In 2015, Mauricio Macri became President of Argentina and declared solving the energy crisis one of his top priorities. When Macri attempted to raise utility tariffs, however, he faced loud protests from citizens. In search of solutions to growing shortages, the government seized on Argentina's still largely untapped, but potentially vast renewable energy sector and created an ambitious program called RenovAr (renew in Spanish). By 2016, the country's share of renewable energy stood at less than 2 percent of the power mix. RenovAr's goal was to raise that percentage to 20 percent by 2025. An ambitious plan for an economy still reeling from the 2001 default. This case describes the business friendly Macri administration's strategy to attract private investment in the nascent renewable energy sector, under challenging macroeconomic conditions. The case package includes a sequel that describes the events between 2018 and 2020, when Argentina faced a crippling economic downturn and Macri lost to the Peronist duo, Alberto Fernandez and Vice President Fernandez de Kirchner. The sequel catches the reader up on the state of the RenovAr program during a period of intense economic tumult and political change.
In 2015, Mauricio Macri became President of Argentina and declared solving the energy crisis one of his top priorities. When Macri attempted to raise utility tariffs, however, he faced loud protests from citizens. In search of solutions to growing shortages, the government seized on Argentina's still largely untapped, but potentially vast renewable energy sector and created an ambitious program called RenovAr (renew in Spanish). By 2016, the country's share of renewable energy stood at less than 2 percent of the power mix. RenovAr's goal was to raise that percentage to 20 percent by 2025. An ambitious plan for an economy still reeling from the 2001 default. This case describes the business friendly Macri administration's strategy to attract private investment in the nascent renewable energy sector, under challenging macroeconomic conditions. Sequel is forthcoming.
In 2015, Mauricio Macri became President of Argentina and declared solving the energy crisis as one of his top priorities. When Macri's administration attempted to raise utility tariffs, however, it faced loud protests from citizens. In search of solutions to growing shortages, the government seized on Argentina's still largely untapped, but potentially vast renewable energy sector and created an ambitious program called RenovAr (renew in Spanish). By 2016, the country's share of renewable energy stood at less than 2 percent of the power mix. RenovAr's goal was to raise that percentage to 20 percent by 2025. More renewable energy in the electric system was a welcome improvement, but seamlessly integrating renewables into electricity grids had proven challenging in many countries. Argentina's cash-strapped wholesale electricity market, which for the better part of two decades had seen few upgrades, would have to contend with a host of expected and unexpected bottlenecks.
In 2013, Rio de Janeiro's main international airport, Galeão, was set to be privatized through a 25-year term concession. The Brazilian government set a minimum bid value of $4.8 billion for the airport. Five consortia submitted bids, surpassing the minimum bid value by at least 36 percent. The winning consortium of Singapore's Changi Airport and the Brazilian construction company Odebrecht surprised everyone by offering to pay R$19 billion, almost four times the minimum bid. The case lays out the assumptions used in arriving at the minimum bid value and discusses where the additional value might be coming from. Case number 2097.0
Supplement to case KS1212. The case - Miami-Dade County and Sea Level Rise - focuses on the politics and economics of local adaptation to the threat of climate change impacts. Specifically it focuses on whether a jurisdiction -Miami-Dade County - should amend a draft consent decree to fix and upgrade the county's sewerage system by including investments in adaptation to climate change. The County has three sewerage treatment plants, all of which are built on the coast and thus vulnerable to possible sea level rise, particularly in an era of more intense storms. The case provides a basis to assess three key issues: 1. How certain are the possible impacts of sea level rise over the next thirty years?; 2. What are the political and economic challenges of allocating present financial revenues for benefits in the future that could be significant, but are uncertain?; and 3. If such investments are approved, who should pay for them?
The case - Miami-Dade County and Sea Level Rise - focuses on the politics and economics of local adaptation to the threat of climate change impacts. Specifically it focuses on whether a jurisdiction -Miami-Dade County - should amend a draft consent decree to fix and upgrade the county's sewerage system by including investments in adaptation to climate change. The County has three sewerage treatment plants, all of which are built on the coast and thus vulnerable to possible sea level rise, particularly in an era of more intense storms. The case provides a basis to assess three key issues: 1. How certain are the possible impacts of sea level rise over the next thirty years?; 2. What are the political and economic challenges of allocating present financial revenues for benefits in the future that could be significant, but are uncertain?; and 3. If such investments are approved, who should pay for them?
