Munasinghe Energy Analysis and Policy

Selected Works
1. Auflage 2013
ISBN: 978-1-4831-6207-2
Verlag: Elsevier Science & Techn.
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 336 Seiten

Energy Analysis and Policy: Selected Works discusses the major aspect of electricity economics, including pricing, demand forecasting, investment analysis, and system reliability. This book provides a clear and comprehensive overview of the diversity of problems in analyzing energy markets and designing sound energy policies. Organized into 14 chapters, this book first discusses the energy economics in developing countries; integrated national energy planning (INEP) in developing countries; energy pricing; practical application of INEP using microcomputers; and energy strategies for oil-importing developing countries. Subsequent chapters describe the energy demand management and conservation; national energy policy implementation; energy demand analysis and forecasting; and energy project evaluation and planning. Other chapters explore non-conventional energy project analysis and national energy policy; rural energy issues and supply options; and bioenergy management policy. Rural-industrial energy and fossil fuel issues, as well as energy R&D decision-making in developing countries, are also presented. As the issues in this book are very important, this book will be helpful to a wide and appreciative audience.

Autoren/Hrsg.

Munasinghe, Mohan

Leseproben

INTRODUCTION1

Writing an introduction to the works of a great author is similiar perhaps to introducing a distinguished speaker to an audience eager to listen to the star of the evening and not one bit interested in the drabness of the introduction. In preparing this short text, therefore, I feel uncomfortably sandwiched between a lucid and effective Foreword by a distinguished economist -- Professor Robert Pindyck -- and the rich creation of Professor Mohan Munasinghe based on years of thought, analysis and insightful probing into the energy problems facing the world. However, since I have the honor of contributing the introduction to this admirable piece of work, I shall attempt to do full justice to my task.

Before I get into the substance of the enormous range of subjects covered by Mohan, I must pay adequate tribute to the professional in him. Each one of us has memories of that one great teacher who, through his brilliance and mastery of the subject, could explain the most complex of ideas and analyses in the simplest terms. Professor Munasinghe’s writings are typically those of that great teacher -- covering the most intricate and difficult issues with the facility and ease of a master.

The other general impression which I have gathered from the valuable material contained in this volume relates to the great industry, zeal, and dedication of the man. Most of us hold talks and lectures at many training programs and workshops, but I have run into very few who do not follow the general practice of putting a few things together at the last minute and presenting a rehash of what they have been saying for the past several years. Often the applause that one receives at the end of such a talk lulls one into a feeling of false accomplishment, tempting one to repeat the process at the next opportunity. One gains a facility with words and delivery, which over time becomes a substitute for profound analysis and original thinking. It is apparent from the lectures delivered by Professor Munasinghe, some of which are included in this book, that he treats each such event as a professsional challenge and as an opportunity to produce a work of original scholarship and rigorous analysis. Herein lies his strength, which undoubtedly is evidence of his dedication to perfection.

The material presented in this volume has general relevance to energy analysts and policymakers throughout the world, but has a special appeal for those dealing with this area in the developing countries. This Third World emphasis reflects not only the author’s own interests and concerns, but has merit of its own, since the developing countries face unprecedented challenges in the energy sector, which can only be met through analysis and innovation of the highest order.

The most difficult challenge facing Third World countries lies in the growing demand for finance that those dealing with energy sector decisions have to contend with. This challenge results not only from a rapid increase in demand for energy, and therefore, for supply capacity, but also from the growing capital intensity of the energy supply industry. The problems to be solved are, therefore, manifold.

Firstly, energy sector organizations in the developing countries must achieve economic efficiency in their investment decisions and operations through the practice of rational economic priniciples. Secondly, supply capacity enhancement must be integrated with approaches for management of demand, so that overall resources for development are utilized in an optimal fashion with explicit inclusion of efficiency objectives. Thirdly, the imperatives of growth require that the development of the energy sector must take place in a manner such that the welfare of society is maximized, particularly in respect of economic disparities that exist between rich and poor in the Third World.

The chapters of this volume address these questions and provide a framework whereby analysts and policymakers can pursue integrated energy planning and policymaking in accordance with the overall objectives of growth and equity.

