The Asian Development Bank (ADB) and the Ministry of Rural Rehabilitation and Development (MRRD) of Afghanistan today inaugurated the distribution of 80 off-grid solar kits, called “electricity-in-a-box”, to rural households near Kabul without grid electricity.
Residents of Naway Niyaz Village of Char Asyab District will receive the innovative electricity solution that packages together three disruptive energy technologies: solar power, super-efficient appliances, and lithium-ion batteries that power electric cars.
The inauguration was attended by Afghanistan Minister of Rural Rehabilitation and Development Mr. Mujib Rahman Karimi, Minister of Energy and Water Mr. Gul Mohammad Khulmi, and ADB Country Director for Afghanistan Mr. Samuel Tumiwa.
“Access to clean and affordable electricity is a very important driving factor for inclusive economic growth and social development of rural communities in Afghanistan,” said Mr. Tumiwa. “Although the long-term goal is to provide access to grid-electricity for all of Afghanistan, this may take some time. As an interim measure, we need to provide access to electricity as soon as possible. These kits are part of this solution.”
Historically, rural households use kerosene for lighting and small diesel generators for more intensive energy use. However, kerosene and diesel generators are both environmentally unsafe and prolonged use have caused severe health issues such as eye and lung diseases. They are also very expensive.
The “electricity-in-a-box” package uses recent technological advances to make off-grid connections economically more viable and environmentally friendly. In the past, solar packages only provided solar photovoltaic panels and lead acid batteries for lighting. The “electricity-in-a-box” provide not only the solar photovoltaic panels to generate energy, but also more durable lithium-ion batteries for storage and energy efficient 12-volt DC appliances including a television set, refrigerator, fan, and LED lights for daily household usage. The recipients will contribute a monthly fee, through a community led cooperative, for operation and maintenance of the kits.
Based on this pilot project, ADB and MRRD are exploring and expanding the provision of electricity-in-a-box throughout the country, especially in border provinces.
The project is part of ADB’s regional technical assistance for Central Asia Regional Economic Cooperation (CAREC) countries to promote inclusive economic growth and deliver sustainable energy supply to rural households. The pilot project will increase awareness on off-grid solar electrification to communities, private sector and public institutions with design specifications being publicly available for replication, and adoption through the private sector. This pilot project is also currently being carried out in the Kyrgyz Republic and Tajikistan. There are future plans to also introduce these kits to rural communities in Pakistan.
ADB is Afghanistan’s largest development partner in the energy sector with cumulative grant assistance of nearly $2.2 billion, all of which is on budget with the government. Over the coming years, ADB will support the increase in the country’s electrification rate from 30% to 83% and lift the share of domestic generation from 20% to 67% by 2030. ADB also plays a major role in power transmission both regionally and domestically, and promote clean energy, including through solar power.
Electricity Trade to Unlock Affordable and Reliable Electricity in West Africa
The World Bank Board of Directors approved today a total of $300 million in International Development Association (IDA)* credits and grants to support reforms that will help promote electricity trade in West Africa.
The West Africa Regional Energy Trade Development Policy Financing Program (West Africa Energy DPF) seeks to remove barriers to electricity trade, which will lower electricity costs for consumers, support the competitiveness of firms and improve resilience and reliability of supply. Currently, only 50 percent of the population in West Africa have access to electricity, and those who do, pay among the highest prices in the world – more than double those of consumers in East Africa. In addition, due to operational deficiencies, electricity services are unreliable, with an average of 44 hours of outages per month.
Over the past decade, member countries of the Economic Commission of West African States (ECOWAS) have been working — through the West Africa Power Pool (WAPP) — towards a fully integrated power market. Within a few years, they will have completed the primary interconnectors that will link them together. The West Africa Energy DPF supports a policy reform program being implemented by Burkina Faso, Côte d’Ivoire, Guinea, Liberia, Mali and Sierra Leone, to facilitate trade in cleaner low cost electricity generated from gas, hydropower and renewable energy across borders. This will replace the more expensive electricity generated from inefficient small-scale oil-fired and diesel generation and improve the reliability of electricity services.
