Despite the efforts of the international community, the overall situation in Africa has got worse, mainly because of population growth that has outpaced the slight increases in electrification rates. Southern Asia, in spite of impressive progress (more than 200 million people got access during the last decade), still harbours the biggest group of unelectrified people in the world.
We can never be reminded too often of the role that energy, and more specifically electricity, plays in development. Energy alone is not sufficient to alleviate poverty, but it is certainly necessary and there will be no major development progress without a growing number of people gaining sustainable access.
Energy poverty is the most ‘horizontal’ issue of all; energy access is not one of the Millennium Development Goals (MDGs), but a vital requirement for progress towards them. Access to modern energy helps:
Finally, if access to energy is achieved with environmentally sound technologies, it directly contributes to global environmental sustainability (MDG 8). More recently, the United Nations Sustainable Energy For All initiative has highglighted, once again, the strong link between access to energy and the achievemenet of the MDGs.
Rural electricity provision
There are three basic approaches to bringing electricity to remote areas.
The first approach is simply to extend the national grid but this is at best a long-term hope in many countries. Often national utilities are already struggling with grid stabilisation, and concentrating on increasing generation capacity to match the demand of growing populations in the urban centres. Costly extensions to rural areas are a long way down the priorities (according to the World Bank/ESMAP, grid extension prices vary from US$6,340/km in a densely populated country such as Bangladesh to US$19,070/km in a country like Mali).
Therefore, in many countries, the grid is not a viable option even in the medium or long term. For instance, according to the 2012 Energy Access Practitioner Network report published at Rio+20, from the 952 TWh that will be necessary to achieve universal electricity access by 2030, 40% will be grid connected and 60 % will be off-grid (18% stand alone systems and 42% mini-grids), thereby making a strong case for the implementation of off-grid technology solutions.
The second approach is based on off-grid technologies. The dispersed character of rural settlements is an ideal setting for these solutions in particular with renewable energy (RE) sources that are more competitive in remote communities, and help to reduce the power losses of long transmission lines.
In this framework, energy home systems (EHS), designed to power individual households and to provide an easily accessible, relatively cheap and easy to maintain solution, are a good alternative. The most known examples of EHS are the solar home systems (SHS), millions of which have been deployed around the world in the last decades. However, EHS provide electricity primarily for lighting and small appliances but cannot supply motive power.
The third approach is to build electricity mini-grids, which can provide centralised electricity generation at the local level to both domestic appliances and local businesses using village-wide distribution networks. These can be powered either by fossil fuel (diesel most of the time) or by RE. Diesel often remains the most used technology because of the persistent idea, often wrong, that it is the cheaper option. The reality shows that renewables present numerous competitive advantages, including cost.
Systems running on diesel fuel have the theoretical advantage of being dispatchable on demand. However, in a rural context, the ability to run a generator set (genset) depends on the sheer availability of fuel, which is often a challenge in isolated areas. And the problem of availability and dependence on fuel goes, of course, beyond the community level. In little over a decade, the bill of oil importing less developed countries has reached an estimated US$100 billion in 2011, or 5.5% of their gross domestic product (GDP). Oil import bills in sub‐Saharan Africa increased by $2.2 billion in 2010. For this reason already, diesel gensets are a much less attractive option.
In addition, environmental impacts also have to be taken into consideration. Locally, gensets are noisy, polluting and have a direct health impact on users, especially when they are poorly installed and maintained; and globally they contribute to the environmental problems which are first striking developing countries.
Of course it is impossible to ask countries rich in fossil fuels to renounce cheap energy; however, renewables represent a sustainable option for the countries deprived of these reserves, and an immediate solution for rural areas, even in countries rich in resources but where grid extensions are not an economical option. In brief, developing countries would be advised to broaden and diversify their energy mix, to look at sustainability and to integrate the particular requirements of rural areas.
However, it is undeniable that energy choices in developing countries are driven by the lowest cost options. And yet, renewables are emerging as cost competitive solutions, especially in isolated areas. Several technologies – mini-hydro, biomass, wind and photovoltaics (PV) – already offer the lowest ‘levelised’ generation costs for off-grid electrification, either alone or within a mini-grid, and also present an important potential for further technological advances with generation costs expected to continuously decline, whereas diesel is ultimately doomed to become more expensive. According to ESMAP, “diesel-gensets are neither affordable nor sustainable, even with 100 per cent capital subsidies. On the other hand, diesel-PV-hybrid systems become more attractive, since they require lower tariffs and are less exposed to fuel price volatility. For a village (with a small load) a properly designed diesel-PV-hybrid system can offer an affordable tariff (with a limited support on the capital subsidy)”[1].
