Simon Trace

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Simon Trace was Practical Action's Chief Executive Officer, 2005-2015. He was associated with the organisation during a period of strong growth and rising international recognition for its work, particularly in the area of the environment and energy where Practical Action won a number of international awards. A civil engineer by training, Simon also studied anthropology. Simon's career has principally been in community development, in the fields of soil and water conservation or water and sanitation, and he has spent time with a number of agencies, including periods of secondment to CARE and Unicef. He also spent a total of 10 years in Zambia and Nepal prior to moving to London to take up a series of positions with WaterAid, including Asia Regional Manager and Head of International Operations. Prior joining Practical Action, Simon was Strategic Development Director for the UK NGO WaterAid. Simon stepped down from the post of Chief Executive at the end of October 2015.

Recommended reading: http://www.practicalaction.org

Posts by Simon

  • Robbed at COP? A novice’s view of the talks.

    December 18th, 2014

    Attending the second week of the UNFCCC COP meeting in Lima, Peru has been a challenging and a bewildering experience, for a first timer and non-specialist in international climate talks.

    First of all there is the terminology – the main text that is being developed at the moment, and which should form the basis of final negotiations for a new global climate convention in Paris next year, is known as a ‘non-paper’ for example. Not a very inspiring name for something that is absorbing the attention of so many people! Then there are the conversations that are sprinkled with acronyms to the extent that it sometimes feels like you are listening to a text message rather than a human being – COP, CMP, INDC, SBSTA, GCF, CIF, and so on.

    Then there is the content of the ‘non paper’ itself. I had a quick glance at a version on Wednesday. It was around 40 pages long and seemed, from a quick read, to be a jumble of contradictions. Almost every clause or commitment or resolution in the document contained 2,3,4 or more alternative options for text, sometimes variations on the same sentiment, but sometimes options that completely contradicted each other (for example in the final version published on the UNFCCC website the section on adaptation options for paragraph 25.2 include both “establish a global goal for adaptation” and “no global goal for adaptation”). The plan is that this text will gradually be honed down by working parties over the coming year to something that can form the basis for final negotiations in time for the Paris COP in 2015. All I can say is that I wish Christiana Figueres, Executive Secretary of the UNFCCC Secretariat, and her staff all the best with that task!

    I was privileged to hear Ms Figueres speak at the COP. Practical Action is part of an alliance with the Zurich Insurance Company, and 3 other organisations working together on developing new ways to help poor people in the developing world reduce their vulnerability to floods. (as a side note – floods not only affect more people globally than any other type of natural hazard but the associated economic, social and humanitarian losses are expected to grow as the climate change leads to increase in extreme rainfall events and rising sea levels). The Alliance was lucky enough to win a UNFCC Momentum for Change award (or M4C – another acronym!) for its work and Ms Figueres (and the UN Secretary General Ban Ki Moon) spoke at the awards ceremony on Wednesday. She spoke passionately and from her heart about the low point of the COP meeting in Copenhagen in 2009 from which everyone had come away depressed and downhearted, with a sense that progress towards a global climate agreement was impossible. She talked about the need after Copenhagen to create a momentum for change and a new positive picture of what could be achieved. The M4C awards were a (very modest) part of that process, showcasing examples of people and organisations taking concrete actions on mitigation or adaptation.

    She also talked about how far things had moved post Copenhagen and how different and more positive the atmosphere was at the Lima talks. Certainly the China / US agreement prior to the COP lifted the atmosphere and those who had attended previous COPs told me that the language was gradually changing for the better – one example was the use of the concept of national carbon budgets by many of the official delegations – something that would have been an anathema a couple of years ago.

