EXPERIENCE WITH TECHNOLOGY NEEDS ASSESSMENT, DEVELOPMENT AND

IMPLEMENTATION

WILLIAM KOJO AGYEMANG-BONSU

NATIONAL CLIMATE CHANGE COORDINATOR

ENVIRONMENTAL PROTECTION AGENCY, GHANA

ANNEX I EXPERT GROUP SEMINAR ON WORKING TOGETHER TO RESPOND TO CLIMATE CHANGE

21-22 MARCH 2005, OECD HEADQUARTERS, PARIS, FRANCE

OUTLINE OF PRESENTATION

Elements of UNFCCC Technology Development and Transfer Framework

Ghana’s Technology Needs Assessment CFL Example Challenges Conclusions

Elements of UNFCCC Technology Development and Transfer Framework

1) Technology Needs Assessment Information needs Capacity building needs – institutional, human Assessment of enabling environment – systemic capacities, including

barriers and actions to overcome them Financing

2) Technology information3) Enabling Environment4) Capacity building5) Mechanisms for technology transfer – institutional and

financing aspects

Ghana’s Technology Needs Assessment

Goals of the TNA

Contribute to global effort towards sustainable development and in particular the protection of the climate system.

Communicate to COP under UNFCCC and the global community Ghana’s climate change technology requirements.

Identify a portfolio of technology development and transfer programmes that have the potential to reduce greenhouse gas emissions and contribute to Ghana’s sustainable development

Identify, analyze and prioritize technologies that can form the basis for a portfolio of ESTs projects and programmes

Identify human, institutional and systemic capacity needs that ensure the smooth development, transfer and acquisition of ESTs

Enlist interest and commitment from key stakeholders and forge partnerships to support investment or barrier removal actions for purposes of enhancing the commercialization (or otherwise), and the diffusion of high priority technologies

Immediate Objectives

Stakeholders

Government Quasi-Government Business Associations Financial Institutions NGOs Research/Academia Development Partners

Resources for Ghana’s Needs Assessment

Major funding from UNDP/GEF

Technical support provided by NREL with funds from CTI/USDOE

Overview of Ghana’s Approach to Needs Assessment

Development of background documentation Stakeholder identification (national/international) Organization of scoping meeting/stakeholder consultations Establishment of Technology selection criteria Choosing sectors/sub-sectors for assessment Establishment of core/expert teams Prioritizations of technologies Holding donor consultations In-depth analysis Preparation of needs assessment report Development of technology transfer implementation plan Publication of TNA final report

Technology Priorities Setting

Selection Criteria Development benefits Market Potential Contribution Towards Mitigating

Climate Change Additional Attributes

Selection Criteria

Development benefits Job creation Wealth creation for the poor Capacity building Use of local resources Contribution to GDP growth Good effect on balance of trade Health Improvement Skills development

Market PotentialLevel of initial capital outlayAffordabilityInvestment sustainabilityLow maintenance – durabilityCommercial availability andReplicability

Selection Criteria

Contribution Towards Mitigating Climate Change

No or low GHG emissions Low potential for “leakage” Enhance sinks and waste recovery

Selection Criteria

Additional Attributes Able to meet other social need(s) and are

socially acceptable Promote international trade in the context of

north-south and south-south cooperation Promote sub-regional cooperation with respect

to optimization in use of resources for development

Selection Criteria

Contents of the Needs Assessment Report

Executive Summary Technology Transfer Implementation Plan – In-

depth Analysis National Environmental Context Technology Priorities Review of Legislative and Institutional

Framework Conclusions and Recommendations

Technology Implementation Plan – In-depth Analysis

Background of Technology - information Barriers to the development and transfer Suggested Actions to Remove Barriers

Ghana Actions Existing programmes and policies Additional actions

Actions expected from International Community

Expected results of technology transfer• Development, Economic and Social Benefits• Market Penetration and sustainability• GHG reduction and other environmental benefits

List of stakeholders• National• International (Informed by TT Clear website, CTI personal

communication and website) Capacity needs Recommendations for the creation of enabling

environment and general conclusions

Technology Implementation Plan – In-depth Analysis

Top Priority Technologies

Energy efficient lighting using compact fluorescent lamps

Industrial energy efficiency improvements – demand side management including power factor improvement and boiler efficiency enhancement

Methane gas capture from landfills Use of bio-fuels (jatropha)

CFL EXAMPLE

Background

Power shortages Drought and low hydro availability Electricity rate reform

~100% retail rate increases in 2002 Lighting end use significant

One third of energy share Coincident with peak

CFL promotion as key part of response

Goals

Transform the Ghanaian lighting market from incandescent lamps to CFL

Reduce the risk of a power crisis Mitigate the impact of electricity price

hikes, on electricity consumers Reduce power demand and need for added

generation

Impacts

Easing of tight electricity supply situation Reduction in consumption of 350 MMkWh/year 170 MW reduction in peak load

Sustainable, self-financing transformation of lighting market in Ghana

Value to Ghana economy $10 million NPV (25% discount rate)

