Energy Poverty Impacts Three Billion People. Time to Think Big.

This article was originally published by the Aspen Institute. In the midst of the coronavirus crisis, 2020 is shaping up as a pivotal year in India’s transition toward renewable energy.

Ghana is fast approaching 100% electrification, but continues to battle with irregular electrical power supply. In 2014, Ghanaians experienced severe power outages -- known as “dumsor” -- with the productivity losses estimated at 2 percent of GDP.1,2 Reliability has since improved but hydropower remains vulnerable to erratic rainfall (for generation via the Bui, Kpong and Akosombo dams) and thermal power is subject to volatile oil prices and inconsistent gas supply from the West African Gas Pipeline (WAGP).3 Domestic natural gas production could provide reliable and low cost electricity for Ghana, if it can be developed.

When it comes to deploying renewables for Africa’s urgent need for a high-energy future, big is indeed beautiful -- and necessary. But history suggests that proposing massive coordinated infrastructure projects as quick fix/catch-all solutions to a country or region’s energy challenges is far less straightforward than the alternative: fostering a market for utility-scale renewables. Supersizing project ambitions beyond the capacity limits of governments, utilities, and grids may not ultimately be the fastest or most cost-effective path to achieving infrastructure goals.

Varun Sivaram heads anyone’s short list of global solar power experts. A physicist, best-selling author and clean energy technology expert with experience spanning the corporate, policy and academic sectors, Sivaram was most recently the CTO of ReNew Power, India’s largest renewable energy firm. His 2018 book, Taming the Sun: Innovations to Harness Solar Energy and Power the Planet, was heralded by the Financial Times as “the best available overview of where the industry finds itself today, and a road map for how it can reach that brighter future.”

In the second session of the Climate Solutions Series features experts Jesse Jenkins (Princeton University), Sue Tierney (Analysis Group), Chris Shelton (AES; AES Next); and Todd Moss (Energy for Growth Hub) for a discussion of the important themes and issues facing the power sector in the context of decarbonization.

One of our Hub Fellow's, Jessica Lovering, joins Matt Yglesias to discuss the role of advanced nuclear in combatting climate change.

Electricity systems across many developing countries face tariffs set below cost recovery, typically due to social and political pressures. Utilities are often stuck, because the energy infrastructure in most frontier markets is insufficient or decrepit, and non-cost-reflective tariffs mean these utilities are chronically low on cash-flow and usually unable to attract significant private investment. Tariff reform is usually seen as a crucial step toward making the electricity system sustainable and luring capital for further enhancements to boost quality and reliability.

In early 2020, the United Arab Emirates will start up the massive 5.6 GW Barakah nuclear power plant, the first country in nearly a decade to successfully start a new nuclear power program.

If you were planning to open a coffee shop in your neighborhood, you would want to know how many cups your potential customers might consume each day.

Kenya is the epicenter of Africa’s energy transition. The country is now the world’s 8th largest geothermal power producer, has the continent’s largest wind farm, a vibrant offgrid energy market, and an aggressive last mile campaign to connect every citizen.

ASEAN countries are a diverse group of countries at different stages of economic development and with different energy challenges. Some members, like Singapore and Brunei are high electricity consumption markets, while Myanmar and Cambodia are very low consumers and still working to deliver universal access. Fast economic growth and aggressive electrification efforts will drive higher demand, which is expected to more than double electricity consumption by 2040.1 The region’s current electricity production is over 80% fossil fuels, a trend poised to make ASEAN one of the largest contributors to global warming.2 At the same time, ASEAN is also at great risk of the impacts of climate change, with some members poorly equipped to cope with its effects without solving its electrification constraints.

From World Development Perspectives (January 2020) A number of “disruptive” data science and sensor technologies are creating new opportunities for addressing global challenges.

LCOE = {(overnight capital cost * capital recovery factor + fixed O&M cost)/(8760 * capacity factor)}+(fuel cost * heat rate)+(variable O&M cost)[1] What is the Levelized Cost of Electricity? LCOE is the net present value of the unit-cost of electricity over the lifetime of a system. Pros of LCOE Simple.

