Public Policy in Asia PhD Conference | 26-27 May 2014 Lee Kuan Yew School of Public Policy | National University of Singapore Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia Jens Marquardt | May 26th 2014 Field of research dominated by economists and engineers: Promotion of RE Especially in the field of development aid: Conducting economic feasibility studies + promoting technical pilot projects  showing feasibility since 20 years Interstingly, no major breakthrough despite availability of resources, technical solutions and economic feasibility Highlight the importance of public policy and governance in this field of research In this paper: Apply a multi-level governance approach to RE support in Southeast Asia  Philippines and Indonesia

On the Agenda 1 2 3 Background Findings Conclusions Introduction & theoretical framework Findings Focus on the Indonesian case Conclusions Discussion & recommen-dations 1 2 3 Agenda for remaining 8 minutes: Background: Short Introduction into the overall topic + theoretical framework Findings: Experiences from the Philippines and Indonesia Conclusions and recommendations for public policy  RE support as a challenge of multi-level governance 26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

What is the topic all about? 1 Energy Policy Research in Southeast Asia Background What is the topic all about? Southeast Asia as a fascinating region for energy policy research Booming region: tripple demand by 2030 Energy side Developing region: build up future energy system Previliged region: renewable energy potentials Diverse region: Various political systems Politicalside Developing region: social / political pressure Changing region: democratization, stabilization Case Studies Philippines + Indonesia Research Question How can a regime shift towards renewable energy be governed within a decentralized multi-level political system? Introduction SEA as a highly intersting region  rapid changes concerning energy + high RE potentials, BUT: energy system based on fossil fuels Research question: How does a multi-level governance system in Southeast Asia influences RE support / policies / projects etc.? 26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

Theoretical framework 1 Background Theoretical framework Multi-level Governance [Jan Rotmans, René Kemp, Frank Geels] Coordination between different levels of decision-making Regime shift also depends on distribution of power Transition Management [Derk Loorbach, Geert Verbong, Jeroen v. d. Bergh] Multi-phase perspective Multi-level perspective  Niche + Regime + Landscape level landscape landscape political system economic system social system electricity regime   awareness market science culture policy industry technologies Theory: Multi-level governance Complexity of regime shifts: depends on coordination and the distribution of power (actor constallations, networks etc.) First step: understand the energy system from a multi-level governance perspective Analytical framework needs to cover the multi-level perspective = transition management: Niches = „the locus of radical innovation“ (Geels)  for innovations not in line with the existing regime Regime = socio-technical regimes, crucial level for change Landscape = overarching framework conditions, context, visions, norms Very eurocentric model, but important to acknowledge different levels of political decision-making niches         26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

Methodology of the paper 1 Background Expert interviews with stakeholders of the RE sector in Indonesia and the Philippines Analyze RE support in the energy system from a multi- level perspective Discuss RE support from a transition management perspective Methodology of the paper Philippines Indonesia Government Development aid Public energy sector Civil society RE business Science 50 50 Three steps approach: 1. expert interviews, semi-structured, qualitative analysis (pros and cons) 2. based on interviews & literature: analyze RE support within the energy system from a multi-level perspective 3. use transition management as an analytical framework + discuss the usability of this approach 26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

1) Multi-level governance does play a role. „local authorities“ „bupatis and walikotas“ „decentralization“ „complex corruption“ Background Results from Expert Interviews (focus on Indonesia) Political issues related to multi-level governance are perceived as a major barrier for RE support Actors on different levels of decision- making are perceived as barriers, but only the national level is considered to be a driving force for RE support. There is a clear perception of a need for a top-down approach, rather than a bottom-up process to support RE 2 Findings 1) Multi-level governance does play a role. What are the key barriers for RE in IDN? Which actor is the main driving force for RE? Which actor is the main barrier for RE? Findings following the three steps approach  focusing on Indonesia (excluding the Philippines) Indonesia: biggest and most populous country in SEA, rich in natural resources, especially coal (world‘s biggest exporter) At the same time: less than 80% electrification of households, energy demand increase 7-8% per year Political barriers perceived as the biggest challenge for RE support  not representative, but gives a snapshot of the sector These political barriers related to decentralization and multi-level governance Main driving force = national government (EBTKE) / Main barrier = local government  top down rather than bottom up Negative perception of decentralization when it comes to RE support (only some interview partners positive) 26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

