1 Keith Kozloff is Project Manager at Hagler-Bailly, Inc., an energy and environmental consulting firm. Before joining Hagler-Bailly, Dr. Kozloff served at the World Resources Institute, where he wrote numerous publications on energy in developing nations. He may be contacted at 1530 Wilson Blvd., Suite 900, Arlington, VA 22209; (703) 351-0300. The ideas presented in this paper benefited from research funded by the Global Office of the U.S. Agency for International Development.
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2 North America, Western Europe, Japan, Australia, and New Zealand.
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3 Dennis Anderson and William Cavendish, Efficiency and Substitution in Pollution Abatement: Three Case Studies, World Bank Discussion Paper 186 (Washington, DC: World Bank,1992).
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4 Anil Cabraal, Mac Cosgrove-Davies, and Loretta Schaeffer, A Best Practices for Photovoltaic Household Electrification Program, World Bank Technical Paper No. 234 (Washington, DC: World Bank, 1996); World Bank, Indonesia Policy and Operations Division, Staff Appraisal Report: Indonesia, Solar Home Systems Project, Report No. 15983-IND (Washington, DC: 17 December 1996).
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5 Heidarian and Wu, Power Sector Statistics for Developing Countries, 1987-1991 (Washington, DC: World Bank, December 1994).
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6 The factors driving power sector reform in developing countries are quite different than those in OECD countries. Developing countries need to attract private capital to invest in expanding and upgrading their power systems. They also recognize the need to improve managerial efficiency, accountability, and customer service. In contrast, power sector reforms in OECD countries are driven by the desire to lower electricity costs through competition.
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7 John Besant-Jones, "The England and Wales Electricity Model - Option or Warning for Developing Countries?" Viewpoint (Washington, DC: Industry and Energy Department, World Bank, June 1996).
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8 In the United States, this price is based on the costs that the utility avoids by not having to develop new capacity itself. Avoided costs, however, vary widely among utilities due to input assumptions, data availability, and analytic approaches.
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9 Robert Bacon, Appropriate Restructuring Strategies for the Power Generation Sector: The Case of Small Systems, Industry and Energy Department Occasional Paper No. 3 (Washington, DC: World Bank, 1995).
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10 Discounting is the opposite of accruing interest-with a positive discount rate, a dollar is worth more today than in the future.
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11 John Nimmons et al., Legal, Regulatory, and Institutional Issues Facing Distributed Resources Development, NREL/SR-460-217891 (Golden, CO: U.S. Department of Energy, National Renewable Energy Laboratory, 1996).
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12 Although hydropower has minimal air emissions, big dams have other ecological and social impacts that complicate the environmental implications of privatization in previously hydro-dominated power systems.
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13 Paul Centolla, "Wind in Competitive Power Markets: How Market-Based Policies Can Incorporate Renewable Energy Benefits," presented at Wind Energy in a Restructured Electric Industry, Washington, DC, 1994.
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