As we described last week, there is a growing consensus that the time is right for a global shift to sustainable energy solutions. The Worldwatch Institute, in partnership with the International Renewable Energy Agency (IRENA), is taking a leading role in facilitating this shift through the creation of the Renewable Development Index.

Countries enacting renewable energy support policies or targets as of 2011 (source: IPCC SRREN, 2011)

Countries worldwide are recognizing the significant role that renewable energy can play in their national development. As of early 2011, nearly 100 countries had set targets for wind, solar, biomass, and other renewable energy sources. Governments aim to utilize these technologies to meet a host of development priorities, including reducing carbon emissions, expanding energy access, enhancing energy security, and creating new jobs and industry opportunities. At both the national and sub-national levels, they are using a variety of policies and measures to support centralized and decentralized renewable energy installations and to work toward achieving wider national development goals.

Despite the many forces working in favor of renewables, growth within the sector remains constrained. Although renewable energy technologies accounted for roughly half of the newly installed power generation capacity during 2010, they were responsible for only 16 percent of global final energy consumption and close to 20 percent of electricity generation that year. Government support policies, adopted by 118 countries as of early 2011, continue to be one of the most significant forces driving renewable energy deployment.

To more efficiently harness the potential of renewables to meet national goals, decision makers must have a better understanding of the effectiveness of support policies in overcoming existing barriers. Countries continue to face challenges in the renewables sector, including gaining public acceptance and buy-in, mobilizing financing, attracting investment, building local capacity, and facilitating collaboration between the public and private sectors.

Worldwatch is partnering with IRENA to help governments develop policies aimed at best utilizing their renewable energy potential as a way to meet national growth and development goals. As a first step, the project seeks to identify barriers constraining renewable energy deployment. It will then develop strategies that can help policymakers overcome those hurdles. Finally, the project aims to develop a set of renewable energy indicators, with the goal of helping countries assess the effectiveness and efficiency of renewable support programs. Because there is no one-size-fits-all policy for promoting renewable energy, fully inclusive indicators can help to inform the policy community in a more objective manner.

In the development arena, well-designed high-level indicators, such as the United Nations Development Programme’s Human Development Index (HDI), have been influential in shifting the discourse away from one based solely on domestic economic growth, providing the basis for a deeper understanding of national progress toward overarching development goals. The Renewables Development Index aims to achieve a similar goal in the energy arena, steering the discourse away from conventional fossil fuel energy usage and toward cost-effective and more environmentally sound approaches to meeting global energy needs.

Worldwatch has actively engaged key actors from leading institutions in the international energy community on this initiative. Through a series of interviews, meetings, and workshops, the Institute’s Climate & Energy team will facilitate the development of this new and influential tool.

When completed, the analysis based on this small and concise set of renewable energy indicators will provide governments with a powerful new instrument to better inform domestic policymaking, implementation, and monitoring processes. The indicators can be used for steering investments, refining policy choices, optimizing the impact of limited financial resources, and understanding the outcome of policy results supporting renewable energy development.

This Renewables Development Index will fill an important void in the landscape of sustainability indicators and will help countries in their important transition to a sustainable energy future.

Evan Musolino is a Climate and Energy Research Associate at the Worldwatch Institute, an international environmental research organization. Alexander Ochs is Director of the Climate and Energy Program at Worldwatch.

Energy is at the very foundation of modern economies. Since the Industrial Revolution more than 200 years ago, all countries—if at a quite different pace—have developed on the back of the production and burning of fossil fuels. There is no doubt that the comfortable lives many of us live today would not be possible without the fossil-fueled development of the past. But the merits of fossil fuels now seem less and less convincing.

Renewable energy technologies, such as solar PV, offer the potential to benefit countries around the world. (source: Flickr user Magharebia)

First, take subsidies. Currently, we throw about 10–12 times more taxpayer money at fossil fuels than we put into renewables—and those are just direct subsidies. In addition, local air and water pollution and related health consequences cost trillions of dollars worldwide. The U.S. National Research Council estimates the “hidden” costs of fossil fuels in the United States (the real costs to society that are not reflected in the fuels’ market prices) at $120 billion annually. The Chinese government believes pollution and related healthcare costs amount to 10 percent of that country’s GDP.

Then there is the volatility of fossil fuel markets, which has arguably led to enormous economic instability in the recent past. Just to give an idea of what this volatility means to some nations: an increase in the world oil price of just $10 can mean a decrease in the GDP of some small nations of 2–3 percent.

