Flexible Research Fund Projects

The Open Call for Flexible Research Fund applications took place in September last year. Here are details of the projects that were successful with their applications.

1. Green Hydrogen Ecosystem: A Strategic Roadmap to Successful Implementation

Situation

Global hydrogen demand reached 95 million tonnes per annum (MTPA) in 2022, consumed mainly as a feedstock in the refining and industrial sectors (chemical, iron and steel production). Most of this hydrogen is produced from fossil fuels through coal gasification or steam methane reforming (SMR) of natural gas, resulting in over 1100-1300 million tonnes (Mt) of CO2 equivalent emissions. China is the world’s largest hydrogen consumer, with a demand of around 28 Mt in 2021. The United States is the second and the Middle East is the third at about 12 Mt each. Europe is the fourth with more than 8 Mt demand in 2021 and India is next, with a growing market of almost 8 Mt, up 7% from the previous year.

India’s demand for hydrogen is expected to increase significantly in the coming decades, according to IRENA (2022). The National Hydrogen Energy Board was established in India in 2003, acknowledging hydrogen’s importance as a sustainable energy source. In 2006, the Ministry of New and Renewable Energy (MNRE) developed a national roadmap for hydrogen, recognising its potential as a fuel across various industries. India aims to reduce its dependence on fossil fuels by increasing its hydrogen production using electrolysis which uses zero-carbon electricity from renewable sources. To achieve this goal, the government launched the National Green Hydrogen Mission (NGHM) on 15 August 2021. The mission aims to establish India as a global hub for green hydrogen production, usage, and export, with a target of producing at least 5 million metric tonnes (MMT) per annum by 2030. This could reach 10 MMT per annum with the growth of export markets.

Research Aims and Objectives:

Our research aims to collect relevant information and data to develop a comprehensive strategy for implementing green hydrogen policies in India, specifically focusing on Tamil Nadu. With its impressive track record in renewable energy, particularly wind energy, Tamil Nadu is an ideal location for this study. According to Niti Aayog’s SECI (Round 1) report for 2022, Tamil Nadu has harnessed around 9608.04 MW of wind energy and 4475.21 MW of solar energy as of March 2021.

Our research will primarily focus on the technological aspects of hydrogen production and utilisation and the role of economics, politics, and organisations. Our objective is to foster collaboration and knowledge-sharing among stakeholders at national and state levels, leading to a practical and effective report. Policymakers, industry stakeholders, and government entities will benefit from the recommendations and insights generated by our research to promote the adoption and utilisation of green hydrogen as a reliable energy source.

2. Green hydrogen from biomass in Punjab

Situation

Biomass gasification is a mature technology pathway that uses heat, steam, and oxygen to convert biomass to hydrogen and other products, without combustion. As biomass gasification removes potential CO2 from the atmosphere, the net carbon emissions of this method are extremely low, and hydrogen produced this way can be considered as green hydrogen. Punjab’s status as a predominantly agriculture-based state with significant biomass availability, particularly in the form of crop residues, provides a unique opportunity to leverage these resources for the production of green hydrogen. This could reduce carbon emissions and create economic opportunities in the renewable energy sector. However, it requires a coordinated effort involving government support, private investment, and technological innovation to realize its full potential.

Research Objectives

Develop innovative market model where local biomass (crop residues) may be used to generate green hydrogen and utilise green hydrogen in applications such as refineries, transportation, ammonia etc.

Create knowledge bank for Punjab government to support decision making for implementing biomass to green hydrogen projects.

3. Implementation of Effective Energy Efficiency Measures in Lao PDR

Situation

EE in Lao PDR is still at an early stage. The EE&C Policy (2016) and the EE&C Decree (2020) set a target of a 10% reduction in total energy consumption by 2030. However, reliable and comprehensive energy data is not available in Lao PDR and hence there is considerable uncertainty over how to calculate whether or not the Policy target has been met.

In addition, effective implementation of the Policy and Decree by the Department of Energy Efficiency and Promotion (DEEP) and the Ministry of Energy and Mines (MEM) is yet to be realised. A good foundation for effective implementation of the Policy and Decree has recently been laid by DEEP/MEM with support from the New Zealand – ASEAN Renewable Energy Facility and this research will move key aspects forward.

