strategic planning and management of energy sector

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Vision

Set objectives

and targets

in a strategy

Stakeholderinvolvement

Develop

programme

of action

Implement

the programme

Monitor andreport progress

Review

and reset

Guidelines on Strategic Planning andGuidelines on Strategic Planning and

Management of the Energy SectorManagement of the Energy Sector

ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFICECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC

UNITED NATIONSUNITED NATIONS



Guidelines on Strategic Planning andGuidelines on Strategic Planning andManagement of the Energy SectorManagement of the Energy Sector

ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFICECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC

UNITED NATIONSUNITED NATIONSNew York,New York, 20022002



The designations employed and the presentation of the material in

this publication do not imply the expression of any opinionwhatsoever on the part of the Secretariat of the United Nations

concerning the legal status of any country, territory, city or area orof its authorities, or concerning the delimitation of its frontiers or

boundaries.

Mention of any firm, institution, organization, licensed process orcommercial product does not imply the endorsement of the United

Nations.

The views expressed in the papers comprising this publication are

those of the authors and do not necessarily reflect those of theUnited Nations.

This publication has been issued without formal editing.

ST/ESCAP/2211



Foreword i

Foreword

Energy has been recognized as one of the essential inputs for social

and economic development. For the past decade, there has beenmounting pressure to ensure that the energy sector pay sufficient

attention to environmental and social issues while ensuring that

there is enough energy to support the development of the nation.

Linking energy issues to other critical issues such as the

environment and social issues is clearly an area that requires

additional efforts to support sustainable development. In

preparation for the ninth session of the Commission on Sustainable

Development, which was dedicated to dealing with energy issues

prior to the World Summit on Sustainable Development, ESCAPmembers and associate members in the Asian and Pacific region

adopted the Sustainable Energy Development Action Programme,

Strategies and Implementation Modalities for the Asian and Pacific

Region, 2001-2005 at the High-level Regional Meeting on Energy

for Sustainable Development, held in 2000. One of the priority

areas identified in the Action Programme is to strengthen planning

capacity in sustainable energy development by establishing clear

linkages to other sectors.

Against this backdrop, with funding from the United Nations

Development Account, a project entitled “Capacity-building in

strategic planning and management of natural resources in Asia and

the Pacific” was launched in 2000 to address the issue of

establishing linkages between the energy sector and other sectors.

The main objective of the project is to strengthen the capacity of the

developing countries in the Asian and Pacific region in strategic

planning and management of natural resources development and

environmental protection. The project is being implemented inthree phases: (a) development of guidelines; (b) subregional

workshops; and (c) activities at the national level.

In 1997, ESCAP, with the cooperation of the Government of the

Netherlands, implemented a project to promote the concept of

strategic environmental planning and management. It is an



ii Guidelines on Strategic Planning and Management of the Energy Sector

approach that requires appropriate action over the long term to

prevent environmental degradation or to reverse that trend. Itincluded setting staged targets for change. Governments need to

encourage policy makers in all sectors of society and business andcommunity leaders to take environmental considerations into

account in their decision-making processes.

Building on the work on the concept of strategic environmental

planning and management, ESCAP, with the assistance of Mr Hans

van Zijst, an international consultant, and with input and

contributions from a number national experts, has developed the

guidelines for the energy sector using a similar approach.

The guidelines focus on integrating environmental and social issues

into energy sector planning. While it is conceptually easier to

accept the notion of integrating environmental and social issues into

energy sector planning, it is difficult to accomplish such tasks as

there is a lack of clear understanding and comprehensive tools or

techniques are not available to ensure systematic planning,implementation, monitoring and evaluation of energy plans with

effective integration or incorporation of social and environmentalissues. The guidelines contain a step by step approach to develop

long-term policies based on a shared vision, strategy, programme of

action, implementation of the programme, monitoring and

evaluation. In essence, it is an attempt to develop energy policies

incorporating environmental and social issues which are widely

accepted and understood by stakeholders. It provides a

comprehensive framework towards achieving common goals by

concerned government agencies, utilities, private sector and NGOs.

The guidelines have been reviewed at the Expert Group Meeting,

held at Bangkok in June 2001 as well as at the Regional Workshop

in December 2001. It includes some examples of how

Governments in the Asian and Pacific region are dealing withcertain components of strategic planning and management.



Foreword iii

The publication is intended to strengthen the capacity of energy

planners in developing countries by providing a planning tool indeveloping energy policies to ensure sustainable development. It is

intended to be used during subregional workshops and duringactivities at the national level in building national capacities to use

the guidelines to shift towards strategic planning and managementof the energy sector.

The secretariat wishes to acknowledge with appreciation the

valuable contribution made by the consultant and experts in

developing the guidelines.



Contents v

CONTENTS

Page

Foreword .................................................................................... i

Introduction .............................................................................. 1

I. THE CONCEPT OF STRATEGIC PLANNING ....... 7

II. STRATEGIC PLANNING AND MANAGEMENTOF ENERGY RESOURCES ........................................

17

III. THE GUIDELINES ........................................................ 23

IV. STAKEHOLDERS’ INVOLVEMENT ........................ 49

V. MANAGING STRATEGIC PLANNING AND

MANAGEMENT ............................................................

59

VI. MODEL VARIANTS ..................................................... 65

VII. CONCLUSIONS ............................................................. 71

Annex I. Glossary .................................................................... 75

Annex II. Literature ................................................................ 79



INTRODUCTION



4 Guidelines on Strategic Planning and Management of the Energy Sector

‘Energy is a crucial input into the development process. However,

the current energy system is not sustainable’2, in particular because

of the negative effects of burning fossil fuel. Globally there are no

immediate concerns regarding resource availability. In order toattain sustainable development in the long run, dependency on these

resources must be reduced gradually, in favour of renewable energysources. The links between energy, environment and sustainable

development present a difficult paradox to the Governments of the

Asian and Pacific region. The huge demand for energy to facilitate

economic growth and social development is largely met with fossil

fuels. The extension of energy services to people without access is

critical in alleviating poverty, but burning carbon has significant

negative effects on the well-being of humans and eco-systems. Thisis caused by indoor and urban air pollution, cross-boundary

pollution and global climate change. In the medium-term part of

these dilemmas can be solved through a more efficient way of

production, distribution and consumption of energy. However, the

real challenge lies in the long-term switch to renewable energy

sources. This will require additional research and technologydevelopment as well as the transfer of these new technologies to the

Asian and Pacific region.

This document presents guidelines on the strategic planning and

management of energy resources. It covers conventional energyresources as well as a sustainable energy future. The guidelines are

presented in a practical format, very much as a road map forcountries wishing to plan and manage their energy resources in a

sustainable manner. Countries in the ESCAP region that havealready undertaken some form of strategic planning and

management may find this guidelines worthwhile as a referencedocument for their future review of energy strategies and policies.

2 See the Regional Action Programme.



Introduction

The contents of the guidelines are:

Chapter I contains a short introduction of the concept of strategic

planning and management, including a comparison with a moretraditional policy development approach.

Chapter II presents the relevance of this concept for energy

resources management in general. It presents an oversight of

expected benefits from the application of the guidelines as well as

an introduction of the guidelines.

Chapter III presents the guidelines on strategic planning and

management in energy resources policy making.

Chapter IV provides an introduction to stakeholder involvement in

the planning process.

Chapter V focuses on the overall management issues in applying

strategic planning and management to the energy sector.

Chapter VI highlights several model variants that are useful to bearin mind when making decisions on the application of the concept on

energy resources management.

Chapter VII presents conclusions on the guidelines and their

applicability and usefulness.

Annex I presents definitions of terminology in a glossary.

Annex II contains a literature and reference list.



CHAPTER I

THE CONCEPT OF

STRATEGIC PLANNING



Chapter I: The concept of strategic planning 9

I.1 I NTRODUCTION

The concept of strategic planning and management of natural

resources has been developed over the last decade of the twentiethcentury in several countries around the world. 3 After two decades

(roughly 1970-1990) of environmental regulations on emissions toair, water and soil, many developed countries found that overall

gains in environmental quality were less positive than expected.These gains were insufficient for the sustainable development of

their country. In many cases single focus end-of-pipe regulationsled to a situation of pushing waste streams around, notably quite

hazardous streams (such as industrial sludge, fly-ash, an-organic

residues). The regulatory approach seemed less successful inrelation to changing production and consumption methods.Countries such as the Canada, Netherlands, New Zealand and

Sweden looked for new approaches to allow for process-integratedand resource-based solutions. New goals included increased

efficiency in the use of natural resources, minimizing losses of material in the production of goods, taking responsibility for the

whole production chain (from the production fields of primary

material to the point of disposal ‘cradle-to-grave’ or even to the

point of recycling and re-use ‘cradle-to-cradle’).

