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Parliaments and Renewable Energy

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Many countries have started to implement policies and adopt legislation to harness renewable resources - water, sun, wind, geothermal and biomass - to produce electricity, heat and fuel. As the world moves towards adoption of renewable energy as a key source of energy production, the role of parliamentarians has been and will remain critical in developing legislation required to create and deliver access to energy from renewable sources.

The development of renewable energy provides a range of benefits. Firstly, it can create significant economic and employment opportunities and help secure new investments in a wide range of industries, both at local and national level. Renewable energy technologies also provide a unique opportunity to curb carbon emissions without compromising access to energy, which has important implications for slowing climate change. Thirdly, developing a country’s national renewable resources will create access to energy that is inexhaustible, thereby reducing a country’s reliance on foreign resources and strengthening its energy security. Moreover, whether used on a mass scale to power a city, or on a small scale to run a village mini-grid, renewables bring considerable health benefits by providing clean, safe energy without the negative impacts of fossil fuels.

Beyond these broader benefits, renewable energy is an important catalyst for rural electrification. Many rural communities in the developing world have access to at least one form of sustainable energy, be it strong sunshine for solar, a river for micro-hydro or reliable wind for a wind turbine. These resources can be harnessed to provide clean electricity even in communities far from the national grid.

Renewable Energy for Parliamentarians: a How-To Guide

This ‘How-To Guide: Renewable Energy for Parliamentarians’ was developed in the framework of the Parliamentary Action on Renewable Energy project (PARE), a joint project by UNDP and the Climate Parliament, with the support of the European Commission and the Danish Ministry of Foreign Affairs.

This publication seeks to facilitate and encourage parliamentary action on renewable energy. The Guide explores the benefits of renewable energy development, presents an overview of renewable energy technologies and their respective applications, and offers concrete guidelines and tips for parliamentary action. Specific attention is paid to regulatory and policy frameworks.

To read the Guide, please click here

Barriers to renewable energy development

Technical barriers, once a major challenge, are being lowered as considerable breakthroughs continue to be made. Renewable energy technologies are swiftly becoming more efficient, cost-effective and accessible. Economic barriers relate mainly to the cost of electricity generation and the persistence of subsidies for fossil fuels. Parliamentarians can act on both issues by ensuring that renewable energy development can compete on a level playing field, allowing it to attract the necessary investments to launch large-scale projects. The cost to produce renewable energy has fallen dramatically in recent years thanks to technological breakthroughs and economies of scale, and continues to do so.

The greatest barrier to renewable energy development in many countries is the policy framework that regulates electricity, heating and transport fuel markets. It is common for an electricity market to be operated by a monopoly, often a state-owned utility, which is in full control of generation, distribution and the sale of electricity to consumers. This provides very little incentive for the development of alternative technologies. A related challenge is the bureaucracy that must regulate and approve the development of electricity generation (or heating or transport fuel). The development of on-grid renewable energy can be substantially accelerated by ensuring the policy and legal framework is fully coherent and the decision process transparent.

Another barrier is a lack of community support, which may slow the build renewable energy projects. Even a parliamentarian who is fully committed to the benefits of renewable energy will have those convictions challenged when faced with political opposition from constituents who do not expect to enjoy the benefits of such investments. Finally, counter-lobbying remains an issue in many countries. Parliamentarians who decide to push for the adoption of renewable energy policies in their countries will likely encounter significant opposition from fossil fuels interests and their lobbyists.

Financing renewable energy development

The building of renewable energy projects involves significant upfront investments. A country will need to make a major investment in generation and transmission infrastructure, the cost of which may run into billions of dollars, if it is to significantly reduce its reliance on energy from non-renewable sources. Governments typically turn to three sources of financing to fund renewable energy development: private financing, public financing and consumer financing.

In order to build renewable energy capacity on a mass scale, private sector investment is a necessity. Historically, private financiers have been hesitant to invest in renewable energy projects because they were seen as high risk, meaning they thought there was a strong likelihood that they might not obtain a return (or profit) from their investment. Parliament can help to reduce the risk of such investments by promoting a legal framework that facilitates secure, transparent investments and offers the necessary guarantees to investors.

