Towards pro-poor innovation systems for sustainable energy


January 27th, 2017

This article is informed by research conducted at Practical Action’s Southern Africa offices in Harare, Zimbabwe as part of a work-based placement at the University of Edinburgh.

Distributed renewables for access

The ongoing energy poverty that leaves 1.2 billion people in the world without access to electricity, and 2.7 billion people relying on traditional biomass for cooking is one of the great injustices of our time. Innovation systems need to shift in order to ensure the goal of enabling universal access to affordable, reliable, sustainable and modern energy for all by 2030 is achieved. Technologies and business models have emerged that have the potential to live up to the challenge. In particular, Distributed Renewable Energy System (DRES) have tremendous potential to respond rapidly and efficiently to energy poverty, especially in rural areas.

maintenanceStill, the development of pro-poor innovation systems for sustainable energy access based on DRES faces challenges at multiple levels, as large energy projects continue to be promoted by governments in developing countries and attract support from major development financiers, as go-to solutions for electrification. When small-scale renewable energies are financed, the sum of the smaller projects usually does not even come close to matching the large-scale project both in terms of total capacity of sustainable energy generation and of funding. However, considering the urgent demands of energy poverty, the speed by which small-scale renewables can become operational and the ever-decreasing cost for their installation should favour rural electrification policies based on DRES. The habitual preference for large and mega-projects is also inadequate to effectively address energy poverty as well as provide a sustainable and reliable source for energy in the light of climate change.

Opportunities for pro-poor innovations

Technology justice demands stronger efforts by all actors in the innovation systems to address the needs of the poor. Innovation is needed across the board to promote a more holistic understanding of the long-term impacts of energy projects taking account of:

  • Their resilience to climate change and the vulnerability of highly centralised national/regional energy systems to extreme weather events and disasters
  • Their water footprint (cooling of coal power plants) and water requirements (in particular run-of-the river hydro-power plants) in the light of climate change-related decreases in water security and more frequent droughts
  • The relatively low energy return on investment associated with high-input, large fossil-fuel based infrastructure (e.g. the energy it takes to extract, transport coal and build a power plant, etc.), the greenhouse gas emissions and the environmental impact of the entire lifecycle of the project.

mapThe benefits of DRES as opposed to big power projects need to be made more explicit in economic terms for decision-makers who are concerned with growing the aggregate national economy. Currently, the economic calculations do not take sufficiently into consideration the impacts listed about or the impacts of fossil fuel plants on public health, or the potential for DRES to be an engine for sustainable growth in rural areas.

Whereas prioritising access to energy enables education and promotes entrepreneurship, the creation of local businesses and sustainable energy services, e.g. via refrigeration, irrigation, powering machinery and recharging batteries for electronics; large projects tend to benefit energy-intensive industries rather than aim at the alleviation of energy poverty. Given the appropriate incentives via transitioning towards a cost-reflective tariff for electricity and by including models of climate risk and ecosystem services in economic calculations, the private sector can be galvanised to innovate for the benefit of people in rural areas where there are large levels of energy poverty. After all, the rural poor do not merely have the willingness but also the ability to pay if provided with suitable financial instruments.

However, access to finance is arguably the core barrier for the alleviation of energy poverty at the moment. Innovation accompanied by capacity building needs to occur in the financial sector, where there is a need for financial instruments that are accessible and affordable to the energy poor. Innovative initiatives are being rolled out by development organisations that de-risk rural, small-scale renewable energy investments in the developing world. Still, the challenge for the development sector remains to ensure that financial institutions give out loans for sustainable energy access as well as invest in local entrepreneurs offering energy services and building businesses on the back of the productive uses of energy.

Finally, in terms of technological solutions, there is a large demand for affordable and effective solutions to energy storage. Likewise, the full potential of both solar PV and especially concentrated solar power remains to be unleashed. Whereas some solutions require high-input R&D, national and local innovation systems in the developing world should build on the creative and entrepreneurial spirit of the youth to find accessible, affordable and sustainable solutions responding to local needs.

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