    But there are still reasons for a good dose of pessimism though, many related to the US, despite Australia doing its best to be the ‘bad guy’ by winning more ‘fossil of the day’ awards (given by the NGO community to official delegations for outrageous behaviour) than any other country. In a nutshell ‘conventional wisdom’ says that a Republican Congress won’t ratify further significant financial commitments to the Green Climate Fund and won’t countenance the concept of reparation to developing countries for ‘loss and damage’ – another theme of the talks. Verification was also an ongoing issue. Countries have agreed to submit ‘Intended Nationally Determined Contributions’ in time for the Paris COP next year to explain their plans for cutting carbon. European nations have been pushing for the UN to provide independent verification of progress against these targets but others, China and the US included, have resisted any commitment to external verification, throwing doubt over the solidity of the commitments being made. Finally, although there was much talk about adaptation being mainstreamed in the talks much more than in the past, a presentation on existing climate finance in one side events I attended showed that finance for adaptation remains the poor cousin, accounting for less than 10% of current climate financing, with the remainder going to mitigation.

    Government delegations were not the only ones attracting negative press last week however. There were those amongst the NGOs that felt Greenpeace should have been given a ‘fossil of the day’ award for a publicity stunt that went badly wrong. A group of the NGO’s activists decided to use the Nasza lines as a backdrop for one of their protest events. The Nazca lines are a series of huge ancient patterns inscribed into the desert coastal plain of Peru that can only really be appreciated from the air. Created simply by clearing stones and debris away from fixed lines, the patterns have remained intact for hundreds of years in the arid conditions and are a UNESCO World Heritage Site. Greenpeace activists spelt out a slogan about solar power next to one of the most iconic patterns for Peru, a hummingbird. Although they were careful to avoid damaging the lines themselves (the letters were just made out of cloth laid on the ground) the tracks of their vehicles left a maze of marks on what until then had been the undisturbed ground around the pattern. The Peruvian press was incensed at the damage done to their site and there were reports from that the ministry of culture would be suing Greenpeace for damage.

    For me though, one of the abiding images from the various side events I attended was a graph from a Royal Society presentation on its new report “Resilience to extreme weather”. The graph (see below) shows an inexorable rise in the annual global economic loss, given as a % of global GDP, over the past 30 years. The graph was a salutary reminder of why the UNFCC process is so important, as climate change continues to drive growth in extreme weather events. But it also made me wonder how much it was an under representation of the true social cost to the poor and marginalised communities in developing countries, those most vulnerable to the impacts of climate change because they rely on land that is already marginal for farming or live in informal urban settlements most at risk from flooding and natural disasters. In % points of GDP their losses may not amount to so much, but in terms of human deprivation their losses are already immense.

    Reactions to the final outcome of the COP are varied, even amongst civil society actors at the event.  For example the World Resources Institute in the US concludes that  “delegates in Lima laid the groundwork for a successful international climate agreement in Paris next year” , whilst in the UK the International Institute for Environment and Development’s Saleemul Huq is quoted in the Guardian as saying “It sucks. It is taking us backwards”, whilst WWF claims “We are on a path to three or four degrees with this outcome”.

    CaptureWas a potential transformative agreement at COP20 stolen from under our noses at the last minute, despite the positive omens at the start of the conference? I have to confess, as a COP novice I have no bench mark to compare these talks to and so no idea. But, despite the challenges to progress there undoubtedly have been, I found it difficult to leave the COP20 meeting without being infected to some degree with the positivism being radiated by Christiana Figueres and Ban Ki Moon. The road ahead is still a long and difficult one, but I like to think there’s just a chance that we could look back at the Lima meeting in a few years’ time as the turning point when the world started to take climate change seriously and started to work together on finding a solution.

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  • Supporting local regeneration – moving from energy policy to energy economies

    December 4th, 2014

    Here’s a second blog on my learnings from attendance at Community Energy Scotland’s annual conference. In my last blog I talked about problems when community projects generate too much energy, drawing parallels between experiences from Scotland and Nepal.

    There were many more parallels I noted during the two days. These included very practical issues around educating communities over power requirements for different appliances so as to manage peak loads (as one lady put it, how do I stop everyone using their electric hair curling tongs at the same time – which trips the system!). There were also the expected common problems around limited access to finance for building new projects and also policy problems – for example the difficulty and lengthy procedures necessary to get a licence to be allowed to sell power to consumers in Scotland (a problem we have only just resolved for a micro hydro project we’re working on in Malawi).

