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“Smart grids from invention to implementation” Preliminary Findings
WEC Knowledge Network on Innovative Financing Mechanisms
EU North America Japan South Korea China India Brazil
Innovative Financing Mechanisms
WEC Knowledge Network
* Brazil has recently joined
Policy Recommendations
To formulate Policy Recommendations towards Innovative SG Financing Mechanisms
Summer 2012
End of June 2012
Preliminary Analysis
Final report
Late 2012
Regional Context
Main SG drivers
Main challenges
Currently available Financing Mechanisms
Spring 2011
SG Main Drivers and Challenges WEC - Preliminary Findings
• OECD Countries Low Carbon and Energy Efficiency
• OECD Asian Countries Green Economy Growth Agenda
• Emerging Countries Fast Growth Infrastructure
Main Drivers
• Most Countries Business case and Financing
• EU and North America Regulation
• EU and North America Public awareness/acceptance
Main Challenges
Drivers strongly depend on the regional context
No significant challenges reported by South Korea
Just a few from China (where state-owned network companies enable rapid construction)
High technical and non technical losses reported in India (mainly from thefts) and Brazil
Available Financing Mechanisms WEC - Preliminary Findings
• New Tailored Mechanisms: •AEEG (IT) ‘Del39/10’
•OFGEM (UK) ‘RIIO, LCNF’, IFI, RPZ’,
•‘R-APDRP’ (India)
• North America: Partnership GE/venture capital firms
• South Korea: Government + private funds (0.5 +18.1 billion USD)
•USTDA $686,447 grant for SG implementation
•DRUM Training Program: $30 million by the USAID and the Indian Ministry of Power for SG development
• European Union: EU funding programs for RD&D projects (FP7, IEE, NER300, Connecting EU facilities)
• USA: over $4 billion from DOE
Public Funding
External Grants
Regulatory Incentives
Private Funding
Some Best Practice examples
BACK UP
EU North America Japan South Korea China India
Main Drivers
Low Carbon
Agenda
Grid upgrading and
energy efficiency
Re-examination
of nuclear
energy policy
Green Economy
Growth Agenda
Fast Growth
Infrastructure
Fast Growth
Infrastructure
Integration of RES
Infrastructure
upgrade
Infrastructure
upgrade
Surge in wind
capacity
Energy
efficiency
Enhancing
energy
security
Environment
al protection
Boosting
manufacturin
g and IT
industry
Consumption
growth
Long-term
economic
growth
Energy
consumption
growth
Rising
demand
High levels
of losses
Main Challenges
Large Scale Demos
Coordination needs Unsuitable Funding
(inappropriate
regulatory frameworks)
Deployment
Technology
Standards
Unclear Regulation
Negative Business
Cases
Public awareness
Unclear
Regulation
Insufficient funding
Abundance of
natural gas (over
RES)
Consumer
pushback to smart
meter rollout
Insufficient
funding
(need of
appropriate tariff
mechanisms
reported)
No significant
reported
challenges up to
date
Few reported
barriers
State-owned
network
companies
enable rapid
construction
Inaccurate
billing
High
electricity
thefts Insufficient
finances
SG Innovative Financing Mechanisms (1/2) WEC - Preliminary Findings
SG Innovative Financing Mechanisms (2/2) WEC - Preliminary Findings
Formulating Policy Recommendations Late 2012
Preliminary Analysis
Final report
Summer
* to be presented at an Int. Conference still to be chosen
EU North America Japan South Korea China India
Main available financing mechanisms
EU funding (FP7, IEE)
Regulatory Incentives
New Tailored
funding mechanisms
(Italy ‘Del39/10’,
Ofgem’ RIIO, LCNF’,
IFI, RPZ’)
Changing
Framework (Finland,
Portugal)
Traditional
Regulatory
Frameworks
(Austria, Germany)
Private
Funding/Venture
Capital
Best practice
example:
partnership among
GE and venture
capital firms
Public Financing
With funding from
the Recovery Act,
the DOE invested
over 4 billion USD
Public
National
Funds
METI
National
Funds (157
M USD+
111 M USD
in 2012 for
large scale
demos)
No
regulatory
incentives
Private/Public
funds
18.6 billion USD
by 2030
(0.5 billion USD
from
government +
18.1 billion USD
from private
funds)
Govt.
Funds
Funds from
State Grid
Corporation
of China
(SGCC)
Regulatory
incentives
Policies for
onto-grid
electricity
prices of
renewable
energy
Public National Funds
USD 134 million from government
on 8 pilot s
External grants
•USAID and the Indian Ministry of
Power : $30 million also with
training
•USTDA : $686,447 grant for SG
implementation
Regulatory Incentives
Re-structured Accelerated Power
Development and Reforms
Programme (R-APDRP) is a Govt.
of India financial incentive scheme
(~ USD 9 billion) for strengthening
and up gradation of sub-
transmission and distribution
network through adoption of IT and
implementation of SG technologies