Energy Storage, Bitcoins, internet of things, big data……there are countless of topics that constantly stimulate the imagination of investors and big corporates. In this “innovation race” big firms easily detected emerging countries as a huge and unexplored market. It’s not really necessary to be a market expert to understand that those 1.3 billion people without access to electricity will become new customers, sooner or later. Technologies are spreading, prices are decreasing, economies are growing and dollar signs are shining in the investors’ eyes.
But why haven’t we already reached the universal energy access and what is holding back the investments in achieving the world’s 100% electrification? The answer is maybe simple: low margins and sometimes the non-profitability of investments due to the inability of the population to pay electricity costs or the extremely high costs of projects. But this could also be the evidence of a wrong approach to the problem.
Some governments are trying to solve it through a simple top-down approach: combining statistics, budgets, complex costs calculation just to figure out that a coal plant can resolve any problems and never mind if the environment will be destroyed and if this will distort the country’s economy, inducing the inhabitants to migrate to cities…at least people will get electricity at an accessible price! But luckily centralized energy production is not the only solution and in many case it is not event necessary.
But what are the real needs of people living in no-energy areas and why are they willing to get access to electricity and clean energy?
The “Practical Action” association represented in an infographic what the basic needs in term of energy use are, within a path from the simplest to the more energy intense need, as you can see in the graph below:
Solar lamps and clean cookstove can be a good starting point to satisfy basic needs and to improve living conditions to many communities. This could also be a good solution for replacing the massive use of the dangerous and polluting kerosene.
Perhaps kerosene is also one of the reason of the slow adoption of those cleanest and safer technologies…. kerosene is a good business, like all the other fossil fuels and the total life expenditure of a kerosene lamp is much higher than a solar lamp!
How much do we need to reach 100% worldwide energy access?
For the World Energy Outlook approximately 43 billion dollars per year are needed, up to 2030.
Well, to me this looks like a huge amount of money….and of course it is! But a huge amount related to what? I always had some problems in understanding the real value of things so I decided to check some other data.
Let’s start with current events: Iraq, the cradle of civilization, a territory disputed by religious aspirations and Western ambition. Well, these disputants are also contending a production of more or less 73-billion-dollar annual oil production (2015 production data, considering the current oil price…so low estimation).
Another important data (I took example by an excellent presentation made by David McCandless) is the US annual military expenditure. I really don’t want to look like an ardent anti-militarist, but this seems to be like a really huge sum to me! Well, the expenditure is……598 billion dollars per year!
Other data about corporates (2015):
- Volkswagen (Automotive, Germany), 245 billion $/annual revenue
- Total (Oil and gas, France), 212 billion $/annual revenue
- China national petroleum corp (Oil and gas, China), 428 billion $/annual revenue
- Saudi Aramco (Oil and gas, Saudi Arabia), 338 billion $/annual revenue
- The sum of the first 50 world companies, 9238 billion $/annual revenue
The cost of basic needs
As we’ve seen in the “Practical Action” infographic sometimes is not really necessary to invest in expensive grid infrastructure and in centralized production to meet primary needs. Starting from a bottom-up approach and thanks to some off-grid tools, we could significantly improve living conditions of many communities. What could be the costs of providing these basic technologies worldwide? Let’s take the solar lamps and clean cookstove examples:
Cost of a good quality solar lamp = 20 $
Cost of a good quality clean cookstove = 100 $
People without energy access = 1,3 billion $
People without clean cookstove technologies = 2,6 billion $
Considering an average family size of = 4 people
To provide solar lamps to people without electricity = 6,5 billion $
To provide clean cookstove to people who need it = 65 billion $
So, yes, these values are quite high and it will not be easy to provide these technologies to everybody, but with a moderate worldwide effort we can achieve it!
How to spread these technologies?
Yes, in practice this is not an easy task! People live in many different places, often not easily accessible. In addition there is a shortage of funds or they are not well distributed. And there is also a lack of sales agents in these areas.
Some companies and NGOs are exactly working on these existing lacks. They provide knowhow and tools to push local people, especially women, to become entrepreneurs spreading technologies such as solar lamps and clean cookstove to their communities.
Usually these projects are funded by social funds, crowdfunding or micro-credit and in some other cases new business models are proposed, like for example the pay-per-use model.
This bottom-up approach is conducting to an effective improve to living condition, bringing to a remarkable development also in terms of health and economy.
Subsequently, the increase of population’s income can encourage local actors to invest in micro-grid projects and in the installation of renewable energy systems, contributing to the spread of a distributed and sustainable energy production.
Among the various initiatives and the different existing business and no-profit models, I would like to report as examples:
STOVE PLUS, conducted by GERES, a French NGO: a global program with the aim to assist, advise and support projects having the goal to spread clean cooking solutions for populations relying on biomass.
UGESI GOLD, a social business that promotes women-empowerment by starting micro-utility franchises in rural and informal settlements across Sub-Saharan Africa.
PEG, provide solar home systems on credit to households in West Africa. Using a ‘pay-as-you-go’ financing approach, enable customers to replace their perpetual spending on poor-quality polluting fuels, such as kerosene, with solar energy.
In summary, what could be an easy and fast solution to achieve worldwide energy access?
There is not a unique and simple solution, but for sure a good answer is to think and to act locally.
Coming out of the dependence on fossil resources; exploring more sustainable way to product energy integrating local resources, such as wastes and biomass; providing support to local entrepreneurs with training or improving the public awareness; providing micro-credit solution to buy off-grid equipment and clean technologies……all these actions could be good solutions for an equitable and sustainable energy supply.
Electrification, and in particular sustainable electrification, is a key component for good life condition, contributing to health, instruction, economy and avoiding many population to emigrate to other places or countries.
To conclude I would like to provide some additional useful data sources about energy access: