DMIC, will depend largely on the ability of the country’s policy and regulatory infrastructure to streamline administrative procedures and create a welcoming environment for new investments. India’s federal government and several state governments have established a multitude of laws and regulations to promote renewable energy, including feed-in tariffs (FiTs), renewable purchase obligations (RPOs), generation-based incentives, capital subsidies, accelerated depreciation, and tax incentives. Renewable energy capacity in India has grown rapidly in recent years, due in part to these measures. India ranks fifth in the world in installed wind capacity, with around 15 GW of wind capacity in August 2011. Installed solar capacity is growing rapidly and is expected to reach 200 MW by the beginning of 2012, with an ambitious national target of 20 GW of solar capacity by 2022.

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energy infrastructure, feed-in tariff, finance, India, renewable energy finance, renewable energy investment, renewable energy policy

Part 2: Clear Policy Signals To Develop Renewable Energies

This series of blogs explores current mechanisms in place to finance renewable energies in the Dominican Republic. Be sure not to miss Part 1 on the Dominican Republic’s clean energy entrepreneurs.

Far from the media spotlight, the Dominican Republic is paving its way to a cleaner energy sector. Over the past ten years, the government has published a large set of policies and laws to incentivize renewable energy production. Lifting clean-energy development to a constitutional objective, Article 67 of the Constitution of 2010 reads, “The State shall promote in the public and the private sector the use of clean alternative technologies to preserve the environment.

Law 57-07 to incentivize the production of energy from renewable sources

A whole corpus of domestic laws recognizing the necessity to transition the energy sector to cleaner fuels has been instituted during the past decade, culminating in 2007 with the publication of Law 57-07 on Renewable Sources of Energy Incentives and its Special Regimes and its appending regulation, which sets a target of 25 percent of renewable energies in the country’s final electricity consumption by 2025.  The law also aims at “opening the door” to sustained commercial financing for the renewable sector through financial incentives such as tax exemptions, a feed-in-tariff (FiT), and a national fund for renewable energies, discussed in more detail in this blog series.

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clean energy, climate finance, Dominican Republic, energy policy, environmental policy, feed-in tariff, finance, green power, low-carbon, renewable energies, renewable energy finance, renewable energy investment, renewable energy sources

Let’s say that Worldwatch’s Low-Carbon Energy Roadmaps help convince key decision makers in target countries to move away from fossil fuel dependency and toward a more renewable energy portfolio. And let’s assume that Central and South American countries decide that they all want to have 50 percent of their energy needs met by renewable sources by 2050. While we’re at it, let’s suppose that governments also have the political will to bring these ideas to life and sign a binding agreement that they are all in this together. One question remains: Who is going to pick up the check?

Last week, Euromoney Energy Events, the American Council On Renewable Energy (ACORE), and the Latin American and Caribbean Council On Renewable Energy (LAC-CORE) helped answer that question by hosting the first Renewable Energy Finance Forum focused on Latin America and the Caribbean, also known as REFF-LAC. For two days, financiers, developers, policy professionals, and multilateral banks explored the challenges present in today’s global markets, including uncertainty due to risk, legislative initiatives, and a credit crisis. Similar to its sister event, REFF-Wall Street, REFF-LAC was an opportunity for participants to learn how to start addressing these challenges and move the industry forward. It was also the perfect forum for assessing the changing role of governments, multilateral banks, and commercial lenders.

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ACORE, developing countries, emerging markets, euromoney energy events, lac-core, low-carbon, reff-lac, renewable energy, renewable energy finance, renewable energy investment

Throughout the 1960s 70s and 80s, Cuba traded one ton of sugar to the Soviet Union in exchange for four tons of oil. This agreement helped the Cuban economy progress in the face of the U.S. trade embargo. But the collapse of the Soviet Union in 1991 ushered in what Cubans call the country’s “Special Period,” an economic crisis punctuated by a sudden lack of fossil fuel energy that crippled every sector of the country’s economy.

Oil shortages have left Cuba with old-school ways of manifesting the the power of the future.

This major setback resulted in an economy that moves at a glacial pace. The Economist Intelligence Unit reports that despite Cuba’s own oil reserves, a healthy volume of imports from Venezuela, and large investment in the island’s refining capacities, troubles such as inconsistent supply and electricity shortages persist. As a result, the country launched its “Energy Revolution” in 2006. The goal was – and still is – to decentralize power generation, improve transmission lines, replace old appliances with energy-efficient ones, and increase the presence of renewable energy sources.

To that end, Cuba’s state-owned Zerus S.A. recently signed a Memorandum of Understanding (MOU) with Havana Energy Ltd., a U.K.-based renewable energy company, to develop a 30 megawatt MW pilot project for generating electricity from sugarcane stalk residue, or bagasse, at a sugar mill in Ciro Redondo. It’s the first step of a larger project that has the potential to satisfy almost half of the island’s 3,000 MW power needs and to possibly deliver a return on investment in just five years.

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Caribbean renewable energy, developing countries, energy, renewable energy, renewable energy investment, sugarcane bagasse

Bjørn Lomborg—one of the most controversial figures on the climate change scene—previewed his new film, “Cool It,” at the Heritage Foundation on Tuesday, October 5, in Washington, D.C.  Directed by Ondi Timoner, “Cool It” is a documentary that begins by chronicling Lomborg’s early life and career in Denmark and ends by outlining his plan to mitigate the impacts of climate change. This may seem like a reversal of course for a self-proclaimed “skeptical environmentalist,” but Lomborg maintains he has always thought that climate change is a real and important issue. He said in my conversation with him after the screening that he felt climate change needed to be addressed, and that the film is a vehicle to articulate his solutions.

Bjørn Lomborg

Bjørn Lomborg - Wikimedia Creative Commons / Simon Wedege

Lomborg proposes a plan that relies on investment in research and development. The plan has a budget of $250 billion per year, set to equal an estimate of what the EU will spend to reach its two key climate policy goals: 1) reducing greenhouse gas emissions 20 percent below 1990 levels by 2020, and 2) simultaneously achieving a 20 percent renewable share in its overall energy supply. In this assessment of the EU 20/20/20 policy for the Copenhagen Consensus Center (a think-tank that Lomborg founded and now directs), the policy would yield only three cents of benefit for every Euro invested and decrease global temperature by just 0.05 degrees Celsius by the end of the century. Rather, Lomborg argues, this money, equivalent to 1.3 percent of the EU’s GDP, should be invested in research and development.  He suggests that such an R&D fund be financed by a global carbon tax of $7 per metric ton. [For more on the economics of climate change, read the recent ReVolt post, “Climate Change and Its Cost – What Is at Stake?”]

In “Cool It,” Lomborg explains his plan to invest $100 billion a year on R&D of green energy technologies and $1 billion a year on R&D for geo-engineering. While the film spends most of its 89 minutes discussing new green energy technologies, it does highlight some geo-engineering proposals that plan to temporarily manipulate Earth’s climate to offset the impacts of greenhouse gas emissions. [Geo-engineering will be the topic of a forthcoming ReVolt post.] After the R&D, there is $149 billion a year left in his budget, which Lomborg intends to spend on adaptive technologies (retroactive climate change management) and other pressing global issues, such as poverty, malnutrition, and clean drinking water.

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Bjørn Lomborg, Climate Change, Cool It, EU 20/20/20 policy, Green Technology, Heritage Foundation, low-carbon roadmap, Ondi Timoner, renewable energy investment, renewable energy R&D, research and development, Skeptical Environmentalist