Successive interventions, including privatization, have not yet resolved Nigeria’s persistent power sector challenges. This year, the newly-appointed Honorable Minister of Power will continue on the path towards achieving key power sector goals, namely increased reliability and reduced revenue loss.

Context: Energy demand in India is forecast to double between now and 2040 as the country strives to improve living standards for its population of over 1.3 billion.

Summary High penetration of variable renewables requires short-term and seasonal storage  A promising option is to use excess renewable power to produce hydrogen or “synthetic natural gas” which can be stored for later usage.   Power-to-gas needs much of the same infrastructure as gas-to-power, thus limiting risks of climate stranded assets.

Context: Nigeria has Africa’s largest population and economy, but Nigerians consume 144 kwh per capita annually, only 3.5% as much as South Africans.1 With only 12 GW installed, and typically just one-third of that delivered, Nigerian power production falls far short of demand, which is a primary constraint on economic growth.

Nigeria’s power sector was unbundled and partially privatized to establish a competitive market intended to improve management and efficiency, attract private investment, increase generation, and provide reliable and cost-efficient power supply.

From the World Economic Forum: Energy consumption, in all its many forms, enables everything from how we live, eat and move, to how we work and communicate.

I’ve written on Nigeria’s nuclear power ambitions before (here and here), but last month marked my first visit to the country.

Adequately tracking progress against energy poverty requires a metric that is more closely tied to income and employment than the commonly-used household access rate.

Danger and possibility under Lake Kivu Beneath the surface of the lake lies 60 billion cubic meters (bcm) of methane gas and 300 bcm of carbon dioxide originating from local volcanic activity.1 Without intervention, a gas eruption could occur within the next century.2 Located between Rwanda and the Democratic Republic of the Congo, over 2 million people live on the shores of the lake.

High power generation costs in Sub-Saharan Africa are driven by stark imbalances in supply and demand, poor utility performance, and constraints on independent power producers.

From OneZero: Modern life is amazingly energy intensive. All those computers, data servers, and air conditioners devour a lot of electricity.

Dramatic cost reductions in wind and especially solar power seem to promise a distributed energy future. Grid-connected rooftop solar lets any home or industrial facility become a “prosumer” that produces electricity as well as consuming it.

Power Africa is a multi-agency US government initiative that aims to increase generation capacity and expand access to energy in Africa. The USAID-coordinated program aligns its support and activities by tackling the most pressing obstacles to power projects and private investment in each market.

Eskom, South Africa’s state-owned power company, is in an existential crisis. Problems at Eskom have regional reverberations because it is the continent’s largest utility and trades power with seven countries. More than a decade of mismanagement, governance failure, spiralling costs, and the accumulation of unmanageable debt has put Eskom into a death spiral.

The availability and reliability of electricity services is crucial for economic development because of electricity’s role as a powerful engine of social and economic change.

From Bloomberg: Africa is rural. Or that’s what senior Western officials envision when they talk about the continent. America’s top diplomat for the region, Tibor Nagy, recently said that Africa is “by and large an agricultural society.” He isn’t alone: Germany’s recent Marshall Plan with Africa insists that “rural areas will determine Africa’s future.” This is wrong.

Will Bitcoin cook the planet? A great Axios piece “No, Bitcoin won't destroy our climate by 2033” argues that carbon emissions from the substantial energy consumption of bitcoin mining isn’t likely to significantly contribute to global warming.

Incinerating organic waste is the most common method of producing energy from municipal solid waste. While this approach is significantly more costly than landfills, waste-to-energy (WTE) can make economic sense in areas where there are energy deficits and/or a shortage of landfill space.

Sub-Saharan African countries urgently need more electricity services to foster economic growth and job creation. While plugging the energy gap is not sufficient to address all the region’s economic woes, it is a fundamental building block to the wider aspirations of these societies.

While the country will likely achieve universal access soon, load-shedding is still a common occurrence and a major obstacle to economic activity. In order to prepare for a population that will be far bigger (200 million or more by 2050) and aspires to be richer (aiming for Developed Country status by 2041), the government plans to build a total of 60 gigawatts (GW) of new generation by 2041.

