energy planning
Engineers with blueprints talking at power plant in Cape Town South Africa

Strategic energy planning involves forecasting a country’s or region’s future energy needs and shaping pathways for meeting them in ways that satisfy goals for energy access, energy security, climate action and environmental protection. Simon Trace, Energy and Economic Growth’s (EEG)* programme director, explains how key principles can loosen constraints.

EEG is funded by the UK’s Department for International Development (DFID).

This article first appeared in ESI Africa Issue 2-2020.
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Strategic energy planning is an essential part of policy and investment decision-making in the energy sector. It is often informed by technical models and decision-support tools, underpinned by data and robust assumptions.

However, policy makers and regulators in sub-Saharan African (SSA) countries seldom have the knowledge, data and analytical tools they need for planning well-designed and cost-effective electricity systems, or for making decisions on renewable energy deployment.

This level of planning involves forecasting a country’s or region’s future energy needs and shaping pathways for meeting them in ways that satisfy goals for energy access, energy security, climate action and environmental protection. Effective planning tools and models are pivotal to this process.

They have significant potential to improve and define national electrification strategies (or provide a basis where they don’t yet exist) and offer considerable scope for increasing the accuracy of demand forecasts, which can have a significant impact on location, sizing and timing of generation and transmission infrastructure development.

Energy planning challenges

In SSA, however, policymakers, regulators and other government officials rarely have the knowledge, data and analytical tools that are necessary for planning well-designed and cost-effective electricity systems.

There is often insufficient capacity to effectively use decision-support tools and models, exacerbated by a lack of dedicated institutions for long-term capacity and skills development. The tools that are available are often too general (or are specifically designed for developed countries, rather than the needs of developing ones); and existing electrification, energy and
integrated assessment models often lack data that’s critical for informing policy analysis in low-income countries, in part because they are often closed-source, expensive or difficult to adapt.

In addition, a lack of decision- and context-relevant information constrains
the adoption of renewable energy in mainstream energy planning. Recent cost declines and advancements in renewable energy technologies – specifically solar photovoltaic (PV) and wind power – offer increasingly cost-effective and sustainable alternatives to conventional generation.

But solar and wind resources are, by their nature, variable and uncontrollable, making them challenging to integrate into electricity grids at scale. There is a need for sophisticated, transparent and accessible models to understand the impact of renewable resources and associated integration strategies, and for improved energy siting tools and analyses.

The role of research

Several EEG projects focus on energy planning, including, for example, on energy systems planning for Sustainable Development Goals (SDGs), led by the KTH Royal Institute of Technology. The team is promoting the use of quantitative analysis through free, transparent and robust energy modelling to directly inform energy policy in Ethiopia, Uganda and Sierra Leone. The project is drawing on planning tools developed by the OpTIMUS Community of Practice, including the Open-Source Electrification Toolkit (OnSSET), the Open-Source energy Modelling System (OSeMOSYS), and the integrated Climate, Land-use, Energy, Water strategies (CLEWs/OSiMOSYS) framework.

Building on this project, and also drawing on OnSSET, OSeMOSYS and CLEWs, a team from the University College London Energy Institute is developing possible transition pathways in Ethiopia to modern energy – specifically clean electricity – by incorporating behavioural issues (such as energy efficiency improvements and pricing) in energy system modelling.

Another project plans to inform stakeholders in the agricultural sector (the
backbone of large parts of the rural African economy) on understanding, forecasting and prioritising electricity demand for agricultural purposes. The project team, from the RWI Leibniz Institute for Economic Research, is building a model to help determine the cost of electrifying particular
locations by grid extension, mini-grid or dedicated solar PV, and will map the demand for new irrigation and agro-processing potentials.

Meanwhile, a project led by the University of California Santa Barbara aims to identify decision-support tools to accelerate large-scale renewable energy deployment in Southern Africa. The research will map renewable energy and power system planning and policy processes in the 12 member countries of the Southern African Power Pool (SAPP), investigating the key
gaps that can be addressed with targeted analyses and decision-support tools. Developable solar PV and wind resource locations will also be investigated.

All the projects have capacity building at their core – with the objective of enhancing the understanding and use of energy planning models and tools among academic, research and government institutions. For example, starter datasets, tools, online teaching material and training are being provided, which, where possible, will be broadly applicable and used in
other energy planning programmes and capacity development projects. KTH’s material, for example, will be adopted by the UN’s Modelling Tools for Sustainable Development project, and regularly used at the Global Summer School of the same name and the annual Energy Modelling
Platform for Africa (EMP-A).

