From free market to 'Our Power'

From free market to 'Our Power'

Liam Salter, Jakarta

Energy and sustainable development are inherently linked -- a
fact recognized by all organizations. Furthermore the inherent
unsustainability of an energy system based upon the wasteful use
of fossil fuels and non-renewable fuelwood supplies is also
widely accepted.

The power sector epitomizes and provides the focus for the
sustainable energy debate across the region. Access to clean,
reliable, affordable electricity is development goal enshrined at
a high levels through processes such the WSSD and the Millennium
Development Goals.

In Asia the implications of continuing with the current power
paradigm are staggering and mainly related to the continued
dominance of coal power. Nearly 60 percent of global coal
consumption will be in Asia Pacific by 2025 -- an increase of 1.9
billion tonnes per year. About 75 percent of incremental global
coal demand is expected in China and India alone. SO2 emissions
would increase by over 200 percent, carbon dioxide emissions by
85 percent. Even today Asia Pacific coal plant are responsible
for 50 percent of global mercury emissions and acid rain alone
costs the region about US$90 billion annually.

Pollution is a key development issue especially as its impacts
usually most heavily impact the poorer sections of society who
are either unable to relocate or oppose the development of
polluting plant or associated extractive industry.

However the power sector is also a key development issue for
other reasons. Inefficient plant technology, inadequate
transmission infrastructure and massive overcapacity, stemming
from bad planning and poorly designed regulatory structures,
politicized decision making and politicized decision-making have
left many consumers with spiraling bills, unreliable supplies and
have constrained the extension of electricity supply to
unconnected communities. Demand side management and energy
efficiency, despite some isolated examples of best practice are
widely neglected, and waste is a common component of all national
power development plans.

Simply put the "conventional sources of and approaches to
providing and using energy are not sustainable". And the so
called "Hard Energy Path" for the power sector in Asia-Pacific is
a classic example. WWF is therefore seeking a truly sustainable
paradigm shift that solves the pollution problem, at the same
time as improving access to cheap, reliable power.

It is also widely understood that technology is not a real
barrier to a paradigm shift away from the Hard Energy Path.
Demand side management is a demonstrated low cost alternative --
the Thai government's DSM program for example delivered at US1.3
cents per kWh compared to new coal supply at 5 cents. Economic
renewable energy resources are substantial. In the Philippines
for example 7300MW of wind power potential has been realistically
estimated at between 5-6 c/kWh, compared to current marginal cost
of fossil dominated grid generation of about 7c/kWh.

Taken together the potential for demand side management,
renewable energy and efficient use of fossil fuels can provide a
package of alternatives to a coal, nuclear and large dams in any
country in the region. WWF's own scenarios, conducted with
national academic partners in Japan, Philippines and Thailand
reveal that such packages usually deliver a cost saving as the
avoided infrastructure development from energy efficiency offsets
the increased capital costs of renewables. Security of supply is
also usually enhanced.

The flipside of this discussion is that, contrary to the
common perception of many environmentalists, renewable energy on
its own is not enough. Appropriate technology solutions and
technology packages vary from country to country. However it is
not the cost or the availability of the technologies that are the
real barrier to a paradigm shift.

Many of these and other barriers to sustainable energy can be
linked to power sector reform programs that have been promoted by
organizations such as the World Bank, ADB, IFC and bilateral
donors such as DFID and USAID. These programs, that have almost
exclusively focused around privatization and liberalization as
proxies for delivery of sustainable energy services, have often
been dominated by a small number of actors with a vested interest
in promoting the Hard Energy Path. This in turn has led to power
markets with limited competition, little transparency in
decision-making, few new market entrants and continued huge
financial biases in favor of Hard Energy Path technologies.

The potential for a paradigm shift rests neither on the
promotion of new technologies nor on the promotion of a shift to
market based systems. The potential -- at least in democracies
such as Philippines, Thailand, Indonesia and India -- stems from
the fact that it is the small consumers that are paying the price
of the current system. They can all talk to the press. And they
can all vote.

Currently across democratic developing Asia, power plant
developers are running into increasing opposition from local
communities. In Pulapandan, Negros Province a 50MW coal plant
was blocked for environmental concerns. This has spread to the
neighboring Province of Panay which recently blocked a 100MW
system for environmental reasons, but also because there was no
consultation. In Thailand Bo Nok and Hin Krud developments --
some 1700MW of capacity have been forced to switch from coal to
gas because of local environmental and political concerns.

Increasingly groups are moving beyond simply opposing
individual plant. They are demanding a say in regional planning
processes, in tariff discussions and in national political energy
priorities. In the Philippines the giant distributor Meralco was
temporarily forced to postpone tariff hikes after an NGO court
challenge. In Thailand groups have commissioned research
exposing the limitations of the governments proposed single buyer
model and this year 60 000 people demonstrated regularly in
Bangkok against the reform proposal. In Indonesia NGO panels must
be consulted in the design of the implementing rules and
regulations for the new power market.

In India NGOs have forced the publication of IPP contracts and
exposed utility overcharging, forcing the regulator to intervene
to block proposed tariff increases.

Whilst the examples are fragmented, the trend is clear --
empowered consumers, employees, local communities, local
governments, local companies are beginning to act to demand
cheaper, cleaner, and more reliable energy.

The writer is a coordinator WWF Asia Pacific. He can be
reached at lsalter@wwf.org.ph