Controversial report on financing energy access from the UNSE4ALL


May 20th, 2015

I’m writing this blog while sitting in the very impressive surrounds of the UN General Assembly Hall in New York on the 3rd day of this year’s UN Sustainable Energy for All (UNSE4ALL) annual forum. It’s great to see so many people gathered in one place to discuss the goals of universal access to energy, a doubling of the amount of renewable energy in the global energy mix and a doubling of the rate of improvement in energy efficiency. Although there is a long way to go, the UNSE4ALL initiative has genuinely accelerated interest in these issues in the last couple of years and has galvanised investment and developed really innovative ways of transparently tracking progress against these goals through what’s known as the Global Tracking Framework.

energy enablesPractical Action has lent its full support to UNSE4ALL and continues to believe ensuring its success will be a critical contribution to both fighting poverty and achieving a sustainable future for everyone on the planet. But sitting here today, listening to a debate on how we find the necessary finance to achieve the goals, something worries me about the assumptions behind some of the calculations for funding needs for universal energy access. In 2011 the International Energy Agency (IEA) annual World Energy Outlook produced a detailed analysis of the funding needs to achieve universal access by 2030. Critical to that analysis were the assumptions about how far extensions to central electricity grids would be the answer to providing energy for those who do not have it at the moment and how much off grid solutions (such as solar powered lights, solar home systems, independent mini grids powered by renewable energy or diesel generators etc) would play a part. The IEA analysis concluded that total investment in energy access would need to range between around $30 billion a year over the period 2010 to 2015 to around $55 billion a year over the period 2026 to 2030. During that period the proportion of that investment that would need to be made in off grid technologies would need to rise from around 25% at the start to over 50% by the end. That is a really important conclusion as it says that we need a transformation of the energy sector with a huge emphasis on building capacity for an investment in off grid solutions such as solar power, micro hydro electricity, biogas etc. That is very different from where we are today, with the vast amount of investment just going into the grid.

So why am I worried? Because, the UNSE4ALL’s Finance Committee has just published a report that contradicts this analysis (without providing any information on why different assumptions were used to the IEA). According to this new report off grid technology will only need to account for 15% of total annual investment (as opposed to the IES’s estimate of between 25% and 50%). Why does this matter? Because it takes the pressure off governments and the development banks to redirect finance to where it’s needed – to deliver off grid solutions for those who have no access to electricity now. It’s effectively a green light for business as usual – more money is needed yes, but just for the traditional energy sector. It’s a huge disappointment to see UNSE4ALL publishing a report that so dramatically contradicts the IEA’s earlier analysis without either recognising that contradiction or explaining the rationale behind it.

 

 

 

Leave a reply