Grid or no grid, efficiency is key to powering the global South

Grid or no grid, efficiency is key to powering the global South

Energy efficiency could help 1.1 billion people around the world who don’t have access to electricity.

Global demand for electricity is expected to grow by 56 percent between 2010 and 2040. Most of this increase will come from developing countries, often referred to as the global South, where strong economic growth is driving demand.

For the quantitative minds among us, that's an anticipated uptick from 524 quadrillion Btu to 820 quadrillion Btu, according to the U.S. Energy Information Administration.

But energy growth isn’t the same as energy access, and the latter could continue to be a problem in the world’s poorest regions.

In many off-grid regions, small-scale solar and wind technologies, as well as microgrids, are helping to bring electricity to entire swathes of humanity. But energy efficiency could be the key to making these technologies viable in remote regions, accelerating efforts to make modern energy services available to those who need it most, according to a recent report by the World Bank.

A total of about 1.1 billion people around the world don’t have access to electricity, according to the World Bank, and 2.9 billion live without modern fuels for cooking and heating. This effectively bars them from the modern economy, and also creates widespread social and environmental problems.

Learn more about on- and off-grid energy innovation Oct. 26-29 at VERGE 2015 in San Jose, California.

In a world without electricity, productive hours for working adults are limited to daylight hours, and these jobs typically are low-tech and low-paying. Likewise, children can’t study at home after dark, which puts a damper on education. I witnessed this first-hand late last year during a trip to Mathare, a slum in Nairobi, Kenya.

Simply put, nearly everything in the modern global economy relies on electricity to function.

Commercial buildings, industrial facilities and, of course, homes all require electricity to work in the 21st century. The Internet, which forms the digital infrastructure of e-commerce, relies on physical infrastructure capable of generating and delivering copious amounts of energy to data centers.

The energy efficiency-access nexus

The new World Bank report mulling the role of efficiency in global energy development, EA + EE: Enhancing the World Bank’s Energy Access Investments Through Energy Efficiency, identifies a nexus between energy efficiency and energy access by examining eight recent projects.

It also recommends some ways energy efficiency measures can amplify the impact of future projects that aim to achieve universal energy access.

Technology such as home solar systems, small wind turbines and renewable mini- and micro-grids can help generate power for people living off the grid. But greater energy efficiency means there is more electricity to deliver to a larger number of households and businesses, the report said.

In Bangladesh, for example, efficient LEDs combined with the easy-to-use solar kits resulted in longer, more reliable periods of electricity supply at a much lower cost, the report said. Some 18.5 million Bangladeshis have been able to adopt the combination to power their homes.

In another development project, the World Bank sought to expand access to rural populations in Bolivia, which has one of the highest poverty rates and lowest rural electrification rates in Latin America — due to its small population being spread thinly across inaccessible mountainous terrain.

The project succeeded in extending off-grid access by installing over 7,000 solar home systems and over 5,000 Pico PV systems in rural households, schools, clinics and small businesses. However, the World Bank struggled with selling the idea of using LEDs and efficient appliances with the new systems because it's tough to build markets for these products in such remote areas, the report said.

Private capital and closing the energy gap

Making reliable, affordable electricity available to everyone in the world by 2030 was one of the goals that came out of the U.N.'s 2012 Conference on Sustainable Development in Rio de Janeiro.

Later, the Sustainable Energy for All (SE4All) initiative was formed to make it happen. It has rallied the public sector, private sector and civil society around three big objectives: ensuring universal access to modern-energy services; doubling the rate of improvement in energy efficiency; and doubling the share of renewable energy in the global-energy mix.

“Such accelerated action will require serious investment,” Anita Marangoly George, senior director of the World Bank’s Global Practice on Energy and Extractive Industries, wrote in a recent blog post. “Already, SE4All has helped lay out a realistic financing plan with inputs from leading financiers who are part of the partnership.”

The world needs to triple its investment in sustainable energy infrastructure per year, from around $400 billion now to $1.25 trillion by 2030, the World Bank estimates.

“We believe that this level of private capital is available, but investors tend to be wary to enter new markets that they regard as risky,” Marangoly George wrote.

Development partners such as the World Bank are working to make these investments more attractive to the private sector by reducing risk and building strong, reliable energy institutions, Marangoly George said.

It also means laying out energy investment prospectuses to attract private capital and identifying a range of financial tools that give investors the confidence they need.

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