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Step 1 - Market System Selection


This step helps identify which energy market system to focus on to ensure the greatest sustainable impact at scale.

  1. Introduction
    1. Focus your efforts
    2. Availability of facilitation resources
    3. Key stakeholders
    4. Local context and energy resources
  2. Long list of possible energy market systems
  3. Selection criteria
    1. Economic opportunity
    2. Potential poverty impact
    3. Gender and social inclusion
    4. Other important criteria
  4. Data collection, analysis and final decision
    1. Data collection
    2. Scoring, weighting and ranking
    3. Discussions and deliberations
    4. Final decision
  5. Templates
 

Step 1 - Introduction

Iterative Investigation: Although the selection of an energy market system is often subjective to some extent, it is important to try and ensure it is as practical, well informed and evidence-based as possible. If resources are available this is carried out through an iterative investigation. This means carrying out several rounds of discussions and analysis with a wide group of informants, gradually increasing the detail over time.

Table 2 summarises the various components of an iterative investigation of an energy market system, which are detailed in the following sections.

Table 2 Iterative Components of Selecting an Energy Market System

Further discussion and deliberation

 

 
List of possible market systems
Weight, score and rank Focus selection criteria
Discuss and deliberate Data Collection

  • Data Collection +

    Once the long-list of possible energy market systems has been developed as well as selection criteria, relevant information against each criteria must then be collected. Instead of asking everyone for information in one go, it is often more time and resource efficient to ask for information from a few key informants and then check this with others later on.

    The initial collection of data may lead to the immediate exclusion of some energy markets, simplifying the process, or requires the criteria to be adjusted before seeking additional information. It is also important to try and triangulate the information whenever possible, seeking the confirmation of information from at least two sources, particularly for the more subjective qualitative data.

  • Scoring, Weighting and Ranking +

    Once the data has been collected, it is useful to score each energy market system against each criteria, adding the scores together to give an aggregate score that can be compared. Certain criteria can be weighted either higher or lower if there is a clear logic for this and as long as this is communicated in a transparent way. A template has been provided in Annex 2 to help score and rank a range of energy market systems against the set of criteria developed in Section 2.
  • Discussions and Deliberations +

    Once all the data for each energy market systems has been collected, scored and ranked, the results need to be discussed and deliberated with different stakeholders so that consensus is reached and a final decision can be made.

    When ranking the energy market systems it is useful to use the checklist provided in Annex 3, which includes several important selection critical to be aware of when deciding on which energy market system to facilitate.

    If no consensus can be reached, the ranking list can be used as a basis for an additional round of investigation, involving a set of refocused selection criteria and the collection of additional information. This iterative process can be repeated as many times as is necessary, based on resources and patience of the various stakeholders, before consensus on a final decision can be made.

  • Final Decision +

    When making the final decision on which energy market system to facilitate it is important to use the ranking data, but not to rely on it. A discussion of the results of the analysis with key stakeholders is also very important to get their consensus and support. As well as the previous 4 main steps, it is important to take note of the following issues:

    Subjective Process: Although the final decision should be evidence-based, it is ultimately also a subjective decision, as there are a number of subjective elements when comparing different energy market systems. Not all assessment criteria can be objectively quantified, and qualitative and subjective perspectives often need to be included. Weighting and prioritising the importance of each criterion is also often a subjective choice.

    Key Stakeholder Relations: It is important not to underestimate the influence of key stakeholder relations, in particular those of the energy ministry and main donors. The selection of an energy market system never occurs in isolation and in some cases the final selection is highly influenced by the need to respond to the interests of a ministry or donor in order to secure funding or to demonstrate rapid impact. This process is helpful, but the final decision may need to be adjusted depending on strategic influences.

    Process Documentation: It is very important to be as transparent as possible in the process being followed, particularly with important stakeholders who are likely to take an interest in the roadmap process. The rationale for all the key decisions that are made should be clearly documented and communicated as required.

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