LCEDN WORKSHOP 24/25 J UNE 2013 “H OW TO CREATE EFFECTIVE MARKETS FOR LOW CARBON ENERGY SOLUTIONS THAT ENSURE EQUITABLE AND WIDESPREAD ACCESS TO ENERGY SERVICES IN THE G LOBAL S OUTH ?” Teodoro Sanchez 25 June 2013 Session 4th: Policy, Science and Implementation Examples from Latin America

Energy services markets in Latin America A) RURAL MARKET Poor consumers market Low consumption Disperse dwellings 50 million (out of 600m) without energy access Few opportunities to use energy for productive uses B) URBAN & PERI-URBAN MARKETS Low consumption Low capacity to pay Best option for electricity access – Grid

Examples of approaches used in Latin America to promote universal energy access CHILE Increased rural electrification from 53% in 1992 to 96.5% by Two main actions have been promoted by the government. From 1992 to 2000 the Rural Electrification Programme.- It promoted social equity and improved the living conditions of the poor, focused on creating markets incentives that lead to efficient private solutions to rural electrification. From 2001 onwards the Barrier Removal for Rural electrification programme, promoting Renewable Energies.

Case study: Public private partnership in Peru Revolving fund for the installation of small hydro power plants in Peru Implementer: Practical Action

Investment costs (US$/kW installed) (revolving fund for the installation of SHPP) Source: L Rodriguez T,. Sanchez, Practical Action, hydro book, 2011)

Problems faced on the implementation of the Revolving Fund Cumbersome legal frame work: at least 4 important regulations to attend; rights of water, environment protection, electricity concessions law, decentralization law Lack of available credits and scarce opportunities for co-funding Lack of equity, in isolated areas most families do not have legal registry of properties Lack of local capacity to manage, operate and maintain energy schemes Lack of a market of post installation services

Measures to overcame problems 1) Design and promote an appropriate operation and management model 2) Build the local capacity to manage, operate and maintain the schemes 3) Build national capacity to design, and install small hydro schemes, and promote the creation of post installation services (LOCAL MANUFACTURERS AND CONSLTING FIRMS)

What academy can do? Research into the full mix of appropriate energy technologies (hydropower, wind, solar, biomass) Research into new approaches to scale up small scale renewables in rural and isolated areas Policies and strategies required for rural electrification in isolated areas (issues of over legislation) Approaches towards effective capacity building at national and local level including technology transfer Fill-Gap!.- Research into Designing, funding, implementation and operation of mid-size energy schemes (units to hundreds of kWs) Financing sources, example the use of Carbon Credits Subsidies and issues of energy justice

Thank you for your attention