In the early nineties several experimental approaches were underdevelopment around the world. Although originally developed for

environmental protection the concepts soon proved to have a wider

scope of application, including energy resources management.

Table 1 (see end of this chapter) presents a comparison between

traditional approaches towards policy development and strategic

planning and management (SPM).

3 An excellent overview of earlier experiences can be read in an IIED publication:National sustainable development strategies: experiences and dilemmas, Barry Dalal-Clayton a.o., London, 1994.




Depending on existing administrative culture a plan could span a

three- to five-year period. In many cases the plan could be brokendown further in annual operational plans.

Figure 1 presents an overview of the relation between vision,

strategy and action plan.

Figure 1. Relationship between key features of SPM

Vision goals: 15-25 years

Strategy goals: 10 – 15 years

Adaptation of strategy

Action Plans (4-5 years)

RegularFeedback on

Ongoing Strategy-level

feedback

Monitoring Progress

Baseline >> time

In this figure the baseline represents the situation in the initial year

of the process. Progress will be measured against this baseline, andif justified, attributed to the implementation actions since this initial

year. Results of monitoring will feed both ongoing operational (i.e.,

short-term) plans and the overall (i.e., long-term) strategy. Strategic

feedback may result in a revision of the strategy, reformulation of

goals and actions, or other adjustments.




Another key feature of SPM is the establishment of clear targets,

quantitative goals, for the achievement of a sustainable energyfuture. Quantification of targets, followed by monitoring results

against the original baseline, will enhance the transparency of progress.

As energy production increases, and consumption is largely in the

hands of organizations and individuals outside of the Government,

the concept of strategic planning puts great emphasis on the

commitment of civil society (including commercial entities and the

non-governmental organizations), as partners. Each partner has its

own distinct and accountable role to play in the realization of the

target, through the implementation of a set of pre-agreed actions.This is backed by a mix of regulatory requirements and cost-

effective economic instruments, but also with a periodic and

ongoing dialogue between relevant stakeholders.

Roughly strategic planning and management is a five step process:

• Step 1: Set objectives and targets (on the basis of a vision) .

• Step 2: Develop programmes of action with relevant

groups.

• Step 3: Implement the programme.

• Step 4: Monitor, evaluate and report progress.

• Step 5: Review and reset objectives and targets (where

necessary).

Figure 2 illustrates this process. For the purpose of the guidelines in

this document, this approach is elaborated in a more sophisticatedphasing, explained in chapter III.

Stakeholder involvement is important throughout the process.

Chapter IV focuses on their role, how to manage this and who to

involve in which step of the process.




Figure 2. Five step approach

To push this process as well as to manage it, there is need for aclear and effective management structure behind this five-step

approach. This management should reside with the initiatingauthority. This would typically be the department of energy of the

Government, but other possibilities exist. Often management is

actually executed through the establishment of a temporary task

force or working party, with a clear mandate from the responsible

authority to organize and manage the process and deliver a

programme of action. Chapter V focuses on this important overall

management of the process.

Table 1 below presents a comparison between traditionalapproaches and strategic planning and management.

Set objectives and targets

in a strategy

Develop programme

of action

Implement

the programme

Reviewand reset

Stakeholder

involvement

Monitor and

report progress

Vision




Table 1

Issue Traditional approach Strategic planning and

managementGoal Tackling energy issues

when and where theyoccur, based on their

urgency

Developing a comprehensiveplan to provide energyservices to society in a

sustainable manner

Driving force Economic growth and

crisis management, andthe availability of investment funds

Sustainable energy services

for the long-term

Focus Providing energy tocities and industrial

zones

Optimal energy services tosociety as a whole

Criteria forsuccess

Development andexpansion of capacity

Poverty alleviation, socialdevelopment, and economic

growth, ultimately sustainabledevelopment

Responsibility Governmental agencies Governmental agencies inpartnership with civil society

Types of instruments

Regulatory framework,investment policy

A mix of regulatoryframework, agreements, fiscal

incentives, user fees, softinstruments (such asawareness raising campaigns,public information)

Technology Technocratic approach Technology is one of the tools

Role of

society

Comply with

regulations

Engagement > commitment >

empowerment

Monitoring Law enforcement bythe Government

Comparing short-term resultswith long-term goals on aregular basis by all actors

Costmanagement

Based on availability of funds (including donor

community)

Based on long-term self-sufficiency of energy services




It is important to note that the presentation of this comparison

deliberately depicts both approaches in their distinct features, inblack versus white. In reality there are many ‘shades of grey’:

approaches that feature elements of both approaches. The purposeof this table is to help the reader understand the main features of

SPM and how these compare to more traditional approaches topolicy making.



CHAPTER II

STRATEGIC PLANNING

AND MANAGEMENT OF

ENERGY RESOURCES



Chapter II: Strategic planning and management of energy resources 19

II.1 T HE SCOPE OF THIS CHAPTER

This chapter presents an introduction of the use of strategic

planning and management as a methodology to design andimplement a sustainable energy future in the ESCAP region.

Paragraph II.2 gives a short overview of existing experiences withenergy planning in the region, based on material submitted by

ESCAP member countries and a quick scan of open sources.Paragraph II.3 defines the concept of sustainable management of

energy. Paragraph II.4 focuses on the expected benefits of theapplication of the methodology on energy resources management.

Paragraph II.5 contains a short introduction to chapter III, which

presents the guidelines step-by-step in an orderly fashion (althoughreality is less orderly).

II.2 E XISTING EXPERIENCES

Strategic planning of energy resources and energy supply is not

new to the region. Many countries in Asia and the Pacific havedeveloped plans and programmes for energy development, in the

past decade. Some of these countries have done this in the contextof a sustainable development strategy. A growing group of

countries in the region is developing a long-term perspective on

energy services as part of their overall economic plan.

These experiences are very valuable, both for these countries

internally and for other countries in the region. Considering theinterdependencies of economies in several subregions of Asia and

the Pacific (such as ASEAN or Central Asia subregions), planningin one country also improves predictability of energy policies in

energy supply dependant neighbouring countries.

In a series of recent meetings on these issues (particularly inpreparation of the High-level Regional Meeting on Energy for

Sustainable Development at Bali in November 2000 and inmeetings to discuss the drafts of these guidelines), many countries

in the region presented and submitted national papers indicating




existing experiences. In these guidelines these references have

been used to illustrate the diverse elements of the guidelines onstrategic energy planning and management. Annex II to the

guidelines list these papers.

II.3 SUSTAINABLE MANAGEMENT OF ENERGY

The concept of sustainable management of energy is best described

as the process of planning, providing and financing energy services

to society in a manner that balances the economic, ecological and

social impacts, without jeopardizing the opportunities of future

generations to do the same. It is important to note that this process

is dependent on national circumstances, level of economic

development, availability of energy resources, financial resources

and other factors. Each country will have to decide for itself what

sustainable management of energy means in concrete terms. In

many countries in the Asian and Pacific region the first priority is to

alleviate poverty through the provision of energy services to the

poor. Rural electrification is another area of concern to many

countries.

The approach presented in these guidelines is a toolbox for

Governments to strategically plan sustainable management of

energy. As stated earlier, it is not a blueprint. Application largely is

dependent on the national context, national ambitions, economic

opportunities, energy resource availability and finance. More

important, it is dependent on leadership and vision, based on the

understanding that the enormous challenges that poverty alleviation

and economic prosperity pose to society in terms of long-term

sufficiency of energy inputs. This calls for a long-term energy

policy that puts increasing emphasis on the use of renewable

sources of energy, demand as well as supply-side management and

an optimal efficiency in the generation, distribution and use of

energy.



Chapter II: Strategic planning and management of energy resources 21

II.4 E XPECTED BENEFITS

There are no simple solutions to the sustainable management of

energy resources. As the world turns more complex, the dawning of a new energy future will depend largely on the interaction of a

growing number of players within one society. It will also dependon cross-border interaction between countries. Involvement of all

relevant players in all phases of decision-making processes onenergy and related issues will be necessary. Governments continue

to be important, as director of the process, bringing togetherstakeholders, setting the stage and facilitating the play. In those

countries where Governments also own and operate the energy

supply side, their role is mixed with being a main player.

