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educes mortality and improves gender equality. Electricityhas also a substantial impact in terms of economic developmentby increasing productivity and economic growth.World electricity demand is expected to doublebetween now and 2030.Most of the growth of the world’s electricity demand isoccurring in developing countries, where electrificationrates are not keeping up with population growth. There are2.5 billion people who rely on traditional biomass as theirprincipal source of energy. This has terrible consequenceson land use and degradation, but also on human health.Indoor air pollution is directly responsible for 1.3 milliondeaths per year. The cost of fossil-fuel imports is unbearablefor many developing countries. Sudden price increasescause economic interference and can disrupteconomic growth. In many less developed countries, alarge percentage of export earnings (i.e., up to 40 percentin Nepal) are diverted to pay for the importation ofpetroleum fuels.Off-grid power generation is often the bestsolution for bringing an electricity supply torural areas.Due to low potential electricity demand, and severephysical limitations, grid extension is often not a feasibleoption. According to the International Energy Agency, thefigures regarding access to energy will remain largelyunchanged in 2015 unless new strategies are adopted toexpand access to modern services. Therefore, newapproaches are needed to increase the production ofelectricity in rural areas, and to improve local livingstandards. One of the best solutions is a hybrid off-gridpower system. This type of system offers the followingbenefits:• Higher flexibility by coupling all consumers andgenerators on AC (alternative current)transmission line,• Standard AC used technology in the powerrange above several kilowatts,• Different local renewable and conventionalenergy sources are suitable to form a hybrid grid,• Simple expandability,• Extension of an existing diesel based powersystem, and• Use as a backup solution for unstable public grids.A number of opportunities arise in the processof rural electrification.Opportunities from rural electrification include stimulatingfurther investments from the private sector, promotingwin-win situations between all stakeholders involved(foreign industry, local industry, users, local installers anddistributors), fostering economic development through thegeneration of wealth and employment, and increasingelectrification rates in a sustainable way.Solar power is an excellent option for energygeneration in developing countries.Photovoltaics and solar thermal systems have manyapplications in remote and rural areas because thetechnology has no moving parts, generates electricity thatcan be used immediately or stored in batteries, and doesnot depend on the reliability of the grid infrastructure, oron the fluctuating price of oil. Solar power in developingcountries creates opportunities for water pumping andpurification, electrification of rural schools and clinics,microenterprise, household and community lighting, andwireless internet.International Climate andEnergy PolicyInternational attention, appeal, and collaborationis being garnered by investments in cleantechnology and renewable energy projects.At the 2008 Investor Summit on Climate Risk atthe United Nations, signatories of the Summit’sAction Plan agreed to a total investment of $1.75trillion. The action plan initiated the deployment of$10 billion immediately to start mitigating theeffects of climate change. The action plan alsocalled for other measures, including improvingenergy performance of real estate portfolios andinvestments, bettering corporate disclosure offinancial and material risks posed by climatechange, requiring investment managers to assessclimate in portfolios, and factoring in carbon costsinto valuations and investment analysis. Cleantechnology and renewable energy are viable solutionsto the headline issues that will be raised atboth COP 15 Conference in December 2009 and the2010 Investor Summit at the United Nations.American Council On Renewable EnergyExecutive Summary Report 41