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Grid-Connected Renewable Energy
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 Grid-connected renewable energy systems promote local economic development, address regional and local health and environmental concerns, increase energy security and have a high potential to mitigate global climate change. The critical scaling-up challenge is to learn from the markets that have already been developed to create the appropriate policy frameworks, market approaches and financial mechanisms that will accelerate the development of new markets in all regions of the world. more
| | Key Issues
Grid-connected renewable energy power systems require large capital investments and a regulatory framework for independent power producers with open grid access and fair transmission charges. Long-term stable tariffs are required to attract investors because of the typically long payback periods. Experience in countries that have successfully developed large renewable energy power markets has shown the need to address the following key issues:
| | Policy & Regulatory Framework
There are many barriers to implementation of grid-connected renewable energy systems. The following policies and regulatory activities have been used successfully to develop markets, reduce investment cost and pay for the incremental cost of renewable energy:
| | | - Market Facilitation Activities including small power producer programs, standardized power purchase agreements, grid interconnection rules and public awareness
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| | Business Models
The traditional regulated utilities have not been adopters of renewable energy, except large hydropower. Independent power producers are the dominant developers of renewable energy power plants, and they need legal access to the grid and streamlined mechanisms for power contracting and grid interconnection:
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| | Finance Mechanisms
Investment in developing countries is impeded by poorly developed financial markets, products, and institutions. Finance mechanisms are often required to overcome limitations within the local project financing system, provide capacity building for participating financial institutions, and channel grants and loans to support project implementation. Finance mechanisms are directed to the project developers and are generally designed to support one or more of the typical project finance components. Most renewable energy power plants do not emit CO2 and can utilize the new field of carbon finance:
| | | | | - Debt financing approaches for RE projects
| | - Risk Management looks at technology and operational, and contractual risks and WBG risk mitigation tools
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| | Technical Requirements
Grid-connected renewable energy technologies issues of importance to Bank staff and country counterparts are summarized. These include technology descriptions, resource requirements, cost and performance assessments, intermittency and grid interconnection, siting and environmental issues, technical standards and certification requirements, equipment specifications, bidding documents and other requirements for:
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