Assessing Investment & Financial flows for Mitigation in the ELECTRICITY Sector UNDP I&FF Methodology Guidebook: Mitigation

Relevance of Electricity Sector Electricity generation accounts for 15% of total Turkmen national emissions (2004) 68% of generation capacity older than 20yrs Domestic electricity consumption growing rapidly in line with economic development Significant expansion of capacity for export 2

Define scope & boundaries for the assessment Define the institutional framework Specify the time horizon for the analysis: 2005- 2030 recommended, base year 2005 recommended Build on existing model and projections for the sector where possible For presenter: Step 1. Establish key parameters of the assessment Make arrangements for sharing data with the national and sub-national agencies where the information can be obtained. Generally, it is the national energy service and (its decentralized agencies) having the overall responsibility of data collection and storage. Useful can be national working groups with focus on energy. 3

1. Establish key parameters of assessment Subsector electricity generation REGIONAL CENTRE: PLEASE INSERT BETTER GRAPH WITH HELP FROM TURKMENISTAN & NATIONAL COMMUNICATION For presenter: **CURRENTLY INCLUDES TURKMENISTAN INFO** Regarding the question whether to roll up this sector from the demand or supply side, in the energy sector it might be easier to deal with the supply side, because there are usually only a few suppliers but many consumers and because it might be easier to assess the supply side e.g. for data and models/projections – This also leads to the question whether – on the supply side - to include the full national energy production (which might include international exports) or – on the demand side – regard the national consumption (which might include imported energy).   In assessing investment and financial flows, an assessment should be made to benchmark local production against international best practice, and then to assess the capital investment required both to eliminate fugitive/flared emissions and meet international energy intensity production norms. Fossil fuels can be partly replaced by renewable energy sources to provide heat (from biomass, geothermal or solar) or electricity (from wind, solar, hydro, geothermal and bioenergy generation) or by Combined heat and power (CHP) plants. Ocean energy is immature and assumed unlikely to make a significant contribution to overall power needs by 2030. Overall, net GHG emissions are generally low for renewable energy systems with the possible exception of some biofuels for transport, where fossil fuels are used to grow the crop and process the biofuel. Reductions in CO2 emissions can be gained by improving the efficiency of existing power generation plants by employing more advanced technologies using the same amount of fuel. For example, a 27% reduction in emissions (gCO2/kWh) is possible by replacing a 35% efficient coal-fired steam turbine with a 48% efficient plant using advanced steam, pulverized-coal technology. (again example where baseline needed.) Replacing a natural gas single-cycle turbine with a combined cycle (CCGT) of similar output capacity would help reduce CO2 emissions per unit of output by around 36%. Switching from coal to gas increases the efficiency of the power plant because of higher operating temperatures, and when used together with the more efficient combined-cycle results in even higher efficiencies  Additionally, country teams should review UN National Accounts Systems data for their country- and where data is to be used, be sure to highlight the relevant sections/groups/classes for inclusion in a country’s energy sector   4

1. Establish key parameters of assessment Define boundaries for the assessment Example list of subsectors for screening and prioritization Subsectors Data availability Investment (baseline & prior 10 years) Priority in mitigation scenario High Medium Low Rank Fossil-fired generation Total electricity Hydro energy Wind energy Biofuel energy Tidal energy Nuclear energy Transmission & distribution Other renewables 5

1. Establish key parameters of assessment Define boundaries for the assessment Turkmenistan: Scope of Assessment: Electricity Generation Y Gas fired power plant Low carbon alternatives (nuclear, renewables) Sequestration technologies Electricity transmission ? Electricity distribution ? Demand side efficiency ? Industry, Transport, Residential/Commercial?

1. Establish key parameters of assessment Select preliminary mitigation options for energy related GHG reduction Currently Commercial Technologies fuel switching from coal to gas nuclear power renewable heat and power (hydropower, solar, wind, geothermal and power (hydropower, solar, wind, geothermal and bioenergy). renewable heat switching from coal to gas Improved supply and distribution efficiency Technologies to become commercial by 2030 Carbon capture and storage (CCS) for gas, biomass and coal and coal-fired electricity advanced nuclear power advanced fired electricity advanced renewable energy, including ocean energy, concentrating renewable energy, including ocean energy, concentrating solar, and solar Photovoltaic (PV). When evaluating options, the recommendations from the National Communications and other previous studies should be taken into account! This slide should be tailored to fit national context of climate vulnerability and should reflect known GHG reduction technologies used in-country. The selection and definition of options should be based on the sectoral scope, country priorities, cost of implementation, benefits of options, and prior work on mitigation. 7