    There were also interesting parallels between the Scottish experience and Practical Action’s around where community managed energy projects were being built (remote rural communities, often relatively poor, with few economic opportunities).

    What caught my attention most however was a really refreshing address from Chris Stark, Head of Electricity, Energy and Climate Change for the Scottish Government. Chris talked about decentralisation of electricity generation as something that was desirable, as opposed to just an approach to closing access gaps. He also talked about a systems approach that was more than just creating a good energy policy but was also about building energy economies. His argument was that a holistic approach to local energy systems, which looks at the potential inter-relationships between waste, heat, transport, the efficiency of building stock, consumers bills and local generation capacity, could form the basis for the renewal of local economies currently in decline. This idea of building local economies, retaining value in communities and doing things locally where possible rather than importing skills and services, was a recurrent theme throughout the conference and something that chimes closely with Practical Action’s Schumacherian roots.

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  • Energy access is not just a problem for the developing world

    November 27th, 2014

    ZepplinBack in July I attended the European launch of the UN Decade for Sustainable Energy at an event hosted by the Scottish Government in Glasgow. I blogged about it at the time, noting some parallels between the challenge of providing electricity to some of Scotland’s more remote communities in the Highlands and Islands and the challenges poor rural communities in the developing world face.

    I was delighted to be invited back to Scotland, this time to Edinburgh, by the NGO Community Energy Scotland, to talk at a conference attended mostly by representatives of community energy projects in rural Scotland. It was a great opportunity to explore some of the parallels I noted back in July further. I thought I’d write a couple of blogs on these, so this is the first:

    Surprisingly (for me) I found myself hearing several examples of problems with communities generating too much energy in Scotland! The examples I heard about were mostly wind, but could have been from any source. The problem is that wind speed obviously varies and periods of strong wind don’t necessarily coincide with peak demands (the same problem exists with solar energy which peaks during the day although peak need is at night). This is not a huge problem when communities have a good connection to the grid as they can export the excess power to the grid (and get income in return), drawing power from the grid when there is no wind. The problem arises when the grid connection has limitations on it (often the case in remoter areas) and cannot accept the excess power, or when there is no grid connection at all. In Scotland the challenge is being looked at in terms of developing storage – either pumped storage (you use energy to pump water up to a reservoir and then let it run down again through a turbine later when you need the energy) or the production of hydrogen that can be stored and then used either in fuel cells or just as a replacement fuel for gas in heating or nixed 80/20 with diesel to run vehicles (with minor adaptations).

    There is a similar issue in some of the paces we work. In Nepal, for example, several thousand micro hydro projects have been constructed but many are struggling financially because they can’t sell enough power. People are using for fairly low domestic loads, mostly at night, and plants lie relatively idle for much of the day, not being run to their optimum potential . We are trying to put together a project at the moment that would look at developing small model enterprises that could utilise the excess power, increasing income from sales and allowing them to better cover operating costs. A different solution to a similar problem.

    An interesting (non-development) factoid: During a session on hydrogen, someone asked whether it was not dangerous to store and use as a fuel, citing the famous Hindenburg airship that blew up as it docked due to a discharge of static electricity. The answer was that hydrogen has the 2nd fastest escape velocity of all gases and was not what killed the passengers on the Hindenburg. The hydrogen explosion occurred around 30 m above the airship (visible in the photo above ) because the gas escaped upwards so quickly. The reason the disaster was so deadly was that the dope that was used to treat the fabric that covered the airships frame was highly flammable and quickly engulfed the entire structure in flames.

     

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  • Call to major philanthropic foundations to back move to renewables

    September 22nd, 2014

    Ahead of the global Climate Change talks in New York this week a group of 160 environmental prize winners from 44 countries called on the major philanthropic trust and foundations around the world to apply their billions of dollars of trust funds and endowments to “turn the tide of climate change”. Co-ordinated by the European Environment Foundation  (I declare an interest here as I am a Trustee), the environmental laureates declaration on climate change was published in the International New York Times, a week before world leaders arrive in New York for a UN Climate Summit.

