Energy access through off grid renewables: Enabling the transition
The UN’s 17 Sustainable Development Goals, approved at the UN General Assembly in September, seek to eradicate poverty while healing and securing our planet. A central component of this agenda is to ensure universal access to clean, reliable electricity.
For those of us living with electricity, it is easy to forget the social and economic impact of going without. Power shortages cut economic growth by 2 to 4 per cent annually. Households without electricity pay 60 to 80 times more for energy-related products – charcoal, candles and kerosene – than people in New York or London. Health clinics without electricity struggle to refrigerate much needed medicines and exposure to smoke from wood-fired cook stoves cause 4.3 million premature deaths per year.
Great strides have been made in the last two decades to increase global access to electricity, with nearly two billion more people connected today than in 1990, but there is still too large a gap between the haves and the have nots. More than one billion people, mostly in rural areas, still lack access while another one billion have unreliable supply.
Renewable energy, specifically off-grid renewable energy, has a key role to play in closing this gap. Renewables are now the default choice for off-grid installations in most rural and peri-urban areas and IRENA estimates off-grid solutions can meet the majority, roughly 60 per cent, of the demand.
Thanks to dramatic cost reductions in recent years, renewable technologies are now the most economic option for off-grid electrification. They can be significantly cheaper than diesel-fired generation or kerosene-based conventional lighting, the dominant sources of rural electricity supply. For example, if Nigeria used modern off-grid lighting solutions, it would save more than USD 1.4 billion annually. Replacing all the kerosene, candles and batteries used annually for off-grid lighting would also save Nigeria the equivalent of 17.3 million barrels of crude oil per year.
Beyond pure costs, the modular nature of off-grid renewables allows them to be customised to meet local needs and be deployed rapidly. For example, Bangladesh’s solar home system programme deployed 280,000 solar home systems in six years between 2002 and 2008. Today, it deploys the same number in fewer than five months. The programme now benefits over 13 million beneficiaries or nine per cent of the total population.
The business case for deploying off-grid renewables in rural areas has never been stronger, and innovative business models are emerging to encourage growth in the sector. But further tapping into this vast potential will require collective efforts to create an enabling environment that supports the scale-up of energy access efforts through private sector participation. This includes adopting an effective policy and regulatory framework, along with tailored business and financing models and adapting technologies to the rural context. If the enabling environment is appropriate, off-grid solutions can be deployed rapidly to extend electricity access for meeting basic needs but also for promoting productive uses, as modelled by the Bangladesh solar home system programme.
These enabling policies can also create a more secure environment to encourage investment. We currently invest USD nine billion a year on energy access, but USD 45 billion is needed to achieve universal access. This investment is beginning to trickle in. For example, the US-led Power Africa’s “Beyond the Grid” initiative committed one billion over the next five years to seed and scale distributed energy solutions, and the Islamic Development Bank will loan USD 180 million for Africa projects improving access to electricity through off-grid solutions.
Efforts made to increase energy access also benefit other sectors critical to human development. Access to electricity can improve the accessibility and reliability of the water supply. It can also facilitate extension of basic rural healthcare services and enable the outreach of telecommunication services in rural or island contexts, thereby further contributing to the UN Sustainable Development Goals.
This complementarity presents a compelling case for policy-makers to adopt a more holistic approach to energy access and to include it as a means to stimulate economy-wide development, fight poverty and improve livelihoods, all while protecting the planet from the dangerous effects of climate change.