Strategic planning of energy resources provides Governments with

an approach to build an energy future in close cooperation with allrelevant players, focusing on long-term benefits in social, economic

and ecological terms. Benefits include:

• A clear sense of direction for 15 to 25 years into the future.

• Commitment of relevant stakeholders.

• Investment security due to long-term arrangements.

• Integral assessment of alternative energy scenarios.

• Cost-effective measures where possible.

• Demand-side and supply-side management.

• Rural electrification as an integral element of the nationalplan.

• Provision of energy services to the poor.

• Reduction of negative health impact due to cleaner air.

Obviously, many of these benefits will only be achieved if the

strategy includes these issues in the decision making process. There

are no free lunches: e.g., energy for the poor will need to be




financed one way or another, but as part of an overall package of

energy services for all users, this could be possible.

Those countries in the region that have a surplus of energy, e.g.,owing to the presence of hydropower or large reserves of energy

resources, will still benefit from a strategic energy resourcesmanagement plan. Be it for future purposes or as an export to

neighbouring countries, the energy should be well-managed andused wisely.



CHAPTER III

THE GUIDELINES



Chapter III: The guidelines 25

Introduction to the guidelines

The guidelines introduced in this chapter are focused on the

strategic planning and management of energy resources for socio-economic development and environmental protection. Based on

ongoing work under the auspices of ESCAP within the Asian andPacific region, the guidelines offer a methodology to the countries

of the region to design an energy future in an open and transparentmanner, working closely with relevant stakeholders. This approach

pushes energy policy beyond what is usually possible through theexclusive application of regulatory instruments.

The guidelines are presented under the following headings:

III.1 Vision

III.2 Driving forces

III.3 Identifying the baseline

III.4 Developing scenarios

III.5 Formulating a strategy

III.6 Formulating an action planIII.7 Monitoring progress and evaluation

III.8 Adjusting to new information

Although there is a natural order in this sequence, experience shows

that during the planning process there is a constant forward and

backward, cyclic interaction, making the actual process much more

complex than presented in this orderly fashion. The guidelines

should not be seen as a linear process . The whole concept of

strategic planning is very much benefiting from circular motions inan iterative process (see figure 2 on page 13). For example,

monitoring progress of the plan in the course of its implementation

(see III.7) requires a clearly identified baseline of data in the

reference year (see III.3). Linking the vision (see III.1) to the

strategy (see III.5) to the action plan (see III.6) is a forward-looking




action, but it will benefit from a retrospective analysis to assess

whether all actions (see III.6) are relevant to the vision (see III.1).

Involving stakeholders in the development of the scenarios willbuild ownership and thereby enhance the likeliness of broad

commitment to the success of the strategy. Stakeholder involvement

is important at all stages of the process, from vision (see III.1) to

adjustments (see III.8) in the next policy cycle.

The guidelines will only come to full fruition in an open andtransparent atmosphere. Stakeholders from diverse backgrounds

need to feel secure in committing themselves to a result. The

Government needs to be a trustworthy partner, in setting the stage,in sharing information and communicating to all parties in aconsistent and equal manner. The guidelines do not include specific

directions on external relations with stakeholder organizations, but

these are of paramount importance in bringing the guidelines to

effectiveness.

III.1 V ISION

Strategic planning should be based on a vision. Many countries

have set economic and social development goals on the national,

regional and/or local level either through an integrated five-year

plan or through a series of sector-specific plans and programmes.

India for example, integrates the vision on renewableenergy in its main planning cycle. The Indian Governmentgave new impetus to renewable energy in its Eight Five-Year Plan (1992-1997), by promoting commercialization

through the private sector, rather than increased publicinvestment. This was followed by a new Strategy and

Action Plan in 1993.6

6 Somit Dasgupta, 2000. “Sustainable development in India”, presented at the AdHoc Expert Group Meeting on Strategic Planning towards a Sustainable EnergyFuture: Policy Options, Barriers and Action Plan, ESCAP, Bangkok, 18-20 September2000.




Economic growth and social well-being require a vast amount of

energy resources. Many countries have access to domestic sourcesof fossil fuel (such as oil, gas and coal), or to hydropower or

biomass, while others depend largely on energy imports.

Energy is an important driver for economic growth. The energyvision needs to contribute to the national social and economic

development goals. It can be very instrumental in creatingconfidence with possible investors, who would like to know what

the Government’s long-term ambitions mean in terms of privatesector involvement.

A vision should look well into the future, preferably 20 to 30 years.

The Philippine Energy Plan 2002-2011 outlines the energysector’s blueprint in support of the thrust of the Arroyoadministration of balanced economic growth, a robustmarket-based industry and poverty alleviation through

social equity and good governance. The plan provides aten-year perspective of the country’s energy sector amidst

the structural reforms that are swiftly transforming thePhilippine economy. Interestingly, this ten-year plan iswritten in support of the national aspirations as embodiedin the Medium-Term Philippine Development Plan 2001-

2004.7

Net exporters of energy resources should have a vision on short-term cash versus long-term availability of resources. Net importers

of energy resources should have a vision on the long-termdependency on other countries or the private sector.

The vision typically contains at least the following elements:

7 Philippine Energy Plan 2002-2011, Department of Energy, Manila, 2001.




Cambodia’s power sector development policy (1994)

contains elements of this vision, among others: to providean adequate supply of energy throughout Cambodia atreasonable and affordable prices, ensure reliable, secureelectricity supply at prices, which facilitate investment in

Cambodia and development of the national economy,encourage the exploration and environmentally and

socially acceptable development of energy resourcesneeded for supply to all sectors of the economy. The policyalso calls for encouragement of the efficient use of energy

and to minimize detrimental environmental effectsresulting from energy supply and use. The CambodiaPower Sector Strategy 1999-2016 translates these elementsin a practical approach, cognizant of the fact that the vision

will take many years to mature.8

8 Khlaut Randy, 2000. “Cambodia country paper”, presented at the Ad Hoc ExpertGroup Meeting on Strategic Planning towards a Sustainable Energy Future: PolicyOptions, Barriers and Action Plan, ESCAP, Bangkok, 18-20 September 2000.

• Energy demand to match economic and social

development goals

• Availability of domestic financial resources (userpays principle or other)

• Prospects for renewable energy resources

• Prospects for technological improvements inconversion, transmission and distribution

• Geographic relation between energy production and

energy consumption

• Priority areas for energy supply (residential as well as

industrial/commercial; including energy for the poorand rural electrification)

• Dependency on and security of foreign sources(ODA, DFI)




Fiji, for example, has formulated the goal of theDepartment of Energy’s National Development Plan 2000-

2004 as follows: ‘to facilitate a resource efficient, cost

effective and environmentally sustainable energy sector inFiji’.10

There are several ways to formulate a vision. Traditionally, it has

been in the form of a political statement. It might also be based on

analytical preparatory work of national experts, sometimes with the

help of the international community (such as the World Bank,

Asian Development Bank and bilateral donor agencies), prepared asa part of the integrated plan or as a self-standing document.

The first Netherlands Environmental Policy Plan (1989)was based on a research study of the Dutch NationalInstitute for Public Health and the Environment, titledConcern for Tomorrow (1988). The study assessed thestatus of the national environment and presented threescenarios for future environmental policy to combat

pollution. The Canadian Green Plan (1991) was based on avoluminous Canadian State of the Environment report,

indicating both pollution issues and loss of biodiversity.

Other approaches could be to develop a vision through a system of consultations with different stakeholders, creating a wider platform

for approval than the current Government. Shared responsibility

with other stakeholders is certainly an important aspect of strategic

planning. In particular, the electricity production companies and

large users of energy in the country should be involved in order to

warrant success for the vision. Widespread public consultation will

not always be successful: in many cases the public wants the

Government and/or the political leaders to have an opinion, a

vision. The public would like to react to that vision, not constituteit.

10 Avinesh Narayan, 2001. “Country paper for Fiji Islands”, presented at the Ad HocExpert Group Meeting to Review the Draft Guidelines on Strategic Planning andManagement of Natural Resources Development, ESCAP, Bangkok, 18-20 June 2001.




The vision may contain quantitative goals, targets in terms of

energy resource development and use, or in terms of dependency onforeign resources, or in terms of fuel mix. This obviously requires a

certain amount of data collection and interpretation of future energydemands. See paragraph III.3 Identifying the baseline.

An important aspect of a vision is realism. The vision should be

optimistic and sketch a positive picture, but nevertheless it should

be realistic. It may be ambitious as long as the timeframe allowed

for the achievement of the vision is realistic.

III.2 D RIVING FORCES

For any strategic planning process it is important to understand the

underlying driving forces. What makes energy demand grow? The

vision on the long-term energy resource planning and management

should preferably be based on the understanding of the complexity

of economic, social, demographic and political drivers.

Viet Nam sees its energy policy very much as one of the

pillars of its overall national socio-economic development.

For the next 20 years this development should promotemodernization and industrialization, while setting up an

equitable and civilized society. Specifically, thisdevelopment should (a) stabilize macroeconomics in order

to propel the growth quickly and firmly, (b) change theeconomic structure through the increase of industry andservice, and (c) intensify family planning and decreasepopulation growth. The new policy calls for substantial

demand to promote productive use of electricity, and theinstallation of 6 thermal power plants and 19 hydropower

plants.11

11 Nguyen Van Huong, 2001. “Development in energy sector of Viet Nam”,presented at the Ad Hoc Expert Group Meeting to Review the Draft Guidelines onStrategic Planning and Management of Natural Resources Development, ESCAP,Bangkok, 18-20 June 2001.




pursuant to their own environmental and developmentalpolicies, and the responsibility to ensure that activities

within their jurisdiction or control do not cause damage

to the environment of other States or of areas beyondthe limits of national jurisdiction.

- Principle 3: the right to development must be fulfilledso as to equitably meet developmental and

environmental needs of present and future generations.

- Principle 9: States should cooperate to strengthenendogenous capacity-building for sustainabledevelopment by improving scientific understandingthrough exchanges of scientific and technologicalknowledge, and by enhancing the development,adaptation, diffusion and transfer of technologies,including new and innovative technologies.

- Principle 17: environmental impact assessment, as a

national instrument, shall be undertaken for proposedactivities that are likely to have a significant adverse

impact on the environment and are subject to a decisionof a competent national authority.

Each of the driving forces may have a time dimension (a trend) as

well as subnational deviations. Proper understanding of these trends

and deviations (e.g., between rural and urban regions) requires

some statistical data on economic, social and demographic

developments. These data will also be useful for the identification

of the baseline and for the scenario development, in the planning

process.

An interesting example of a important driver is the

regulation through OPEC production quota. The annuallevel of oil production of the Islamic Republic of Iran isdetermined by OPEC agreements rather than by domesticproduction constraints. This means that the exportablesurplus of oil is determined (at least in the short run) by thedifference between production quota and domestic

demand. The reduction of domestic oil consumptionthrough energy savings and fuel substitution has become




the most important policy objective of Iranian energypolicy as it increases the oil exports and thus the national

income.12

It is important to distinguish between manageable and autonomous

developments in driving forces. What is manageable and what is

not, to some extent depends on the country, its power, its economic

opportunities, and its culture. For example, demographic

developments like population growth and migration between rural

and urban areas are valued differently in countries in the region.

Autonomous developments (e.g., technological developments,

societal perception), basically happen outside the control of the

Government.

India has a National Population Policy formulated in anAction Plan (2000). Whether it will be successful or not,

energy demand for domestic use in urban as well as ruralareas will rise, facing the country with a huge challenge.Thousands of Indian villages may not be provided withenergy from the grid in the next 20 years, continuing a

situation of energy poverty for many years in the future. 13

In response to this challenge, India is now planning to

prepare a vision for 2012 to narrow the gap betweenenergy demand and supply.

12

Mohsen Bakhtiar, 2000. “Energy situation and strategic planning towardssustainable energy development in the Islamic Republic of Iran, 2000”, presented atthe Ad Hoc Expert Group Meeting on Strategic Planning towards a Sustainable EnergyFuture: Policy Options, Barriers and Action Plan, ESCAP, Bangkok, 18-20 September2000.

13 Pradeep Chaturvedi, 2000. “Sustainable energy supply in India”, presented at theAd Hoc Expert Group Meeting on Strategic Planning towards a Sustainable EnergyFuture: Policy Options, Barriers and Action Plan, ESCAP, Bangkok, 18-20 September2000.




Here are some examples of driving forces:

Economic

growth

Population growth Urbanization Industrialization

Internationaleconomicdevelopments

Ratification of internationalagreements

Emergencypreparedness

Pricedevelopment onthe resourcemarket

Need for hard

currency

Loan conditions

for donormoney/loans

Pressure from

private investmentinterest

Technology

breakthrough

It is important to decide whether -in the context of the country-these examples are:

(a) applicable;(b) autonomous or manageable.

III.3 I DENTIFYING THE BASELINE

The most successful examples of the application of strategicplanning in the world have had some sort of identification of the

baseline as the starting point of the process. The baseline is defined

as the national energy situation at the start of the process.

At a minimum, the baseline should include all aspects of the goals

and targets expressed in the vision. In order to be able to monitorprogress, the quantification of goals on the basis of a baseline is an

important precondition.

For strategic planning of a sustainable energy future, the baselinewould preferably include the following items:




Additionally, it could include important side items like:

It goes without saying that this calls for a systematic collection of data relating to energy production and consumption, demographics,

socio-economic developments, etc. These data need to be processedin databases, to be developed and maintained in close cooperation

between Governments, research institutes and relevantstakeholders. Where national data are missing, one should start

collecting these, provided the data are relevant to the strategy.

• Energy use per capita in the base year and expected

trend towards the target year

• Energy demand in absolute terms per type of resourcein the base year and expected trend per type

• Net import/export in the base year

• Sectoral energy demand in the base year and targetyears

• Energy intensity of the economy

• Expected reserve of domestic energy resources(including lifetime of generating facilities) at the endof the planning period

• Extend to which energy subsidies obscures potentialfor energy saving.

• Health effects

•

CO2 and other emissions• Number of people not having access to energy

services

• Number of motorized vehicles

• Average fuel use in motorized vehicles




Fiji collected data on energy in a systematic order in theearly 90’s. Energy Statistics Yearbooks contained

historical data series back into the 80s. Unfortunately,

shortage of staff and time constraints caused the end of theyearbooks in 1993. Nevertheless data collection continuedand provides Fiji today with many insights in its energyuse and options, including potential development

opportunities for hydro, wind and wave power.14

III.4 D EVELOPING SCENARIOS

From the vision and the knowledge about the driving forces and the

situation in the base year, the next step in the strategic planning

process will be the development of alternative scenarios for asustainable energy future. A scenario calculates the effects of a

certain policy on a given goal. Different scenarios take alternative

policies, very often differentiated in levels of ambition.

Alternative scenarios can be elaborated in different directions.

Quite common is the development of the following:

• A business-as-usual scenario

In which the existing trends and regulatory framework arenot changed.

• A technical possibility scenario In which the current state of energy technology would be

applied across the country, to its maximum potential, using

regulatory or other instruments.

• A sustainability scenario In which the expected long-term results taking into account

social and environmental dimensions, are calculated back

to what needs to be achieved by certain intermediate dates,

through a programme that includes further research,

funding and actions.

14 Makereta Sauturaga, 2000. A similar situation exists in Tonga, although therenewable energy mix is slightly different.




Other sets of scenarios could be imagined, such as a set based on

different assumptions on economic growth (and thus energydemand). Scenario calculations could be performed on the basis of

a national model, where necessary with the help of experiencesdrawn from developed countries.

India has used scenarios in its policy development for the

import of primary energy. In 1999, the PlanningCommission defined three scenarios:

(a) Business as usual;

(b) Accelerated hydropower development (5 per centincrease in share of hydro in total installed generation

capacity);

(c) Savings of 10 per cent in domestic electricity and oil

consumption.

India also performs sensitivity analysis on these

calculations.15

It is important to note that most countries around the Asian and

Pacific region have some form of scenario building, mostly based

on assumptions of economic growth. A common approach is to

choose for an optimistic and a pessimistic assumption of economic

growth. These scenarios are generally formulated in terms of

necessary increases in installed capacity of energy production, in

networks to distribute electricity to end-points and in increased

exploitation of existing resources. In the latter case, it is also

feasible to develop resource based scenarios.

