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Energy+: Questions and Answers

The Norwegian government launched the International Energy and Climate Initiative – Energy+ together with the UN Secretary General on 10 October 2011. The initiative aims to increase access to modern energy and energy efficiency, and avoid emissions of greenhouse gases in developing countries.

 

1. What is the International Energy and Climate Initiative – Energy+?

The Norwegian government launched the International Energy and Climate Initiative – Energy+ together with the UN Secretary General on 10 October 2011. The initiative aims to increase access to modern energy and energy efficiency, and avoid emissions of greenhouse gases in developing countries. Additional support from the international society and commercial investors is required to provide more energy services from renewable energy and implement measures to support energy efficiency. Energy+ will provide financial support to developing countries based on results in the form of increased access and reduced (avoided) emissions, and measures taken to support these goals.

2. Why Energy+?

The world faces two interrelated problems that the Initiative will address:

  • 1.3 billion people have no access to electricity and 2.7 billion people still use charcoal and biomass, in an inefficient way, for cooking and heating.
  • Emissions of greenhouse gases must be reduced. 60 % of the global greenhouse gas emissions are related to energy production and consumption. If global warming shall be limited to 2oC, the increased demand for energy has to be met by renewable energy and energy efficiency.

Norway recognized the need to increase the impact of its ODA whilst tackling both these challenges and initiated discussions around Energy+ in an attempt to identify a more strategic approach to support sustainable energy development.

3. What does the plus mean?

The plus signifies our integrated efforts to reduce greenhouse gas emissions whilst increasing efforts to support universal access to sustainable energy based on renewable energy sources and improved energy efficiency.

4. Who initiated Energy+?

The Government of Norway initiated Energy+, inspired by experiences with the Reducing Emissions from Deforestation and Forest Degradation (REDD+) initiative. The outlines of the concept was discussed with other donor countries, developing countries, private sector representatives, international organizations and civil society organizations over a year and a half before deciding to launch it in October 2011.

5. What is the status of the Energy+ Partnership?

Nearly fifty countries and organizations have signed up to the Energy+ Partnership. This comprises developing countries (e.g. Ethiopia, Kenya, Maldives, Senegal), developed countries (e.g. UK, Denmark, France, Norway), UN agencies (UNDP, UNEP, UNIDO), multilateral development banks (World Bank, ADB, IDB, AfDB), international organizations (e.g. IEA, OECD), private sector (WBCSD), think-tanks (e.g. CCAP) and civil society (e.g. WWF).

The Energy+ Partnership is voluntary and open to all interested actors endorsing the guiding principles. Many of the Partners are represented in the Energy+ Technical Working Group responsible for further conceptual development and strategic advice with regards to operations at the country level.

6. What are the Energy+ Guiding Principles

Energy+ actions will be guided by the following principles:

  • Developing country actions in the energy sector will be supported through best-practice policy reforms, technical support and at scale results-based financial investments to increase access to renewable energy and energy efficiency, and greenhouse gas emissions relative to a business-as-usual baseline.
  • Activities will be country-driven and support developing country Partners’ low carbon development and poverty reduction strategies.
  • Results-based resources will be used to leverage commercial investments.
  • Energy+ will employ a three-phased approach to country engagement:
    • support for strategic planning (e.g. low-carbon and energy sector strategies), and policy and regulatory reforms, where needed,
    • the use of results-based financing modalities to create and expand markets, encourage innovation, and leverage private sector investment;
    • performance-based incentives offered to developing country governments for successful delivery against a small number of agreed country-level indicators.
  • Robust indicators to measure outputs, outcomes and impact.
  • Work through existing programs and institutions, thereby limiting transaction costs and speeding up progress.
  • Use national and international social and environmental standards.

 

7. Poor countries need energy services; why does Energy+ focus only on renewable energy and energy efficiency to support this need?

Poor countries need access to energy services to enable economic and social development and will use the energy sources that are most convenient and cost-effective. The International Energy and Climate Initiative – Energy+ will provide measures to make renewable energy an economically viable choice for those countries that want to prioritize renewable energy development to avoid long-term lock-in to fossil fuel. Renewable energy has in general low operational cost, however, large upfront capital costs. In some developing countries hydropower will be the cheapest solution. As of today, developing countries often have to choose the energy solutions with lowest upfront costs, i.e. often fossil fuel based technology. Many countries then go on to spend a large share of their financial resources to import running fuels such as oil, diesel and kerosene which can contribute to energy insecurity and foreign exchange reserve depletion.

