Proceedings of a Workshop
Providing Reliable and Affordable Electricity in Countries with Energy Deficits
Proceedings of a Workshop—in Brief
Twenty scientists, engineers, and other energy specialists from 12 countries and 3 international organizations gathered February 27 – March 1, 2018, in Bellagio, Italy, for a workshop to discuss increasing access to reliable and affordable electricity in energy deficit regions of the world. The U.S, National Academies of Sciences, Engineering, and Medicine (the National Academies), with the support of the Rockefeller Foundation’s conference center in Bellagio, organized the discussion.
In welcoming the conference participants, John Boright of the National Academies underscored that the purpose of the workshop was to identify under-valued activities that are essential for major progress in expanding access to reliable and affordable electricity in energy-deficit regions, particularly in sub-Sahara Africa and southern Asia. He set forth the four themes of the conference, namely: (a) lessons learned in global efforts to improve access to energy/ electricity; (b) approaches in the field that deserve greater attention in energy-deficit regions; (c) engendering more concerted international effort to achieve universal energy access as defined by the UN’s Sustainable Development Goals (SDGs); and (d) considering whether and how regional and national networks of electrification extension centers that are linked to interested partners in the industrial countries with strong capabilities in training, innovation, and business acumen could play an important role in both establishing and sustaining electrification systems. The following structure of the workshop helped to focus deliberations:
- Presentations by participants, followed by group discussion;
- Deliberations by four working groups, covering: (1) electrification goals and the global policy framework; (2) achievement of integrated grid/off-grid planning; (3) energy services to reduce rural poverty; and (4) upgrading human resource capabilities to support electrification; and
- Suggestions of next steps and approaches to electrification for officials of key international development organizations, high-level forums, industry, and government, and practitioners in the field.
Discussions addressed the conference objective of raising the level and intensity of international discourse on many dimensions of electricity access, while highlighting a number of successful models for establishing reliable and affordable electrification systems. Individual participants also identified key messages that deserved wider consideration.
GLOBAL AND REGIONAL ISSUES
William Colglazier, co-chair of the United Nations ten-Member Group appointed to provide advice on the role of Science, Technology, and Innovation (STI) for achieving the SDGs, began the presentations with an overview of the SDGs. These provide a common framework for nations to track their standing on social, economic, and environmental issues. While SDG7, which addresses universal access to energy services, is the most relevant to the aims of the conference, Colglazier highlighted the rich interrelations between the different SDGs: clean affordable energy supports health, education, economic development, women’s empowerment, resilience, agriculture, climate goals, and more. He emphazied that progress toward the SDGs will hinge on: innovations in the social, business, and technical realms; actions
by decision makers to create development roadmaps and allocate resources to infrastructure and capacity building; and scientific expertise to collect and process vast quantities of national data and advise on what is working and not working in the national roadmaps so they can be revised and improved. Given the backgrounds of the conference participants, Colglazier suggested that the discussion outcomes be communicated to a number of upcoming meetings, such as the UN High Level Political Forum, the Sustainable Energy For All Forum, and the UN Multi-Stakeholder Forum for Science, Technology, and Innovation.
Much of the government and donor funding for energy projects has been traditionally directed at grid electrification, said Raihan Elahi who has been involved in the World Bank’s Lighting Africa Program and related energy activities. This narrow focus hampers progress toward universal access to energy services. There is now an increasing shift away from Power Sector Master Plans, which emphasize infrastructure investment, toward National Electrification Plans, which are anchored to the beneficiaries of electrification. Elahi noted that governments are willing to consider off-grid electrification solutions—especially in low-density rural contexts where revenues are low and a single grid connection can cost up to $2,000. More research is needed to effectively reach the substantial “under-grid” population that lives in sight of electricity infrastructure but has yet to be officially connected. Favorable finance schemes for both the service providers and consumers are powerful levers for attracting the private sector into risky and marginal areas, stimulating progress up the energy ladder and toward greater household income and well-being. He presented Figure 1 to highlight positive impacts of solar lighting.
Figure 1 Percent of income spent on lighting, without and with solar systems.
Source: Raihan Elahi.
Following the presentation, participants discussed challenges associated with appropriately sizing off-grid infrastructure so it meets local needs in a cost effective manner. It was pointed out that standardized and modular “plug-and-play” systems, ranging from basic solar home kits to integrated-service medical kiosks and renewables-based mini-grids, are increasingly used to simplify and scale-up off-grid energy solutions.
