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Climate Action 2011-2012

climate policy,

climate policy, Governance & Finance solar © APEX BP Solar If access to energy is achieved with environmentall sound technologies, it directly contributes to global environmental sustainability. Off-grid renewable energy: an immediate solution to energy poverty 60 By Simon Rolland, Secretary General, Alliance for Rural Electrification (ARE) According to the IEA, which has published the figures that are going to have authority in the energy access world for years to come, it was estimated that in 2008, 1.5 billion people, or 22 per cent of the world’s population, had no access to electricity. Eighty-five per cent of these live in rural areas. Two regions in particular suffer this deprivation. 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 to reduce hunger and facilitates access to safe drinking water through food preservation and pumping systems (MDG 1); It can improve education by providing light and communication tools (MDG 2); it can lead to more gender equality by relieving women of fuel and water collecting tasks (MDG 3); it contributes to the reduction of child and maternal mortality and the incidences of disease by enabling refrigeration of medication as well as access to modern equipment, and it helps fighting pandemics such as HIV (MDG 4, 5, 6). Finally, if access to energy is achieved with environmentally sound technologies, it directly contributes to global environmental sustainability (MDG 8). RuRal electRicity pRovision There are three basic approaches to bringing electricity to remote areas. The first approach is simply to extend the national grid; however, 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. 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

Figure 1. Cost comparisons of energy power systems on a lifecycle basis. Total cost ($US) 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 0 Diesel Generator – 1.5¢US Diesel Generator – 1 $US/L Diesel Generator – 0.7 $US/L Hybrid PV-Wind 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Year Source: the Alliance for Rural Electrification: projections made from a case study based in Ecuador with real natural conditions. 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. It is estimated that the recent (and continuing) rise in oil prices have cost an additional US$10.5 billion in oil imports to non-producing African countries, ten times more than their gains in debt relief. 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. “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)” (from Solar-diesel Hybrid Options for the Peruvian Amazon, Lessons Learned from Padre Cocha, ESMAP Technical Paper, 2007, p. 26) 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 Figure 2. The energy pyramid in Africa. Decreasing level of investment Large scale energy initiatives (e.g. fossil fuel and hydropower) Medium scale energy initiatives (e.g. cogen, geothermal, small hydro, wind power, LPG, liquid biofuels, wind pumps, solar heaters) Small scale energy initiatives (e.g. solar dryers, treadle irrigation pumps, mechanical RETs, improved stoves, kerosene) Increasing impact of population Source: Karekezi and Kithyoma, 2005. 61