1.1 billion people still lack electricity. This could be the solution

Candle Light Gaza UN 2018

Ahmed Dalloul/IRIN Two children read by candle light in Gaza.

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Hannah Daly, Energy Modeller, International Energy Agency

Achieving universal access to electricity is essential for solving many global development challenges. Decentralized renewable energy technologies have emerged as a viable solution. Small, clean energy utilities called mini-grids are a key piece of the puzzle. They are community-based grids that generate and distribute power at the point of consumption. And they could be the most cost-effective way to deliver access to more than a third of the 1.1 billion people across the world who still lack any electricity supply, according to new analysis by the International Energy Agency (IEA).

Yet mini-grids are still largely an afterthought for many governments and their financial backers in Africa and Asia. Evidence strongly suggests that this mindset must change if the world is to achieve Sustainable Development Goal (SDG) 7 – access to modern, affordable, clean and reliable energy for all by 2030.

New IEA geospatial analysis, in an “Energy for All” scenario, shows that to provide universal electricity access to 1.3 billion people by 2030 (a number that includes projected population growth), mini-grids would be the cheapest technology for connecting 450 million people, two-thirds of whom live in sub-Saharan Africa.

However, current policies and investments would still leave more than 670 million people globally without access to electricity in 2030. Eighty per cent of these people live in rural areas of sub-Saharan Africa, severely limiting development prospects. Mini-grids are particularly well-suited for closing this gap, especially in remote areas underserved by grid infrastructure, offering an electrification option which can be faster and more affordable than extending the main grid.

Cumulative population gaining access to electricity by 2030

Cumulative population gaining access to electricity by 2030
Image: IEA

Moreover, mini-grids have the ability to lay the foundation for development in rural areas, where more than four fifths of the world’s unelectrified live, by powering economic activities such as agriculture, business and small industry. These “productive uses” can provide consistent revenue to the mini-grid utility, thereby lowering the cost of electricity to households.

In the IEA’s “Energy for All” case, mini-grids would require a total investment of about $300 billion between now and 2030, or $20-25 billion every year. But to achieve this potential investment, governments need to put in place economic and policy frameworks to attract mini-grid developers, so that they can create economies of scale and attract the necessary commercial debt that usually supports energy infrastructure. In particular, that means creating certainty on rural electrification plans – including defining the planned roll-out of the centralized grid – and on tariff and subsidy regimes.

To ensure that mini-grids have a sustainable business model, work is also required to stimulate electricity demand from rural communities. Poor households often cannot afford or do not have access to appliances, beyond basic lighting and communications. Increased power consumption can be achieved by mini-grid utilities selling electricity services, rather than kilowatt-hours, to households, by financing appliances along with connections. This is a common business model for solar home system companies, enabled by mobile phone payments. Moreover, anchoring mini-grids to productive use sectors also increases their business case, providing a source of stable demand and revenue. This is especially the case for agriculture.

Powering the world’s breadbasket

Scaling agricultural production is a critical element for Africa’s future development. Africa accounts for 60% of the world’s uncultivated arable land, and has among the lowest crop yields of any region globally. Less than 6% of farmland in sub-Saharan Africa is under irrigation, compared to 20% in the rest of the world.

As a result, Africa imports $35 billion worth of food every year, which is roughly equivalent to the investment needed to close the power deficit in Africa through mini-grids, off-grid home solar and grid extension. Food imports are estimated by the African Development Bank to rise to $110 billion annually by 2025.

Expanding rural electrification and powering agriculture, from solar-powered irrigation to cold storage to processing, can be achieved effectively with mini-grids, with much of the investment cost offset from increasing domestic food production. While policies are also needed to ensure infrastructure, develop markets and improve training to tip the scales on agricultural productivity, rural electrification is a critical factor.

Moreover, by scaling agriculture through clean, localized grids, demand for power would increase. This would not only bring down the costs for household access to power, but also enable the extension of electricity to street lighting, health clinics and schools.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Refugee crisis update: EU fails to relocate immigrants from Greece and Italy

Gender disparity in salary and promotion in medicine: still a long way to go

Financial Transaction Tax: More money for future bank bailouts?