III.5 FORMULATING A STRATEGY

The main challenge of strategic planning of a sustainable energyfuture lies in the strategy formulation itself. Having the vision and

the scenarios and understanding the drivers, the real work is yet to

15 Pradeep Chaturvedi, op. cit.




come. A strategy sets out the way forward, both in terms of

substance and process. It is the core of the whole SPM approach.

Substance

A strategy translates the vision in realistic targets for energygeneration, energy use, import/export, and the evolution towards a

sustainable energy future. Preferably the strategy addresses allaspects of the energy policy, i.e., the aspects that need to be

changed or phased out as well as the aspects that need to bemaintained. The strategy is the overarching document on which the

action plan (see III.6) will be based.

The strategy takes a long-term view, at least 15 years in the future,

to be divided in intervals of four or five years. Where applicable

this interval will be identical to existing planning procedures in thecountry. The strategy defines the changes to be made in those years,

both for the long-term and the short-term intermediate steps. Asstated before, these changes are preferably defined as quantitative

targets, e.g., required change in megawatt per fuel type as comparedto the base year.

India defined an energy strategy in its Ninth Five-YearPlan (1997-2002), with a short-term, medium term andlong-term strategy, clearly prioritising in a situation where

needs and means need to be balanced over time.16

Fiji has

a system of five-year national development plans andthree-year corporate plans for the Department of Energy.The latter is based on a regular assessment of the desiredfocus of the Department, combining internal assessment

within the Department of Energy, external analysis of

other concerned departments and political analysis.17

16 Pradeep Chaturvedi, 2000, op. cit.





The strategy will indicate the back-up plan: what will happen if the

results are insufficient to meet the targets of the strategy. This couldlead to setting additional measures to be taken. It could also include

evidencing targets for additional stakeholders, not present in theoriginal plan. It could be punitive in nature, if a stakeholder has not

succeeded in achieving a reasonable portion of its overall goal.

The strategy also needs to outline the necessary legal andinstitutional arrangements for the future of the energy market. With

continued liberalization of the energy market and volatile energyprices owing to an unpredictable oil market, it will not be easy to

organize the marketplace in an effective manner. National

circumstances around the Asian and Pacific region vary too widelyfor any conclusive general guidance in this matter. This poses agreat challenge to Governments in the region, because formulating

the strategy requires decisions on legal and institutional issues.

In countries in the region institutional development onenergy issues has been an important issue. Already in1992, the Indian Government established a specialMinistry of Non-conventional Energy Sources, primarily

to give the existing department of the same name within

the Ministry of Energy more autonomy in decision-makingand resource allocation.

18

A specific aspect of the institutional arrangement is a decision to be

taken on the use of investment funds generated through the CleanDevelopment Mechanism under the United Nations Framework

Convention on Climate Change. Beyond the political problemsrelated to the use of this flexible instrument under the Kyoto

Protocol, lies an interesting opportunity to transfer innovative

energy technology (renewable and other) from developed todeveloping countries. This could be technology to lower the

18 Somit Dasgupta, 2000. “Sustainable development in India”, presented at the AdHoc Expert Group Meeting on Strategic Planning towards a Sustainable EnergyFuture: Policy Options, Barriers and Action Plan, ESCAP, Bangkok, 18-20 September2000.




emissions of CO2 or other greenhouse gasses but could also be fuel

switching in power generation. Several countries in the region arecurrently studying advantages and disadvantages of participation in

the Clean Development Mechanism, on the basis of the outcome of the seventh Conference of the Parties of the Framework

Convention; November 2001, Morocco. The World Bank, the AsianDevelopment Bank and other international financial institutions and

the donor community are also looking at the prospects of this

mechanism from their specific perspective.

Process

The strategy is as much a process as it is a plan. Working togetherwith producers, distributors, corporate and individual users,Governments at different levels and stakeholder organizations, the

strategy comes alive. It is this interaction between the players in areiterative process which is as relevant to the success of the strategy

as the plan itself.

In large countries (such as China and India) the relevanceof Government at the regional, provincial and state levelsis very high. Although energy policy is to a la rge extent anational issue, subnational governments have a large

influence on decision-making processes. Indian Stategovernments provide matching funds for the installation of

power plants, have an important role in infrastructuredevelopment and are gradually moving towards policies

for non-conventional energy based power generation.19

Reflecting on the mission statement for sustainable energy

development (see the introduction) ‘…. enhancing the capacity of

concerned stakeholders…’, it is very clear that ultimately theconcerted actions by individual stakeholders will have to bringabout the desired results. Governments need to focus their attention

19 Arun K. Tripathi, 2001. “Strategic planning and management of natural resourcesdevelopment for energy sector in India”, presented at the Ad Hoc Expert GroupMeeting to Review the Draft Guidelines on Strategic Planning and Management of Natural Resources Development, ESCAP, Bangkok, 18-20 June 2001.




on this enhancement of the stakeholders and for that purpose create

a process of interaction, involvement and ultimately commitment of the stakeholders to the implementation of the strategy, the vision.

This accounts for two important items in these SPM-guidelines:involving stakeholders (see chapter IV) and managing the process

(see chapter V).

III.6 FORMULATING AN ACTION PLAN

The action plan is the translation of the strategy to the level of

individual activities or tasks. Every action to be taken by the

initiating agency in order to implement the strategy, to promote the

achievement of results by stakeholders, to manage the process, to

monitor progress, and so on, needs to be included in the action plan.

It is the main management tool for the initiating agency during the

implementation of the strategy. The action plan may also include

the actions of other agencies, private companies, and other

stakeholders.

The action plan specifies the following information for every

action:

The action plan could be divided in several sections dealing with acluster of activities. A cluster manager would oversee the cluster

and report on progress to the overall action plan manager within theinitiating agency. Such a cluster would have a common

denominator, like a specific resource (oil, gas,…) or a specific

• Clear description of the action

• Time frame for the execution of the action

• Organization responsible for the execution of theaction

• Individual who is in charge of execution of the action

• Means of implementation of the action (budget, tools)




target (rural electrification, import power, …). Preferably a cluster

combines tasks within the responsibility of one agency, as thisallows for easier management of the cluster. However, there is

definitely some merit in keeping related issues in one cluster of activities in the action plan, in order to assess better any reciprocal

effects of different activities.

In many of the countries in the region an action plan hasbeen prepared and subsequently implemented. In manycases this action plan is not based on a vision and/or astrategy, but it is a document that contains a whole rangeof actions for a specific period (1-5 years). In most casesactions are energy resource-specific, region-specific, or

organization-specific. The main purpose of existing plansin the region is to meet necessary demand load withenough installed capacity by a certain deadline, to boost

economic development, rural electrification and/or theinternational trade balance.

However, there is a growing group of countries in the

Asian and Pacific region that has national plans embeddedin wider strategy. A good example is the Fiji Departmentcorporate plan (three-year action plan) as implementation

scheme for the five-year national development plans. Thecorporate plan has annual implementation plans thatspecify goals, timeframes, budget and management

aspects.20

One particular form of this clustering is target group management,

in which the initiating agency dedicates a senior staff member to be

the spokesperson/negotiator towards a specific group of industriesor utilities. All issues relating to the contribution of that group to

the success of the implementation of the strategy are discussedbetween that group and the target group manager. The target group

manager reports back to the overall manager of the strategy, withinthe initiating agency.





The management system around the first NetherlandsEnvironmental Policy Plan (1989) introduced target group

management to provide industrial sectors with a dedicated

civil servant. All communication to the target group washandled by the manager. Internally, the manager oversawall ongoing activities that might have an effect on his targetgroup, allowing him to point to any inconsistencies in thegovernment approach to the sector and look for a balanced

approach of the sector. One of the main aspects of this rolewas the ability to work with industry in maximizing the

environmental impact of the invested dollar. Although thesystem had its flaws, the overall assessment of thismanagement approach was quite favourable, both in theeyes of the Government and in the eyes of the sector.

Not every topic is easily embedded in a cluster approach. Some

cross-cutting elements, such as environmental protection, public

health or gender issues, may influence every cluster. Government

agencies responsible for these elements should be allowed to review

and comment on planned activities in advance and assure that the

undertaken actions are in line with government policies in thesefields. Environmental impact assessment, gender meanstreaming

and/or social impact assessments are some tools to be used in thesecross-cutting reviews.

