IEEE Power & Energy Magazine - July/August 2014 - 43

Since the launch of the SuStainable energy
for all (Se4all) initiative by the united nations in 2011,
access to energy has become one of the main priorities for
the international development agenda. as a proof of its
importance, the united nations's post-2015 development
agenda will integrate energy access as one of its primary targets. this acknowledgment comes from the fact that, in spite
of not being included in the u.n. Millennium Development
goals (MDgs) agenda, energy was treated as an overarching
issue essential to the achievement of any other goal by 2015.
according to the World bank, 1.2 billion people worldwide do not have access to electricity or remain unelectrified
due to poor grid quality. technology alone is not enough;
universal access requires sustainable operation and business
models, continued political efforts, and targeted public support. the alliance for rural electrification (are) brings
together a global network of innovative and dedicated professionals with long-standing experience in deploying offgrid renewable energy solutions for rural electrification with
a focus on developing and emerging markets.
the traditional solution-connection to the grid-is
often very costly and not feasible in isolated rural areas,
which account for around 84% of that population. the World
bank estimates that in the developed world under normal
terrain conditions, grid extension costs uS$5,000 per kilometer, while that figure goes up to uS$15,960 in Senegal and
uS$19,070 in Mali. Justifying such large investments only
on the basis of demand in rural areas, which can be relatively
small, does not take into account many necessary qualitative
measures relevant for rural development, however.
nevertheless, in remote and isolated areas off-grid
renewable energy systems are often the best solution: they
are cost effective over the system's lifetime and relatively
easy to deploy, install, and maintain. further, their design
can be tailored to match demand needs, which reduces the
risk of misleading investments. Minigrids, for instance,
can provide centralized electricity generation at the local
level using a village distribution network. another option is
through solar home systems (ShSs). these small power systems are designed to cover the needs of single households,
public buildings, or commercial needs (see figure 1).
a simple ballpark calculation gives a general idea of the
potential size of this market. We can take the 1.2 billion
people currently without modern energy and assume that
this corresponds to about 240 million households that are
currently using traditional low-performance energy sources
and technology. taking into account generally accepted
cost predictions, many of these households would be able to
afford the uS$30 entry-level products such as lighting and
communications/entertainment devices (mobile phones and
tVs). even if only half of them can afford such an outlay,
that still represents a uS$3.6 billion market.
july/august 2014

the international energy agency has also confirmed this
potential for decentralized renewable energies. according to
recently published figures, to reach universal electricity access
by 2030, 949 tW of new capacity will be needed in the developing and emerging markets. of this, 42% (399 tW) should
be supplied through minigrids and 18% (171 tW) by isolated
off-grid systems. to see an increasing interest on the part of
one of the most influential voices in worldwide energy issues
is an important signal that will attract more investments in the
off-grid renewable energy sector.

Going Private
Despite the fact that the economic situation of rural areas
naturally pushes people toward technology choices made on
a short-term, lowest-cost basis, such choices are rarely the
best solution in the long term, especially in isolated communities where diesel fuel is an expensive resource that is
difficult to obtain and distribute. a recent study financed by
the u.S. agency for international Development (uSaiD)
concluded that when compared with all-diesel systems-
currently the most used solution to supply minigrids-a
renewable-diesel hybrid minigrid offers lower operating
costs, making electricity production more affordable over
the lifetime of the system (see figure 2). this is good news
for these populations, and it also opens up new market perspectives for the private sector.
one of the most popular recurring clichés is the impossibility of a profitable market in developing countries. Surely the
world's poorest populations cannot afford to invest in energy?
the fact is, they already do. Most of them are already paying (and paying dearly) for diesel generators and their fuel,
while 1.2 billion people are investing in candles and spending
valuable time gathering wood (time they could be using much
more effectively) just to cover basic energy needs. not to mention that the World health organization (Who) believes that
the burning of simple household biomass fuels-wood, crop
residues, animal dung, shrubs, and grasses-is responsible for
some 2 million premature deaths annually in developing countries, mainly among women and young children.
financing is, as expected, still a complex problem to
solve in this nascent market. charities are not the only ones
that can make off-grid access in developing countries a reality; neither can we rely on governments to provide energy
solutions for 1.2 billion people.
in the developing world, like everywhere else, there is
no one-size-fits-all energy solution. nonetheless, if private
companies are willing to take a chance and invest in the
extraordinary potential of these countries, there is no telling
the proportions that the market might reach. few realize that
business innovation and appropriate modeling are the keys
to success. only with them can renewables in these countries
become the core of a long-term solution.
ieee power & energy magazine

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