Monday, April 20, 2015

Bringing Power to the Unconnected

Access to affordable, reliable and sustainable energy is a fundamental driver of economic development, environmental stewardship and social progress. Electricity is key so that facilities, utilities and businesses can operate and manufacture products needed by customers all over the world. Power is also essential to service providers, such as telecommunications companies, airlines, banks, hospitals and schools so that they can go on providing the larger society the services they need to productively, healthily and peacefully go on with their daily lives. Without electricity, factories cannot manufacture goods, oil & gas facilities cannot produce enough petroleum products to satiate the global demand, cellular and Internet communication will not be possible, financial transactions will halt, hospital equipment will not function to keep patients alive and healthy, and schools cannot hold daily classes to educate children.

Living in industrialized and highly urban cities, the above-mentioned scenarios will, for most of us, be appalling. We are so used to the ubiquity of electricity that imaging life without it is itself unimaginable. Unthinkable as it is, the truth is almost 1.4 billion people around the world still have no access to electricity. These people rely on candles, kerosene and diesel, fire wood, and animal and human dung to produce energy in their homes or small businesses. These people go home to dark houses, have never seen a TV show, have never heard music from a radio, have never had an ice cold drink from the refrigerator, have never researched on the Web, and maybe have never studied under sufficient light.

Just how dangerous is not being connected?

Generally speaking, the “unconnected” comprises an economic sector in society called “the bottom of the pyramid” – a low-income market whose members have an annual earning that do not exceed US$1,500. It is in this sector that we find the 1.4 billion people around the world that do have access to electricity, and the almost 2.7 billion people that still cook with the harmful traditional biomass. Of the estimated 1.4 billion, the International Energy Agency (IEA) reports that 587 million resides in Africa, 404 million in India, 31 million in Latin America, 8 million in China and the other 387 million in other Asian countries.  On the other hand, of the 2.7 billion that still utilize biomass for cooking, 855 million is in India, 657 million in Africa, 423 million in China, 85 million in Latin America and 659 million in other Asian countries.

Owing to the lack of access to a viable and consistent supply of electrical energy, these people resort to the use of biomass and petroleum-based fuels for lighting, cooking or to power small household equipment. Little do they know that what they burn inside or within the vicinity of their houses bring about myriad negative consequences to their health, to the environment and to their household economy.

For instance, fumes from indoor fires cause serious health problems and, worse, death. The World Health Organization reports that every year an estimated two million people, mainly women and children, die from diseases related to indoor smoke.

Additionally, unsustainable gathering of wood and other biomass hastens deforestation, causing a dip in biodiversity and the absorptive capacity for CO2. Owing to this, the black carbon resulting from the incomplete combustion of fossil fuels or biomass, which directly contributes to climate change, is not absorbed.

Add to this the fact that energy from kerosene or candles is estimated to be largely more expensive than electricity from the grid. The high cost of energy among low-income markets further hinders their economic productivity.

Is there hope for power?

The global population will continuously increase at a high rate. From the present seven billion, the UN estimates that it will rise to nine billion in 2050, with a large part of the growth to take place in emerging and developing countries. This is supported by the International Energy Agency, adding that 1.2 billion people will still lack access to electricity in 2030, despite increasing global electrification rates. Therefore, in order to make sustainable inroads into bringing power to low-income markets, innovative approaches to generation, transmission and distribution of electricity are required.

Governments in emerging economies are observed to be warming up to the potential of private energy services for the low-income markets. As an example, Endeva, a social enterprise working towards the eradication of poverty globally, cited that the Indian government had established a national goal for the universal access to energy through its Rural Electrification Policy in 2006. In order to achieve the goal, India had created a number of new financing schemes, including subsidiaries for the installation of renewable energy plants.

Small and large companies are observed to be responding to the demand, but data from recent research shows that most of the business-driven energy projects geared towards the “bottom of the pyramid” are yet to gain considerable traction.

Towards universal electrification

Based on geographical, market and cost-benefit studies conducted by competent entities, three connection types represent the most plausible. For the houses or local businesses that are in close proximity to existing transmission and distribution lines, getting connected to the grid would be the most logical and cost-effective solution. For those in the remote villages, small power plants can be set up to provide electricity for their household and productive energy demands. In areas where there is a very small number of households or other facilities, or where significant geographical constraints are present, solar home systems can be installed, or solar lamps and improved cook stoves can be provided.

All of the nominated methods of electrifying the unconnected have the objective of bringing power to those who have none, to create social and economic opportunities in places where they have not existed, and to introduce new ways of being productive. They are all focused towards ameliorating the standards of living of the low-income markets and including them as active participants in the global economy. They, however, require significant time and investment, thorough planning and designing, years of construction and commissioning and manifold approvals and endorsements. The complexity and magnitude of such electrification projects make them ideal for permanent, long-term solutions as opposed to immediate answers to the plight of the poor in power.
While such initiatives are taking shape, there are technologies available today that can support their intended community-beneficiaries. Temporary power plants represent a fast, scalable, sustainable, viable and cost-effective solution to rural and remote area electrification. Contemporary interim power plants are equipped with the latest industry technologies that allow them to be set up in containers for fast and easy shipping and deployment to anywhere in the world. Once they arrive at the location, they can rapidly be connected to the power infrastructure, commissioned and powered on, owing to their plug-and-play configuration. They can be configured to produce the precise amount of power needed by a community, locality, city, region or country so the electricity supplied is always consistent. They can run on either new-generation diesel, gas or dual-fuel.

Rental power plants are proven to be economical compared to other sources of energy. The power they supply is dependable, predictable and viable; they take very little time to install; they are easy to decommission and ship to origin; and most importantly, they will arrive when needed and where needed. In addition, there are intangible, at times unappreciated benefits of hiring the services of rental power plants that clearly transcend the purchase price. Imagine: How many more days, months, years or decades will the low-income communities remain unconnected? How many children would have been lawyers, doctors, engineers, teachers or scientists had they been offered a decent education and a conducive environment for learning? How many patients in hospitals would have recovered and become productive again had they had working life support systems? How many businesses would have flourished had they had power to continuously produce and render their services? The rural and remote communities need not to wait for the permanent power solutions to be up and running. While these are being optimized for the long-term, temporary power plants can start supplying power to the communities.

Universal electrification is an enormous challenge that energy markets around the world are facing. In order to bring electricity to as many people as possible around the world, various industry stakeholders, including the government, the private sector, the academia and the financing institutions, must come together and work to reach the common goal. The “bottom of the pyramid” is a wide but largely untapped sector, full of social, political and economic potentials. With all the available technologies, be they permanent or temporary, and with the advancements in the energy industry, there is no better time to bring power to the unconnected than now.

*This article was originally published in the February 2015 edition of Infrastructure Middle East magazine.**


Robert Bagatsing
Altaaqa Global
Tel: +971 56 1749505

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