From Scientific American: A global energy transition is under way. Its potential to redraw the landscape will be most profoundly felt in developing economies.

India, already the third largest electricity producer in the world, is rapidly expanding its power sector. In 2017, India alone accounted for a quarter of the rise in global power demand and is projected to more than triple its electricity consumption by 2040.

Host Daniel Raimi of Resources For the Future talks with Todd Moss. They cover two major topics: avoiding the so-called "oil curse" in the nation of Guyana, and supporting economic growth in the developing world by improving energy access for businesses and industries. Listen to the whole Podcast below or here.

It is universally true that all rich countries use a lot of energy. This might make you think about in-home systems: refrigerators, lights, etc.

The launch of the U.S. Development Finance Corporation (USDFC) in October 2019 is an extraordinary opportunity to accelerate capital flows into emerging and frontier markets in support of U.S.

From Axios: Electrification initiative Power Africa has been faulted in a USAID Inspector General report for overstating the impact of its development efforts by counting the delivery of solar lanterns as new electricity connections. Why it matters: Accurate measures of progress are essential for reaching the UN’s Sustainable Development Goal 7: to ensure reliable and affordable energy worldwide by 2030.

Access to electricity and clean cooking solutions are separate objectives of Sustainable Development Goal 7 (SDG7). Programs tackling these aims have been largely disconnected, however new research identifies virtuous cycles from their joint consideration: increasing electric cookstove penetrations increases electricity consumption, lowers electricity unit-costs through the realization of economies of scale, and improves the viability of electric cookstoves, continuing the cycle.

More than a billion people worldwide live without access to basic electricity: One in every six people on Earth doesn’t have enough energy at home for indoor lighting or even to charge a mobile phone. But as appalling as that figure is, it has misled policy-makers, nonprofits, and funders about the true extent of global energy poverty.

Context: Power Africa is a US government electrification initiative. With over $50 billion in aggregate commitments since its creation in 2013, it is one of the world’s largest public-private development partnerships.

Energy Poverty conventionally refers to the lack of household electricity. Over 1 billion people live without reliable sources of electricity — but a new group seeks to change how we think about energy poverty. We kick off talking about energy poverty–specifically why the traditional definition of that term may be an inadequate understanding of the problem.

This Memo was drafted in collaboration with Patrick Okigbo of Nextier Advisory In 2016, Nigeria signed power purchase agreements (PPAs) worth US$2.5 billion with 14 independent power producers (IPPs) to build a total 1,125 megawatts of installed solar capacity for the national grid.

When natural gas is brought to the surface but cannot easily be used, it is burned for disposal or “flared.” Flaring mainly happens when gas is produced as a byproduct of oil extraction.

As the country of Ghana approaches universal access, we examine Ghana's power sector goals.

About half of the world’s employed people working outside agriculture are in the informal economy. Because this diverse sector exists outside the rules and formal administration, little is understood about the current and future power needs of urban informal economies.

Given pervasively high electricity tariffs across the region and rapidly falling CAPEX costs, utility-scale solar may be a profitable cornerstone solution to Sub-Saharan Africa’s energy needs. But large-scale solar projects face major execution barriers that cause high pipeline attrition.

Originally posted on World Economic Forum.  Africa is urbanizing faster than any other continent, at a rate of 4% every year, compared to the global average of 2%.

The Millennium Challenge Corporation (MCC) is a small, focused US agency which provides assistance to countries that (a) promote economic freedom, (b) rule justly, and (c) invest in people. Learn how it invests in the power sector.

The World Bank’s Regulatory Indicators for Sustainable Energy (RISE) is a set of indicators intended “to help compare national policy and regulatory frameworks for sustainable energy.” Morgan Bazilian discusses key takeaways.

Can Africans increase their access to energy faster and more broadly through an on-grid or an off-grid approach? Practitioners, advocates and academics who work in the African energy space often fixate on this debate. But the 600 million people without access to electricity in Africa (and yes, it’s still 600 million) would likely prefer a little less debate and a lot more action.

