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New report highlights needs for energy-secure future

Cape Town, South Africa — ESI-AFRICA.COM — 29 April 2011 – A newly-launched World Economic Forum report says that, more than public and private finance, a more flexible regulatory framework and improvements in electricity grid infrastructure are the keys to building a sustainable, energy-secure future.

Produced in collaboration with PwC, the report “’ “Developing Renewable Energy Capacity” “’ has been launched ahead of the upcoming World Economic Forum on Africa here from 4 to 6 May.

It says that renewable power capacity has grown rapidly over the past decade. Driven by economic development and associated increasing demand for energy, 2009 saw over US$ 150 billion invested in renewable energy This amount increased to over US$ 240 billion in 2010, with the United States and Europe adding more renewable than conventional power capacity.

“Simply spending more government and multilateral money will not transform renewable energy from a niche player to a dominant market technology in a particular country, unless early regulatory and infrastructure challenges are addressed first,” remarked Busba Wongnapapisan, Head of Renewable Energy Industry at the World Economic Forum, and co-author of the report.

“Institutional and regulatory frameworks must facilitate private renewable energy activity.”

The report aims to move the debate forward and draws on the study of five countries: South Africa, Indonesia, Jordan, Mexico and Morocco. The study aims to provide key lessons and increase understanding of regulatory and infrastructure issues in emerging markets.

For example, says the report, in South Africa, businesses have organised themselves into the National Energy Association and Alternative Energy Association, conducting workshops and working closely with the government and stakeholders to support the design and development of renewable energy feed-in tariff programmes.

“The removal of regulatory and infrastructure barriers is pivotal to support the further development of renewable energy in many of these emerging countries,” said Gus Schellekens, director, sustainability and climate change, PwC, United Kingdom, and adviser to the project.

“Unless governments are able to address these barriers, there is the risk that market development will be fundamentally constrained. The five countries highlighted by the report have the opportunity to make substantial progress in years to come, supported by international interest in the ‘green economy’ and their abundance of renewable resources,” he added.

The report identifies five key factors that impede deployment of renewable energy in emerging markets:

  • The absence of long-term planning, with specific implementation plans for renewable energy capacity targets, creates uncertainty and undermines government The report recommends actions and partnerships required by stakeholder credibility;
  • Government and regulatory bodies do not always communicate effectively with each other, causing confusion among developers and delays in project approval;
  • Many government bodies and regulators face shortages of experienced staff familiar with the renewable energy industry; this has led to a high level of risk aversion and slow processing of permit applications;
  • The structure of electricity markets: one dominant player prevents private developers from conducting business on a level playing field; and
  • Limited grid infrastructure in the areas where renewable resources are most abundant presents a current and future barrier to increased generation
  • groups to overcome the challenges. Successful best practices to address the challenges are also featured in the report, including examples from India, Morocco, Portugal and the European Union.