III.7 M ONITORING PROGRESS AND EVALUATION

The main purpose of monitoring as an integral element of strategicplanning is to ensure that the activities of all stakeholders relevant

to the success of the sustainable energy future plan are beingexecuted and result in the desired outcome. This feedback

mechanism makes progress (or lack of it) visible. It is important topass on the information to all stakeholders, as it will tell them too

how they are doing (e.g., compared to other stakeholders). It willenable them as well as the managing agency to adjust their policies

or take new actions that contribute to the overall goal.




There are many ways to monitor progress. A few of the most

commonly used are:

The latter option has become quite fashionable during the nineties,but restraints on funds to gather and process data have been

hampering progress in many countries in the Asian and Pacificregion. Still, with continued support from international

organizations such as ESCAP and IAEA and the United NationsDepartment of Economic and Social Affairs, further development

of a set of key indicators, relevant to sustainable use of energy, may

prove to be beneficial to the region in understanding progress in the

field of energy management.

Depending on the goals of the vision and the strategy, the initiatingagency may define a set of indicators at the start of the project and

report on them on an annual basis from the second year of the

implementation of the project. Here are some suggestions for

indicators for a sustainable energy future:

• Share of non-fossil fuel in total energy generation.

•Share of non-renewables in energy resources.

• CO2 emissions as a function of economic growth.

• Accessibility of energy resources (e.g., to the poor).

• Affordability of energy services.

• Net energy trade balance.

• Statistical information collection and disseminationon energy generation, use, import and export,

intensity, etc., by the statistical bureau

• Qualitative study based on a questionnaire by ascientific organization or consultant

• Inspection or supervision by a separate governmentagency

• Use of indicators




Additional ideas on indicators can be found in the indicator sets of

IAEA and the Commission on Sustainable Developmentrespectively. The work of that Commission is under development

and can be followed on the Internet: http://www.un.org/esa/sustdev.

It is clear that a strategy with quantitative targets will provide aclear reference for periodic comparison with indicator results. This

will make progress quite transparent, which is a deliberate choicewithin strategic planning and management.

At the same time, lack of progress will also be visible. For this

reason many managing agencies are careful with the distribution of

these figures. Experience shows that negative results often becomea driving force for further and increased activities to meet the

targets. It takes courage to show these data but they are an

important factor in the engagement of stakeholders and in thecommunication to the general public.

The results of the monitoring exercise will provide the initiating

agency with the important data and information to evaluate the

progress in the course of the planning cycle. In the evaluation of

this material it may become obvious that certain policies,instruments and process arrangements need to be changed. This

insight moves the process forward in a new cycle, towards an

adjustment of the strategy or the plan.

III.8 A DJUSTING TO NEW INFORMATION

It has been stated before: strategic planning is not a one-time event,

it is a continuous process. New information, new insights,

monitoring progress, new stakeholders and new alliances betweenstakeholders, all indicate a system of continued renewal and

evaluation. Even if the plan is on track, new energy demands mayrequire revision of existing scenarios and additional measures.

Some other examples are structural reforms, technologicaldevelopments and availability of funds from the Clean

Development Mechanism.




The initiating agency, in its capacity as the overall manager of the

process, should regularly take a few steps back to look at theimplementation of the strategy from a further distance. This will be

helpful in understanding the bigger picture, as energy is an integralfunction of society and is driven by factors other than energy policy

alone. It may be helpful to call upon external parties to assess thestate-of-the-strategy on a regular basis and to report on its viability

for the future.

An important aspect of this could be the energy dependency on oneor more countries. There could also be other dependencies. Any

problem outside the control of the managing agency poses a clear

and direct threat to the success of the strategy. Some examples are:

• Energy import not keeping up with domestic growth in

energy demand.

• Acidification policy results will be compensated by

increased import of emissions from neighbouring countries.

• Risk reduction by closing down old nuclear facilities willbe compensated by border region establishment of new

facilities.

New inputs require adjustments, making the strategy dynamic, or

turning the plan into a process of continuous improvement. It is

very important to think about the sustainable energy future as a

work-in-progress. New written versions of the strategy will be

required on a periodic basis, perhaps every five years, but the

strategic process needs to be a continuum.



CHAPTER VI

MODEL VARIANTS



Chapter IV: Stakeholders’ involvement 51

Introduction

A stakeholder is any organization or individual which may affect or

may be affected by the issue under consideration. A stakeholder isinvolved in the origin and/or the solution of a problem. This

involvement will be or can be caused by a decision or the absenceof a decision. When applied to energy resource management, it is

easily understood that almost everybody has an interest in energy. It

is important to identify who are the key stakeholders, i.e., who

among all stakeholders should be addressed as partners in a

strategic process. With these key stakeholders the initiating agency

will look for long-term mutual benefits.

To date, energy policy is seldom developed in close cooperationwith stakeholders other than different ministries and a relatively

small group of private sector parties that produce energy out of renewable or non-renewable resources or have a role in the chain of

production-distribution-supply.

In most of the country presentations listed in annex II,stakeholder participation seems to be limited to a broadrange of national ministries, lower government authoritiesand the privatized entities in the electricity chain. In

hydropower development, which is often paid for throughinternational financial institutions such as the World Bank

and the Asian Development Bank, stakeholderinvolvement is a condition for appropriation of funds. Anotable example that frequently occurs is hydropowerdevelopment, which regularly comes with resettlementowing to flooding of habitat.

Involving relevant stakeholders throughout the strategic planning

process is very important to broaden the support for policy andactivities, to avoid conflicts and to generate as much support as

possible for the implementation of the plan over time. Experiences

around the Asia and Pacific region show increasing stakeholder

participation, notably of the private sector and non-governmental

organizations. The rest of civil society is less involved in many

countries in the region but is keen on getting involved. The




In the following paragraphs the different tasks are presented in a

three-stage approach:

• Getting started (stage 1)

• Working together (stage 2)

• Ensuring progress (stage 3).

IV.1 STAGE 1, TASK 1 D EVELOPING A CLEAR MISSION , A

STAKEHOLDERS’ STRATEGY

It is important to strategize stakeholders’ involvement. There needs

to be an agenda on the side of the initiating agency. This agendacomprises a clear view on the role, responsibility and possibilities

of each of the stakeholders. The agenda is basically for internal use

by the initiating agency only. The agenda provides answers to such

questions as:

• What is the problem or issue?

• What is the organization’s contribution to the problem?

• What is the organization’s contribution to the solution?

• How well does the organization represent its stake

(credibility issue, level of representation, power base)?

• Is the organization prepared to negotiate with otherstakeholder organizations in order to build consensus?

• What do we need from this organization?

• What can be offered to this organization?

Such a strategy may also address the issue of stakeholders’management. This is merely a tool to manage a wide variety of

stakeholders around one complex issue. It may include a ranking of importance among the stakeholders. It may also include a

systematic approach towards managing contacts with each

organization: all communications with a specific organization arechannelled through one person, the liaison officer, who needs to




build a relationship of confidence with that organization. It is

helpful (for internal purposes) to define the answers to thesequestions as a clear mission statement.

IV.2 STAGE 1, TASK 2 I DENTIFYING THE STAKEHOLDERS

On the basis of the vision, the strategy and the insights in the

driving forces of energy supply and demand as well as the mission

statement on stakeholder involvement, the initiating Government

should be able to identify the stakeholders. This may include the

following organizations:

• Government departments outside the initiating ministry oragency, such as planning, finance, environment, health,

forestry, economy and trade, foreign affairs.

• Energy industry, ranging from exploration and exploitation

of oil wells, distribution, storage, to transmission

operations.

• Energy users, from individual energy-intensive corporation(ore processing, refineries, chemical industry) to energy

generation plants.• Local governments, on provincial/state/regional level as

well as local level, in particular in relation to rural

electrification.

• Scientific community, making good use of domestic

academic capability in scientific research, planning and

applied technology.

• Organizations representing specific interests in civil

society, such as consumer associations, and organizationsfor social development, indigenous peoples, biological

diversity, nature conservation, environmental protection

and equality for women or minorities.




Table 2 below provides an indication of possible involvement of

certain stakeholders in the course of the process. It is stressed that isthis only one way of looking at levels of involvement. The initiating

agency should assess the level of involvement for each issue underconsideration in the national setting.