    “We, 160 winners of the world’s environmental prizes, call on foundations and philanthropists everywhere to deploy their endowments immediately in the effort to save civilization,” say the laureates. “The world’s philanthropic foundations, given the scale of their endowments, hold the power to trigger a survival reflex in society, so greatly helping those negotiating the climate treaty.”

    Jeremy Leggett, founder of Sunny Money and the charity Solar Aid helped to organise the crowd sourced fund-raising for the advertisement and describes on his blog 4 ways in which the laureates think Foundations could help:. The first is to invest in zero-or-low-carbon climate-solution companies and projects, as debt and/or equity, ideally relaxing the interest rates, hurdle rates and exit timeframes usually sought. The second, relatedly, is to divest from fossil fuels, and to reinvest in clean energy companies. The third is to stay invested in fossil-fuel companies, and campaign to put shareholder pressure to end spending on exploration for and development of new reserves. The fourth option is to accelerate zero-or-low-carbon markets, new and embryonic, by giving grants – on a scale they have never before – to the multiplicity of projects that can make a difference across the greenhouse-gas emissions spectrum, including new projects of the foundations’ own design, based on the vast collective and individual experience of they and their networks.

    Having made that call last week it’s encouraging to see Reuters report today that the Rockefeller Brothers Fund has announced today a pledge to divest a total of $50billion from fossil fuel investments, with one of the signatories and an heir of Standard Oil founder John D. Rockefeller, saying, according to Reuters that “We are quite convinced that if he were alive today, as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy.”

    If even the Rockefellers are moving out of oil perhaps we have reached a turning point?!

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  • As the costs of renewables plummet, are we about to see Technology Justice in the energy sector?

    September 12th, 2014

    Introduction

    IRENA (the International Renewable Energy Agency) has just published a really fascinating report – REthinking energy 2014. It’s the first of a series exploring the changes that are transforming the way we produce and use energy and should be on the reading list of anyone interested in renewables.

    The report kicks off by reconfirming that business as usual in the energy sector will not keep us below the CO2 levels necessary to avoid severe climate change, but that doubling the share of renewables in the global energy mix (one of the 3 UN Sustainable Energy for All targets for 2030) would.

    That’s not exactly news, but the report then goes on to provide some fairly extraordinary statistics concerning just how rapidly advances are taking place right now in renewable energy. For this blog I thought I’d just pick three really interesting facts, although there are plenty more on offer in the report.

    FACT 1: The cost of renewable energy is plummeting

    Solar photovoltaic (PV) prices have fallen by 80% since 2008. Moreover they are expected to keep dropping, as the diagram below (from p 35 of the report) shows:

    IRENA (2014) Rethinking Energy: Towards a new power system, p 35

     

     

     

     

     

     

     

     

     

     

     

     

     
    In a number of countries, including Italy, Germany and Spain commercial solar power has already reached grid parity – the point at which the price of electricity from renewables equals the price of power from the traditional grid.

    The cost of onshore wind electricity has also fallen – 18% since 2009, making it the cheapest source of new electricity in “a wide range of markets”.

    The pace of technology development revealed by the IRENA report is staggering. The efficiency of solar PV modules in converting sunlight into electricity has improved by around 3%-4.5% per year for every one of the last 10 years. But that statistic is dwarfed by the one concerning energy storage – in some senses the holy grail of the renewable energy sector. Better storage would allow us to smooth out the peaks and troughs of electricity generated from wind or sunlight and better match supply with demand. Until recently pumped storage (a method where water is pumped up to a reservoir when excess electricity is available and then sent back down through turbines to generate electricity at times of peak demand) has been the only viable large scale energy storage solution. But large scale battery technology is developing rapidly and IRENA expects this to transform the market for energy storage from approximately USD 200 million last year to USD 19 billion by 2017 (a nearly 100 fold increase in just 4 years!).

    FACT 2: Financing renewables is getting cheaper, and easier

    The report notes that “government financial support has traditionally been critical for promoting renewables” (a comment that chimes with my blog last week). But it seems that private finance is increasingly ready to play a part with “early-mover private developers” attracting USD 11 billion in 2013, up 200% in 12 months.