Eventual cash flow + $15 million per year

Timing

Dec-03 Dec-04 Dec-05Bulbs in service 780,000 2,220,000 3,780,000

Installation Schedule

Organization

Initiative of Ghana Energy Foundation Integrated into Ghana’s Technology Transfer

Needs Assessment under the UNFCCC Ghana EPA lead organization VRA, ECG, Energy Commission, broad representation

of other Ghana stakeholders Technical support from NREL on behalf of Climate

Technology Initiative Ministry of Energy formed Committee on CFL

Promotion

Delivery Modes

Installation by task force members Initial emphasis on this mode

Retail sales by task force Sales through employers Sales through retail outlets

Cash Flow Summary(NPV at 25%)

Ghana NPV 10,146,000$ Consumer NPV 11,963,000$ Utility NPV (4,547,000)$

Tariff Revenue $2,730,000

Important utility benefits are omitted, e.g. deferred investments in new generation

Cash Flow ProfileSources of Cash Flow

$0$200$400$600$800

$1,000$1,200$1,400$1,600

Jan-

03

Apr-0

3

Jul-0

3

Oct-0

3

Jan-

04

Apr-0

4

Jul-0

4

Oct-0

4

Jan-

05

Apr-0

5

Jul-0

5

Oct-0

5

Cash

Flo

w (0

00)

Carbon Credits

Reduction ingeneration cost

Cost Profile

Utility Costs

0200400600800

10001200140016001800

Cos

ts (0

00) CFL Retailing

Taxes

FOB bulb costs

Utility rebates to consumers

Financing

CFL installation Self financing $250,00 line of credit sought to cover initial

purchases

Public Awareness and Outreach $500,000 Grant financing sought

Global Assumptions

Unit price $2.64 wholesaleCFL power 14 W Replaced Incandescent 71 W % Savings rebated to consumers 81%Hours per day operated 4.5Marginal cost of electricity $0.05 /kWhValue of carbon credits 3 per ton CO2Bulb nominal lifetime 6000 hours of useStd. Deviation of life 25% of lifetimeRetail margin 8%

Reference Case Parameters

Customer Assumptions

Customer classFraction of all customers

Fraction of savings rebated

I: 0-50kWh/mo 60% 90%II: 51-300kWh/mo 30% 70%III: 301+ kWh/mo 10% 60%Average rebate over all customers 81%

Potential Policies

Residential, 0-50 kWh/moConsumers get 90% of Savings

$.34/mo/bulb

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

Average bill before Average bill after

Residential, 51-300 kWh/moConsumers get 70% of Savings

$.27/mo/bulb

$0.00

$2.00$4.00

$6.00$8.00

$10.00$12.00

$14.00

Average bill before Average bill after

Residential, 301+ kWh/mo$.23/mo - 60% of savings

$0.00

$5.00

$10.00

$15.00

$20.00

Average bill before Average bill after

Bulb Pricing Assumptions

Average bulb

CFL wattage 12.5 18 23 14.1FOB price (from E.F.) $1.90 $2 $2.10 $1.93Taxes $0.70 $0.74 $0.78 $0.71Wholesale price $2.60 $2.74 $2.88 $2.64Fraction of bulbs sold 80% 10% 10%Wattage of replaced bulb 62.5 90 115 70.5

Bulb SurvivalAverage Lifetime 6,000 hours, Use 4.5 hrs/day

0

0.2

0.4

0.6

0.8

1

1.2

- 10 20 30 40 50 60 70 80

Months of Service

Per

cen

t S

urv

ivin

g

Sensitivity to Bulb Lifetime

Breakeven Price (NPV=$11 million)

$0

$1

$2

$3

0 2000 4000 6000 8000 10000

AverageBulb Lifetime

Pri

ce

CHALLENGES

Access to technology information Development of bankable project portfolios Developing implementation models and business

plans – capacity, barrier removal strategies Creation of the enabling environment for

sustained technology development and transfer, including market transformation

Building of business partnerships and identification of technology transfer intermediaries

CHALLENGES

“Distressed” international political will to discuss the issue of technology development and transfer (compared to e.g. CDM) as reflected under UNFCCC

Lack clear direction for engaging the private sector to promote cooperation and effective partnership development

Inadequate and uncertainties in financing options – where (under UNFCCC and other donor sources), when, what and how?

CONCLUSIONS

Technology needs assessment is the critical niche The weakest link of the technology development

and transfer chain is the mechanism for technology transfer - including financing

Technology transfer is not a formula but an innovative process, involving learning by doing

Therefore there is the need for joint research and development through partnerships that will address the fear of loss of IPRs

CONCLUSIONS

Opportunities for financing technology development and transfer arise from barrier identification and removal strategies identified during technology needs and needs assessment

Sustained partnership that is built on mutual trust and benefit sharing is crucial for technology transfer

There is need to work to reduce risk associated with needed technologies to make them marketable

Entrepreneurial skills development is required