The first chapter in the book deals with energy economics in developing countries, and examines the complex problem of adapting economic theory to practice in an environment where market forces and mechanisms often do not operate at all, or function under distortions which are not easy to remove in view of various social, political and organizational constraints. The value of this chapter (which is an edited version of Munasinghe’s acceptance speech on the occasion of receiving the annual IAEE Award for Excellence in 1987), lies in the fact that policymakers often dismiss sound economic theory for being too far removed from reality. On the other hand, many theorists denigrate institutional arrangements in such situations as totally unsuitable for the implementation of rational economic principles, and contend that unless existing institutions and organizations are dismantled, sound economic theory cannot be applied. Mohan bridges the gap between these two extremes and one emerges with a greater understanding after reading his analysis irrespective of whether the reader prefers one or the other viewpoint.

The second and third chapters are classic works published concurrently in 1980, in which Munasinghe brought together his research of the late 1970’s, to develop an original and comprehensive framework for energy pricing, planning, policy analysis, and implementation in the developing countries. In the second chapter, the principles of integrated national energy planning are set out, clearly. Here, not only are non-conventional forms of energy included in the exposition, but also traditional fuels -- a vital part of energy consumption in many developing countries. This chapter is particularly valuable, because planning for different forms of energy remains oftentimes fragmented in most countries, both developed and developing.

The concept of integrated energy planning is relatively new and came into focus only when substitution possibilities became more attractive economically, in the wake of the first oil price shock of 1973–74. Earlier, electric utilities, oil companies, coal suppliers, and the nuclear power establishment generally followed their own isolated attempts at energy planning. Notwithstanding the inclusion of a few variables such as the price of substitute fuels that entered into their demand functions, very little was done to evaluate fuel choices within an integrated framework.

In those countries where energy planning is based on the free interplay of market forces, there is still no integrated energy planning, even though governments may have prepared documents and future scenarios utilizing an integrated approach. In the developing countries, where a large share of energy sector decisions is still centralized in the hands of the government, the integration of different energy forms within an overall framework is essential not only for ensuring balanced economic growth, but also for minimizing overall costs of energy and use.

Munasinghe has done valuable work in the field of energy pricing. His writings are not only quoted frequently, but several of his arguments are utilized extensively by researchers, policymakers and analysts. I find his 1980 paper on “Energy Pricing: An Integrated Framework” perhaps the most valuable contribution in this volume, difficult as it is to separate out one from so many excellent chapters. It is really in this chapter that, through a simple but rigorous approach, the author presented a novel framework linking energy prices with other economic variables, and analyzed the structure of energy prices and their influence on economic activities and vice versa.

Perhaps greater harm has been done in the long run by policymakers round the world who deviate from an integrated energy pricing framework than from any other set of energy related decisions. Unfortunately, a regime of irrational prices is very difficult to alter. Even more difficult is the prospect of changing opinions and positions on energy pricing when they have been developed over time through a restricted view of the role of prices in an economic system. Munasinghe’s chapter in this book presents an excellent picture of how pricing decisions should be promulgated, if economic welfare is to be maximized. He has adopted a framework that is concurrently logical, easily understood and yet rigorous.

The fourth chapter dealing with integrated national energy planning using microcomputers is an interesting exposition of how he successfully implemented, while serving as the Senior Energy Advisor to the President of Sri Lanka, many of the principles and analytical techniques he had developed earlier. I recall the presentation of this paper in a one week workshop dealing with this subject in September 1985, at which I had the pleasure of being the Technical Chairman of the workshop organized by the the UN DTCD. Mohan’s was one of the few papers that addressed the challenges of applying the use of models within a Third World organizational and institutional milieu which may not be entirely conducive to energy modelling. Often, researchers who have developed energy models get carried away in their presentations by the technical excitement of the model itself, divorced from the environment within which these models are to be used.

Of course, 1985 was a period when interest in microcomputers and the development of microcomputer-based software was not as widely prevalent as it is today. The subsequent four years witnessed an enormous explosion of...