ENERGY 45
between the haves and the have nots. More than
one billion people, mostly in rural areas, still lack
access while another one billion have unreliable
supply.
Renewable energy, specifically off-grid renewable
energy, has a key role to play in closing this gap.
Renewables are now the default choice for off-grid
installations in most rural and peri-urban areas and
IRENA estimates off-grid solutions can meet the
majority, roughly 60 per cent, of the demand.
Thanks to dramatic cost reductions in recent
years, renewable technologies are now the most
economic option for off-grid electrification. They
can be significantly cheaper than diesel-fired
generation or kerosene-based conventional lighting,
the dominant sources of rural electricity supply. For
example, if Nigeria used modern off-grid lighting
solutions, it would save more than USD 1.4 billion
annually. Replacing all the kerosene, candles and
batteries used annually for off-grid lighting would
also save Nigeria the equivalent of 17.3 million
barrels of crude oil per year.
Beyond pure costs, the modular nature of off-grid
renewables allows them to be customised to meet
local needs and be deployed rapidly. For example,
Bangladesh’s solar home system programme
deployed 280,000 solar home systems in six
years between 2002 and 2008. Today, it deploys
the same number in fewer than five months.
The programme now benefits over 13 million
beneficiaries or nine per cent of the total population.
The business case for deploying off-grid
renewables in rural areas has never been stronger,
and innovative business models are emerging to
encourage growth in the sector. But further tapping
into this vast potential will require collective efforts
to create an enabling environment that supports
the scale-up of energy access efforts through
private sector participation. This includes adopting
an effective policy and regulatory framework,
along with tailored business and financing models
and adapting technologies to the rural context. If
the enabling environment is appropriate, off-grid
solutions can be deployed rapidly to extend
electricity access for meeting basic needs but also
for promoting productive uses, as modelled by the
Bangladesh solar home system programme.
These enabling policies can also create a more
secure environment to encourage investment. We
currently invest USD nine billion a year on energy
access, but USD 45 billion is needed to achieve
universal access. This investment is beginning
to trickle in. For example, the US-led Power
Africa’s “Beyond the Grid” initiative committed
one billion over the next five years to seed and
scale distributed energy solutions, and the Islamic
Development Bank will loan USD 180 million for
Africa projects improving access to electricity
through off-grid solutions.
Efforts made to increase energy access also benefit
other sectors critical to human development.
Access to electricity can improve the accessibility
and reliability of the water supply. It can also
facilitate extension of basic rural healthcare services
and enable the outreach of telecommunication
services in rural or island contexts, thereby further
contributing to the UN Sustainable Development
Goals.
This complementarity presents a compelling case
for policy-makers to adopt a more holistic approach
to energy access and to include it as a means
to stimulate economy-wide development, fight
poverty and improve livelihoods, all while protecting
the planet from the dangerous effects of climate
change. Q