Chapter 6. Policy Measures and Programs
6.2 Legal and Institutional Framework
6.2.2 Organizations and Governance
enactment of separate acts for creating subsidiary organizations suggested below. These subsidiary organizations should be referred in the Promotion Act.
❙Table 6-3❙ Renewable energy promotion law roadmap
2017 2018 2019 2020 2025 2025~
Bill preparation and opinion collection
Enactment
6.2.1.3.3 Financing plan for introducing the Promotion Act
A separate budget for implementing the Promotion Act is not required. However, some minor costs may be incurred in the process of formulating a draft, such as holding hearings and gathering opinions, and a budget for these costs may be set aside in advance.
6.2.2.1. Establishing the Cameroon Renewable Energy Agency 6.2.2.1.1 Background
The share of RE including large hydropower is about a half of the total energy production in Cameroon, and there is large potential for the expansion of RE deployment in the future. To effectively deploy the RE, the MINEE may create a subsidiary organization, tentatively called the Cameroon Renewable Energy Agency (CREA), under the MINEE, which is specialized in RE and energy management with larger manpower and more divisions than currently the DREEM has, and entrust some part of DREEM’s tasks, while DREEM oversees the subsidiary organization.
6.2.2.1.2 Implementation Plan
Major direction
The basic work of the CREA should include the tasks currently performed by the DREEM. In addition, the tasks related to the production and utilization of RE currently performed by MINFOF, MINEPIA, AER, ASREL, and MINEPED should be transferred to or coordinated with the CREA.
[Figure 6-2] RE function adjustments in case of creation of CREA (tentative)
Source: KEEI
The main tasks of the CREA are as follows.
- Establishment and implementation of RE policies and strategies - RE related regulatory management and supervision
- RE resource potential assessment and research
- Development of RE technologies and technology transfer
The CREA could have a renewable energy public corporation, which is described below in detail, as a subsidiary, which the CREA supervises and gives mandates.
Roadmap
To establish the CREA, the “Cameroon Renewable Energy Agency Organization Act (tentative)” should be enacted, or the “Law on the Organization of the MINEE” (2012) should be amended appropriately. Also, in the case of enacting the previously mentioned the Promotion Law, content on the organization and management of the CREA should be added before enactment.
The establishment of the CREA should be completed before 2025.
❙ Table 6-4 ❙ Roadmap for establishing the CREA
2017 2018 2019 2020 2025 2025~
Review of alternatives, planning
Gathering opinions, drafting bills Bill enactment Establishment of
CREA
Cases on establishing of dedicated RE agency in other countries
Several countries have dedicated government organizations to promote the deployment of RE, most of which are LDCs and their goal is to solve energy supply problems by using RE. In 2013, Azerbaijan established the State Agency for Alternative and Renewable Energy Sources by presidential decree to promote RE deployment. In 2007, Libya established the Renewable Energy Authority of Libya (REAOL) under the Ministry of Electricity and Renewable Energies. India has the Ministry of New and Renewable Energy (MNRE), and Egypt established the New and Renewable Energy Authority (NREA) in 1986. The Republic of Ecuador currently has the Ministry of Electricity and Renewable Energy (MEER).
6.2.2.2 Establishment of a public entity dedicated in implementing RE deployment
6.2.2.2.1 Background and necessity
effectively to the attendant increase in work. Therefore, the government of Cameroon voiced a need for newly establishing a separate organization or an agency to promote deployment of RE through amendments to the Act on Electricity. Two options are reviewed below as a candidate for dedicated subsidiary organization.
6.2.2.2.2 Direction of establishing a public entity
A government-owned company for RE can be in the form of a public corporation or a public service;
however, there is a difference between the two in the degree of intervention in markets. Whereas a public corporation proactively participates in the market by directly developing and implementing RE projects and energy management projects, a public service assists and supports the projects of private companies through execution of government budget as well as development of infrastructure for RE deployment and energy management as an entity of the government.
If RE deployment were to be spearheaded by the government, a public corporation on RE should be established under the MINEE. Otherwise, a public service should be created under the MINEE and encourage participation of private sector in the RE projects and energy management projects.
However, creating a public service is redundant if the CREA is established, because duties of the CREA and the MINEE would overlap each other. The MINEE should choose one between a public corporation and a service, in conjunction with the decision on establishment of the CREA through an additional review.