1. Establish key parameters of assessment Select analytical approach Development of simple speadsheets Use of existing energy models Sector projectsions/trends To arrive at an estimate of projected demand and supply in the sector

2. Compile historical I&FF data and other input data for scenarios Sources of Data National accounts: System of National Accounts (SNA) Systems of integrated environmental and economic accounts (SEEA) Existing sectoral plans Energy sector/econometric models: Private sector reports Other sources: GHG Inventories, National Communications etc. For presenter: These are the main points to complete step 2. Compile 10 years of historical I&FF data, for the base year and the previous 9, minimum 3 years. Assemble inventory of power plant together with operating cost/performance characteristics Acquire energy use by power plant for a 3-10-year period prior to the base year of the assessment Data for each investment type, and be annual, be disaggregated by investment entity, and, if possible, by funding source, and divided into investment and financial flows. 9

2. Compile historical I&FF data and other input data for scenarios Historical Data (1996-2005) Forecast Data (2005-2030) Electricity production by fuel and technology Electricity consumption by sector and fuel Inventory of large generation and transmission infrastructure, including commissioning and expected retirement/upgrade timescales Capital infrastructure investment data 1996-2005 O&M data for key infrastructure Electricity price and subsidy data GHG emissions data for electricity sector Power generation efficiencies 1996-2005 Transmission and distribution losses 1996-2005 National energy resource assessments Socio-Economic growth forecasts (population/GDP) National energy forecast models Forecasts for electricity production Forecast electricity demand and export National resource assessments by fuel Forecast sector investment data Forecast upgrades for end of life equipment Forecasts for price support and subsidies Emissions projections for sector 2005-2030 Cost forecasts for new and emerging technologies

2. Compile historical I&FF data and other input data for scenarios Data collection, rely on national accounts data Compile annual IF&FF data at the appropriate level of disagregation (according to the national circumstances): By investment type i.e.: Switch to renewable energy sources Improved efficiency of electricity production (e.g. gas turbine efficiency) By investment entity Government Public corporations Private corporations (domestic) Private corporation (foreign) ODA

2. Compile historical I&FF data and other input data for scenarios Data collection, rely on national accounts data Examples of I&FF data disaggregation in each sub-sector For presenter: Also, as possible, data should be disaggregated by year (i.e., starting 10 years before the assessment’s Baseline Year), source (i.e., by corporations and government), and type (i.e., national funds, foreign direct investment, official development assistance). The project team should be prepared to make judicious assumptions along the way in the absence of hard information. annual estimates of I&FF for the mitigation (or adaptation) scenario are derived. costs should be in real terms (ideally in constant 2005 US$) OR The total annual investment is simply the product of the projected unit cost (in real, unannualized terms) and the installed infrastructure. I&FF estimates should be disaggregated by investment entity, source, investment flow type, and financial flow type output of this step: stream of annual investment flows and financial flows for the entire assessment period Note that the sectoral investments should encompass all investments in the sector, not just those for implementing the adaptation) options. The investments are likely to include some of the investments that are in the baseline scenario, altered versions of some of the baseline investments, and entirely new investments. 12

Define the physical basis for the Baseline Scenario A baseline scenario: description of what is likely to occur in the absence of ADDITIONAL policies to address climate change; expected socioeconomic trends (e.g., population growth and migration, economic growth), technological change (if relevant), and expected business-as-usual investments in the sector. For presenter: Step 3. Define Baseline Scenario If a model is being used in the analysis, it can be used to develop and define the baseline scenario. Otherwise a sectoral plan, a projection of trends, or the current situation (assuming no change), or some combination, can be used as the basis of the projection. The physical basis means the actual plans or forecast for the physical assets, equipment, facilities, etc that would be represented by a particular scenario such as thermal power plants to be installed over the 30 year time frame; refining capacity required to meet demands of petrochemical feedstock, diesel, gasoline, etc.   Creating the Baseline Scenario requires an unambiguous flow of investments over the entire duration of the planning period. E.g., if the current sectoral development plans call for the addition of new coal steam and natural gas combustion turbine capacity over the planning period to meet projected electricity demand, the total annual investment is the product of the projected unit cost and the installed capacity In the event that country teams choose to develop Baseline Scenario, this scenario is linked to current national plans that have been developed in the absence of any climate change mitigation considerations. 13