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For the seven countries of Central America—Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama—a transition to renewable energy and low-carbon technologies is imperative. In addition to reducing greenhouse gas emissions, a robust renewable energy industry can stimulate the growth of clean energy manufacturing and help address regional problems such as an energy supply deficit, low rural electrification, and poverty.

Yet despite abundant renewable energy resources—including wind, solar, biomass, and geothermal—Central America remains highly dependent on imported oil, fossil fuel-based electricity, and unsustainable large hydropower. In the 1990s, deregulation of regional electricity markets opened the power sector to private investments, but it also paved the way for a surge in fossil fuel-based capacity, as most governments did not consider policies to promote renewables during the early stages of these reforms.

Solar panels used by Alimentos Campestres to dry fruits and vegetables. Source: Alimentos Campestres.

As the region’s economies expand, led by strong growth in Panama, energy demand is expected to surge. As a result, these countries will only become more vulnerable to high and fluctuating energy costs from imported oil.

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The public transportation system in Medellín, Colombia, has proven to be one of the most successful transit systems in the world. It not only reduces the city’s energy consumption and carbon footprint, making the city more environmentally sustainable, but also drives positive social and economic change for Medellín as a whole.

Medellín metro system. (Source: http://www.colombia.travel/en/international-tourist/multimedia/photo-gallery/medellin)

Medellín received the 2012 Sustainable Transport Award from the Institute for Transportation and Development Policy. ITDP is a global consortium of organizations that works with cities worldwide, mainly in developing countries, to provide solutions for their public transportation systems, tackling carbon emissions, poverty, and social inequality. The previous award winners are Guangzhou, China, in 2011 and Ahmedabad, India, in 2010.

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Earlier this week, a Committee of Secretaries (CoS) established by Indian Prime Minister Manmohan Singh met to discuss environmental and economic issues facing the country’s electricity generation sector. CoS members included the Principal Secretary to the Prime Minister, as well as representatives from the Ministries of Power, Petroleum, Coal, Environment, and Finance.

The 4,000 MW Tata Power Ultra Mega Coal Power Project at Mundra, photo credit: Flickr - Joe Athialy

The first day’s discussion focused on increasing difficulties of coal power production, including domestic production shortages and import costs. While the availability of domestic and supposedly cheap coal supplies was once cited as a central justification for pursuing coal power in India, which currently supplies about 70 percent of the country’s electricity generation, recent coal shortages, dramatic price increases, and environmental mismanagement by the coal industry have led policymakers, energy developers, and investors to acknowledge the need for the country to pursue an alternative energy path.

In January, an Indian Power Ministry official expressed concerns regarding the pricing scheme of the state-owned coal mining company, Coal India, which would increase the cost of coal power generation by an estimated 35 percent. Coal India is responsible for over 80 percent of the country’s coal production. A Coal India executive cited the need to rework the company’s pricing scheme, as coal prices have recently risen by 50 to 180 percent, depending on fuel quality.

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Central America is an economically and ecologically diverse region with growing energy needs and unique vulnerabilities to climate change. Boosting investment in renewable energy is a key way that the region can protect its ecologically sensitive areas while achieving reliable access to clean energy for its population. In Central America, the top four renewable energy sources are geothermal, hydroelectricity, biomass, and wind. The relative importance of each renewable resource is different for each country depending on the geographical and geological situation. The Worldwatch Institute has recently begun work aimed at creating a favorable policy and investment environment for renewable energy in Central America.

Globally, the electricity sector is one of the largest and fastest-growing consumers of energy.  It is therefore important

The BELCOGEN bagasse plant in Orange Walk, Belize. Photo Credit: Belize News

to consider the role of state and private utility companies in transitioning Central America to renewable energy sources. One of these companies, BELCOGEN, a subsidiary of state owned Belize Electricity Ltd (BEL), has received enormous amounts of attention and praise due to its recent investment in a 31.5 megawatt (MW) biomass power plant fueled by bagasse. BEL invested US$63 million to create BELCOGEN and the bagasse project. The price tag has officially made the deal the largest private investment ever made in Belize. Originally, the project was scheduled to be completed in 2007 and the investment was much lower; however, the necessary investment grew as the scheduled date of completion was postponed, and the project was finally completed in 2009. The plant runs on a combination of 92 percent bagasse and 8 percent heavy fuel oil. BELCOGEN is contractually obligated to sell at least 106 gigawatt-hours (GWh) to BEL for the first year of operation, making the company the source of at least 20 percent of Belize’s national energy demand. The rest of the energy produced (up to 44GWh) will be sold to Belize Sugar Industries Limited (BSI).

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