Table 2. Possible level of involvement of stakeholders

Stakeholder Strategy

formulation

Action plan

formulation

Implement

activities

Monitoring Adjustment

Energy

serviceproviders

- B A A -

Governmentagencies

- National- Local

AC

AB

AA

AB

AC

Financial

Institutions

C B B C C

Utilities - B A A -Consumers

- commercial

- residential

C

C

C

C

B

B

-

-

-

-

Technology,

R&D,Academia

B C - B C

NGOs B B - B B

A: High involvement (co-production, development of part of the work, high self-

interest)

B: Medium involvement (input at request, low self- induced action)

C: Low involvement (reacting to documents, no self-induced action).

IV.3 STAGE 2, TASK 1 ESTABLISH EFFECTIVE TWO-WAY COMMUNICATION

Being transparent, open and clear

Having identified the stakeholder organizations relevant to the

energy strategy and having clarified the internal agenda on what to




expect of each of them, it is necessary to communicate the goals,

rules and fall-back positions of involvement. The stakeholders doneed to know what is expected from them in the process of defining

the sustainable energy strategy, not only at the start, but also in thecourse of the planning process. This calls for an effective two-way

communication system and a transparent organization of work.Transparency is a key feature of strategic energy resources

management and planning. Responsibilities need to be clearly set,

defined and understood by those to be involved.

Specific attention should be paid to the rules of the game, the

method of working together towards a sustainable energy future.

Many stakeholder involvement actions do not provide the expectedresults because organizations drop out after negative experiences,lack of trust or confidence in the process, in other players, or worst,

in the initiating agency. An important factor in this matter is thecreation of an enabling environment, where organizations have a

clear understanding of their role, the opportunities as well as thepitfalls of cooperation and the possible outcomes. It is important to

understand that these outcomes do not necessarily meet the

expectations of all parties in the process.

IV.4 STAGE 2, TASK 2 D EVELOP OPTIONS FOR MUTUAL GAIN

Preferably, stakeholder involvement creates gains for all parties in

the process, i.e., everyone gets benefits, more than if they had not

taken part in the process. These so-called win-win situations are not

always possible, but stakeholders may still feel better about their

role inside the process than outside, if the final result is positive to

sustainable development of their country or region. Therefore, a

win-win situation may arise from the production of collective gains

for all stakeholders combined, rather than individual gains for each

stakeholder.

It is important to engage in partnership with the stakeholders,

identifying options and defining the playing field. Sometimes the

playing field needs to be enlarged to acquire more options for




negotiation and trade-off. Sometimes compensatory measures may

be found in another field than sustainable energy management, forexample in new economic opportunities for resettled inhabitants of

a future hydropower basin.

Close engagement may turn into conflicts, either of interests orbetween persons. Managing these conflicts is a key feature of

stakeholder involvement, particularly in problematic situations of limited options, limitations in negotiation space, or otherwise.

IV.5 STAGE 2, TASK 3 AGREED CRITERIA FOR COMPARING POLICY

OPTIONS

Focusing on agreed criteria will help move stakeholders away from

their stated positions. The initiating agency can produce a

preliminary list of criteria for discussion among the relevant

stakeholders, opening the list for further submissions. In a process

of negotiations the group of diverse stakeholders is to agree on a list

of criteria for comparison of policy options, regardless of theiropinion of the actual energy policy.

If agreement is not reached, the initiating agency may wish to callupon outsiders, like research institutes or foreign experts, to assistin drawing up a list of criteria for comparison of options. In this

case, the different stakeholders may be asked to provide names forthese experts.

IV.6 STAGE 3, TASK 1 D ISSEMINATING INFORMATION THROUGH

THE MEDIA AND OTHER NETWORKS

The use of public media such as newspapers, television, radio and

the Internet targets the general public. Providing these media with

information on energy policy and in particular on measures that

affect their daily lives, such as rural electrification schemes,gasoline pricing and urban air pollution measures, can generate

public support. This is critical to the success of these policies.



CHAPTER V

MANAGING STRATEGIC

PLANNING AND

MANAGEMENT



Chapter V: Managing strategic planning and management 61

A very important, but generally underrated aspect of strategic

planning, is the overall management of the whole process, from thevision to the revision. This management is executed by the

initiating agency, i.e., a ministry of energy or power. Although it isabout the management of the whole process, it focuses in particular

on the timely and cost-effective delivery of the results of theprogramme of action (often four to five years). As many

stakeholders and organizations will be working on operational parts

of the implementation, it is crucial to maintain oversight and

manage any conflicts between different organizations working in

seemingly different niches of the action program. Oversight is also

needed to organize effective periodic reporting on the progress of

the implementation of the program (as well as the strategy!).

There are many ways of managing an action programme. The size

of the programme, the number of implementing agencies and thesize of the country are just a few of the criteria to assess the proper

dimensions of a management scheme. It is likely that theresponsible government agency opts for a structure which is most

known to the country, preferably embedded in an existing

administrative structure. Alternatively, the initiating agency may

opt for a task force or working party approach, invitingrepresentatives of other agencies to join a (temporary) team thatoversees implementation of the programme. Such an approach

would provide the lead agency with a liaison structure allowing forclose and effective interaction with the most involved agencies in

the Government.

The project teams that have worked on four consecutivenational environmental policy plans in the Netherlands,

have been staffed from different ministries, all involved inenvironmental policy. Although the Minister for theEnvironment and the team leader were from theenvironmental ministry, many staff members came fromsuch diverse ministries as economic affairs, agriculture,

nature management and fisheries, developmentcooperation and transport and water management. Their




respective ministers co-signed the document as it was sendto Parliament for approval.

These government-based structures typically assign tasks, requirereporting and decide on progress on the basis of actual results. This

system relies on a series of one-to-one relations, always involvingthe responsible agency on one side of the relation.

In Viet Nam, the Pre-Investment Division, a governmentagency, was established under control of Electricity of Viet

Nam (part of the national Ministry of Industry). Thedivision is responsible for management of implementationof the action plan on electric power development, control

over the process of implementation and for managing thebudget.

22

On the other hand, really innovative approaches to a sustainable

energy future may actually benefit from an innovative management

scheme. This could look such as a multi-stakeholder dialogue such

as a roundtable, where representatives from diverse stakeholder

organizations sit together periodically to discuss progress andnegotiate additional measures to keep the plan on track.

Chairmanship could lie with the responsible minister, but also withan independent person who is trusted by all participants to guide

them through their joint effort.

The Canadian Government worked with stakeholderorganizations in the early nineties in setting up aRoundtable for Environment and Economy. Five Cabinet

ministers joined 20 representatives from diversestakeholder organizations in periodic discussions of theprogress in the execution of the Green Plan. After the

Green Plan was abandoned by the next cabinet, theRoundtable continued its important role of providing a

22 Nguyen Van Huong, 2001. “Development in energy sector of Viet Nam”,presented at the Ad Hoc Expert Group Meeting to Review the Draft Guidelines onStrategic Planning and Management of Natural Resources Development, ESCAP,Bangkok, 18-20 June 2001.



Chapter V: Managing strategic planning and management 63

platform for civil society to discuss environmental policywith the ruling Government.

Whoever is in charge of the process, the most important element of overall management is delivering the plan. The overall manager

should focus on the contribution of every responsible task managerto the greater picture. Ownership by and clear attribution of tasks to

individual organizations (such as ministries, agencies, etc.) or toassociations of industry are of paramount importance. With energy

management this requires a structure that is capable of managingthese tasks on several levels: the national level, the provincial/state

level and finally the local level.

Obviously, this is not a one-man job. It will require an effective,

lean-and-mean structure, including monitoring, feedback and

correction mechanisms. As a continuous process, strategic energyresources management is never done.



CHAPTER VI

MODEL VARIANTS



Chapter VI: Model variants 67

Several model variants can be applied to planning of a sustainable

energy future in the countries of the Asian and Pacific region. Themost common are discussed in this section of the guidelines.

VI.1 SUBREGIONAL COOPERATION IN ENERGY ISSUES

The Strategic Planning and Management approach could be applied

to supra-national subregional cooperation. In several subregions of

the Asian and Pacific region cooperation between States is ongoing.

This could be through trade in energy resources, import/export of

power, shared development of hydrocapacity, technological

cooperation, or other. At this level, many of the elements of the

approach are valuable, but the role of the initiating agency will have

to be organized in a different manner. It could be imagined that a

multinational agency or a secretariat would be set up to perform this

role. Such agency would have the national ministries of energy as

its main stakeholders.