“West Africa has huge potential for clean and green energy generation, which countries can unlock and pool together to bring lower cost electricity to communities and help create jobs,” says Ousmane Diagana, the World Bank Vice-President for Western and Central Africa. “The West Africa Power Pool has done the fundamental work of interconnecting national grids, and it is now time to realize the full strength of the regional power market. Coordinated policies paired with effective institutions and regulatory frameworks will help improve trust in the electricity trade and usher in a new era of affordable and reliable energy in West Africa.”
The new operation supports a regional energy reform program set out in three pillars. The first aims to increase confidence in the enforcement of commercial arrangements by supporting payments and enforcement mechanisms relating to energy trade. The second supports the implementation of least cost investment decisions that consider regional options and that promote competition. The third supports transparency, by addressing creditworthiness of national power utilities and keeping the market informed on key investment decisions that impact demand and supply.
“This is a landmark program for achieving our goal of having a regional energy market and I want to thank the World Bank support,” says Jean-Claude Kassi Brou, President of the ECOWAS Commission. “The West Africa Power Pool will continue to make strides and with this support, it can help member countries work together on the key coordinated policy reforms needed to deliver regional electricity trade – and therefore access more affordable and reliable electricity. By better using energy resources in the region, we expect the resulting efficient and resilient power systems to make our economies much more productive and inclusive. ECOWAS will continue to be a strong partner in realizing this goal.”
The West Africa Regional Energy Trade Development Policy Financing Program is the first World Bank operation to use the IDA Regional Window for a DPF program. It allows the World Bank to support reforms in order to reach a common objective across several countries in a coordinated manner. It represents a watershed on the regional integration agenda in West Africa by supporting the operationalization of the ECOWAS Directive on the Securitization of Cross-Border Power Trade, which was adopted in December 2018 and aimed at creating a regional power market. Across the ECOWAS region, the economic benefits of the regional power market are evaluated at $665 million per year with a reduction of one third in the average cost of electricity generation in the region.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.6 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.
Global Gas Flaring Jumps to Levels Last Seen in 2009
Estimates from satellite data show global gas flaring increased to levels not seen in more than a decade, to 150 billion cubic meters (bcm), equivalent to the total annual gas consumption of Sub-Saharan Africa.
The 3% rise, from 145 billion cubic meters (bcm) in 2018 to 150 bcm in 2019, was mainly due to increases in three countries: the United States (up by 23%), Venezuela (up by 16%), and Russia (up by 9%). Gas flaring in fragile or conflict-affected countries increased from 2018 to 2019: in Syria by 35% and in Venezuela by 16%, despite oil production flattening in Syria and declining by 40% in Venezuela.
Gas flaring, the burning of natural gas associated with oil extraction, takes place because of technical, regulatory, and/or economic constraints. It results in more than 400 million tons of CO2 equivalent emissions every year and wastes a valuable resource, with harmful impacts to the environment from un-combusted methane and black carbon emissions.
“Our data suggests that gas flaring continues to be a persistent problem, with solutions remaining difficult or uneconomic in certain countries,” said Christopher Sheldon, Practice Manager in the Energy & Extractives Global Practice, World Bank. “The current COVID-19 pandemic and crisis brings additional challenges, with sustainability and climate concerns potentially sidelined. We must reverse this worrying trend and end routine gas flaring once and for all.”
The top four gas flaring countries (Russia, Iraq, the United States, and Iran) continue to account for almost half (45%) of all global gas flaring, for three years running (2017-2019). When looking at all oil-producing countries, excluding the top four, gas flaring declined by 9 bcm (or 10%) from 2012 to 2019. In the first quarter of 2020, global gas flaring fell by 10%, with declines across most of the top 30 gas flaring countries.
“The World Bank and GGFR are committed to working with governments and industry to end this ‘sticky’ problem. We are working in many of the highest gas flaring countries in the world, helping them develop policies, regulations and practices to end routine flaring. At the same time, we are garnering more commitments from governments and companies to end routine flaring through the Zero Routine Flaring by 2030 initiative. Now over 80 governments and companies, accounting for over half of the world’s routine flaring, have pledged to end this 160-year-old practice,” said Zubin Bamji, Program Manager of the World Bank-managed GGFR Trust Fund.