Kevin Urama from the African Development Bank highlighted the robust correlations between access to modern types of energy and socio-economic development. Africa has significant raw energy resources both in renewables and fossil fuels (see Figure 2), yet many African countries still struggle to surmount the energy poverty which affects the lives of hundreds of millions. While many successful schemes have provided specific energy services, such as solar lighting, Urama emphasized that these are not a complete solution: a solar lamp does not resolve cooking needs, nor can a TV provide medicines. There is a tendency to focus on partial solutions, but initiatives targeting those at the bottom of the energy priorities will not be sustainable if they do not increase household income and support enterprises. Urama cautioned that prioritizing renewable generation without heed to alternatives, which may be cheaper and easier to implement, needlessly prolongs poverty conditions; and it exacerbates greenhouse gas emissions through the inefficient use of primary fuels such as wood or agricultural waste. He noted that a greater focus on improving energy transmission and distribution systems and on policies for efficiency in energy supply and demand will benefit inclusive and green growth more than restrictions on fossil fuels. In closing, Urama highlighted a number of encouraging flagship programs across the continent.
Figure 2 Potential Energy Resources in Africa.
Source: Kevin Urama.
He cited, for example, the African Development Bank’s Facility for Energy Inclusion, the Desert-to-Power Project, and schemes by national utilities all seek to accelerate access and generate a pipeline of bankable projects by strengthening collaboration, regulation, financing, risk mitigation, training, technology acquisition, consumer outreach, and market support. Urama then summarized important policy options set forth in Figure 3.
Figure 3 Policy Options for Energy Access.
Source: Kevin Urama.
A discussant remarked that productive use of electricity needn’t require high consumption: for instance, efficiently drying produce to preserve it for market is both low-cost and high-payoff. In terms of improving household incomes, it is sometimes more effective to displace expenditures than improve earnings (e.g., replacing expensive and hazardous paraffin lighting with solar lamps).
Shonali Pachauri from the International Institute for Applied Systems Analysis addressed methods for quantifying the inadequacy of energy. Recently minted indicators, for instance SE4All’s Multi-Tier Framework, have been used to improve our understanding of energy poverty beyond relying on simple binary measures; but the indicators still suffer from practical shortcomings. For instance, they fail to fully distinguish the importance of the power delivered to a household from the household’s need for power. Pachauri argued that a similar statement can be made for appliance ownership, which is merely a (normative) proxy for which energy services are available and to whom. Another issue is that unified metrics developed for global comparisons inevitably sacrifice dynamic range when applied at the national or local level and ignore specific local needs and values. Pachauri presented a new indicator which measures energy access in two dimensions with three tiers each: one axis measures the quality of energy supply (its reliability and cost), and the other measures energy poverty (affordability and services that are available). This provides more contextual flexibility and more sensitivity to the supply-versus-consumption-oriented dimensions of electricity, while highlighting the question of whether the potential benefits of energy access are being realized.
Some participants noted that the prevailing focus on prescriptive metrics and technological solutions is slowly giving way to a focus on what to achieve with them. Other participants remarked that there may be a false dichotomy of productive versus consumptive use of electricity.
James Watson of the UK Energy Research Center presented insights into how governance can support renewable energy innovation and deployment worldwide. The composition of national energy mixes and their change over time depend on the national policies enacted to guide development. China, for instance, has witnessed an enormous shift away from “biofuels” (i.e., cooking on open fires fed by agricultural waste) and toward hydroelectric power and photovoltaics. Successful and influential policies for enabling renewable technology do not focus on R&D alone, but encompass the whole innovation system, support market-building, and are intended to sustain iterative feedback. These approaches should transcend national boundaries (e.g., Chinese PV panels are bought in Germany), and they include the whole landscape of competing products, services, business models, and subsidies. Watson’s conclusions highlighted the important role of international technological collaborations for building innovation and economic planning capabilities and for interconnecting regional grids to bring down costs and endow resilience.
International collaboration was also a key theme of a talk delivered by Han Huang of the Global Energy Interconnection Development and Cooperation Organization (GEIDCO). He applied lessons learned from the Chinese electrification experience to the unique energy challenges in Sub-Saharan Africa. He presented Figure 4 to highlight the geographic spread of the electricity deficit. Huang introduced the Global Energy Interconnection (GEI) model as a powerful electrification strategy.
Figure 4 Geographic spread of the electricity deficit.
Source: Han Huang.
GEI envisions a global electricity network, wherein local smart grids based on clean generation are connected by a backbone of ultra-high voltage transmission. Huang emphasized the technology’s potential to help countries around the world utilize their clean energy resources and reach their electrification goals, and he shared China’s experience of electrifying 100 percent of its population in 2014. He maintained that the proliferation of mini-grids may be a transitional solution, with distributed generation eventually being incorporated into larger networks made possible by advances in transmission technology.