    Total investment in renewable energy rose more than 5 fold from US$ 40 billion in 2004 to US$ 214 billion in 2013 (excluding large hydropower – which accounted for a further US$35 billion in 2013). This is still less than half of the estimated annual investment of US$550 billion needed to achieve the 2030 goal of doubling the share of renewables in the global energy mix however.

    IRENA highlights the important role governments have to play here. In the more developed markets they need to be sending clear signals that energy will be a larger part of their national energy mix, so reducing uncertainty and attracting more investors, whilst in emerging markets, according to IRENA, they will still need to provide public finance to develop domestic structures to support the deployment of renewables.

    FACT 3: New renewables now outpace new fossils and nuclear.

    IRENA (2014) Rethinking energy: Towards a new power system, p 25

     

     

     

     

     

     

     

     

     

     

     

     
    Falling costs and rising availability of finance means, as the diagram here shows (from page 25 of the report) , renewables now add more new generating capacity each year than do fossil fuel and nuclear power, combined. 

    Are we about to see Technology Justice in the energy sector?

    To be fair, with 1.3 billion still without electricity and 2.6 billion still cooking on open fires the prospect of technology justice in the energy sector still looks a good way off. But there are some really interesting positive trends developing that are starting to move us in the right direction.

    Renewables are beginning to be the technology of choice for new generating capacity, which has to be good news, albeit the rate of increase in renewables still needs to accelerate to avoid catastrophic climate change goals.

    But renewables are also showing how technology could be democratised. IRENA notes that “as the share of renewable energy grows… the nature and role of power producers are undergoing change. A sector once dominated by large utilities is becoming more decentralised, diverse and distributed. In Germany, almost half of all renewable energy is now in the hands of households and farmers, and only 12% of renewable assets are owned directly by utilities”.

    It also notes that “in many emerging markets, renewables are already the most economic power source for off-grid and mini-grid systems” and, conveniently, that “decentralised mini-grids are seen as a way to improve grid reliability, by localising generation and reducing the risk of transmission faults – particularly during natural calamities.” IRENA compares the opportunity for developing countries to sidestep national grids and move to a flexible system of interconnected mini grids to the opportunity those same countries have already taken to leapfrog fixed line telephone technology in favour of mobiles.

    Innovation is not confined to technology alone though. The report cites examples from Denmark and elsewhere to show how crowdfunding is growing quickly as a source of finance for renewable power infrastructure. “Specifically, in conjunction with decentralised technology, crowdfunding allows individuals and local communities to be the driving force behind the global energy transformation and to simultaneously benefit from the change.”

    IRENA concludes that “these and other trends require a different way of thinking about energy, shifting from a system dominated by a few centralised utilities, to a diverse, distributed system, where consumers are also producers, with far more control over how and when they use energy”.

    Sounds an awful lot like Technology Justice to me!

     

     

     

     

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  • Innovation – is there a role for government in getting new technology to market?

    September 5th, 2014
    Solar panels for sale in market in Harare, Zimbabwe

    Solar panels for sale in market in Harare, Zimbabwe

    Conventional ‘free-market’ economics dictate that the role of the state is to regulate markets, not to become actively involved in them. Technology innovation comes from lean and agile companies responding to market pressures, so the mantra goes. Government bureaucracies don’t foster creativity themselves and lack the capacity to recognise it in others, so asking them to pick commercial winners to back is also inefficient and ineffective.

    But is that actually true? The economist Mariana Mazzucato, R.M. Phillips Professor of Science and Technology at the University of Sussex suggests not in her recent book: The Entrepreneurial State – Debunking Public vs. Private Sector Myths (Anthem, 2013). In an extract from the book published in the Milken Institute Review, Prof. Mazzucato looks at the renewable energy industry and “how the state plays a vital role in promoting radical new technologies – not merely by inventing new tax incentives, but by getting (and staying) involved in every aspect of the wind and solar power business”.

