Overall RISE Scores, 2016

What’s making the lights go on? (Or keeping countries in the dark?)

10/03/2017

Resource:  Regulatory Indicators for Sustainable Energy (RISE)

Type:  Free

Published by: RISE is a product of Sustainable Energy for All (SE4ALL) Knowledge Hub housed in the World Bank

Website 

Note:  All graphics and charts are sourced from the RISE 2016 report.


RISE is a new addition to a growing suite of tools that enable countries to understand how they are faring either better or worse than their peers on climate-related matters.  We have also recently looked at ND-GAIN , on adaptation, and ClimateScope, on renewables investment.

Sudeshna Banerjee – Lead Energy Specialist at the World Bank

The RISE tool measures 27 indicators and 80 sub-indicators that capture the quality of policies and regulations for energy access, renewable energy and energy efficiency in a country, and from these creates both an overall country score and a score for each of these three pillars of sustainable energy.

“The main users we had in mind when the tool was created were governments, as they are the ones that can actually make changes,” says Sudeshna Banerjee, Lead Energy Specialist at the World Bank and lead author of the RISE 2016 report.  “It was born out of a number of countries benefitting from the World Bank’s Scaling Up Renewable Energy Program (SREP) who were trying to scale up their renewables levels saying to us, ‘How do we work out what we need to change to get this working better’?

Starting with pilots in 17 countries, RISE now covers 111 countries, and will be added to further as updates are published every two years.

Overall RISE Scores, 2016

The country scores are ‘traffic-lighted’ (green, yellow and red), indicating at a glance that a country is respectively on track, still has work to do on policy, or is at a very “nascent stage of policy development” as Banerjee diplomatically puts it.  As the map above shows, most of the lower-scoring countries are in sub-Saharan Africa.

We measure the enabling environment, not numbers of panels and turbines

At first glance, some of the results seem surprising.  For example, India gets a green light on energy access.  How can that be, we wonder, when hundreds of millions of people still have no access to energy?  “RISE measures the policies that have been put in place, not the rollout of projects. India has made tremendous progress on energy access policy in the past few years, and the rollout on the ground has also gained momentum but clearly there is a way to go.  If you look at Pakistan next door, you will see that it has green light for renewables – that also reflects the recent policy progress, not yet the reality on the ground.”

The traffic lights thus assess the state of the enabling environment, not panels and turbines. The World Bank, in collaboration with partner agencies, also publishes the companion Global Tracking Framework report to present the status of progress towards the three SE4ALL goals (energy access and efficiency, and growth in renewables).

Though RISE can’t at this point measure how good policy leads to growing investment, Banerjee says that this is one of the things they hope to be able to track as the tool is updated every other year (the next update will be for 2018).

While in ‘standard’ mode RISE doesn’t weight indicators, when countries use the tool for their own evaluation purposes, they can do this.  “What that allows is for countries to assess how a focus on this or that policy agenda might result in the best outcome within the overall agenda that the country is pursuing.”

Testing different policy mixes

How this might play out is demonstrated by a comparison between different policy measures in energy access in South Asia and sub-Saharan Africa.  As the chart shows, consumer affordability of energy and transparency of utilities are considerably better in South Asia:   if utilities are better monitored for things like pricing, and electricity is more affordable, more of it will get used. A country finding that it may have good installed capacity but lower usage than expected could then weight policy changes towards these factors.

Energy is typically far more affordable in South Asia than in SSA

“Frameworks for stand-alone systems like solar home systems are also less good in SSA,” Banerjee notes, “meaning that these countries are missing out on the dividend from the crash in solar PV costs.”  This is an area, though, where energy and other regulatory issues start to intertwine – for example the success in scaling up home lighting systems in East Africa has a lot to do with the availability of mobile money services, which allow remote payments for energy and systems.  These mobile money services, such as Mpesa in Kenya have been enabled by changes in financial regulation, so it’s clear that energy policy doesn’t stand in isolation.  Banerjee accepts that this is the case but points out that solar home system rollout in Bangladesh, for example, pre-dated the widespread availability of mobile money.  “But these are exactly the sort of linkages we will analyse more over time,” she says.

Not paying attention to energy efficiency early on is a false economy

Some key points globally emerge from the report accompanying the launch of RISE in February 2017.

Low income countries tend to score more poorly on energy efficiency policy

One is that low-income countries tend to have the worst policy environments on energy efficiency. “That may seem logical on the face of it,” Banerjee says, “since they may be very small users of energy by world standards.  But in fact it’s a false economy, because retrofitting for energy efficiency once your economy starts to grow is much more expensive than doing it at the outset.  But this isn’t a hard and fast thing – Vietnam is doing really well on energy efficiency for example.”

Similarly, there is a very strong correlation between governance and good policy on energy.

Countries that score best on governance tend to also score well on RISE

“Although there are outliers, the correlation here is generally pretty clear,” Banerjee says.  “Countries that score well on the World Bank’s ‘Ease of Doing Business’ index tend to also score well on RISE.  And it’s the same when you look at other governance indicators for a country. But this is something we want to do further analysis on for the next update.”

Extensive library of policy documentation

Another feature of RISE that Banerjee points to is its library of policy documents and laws.  “There are over 3,000 documents in there, which we think makes this the most comprehensive free resource for understanding in detail a country’s legal and policy framework.”

This is one of the tools on the site that Banerjee thinks might be of most interest to the private sector and investors looking at a country as a possible destination for investment. “The library is being added to all the time and users can really drill down there to the nuts and bolts of policies, regulations, and laws.”

“As of now, we have not explored that direct connection between RISE and investment.  Potential investors would need to go to other resources like Climatescope for things like levels of renewables investment in the relevant economy.  Right now users like investors can get a snapshot of the policy environment in a country, but this is a dynamic tool and we will develop further linkages as we update it in the future.”

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