MEPs propose measures to combat mobbing and sexual harassment

The EU Parliament endorses tax on financial transactions

Camino de Santiago – a global community on our doorstep

Fighting for minds of youth in Latvia

EU-US to miss 2015 deadline and even lose Germany’s support in TTIP’s darkest week yet

Mental Health Policy, a significant driver for growth

Can China deal with climate change without the U.S.?

Where are the charities in the great Artificial Intelligence debate?

Who is culpable in the EU for Ukraine’s defection to Russia?

Security Union: political agreement on strengthened Schengen Information System

Women in video games: ‘Accept it, or don’t buy the game’

Trade wars won’t fix globalization. Here’s why

EU to Telcos: Stop Mergers and Acquisitions but please help me urgently with 5G development

Greece did it again

EU Commission: Growth first then fiscal consolidation

Catalonia secessionist leader takes Flemish ‘cover’; Spain risks more jingoist violence

Palestinian Bedouin community faces demolition after Israeli court ruling, warns UN rights office

Ukrainian civil war: Is this the beginning of the end or the end of the beginning?

Egypt urged to free prominent couple jailed arbitrarily since last June: UN rights office

At global health forum, UN officials call for strong, people-focused health systems

Tougher defence tools against unfair imports to protect EU jobs and industry

An Easter Special: Social protection of migrants in Europe as seen through the eyes of European youth

Social Committee teaches Van Rompuy a lesson

It’s Time to Disrupt Europe, Digital First

Why the 33,000 staff European Commission did not have a real contingency plan for the refugee crisis?

Preparing for developing countries the ‘Greek cure’

Bertelsmann Stiftung @ European Business Summit 2014: Transatlantic Free Trade Agreement (TTIP) needs balanced approach

Commission facilitates the activities of ‘merchants of labour’

European Commission: Does Apple, Starbucks and Fiat really pay their taxes?

Snowden is the “EU nomination” for this year’s Oscars

France sneaks into the Geneva US-Iran talks to claim its business share in Tehran

More answers from Facebook ahead of Parliament hearing today

Entrepreneur India Convention 2016: Bringing together Entrepreneurs, Investors, Startups and SMEs

How Greece was destroyed

China-EU Special Report: Chinese Premier Li Keqiang endorses China’s big investment on Juncker’s plan at 10th China-EU Business Summit

AIDEX 2015: Humanitarian Hero Award Winner Announced

Is there a way out of the next financial crisis? Can more printed money or austerity save us all?

UN chemical weapons watchdog adds new powers to assign blame, following attacks

Cyber defence: MEPs call for better European cooperation

New skills agenda for Europe needs real investment

Statement by the Brexit Steering Group on UK paper on EU citizens in the UK

The EU banking union needs a third pillar guaranteeing deposits

Is sub-Saharan Africa ready for the electric vehicle revolution?

New identity cards deliver recognition and protection for Rohingya refugees in Bangladesh

EU to pay a dear price if the next crisis catches Eurozone stagnant and deflationary; dire statistics from Eurostat

OECD: Mind the financial gap that lies ahead

Young students envision turning Europe into an Entrepreneurial Society

Berlin cannot dictate anymore the terms for the enactment of the European Banking Union

EU Commission accuses Germany of obstructing growth and the banking union

What can stop the ‘too big to fail’ bankers from terrorising the world?

COP21 Paris agreement: a non legally-binding climate pact won’t stop effectively global warming while EU’s Cañete throws hardest part to next Commission

Europe moulds global defense and security chart given US new inward vision

Why do medical students need to go abroad to become a doctor in 2017?

Eurozone to enter the winter…

Ideology is the enemy of growth

German opposition win in Lower Saxony felt all over Europe

Catalan Pro-Independence vote: how many hits can Brussels sustain at the same time?

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s