3. Define baseline scenario Characterizing each relevant electricity supply and electricity end-use subsector over the assessment period Assuming no new climate change policies are implemented Baseline scenario reflects Current sectoral and national plans Expected socioeconomic trends Expected investments in the subsectors

3. Define baseline scenario Define physical basis for the Baseline Scenario Information should be disaggregated by: Year (starting 10 years before the assessment’s Base Year) Source (by corporations and government) Type (national funds, foreign direct investment, official development assistance) For presenter: At a minimum, countries should collect at least one year of historical I&FF data (which would be the base year). Ideally, countries would collect 10 years of historical data, i.e., for the base year and the previous nine years. There may be sectors in which measures that reduce GHG emissions are already being taken, but are being implemented for reasons other than to address climate change. 15

4. Derive I&FF for baseline scenario Compile annual estimates, disaggregated by investment entity, source, investment flow type, and financial flow type Calculate the total investment cost in real, unannualized terms over the planning period. Estimate annual investment costs associated with the new plan Develop a breakdown of total investments into major categories (e.g., ODA, FDI, domestic funds) For presenter: Step 4. Derive I&FF for Baseline Scenario Output of this step: Fully characterized Baseline Scenario that reflects government and private plans for future investments in the electricity sector. real, unannualized  in conflict with call for annualized in prior slide? etc. need to reconcile this before sharing with Centres of Excellence ??

4. Derive I&FF for baseline scenario Estimate annual I&FF Adding costs to baseline scenario Cumulative investment (2005-2030) Funding entity category Source of funds (billion 2005 $) (%) Governments Domestic funds (budgetary)   Foreign borrowing (loans) Foreign aid (ODA) Corporations Domestic equity Foreign investment Domestic debt Foreign borrowing Government support Total 17

5. Define Mitigation scenario Mitigation scenario: incorporates measures to reduce GHG emissions The mitigation scenario should describe expected socioeconomic trends, technological change (if relevant), measures to mitigate GHG emissions, and the expected investments in the sector given implementation of the mitigation measures. Costing tools and international information sources may help to identify I&FF needs for different mitigation options For presenter: The need to prioritize mitigations options and to use sectoral models and international costing tools and data should be stressed in this slide If a model is being used in the analysis, it can be used to develop and define the adaptation scenario. Otherwise a sectoral plan, a projection of trends, or the current situation (assuming no change), or some combination, can be used as the basis of the projection. Prior work on climate change, if it exists, should also be used in this step. In the first stage of this step, the preliminary set of the mitigation options that were identified in step #1 should be re-evaluated, given the analytical approach chosen in step #1 and the data compiled in step #2, and revised if needed. For example, the physical basis for a Mitigation Scenario could be the introduction of 100 megawatts (MW) of solar panels in a certain year. This new physical asset serves as the basis for the associated investment costs. On the demand side it could be infrastructure for travel e.g. highways, railroad, etc. 

5. Define mitigation scenario Energy Sector Mitigation Measures 5. Define mitigation scenario Category of Mitigation Measure Energy Supply Measures Energy End-Use Measures Reduce Combustion Emissions Reduce Fugitive Emissions Reduce Energy Demand Improve efficiency of energy use Efficiency improvements in energy supply processes Efficiency improvements in energy end-use technologies Energy conservation measures Reduce emissions per unit of energy production or use Switch to lower carbon fuels Switch to alternative energy sources Reduce fugitive losses (including recovery and use) For presenter: Audience to consider: Was priority given to sub-sectors of higher economic potential and environmental sustainability? Are there mitigation options assessed in national communications or other reports? Were specific models used for mitigation/ options selection? For which time frame? What problems with data collection on adaptation assessments were encountered? What are the available sources of information on domestic sources of I&F for the sector? On international I&F? 19