This sequel accompanies case number 1999 (HKS766). This case looks at public-private partnership (PPP) between the Health Ministry for the government of Lesotho and a private consortium headed up by Netcare, a South African company, to build and operate a new referral hospital and four feeder clinics in Maseru, the nation's capital. The project was one of the first efforts to design a PPP in Africa for the construction and the operation of a major hospital plus the clinical services. The project is perceived by the International Finance Corporation as a major success. The case focuses on three issues: 1. the steps taken by the government, IFC, and the private parties to form a workable public-private partnership; 2. the design and implementation of the key performance indicators contained in the contract; and 3. the sustainability of the project in light of higher than anticipated costs and lower quality health services in other areas of the country, which have resulted in a demand for services from the new clinic and hospital far in excess of the numbers originally forecast. Case number 1999.2
This sequel accompanies case KS1170. In 2008, British Columbia became one of the few jurisdictions in the world to successfully implement a comprehensive carbon tax. The architect of the tax, Premier Gordon Campbell, championed the broad-based carbon tax that applied to nearly all fossil fuels and made it "revenue neutral." Every dollar raised from the tax would be returned to BC residents and businesses in the form of personal income and corporate tax cuts. Campbell was an unlikely proponent of the carbon tax. As the leader of the traditionally conservative BC Liberal Party, he had cut taxes in the past, but now he had reason to believe a revenue neutral carbon tax could be a winner for both the environment and the economy. But with elections just months away and growing public distrust of the tax, combined with a noisy campaign against the tax mounted by the opposition New Democratic Party, the tax's fate, and that of Campbell's political career was far from certain. This case provides an insider's account of how the carbon tax was designed, with the strong role Premier Gordon Campbell played in its creation. It also explores political and other challenges the government faced when designing and implementing the tax.
In 2008, British Columbia became one of the few jurisdictions in the world to successfully implement a comprehensive carbon tax. The architect of the tax, Premier Gordon Campbell, championed the broad-based carbon tax that applied to nearly all fossil fuels and made it "revenue neutral." Every dollar raised from the tax would be returned to BC residents and businesses in the form of personal income and corporate tax cuts. Campbell was an unlikely proponent of the carbon tax. As the leader of the traditionally conservative BC Liberal Party, he had cut taxes in the past, but now he had reason to believe a revenue neutral carbon tax could be a winner for both the environment and the economy. But with elections just months away and growing public distrust of the tax, combined with a noisy campaign against the tax mounted by the opposition New Democratic Party, the tax's fate, and that of Campbell's political career was far from certain. This case provides an insider's account of how the carbon tax was designed, with the strong role Premier Gordon Campbell played in its creation. It also explores political and other challenges the government faced when designing and implementing the tax.
The case - Buchanan Renewables: Bringing Power to Liberia - focuses on a proposal to build two 17 megawatt facilities to provide power to Monrovia, the capital of Liberia. The country has just come out of a bitter civil war in which almost all of its power system was destroyed. The case can be taught as an energy case - comparing the alternative supply options or as an infrastructure case - looking at the question - should Liberia pursue a project that can supply power quickly to create hundreds of jobs, but one that key donor agencies believe is overpriced and would place an untenable financial burden on the Liberian Electric Company (the state-owned distribution company)? This case allows for a discussion of energy alternatives for developing countries in sub-Saharan Africa. It also raise the tough question of deciding between meeting short-term political and energy goals versus pursuing less expensive options that might not be available for 4-6 years. HKS Case Number 2022.0.
This case looks at the public-private partnership (PPP) between the Health Ministry for the government of Lesotho and a private consortium headed up by Netcare, a South African company, to build and operate a new referral hospital and four feeder clinics in Maseru, the nation's capital. The project was one of the first efforts to design a PPP in Africa for the construction and the operation of a major hospital plus the clinical services. The project is perceived by the International Finance Corporation as a major success. The case focuses on three issues: 1. the steps taken by the government, IFC, and the private parties to form a workable public-private partnership; 2. the design and implementation of the key performance indicators contained in the contract; and 3. the sustainability of the project in light of higher than anticipated costs and lower quality health services in other areas of the country, which have resulted in a demand for services from the new clinic and hospital far in excess of the numbers originally forecast. Case number 1999.0
Iceland has two unique features. First it has one of the most unique landscapes in the world. A country twice the size of Switzerland, it has only 300,000 inhabitants and thus most of its regions are sparsely inhabited. Second, it also has access to significant amounts of "green energy" in the form of geothermal and hydroelectric power and in the future, possibly wind. Further in Iceland green energy is comparatively inexpensive. These two attributes have set in motion a major debate - should Iceland accelerate the development of its green energy resources by attracting more power intensive industries to locate in the country and perhaps export some of its power to Europe or should it slow the rate of power development and focus on preserving its unique natural resources and build up its tourism industry? This case addresses these two alternatives. It is built around two specific decisions - whether the government should build the generating facilities that would provide the electricity for a fourth aluminum smelter and whether to accept a new plan written by the national electric company to aggressively embrace additional development of its energy resources. Case Number 1968
Inspired by the experiences in Germany and Spain, Gainesville Regional Utilities (GRU) developed a pilot feed-in tariff to stimulate investment into solar photovoltaic systems. This case explores the factors behind the decision to promulgate a feed-in tariff, and the factors that affected the design of the tariff and its rate. Once implemented, GRU found that its design created several perverse incentives that led to some unexpected results. The actions GRU took in response to these results are addressed in the epilogue. The case can be taught as either an energy policy case or as a regulatory economics case. Regulation and management issues such as asymmetry of information between the utility and renewable industry are explored. Case Number 1963.0.
