Two years of a pandemic have highlighted the vulnerability and isolation of populations without electricity and have prompted countries to increase their focus on energy access and affordability, finds a new World Bank report on energy policies and regulations. The 2022 edition of the RISE (Regulatory Indicators for Sustainable Energy) report shows that many countries have embedded new policies to improve their energy independence and minimize energy costs in their COVID-19 recovery plans.
“Confronted with multiple crises, now more than ever countries are recognizing the urgency of connecting their populations to sustainable, affordable, and resilient energy sources,” said Riccardo Puliti, World Bank Vice President for Infrastructure. “Clear policy frameworks and planning enable governments to map out their energy strategies and to provide the predictability and transparency needed to attract investments.”
According to the bi-annual report that evaluates energy policies and regulatory frameworks across a set of indicators, the pandemic was a strong trigger: nearly half of the 140 surveyed countries in each region included new policies to minimize disruptions to electricity access, quality, and affordability in their COVID-19 recovery packages.
Many governments improved their electricity access policies, with Sub-Saharan Africa and Latin America, and the Caribbean scoring the highest on this indicator. This included the two largest energy access-deficit countries—Nigeria and Ethiopia— which showed noteworthy progress thanks to policy and regulatory measures on electrification planning, frameworks for mini grids and off-grid systems, and consumer affordability of electricity.
And the number of countries with advanced mini-grid policy frameworks more than doubled between 2019-2021, reflecting how mini-grids and solar home systems are now widely viewed as sufficient substitutes for grid extension. Over 40% of countries surveyed offered publicly funded financing options to secure funding for mini-grid operators. This had a positive effect on the cost of off-grid electricity, as the unsubsidized levelized cost of mini-grids fell by a third, from US$0.55 per kilowatt-hour (kWh) in 2018 to US$0.38 per kWh in 2021.
Meanwhile, with renewable technologies becoming cost-competitive with traditional baseload energy sources over the last decade, many countries phased out incentives to compensate for renewable energy production. Tax reduction is now the most prevalent renewable energy fiscal incentive in place to attract large-scale corporate investments, with half of the countries surveyed offering tax reduction incentives for renewable energy projects.
Finally, the report found that energy efficiency policies were not receiving adequate attention despite unprecedented energy price hikes, with 49 countries showing little to no advances in energy efficiency policy frameworks.
Every two years, the Regulatory Indicators for Sustainable Energy or RISE report measures policy progress in 140 countries, representing over 98 percent of the world population, on renewable energy, energy efficiency, electricity access, and access to clean cooking – the four target areas of Sustainable Development Goal 7 (SDG7) on access to affordable, reliable, sustainable and modern energy for all by 2030. RISE 2022: Building Resilience is the fourth edition of the report. The report is published by the World Bank with funding from the Energy Sector Management Assistance Program (ESMAP).