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Electricity-Centered Clientelism and the Contradictions of Private Solar Microgrids in India

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Most discussions about solar microgrids focus on sustainable energy and development goals and the technical aspects of electricity generation, storage, transmission, and distribution. Very few explicitly examine the ways in which their introduction upsets and reshapes entrenched practices of electoral politics and citizen claim-making around electricity access and development. In India, as in many parts of the world, electricity represents the most visible symbol of economic development and social well-being. Democratic politics in many developing countries are linked to demands for access to electricity. The meshing of electricity, development, and democratic politics in post-independence India has produced a politics of clientelism in which parties have sought to gain voter support with promises of cheap or free electricity. Although this electricity-centered clientelism has expanded supply, it has simultaneously contributed to skewed spatial access, unreliable supply, and high debt burdens for state-owned electricity distribution companies. This article examines histories of clientelism and the contradictions emerging from the introduction of private solar microgrids in rural areas of the northern Indian state of Uttar Pradesh. It shows that although solar microgrids avoid electricity-centered clientelism, significant numbers of rural households in their supply areas are both excluded by their user-pays approach and unable to demand fair access through political representatives. The study calls for alternative governance and support programs at local levels that ensure that private solar microgrids can deliver reliable electricity to rural households.

Published in the Annals of the American Association of Geographers, this article draws on our Mapping Power research.

The remaining potential for energy savings in UK households

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Progress on improving energy efficiency of UK homes has stalled in recent years and the question arises how much more potential for further energy savings exist across the housing stock. Whilst there are some high-level estimates of the potential for buildings energy efficiency in the UK, a more granular assessment is needed to understand exactly where this potential lies and what form it takes. Our analysis fills this gap. It is based on the best available evidence on the remaining potential for energy efficiency improvements within UK residential buildings. Using UK government criteria for investment appraisal, we demonstrate that there is a significant resource of untapped energy-saving opportunities in UK homes. Specifically, our estimates suggest that: one quarter of the energy currently used in UK households could be cost effectively saved by 2035; and this could increase to one half if allowance is made for falling technology costs and the wider benefits of energy efficiency improvements. However, these estimates are sensitive to the assumptions made about capital, energy and carbon costs, and capturing this potential will require both significant policy change and large-scale investment.

Energy efficiency obligation schemes: Their future in the EU

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The International Energy Agency reported in 2016 that energy efficiency is increasingly understood as a key component of low-carbon energy policy. The European Union encourages Member States to introduce energy efficiency obligation schemes (EEOS) to help meet energy savings objectives. Today, the EU boasts 15 active programs, more than double the number upon introduction of the 2012 Energy Efficiency Directive. However, the long-standing EEOS in Denmark and the U.K. face challenges because of concerns over increasing costs.

In many countries now, the question is not whether energy efficiency should be delivered, but how best to do so. Which policies and policy mixes are most effective and economical, and how should they be implemented? These questions are even more relevant with the ratification of the U.N. Paris Agreement, which sets an aspirational limit for global temperature rise at 1.5 degrees Celsius, rather than the 2 degrees that formed the basis for much of earlier policymaking.

After considering the role of EEOS in EU energy policy, authors Tina Fawcett, Dr. Jan Rosenow, and Paolo Bertoldi use Denmark and the U.K. as case studies to explore the future of longer-established EEOS. They assess recent and planned redesigns in these two countries, analysing the factors that led to changes in policy ambition. They determined that an over-ambitious delivery target and timeline, coupled with the absence of opportunities to learn about effective policy, are the key risks to new EEOS. After assessing nine EEOS, their research found that savings in Croatia, Latvia, and Spain are the most at risk.

Correctly designed, an energy efficiency obligation scheme can deliver sustained energy savings over multiple years. This tool is flexible and can be designed in a variety of ways to meet national needs and fit within different policy mixes. EEOS have been used to deliver savings primarily through upgrading building stock, replacing inefficient appliances and equipment early, and improving industrial processes—efficiency savings that are not covered by minimum standards or regulations.