The widespread and effective adoption of EE measures involves many stakeholders. Within MEM, the Department of Planning and Cooperation (DPC) is responsible for collection, management and reporting of energy data. Other relevant line Ministries, provincial authorities, and public and private sectors with an interest in EE include the Ministry of Industry and Commerce (MOIC), the Ministry of Public Works and Transport (MPWT), and the Provincial Departments of MEM (PDEM). Greater coordination and collaboration across Ministries and Departments is needed.

Research Objectives

The research will build on key aspects of recent EE&C work undertaken by MEM with support from:

New Zealand – Laos Renewable Energy Facility (the Facility) – EE&C project with MEM undertaken from 2020-2023.
Economic Research Institute for ASEAN and East Asia (ERIA) – energy statistics and energy data with MEM undertaken from 2017-present.
World Bank – “Super-Clean Cookstove, Innovative Financing in Lao PDR Project Promise Results for Women and Climate” from 2018.
World Bank – “Lao PDR Clean Cook Stove Initiative” from 2019.

4. Macroeconomic Implications of Transitions to Low-Carbon Energy in Vietnam

As outlined in its 2022 ‘National Strategy for Climate Change until 2050’, Vietnam has committed to achieve net zero emissions by the mid-21st century. This strategy also articulates an interim goal, aiming to reduce greenhouse gas (GHG) emissions by 43.5% by 2030 with a clear-cut emissions limit imposed on the energy sector. Following this commitment, the country, however, will face a huge challenge as more than half of its energy production is from coal and this is expected to rise in the near future to temporarily cope with power crunches. As a result, a noteworthy infusion of investment and structural adaptations will be imperative to facilitate Vietnam’s transition towards cleaner energy sources. An optimistic perspective, previously delineated in the country’s 2012 ‘Green Growth Strategy’, envisages that this shift to clean energy could yield various favourable ancillary outcomes, including fresh investment opportunities, the cultivation of green jobs, enhancements in air quality, and more effective management of natural resources.

Although potential risks and benefits associated with the strategy were documented, there is a lack of evidence-based implications of this energy transition plan on macroeconomic factors in Vietnam. Among the variables pertaining to the transition plan that concerns policymakers, the price of carbon emissions stands out as a paramount factor. Carbon prices incorporate the external social costs of carbon emissions into economic transactions. They specifically target the carbon content involved in production processes, leading to a heightened cost for carbon-intensive production when compared to less carbon-intensive alternatives. Consequently, increases in carbon prices play a pivotal role in incentivizing the reduction of carbon emissions. Vietnam has initiated a strategy to establish a comparable Emissions Trading System (ETS), following the models of the EU, Korea, and China. This system is set to be officially launched and integrated into international markets by 2028. In conjunction with domestic carbon taxes and other national environmental levies imposed by regulations on polluting fuels, these measures impose a direct or indirect cost on carbon emissions.

Research Objectives

This proposal aims to offer evidence-based insights into the impact of the energy transition on macroeconomic aspects in Vietnam, with a particular emphasis on the economic consequences of carbon prices. More specifically, the project aims to investigate by establishing the alike ETS and other national levies, how carbon prices affect key macroeconomic indicators such as employment, competitiveness, growth, and the fiscal balance. Furthermore, the project will also investigate the economic multiplier of investment in clean energy through fluctuations in carbon prices through analyses at both aggregate and sectoral level.

5. Model for Financing Electrifying Urban Buses in Cities in Vietnam

Situation

The Vietnam Government has high ambitions to reduce emissions and at COP26 it committed to obtain the goal of net zero greenhouse gas emissions by 2050. Vietnam has been interested in improving mechanisms and policies – one of the most important first steps in implementing its commitments. The Government has issued Decree 06 regulating greenhouse gas emission reduction and ozone layer protection; Decision No. 01 approving the list of emitting facilities that need to make inventory of greenhouse gases; Decision No. 148 of the Prime Minister on monitoring climate change; Decision No. 888/QD-TTg of the Prime Minister approving the Scheme on breakthrough tasks and solutions to implement the results of the COP26 Conference on climate change; Action plan to reduce methane emissions to 2030; Promulgating the climate change strategy for the period up to 2050; Review and update NDC 2022, taking into account Vietnam’s Net Zero commitment etc. These policies have been creating changes in related industries and fields.

Research aims and objectives:
The proposed activity is research aiming at defining the international experience in (i) preparing the
strategy/roadmap for shifting electric buses in cities in Vietnam; and (ii) developing the models of
financing to increase the rate of electric bus penetration in cities in Vietnam (for both electric bus
fleets and charging stations). The research then proposes policy implications for Vietnam’s
government and makes recommendations for relevant businesses in Vietnam.

