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Encouraging Renewable Energy Development ENCOURAGING RENEWABLE ENERGY DEVELOPMENT: A Handbook for International Energy Regulators 2014 Update This publication is made possible by the generous support of the American People through the United States Agency for International Development (USAID). The contents are the responsibility of NARUC and do not necessarily reflect the views of USAID or the United States Government. Case Studies on Peru, The Gambia, and Tanzania were contributed by Jorry Mwenechanya in 2013 and 2014. Originally prepared in 2011 by Isabel Bjork Catherine Connors Thomas Welch Deborah Shaw William Hewitt The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. www.naruc.org/international (cover photo credit: Julie Taylor, NARUC 2009) ACKNOWLEDGEMENTS The United States Agency for International Development (USAID), the National Association of Regulatory Utility Commissioners (NARUC) and their consultant, Pierce Atwood LLP, would like to thank all the regulators that contributed their time and expertise to this Handbook. In particular, we would like to thank the regulators and experts who helped us build and research case studies. Without the contribution and support of the following organizations these case studies would not have been possible: Armenian Public Services Regulatory Commission (PSRC), Comisión Nacional de Energía Eléctrica de Guatemala (CNEE), Egyptian Electric Utility & Consumer Protection Regulatory Agency (EgyptEra), Electricity Control Board of Namibia (ECB), Electricity Regulatory Commission of Jordan (ERC), Energy Regulatory Commission of the Philippines (ERC), Philippines Energy Regulatory Commission (ERC), Renewable Energy & Energy Efficiency Institute (REEEI) Polytechnic of Namibia and Superintendencia General de Electricidad y Telecomunicaciones de el Salvador (SIGET). We would like to extend a special note of gratitude to the regional regulatory associations that provided outreach to national regulators in support of this Handbook: Asociación Coordinadora de Entidades Reguladoras de Energía Eléctrica de América Central (ACERCA), Regional Electricity Regulators Association of Southern Africa (RERA), African Forum for Utility Regulators (AFUR), Organization of Caribbean Utility Regulators (OOCUR), and Asociación Iberoamericana de Entidades Reguladoras de la Energía (ARIAE). NARUC member State Commissioners and Commission Staff also provided strong leadership to ensure the successful publication of this Handbook. In particular we thank Commissioner Jim Gardner, Mr. John Rogness and Ms. Gretchen Gillig of the Kentucky Public Service Commission, and Mr. Nathan Phelps of the Massachusetts Department of Public Utilities for their guidance on this publication. NARUC would like to express its strongest appreciation to the Bureau for Economic Growth, Agriculture, and Trade at USAID, especially to Ms. Simone Lawaetz, our Agreement Officer’s Technical Representative. In addition, we would like to acknowledge the excellent work of our colleagues and NARUC staff, including Ms. Erin Hammel, Mr. Matthew Gardner, Ms. Bevan Flansburg, Ms. Barbara Doggett and Ms. Kirsten Verclas. We thank NARUC members Danny Kermode, Jorge Ordonez and Yuliya Shmidt for their work in updating the RE Handbook in 2013 and Jorry Mwenechanya for the Case Studies on Peru, Tanzania, and The Gambia. Acknowledgements {W2166181.1}I {W2166181.1}II TABLE OF CONTENTS ACKNOWLEDGEMENTS ........................................................................................................................................ I ACRONYMS ......................................................................................................................................................... V EXECUTIVE SUMMARY ......................................................................................................................................... 1 INTRODUCTION ................................................................................................................................................10 PART I: COMMON ISSUES IN RENEWABLE ENERGY PROMOTION ..............................................................12 CHAPTER 1: DEFINITIONS AND RATIONALE FOR RENEWABLE ENERGY...................................12 CHAPTER 2: UNDERSTANDING THE CHALLENGES TO RENEWABLE ENERGY EXPANSION: TECHNOLOGY AND ECONOMICS .............................................................................19 NAMIBIA: OPTIMIZING DOMESTIC RESOURCE POTENTIAL ........................................................26 CHAPTER 3: OVERVIEW OF CONSIDERATIONS FOR INVESTORS ...............................................31 CHAPTER 4: POLICY AND REGULATORY MECHANISMS IN SUPPORT OF RENEWABLE ENERGY .........................................................................................................................35 PERU: USING AUCTIONS TO PROCURE RENEWABLE ENERGY SUPPLY .......................................48 THE PHILIPPINES: THE REGULATOR ADOPTS THE COUNTRY’S FIRST FEED- IN TARIFF RULES .................................................................................................................................57 THE PHILIPPINES: AN UPDATE ON THE COUNTRY’S NEW FEED-IN TARIFF ..........................63 CHAPTER 5: INTERNATIONAL AGREEMENTS, REGIONAL PARTNERSHIPS AND NATIONAL PLANS ..............................................................................................................................71 CHAPTER 6: THE REGULATORY ENVIRONMENT .........................................................................78 TANZANIA: SMALL POWER PURCHASE AGREEMENTS (SPPAS) – A CASE STUDY .................................................................................................................................................90 THE GAMBIA: LICENSING AND INTERCONNECTION OF RENEWABLE ENERGY GENERATION ................................................................................................................................... 102 EGYPT: BUILDING THE FOUNDATION FOR RENEWABLE ENERGY INVESTMENT ..................... 111 PART II: SPECIFIC TYPES OF RENEWABLE ENERGY AND CASE STUDIES .................................................. 117 CHAPTER 7: HYDROPOWER ...................................................................................................... 117 Table of Contents {W2166181.1}IIIIIIII ARMENIA: REGULATORY SUPPORT FOR SMALL HYDROPOWER DEVELOPMENT ................................................................................................................................. 122 CHAPTER 8: WIND POWER ....................................................................................................... 126 JORDAN: RECENT STEPS TO BRING RENEWABLE ENERGY TO MARKET ................................. 130 JORDAN: UPDATE - BRINGING RENEWABLE ENERGY TO MARKET ........................................ 135 CHAPTER 9: SOLAR ENERGY ...................................................................................................... 140 CHAPTER 10: BIOMASS ............................................................................................................... 143 CHAPTER 11: GEOTHERMAL ENERGY ....................................................................................... 147 EL SALVADOR: GEOTHERMAL DEVELOPMENT ........................................................................ 151 CHAPTER 12: DISTRIBUTED GENERATION ............................................................................... 157 GUATEMALA: BUILDING OF A REGULATORY FRAMEWORK FOR DISTRIBUTED GENERATION ................................................................................................................................... 164 GUATEMALA 2013 SNAPSHOT: DISTRIBUTED GENERATION (DG) ................................. 172 CONCLUDING COMMENTS ........................................................................................................................... 175 BIBLIOGRAPHY ................................................................................................................................................ 177 Table of Contents {W2166181.1}IIIIIIV ACRONYMS ACERCA – Asociación Coordinadora de Entidades Reguladoras de Energía Eléctrica de América Central ACP – Alternative Compliance Payment AFUR – African Forum for Utility Regulators ARIAE – Asociación Iberoamericana de Entidades Reguladoras de Energía – Latin America and Spain BOOT – build, own, operate and transfer CAFTA – Central American Free Trade Agreement CDM – Clean Development Mechanism CIDA – Canadian International Development Agency CNEE – Comisión Nacional de Energía Eléctrica CSP – concentrating solar power DANIDA – Danish International Development Agency DFID – United Kingdom's Department for International Development DG – distributed generation DNA – Designated National Authority DOE – Department of Energy DRG – Distributed Renewable Generation EAPIRF – East Asia and Pacific Infrastructure Regulatory Forum ECB – Electricity Control Board ECG – Electricity Cooperation of Ghana EE – energy efficiency EEHC – Egyptian Electricity Holding Company EgyptEra – Egyptian Electrical Utility and Consumer Protection Regulatory Agency ENTSO-E – European organization of transmission system operators Acronyms {W2166181.1}IIIIIV ERC – Electricity Regulatory Commission ERRA – Energy Regulators Regional Association – Central, Eastern Europe and Eurasia ESMAP – Energy Sector Management Assistance Program EU – European Union FIT-All – Feed-in
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