EEOS are likely to continue to evolve in objectives, design, and delivery as the energy and policy landscape changes around them. The new European framework of “energy efficiency first” supports EEOS, and the planned extension of the Energy Efficiency Directive to 2030 is also vital. EEOS have a strong track record in securing savings from low-cost measures, and they are expected to continue to do so. However, their scope may need to widen as savings targets increase and if—or when—low-cost opportunities reduce. Delivering higher-cost measures, particularly deep retrofits to buildings, is very challenging, regardless of the policy instrument or policy mix used. EEOS may be able to support this progress, but policymakers will need to ensure that the policy is seen as fair and retains energy company, public, and political support.

The politics of electricity reform: Evidence from West Bengal, India

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Across many developing countries, the power sector persistently underperforms despite years of market reform efforts. India, where de facto responsibility for the power sector rests with subnational (state) governments, provides a useful laboratory to examine why. The state of West Bengal provides an example of public sector reform as an alternative to the so-called “World Bank template” for electricity liberalization, and a lens on the political preconditions for reform success. Drawing on 30 interviews in 2016 alongside comparative evidence from other Indian states, this article documents the reform design and assesses its success. West Bengal’s reforms aimed at internally strengthening the utility against political interference. The study finds that this reform model delivered initial performance among the best of any Indian utility, and that successful reforms in several other states were also more statist than often recognized. However, longer-term sustainability remains challenging. While weak rural lobbies had some effect, the study explains this trajectory as the result of the transition from one-party dominance to intensified party-political competition, a finding that resonates with evidence from other Indian states. In contrast to influential political theories developed in the Global North, this suggests that party-political competition does not make Indian politicians more likely to deliver public services, but rather leads to short-termism and political capture of utilities. Conversely, under some conditions one-party dominance can encourage longer-term reforms. The study thus assesses the promise and limits of public sector reforms as an alternative to liberalization, and suggests how electoral competition can influence development priorities in Indian states.

This article was published in the April 2018 edition of World Development

Solar ‘power’: Socio-political dynamics of infrastructural development in two Western Indian states

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The growth and development of solar energy, which is so important in the current global context, is determined by political economic factors, and in turn, has varied implications for energy justice. India’s western region presents a complex context within which to examine why these trajectories unfold in particular ways and to what end. This article first situates India’s renewable energy policy within the dynamics of its federal politics. It then focusses on the trajectory of renewable energy development in two Western Indian states, Rajasthan and Gujarat, highlighting how regional particularities and path dependence have shaped the emergence of solar energy, often in ways that run counter to both expected and hoped for results. The idea of energy justice is subsequently introduced as a way to evaluate whether solar energy infrastructural growth in its present form is best serving the multi-pronged needs of climate justice, economic development, and social equity. By combining a political economy of renewable energy that accounts for the political and institutional factors conditioning the growth of solar capacity with the normative arguments embedded in the energy justice literature, this study contributes to a growing understanding of the intersection of solar power and development.

This article appears in Energy Research & Social Science

How German Energiewende’s Renewables Integration Points the Way

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​The power sector’s shift from large, inflexible generation to smaller, more dispersed variable renewable resources has triggered a debate among some U.S. policymakers about reliability and the continued need for baseload power plants, such as coal and nuclear. Yet numerous studies sponsored by utilities, system operators, the national labs, and others show that a large share of variable renewable energy production can be integrated while keeping the lights on, without any valuable role for traditional baseload. American policymakers who are still skeptical can look across the Atlantic for a concrete example of a successful transition away from traditional baseload. Germany, which traditionally relied on a significant share of inflexible thermal generation such as coal and nuclear to supply the grid, now meets nearly a fifth of its energy demand with variable renewables. This Energiewende, or energy transition, has been accomplished without reliability problems on either the distribution or bulk electric system—if anything, government data show that the reliability of the German system has increased.

