De-Centralized Electricity in Africa and Southeast Asia
January 28, 2015
Around the world, almost a quarter of the world’s population or 1.3 billion people lack access to electricity. Of these, close to 85 percent of those without electricity live in rural areas and 87% are geographically concentrated in Sub-Saharan Africa and South Asia. These statistics only provide a brief insight into the problem as many of those who do have access to electricity still experience frequent and unplanned outage periods. The lack of access to reliable electricity unfortunately is a great hindrance of development, limiting people’s ability to enhance their incomes, improve food security, educate their children, access key information services. It especially burdens women with physically taxing activities and reduces their safety within communities. Lack of access to electricity is a major barrier to achieving a more inclusive economy and to building the resilience of poor or vulnerable communities.
Due to the high consumer interest in off-grid electricity, many have drawn parallels between the explosive growth of the telecommunication sector in the past decade with that of a nascent off-grid energy market. According to IFC, the number of African telecommunications subscribers has grown at a rate of approximately 30 percent annually for the past 10 years. The growth in the telecommunications sector has shown how technological advancements can allow a leapfrog effect in emerging markets and it also demonstrates that even low and middleincome consumers have purchasing power that should be recognized. This telecommunication growth also provides a unique opportunity as they continue to expand their infrastructure investment in rural areas, thereby improving both coverage and reliability.
This continued growth provides a unique opportunity to meet the current demand for power from off-grid telecom sites. The Rockefeller Foundation saw an opportunity to catalyze the telecommunications and offgrid energy sectors. Currently cell phone towers in rural areas are often powered by expensive diesel generators and companies are looking for cheaper alternatives, thereby creating the possibility for a strong “anchor” demand for off-grid power in rural areas. Entrepreneurs can take advantage of this demand by setting up power plants which provide electricity to cell phone towers as well as surrounding communities and other local enterprises.
With a total commitment of $75 million, The Rockefeller Foundation has launched Smart Power for Rural Development to promote sustainable business models that deliver renewable electricity and spur economic development among poor, underserved rural populations. The initiative will focus on India, where the Foundation is establishing a new organization that will partner with energy service companies (ESCOs), telecom tower operators, investors, non-governmental organizations (NGOs), and government agencies to electrify 1,000 villages in the next three years (2014-2017).
The following study was in support of The Rockefeller Foundation, building off the lessons learned in India over the past four years, to explore the feasibility of the expansion of the model to new countries. The Rockefeller Foundation and Accenture Development Partnerships partnered to assess the viability of the Smart Power for Rural Development model in seven countries throughout Africa and Asia, where the approach was determined to have substantial potential for adaptation and scale. The goal of this report is to share the information and encourage greater collaboration with practitioners who are interested in in de-centralized renewable energy mini-grids market. In this light, we hope this report will contribute to global dialogue and innovation on solutions addressing energy poverty.