It has not easy to imagine the application of StrategicPlanning and Management approach to the entire ESCAPregion. At this regional level the cooperation would

preferably be targeted at building the national and(sub)regional capacity to apply SPM to energy resource

management. After the finalization of the guidelines, theregional cooperation could move forward to training andfurther capacity-building at the subregional level. Theguidelines could be transformed in training material and an

increasing amount of hands-on material, enriched by thegrowing experiences of those countries that will apply the

approach in their decision-making processes on energy(resources) policy.

VI.2 N ATIONAL VERSUS SUBNATIONAL LEVEL

In general, a sustainable energy future will be developed and

implemented on a national level. In most countries in the Asian andPacific region, energy policy is national policy, with a central

agency taking care of planning, frequently in the context of an




economic five-year plan. Some countries are so large in geographic

size, that a subnational level approach may be more appropriate.The most important factor to decide the correct level is the level of

control over the energy generation process. If energy generationpolicy (in an institutional and regulatory sense) is in the hands of a

higher level authority, it will prove to be impossible to manage thestrategy process effectively at a lower level. Ideally the

management of the process is at the same level as the control

mechanisms (institutional and legal arrangements) for the energy

sector.

If a subnational level is relevant, the strategy needs to spell out the

dependency on national regulatory and non-regulatorycircumstances. The strategy needs to deal with these circumstancesas far as necessary. This would probably lead to a situation where a

national government agency will be a stakeholder in a subnationalgovernment-led process.

VI.3 PUBLIC UTILITY VERSUS PRIVATE SECTOR POWER

GENERATION

Implementing a sustainable energy future strategy in a country that

largely produces energy through government owned and/or

operated utilities will be different from implementing such strategy

in private sector situation. The region features both examples as

well as intermediate situations where utilities are run like

companies but the shares are held by the Government. Private

sector involvement in exploration and exploitation of energy

resources may burden the national authority’s flexibility in using or

reserving resources, depending on the contents of the agreement

between the two parties. Often these private sector parties will

demand some form of guaranteed generation quota, allowing them

a profitable margin on their investments.

Every situation needs its own set of tools and instruments, but the

mechanisms of the guidelines are basically the same. Stakeholder

involvement, including utility involvement in developing the



Chapter VI: Model variants 69

strategy, the action plan and the monitoring and reporting

requirements, will raise the level of ownership of the strategy withthe counterpart. It will also appeal to each player’s specific role and

responsibility in raising the energy supply and use situation to ahigher level of sustainability.

VI.4 D IFFERENCES IN LEVEL OF DEVELOPMENT IN THE REGION

Differences in the level of development of countries in the region

may not pose a problem for using the same set of generic

guidelines, but certainly the application of the guidelines in the

domestic situation will differ. In terms of process it is advisable for

less developed countries to take time for the development as a

whole; in particular, to spend more time on disseminating

information and building institutions and capacity within civil

society in order to allow for the creation of meaningful

counterparts. The similarity with Central and Eastern Europe in the

early nineties, just after the collapse of the Berlin Wall, is

exemplary: the first years were needed for the creation of a

democratic civil society, giving organizations access to information

and funds to get organized and to develop ideas and ways of communicating these ideas. In these same years the Government

needed time to get organized in a new manner, opening up to

democracy, multi-party systems and decentralization of power.

Another aspect of developing countries with a relatively low

economic growth rate to date is that they seem to be in the category

of countries that are highly dependent on foreign sources of energy.

Again, this does not change the guidelines as such, but places

special emphasis on the dependence on non-domestic factors in the

determination of the energy future.

In order to get an effective interaction with stakeholders, thestakeholders need to be organized and develop ideas and a vision

for themselves.



Chapter VII: Conclusions 73

Strategic planning and management of energy resources and the

development of a sustainable energy future are within reach formany of the countries in the Asian and Pacific region. It builds on

existing planning and management approaches already applied inthe region. Further elaboration, in many cases by taking a wider

perspective (a sustainability perspective), will provide betterdecision-making, better involvement (and commitment) of (key)

stakeholders and in the end a more sustainable future for the

countries in this region.

The region is gifted with many sources of energy and could largely

solve the issues within the region, learning from and using each

other’s experiences and comparative advantages. Countries thatneed support in bridging their current energy situation towards anew future could benefit from support of the donor community.

The guidelines presented in this document are a mere toolbox to

assist the countries of the region in making the transition to asustainable energy future. Every country will face its particular

problems and challenges. The guidelines are intended to provideideas and inspiration on how to counter these challenges and how to

apply a meaningful approach towards dealing with long-termaspirations of social and economic development, by taking small

steps at a time.

The results are not around the corner. They will take time and effort

from Governments at different levels and from many partners in

society, but walking this path together can create social cohesion,economic growth and a clean environment.



ANNEX I

GLOSSARY



Annex I: Glossary

Action planor

programme

Short-term plan (1-5 years) to translate general strategiesinto specific activities, each with a clear mandate,

responsible actor, adequate budget and other resources

Baseline Preferably quantified national situation at the start of theplanning cycle (reference point)

Driving force

Demographic, political, economic, social or environmentaltrend that is influencing energy policy in a meaningfulway

Project Coherent set of activities to realize a specific item of theaction plan

Scenario Calculated development of an issue based on certainassumptions

Stakeholder Any organization or individual which may affect or beaffected by the issue under consideration

Strategicmanagement

Holistic control of a process, integrating long-term,economic, social and environmental considerations, inongoing decision-making

Strategic

planning

Holistic development of an idea over a certain time period

to realize a desired result

Strategy (the

document)

Document to translate a vision into a set of realistic targets

to be achieved in the long-term (15-25 years)

Strategy (theprocess)

Process to create a strategy document in interaction withall relevant players

Sustainable

development

Development that integrates economic, social and

ecological considerations, without jeopardizing theopportunities of future generations to satisfy their needs

Vision Future-oriented, general political statement on the desired

development of a nation in the next 15-25 years



ANNEX II

LITERATURE



Annex I I: Literature

General reading

• Strategic Environmental Planning, ESCAP, United Nations

publication, Sales No. E.99.II.F.47, New York, 1999• Guidelines on Stakeholder Involvement in Strategic

Environmental Management, Environmental Resources

Management, Oxford, 1999

• Sustainable Energy Strategies, materials for decision-makers,UNDP, New York, 2000.

• Sustainable Development Asian and Pacific Perspectives, Asian

Development Bank, No. 030399, Manila, 1999

• Harmonising Environment and Development in South Asia,

Wijiayadasa (ed.), South Asia Cooperative Environment

Programme, Colombo, 1997

• Strategies for National Sustainable Development, a Handbook

for their Planning and Implementation, Carew-Reid, Prescott-Allen, Bass and Dalal-Clayton, Earthscan Publications, in

association with IUCN and IIED, London, 1994

• National Sustainable Development Strategies: Experiences and

Dilemmas, Dalal-Clayton a.o., IIED, London, 1994

Country presentations

A series of country presentations to the Ad Hoc Expert Group

Meeting on Strategic Planning towards a Sustainable EnergyFuture: Policy Options, Barriers and Action Plan, held in Bangkok,

in September 2000:

• Zhou Fengqi, Country paper of China on strategic planningtowards a sustainable energy future

• Khlaut Randy, Cambodia country paper

• Makereta Sauturaga, Sustainable energy development in Fiji

• Pradeep Chaturvedi, Sustainable energy supply in India




• Somit Dasgupta, Sustainable development in India

• Nenny Sri Utami, Indonesia: Sustainable energy development

• Mohsen Bakhtiar, Energy situation and strategic planningtowards sustainable energy development in the Islamic Republic

of Iran

• Houmphone Bulyaphol, Country paper: Lao People’s Democratic Republic

• Phouvong Sayarath, Country paper of the Lao People’s Democratic Republic

• Soe Myint, Energy development programmes in Myanmar

• Madan Bahadur Basnyat, Country paper on renewable energy in

Nepal

• Panich Pongpirodom, Country paper of Thailand

• Sunmin Kim, Republic of Korea’s energy policy directives – an

introductory review of the Republic of Korea’s energy policy -

In the context of the preparation of these guidelines (2001) severalcountry presentations were made, providing illustration material for

this document:• Zhu Xingshan, Energy resource planning and management in

China

• Somit Dasgupta, Country paper for India

• Arun K. Tripathi, Strategic planning and management of naturalresources development for energy sector in India

• Avinesh Narayan, Country paper for Fiji Islands

• Ch B C t f th L P l ’

strategic planning and management of energy sector

Documents