6. Pathways for Financing Ghana’s Energy Transition

Ghana’s government has committed to cutting 15-45% of greenhouse gas (GHG) emissions by 2030 and reaching net zero by 2070. However, achieving this rests mainly on having a low-carbon energy sector. The energy sector accounted for over a third (35.6%) of total GHG emissions between 1990 and 2016. In November 2022, Ghana’s government launched the Energy Transition Framework, which seeks to contribute to emissions reduction by increasing the share of renewable energy in the energy mix from less than 1% to 10% by 2030, among other interventions. Ghana needs about US$562 billion (almost 8 times its US$73 billion GDP in 2022) to implement this transition. Nevertheless, innovative policy pathways to unlock financial investments to support the transition are currently lacking. As a recent IMANI CPE study shows, many public institutions also lack the technical capacity to plan and prepare bankable projects that can attract domestic and international green finance.

Macroeconomic constraints, technical capacity gaps, and policy incoherence continue to hold back green financial investment in Ghana. The current macroeconomic environment, characterised by high inflation, escalating interest rates, and unsustainable public debt, pose severe challenges for mobilising financing to support energy transition in Ghana. In 2022, the total interest payments were about 48% of the total revenue and almost double the cost of total capital expenditure. As a result, domestic revenues are insufficient to finance the energy transition.

While Ghana has a patchwork of energy sector policies, they are also not backed by a climate or green transition law that binds the government to commit to energy transition targets and guarantee a predictable investment environment. Furthermore, there is shortage of investable projects because national and subnational agencies lack the knowledge to prepare bankable ones, resulting in misalignment between the available financing opportunities and government strategies.

Research aims and objectives

This project aims to identify feasible policy tools and approaches for accelerating finance for Ghana’s energy transition. The project is designed to achieve the following specific objectives:

Understand and identify the policy reforms required to unlock public and private—domestic and international— finance to support Ghana’s energy transition.

Understand the drivers and enablers of clean energy project bankability in Ghana and produce a toolkit that can be used by policymakers, financiers and clean energy companies to assess bankability.

Explore the potential of relevant earmarked and statutory funds to accelerate green finance at the subnational level.

Contribute to Ghana’s energy transition policy planning and implementation, and increase stakeholder awareness and participation in energy transition issues in Ghana.

7. Sustainable Cooling towards Net Zero Buildings in Vietnam

Situation

Sustainable cooling is a critical requirement of Net Zero Buildings (NZBs) Zero Emission Buildings (ZEBs) and Zero Carbon Buildings (ZCBs) in hot tropical and subtropical conditions. In Vietnam, the hot and humid air regime is a major challenge for cooling systems to provide thermal comfort. Meeting ambitious sustainability goals, including for net-zero CO2 emissions by 2050, requires a massive scale-up of low-carbon approaches and energy efficiency measures, including in the building sector. Rising temperatures, increased frequency of heat waves, and growing populations with rising spending power mean that demand for space cooling in buildings is on the rise.

In 2022, space cooling was responsible for more than 90% of the global cooling capacity and for around 60% of the global annual greenhouse gas (GHG) emissions from cooling. According to the International Energy Agency (IEA), without moving towards the best available products and improving the performance of the buildings, electricity demand for space cooling in buildings could increase by as much as 40% globally by 2030. Also, according to the IEA 2050 scenario, the building and construction sector needs to reduce its emissions by 98% compared to 2020 to reach the net-zero emissions target. ASEAN countries with tropical climates, economic growth and urbanising populations are expected to have space cooling contribute 12% of the total CO2 emissions in the energy sector by 2050 in business-as-usual (BAU). This is higher than any other region or major country.