5. Define mitigation scenario Two approaches to define Mitigation Scenario 5. Define mitigation scenario Approach #1: assume an end point for electricity supply emissions E.g. setting a target in 2030 for accumulated emissions from the electricity sector, favouring alternative sources Approach #2: assume a set of technologies for electricity supply: E.g. Review national potential for energy policy that articulate a set of technological options, such as renewable energy, and other carbon-reducing options to meet future energy demand. For presenter: Approach #1: assume an end point for energy supply emissions: This will involve setting some sort of setting a target in 2030 for emissions from the energy supply sector. For example, assume a target for emissions in 2030 is set to be 20% less than what they were in the Baseline Scenario for that year. It is then a matter of introducing new types of capacity consistent with the lower emissions profile and with the level of energy services needed in the Baseline Scenario. Approach #2: assume a set of technologies for energy supply: Exploring this will involve an exploration of the national potential for energy policy, such as renewable energy, and other carbon-reducing options to meet future energy demand. For example, assume that all potential opportunities for these resources are identified and exploited over the planning period (a very aggressive example for illustrative purposes). It is then a matter of constructing defining the types/amounts of new annual capacity consistent with the level of energy services needed. Regardless of which of the above approaches is adopted, the output remains the same - an unambiguous flow of investments over the entire duration of the planning period. Obtaining this output will require the balancing of energy demand with energy supply that accounts for the particular operational constraints that may be associated with the alternative set of technologies. In other words, there will need to be members of the project that are able to conduct an assessment of an alternative investment plans that fully accounts for reliability, resource, and other concerns. As with the Baseline Scenario, the total annual investment is the product of the projected unit costs and the installed capacity by type. 20

Compile annual estimates, disaggregated by investment entity, source, investment flow type, and financial flow type Estimate annual investment costs associated with the alternative management plan Calculate the total investment cost in real, unannualized terms over the planning period. Develop a breakdown of total investments into major categories (e.g., ODA, FDI, domestic funds) For presenter: Step 6. Derive I&FF for Mitigation Scenario The source of these data, or method of derivation, will depend on the analytical approach, the sectoral scope, and the types of investment entities that are relevant. The I&FF estimates may be the output from a sectoral model, from a planning document or several documents, and/or might involve expert judgement. If a model is not used, information may be available from the investment entities, government ministries or statistical agencies, and/or research institutions As with the Baseline Scenario, the total annual investment is the product of the projected unit costs and the installed capacity by type. Output of this step: Fully characterized Mitigation Scenario that reflects a plausible plan for future investments in the electricity sector. 21

Cumulative investment 6. Derive I&FF for mitigation scenario Projecting investments Adding costs to mitigation scenario Cumulative investment (2005-2030) Funding entity category Source of funds (billion 2005 $) (%) Governments Domestic funds (budgetary)   Foreign borrowing (loans) Foreign aid (ODA) Corporations Domestic equity Foreign investment Domestic debt Foreign borrowing Government support Total

Subtraction of the Baseline Scenario from the Mitigation Scenario. Subtract the baseline annual I&FF, by entity and source, from the mitigation annual I&FF, by entity and source. Subtraction of the Baseline Scenario from the Mitigation Scenario. Sum incremental amounts over all years, by entity and source. For presenter: Step 7. Estimate changes in annual I&FF needed to implement mitigation First, the annual I&FF, by entity and source, in the baseline scenario are subtracted from the annual I&FF, by entity and source, in the mitigation scenario. Then, the incremental amounts of I&FF, by entity and source, are summed over all years. The key activity in this step requires subtracting projected I&FF of the Baseline Scenario from the Mitigation Scenario. The comparison is likely to show decreased needs for some measures that are part of the Baseline Scenario and increased needs for measures that are part of the Mitigation Scenario. Under the Mitigation Scenario, investment may be lower for some entities, shifted for other entities, or higher for other entities. Depending upon the timing of the projected investments for the Baseline and Mitigation Scenario, there could be a net decrease. The difference between the baseline and adaptation estimates displays in which aspects of the sector and from which sources are more or less I&FF needed to reach the adaptation scenario some years and a net increase in others. The difference in the costs between the two scenarios represents the incremental investment needed to build national resilience against climate change within the framework of national development priorities . The project team will then need to make an estimate of the type of options for meeting this demand that can be reasonably assumed to meet future requirements, given the current policy and regulatory framework in the country. At the minimum, the analysis should identify the incremental investment (i.e., total dollars) by source (i.e., domestic funds, ODA, FDI, etc) up through 2030 to support adaptation or mitigation activities. Additional outputs, such as new enabling environments required, operational constraints that need to be overcome, protocols for communicating results to national/international institutions, etc are highly encouraged but remain at the discretion of national teams    23

7. Estimate changes in annual I&FF needed to implement mitigation Subtract the baseline annual I&FF from the mitigation annual I&FF For each chosen electricity mitigation option, the analysis should identify the incremental investment (total dollars) by source (domestic funds, ODA, FDI etc.) up through 2030 to support the respective electricity management option. [ 24