6.2.2.2.3 Implementation plan for establishing a subsidiary organization A. Alternative 1: Establishment of a public corporation
Tasks and structure of a public corporation
The MINEE establish a public corporation, tentatively called the Cameroon National Renewable Energy Corporation (CNREC), through budget contribution from the government. It is supervised by the MINEE after the establishment, and mandated by the MINEE to develop and execute RE projects to achieve REMP RE deployment targets, as well as to execute energy management projects. The main tasks of CNREC are as follows:
1) Development and construction of the RE projects
2) Production and supply of energy through the operation of the constructed RE facilities
To conduct its operations, the CNREC will include a technology division and a project division. The
technology division will have a technology department, which is charged with development of technology and design related to RE projects, and a construction department, which is charged with construction of RE projects. The business division will have a management department, which is charged with directing the operation and maintenance of RE projects constructed by the construction department, and regional branches, which are charged with the actual operation and maintenance of RE projects in their regions.
[Figure 6-3] Organization structure of CNREC (tentative)
Source: KEEI
To establish a CNREC, enact the (tentative) Act on Establishing Cameroon National Renewable Energy Corporation' (hereinafter “Corporation Act”) and its enforcement ordinance (hereinafter “Corporation Enforcement Ordinance”). The Corporation Act includes the establishment purpose, office location, capital (government funds), registration, confidentiality, projects, profit and loss handling, supervision, land expropriation, and relations with other laws. The Corporation Enforcement Ordinance regulates items delegated from the Corporation Act, such as establishing branches, and the scope of items for approval of a project, as well as the items necessary to implement them. Hydro-Mekin, which was established to construct the Mekin hydropower plant, could be merged with the CNREC when it is established.
Roadmap
and opinions should be collected from related ministries, institutions, and experts. By 2020, led by MINEE, the Corporation Act should be enacted. After 2020, the CNREC should be set up and operated.
In the case of the CREA established, tasks and works of the MINEE for setting up the CNREC should be transferred to the CREA. However, the MINEE should strive to introduce the Corporation Act by 2020 to facilitate the establishment of the CNREC in timely manner.
If the above-mentioned Promotion Act is to be introduced, then it should include articles relating the establishment and operation of the CNREC.
❙Table 6-5❙ Roadmap for establishing CNREC
2017 2018 2019 2020 2025 2025~
Review of alternatives, planning
Gathering opinions, drafting bills Bill enactment Establishment of
CNREC
Financing plan
In accordance with the Corporate Act, the CNREC will be established by budget allocation from the government, of which the budget scale is determined by the Corporation Act. Subsequently, the CNREC conducts its business under the independent profit system, and the issues, such as the profit handling (which includes preservation of deficits carried over, provision of legal reserve, and treasury payments) and the deficit covering, should be defined in the Corporate Act and applied to the CNREC, accordingly.
Cased on establishment of a public corporation in other countries
In 2013, Azerbaijan established the State Agency for Alternative and Renewable Energy Sources by Presidential Decree, and set up a public corporation, the Azalternativenerji, under this agency, which is dedicated to implementation of RE projects. The State Agency carries out formulation of policies and regulation, supervision and management of RE market, the Azalternativenerji and business. The Azalternativenerji develops business plans, constructs and operates RE facilities, produces and purchases energy, and builds infrastructure for RE deployment entrusted by the State Agency. Generally, the entrance of private companies into the RE market is permitted even if the Azalternativenerji exists, and they will either compete or cooperate with the Azalternativenerji in the market. .
[Figure 6-4] Governance of renewable energy in the Azerbaijani Republic
Source: KEEI
B. Alternative 2: Establishment of a public service
Tasks and structure of a public service
The MINEE establish a public service, tentatively called the Cameroon Renewable Energy Development Service (CREDS), through budget contribution from the government. State corporations in electricity sector in Cameroon, such as the Electricity Development Corporation (EDC) and the Energy of Cameroon (ENEO Cameroon), may contribute to the budget, if necessary. It is supervised by the MINEE after the establishment, and mandated by the MINEE to implement RE deployment policy to achieve REMP RE deployment targets, as well as to execute energy management projects. The main tasks of CREDS entrusted by the MINEE are as follows:
- Support and management for certification and standards of RE equipment - Technical support for existing RE facility
- Support and management for publication of equipment and its parts - Support and management for RE specialized company
- Support and management of RE deployment business
- Support and management for RE users and participants in RE deployment business - Support and management for educating, advertising and publicizing the benefits of RE - International cooperation and foreign investment support
- Establishment and management of RE statistics
- Other entrusted businesses by the head of the overseeing department to promote deployment of RE.