Vietnam has released a new updated Nationally Determined Contribution (NDC 2022) under the Paris Agreement, in which the country increases its unconditional GHG emissions reduction target to 15.8% by 2030 relative to a BAU scenario. Vietnam has set an emissions reduction target of 43.5% by 2030, conditional on international support and financing through bilateral and multilateral cooperation. In Vietnam, no comprehensive assessment of the cooling sector has been performed, but recent experience has shown that cooling loads are straining power systems. This has led to power rationing during periods of high temperatures. It is critical that Vietnam develops targeted strategies, plans, programmes and policies for addressing rising cooling demand nationally, particularly in cities where cooling demand is concentrated and growing, and temperatures are fast rising due to the Urban Heat Island Effect (UHI). The Vietnam Government has recognized the need to address the rising cooling demand more sustainably for buildings to reduce the GHG emissions and electricity consumption from the cooling sector while improving access to high quality and cleaner solutions. In Vietnam, some of the technical assistance policies (energy audits, energy benchmarks, technical regulations and standards, assessment and labelling of efficient materials and equipment) have been prescribed by Laws and Decrees, but their impact in practice is still very limited. Residential and commercial buildings account for nearly 30% of the final energy consumption (2015) with space cooling being a significant contributor. Space cooling including fans, coolers and air conditioning units is already estimated to account for up to 40% of residential power demand and 25-40% of commercial/public services demand. The urban air conditioning electrical demand is expected to contribute to 80% of this overall demand.

Objectives of the project
In the attempt to address the gaps of sustainable cooling in buildings, especially in urban areas, the study is to implement the mitigation of GHG emissions in buildings in terms of promoting the technical strategies and providing roadmaps for sustainable cooling towards NZBs in Vietnam.

Therefore, the objective of the project is foreseen as: (i) Investigate operational behaviours of buildings in the aspects of energy efficient use, thermal comfort and IAQ in the Vietnam conditions; (ii) Suggest technical solutions and analysis economic costs in the phase of designing, installation, and operation for achieving sustainable cooling. NZBs, and (iii) Propose the roadmaps for sustainable cooling systems in NZBs.

Consequently, the methodology development for assessment of energy consumption in operation and the intervention solutions such as energy renewable, passive cooling, nature-based solutions, building envelope improvements, and cooling equipment efficiency is needed. Recommendations and pathways to promote energy efficiency with sustainable cooling and well-being towards NZBs integrating into policy documents will be provided in the project, also.

8. Market assessment for Standards and Labelling on air conditioners in Lao PDR

This project is the result of country needs surrounding cooling identified in different conversations across Lao PDR. The specific background for Lao PDR where research activities will take place is detailed below.

A decision on energy performance standards for Air Conditioners (ACs) in Lao PDR (Energy Performance Standard and Labelling for AC) was published in March 2022. However, the practical implementation has been far from ideal because of several issues related to labelling, testing and data availability. Particularly:

AC equipment is not produced in Lao PDR. Instead, it is imported from other Asian countries (mainly China, Thailand, Malaysia, and Vietnam). Retailers usually import equipment regardless of brand or country without knowing their Minimum Energy Performance Standards (MEPS).
Our experience is that labels are added to equipment from Thailand, but not for Chinese or Vietnamese equipment. Equipment also tends to be imported with incorrect labels.
There is a lack of AC testing in Lao PDR. The government planned to build a testing center in March 2023, but the center has not yet been created.
There have been proposals in the last two to three years to support AC testing, but they have not received funding support for different reasons.
There is a lack of data available on the type of products imported and the impact that labelling and standards have, since no surveys are done on sales.
The Department of Energy Efficiency and Promotion (DEEP) (Ministry of Energy and Mines) is undertaking discussions with the Department of Import (Ministry of Industry and Commerce) on air conditioners as designated goods, because air conditioners use a lot of electrical energy.
DEEP is also interested in testing ACs but they have identified a lack of internal capacity to conduct testing or update the Standards and Labelling policies.
There is Lao Business Refrigeration Association (LBRA) in Lao PDR, a stakeholder that needs to be included in the project.

Research Objectives

This project aims to strengthen Energy efficiency and conservation Policy, Decree on energy efficiency and Conservation, and Decision on Energy Performance Standard and Labelling of Air Conditioners in Lao PDR. Lao PDR relies on equipment imports, often without full certainty of equipment efficiency labels. The results of the project should aid in reducing energy demand for cooling in the country and to build relationships between three Global South countries for future cooperation.

Identify how to address the issues that hinder progress in the implementation of standards and labelling of ACs. These can include activities such as government-level procurement of equipment, revising labels over time setting milestones, determining AC performance effectively, among others.
Determining the critical interventions in different production stages to decarbonize and reduce the material use during the manufacturing of ACs
Strengthening collaboration among educational institutions, ministries, and research institutes to promote energy conservation and savings in air conditioners. reducing impediments in the implementation of the task of labelling between public and private bodies.