Several participants agreed that lack of appropriate technology is in some countries a significant hindrance to development of cost-effective energy systems and that regional interconnections and power pools may be crucial for delivering efficiency and resilience. They noted that to fully leverage their potential will require strong institutional linkages and educational capabilities.
Carlo Papa from the ENEL Foundation, noted the virtuous cycle whereby electricity fuels economic development, which stimulates further electricity investment, and so on. It is therefore paramount that infrastructure is able to expand with demand, allowing communities to systematically climb the energy ladder. Village mini-grids will become increasingly integrated with one another and ultimately form large regional networks, and it will be important to develop and diffuse in advance the standards for equipment, load management algorithms, payment systems, and site selection. In terms of government licensing, Papa pointed to Morocco’s auction system as an effective and low-cost solution with wide applicability. He then presented a new regulatory model designed to harness the capital, capacity and large revenues of centralized generation facilities, which would be regulated to ensure that a small fraction of their electricity is delivered to low-income consumers.
Mini-grids are increasingly seen as alternatives to utility-scale grids in remote areas where grid electricity is unreliable. But rapid adoption of mini-grids depends on their commercial viability. Umang Maheshwari from Smart Power India outlined some of the key financial and technical challenges in deploying mini-grids and lessons learned about local electricity providers’ business models. Chief among these was the importance of a reliable and stable service, which promotes trust and willingness to pay and encourages consumers to invest in appliances, increase their demand, and even rely on electricity for powering new income-generating businesses (such as mobile charging, hair dressing, food preservation, internet access, welding, and flour milling). Maheshwari pointed out that these demand-side considerations, along with more obvious supply-side innovations such as remote meter monitoring and optimization of generation assets, can drive healthier return on capital and attract investors. A holistic approach to village development supports business through information, expertise, training, appliances, finance, and market access. It is also responsive to local priorities, sometimes providing access to useful services like irrigation rather than to electricity itself (which would require farmers to acquire their own equipment). Together this can stimulate impressive growth in enterprise and the demand needed to sustain electricity providers. In conclusion, Maheshwari presented Figure 5 that reflects experience in India in scaling up enterprises to become mini-anchor loads.
In follow-up discussions, the importance of electric power reliability was repeatedly emphasized. Several participants pointed out that underinvestment in equipment and human resources has doomed whole projects. More details were provided about managing productive anchor loads (for instance mobile phone towers or irrigation systems), with excess capacity serving local households. In the irrigation example, the success of the scheme relied on careful consultation with farmer groups to smooth out peak loading through multi-cropping and irrigation schedules.
A statement submitted by John Holmes of the Smart Villages Initiative stressed the foundational importance of productive enterprise to expand livelihood opportunities, enable the provision of community services (like education and healthcare), and establish energy and income as mutually sustaining. Governments and development organizations have a key role to play in supporting the creation of effective markets for manufacturers, distributors, retailers, operators, and financiers—but the typical strategy of providing free appliances and services to consumers tends to undermine sustainable business ecosystems. A better strategy is to invest in the skills base and support access toaffordable finance (for instance by providing credit guarantees to drive down loan interest rates). And when subsidies to public-private-community partnerships are unavoidable, Holmes argued they should be time limited and focus on capital (rather than operational) costs for minimal market distortion.
Figure 5 Scaling-up Micro-enterprises to become day time mini-anchor loads in India.
Source: Umang Maheshwari.
Robert Aitken from Restio Energy also contributed a written statement which lamented the lack of political champions for off-grid solutions in Sub-Saharan Africa—these solutions are frequently regarded by governments as secondary (or a threat) to conventional grid expansion. But more open-minded and collaborative planning within the power sector will shore up private confidence in mini-grids, which too often are uncertain investments with revenues that turn out to be insufficient to repay even the interest on their debt. Aitken suggested that analyses of the sector as a whole need to synthesize the experience in project management and demand trajectories. From there it is necessary to formulate rigorous and realistic business models. There should also be an effort to clarify the responsibilities of government agencies and other stakeholders to prevent duplication of effort and to facilitate the adoption of “best practice” standards.
This presentation tied into other debates about the role of government services, such as schools and clinics, in providing diversified revenue streams for electricity providers (both public and private). A discussant suggested that this approach would render the providers more financially viable, which in turn would ultimately benefit their customers.