Continuous engagement with key stakeholders, such as electricity system
planners and analysts, will ensure that projects have an impact on processes, policies and decision-making. As well as supporting projects on energy planning, EEG acts as the Secretariat of the Roundtable Initiative on Strategic Energy Planning, which aims to improve the coherence of support given to strategic energy planning.

Roundtable principles for supporting strategic energy planning

The main stakeholders involved in energy planning in developing countries are government decision-makers, with inputs from civil society, the private sector and other energy sector actors. Government is often supported in turn by a mix of bilateral and multilateral donors and development partners, with technical institutions and consultancy firms providing data and analysis using a variety of software tools and models.

However, when it comes to improving decision-making, this support is currently not effective enough. There are several reasons behind this – for example, donor support can be too fragmented and not in line with governments’ own priorities; externally funded capacity-building efforts can often be disparate (consequently failing to align or build on existing national planning structures and processes); and the platforms and collaborations that do exist between international technical institutions to share data, tools and models can have gaps and be hard to navigate.

The Roundtable Initiative aims to increase the effective use of evidence and analysis by decision-makers in developing countries. It has established five key Roundtable Principles (forming a Code of Conduct), developed through a roundtable consultation process, to help development partners work collectively towards improving the effectiveness of the support provided for strategic energy planning, in line with the 2005 Paris Declaration on Aid
Effectiveness.

The principles have so far been endorsed by 18 organisations, including the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA), the International Renewable Energy Agency (IRENA), the Regional Center for Renewable Energy and Energy Efficiency (RCREEE), DFID, the World Bank’s Energy Sector Management Assistance Program (ESMAP) and Agence Française de Développement (AFD). The principles are outlined here.

Roundtable principle: National ownership

Country leadership is essential in aligning and agreeing the priority objectives for the energy sector, and ownership of energy planning processes has been identified as one of the most important principles. The aim is to support country-led energy planning processes that work in partnership with key stakeholders to achieve broad consensus on strategic objectives and plans, and to help empower the relevant authorities at regional, national and subnational level to rally stakeholders to implement them (and push back on proposals that do not align).

Roundtable principle: Coherence and inclusivity

Improving the coherence of strategic decisions has been identified as a critical need. The aim is to assist governments in ensuring that strategic decisions taken in the energy sector are coherent with broader economic, social and environmental goals (including SDGs and Nationally Determined Contributions under the Paris climate change agreement) by committing to evidence-based, integrated and inclusive energy planning processes that lead to fair and technically sound energy development programmes.

Roundtable principle: Capacity

Countries should be supported to identify capacity gaps across the energy sector and relevant institutions, and to develop a roadmap for building long-term national knowledge and skills. The intention is to support governments in activities that will strengthen the capability of national institutions to take the lead on strategic energy planning and incorporate plans and evidence into decision-making and implementation processes; to commit to the coordination of development partners in line with government visions, requests for support and goals; and avoid fragmentation and duplication of efforts.

Roundtable principle: Robustness

Different types of models or tools may be used in energy planning, depending on the type of evidence needed to support particular decisions. For example, system-level choices (such as grid versus off-grid electrification) will require different analytical tools from project-level
investment ones (e.g. choice of generation technology) or operational decisions (e.g. dispatch order for power plants). Tools and models that are interoperable and accessible help planners choose the right analytical approach.

Development partners should promote the use of models, analysis and decision-support tools that are best-in-class, have strong technical and economic foundations, are fit-for-purpose to deal with rapidly changing circumstances in the energy sector, are able to support flexible and adaptive approaches to energy sector planning and can be easily and regularly updated.

Roundtable principle: Transparency and accessibility

A prerequisite to applying the above four principles is accessibility of data, and transparency regarding the quality of data and assumptions. Using transparent data and assumptions in the planning process can help to ensure that the drivers of the results are appropriately understood by all stakeholders involved. Therefore, the international community should
promote the use and sharing of data and assumptions on open or easily accessible platforms, as well as the use of opensource software for models and decision-support tools when possible and if relevant (subject to government restrictions and commercial confidentiality constraints).

Although not legally binding, signatories to the principles commit to incorporating them in their working practice. The principles are evolving and will adapt as the coalition builds.

Energy goals that are clear, evidence-based and widely agreed upon can help align the incentives and actions of key stakeholders – but decision-makers need access to appropriate data and analytical tools to inform strategic energy planning, and the necessary skills and capacity to implement, adapt and update plans. Both the EEG funded projects and the Roundtable Principles aim to inform strategic energy planning and capacity building, supporting the achievement of economic and human development objectives. ESI