international analysis and commentary

Universal access to energy: the path to sustainable development

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Modern energy services are crucial to human well-being and to the development of our world. Access to modern energy services means provision of clean water, sanitation and healthcare as well as reliable and efficient lighting, heating, cooking, mechanical power, transport and telecommunications services.

Today large parts of the world suffer from limited access to the most basic energy services: as the World Energy Outlook 2014 pointed out, nearly 1.3 billion people still lack access to electricity and 2.7 billion people rely on the traditional use of biomass for cooking, which causes harmful indoor air pollution. These people are mainly in either developing Asia or sub-Saharan Africa, and most of them in rural areas.

Given these circumstances, the fight against energy poverty is one of the United Nations’ Millennium Goals. This commitment was reiterated by the UN General Assembly which designated 2014-2024 as the decade of Sustainable Energy for All (SE4All). About 80 developing countries have signed up to the SE4All initiative aimed at raising awareness of governments, civil society and the private sector and mobilizing them to achieve three fundamental objectives:

a) ensure universal access to modern energy services,

b) double the global rate of improved energy efficiency,

c) double the share of renewable energy in the global energy mix.

The pursuit of these goals requires a profound change in the world of energy as well as a rethinking of global policies on the issue. Actions are therefore necessary to tackle the problem effectively and decisively and to outline a plan for the electrification for the most vulnerable areas of the world.

In this context utilities can play a key role: Enel, which joined the SE4All Advisory Board in June 2014, is strongly committed in the three SE4All objectives, playing an active role in their achievement, through the “ENabling Electricity” program. The program, which is part of SE4All initiative, aims at helping to fight energy poverty by providing isolated communities and disadvantaged people with sustainable access to electricity.

In promoting sustainability in both energy and social terms, innovation is an essential lever which enables the emergence of new business approaches and new technological solutions where the traditional model has proven insufficient to meet the needs of local communities. For instance, in Chile at the Ollague Project, Enel has developed an off-grid hybrid plant combining photovoltaic panels and a mini-wind turbine generator, coupled with an energy storage system.

In order to achieve the goal of universal energy access by 2030 an integrated approach is needed. This can be achieved only by reinforcing cooperation among the key players, such as governments, international institutions and the private sector. Providing expertise in different contexts with a participatory perspective and a constant search for reciprocal gains can make the difference, leading to solutions specifically designed for the needs of different communities, using appropriate technologies and innovative business models.

In developing countries, rural households – lacking connection to the electric grid and unable to use conventional power distribution systems – represent a sizable market. This can be exploited by innovative entrepreneurs if they are ready to design completely new low-cost products and services.

Today several interventions that are now taking place in many rural communities in Africa and Asia exist, where the focus is on decentralized hybrid mini-grids for distributed generation (i.e. a method of generating electricity from multiple small generation systems very near to where the electricity is actually used), that do not require initial investment by the customer, but only a subscription fee. To minimize the network cost, the general strategy is to develop business models that limit household load providing basic services tuned on the needs of the communities.

A further challenge for the entrepreneur is to develop a regional service comprising multiple such grids served by a common maintenance and collection service.

To promote the deployment of new technologies and new business models an integrated approach is required, including many different players. These include donors, thanks to whom projects can be started quickly, and non-governmental organizations and private companies, allowing the implementation of the projects and their sustainability over time. Cooperation with traditional educational systems is strongly recommended to train local people to be able to operate and maintain the implemented technologies and to establish mini/micro businesses that can implement appropriate business models for the management of the energy systems. This arrangement requires the participation of local agencies that can enhance, with appropriate policies, the development of local enterprises having the aforementioned qualities.

All this must be designed in such a way that once the individual project is completed, the loans granted can generate over time sustainable improvements in the capitals’ assets (i.e. improvements in the technologies used to generate, distribute and manage energy) in order to generate added value for that area.

In this way, cooperation can leverage a collective effort, thus playing on the strengths and addressing the weaknesses of increasingly diversified societies, along the path to sustainable development. Energy access designed to just meet the basic needs of a household, a geographical area or even on urban conglomerate, is not enough to support the economic and social development of a society. Over the long run, the ultimate goal is to ensure electricity supply that spurs economic activities which in turn can provide sustainable development for all.