Investment in off-grid power systems is growing, noted Anil Cabraal from the Energy Forum in Sri Lanka. But the underperformance or failure of components, arising from shoddy manufacture, absence of quality oversight, human error, and lack of community ownership undermines the usefulness of electricity and diminishes trust in off-grid technologies. To provide reliable and cost-effective service, proper planning coupled with good designs and use of quality components and installations are required. Attention must also be paid to provision of maintenance and spare parts, enforceable warranties, consumer education about competing components, and, at a minimum, adequate collection of funds to pay for recurring costs. Two projects of the World Bank Group—the China Renewable Energy Development Project and Lighting Global—have demonstrated the impact of quality standards for products and services, as well as of community engagement and support.
The ensuing discussion highlighted the negative effects of import tariffs on electrification projects, particularly when local manufacturing is underdeveloped and cannot meet demand. Batteries were offered as a prime example wherein measures to protect local industry can result in high prices and low quality, prompting Bangladesh and Ethiopia, for example, to remove tariffs altogether. Another discussion point was asset ownership: giving communities a stake in power projects encourages good maintenance and stewardship of the resources, and sharply reduce incidences of vandalism and theft.
The issue of local participation was also raised by Hari Sharan of DESI Power, who emphasized that strategies decided at the top levels of government frequently turn out to be ineffective or misguided in application, and may
even recapitulate colonialist power structures. Decentralized generation will be most successful if it is accompanied by a village-centric framework of governance, financing, and regulatory policies. In India, for instance, the institutions of Gram Sabhas and Panchayats can collaborate with local people and businesses to best integrate activities related to agriculture, social services, job creation, and energy services. Then migration to cities can become a matter of choice rather than survival. These were the guiding principles for DESI Power’s micro-grid program. Their pilot projects have explored various models of business, ownership, and management.
Sharan’s experience echoed experience of others: success depends on (a) training and capacity building of villagers; (b) investments in job-creating local enterprises; (c) securing publicly funded guarantees for investors and financing options for villagers; and of brokering power exchange agreements between micro-grids and the central grid. The critical importance of a shift in policies to enable “bottom-up” planning, e.g., at the district level in India, was emphasized. Sharan concluded by introducing DESI Power’s software tools—one already deployed and one under development—which enable such bottom-up planning, thereby allowing unskilled villagers to become their own decision makers by providing forecasts of the financial, technical, economic, and ecological risks of different project strategies.
Participants noted that collaboration among consortia of villages to share resources and costs is becoming increasingly easy with the spread of mobile phones and other communication platforms. Yet, there are still considerable social barriers to the distribution and effective use of such planning tools.
LOCAL AND COUNTRY CHALLENGES
Anupama Kowli from the Indian Institute of Technology Bombay, opened with an overview of India’s vast national grid. While investment in power facilities have historically focused on coal and benefitted industrial centers, the Indian government has recently adopted ambitious targets on renewables, rural access, grid interconnectivity, and cleaner technologies such as electric vehicles. Significant progress toward these targets has already been made through programs such as UJALA Yogana to distribute efficient electrical appliances and UDAY to restructure dysfunctional distribution companies. Yet as the national network grows and evolves, so too do the challenges it faces. Increased penetration of distributed renewables, with their variable supply characteristics, puts strain on the grid. This demands robust and automated mechanisms for managing assets and for costing and distributing power, as well as anticipatory upgrades of transmission infrastructure. Kowli’s proposals for facilitating these transitions have included: (a) hard-wiring the ability to partition sections of the grid to protect them from faults in their neighborhoods; (b) adopting fairer frameworks for allocating energy and service interruptions; (c) reducing peak loads using dynamic pricing and consumption scheduling; and (d) investing in battery storage.
Ensuing conversation highlighted that the main challenges in improving grid management are often not technical, but political and social. Several participants noted that the tools exist, but it takes time to first convince operators and funders that the benefits outweigh the costs and then to develop good schemes for implementation.
The rapid adoption of mobile phones throughout Africa demonstrates the potential of new technologies; but conditions are not always optimal, argued Izael Da Silva of Strathmore University in Kenya. He introduced an engineering and education project on Wasini Island, which brought a photovoltaic mini-grid system to a previously un-electrified community and trained residents to operate and maintain it. Local residents developed a range of new businesses and services (such as phone charging, IT, and school lighting), buoyed by growing awareness of the available energy options and the negative health consequences of traditional fuel. Strathmore Energy Research Centre’s efforts to standardize and quality-test equipment have also been important.
Da Silva stressed that the local availability of trained expertise in photovoltaics and electrical systems is paramount: “Would you buy a car if the closest mechanic was 200 km away from you?” Effective training kits and education schemes, like WISEE (Women in Sustainable Energy and Entrepreneurship) which specifically recruits women, have initiated a domino effect, spreading knowledge far beyond the original trainees. The Strathmore model, Da Silva said, is easily reproducible, and it can have a transformative and empowering effect if widely adopted.
