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Center for Environment
>> Return to Home Page >> Central Programs >> Global Programs >> Environment ACTIVITY DATA SHEET
PROGRAM: Central Programs
TITLE AND NUMBER: Increased, environmentally sustainable energy production and use, 934-003; IR 3.2 Increased use of renewable energy resources
STATUS: Continuing
PLANNED FY 2001 OBLIGATIONS AND FUNDING SOURCE: $5,863,000 DA
PROPOSED FY 2002 OBLIGATIONS AND FUNDING SOURCE: 4,200,000 DA
INITIAL OBLIGATION: FY 1999; ESTIMATED COMPLETION: FY 2008Summary: One-third of the world's population lives without the benefit of electricity or other modern energy resources. Yet nothing is more central to economic growth than energy. The majority of these people live in developing countries within areas that are too remote and expensive to connect to existing energy systems. For these two billion people, renewable energy sources represent a viable alternative and can contribute to economic development, poverty reduction, improved human health in urban and rural areas, and reduced greenhouse gas emissions.
The program aims to overcome market and institutional barriers to encourage more widespread adoption and use of renewable energy systems. It pays particular attention to moving beyond an emphasis on the provision of energy in order to work with communities to develop useful applications such as irrigation pumping and processing agricultural commodities. The program promotes renewable energy technologies and services in situations where sustainable markets are close at hand, where results have a large potential for replicability, and where leveraging of other financial resources can be achieved. Specifically, Global's Center for Environment (the Center) fosters implementation of policy or regulatory changes that establish incentives for renewable energy technology transfer and cooperation; mobilizes business entities to pursue renewable energy projects; leverages financial commitments to renewables; and strengthens the establishment of host-country, non-profit institutions which promote renewables.
USAID recognizes the value of its renewable energy activities in following its international development agenda. These activities contribute to several U.S. foreign policy priorities, providing benefits to the nation's economy, public health, national security and environmental status. By promoting U.S. goods and services and focusing on market sustainability, USAID energy programs open new commercial opportunities for U.S. businesses, creating jobs in the United States while helping developing countries accelerate economic growth in a sustainable manner. Activities pursued under this program help U.S. companies improve access to the global energy market, valued at $10 trillion over the next 20 years.
Key Results: The Center measures progress in newly installed capacity, both for on-grid and off-grid; adoption and implementation of policies or regulations that level the playing field for renewable energy systems; and increased public- and private-sector financial commitments to renewable energy systems. In locations where population densities and energy uses are low, or the terrain is too rugged to gain reasonable access, distributed generation based on renewable energy systems are frequently the least-cost option for delivering electrical or thermal energy to end-users. This is especially true in developing countries where sophisticated energy infrastructures do not currently exist. Thus, the program targets the expanding, yet limited, energy infrastructures of developing countries that are particularly well positioned to make use of environmentally sustainable energy technologies. These countries can choose to pursue less carbon-intensive economic development pathways and leapfrog over the polluting, carbon-rich industrialization phase that developed countries experienced.
Performance and Prospects: USAID assisted the Government of Mexico to develop the country's first comprehensive renewable energy program. The Mexico program supports training, technical assistance and pilot projects designed to increase the use of renewable energy technologies for livestock and agricultural irrigation, protected areas management, communications, water heating for processing, lighting for commercial and business ventures, and other such productive uses. To date, over 50,000 Mexicans have benefited from the 200 systems installed. More than 40 renewable energy companies from the United States and Mexico have participated in the program.
The program is also an important part of the Central American Hurricane Mitch response effort. Because renewable energy resources are indigenous and not as interruptible by natural disasters and market variation as are traditional fuel supplies and services, some countries of Central America affected by Hurricane Mitch have announced intentions to increase their reliance on renewable energy as a hedge against future disasters. For example, Honduras gives a 10% premium in power purchase contracts that supply energy from renewable resources. The program continues work with local nongovernmental organizations to meet the energy needs of these countries' rural populations without access to electricity through activities such as water pumping and powering rural schools by renewables to bring distance education programs to these remote areas. The program has also been working with the Philippines Department of Energy to design mechanisms to expand the potential for renewable energy initiatives and to help the World Bank design a new rural electrification loan.
In FY 2000, the Center -- in conjunction with USAID Missions, the World Bank and Winrock International -- installed 162 megawatts of grid-connected renewable energy in Brazil, Guatemala, Honduras, India, Indonesia, Nepal, Nicaragua and the Philippines. The Center also developed over 20,000 small off-grid units in India, South Africa, the Philippines, Mexico, Sri Lanka, and Indonesia. In FY 2000, $873.1 million in new financial commitments were made available for renewable energy projects in assisted countries and $817.2 million was leveraged from multi development banks, principally from the Asia Sustainable Energy Unit of the World Bank, and from the Global Environment Facility, and the United Nations Development Programme. This accomplishment also far exceeded program targets.
By FY 2002, the program expects to help 13 countries design and implement at least 26 policies that encourage investment in renewable resources. The program is also expected to yield over $1 billion in investments leveraged from international financial institutions and support the establishment of nine host-country institutions for the promotion of renewable energy. In addition, over 665 megawatts of renewable energy is expected to go online by FY 2002. One megawatt can provide electric power to a community of about 5,000 residents in a developing country. Although the immediate payoff in megawatts-installed is modest, the limited number of pilot projects supported by the program are expected to play a catalytic role, leveraging widespread, multi-megawatt investments in similar projects by the private sector.
FY 2002 funds will be used to support the strategic realignment of renewable energy activities to more effectively address the delivery of energy services to rural and urban populations. For example, existing fee-for-service operations demonstrate that off-grid energy supply businesses can be built and successfully operated without subsidies of any nature. In some countries, the decision has been made to discontinue subsidizing uneconomical electric line extensions or imported fuel, and instead apply a part of that subsidy to buy down the initial cost of small renewable energy systems. This one-time benefit enables businesses to be established which provide affordable electricity to rural customers on a fully sustainable basis, and at a price approximately the same presently being paid for the less superior candles, kerosene and battery charging.
A thorough review of existing programs will lead to the continuation of some activities (e.g., improving the policy and regulatory frameworks for increased commercial delivery of renewable energy services) and to the likely initiation of new activities (e.g., integrating the issues of agriculture and water into commercial-based energy service provision).
Possible Adjustments to Plans: The Strategic Framework and the Performance Monitoring Plan are currently under review to ensure that both mechanisms are accurately capturing program results.
Other Donor Programs: Within the donor community, USAID works closely with lending institutions (World Bank, Inter-American Development Bank, regional development banks, and private commercial banks) to improve access to long-term financing. To achieve this, the program provides technical assistance to host countries receiving loans from the World Bank, regional development banks, and private commercial banks in order to leverage this financing for renewable energy enterprises. The program also works closely with international organizations on technical assistance and information dissemination.
Principal Contractors, Grantees or Agencies: Primarily, the program cooperates with Winrock International, Eamp;Co., the Organization of American States, and the World Bank to implement program activities. Activities are also implemented through interagency agreements with U.S. Department of Eneregy's National Renewable Energy Laboratory and Sandia National Laboratories. In addition, the program periodically contracts with Institute of International Education, Academy for Educational Development and CORE International.
Selected Performance Measures:
Indicator FY97 (Actual) FY98 (Actual) FY99 (Actual) FY00 (Actual) FY01 (Plan) FY02 (Plan) Indicator 1: Newly installed capacity on-grid 85 92 99.0 162 NA NA Indicator 2: Number of policies or regulations adopted and implemented that are clearly favorable to renewable energy 17 10 10 10 NA NA Indicator 3: New financing explicitly made available for, or committed to, renewable energy projects by the private or public sector 386 483 194 873 NA NA Indicator Information
Indicator Level (S)or(IR) Unit of Measure Source Indicator Description Indicator 1: IR Megawatts (MW) Collaborators, contractors, and stakeholders Indicator measures the capacity (in megawatts) of new generation facilities using renewable energy that comes on-line, linking to a national or regional electricity grid, as a result of G/ENV assistance. To provide context, 1 MW will provide electric power to a community of about 5,000 residents in a developing country. Indicator 2: IR Actual number of policies or sets of regulations adopted and implemented Collaborators, contractors, and stakeholders Indicator tracks the national, state, and local policy or regulatory reforms that G/ENV plays an instrumental role in advancing. Indicator tracks when governmental bodies formally adopt and implement policies or regulations. Results to be monitored include incentives adopted, subsidies for fossil fuels reduced or eliminated, and improved access laws for renewable energy resources. Indicator 3: IR U.S. dollars (million) Collaborators, contractors, and stakeholders Indicator tracks three categories of financial commitments that are made for renewable energy projects, prior to construction or installation of hardware: (a) approval of loan packages dedicated to renewable energy by the multilateral development banks (public sector); (b) financial closure on specific projects by the private sector (which may include financing from private banks); and (c) obligation of financing for renewable energy technologies by non-MDB public sector entities. The intention of this indicator is to capture signals of intermediate success in mobilizing financing for investment.
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Last Updated on: May 29, 2002 |