To conduct the tasks, the organization of the CREDS is divided mainly into a deployment division and a
department, which is oversees deployment and support and promotion of private companies. The policy division comprises an external relations department that conducts tasks related to investments from overseas, such as international cooperation and ODA, and a statistics department that collects data and information to create and manages statistics.
[Figure 6-5] Organizational structure of CREDS
Source: KEEI
The legal status of the CREDS is guaranteed through the enactment of the Promotion Act. The Act includes the budget allocation, registration, delegation of authority, tasks entrusted by the MINEE, and reporting.
Roadmap
The feasibility of establishing the CREDS should be reviewed by 2018, with the relevant laws enacted and detailed plans to establish the corporation. By 2019, amendments should be made to the “Law relating to the organization of Ministry of Water Resources and Energy” regarding the establishment and management of the CREDS, and opinions should be collected from relevant ministries, institutions, and experts. By 2020, relevant regulations should be enacted and announced, led by the MINEE. After 2020, the CREDS is established and operated. Also, if the Promotion Act should be introduced, it should contain content on the establishment and operations of the CREDS.
❙Table 6-6❙ Roadmap for establishment of CREDS
2017 2018 2019 2020 2025 2025~
Organization Alternatives, Planning
Gathering opinions, drafting bills Bill enactment Ministry established
Financing plan
Based on the relevant laws, the CREDS will be established and operated by budget contribution from the government and non-government entities. When the government is contributing fund for the operation of the CREDS, it must appropriate the fund in the annual expenditure budget.
Cases on establishing a public service
In 2002, South Korea set up the Center for Development and Deployment of Alternative Energy under the KEA, as the government was amending the Alternative Energy Development Promotion Act. Later, the name of the center was changed to New and Renewable Energy Center (KNREC). The center conducts businesses, such as support for technology development and deployment, certification support, specialized company support, RPS and RFS support, international standardization and international cooperation response, and statistics management. The KNREC does not deploy RE directly, but supports and assists the deployment conducted by the private sector.
- Government: policy establishment, budget procurement
- The KNREC: a government agency to support businesses, regulatory management and supervision, build infrastructure
- Private companies: RE projects execution
[Figure 6-6] Governance of renewable energy in South Korea
Ministry of Trade Industry and Energy Korea Energy Agency-Korean New and Renewable energy Center
6.2.2.3 Comparison between Alternatives for Organizations and Governance 6.2.2.3.1 Overview by Alternative
There are broadly two alternatives for establishing organizations and governance for an effective promotion of RE deployment in consideration of minimization and effective allocation of overlapping duties among entities and effectiveness of policy implementation. One is a CREA-CNREC system, and the other is a MINEE-CREDS system.
Alternative 1 is to establish a CREA and CNREC to appeal to the private sector to participate by the CREA managing RE policies and operating the deployment programs. This approach enables the CNREC to pursue projects that are difficult for private enterprises to participate in.
Alternative 2 is to establish the CREDS to operate the deployment program under the management/
supervision of MINEE. This approach enables the CREDS to provide cooperation and support to encourage the participation of private enterprises.
[Figure 6-7] Organizations and governance structure for Alternative 1
Source: KEEI
[Figure 6-8] Organizations and governance structure for Alternative 2
Source: KEEI
6.2.2.3.2 Comparison between the Alternatives
Each alternative has strengths and weaknesses, as shown in the following table.
❙ Table 6-7 ❙ Comparison of strengths and weaknesses between the alternatives
Strengths Weaknesses
Alternative 1
Could increase RE deployment in a short period of time through the CREA and the CNREC
Can increase administrative efficiency by unifying RE related tasks
Less cost effective owing to the public corporation characteristics
Boundary between the business units of the CNREC and private enterprises becomes ambiguous over time
Alternative 2
Can efficiently address requests related to policies and programs from private sector through the CREDS
Advantageous in long term in respect to shifting from government-oriented deployment system to private-oriented deployment system
Relatively disadvantageous for short-term deployment expansion
Could result in inefficiency owing to dispersion of relevant duties among departments