Considerable interest was expressed in the lab setup for equipment-testing, as well as the number of people who had benefited from the original training scheme (over one thousand). Another topic considered was the high cost of capital for renewable mini-grid projects (15-25 percent interest is typical in Kenya), due to their unproven business models. This, coupled with fragile distribution chains for equipment and slow government bureaucracy, makes access to cheap money from development finance institutions indispensable until confidence in the sector improves. In conclusion Da Silva recommended a recent report that addresses financing national energy access through a bottoms up approach, Poor People’s Energy Outlook 2017, http://policy.practicalaction.org/PPEO2017.
Enamul Karim of Bangladesh’s Infrastructure Development Company Limited (IDCOL) described an ongoing initiative to leverage public-private partnerships for financing 100 village mini-grids in the country. IDCOL has ample experience in defining optimal roles for each partner and executing speedy and cost-effective implementations. Karim reported that technological advances such as pre-paid metering systems have improved project performance and investor confidence by reducing operational and technical losses. But maintaining the balance between using the best quality equipment (which is often imported) and supporting local manufacturers can be challenging. Solar energy for irrigation is another major focus for IDCOL, which at present supports businesses that pump and sell water to farmers, but is beginning to investigate models wherein farmers own their own pumps. For both the mini-grid and the irrigation projects, energy efficiency is key to affordability, especially since the cheapest tariffs available are still substantially higher than those of the government-subsidized national grid. While major challenges remain in attracting investors who are concerned about long pay-back times, significant progress is also being made in reducing equipment costs and in brokering arrangements to sell excess off-peak power to public services and other businesses.
A lively discussion about the role of subsidies followed. Several participants acknowledged that grant- or government-funded subsidies to mini-grid companies should eventually be eliminated in order to demonstrate financial sustainability and to minimize distortions that hide market inefficiencies. However, the rate of phase-out was contentious. Those who defended subsidies argued that the bottom line should be affordability for rural customers and pointed out that all emerging technologies need subsidies to compete with existing systems.
Daniel Waddle from NRECA International presented an overview of electrification challenges, including how the electrification experience unfolded in the United States during the 1930s-1950s. Although several new technologies have dramatically eased the provision of electricity around the world, there remain many common challenges such as low population density and difficulties in supporting productive use of electricity. Waddle emphasized the role of geospatial planning in integrating grid and off-grid solutions effectively and discussed the need to expand the scope of rural electrification agencies to go beyond planning and construction and include coordination with private sector off-grid investment. He added, supporting productive use programs; establishing lower-cost design/construction standards; and providing significantly more training for local service providers and other electrification stakeholders. Scaling up to achieve universal access will require expanded planning, coordination between grid and off-grid investment programs, and financial models designed to bridge the cost-affordability gaps that exist in many countries where access is critically low. Waddle also highlighted the need for exploring business models where multiple smaller service providers could reduce costs by sharing services, including business systems, and maintenance and operations personnel.
Reflecting on lessons from her personal trajectory through basic research, energy access policy, and capacity building, Rose Mutiso of the Mawazo Institute, Kenya, noted that progress on topics of critical importance to Africa is undermined by a weak research base and lack of innovation capabilities. Those tasked with allocating R&D resources must take an evidence-based approach and bear in mind that exciting and supposedly disruptive new technologies often end up being surpassed by more slowly maturing ones with broader applicability and potential for scale. Moreover, technology is an enabler rather than a driver of societal change. The example of LED lights attests to this, as their transformative impact was possible only because of concerted policy effort to move them beyond the laboratory shelf. Mutiso remarked that it is often the crafting of policy and other structured decision making, rather than innovation or market forces that ultimately stimulates technological progress. In order to leverage the full potential of policy interventions, it is crucial to recruit broad coalitions of stakeholders to devise recommendations. In the energy space, these coalitions should include participants with agricultural and environmental interests, whose policy and basic research priorities often align.
A wide-ranging discussion followed, touching on: (1) how to foster collaboration among siloed government ministries; (2) how regulatory effort in strengthening the markets for products and services can ensure that electricity supports enterprise; (3) how inefficient tax tariffs and perverse incentives in many developing countries can be addressed; and (4) how to implement models for cycling income generated from electricity sales back into the community.