In this article, written for Public Utilities Fortnightly, the authors review Germany’s reliability data in detail and discuss how reliability and least cost are best served by increasing the share of flexible resources on the system. Germany’s energy transformation envisions a grid where conventional thermal generation would follow “net load,” meeting short-term energy demand in some hours and the demand for flexible reserves in other hours, and variable renewables such as wind and solar would provide the bulk of energy over a regional grid. For U.S. regulators, the Energiewende provides important evidence that this type of system can be reliable and is attainable.​

Energy distribution trajectories in two Western Indian states: Comparative politics and sectoral dynamics

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This article, published by Energy Research & Social Science, unpacks the institutional bottlenecks and path dependency holding back the energy transition in Gujarat and Rajasthan. As heavily-indebted electricity distribution companies in Rajasthan seek to emulate thriving counterparts in Gujarat and turn to technology adoption, efficiency enhancement, and loss reduction measures, this study offers an in-depth stakeholder analysis, reflecting on implications for energy futures. Based on 56 expert interviews, it pries open the political economy of the distribution system within the energy transition in Western India, spanning concerns of consumers and providing insights into the roles played by several institutions, from regulatory commissions to renewable energy agencies. The article adds to existing scholarship by explicating how institutional conditions promote and hold back transitions to sustainable energy futures, bookmarking stakeholders’ expectations with regard to current developments on tariffs, renewable energy growth targets and compliance, the advent of competition, and public participation. It contributes a comparative understanding of the current issues, concerns, and ideologies that characterise this transforming sector at the state level, interweaving electricity distribution trajectories and regional political economic developments to explain the dynamics of change and nature of resistance.

Costs and Benefits of Energy Efficiency Obligations: A review of European Programmes

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The economics of energy efficiency programmes have been subject to considerable academic debate lasting well over three decades. In this paper, we contribute to this debate by reviewing the costs and benefits of a specific type of policy+ instrument that recently gained significant traction in Europe—energy efficiency obligations (EEOs). Following the introduction of the EU Energy Efficiency Directive in 2012, the number of EEOs has grown from five schemes to 16 EEOs in operation or planned across the EU. The emerging body of evidence on the costs and benefits of energy efficiency obligations covering a wider range of EU countries, offers an opportunity to improve our understanding of the economics of energy efficiency obligations. In this paper, we draw on this new data and provide a) a comparative analysis of the costs and benefits of EEOs in a number of European countries, b) discuss the uncertainties and challenges around calculating the costs and benefits of energy efficiency obligations, and c) provide a categorisation of the multiple benefits often overlooked in cost-benefit-analyses.

This article was originally published by Energy Policy.

Please cite as: Rosenow, J., & Bayer, E. (2017). Costs and Benefits of Energy Efficiency Obligations: A review of European Programmes. Energy Policy 107, pp. 52-63.

 

Assessing the European Union’s Energy Efficiency Policy: Will the Winter Package Deliver on “Efficiency First”?

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On 30 November 2016, the European Commissions published its so-called “Winter Package” of energy legislation that will provide the framework for energy policy in the European Union for many years to come. It contains proposals for a broad range of energy-related issues, including energy markets, energy infrastructure, renewable energy, climate policy, and energy demand. In this article, we carry out a preliminary review of the proposals and what they mean for energy efficiency. The European Union adopted the principle of “Efficiency First” in a communication issued in February 2015. More specifically, we analyse the revised Energy Efficiency Directive (EED), the Energy Performance in Buildings Directive (EPBD), the directive on common rules for the internal energy market for electricity (IEM), the regulation on the electricity market, and the regulation on governance of the Energy Union.