7. Estimate changes in annual I&FF needed to implement mitigation Summarizing incremental investments Investment (billion 2005 $) Cumulative (2005-2030) Incremental Funding entity category Source of funds Baseline scenario Mitigation scenario Governments Domestic funds (budgetary) Baseline value Mitigation value Baseline minus Mitigation value Foreign borrowing (loans) … Foreign aid (ODA) Corporations Domestic equity Foreign investment Domestic debt Foreign borrowing Government support Total Sum (Baseline) Sum (Mitigation) Sum (Baseline minus Mitigation) For presenter: RI1 = Cumulative investment costs in the Baseline Scenario for funding entity category #1; MI1 = Cumulative investment costs in the Mitigation Scenario for funding entity category #1; MI1- RI1 = Incremental cumulative investment costs associated with the Mitigation Scenario for funding entity category #1; [

8. Evaluate policy implications Determine policy instruments and measures to encourage changes in I&FF Identify the entities that are responsible for the significant incremental changes in I&FF Determine the predominant sources of their funds, particularly important to distinguish between public and private sources of finance For presenter: Policies may include regulations or incentives to influence investment decisions by government departments, corporate sector, civil society and private sector entities. Many energy efficiency measures, for example, yield an attractive return on investment - the incremental cost of a more efficient appliance, building or vehicle, is recovered in a few years from the energy bill savings - but are not implemented due to various market failures. Energy efficiency standards for buildings and equipment can be effective policies to overcome the market failures and to provide economic benefits for the owners.   Many countries provide subsidies for production or consumption of fossil fuels and electricity. These subsidies are almost always a costly and inefficient way to assist the intended beneficiaries (UNEP, 2008). Policies that support the real incomes of targeted social groups in more direct and effective ways may allow the subsidies to be reduced. That would benefit the national economy, make mitigation measures more attractive and reduce greenhouse gas emissions directly. Mitigation measures may qualify for funding from bilateral or multilateral aid or from funds established under the United Nations Framework Convention on Climate Change or the Kyoto Protocol. The Global Environment Facility provides funding for mitigation measures and has recently and the Special Climate Change Fund (SCCF) helps technology transfer projects, which could include mitigation measures. Many mitigation measures, such as renewable energy supplies and energy efficiency measures could be implemented as Clean Development Mechanism projects to improve their economic viability. Several new bilateral and multilateral funding mechanisms, such as the EU-World Bank EU Global Climate Financing Mechanism, Germany’s International Climate Protection Initiative, Japan’s Cool Earth Initiative, and the World Bank’s Climate Investment Funds - have been announced recently. The Bali Action Plan indicates that enhanced provision of financial resources and investment to support mitigation, adaptation and technology cooperation should be part of a post-2012 agreement. Some of these new funding mechanisms will have broad mandates, such as funding mitigation (or adaptation), while others will have a narrow focus, such as providing financial support for REDD or CCS.

8. Evaluate policy implications Assess policy options and summarize the projected I&FF for the key sector Policy options Policy objectives Economic instruments Regulatory instruments Policy processes Voluntary agreements Information & strategic planning Technological RD&D & deployment Energy efficiency Higher energy taxes Lower energy subsidies Power plant GHG taxes Fiscal incentives Tradable emissions permits Power plant minimum efficient standards Best available technologies prescriptions Voluntary commitments to improve power plant efficiency Information and education campaigns Cleaner power generation from fossil fuels Energy source switching GHG taxes Power plant fuel portfolio standards Voluntary commitments to fuel portfolio changes Increased power generation from renewable, nuclear and hydrogen Renewable energy Capital grants Feed-in tariffs Quota obligation and permit trading Targets Supportive transmission tariffs and transmission access Voluntary agreements to install renewable energy capacity Green electricity validation Increased power generation from renewable energy sources For presenter: Potential policy options should be outlined as indicated in the table that might be used in the context of delivering the mitigation scenario. Policies may also be related to encouraging innovative research and development for energy security, such as blending of gasoline with bio-alcohol, coal to oil, use of bio-alcohol as in India. However, from the mitigation point of view, coal to oil will increase CO2 emissions. The other policy option that the developing countries could think of is to make renewable energy portfolio standards that make it mandatory to purchase a certain percentage (e.g. 10%) of power sold by utilities that should be from Renewable Energy Technologies (RETs).  Co Benefits: In addition, potential co-benefits should also be identified. Mitigation policies relating to energy efficiency of plants, fuel switching, renewable energy uptake and nuclear power, may have several objectives that imply a diverse range of co-benefits. These include the mitigation of air-pollution impacts, energy-supply security (by increased energy diversity), technological innovation, reduced fuel cost, employment and reducing urban migration. Reducing GHG emissions in the energy sector yields a global impact, but the co-benefits are typically experienced on a local or regional level. The variety of co-benefits stemming from GHG mitigation policies and the utilization of new energy technologies can be an integral part of economic policies that strive to facilitate sustainable development. These include improved health and sanitation, employment and industrial development. 27