Fabby Tumiwa, from Indonesia’s Institute for Essential Services Reform, spoke about the challenges in reaching the large number of small Indonesian islands that need reliable and affordable electricity. The government is making good progress in achieving universal connection and keeping prices low, using for instance new demand-forecasting tools and aerial images to assist site selection and maintenance needs. But, as Tumiwa noted, some projects have run into difficulties due to failure to account for grid development, poor design and workmanship, expensive or absent financing, lack of local technical expertise, uncertainties about demand growth, low revenues and customer retention, and insufficient government funds for upkeep which leads to equipment malfunctions. Projects completed with great
fanfare are sometimes found to be abandoned two years later, because officials are incentivized to spend in pursuit of impressive numbers rather than to deliver quality and sustainable service. Without a coherent plan for expansion and regulations on standards, the space has become congested. Moving forward, it will be important to engage consumers in the sustainability of electrification projects, giving them a degree of ownership through co-operative or community investment models.
Participants shared experiences concerning regulations, both on the equipment used in electrification projects, and also on the service delivered (for instance, in terms of voltage and hours per day). Several participants observed that while electrification is an enabler of development, but there must be a good understanding of local needs and demands.
Carlo Altamirano Allende, of the National Autonomous University of Mexico, noted that the broad potential of distributed energy systems and associated innovation is creating long-term socio-economic benefits. However, he cautioned that simply deploying clean energy technologies does not guarantee success, and improper project design and implementation may perpetuate local inequalities or create new risks. For example, Puerto Rico’s reliance on imports and external expertise has been a continual drain on income that could have been invested in infrastructure, and this situation has slowed the country’s recovery after the disaster of Hurricane Maria. A desire to understand the many links between energy and poverty—at the individual, household, business, community, and societal levels—has prompted creation of a new metric: the “social value of energy.” This incorporates the effect of energy on health, education, and production, as well as the costs associated with technology or the social changes it engenders. The aim is to focus attention on human energy needs, rather than just technological products and solutions, and to foster models of resource ownership, community investment, and economic opportunity that will drive people out of poverty.
Many discussants supported the paradigm of the “social value of energy.” While the measurement of social benefits (including education, health, and income) is a standard requirement to justify public investment in any infrastructure, the fact remains, they argued, that barriers to benefiting from energy are often seen as purely technical or financial rather than social. A major difficulty is the quantification of such factors, which would be instrumental in designing and evaluating accountable policies.
Participants submitted many interesting ideas for working group topics. Then, four central questions were distilled.
Working Group 1: In aspiring to universal access to affordable and reliable energy services (SDG7.1), and in promoting the share of renewables in the energy generation mix (SDG7.2), what are the most effective success indicators, national plans, policies, regulations, and roadmaps for different contexts?
Group members observed that a more comprehensive definition of energy should emphasize the services that people can access, rather than simply the aggregate energy they consume. Many suggested broadening the scope of SDG7 beyond simply providing energy, as follows:
Achieve universal access to all energy services, including heating, cooling, cooking, lighting, mobility, mechanical power, communications, entertainment, etc. of adequate quality, reliability, affordability, efficiency and environmental sustainability.
Since the importance of each energy service is context-specific, priorities should be defined in consultation with users, participants said, with each service having a metric to track progress and credible mechanisms for gathering relevant data (using low-cost smart sensors, for example). While the provision of access should be technology-neutral—putting needs before solutions—it should also be compatible with sustainability goals, taking into account the long-term and life-cycle impacts of energy resources and technologies, and ensuring that distributed measures undertaken today may be harmoniously integrated in the future.
Working group members emphasized human and knowledge capacity-building at national and community levels and the need for exploring international collaborations that optimize the value of energy resources while promoting resilience in the energy system. The experiences of agricultural extension services can guide the establishment of networked and inclusive platforms for knowledge sharing and policy development, as well as practical and participatory evaluation and improvement frameworks. Well-meaning policies can inadvertently establish perverse incentives. Take the case of Indian farmers who already receive free electricity being subsidized to buy energy-efficient water pumps. These tend to be oversized for the farmers’ needs; yet because of the unreliability of power, they are run
continuously, resulting in wasted electricity, income, and government funds, as well as groundwater depletion and waterlogging of fields. A number of group members noted that it is not energy efficiency per se that should be optimized, but the efficiency of the overall sociotechnical system.
The importance of tools to undertake “bottom-up” planning should be recognized by policy makers, several group members noted. This will facilitate optimizing electricity supply at the district level, and it will also ensure a smooth interface with policies, programs, and schemes planned under currently centralized “top-down” processes.
The policy flexibility to respond to white elephants they said, needs to be balanced against the needs of investors for a consistent and predictable regulatory environment. Governments and international development organizations can strengthen confidence by providing well thought-out risk guarantees and long-term concessional loans for public-oriented projects at all stages of the energy value chain.
Working Group 2: What are the best strategies for integrating grid and off-grid solutions in national electrification plans?