The data was released by the World Bank-managed Global Gas Flaring Reduction Partnership (GGFR), which is composed of governments, oil companies, and international institutions working to end routine gas flaring at oil production sites around the world. GGFR, in partnership with the U.S. National Oceanic and Atmospheric Administration (NOAA) and the Colorado School of Mines, has developed global gas flaring estimates based upon observations from a satellite launched in 2012. The advanced sensors of this satellite detect the heat emitted by gas flares as infrared emissions at global upstream oil and gas facilities. A new and improved web-based application will map global gas flaring data in a reliable, standardized way, and will be publicly available in 2022, with the support of the Oil and Gas Climate Initiative (OGCI).
Commission approves support for production of electricity from renewable sources in Ireland
The European Commission has approved, under EU State aid rules, a scheme to support electricity production from renewable sources in Ireland. The measure will contribute to the EU environmental objectives without unduly distorting competition.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This Renewable Electricity Support Scheme will contribute to Ireland’stransition to a low carbon and environmentally sustainable economy, in line with the European Green Deal and our State aid rules.”
Ireland intends to introduce a new aid measure, called the Renewable Electricity Support Scheme (“RESS”), to support electricity production from renewable sources, including solar photovoltaic and wind. The RESS will contribute to the EU renewable energy target and will help Ireland reach its national target to transition away from fossil fuels and reach a share of 70% of renewables in its electricity mix by 2030.
The RESS, with an estimated total budget of between €7.2 billion and €12.5 billion, will run until 2025. During this time, aid for the production of electricity from renewable sources granted under the RESS will be allocated through auctions. All eligible technologies will compete for subsidies in these auctions, which should ensure the cost-effective achievement of renewable electricity targets by encouraging competition. However, Ireland has justified preferential treatment for a small quantity of energy from solar, as well as from offshore wind on the basis of the longer term potential of these technologies for the country.
Successful applicants of the RESS will receive support over 15 years in the form of a premium on top of the market price. The competitive auctions through which the aid is granted will set a ‘strike price’. When the market price is below this ‘strike price’, beneficiaries will be entitled to receive payments equal to the difference between the two prices. However, when the market price is above the ‘strike price‘, beneficiaries will have to make payments equal to the difference between the two prices. These payments will be returned to Irish consumers in the form of reduced electricity bills.
To help build public acceptance and support for Ireland’s ambitious renewable energy targets, the RESS includes specific forms of support for projects developed by renewable energy communities and for communities that host projects supported by the RESS. Projects developed by renewable energy communities will benefit from grants and loans to support the development of their projects, and will participate to auctions in a special category in order to ensure that a certain number of these projects is successful. The communities hosting projects supported by the RESS will benefit from a fund to which all RESS beneficiaries will contribute to and that will invest in certain technologies and ‘sustainable goals’ including education, energy efficiency, sustainable energy and climate action initiatives in the area surrounding the RESS projects.
Ireland has also developed a detailed plan for evaluating the RESS, including in particular a full analysis of the costs and benefits of the innovative measures supporting the renewable energy communities.
The Commission assessed the scheme under EU State aid rules, in particular under the 2014 Guidelines on State aid for environmental protection and energy.
The Commission found that the aid is necessary and has an incentive effect, as electricity prices do not fully cover the costs of generating electricity from renewable energy sources and only renewable technologies that need public support to be a viable investment will be eligible for support under the RESS. The aid is also proportionate and limited to the minimum necessary, as the amount of aid will be set through competitive auctions.
Therefore, the Commission concluded that the Irish RESS is in line with EU State aid rules, as it promotes the generation of electricity from renewable sources, in line with the European Green Deal, without unduly distorting competition.
The Commission’s 2014 Guidelines on State Aid for Environmental Protection and Energy allow Member States to support the production of electricity from renewable energy sources, subject to certain conditions. These rules aim to help Member States meet the EU’s ambitious energy and climate targets at the least possible cost for taxpayers and without undue distortions of competition in the Single Market. The Renewable Energy Directive established an EU-wide binding renewable energy target of 32% by 2030 and identified the potential for renewable energy communities to support the achievement of ambitious renewable energy targets.
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