Inspired by the experiences in Germany and Spain, Gainesville Regional Utilities (GRU) developed a pilot feed-in tariff to stimulate investment into solar photovoltaic systems. This case explores the factors behind the decision to promulgate a feed-in tariff, and the factors that affected the design of the tariff and its rate. Once implemented, GRU found that its design created several perverse incentives that led to some unexpected results. The actions GRU took in response to these results are addressed in the epilogue. The case can be taught as either an energy policy case or as a regulatory economics case. Regulation and management issues such as asymmetry of information between the utility and renewable industry are explored.Case Number 1963.1.
The New Delhi Water and Power case compares the efforts by the government of the capital territory of New Delhi to privatize its electric distribution company and reform its municipal water company. The case introduces students to problems surrounding the delivery of water and power infrastructure services common in developing countries and the challenges that governments face when they attempt to reform these two sectors. The case can be taught as a technical and financial assessment of designing effective reforms for public infrastructure or as a strategic and political case, exploring the tactical and communication challenges that emerge with efforts to involve the private sector in functions that have historically been provided by the public sector. HKS Case Number 1891.0
On January 11, 2006, residents of New Orleans's Broadmoor neighborhood, which still bore the deep scars left by Hurricane Katrina, were shocked by the headlines in The Times-Picayune. The Urban Planning Committee of a mayoral commission charged with developing a reconstruction plan for the hurricane-ravaged city had proposed giving hard-hit neighborhoods like Broadmoor four months to prove that they were still viable and, hence, worth rebuilding. Worse still, the paper had printed a composite map, drawn from the committee's report, which showed six green dots indicating low-lying areas that could be turned into parks and "greenspace." One of those green dots covered Broadmoor. Incensed at what they viewed as a betrayal by their own city government, Broadmoor residents who had returned to salvage their flood-damaged homes began to consider how to save their neighborhood from the bulldozers. Their efforts quickly coalesced around the Broadmoor Improvement Association-a venerable neighborhood organization-and a determination to create their own plan for recovery. A core group of residents-many of whom had never met each other and none of whom had ever worked on a redevelopment plan-would take the lead in organizing the planning process for the still-scattered community.
On January 11, 2006, residents of New Orleans's Broadmoor neighborhood, which still bore the deep scars left by Hurricane Katrina, were shocked by the headlines in The Times-Picayune. The Urban Planning Committee of a mayoral commission charged with developing a reconstruction plan for the hurricane-ravaged city had proposed giving hard-hit neighborhoods like Broadmoor four months to prove that they were still viable and, hence, worth rebuilding. Worse still, the paper had printed a composite map, drawn from the committee's report, which showed six green dots indicating low-lying areas that could be turned into parks and "greenspace." One of those green dots covered Broadmoor. Incensed at what they viewed as a betrayal by their own city government, Broadmoor residents who had returned to salvage their flood-damaged homes began to consider how to save their neighborhood from the bulldozers. Their efforts quickly coalesced around the Broadmoor Improvement Association-a venerable neighborhood organization-and a determination to create their own plan for recovery. A core group of residents-many of whom had never met each other and none of whom had ever worked on a redevelopment plan-would take the lead in organizing the planning process for the still-scattered community.
This case examines the dilemma confronting the Brazilian electricity regulator in the period following power rationing. Brazil privatized about 65 percent of the distribution companies (DISCOs) in the 1990s, but the companies were hit hard financially, first by a dramatic fall in the currency exchange, and then by a supply crisis that forced the government to require consumers to reduce their consumption by 20 percent. The case explores the deliberations by the Brazilian regulatory agency, ANEEL, on whether to grant significant tariff increases to DISCOs during a period of economic turmoil. It also addresses several key regulatory issues: How to calculate the value of a regulated firm's asset base; Should a regulated firm be compensated for changes in exchange rates? Similar problems are confronted by regulators in other sectors and other countries so that the lessons in this case are transferable. HKS Case Number 1826.0
How does a public-private venture emerge in one of the world's poorest countries (Laos) and how does it obtain $280 million in financing for a 215 MW hydroelectric facility to supply power - not to the host country, but its neighbor? At the time of the project, Laos had no domestic capital market, and commercial lenders and equity investors believed the country too politically and economically risky. As a result, Laos had almost no foreign direct investment and had never entered into a public-private venture for energy infrastructure. HKS Case Number 1829.0