Bridging the Macro and the Micro: Integrating Empirical Realities with Scenario Analysis

Elusiyan Eludoyin

Doctoral Researcher

UCL Energy Institute

Map

Aim Concept

Holistic Framework

Methodological Approach

Conclusion

AimPolicy for sustainable provision and adoption of modern energy services.• Sustainability of the transition for different consumers, under

changing environments.• Nature of the transition• Suitability of policy mechanisms for given socio-economic conditions• Consumer and Supplier relations – How Policy impacts?

Government/ Dev. Agency

Policy

InvestorsModern Energy

Service Suppliers

Consumers

Macro Micro

Concept

• Transition (consumer)– Energy ladder, fuel stacking– Kowsari and Zerrifi 2011 – three dimensional assessment (energy services)

• Decision making (consumer)– Behavioural economics, technology adoption theory, social and environmental

psychology, sociology– Wilson et al 2007 – various economical and non-economical factors

----------------------------------------------------------------------------------------------• Holistic transition

– Beyond financial necessities– Stakeholder engagement and nature, linked to underlying goals (sustainability).– Households, livelihoods; SMEs/public institutions, avoided costs/value

addition– Suppliers, organisational objective (profit, not-for profit)

TRANSITION

service

CONSUMERS

SUPPLIERSdemand

Endogenous

Exogenous

CONDITIONS

MARKET ENVIRONMENTINVESTORS

Type of investmentContractual termsPartnerships

EconomyEnergy ResourcesIndustrializationSovereigntyPolitical stability, Transparency

Resource selectionLiquidityRegulationTechnologyWider sector structure

Framework

Base year 5 years 10 years Scenario End 20 years

Market Environment

Supplier choices

Consumer Choices

LEAP

Market Environment

Supplier choices

Consumer Choices

LEAP

Market Environment

Supplier choices

Consumer Choices

LEAP

Approach – Scenario Analysis

AHP

1. Reference Scenario – Current trends2. Existing Commitments – Broad policy commitments and plans3. Renewable Energy Scenario – Explorative; competitiveness of renewable energy

AHP – Analytical Hierarchy Process

-Necessary livelihood needs (livelihood capitals)-Linked to Exogenous factors

-Necessary operational measures (sustainability factors)-Linked to exogenous factors

Consumers (e.g. household)

Suppliers

Exogenous factors based on relevant policy criteria – Supply-side Policy Criteria

Financing mechanism (access to credit)Subsidy level (direct funding support)Cost of tech components (Tax incentives)Finance/Funding channels (REA, MFI)Technical capacity (development agency policy)Previous Level of Demand (based on LEAP output)

Demand-side Policy CriteriaFinancing mechanism (access to credit)Other Welfare needs (policy alignment)Service Type from Producers (based on supplier AHP analysis)

Conclusion

• Limitations– Dependent on assumptions (iteration process, market picture)– Participant understanding of questions– Secondary data availability

• Willing practitioners• To provide knowledge on the suitability of certain policy actions on

country and local dynamics.

Thank you for your attention

Questions and Comments please