Session 2: Government Policy and Regulatory Design: Perspectives from Different Stakeholders

May 8th, 2018

With the increased cost-competitiveness of renewable energy and widespread recognition of its benefits, the economic case for renewable energy, especially electrical power generation is now firmly established. But successful scale-up depends on how governments use policy and regulatory frameworks to reduce financing costs, reset the rules in the marketplace, and encourage investment from the private sector. This session will address a number of key questions, including: How can governments drive down the costs of purchasing renewable energy, while also ensuring the financial health of the sector? How can governments address other market conditions to ensure project bankability and drive down the cost of financing? What policy levers do governments use to address resistance from incumbent utilities who risk deep revenue losses from installation of decentralized energy systems? What key elements should be put in the policy framework for changing the dynamics from subsidy or ODA to market driven renewable energy development? How can innovative energy planning help inform policy making? The presentations in this session will address these questions from a diverse set of perspectives, followed by a dynamic discussion and debate on the key elements of policy and regulatory design.


Session Chair: Shannon Cowlin, Senior Energy Specialist, Energy Division, Southeast Asia Department Asian Development Bank


Rishab Shrestha, Analyst, GTM Research

Solar Project Investment Viability in APAC Markets

Historically, the installation of solar and wind projects have closely followed changes in policy and regulatory framework. Enabling policies to make project bankable is of utmost importance to secure cost-effective financing and reduce the cost of electricity. This presentation will assess the bankability of projects across key Asia–Pacific markets using criteria’s such as dispatch risk, currency risk, curtailment, regulatory risk, and off-taker payment support, among others. The degree of risks associated with these criteria vary across the region and can be dealt with through various policy measures. The presentation will also discuss the policy options that are available for the government to improve the PPA bankability of the projects and the potential impact they have in reducing costs of renewables.

Pradeep Perera, Principal Energy Specialist, Asian Development Bank

Challenges of Integrating 175 GW of Renewable Energy in India and Policy Options

India has set an ambitious target of 175 GW of renewable energy integration by 2022 and is making steady progress towards achieving this target. Mainstream renewable energy technologies such as wind and solar have become the cheapest source of energy. However, this influx of variable renewable energy into the power system is stressing the rest of the power system. Some of the thermal power plants are struggling with low plant factors and increased operation and maintenance costs due to a need for rapid ramping up and down. There are also transmission constraints as well as inadequate inertia and ancillary services. This has necessitated the need for redesigning the market rules and incentive framework for new generation capacity additions. The presentation will provide various policy options that can be considered to establish appropriate incentive mechanisms to achieve the overall renewable energy goal.

Litthanoulok Laspho, Chief of Energy Policy Division, Ministry of Energy and Mines—Department of Energy Policy and Planning, Lao PDR

The Energy Alternatives Study for the Lao PDR: Informing Energy Planning through 2030

To diversify Lao PDR’s energy portfolio, which historically prioritized investment in their abundant hydropower resources and more recently in coal-fired power, Lao PDR decision-makers are exploring the role that alternative energy resources could play in their future power system. This presentation will detail the goals and key outputs of the Energy Alternatives Study for the Lao PDR, a collaboration between the Lao Ministry of Energy and Mines and USAID. The study focused on developing tools, data, and analytic capabilities to inform Lao energy planning activities to 2030. The presentation will describe the approach and results of a GIS-based technical potential assessment of utility-scale renewable power generation and a levelized cost of energy analysis for electricity generating technologies.

Reman Chua, Vice-President, First Gen Corporation

Energy Revolution in the Philippines

While the rest of the world is moving to clean energy, here in Asia, coal plants continue to be built. What keeps Asia from taking the green road? In the Philippines, challenges include intense price competition with coal, absence of retail competition and open access, and a short-term perspective of a government ambivalent about climate change issues. The recent coal tax was a step in the right direction, but it is not enough. This presentation will give the private sector’s perspective, from the first and only Philippine conglomerate who declared it would not invest in coal and committed to developing only clean energy sources. We look at the millennials and electricity consumers who demand green power, the need for Retail Competition and Open Access, and technology. We conclude with suggestions for the policy, regulatory, and financial markets.

Jia Yu, Senior Operations Officer and the Director of International Development Cooperation at the Institute of New Structural Economics, Peking University

Chinese Solar PV Development: Success and Lessons Learnt

China’s renewable energy particularly the solar PV has been developing very fast, with very clear energy policy directions to pursue low carbon transition and environmental sustainability. Interestingly, the energy policy has been accompanied by industrial policy to create jobs and maintain China’s leading role in solar PV manufacturing. However, both energy and industrial policies are dependent on subsidies to stimulate and scale up the market, which may not be sustainable. China’s experience and lessons learnt are valuable for other developing countries.