9. Synthesize results and complete report Summarize objectives of study, methodology, inputs, and results (aggregate I&FF estimates) in report on this sector Complete reporting templates Include assortment of technical annexes that fully describe the methodology, assumptions, sources, and modeling frameworks used For presenter: Step 9. Synthesize results and complete report The outputs of the I&FF Assessment will inform policymakers’ understanding of the magnitude and intensity of current efforts to tackle climate change in key sectors and economic activities, and perhaps make the case for securing funding for (and planned efforts). Additionally, a clear financial picture of how a country is addressing climate change is critical to the integration of climate issues into national development and economic planning because it will suggest an estimation of the additional costs to mitigate or adapt by 2030 given known climate impacts and development needs. Energy sector policies are likely to be needed to induce the relevant entities identified in the assessment to implement the proposed measures and incur the related I&FF. It will be important to convene a discussion among relevant stakeholder regarding the set of regulations or incentives necessary to influence investment decisions. 28

9. Synthesize results and complete report Integration of I&FF results, and evaluation of policy instruments and measures Integrate I&FF results, and evaluation of policy instruments and measures, across sectors, and across mitigation and adaptation. Make the report accessible to policymakers: brief 10- 15 page report in plain, non-technical language 29

? ? ? ? ? ? Q&A CLARIFICATIONS ? ? ? For presenter: Ask plenary for questions and clarifications. ? ? 30

Additional Information Possible models and methods Name Developer Platform Metho-dology Cost (US$)/ Licensing Web Site/ Contact Description CO2DB IIASA, Windows Database Free WWW.IIASA.AC.ATdowds@iiasa.ac.at Database of CO2 emitting energy technologies ENERGY COSTING TOOL UNDP Excel Accounting WWW.UNDP.ORGMINORU.TAKADA@UNDP.ORG Estimates the amounts and types of energy investments required to meet the Millennium Development Goals ENPEP Argonne National Various Depends on modules used and type of institution. WWW.DIS.ANL.GOV GUENTER@ANL.GOV Suite of Models for Integrated Energy/Environment Analysis HOMER National Renewable Energy Optimization www.nrel.gov/homer Design of off- and on-grid electrification options LEAP Stockholm Environment Institute Physical Accounting, Simulation Free to qualified users from developing countries. WWW.ENERGYCOMMUNITY.ORGLEAP@SEI-US.OR Integrated Energy/Environment Analysis … For presenter: A suitable model helps in defining the scenario(s) needed for the analysis and for calculating the I&FF. Please note however, that a model is not mandatory for the assessment. Chapter 16, Part III includes an annotated list of tools and methods including a list of applicable energy sector models. We have chosen LEAP as an example, which includes forecasting changes in the sector over the selected time horizon (through 2030) and incorporating the proposed mitigation measures. The MARKAL model, used by the IEA, has been widely deployed in developing countries and may be available to the project teams.  LEAP is widely used throughout the international energy community, and is part of COMMEND (COMMunity for ENergy environment & Development), an international initiative designed to foster a community among energy analysts working on energy for sustainable development. Since COMMEND has been designed in part to provide technical support, training, and the exchange of knowledge needed by this new worldwide community of energy analysts it is an invaluable resource to those assessing I&FF in the energy sector.    If a suitable model is not available, a sectoral plan, a projection of trends, or the current situation (assuming no change) can be used as the basis for the analysis. Energy ministries, regulatory agencies or electric utilities often have a model for planning the expansion of the electricity supply system. Though, such a model may not explicitly include the effect of efficiency measures implemented by customers on the projected load. If such efficiency measures are included in the scope of the sector but are not part of an existing model, a suitable means of integrating the impacts of those measures with the electric utility model would need to be developed. One has to distinguish between an utility model i.e for electricity supply and a demand side model for the consuming sectors ex. Estimation of electricity demand in the commercial sector, residential sector, industrial sector etc) We also need to arrive at demand for heating fuel wise, these are important exercises and very crucial for the success of the entire study. For example, the utility model could be modified to include the projected load of each customer class adjusted for efficiency measures implemented by those customers, or the utility’s base load forecast could be modified to incorporate the effects of the efficiency measures in a separate spreadsheet and the modified load forecast could then be used to drive the utility model. 31