    One example given is the Danish wind turbine manufacturer Vestas. Vestas, originally an agricultural machinery manufacturer, was able to move into the renewable energy sector by exploiting Danish government financed research into large scale turbine technology. Vestas then went on to establish a foothold in the renewables market following an order for one thousand turbines from California, where US tax subsidies were, at the time, deliberately aimed at supporting the growth of renewable energy production in the state. A company built in part then on public investment in technology research and a deliberate public policy to support an emerging market with subsidy.

    Prof. Mazzucato shows again and again how critical government support has been in stimulating innovation in the renewable energy sector: R&D support for solar technology from the Department of Energy in the US; the German Government’s feed in tariffs and its “100,000 roofs program” (that, together, encouraged residential and commercial investment that expanded the country’s solar capacity from just 62 MWs in 2000 to over 24 GW in 2011); and, of course state support for the development of solar panel manufacturing capacity in China – now the largest global supplier of PV technology.

    Government finance can be vital in early stage technology R&D, where failure rates are high and even venture capitalists are often reluctant to take on the levels of risk involved. And governments are sometimes also better able to take the long term (maybe 20 year) investment view necessary to complete the journey from the lab to a fully commercialised product; a point evidenced in Mazzucato’s book by examples of the Danish and Chinese government’s willingness to restructure or support key renewable energy companies when they got into financial difficulty, to ensure sector capacity was retained for the future.

    Why is all this important in the context of poverty in the developing world? Because today the increasingly commercial drivers of innovation mean that technology development rarely addresses issues of poverty. A 2008 Global Health Forum report, for example, estimates that only about 5% of the world’s resources for health research are applied to the health problems of low and middle income countries, where 93% of the world’s preventable deaths occur. Meanwhile, a 2009 UN Food & Agriculture Organization report estimates that the 80 poorest countries of the world account for just 6% of global, publicly funded agricultural R&D, and just 2% of privately funded agricultural R&D.

    Although there is an increasing interest in developing products and services for the “bottom of the pyramid”, there remains a strong rationale for public funding of technology R&D to address issues of poverty, whether than be a search for a malaria vaccine, low cost sustainable techniques to increase food production, or cleaner and more efficient cook-stoves, to take just 3 examples. If even a sophisticated market such as renewables in the US and Europe requires government funding to stimulate and support technological innovation and market development, then why should we expect things to be any different in the developing world context?

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  • Energy for the poorest – going beyond the reach of markets.

    July 24th, 2014

    I was lucky enough to be part of a panel discussion today marking the European launch of the UN Decade for Sustainable Energy for All. The event was hosted by the Scottish Government in Glasgow as a cultural side event to the Commonwealth Games.

    Scotland is an interesting place to host such a discussion. It’s a country with some fairly remote, small and difficult to serve communities in the highlands and islands, for whom a connection to the national grid would be prohibitively expensive – mirroring some of the problems faced by rural communities in the developing world.

    One such example is the Isle of Eigg, off the west coast of Scotland, which only got 24 hour electricity in 2008. You can read more about this on their great website: islands going green but, in short, universal access to energy on Eigg was achieved through the efforts of the Eigg Heritage Trust via a community-owned company Eigg Electric. Their scheme is a hybrid one in that it delivers power via a mini grid attached to 3 renewable sources (hydro power, wind and solar) plus a diesel back-up generator. It was financed from a mixture of sources including the European Regional Development Fund, the Big Lottery, HIE Lochaber, the Highlands and Islands Community Energy Company, the Scottish Households Renewables Initiative, the Energy Saving Trust, the Highland Council, the Isle of Eigg Heritage Trust and the residents of the Isle of Eigg themselves.

    Technicians George and Lisungu working on the MEGA project in Malawi

    At 184kw of total renewable generating capacity, 11 km of grid, and a few hundred consumers the Eigg system is not dissimilar to the sort of mini grid projects Practical Action would work on in places like Malawi. What’s particularly interesting is that it is owned and operated by a community organisation and that its capital costs were financed (judging from the list above) at least in part from grant funds.

    Why is that interesting? Because at the moment there is a largely unchallenged assumption in many circles that the additional energy infrastructure needed to ensure universal access by 2030 will be funded through the actions of markets responding to unmet demand. All we need to do, the narrative goes, is get regulation right, remove market barriers, perhaps do a bit of capacity building and then stand back!