Our key recommendations are:

  • Energy Efficiency Directive: The target has been changed from initially 27 percent non-binding to 30 percent binding by 2030. Analyses of the cost-effective potential of energy efficiency shows that a target of 40 percent is justified even if we ignore the multiple societal benefits of energy efficiency. Two options for strengthening the EED are 1) rectifying the lack of clarity regarding new buildings and whether savings from building codes can fully be counted, and 2) linking the current period with the new period.
  • Energy Performance in Buildings Directive: The proposed reforms to the EBPD are unambitious and consist mainly of streamlining existing legislation, albeit leaving a number of gaps such as not directly aligning the obligation to renovate public buildings with the building renovation strategy. The main innovative change is the introduction of a smartness indicator, which is supposed to ensure that buildings are ready to connect and interact with the occupants and the grid. In principle, this is a promising approach, but the EPBD does not yet specify what exactly this will mean in practical terms. In order to make the Directive more effective, fundamental revisions are required that harmonise the targets for buildings set out in the EPBD with the new 2030 framework.
  • Internal energy market: New provisions introduced into the Electricity Directive and regulation strengthen the recognition of energy efficiency as a resource for the electricity system, but fall short of delivering a policy framework to stimulate planning and investment in energy efficiency on a level with supply-side resources. Energy efficiency is recognized as a reliability resource, yet there is no requirement that capacity remuneration mechanisms allow energy efficiency to compete on a comparable footing with supply-side resources. Regulators must provide incentive frameworks and cost recovery for innovative measures to raise the energy efficiency of their networks. This could be a strong stimulus for investment in energy efficiency; however, clarification is needed to ensure that the framing includes end-use efficiency. Distribution system operators are enabled to invest in energy efficiency, but not required to do so. Simply creating an enabling framework is unlikely to stimulate investment beyond what is required under energy efficiency obligations.
  • Governance regulation: The governance regulation recognizes the crucial role that energy efficiency must play in meeting the Union’s 2030 and 2050 climate and energy goals, and sets out a planning process that would chart a path to meeting energy efficiency goals in each Member State. However, the regulation reveals a striking gap between assessment and enforcement. It does not chart governance rules that would cause Member States, utilities, and system operators to invest in efficiency where it is less expensive or more valuable than supply-side options; nor does it contain specific enforcement tools to pay for and deliver energy savings if Member State efficiency programs were to underperform.

This paper was originally published in the journal Energy Research & Social Science.

Please cite as: Rosenow, J., Cowart, R., Bayer, E., & Fabbri, M. (2017). Assessing the European Union’s Energy Efficiency Policy: Will the Winter Package deliver on ‘Efficiency First’? Energy Research & Social Science 26, pp. 72–79.

Follow the Missing Money: Ensuring Reliability at Least Cost to Consumers in the Transition to a Low-Carbon Power System

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The “missing money problem” refers to the idea that prices for energy in competitive wholesale electricity markets may not adequately reflect the value of investment in the resources needed for reliable electric service. In this article published in The Electricity Journal, Michael Hogan unpacks the missing money issue, recapping how energy prices should be expected to be set in a competitive electricity market, the role they are intended to play in shaping critical investment decisions, and some of the ways they can go wrong. He then develops a robust and sustainable strategy for tackling missing money and ensuring a reliable, low-carbon electric supply at the lowest reasonable cost.

The critical insight that differentiates the article’s recommendations from the many other treatments of missing money and reliability is that measures to address missing money must address the entire objective—not simply to ensure reliability, but to ensure reliability at the lowest reasonable cost. The various out-of-market “capacity remuneration mechanisms” often adopted to address missing money are creating a different problem, misallocated money. By overcompensating some resources and undercompensating others, misallocation creates structural incentives to invest in a mix of resources ill-suited to the underlying needs of the system. This is especially true in a low-carbon power system, where the difference in value between flexible and inflexible resources is becoming increasingly acute. Furthermore, it obscures the true value of energy storage and flexible demand as supply becomes increasingly variable. As a result, the business case for innovation is undermined and consumers face significantly higher costs.

Enabling energy prices that truly reflect real-time conditions in the electricity market plays a key role in ensuring least-cost reliability, delivering value for money, advancing innovation, and empowering consumers. More findings on this topic can be found in a RAP paper authored by Mr. Hogan entitled Hitting the Mark on Missing Money: How to Ensure Reliability at Least Cost to Consumers.