The working group discussed the three main components of electrification projects: (a) the technical (i.e., technological and economic) components; (b) the institutional responsibilities for planning, ownership, operation, and oversight; and (c) the financial aspects of investments, including sources and recipients of money, and plans for cost recovery.
On technical matters, a major first hurdle for policy makers, group members observed, is defining the minimum acceptable level of electricity access for their constituents. This has been facilitated somewhat by the Multi-Tier Framework’s universal benchmark. The next stage is planning, which requires expertise in technological, economic, and demographic matters, and clear allocation of responsibility for construction and management roles. A robust and flexible method for selecting optimal technologies is the “levelized cost of energy,” which calculates the life-time cost for a given level of service and therefore allows direct comparison of different potential solutions.
Group members noted that institutional roles include enforcing construction standards and regulating the quality of service. The eventual integration of disparate resources into a single system requires centralized and forward-thinking design principles, as well as good-faith collaboration between the various energy providers who at present seldom share information (resulting in duplicated effort and short-sighted use of scarce resources). During project planning and construction, it is tempting to cut corners or to pursue the solution with lowest up-front investment, to the detriment of long-term viability. Though there are instances when this is the wisest overall strategy—i.e., if future upgrade costs are expected to be significantly discounted—this should be justified by careful analysis rather than unwarranted management practices. Finally, there exists a wide range of decision making, ownership, and reward frameworks. Community ownership through co-operatives helps ensure that energy project profits are re-invested, and moreover gives locals a stake in safeguarding the project’s future.
Different financial models are advantageous in different contexts, the group reported. Some countries rely on debt (e.g., Bangladesh), while others rely on local project equity (e.g., Nigeria). But all must recover their costs to be sustainable. Governments that often subsidize electricity need to decide whether they wish to defray capital expenditures or company operating costs or to devise institutional machinery to subsidize consumers directly. Some strategies are more suitable than others—for instance, subsidies to support operating costs are vulnerable to political forces and future budget constraints. In any case, while electricity tariffs are driven by political considerations as well as business ones, it is paramount that they be at least somewhat cost effective (with cross-subsidies to eliminate the affordability gap) in order to minimize value distortions and inefficiencies.
Working Group 3: What is the best way to develop and implement effective strategies for providing rural villages and communities with energy services that can contribute to improved living standards and reduced poverty?
The group echoed many familiar themes in their examination of poverty alleviation, such as coordination and information flow, community needs, and prioritizing the deployment of resources to improve living standards through production, household, or community-oriented uses. To meaningfully address this topic requires a combination of community decision making, data gathering, and knowledge sharing. This in turn demands responsive models of governance, which not only educate people, but also facilitates two-way conversations about energy needs and intended resource use.
Working group members noted that the capacities for assessing and interpreting the needs of rural communities and for helping them to plan and implement measures appropriate to their situation remain patchy at best. There-
fore, developing user-friendly survey templates and tool kits would be a significant advance. Data collection should be institutionalized as an integral and error-resistant part of regular operations. This will reduce ambiguity as to whether progress is being made toward stated objectives and will facilitate refinement and communication of the best strategies.
The group acknowledged that it is challenging for under-resourced government administrators to integrate their programs across departments; but there is much to be gained in efficiency and long-term viability if, for instance, education ministries can capitalize on the supporting ground work of the energy, health, or agriculture ministries (and vice versa). Similarly, rural electrification authorities are most often focused solely on energy access and construction; and they often fail to develop enabling environments that would contribute to impacts. Quality and service standards are often best instituted by central governments, but coordination may be more appropriate under the purview of regional governors.
Networks of accountable and qualified extension agents could assist villagers and communities in developing new business models, benefit from warranties, and make greatest use of rural financing options, which are usually scarce. At the same time, the group stated, a key policy goal of governments and their private partners should be creating and supporting accessible markets for local enterprise. Finally, past experiences (for instance activities of Indian farmers) show that people are much more likely to value, influence, and benefit from services if they must pay same rate for them.
Working Group 4: How should the human dimensions of SDG7 (training, education, capacity-building, and research) be advanced?
Many challenges and opportunities for education were identified. Some were tied to accessing and promoting hard technologies (for installing grids, off-grid systems, electrical appliances, and stoves). Some involved consumer-facing business innovations (pay-as-you-go, mobile money). Others were linked to the back-end of managing enterprises and energy service companies (accounting, business management). And still others involve understanding and importing successful policies and regulatory frameworks.
Facilitating awareness of the SDGs and associated human resource requirements could be achieved through school textbooks, graduation requirements, and teacher-training, the working group reported. The latent capabilities of universities could be leveraged through communication with other centers of expertise (companies, NGOs, foundations, innovation hubs, etc.). A mobility program for employees of these institutions could significantly illuminate and advance the strategic synergies of counterpart organizations.