Public financing alone will never be sufficient to ensure that renewable energy is developed on the mass scale required to significantly reduce dependence on fossil fuels. If used properly, however, public funds can leverage considerable private investment.

Finally, consumer financing is an accepted but complex source of financing. As policymakers directly accountable to consumers, parliamentarians need to find a set of policies that encourage the development of renewable energy while ensuring the burden imposed on the average citizen is minimized.

In addition to securing the required financial investments, building a robust policy framework is an important prerequisite for the successful domestic development of renewable energy. Here, too, a wide range of options is available. Governments can choose to employ some immediate policy changes that allow for swift deliveries (short-term actions) such as setting national targets, simplifying regulations and awarding subsidies. This will serve to send clear signals on the government’s commitment to renewable energy development, which is an important first step in securing investments and building an overarching regulatory framework. Some of the most prevalent policy options in place today require a more extensive and therefore time-consuming review of the legal framework (long-term actions) such as feed-in tariffs, quota mechanisms and tenders. These options can be adopted to further strengthen the regulatory framework as the renewable energy sector grows.

Taking the lead: parliamentary action on renewable energy

The development of renewable energy cannot be achieved without political leadership. Parliamentarians have all the levers they need in order to act: they vote on laws, impose taxes and approve state budgets; they oversee the operations of government and have direct access to Ministers, Prime Ministers and Presidents; they can influence national policy, build strong legal frameworks, direct spending in new directions, and establish stronger policies and targets for action on renewable energy. In short, the transition to a post-fossil fuels world will benefit considerably from the support of parliamentarians ready to use their political capital for the promotion of renewable energy.

Parliament’s three core functions provide many different entry points for parliamentary action. Through law-making, parliamentarians can propose or amend legislation that will strengthen the legal framework and the policies pertaining to renewable energy development. Their oversight function empowers them to monitor the government’s implementation of set policies and targets, and allows them to hold the government to account. Closely linked to this is a parliament’s power of the purse. As the state budget is considered and approved by the parliament on an annual basis, parliamentarians can push for budgetary provisions dedicated to renewable energy development. Lastly, in their role as representatives of the people, parliamentarians play an important role in soliciting constituent feedback and building community support for renewable energy projects. Engaging constituents on the benefits of renewable energy can be instrumental in the successful implementation of a project.

BLOG: Parliamentary Action on Renewable Energy: Bangladeshi MPs press for action

In a pre-budget meeting with the Bangladesh State Minister of Power, Energy and Mineral Resources, MPs from the Climate Parliament submitted a list of issues and demands to the Government surrounding the development of renewable energy in the country, for consideration in the run-up to the Budget session of Bangladesh Parliament in June.

In the meeting, the Bangladesh State Minister of Power, Mr Nasrul Hamid, stated that the executive order to establish the Sustainable and Renewable Energy Development Authority (SREDA) will be issued this week by the Bangladeshi Government, with the organisation expected to open in July 2014.

With the establishment of SREDA, the Climate Parliament Bangladesh Group of MPs will achieve a milestone in their efforts to develop renewable energy in the country. Having played a key role in passing the legislation which established the Authority in 2012, Climate Parliament MPs then challenged the government over delays to the implementation of the new law. It took more than a year of various parliamentary actions – including meetings with the Power Minister, Memorandums to the Finance Minister, interventions in the Parliamentary Standing Committee on Energy, and round-table discussions with government officials, experts and MPs – to secure a government commitment to making sure SREDA is established.

To read the full blog post, please click here

In addition to the specific tools provided by the parliament’s Rules of Procedure, parliamentarians also have a less well-defined authority that enables them to advocate effectively on an issue that they feel is of particular importance. Such advocacy is best done in cooperation with other political actors. Outside of parliament, parliamentarians can build a coalition of those who support the development of renewable energy, such as community leaders in off-grid regions, industry figures and investors. Such a coalition can create pressure on a government to develop a plan to implement renewables, or identify and advocate the changes required to make an existing plan more effective.

 

This section is taken from the ‘How-To Guide: Renewable Energy for Parliamentarians’, developed by UNDP in the framework of the Parliamentary Action on Renewable Energy (PARE) project.   To read the Guide, please click here