    That assumption does hold true to an extent, in certain circumstances – witness the progress made in Bangladesh with over 4 million solar home systems installed since 2004. But even in this great success story, if you dig a little deeper, you find the assumption holds true only for a certain segment of the ‘market’. As a recent World Bank study shows, people who install solar home systems in Bangladesh have, on average, twice the landholding and three times the non-land assets of those who do not. In other words the poorest and most marginalised are still being left behind (not surprising when a solar home system costs around $450).

    In terms of up front capital costs, the gap between what people can afford and what systems actually cost gets much bigger when you move from solar lamps or solar home systems to mini grids with the capacity to power more than just a few lamps. Which was why, I guess, the people of the Isle of Eigg’s energy needs were not resolved by a market responding to unmet need, but through the actions of their community organisation and the availability of grant financing.

    The Isle of Eigg is not a unique example in the ‘developed’ world of how remote rural communities have eventually got access to electricity. In the US difficult to reach rural communities were connected to electricity in the 1930s and 1940s through the actions of farmers’ cooperatives and subsidised funding from the government. Indeed 11% of all electricity sold in the US today is still provided by those cooperatives, helping to connect the 16 million rural citizens living in places where it remains too difficult for commercial utilities to generate sufficient return to invest (see the NRECA website for further details).

    We need to remember this experience when we make assumptions about how the goal of achieving universal energy access will be financed. Markets, the private sector and private finance will make a huge contribution to this process. But for the poorest and most difficult to reach, history in the ‘developed’ world shows that markets alone will not bridge the affordability gap.

    In her contribution to the discussion at the launch of the UN Decade of Sustainable Energy for All today Lynne Featherstone, the UK Under-Secretary of State for International Development, emphasised a principle of ‘leaving no one behind’ as we pursue development. My main point in the same discussion was that, if we are to achieve that with respect to energy, if we are truly to ensure energy for all, then we cannot just leave everything to the market. There will still be an important role for civil society organisations and public finance.

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  • The beginning of the end for oil?

    July 14th, 2014

    Jeremy Leggett, ‘social entrepreneur’ and founder of SolarAid and SunnyMoney, alerted me to a recent article in the Daily Telegraph newspaper here in the UK. The full article can be see here but, in short, the piece suggests that the oil industry is the new great ‘sub prime’ investment of the current economic cycle, replacing the US housing market which, you will remember, triggered a global recession in 2008. Investment is pouring into exploration in oil shales and deep fields in the Arctic and elsewhere, but these investments are not yet returning any cash and, indeed, require higher oil prices to deliver a real profit.

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    Solar powered water pump in Kenya

    Whilst gambling on higher oil prices might have seemed a fairly safe bet a few years ago, there are now two potentially significant threats to making money out of oil. Firstly, if a global deal is eventually done to maintain atmospheric carbon levels at 450 ppm then, according to the International Energy Agency, two thirds of the oil reserves that oil companies currently have on their books will have to stay in the ground, unburnt, as ‘stranded’ (i.e. unusable) assets. This means the book value of the oil industry is vastly overstated and we can expect to see a mass withdrawal of funds, or a demand for profits to be paid out as dividends rather than re-invested in more drilling, as this eventually becomes clear to the big institutional investors.

    Secondly, the article notes that “staggering gains in solar power – and soon battery storage as well – threatens to undercut the oil industry with lightning speed”. The author (the Daily Telegraph’s International Business Editor Ambrose Evans-Pritchard) goes on to note that photovoltaic energy already competes with fossil fuels in much of Asia without subsidy and that “once the crossover point is reached……it must surely turn into a stampede”, predicting that the energy landscape “will already look radically different in the early 2020’s”.

    For this sort of article to be penned by the business editor of the Telegraph, a newspaper associated with the British establishment and business, is, as Jeremy remarks, truly momentous. The world’s current addiction to a fossil fuel based economy represents a massive inter-generational technology injustice – with the choice to use carbon emitting technologies by this generation having potentially profound negative consequences for future ones.