Even the commonly spread idea that RE only exists in developing countries thanks to subsidies is wrong. A large part of the EHS systems (especially the SHS) are paid for in cash, and some companies develop and operate even bigger systems without any subsidies, for instance in Laos (Sunlabob) or The Gambia (NICE International). Of course, public money and subsidies play a fundamental, and unavoidable, role in accelerating energy access and in supporting these systems, but it is worth mentioning that off-grid renewables are not only clean and sustainable, they are also economically sound.
Renewables represent the most local, flexible, adaptable, easy to scale up, to operate and to maintain sources of energy, capable of turning natural burdens (e.g. deserts) into opportunities. And they are available. The potential for RE in the regions where energy is the most needed is immense. Sub-Saharan Africa has tremendous natural advantages. Some experts estimate the continent’s potential for power generation from renewables is more than 200,000 TWh/year, including more than 30,000 TWh/year rated as competitive in the short term. In Asia, some countries receive some of the highest solar irradiations in the world, whereas others already have important experience in wind, biomass or small hydro.
Finally, there is growing evidence that investment in small and medium scale renewable energy systems may have more impact in improving energy services for the majority of developing countries’ population. Therefore, emphasis should be given to small and medium scale renewables more than any other.
How are we to transform potential into economic success?
So if renewables offer immediate cost-competitive solutions, especially for rural areas, why are they not more widespread?
First of all, in developing countries worldwide there is a problem of education and information about renewables, at every level. Governments still do not believe in RE technologies, banks do not understand the financial structures of RE projects and do not lend to them, even villagers sometimes consider these technologies to be second class.
These educational and information barriers are the first ones to address on a large scale to support widespread deployment of RE. There is no lack of success stories and experience, hence powerful dissemination is key. In parallel, capacities of each stakeholder concerned need to be consolidated on topics such as project development, financing, operation and maintenance.
The second point is linked to the previous one: energy policies remain short-sighted in many countries, and without coherent strategy. According to Athena Ronquillo-Ballesteros “In most countries, policies and regulations currently tend to emphasise short-term costs and supply, rather than the long-term benefits of clean technologies”[2].
Many countries keep focusing on grid extension, urban electrification or on large hydro, gas or coal power plants without any long-term strategy or with sustainability (including of supply) as primary concern. Such reasoning has high economic costs (power shortages, losses for the economic sector) and underlines the need for diversified electricity generation capacities especially in rural areas, where off-grid technologies can now bring reliable electricity.
Suitable policies supporting RE projects are still rare and often not applied and, as in other economic sectors, uncertainties tend to delay projects, especially in a sector where investments need to be made over long periods of time.
RE off-grid and mini-grid methods often offer the most competitive solutions, but translating this potential into success remains challenging. The deployment of hybrid mini-grids, for instance, involves complex financial and organizational questions. The bottlenecks are not in the technologies, but in the financing, management, business models, sustainable operations and maintenance (O&M) and socio-economic conditions.
However, here too, positive experiences exist and answers adapted to every situation can be formulated either with stand-alone solutions (e.g. SHS with micro-credit or fees for service) or mini-grids (e.g. different business models, capital subsidies and cost recovery tariffs etc.).
Countries need to use this experience and must target the local economic growth that is the only way to ensure the revenue generation that will support the long term O&M of the power systems. Therefore a proactive approach regarding productive uses of electricity, especially, but not only, piggy-backed onto an existing developed network, should be encouraged as an integral part of any rural electrification programme.
More detail on these subjects can be found in Renewable Energies for Africa: Potential, Markets and Strategies, REN21, 2010 (www.ren21.net), World Energy Outlook 2011: Energy for All, Productive Uses of Electricity to Increase the Impact of Rural Electrification Programs (2008) and other technical papers, ESMAP (www.esmap.org).
[1] Solar-diesel Hybrid Options for the Peruvian Amazon, Lessons Learned from Padre Cocha, ESMAP Technical Paper, 2007, p. 26
[2] Athena Ronquillo-Ballesteros, in the REN21 forum, www.ren21.net
Simon Rolland is the Secretary General of ARE after being its policy manager for 4 years. He is responsible for the policy sector and outreach of ARE.
With a background in political sciences, a specialisation in European Issues and work experience in NGOs and in the European Parliament, he works closely with ARE partners and international organisations in many advocacy and policy actions. Simon is an expert in policy support, institutional framework and financing schemes for rural electrification and ARE has become a pioneering organisation in the field of sustainable development, supporting and bringing together renewable energy companies active in the emerging off-grid markets for rural electrification in developing countries.
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