8. How can we help countries without access to renewable and clean energy?

Most countries have some potential to use renewable energy sources. In developing countries wood and charcoal is the primary source of energy. The energy efficiency is in general low. Most countries have large energy potential in their solar and wind resources. Some have large untapped hydropower and geothermal potential (although the latter has high risk development costs). The upfront investments in renewable may be high, but through strategic use of Official Development Assistance it is possible to facilitate commercial investments and realize the renewable energy potential.

9. Why is it important with more renewable energy and energy efficiency?

Without increased use of renewable energy and energy efficiency the total emissions from greenhouse gases will increase, and lock-in to unsustainable energy will take place, making it impossible to limit global warming to 2oC with potentially catastrophic climate consequences and therefore society as a whole.

10. Why does Norway do this?

When it comes to energy and climate, Norway has the experience, the knowledge, the industry and resources to make a difference. There are many initiatives, but few who are at scale, have the ability to coordinate and ensure a concerted effort. Through The Government of Norway's International Climate and Forest Initiative we have proven ability to make a difference also in climate change negotiations. In addition to this, Norway is active on various arenas to develop different approaches to climate financing. We wish to use these experiences and apply it to the Energy+ Partnership.

Norway spent NOK 800 million in 2010 to support clean energy in developing countries. In 2012, NOK 1.8 billion has been allocated.

11. How will developing countries be supported?

Financial support from Energy+ will be based on achieved results in terms of increased access to sustainable energy and reduced emissions of greenhouse gases. This includes support to measures taken to establish policies and regulations that bring about increased commercial investments in renewable energy and energy efficiency. The support may be used by the developing countries to further strengthen the enabling environment to attract commercial investments in the energy sector.

12. What is the relationship between Energy+ and the SE4ALL initiative

The United Nations Secretary-General launched his personal ‘Sustainable Energy for All’ (SE4ALL) initiative in 2011 with three inter-related objectives:

  • Universal access to sustainable energy by 2030
  • Doubling of the improvement in energy efficiency by 2030
  • Doubling of the share of renewable energy in the global energy mix by 2030. 

A high level group supported by a technical group has developed an action framework entitled “Sustainable Energy for All: A Global Action Agenda­– Pathways for Concerted Action toward Sustainable Energy for All.” 

Energy+ shares the same objectives as SE4ALL and while the SE4ALL is a coordinating framework Energy+ aims to be an implementing initiative focusing on supporting developing countries to increase access to sustainable energy and reduce emissions of greenhouse gases through the use of renewable energy and energy efficiency. While SE4ALL is global and fuel-neutral, Energy+ is targeted to developing countries that want support to develop their renewable energy sector, improve access and energy efficiency.

13. Energy+ dialogue with private sector and identification of business models

The Energy+ Partnership organizes dialogues with private sector representatives of various scale (small to medium enterprises to larger corporations) and relevant sectors (renewable energy manufacturers, financial service provides, etc.). Based on these consultations four key interventions areas are emerging:

  • Support preparation of national energy and climate strategies:
    • National plans with results-based financing approach; share expertise and experiences; removal og subsidies and import tariffs
  • Gathering and disseminating information necessary to make investment decisions and design successful projects:
    • Support feasibility studies and resource assessment studies; disseminate information on project successes; develop a climate registry
  • Development of a regulatory framework for investments and contracts:
    • Set up a one-stop shop or fast tracking mechanism for projects approval; sharing of experiences on developing legal frameworks with compliance mechanisms; unbundle the power sector; develop standardized PPAs.
  • Innovative and alternative financing models:
    • Blend donor and investor resources; enhance liquidity of local financial institutions; provide zero-interest loans; extend loan maturities; reverse seed investments; establish off-take markets for carbon credits. 
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14. Four country examples where Energy+ can make difference

  • Kenya – support will be provided to implement the ‘Kerosene Free Kenya’ program focusing initially on solar home systems and cook stoves. Use of kerosene is costing Kenya about $500 million annually.
  • Liberia – Because of the civil war, the urgent need for energy in Liberia is now covered by large diesel generators. Liberia has the potential to switch to hydro power, bio and solar energy, and reduce their dependence on imported fossil fuel. Support will be provided to prepare an integrated energy access and climate plan and to build necessary capacity, as well as for electrification.
  • India – Norway has already supported rural electrification with the use of photo voltaic technologies. Now, a new large fund to further support rural electrification based on reverse auctioning will be established. The fund is a result of joint efforts from India, the UK and Norway.
  • Ethiopia – Ethiopia has developed a Climate Resilient Green Economy strategy outlining Ethiopia’s ambitions to become a middle-income country by 2025 and keeping the emissions at today’s level. Support will be provided to increase access in rural areas, initially focusing on cook stoves (9 million stoves by 2015, reducing emissions by 14 million tCO2e).