2) A multi-level perspective reveals obstacles. Background The Energy System from a Multi-level Perspective (focus on Indonesia) From a national perspective: very clear electricity system From a multi-level perspective: Complexity and conflicts Decentralization increased the number of veto players for RE support Findings 2) A multi-level perspective reveals obstacles. 2 Electricity Supply generation Transmission & system operation distribution Market Structure Policy Making PLN IPPs Self- generation Sell to PLN (IPP) Central govern- ment Provinsi Kabu- paten / Kota Provide framework policy coordination Approve / reject projects ESDM Policies Min. of Finance  Subsidies Min. of State Owned Companies  PLN Shareholder BAPPENAS  Develop. planning Dinas for Energy Public Works BAPPEDA Local Identified crucial actors for RE suppport  what is their role in the country‘s energy system?  look at it from a multi-level perspective (to highlight power, coordination etc.) From a narrow perspective: simplistic energy system with state-owned PLN as the dominating actor (85% generation, transmission, distribution) From a multi-level perspective: Complexity and conflicts  horizontally & vertically fragmentation of responsibilities EBTKE as driving force? Only one directorate at ESDM, only one national ministry  many other veto players + coordination needed Example 1: promote RE at PLN  coordination with Min. of State Owned Companies + Min. of Finance (subsidies) Example 2: geothermal project implementation  Min. of Forestry, provinces + Kabupatens Example 3: FiT  coordination with MoF 26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

3) Transition management can be a useful tool. Background RE Support in the Light of Transition Management (focus on Indonesia) Multi-phase perspective: IDN still in its „experimentation phase“ Niche level experimentation: theoretically positive conditions Socio-technical regime: stable fossil-fuel based regime structure Landscape framework: support for coal (energy security, costs…) Coordination: Lack of scaling-up and diffusion Findings 3) Transition management can be a useful tool. 2 TM sees itself as a model to cover these issues of fragmentation, coordination and multi-level interaction  can it be applied to IDN? Multi-phase perspective  IDN still in its „experimentation phase“ despite decades of experiences with large scale RE Niche level experimentation  theoretically good conditions due to decentralization Socio-technical regime  stable fossil-fuel based regime structure Landscape framework  support for coal (energy security, increasing demand, costs) Coordination  Lack of scaling-up and diffusion 26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

? Discussion 3 Background Discussion Findings Conclusions Multi-level governance issues are “bottlenecks” for RE support. Weak capacity and lack of awareness for national energy planning on the local level Lack of understanding for local circumstances among national policy-makers Lack of consultation during the process of policy formulation Transition management can be a useful approach, but needs to be further developed based on insights from outside the OECD. Include non-linear behavior Emphasize the role of local capacity Include negative effects arising from decentralized structures as well as challenges arising from rapidly growing energy systems Findings Discussion 3 Conclusions Findings are by far not new, but multi-level governance approach helps to understand these effects and put them into a holistic context ? 26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

Final remarks and policy recommen-dations Background Research Question How can a regime shift towards RE be governed within a decentralized multi-level political system? Public policy recommendations Involve stakeholders on all levels during policy formulation Focus more on the process of policy implementation Improve consultation & awareness raising among potential veto players Focus on mechanisms of scaling-up, rather than on further pilot projects Highlight positive effects from decentralization and promote a bottom- up process for RE support Findings Final remarks and policy recommen-dations 3 Conclusions Major aim: emphasize the importance of political science research in the energy field  specifically the issue of multi-level governance when it comes to RE support Research question: How can a regime shift towards RE be governed within a decentralized multi-level political system? ! 26.5.2014 Governance for Renewable Energy in Multi-level Systems? Lessons from Southeast Asia

Thank you for your Attention Questions & Comments? Jens Marquardt | Freie Universität Berlin jens.marquardt@fu-berlin.de | www.fu-berlin.de/ffu