Working group members organized technical talent into two major categories: (a) those with specific training targeted at immediate issues (such as electrical systems maintenance and business management), and (b) those with broad qualifications (such as researchers and students in university engineering departments) who are prepared to develop the solutions and systems of tomorrow. Both types of expertise should be embedded in the communities that need it most together with opportunities for updating, refreshing, and expanding knowledge. These opportunities may take a variety of forms beyond traditional manuals and lectures, including on-line videos and in-person demonstrations (of, for example, diesel engine maintenance or computer software), which tend to be more effective.
HIGHLIGHTS AND NEXT STEPS
Many themes and suggestions were covered during the conference. Among those emphasized by several participants was the need for empowering communities to prioritize and deploy financial resources, with robust two-way communication between local and central government decision makers.
Other key messages from individual participants during the discussions were the following: amending high-level UN policy documents to present a more practical understanding of global energy needs; facilitating increased collaboration among government entities, and appropriately allocating authority and responsibilities; standardizing technical and quality-of-service norms for grid and off-grid energy in different geographic regions; standardizing data collection streams, including data needed for monitoring and evaluation, to integrate project costs, risks, and modalities of failure. Also of interest was building trust and collaboration by identifying/resolving misunderstandings between key energy sector stakeholders, while emphasizing that long-term strategies will require multiple solutions. Also, promoting rational incentive structures to stimulate and facilitate investment by the private sector, including public-private partnerships and clear legal/regulatory guidelines, is important.
Several participants urged investing in higher education and private innovation centers for engineering, IT, and business skills, and ensuring that the supply and nature of expertise is appropriately matched to demand; pilot-
ing the concept of a network of extension centers, anchored to local universities and other appropriate institutions, for technical support and rural capacity building; providing managers, technicians, and administrators with business systems and ongoing training to reduce the rate of operational under-performance and failure; and recognizing that electrification projects must serve the needs of people and communities. All of these comments should be of interest to local universities.
The final discussion centered around possible strategies for disseminating the foregoing messages to ministers, officials, executives, charities, universities, diplomats, and other decision makers, and uniting their diverse voices behind common goals and policies. Many participants noted that the SDGs provide a platform for focusing the efforts of the international community, and improvements to their defining language will resonate at high levels. Calls for regional investment in knowledge and human capacity can galvanize a particularly significant response.
At the national level, others said that roadmaps for energy and finance ministries can contribute to optimally targeting resources. Information that is already available should be translated and framed in actionable political language. Similarly, effective distribution of pioneering success stories can build confidence and momentum for future projects. Science advisory institutions and networks like the Inter-Academy Partnership have a role to play in promoting discussion of energy access. Also convening communities of experts to explore models of standardization, education, and technology adoption was suggested.
In conclusion, the participants agreed that the workshop had achieved its goal of identifying activities that needed greater attention to accelerate progress in expanding access to reliable and affordable electricity in energy deficit regions. Several participants underscored that the challenges set forth during the conference are both urgent and daunting. But solutions are emerging which could have a transformative effect, if widely replicated. Enabling these to shine through in global, regional, and local agendas will inspire action and progress toward a more inclusive energy future for all.
DISCLAIMER: This Proceedings of a Workshop—in Brief was prepared by Cato Sandford and Glenn Schweitzer (firstname.lastname@example.org) as a factual record of what occurred at the meeting. The statements made are those of the author or individual meeting participants and do not necessarily represent the views of all meeting participants, the planning committee, or the National Academies of Sciences, Engineering, and Medicine.
REVIEWERS: To ensure that it meets institutional standards for quality and objectivity, this Proceedings of a Workshop—in Brief was reviewed by Izael Da Silva, Strathmore University; M. Granger Morgan, Carnegie Mellon University; and Samuel Tumiwa, Asian Development Bank. Marilyn Baker, National Academies of Sciences, Engineering, and Medicine, served as the review coordinator.
PLANNING COMMITTEE: E. William Colglazier (Chair), American Association for the Advancement of Science; Anil Cabraal, Energy Forum, Sri Lanka; and Umang Maheshwari, Smart Power India.
SPONSORS: This workshop was partially supported by the National Academies of Sciences, Engineering, and Medicine and by the Rockefeller Foundation’s Bellagio Center.
For additional information regarding the [convening activity], visit http://www.nationalacademies.org/PGA/DSC.
Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2018. Providing Reliable and Affordable Electricity in Countries with Energy Deficits: Proceedings of a Workshop—in Brief. Washington, DC: The National Academies Press. doi: https://doi.org/10.17226/25145.
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