    One can only hope that the Telegraph’s analysis is correct in this instance and that we are, indeed, seeing the beginning of the end of the age of oil.

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  • Innovation in the energy sector

    June 10th, 2014

    I have just come back from  New York where we launched Practical Action’s 2014 Poor People’s Energy Outlook report at the UN in New York, during a United Nations Sustainable Energy for All high level meeting to mark the start of the UN decade for sustainable energy.

    22862What became obvious from our meetings during the week is the need to ensure our energy work remains innovative in what has become a very fast changing environment.  The energy sector is heavily focused on the private sector and we need to engage with this to become more effective.

    The sectors we work in include:

    Solar Photovoltaics
    This sector has a large number of social entrepreneurs and is quite competitive.  Practical Action acts primarily as a market facilitator, which means that we have to know their markets better than them – not easy!

    Improved Cook Stoves
    We have supported local producers in the past but there have been issues with building these up to sustainable, high quality production and there is increasing competition from high performance factory made stoves. Again what role can we play?

    Mini-Grids
    We work on development, installation and community management, although recently have begun to look at scalable models, such as MEGA in Malawi. Private sector companies seem to be getting more and more into micro-hydro/mini-grid initiatives with some success (e.g. Husk power in Tanzania, Inensus in Senegal, DC Hydro in Rwanda), so  in the future should we compete or collaborate?

    It is really important in all our work  that we keep up to date with what’s going on around us and constantly ask ourselves the question – how is what we are doing different from what others are doing and how is it innovating and taking the sector forward? Recognising we might not be at the forefront of a sector is an important first step in finding our way to something which is more innovative, either in terms of technology or in demonstrating new and successful ways of delivering at scale.

    We already have some great examples of our current innovative work in the energy sector:

    1. Nepal has just started a project on smoke hoods using a new form of ‘Results Based Finance’ from GiZ and is also about to start a new project looking to establish small enterprises on existing micro hydro projects as a way of making them financially more sustainable.
    2. Our MEGA project in Malawi is trying to establish a social enterprise utility to manage a number of micro hydro schemes as a different management model.
    3. And in Sudan the use of carbon finance for LPG cookstoves, engaged the interest of the global trade body representing the LPG industry.

    But we are going to have to get a lot more creative to become a leading edge organisation in the sector again on the implementation side which is an exciting challenge for Practical Action.

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  • What’s the best way to influence policy makers?

    March 7th, 2014

    Practical Action’s approach means that, in addition to implementing projects on the ground, we spend a lot of time and effort trying to persuade policy makers to adopt new ideas (policy advocacy as its otherwise known). But what approach is most likely to change a policy maker’s mind? Obviously there’s no one answer to that but Oxfam’s Duncan Green has come up with an interesting list of observations in a recent version of his weekly blog. Duncan is writing about the results of a survey of 234 senior White House officials who served under Presidents George Bush Snr and Jnr or President Bill Clinton. You can read the full blog here if you like, but the key findings of the research are as follows:

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    1.  The more policy makers know about a subject the less they are likely to believe ‘experts’
    2. Policy makers listen more to people they know or know of (so personal relationships and, as our communications colleagues keep telling us, brand recognition are important).
    3. Policy makers don’t have time to read: “any research papers that exceed 10-15 pages are not useful”
    4. Newspaper articles are as important to policymakers as the classified information generated inside the government
    5. The internet has not yet become as an important source of information for policy makers as traditional print media (“old fashioned press beats social media”).
    6. The best story (not the best evidence) wins

    I wouldn’t take these too literally – a good story may attract a policy makers attention but it’s no good if we don’t have the evidence to back it up when they start to ask questions. And social media can help to build awareness of who we are, even if it’s not referred to for ideas by policy makers. But Duncan’s overall recommendation seems to ring true to our experience, If you want to gain the attention of policy makers “tell better, clearer, shorter stories and you may actually be listened to”!! Or, as the US Secretary of State Henry Kissinger used to tell his advisors: “Don’t tell me facts, tell me what they mean.”!!

     

     

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