There Is No Silver Bullet – Affordable and Clean Energy For All by 2030 Is A Multi-Sector Effort
We’ve rung in another new year, and still, more than 1 billion people around the world live without reliable access to electricity. Penetration of energy services varies widely across countries, and today, overall progress falls substantially short of what is needed to attain the Sustainable Development Goal 7 (access to affordable and clean energy) by 2030. According to the UN, energy access accelerated by a mere 0.3 percentage points between 2012 and 2014, and more than 3 billion people worldwide are still cooking without clean fuels and technologies.
Recently, the Rockefeller Foundation led a robust panel on achieving SDG7 at the Responsible Business Forum in Singapore. One thing became vividly clear: achieving any progress on widespread electrification will require stepping up on collaboration not only across sectors but even among the various priorities within the global energy access effort.
This is because SDG7 is multi-dimensional in nature. It is about generation as well as distribution, supply as well as demand. It is as much about infrastructure, technology, and financing as it is about engaging consumers, not only to use electricity but to transform those electrons into economically productive outputs and other social benefits. To move the needle, we need to ensure adequate support for each piece of the energy puzzle and ensure they build on each other.
Decentralized electrification has the potential to transform the lives of 1 billion people constrained by lack of access to energy.
Perhaps nowhere is the need for a systems approach more real than with achieving SDG7, which requires aligning new pools of capital, innovative decentralized distribution models, supportive public policy, and new technology applications. This is especially true if we are to realize the full potential of decentralized electrification solutions that have proven nimbler and more effective to produce and deploy in remote, under-served areas where heftier mainline grid infrastructure may be too costly to expand into. With the right blend of policy and regulatory support, innovation and technical assistance, we have the opportunity to catalyze a market for private sector players to take to scale, much of it through renewable energy. This has the potential to transform the lives of 1 billion people whose economic and social progress is being constrained by a lack of access to modern energy.
To get there, there are three main levers in the system to consider:
- Taking energy financing to the next level through private investments, public subsidies and development grants. Decentralized renewable energy needs to be considered an investible proposition. While massive technology improvements have made it more feasible than ever to have reliable access to energy, the blend of different shades of investment needed for widespread adoption has not reached critical mass. According to a report by Sustainable Energy for All (SE4All), closing the gap on energy access will require scaling up annual global energy investment from about $400 billion at present, to $1.25 trillion.
- Merging government silos to create enabling policy environments. For all the progress made, the reality is that many governments continue to tackle electrification as solely under the remit of isolated ministries – be it Power, Renewables or Infrastructure. These government agencies often have conflicting priorities and may lack clear accountability for achieving electrification KPIs. It’s disturbing to see how often these efforts, that could be working in concert, are moving along divergent tracks. We have to break down these silos by thinking about integrated electrification strategies where our end goal is a unified smart grid, which can be built more efficiently and rapidly from the ‘outside in’ by leveraging the power of decentralized technology and business models.
- Galvanizing the private sector. From energy service companies and technology experts, to local enterprises and banks – business on a global scale are making amazing progress in the race to close the gap on global energy poverty. We are encouraged by the enormous technological innovation driven by companies, which have dramatically dropped the costs of generating renewable power. And we also see entrepreneurs who are untangling complex challenges in distribution and customer engagement in previously untouched rural markets. As we continue to understand how to tap and stimulate electricity demand, innovate with new distribution models that can serve low-income customers, and partner with governments to see the benefits of decentralised energy, we are poised to see a new generation of public-private partnership models that will transform the energy market and drive economic opportunity, especially in under-served rural areas.
The complex challenge of electrifying over a billion people, and driving an economic revolution with it, is reason enough for us to work more effectively in coalitions, across sectors and silos. We need alliances that unleash the collective power of businesses, civil society, and governments at every level. With concerted action from all actors, ending energy poverty is within our reach.