The mobile phone revolution is allowing countries to skip landlines, prompting many observers to assume countries might also skip building an electricity grid and jump right to distributed home energy systems (e.g., here and here). New disruptive technologies are exciting and alluring, especially in sub-Saharan markets where the unmet infrastructure needs are huge. After all, if you can charge your smartphone with a rooftop solar kit, then who needs power plants and a grid?

When we think about energy access, we tend to think about making sure everyone can light their homes and charge their mobile phones.

Last month, Todd Moss joined Dan Runde, Director of the Project on Prosperity and Development at CSIS, on his podcast series Building the Future. Todd discussed what led him to launch the Energy for Growth Hub, a new global network connecting research and policymakers to build high-energy systems.

Geographic Information System (GIS) technologies have the capability to revolutionize large-scale electrification planning. Advances in computer-based electrification planning models, satellite imaging, and machine learning are able to optimize infrastructure planning, lowering the costs of electricity provision and expediting progress.

The global record low tariff for a utility-scale solar PV project has been broken seven times since 2016, all within auction environments, with recent leading bids dipping below US $0.02/kWh, and average prices pushing past the cost-competitive range with coal and gas.

Originally posted in CNN Business: It's no surprise that economies around the world need electricity for economic growth and job creation — not just for keeping the lights on.

Originally in Energy Research & Social Science: Power Africa, the United States’ effort to boost electrification on the continent launched in 2013, has made an impressive start.

Kenya is one of the few African countries that produces more electricity than it consumes. Despite this progress, many households still lack access, those with connections experience poor quality, while reliability stifles economic growth.

Nigeria is home to one in every five Africans and it has the continent’s largest economy. More than half of Nigerians are under 20 years old. Whether all these bright young people will drive growth or generate instability depends largely on whether Nigeria’s economy can produce jobs for them. And Nigeria won’t be able to create jobs at the required pace until it solves its energy crisis.

From the Hindustan Times: Ashwini K Swain, one of the authors of Mapping Power, examines Andhra Pradesh’s game-changing plans to improve electricity access without increasing costs for consumers.

Nigeria is Africa’s largest economy, but also has one of the widest energy gaps in the world. With a quickly growing population, Nigeria urgently needs to improve its power sector.

Board Member Tisha Schuller and Advisor Seth Levey write in Scientific American: We have come to understand that energy is among the most important anti-poverty tools....

Board Member Rachel Pritzker writes in the Stanford Social Innovation Review: Imagine living permanently without power. What would this mean for your health, for your children’s education, for your livelihood....

Energy access is one of the keystone development metrics. But how do we define "access", and what limitations does this methodology have?

Africa needs jobs. Jobs require energy. A low energy future is a jobless future. If millions of young Africans and their families are to escape poverty and have a more stable and prosperous future, the challenges of large-scale power must be solved.

Nesistats: Began in 2015 (and made public in 2017) as an initiative of the Advisory Power Team in the Office of the Vice President to share vital statistics, reports, projects on the power sector, as part of the Power Sector Recovery Programme in Nigeria. NERC: The Nigerian Electricity Regulation Commission (NERC) online library provides useful documents, data, and reports on the electricity sector. NBET: The Nigerian Bulk Electricity Trading (NBET) company provides industry and market data as well as working papers on the power sector. Energy Mix Report: an energy publication, news service and resource centre for industry professionals with a primary focus on the Nigerian energy sector. PSRP Brochure: Provides overview of Power Sector Recovery Programme (PSRP) Nigeria Electricity Hub: An online portal that provides a variety of platforms for the analysis and dissemination of power sector-related information and dialogues. Gas Generation: http://www.nigeriaelectricityhub.com/download/gas-power-generation/ Hydro Generation: http://www.nigeriaelectricityhub.com/download/hydro-power-generation-report/ Solar Generation: http://www.nigeriaelectricityhub.com/download/solar-power-generation-report/ Transmission: http://www.nigeriaelectricityhub.com/download/transmission-fixing-the-weakest-link/ Distribution: http://www.nigeriaelectricityhub.com/download/distribution-addressing-the-final-link/ Journals: Audu, E., Paul, S.O.

Many countries have vast gas resources, but too often they are squandered or simply exported rather than used domestically. Our gas lead, Mark Thurber, describes what is necessary to fix the gas-to-power value chain.