Policy ForumENERGY

Deploying Off-Grid Technology to Eradicate Energy Poverty

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Science  05 Oct 2012:
Vol. 338, Issue 6103, pp. 47-48
DOI: 10.1126/science.1222307

In 2009, about 1.4 billion people lived without electricity, and 2.7 billion depended on wood, charcoal, and dung for domestic energy needs (15). This lack of access to modern energy limits income generation, blunts efforts to escape poverty (6), affects the health of women and children (7), and contributes to global deforestation and climate change (8). Small-scale renewable energy technologies and distributed energy options, such as diesel generators and improved cookstoves, offer rural households modern energy services (6). Programs involving governments, businesses, nonprofit organizations, banks, and community cooperatives have expanded access to these technologies and their services in recent years.

But technology alone is insufficient, and in deploying it, we face pernicious barriers. Drawing from scholarship in community governance and common pool resources (913), as well as field research in 10 Asian countries (see the table), this article offers “design principles” or “ideal conditions” for overcoming many of these barriers. As one village leader told the author, “classically, energy planners have seen the access question as one involving ‘givers’ and ‘takers’: the utility giving electricity or donors giving technology, and the consumers taking it. This completely places the energy services provider and consumer into a false dichotomy.” This dichotomy can lead to project failure, as seen in Malaysia, India, Indonesia, and Papua New Guinea (see the supplementary materials).

Electric utilities defer expanding access to underserved or poor areas because such expansion is believed to mitigate commercial profit (14). Public-sector actors can be stymied by their inability to implement or finance projects and are always under pressure to satisfy other urgent public needs. National planners may hesitate to promote off-grid renewable energy projects, because the technology must be imported or they may want to look for “free money” through international donations (15). Government agencies have prioritized expanding access for urban, rather than rural, areas, and they suffer rapid turnover in staff, due in part to uncompetitive pay and unstable political climates (16).

Prioritize High-Impact Actions

To overcome these sorts of obstacles, planners, retailers, and implementers should select “low-hanging fruit” first, achieving maximum impact on expanding access to modern energy services with minimal effort. Widely accepted in energy and climate policy (17, 18), this idea is not always recognized in energy development circles, partly because of poor education of staff in best practices, as well as limited investment in pilot projects and evaluation. Successful efforts should strive to recognize behavioral plasticity—attitudes influencing acceptance or rejection of a technology—alongside sheer technical potential (10). When structured to emphasize maximum penetration at least cost, measurable benefits can exceed their expense. Evaluations of Nepal's Rural Energy Development Programme (REDP), for example, have documented as much as $8 in benefits per household for every $1.40 expended (19).

Enable Sufficient Financial Incentives

Effective programs almost always offer financial assistance to overcome the first cost hurdle related to off-grid energy technology—another idea accepted in energy policy literature but sometimes forgotten among practitioners who either have large enough budgets to give technology away at no cost or who operate in countries that lack robust financing or microfinancing sectors (20, 21). Microcredit, such as small low-interest loans, is used in Bangladesh to purchase cookstoves, solar home systems, and biogas units. In Laos, Provincial Electricity Supply Companies (PESCOs) own and lease solar home systems for a weekly fee. Cost-sharing from communities can lower expenses. Microhydro projects in Nepal and Sri Lanka asked for voluntary land donations for construction of canals, penstocks, power houses, and distribution lines. It also required villagers to contribute labor and civil works. Proper emphasis of these interventions is on affordability rather than installed capacity.

Distribute Reliable Information

Foreign technical experts and bankers design and implement most energy development programs, and they do not always have reliable information about domestic attitudes and local markets. Yet, valid information on energy technologies and delivery programs must circulate between credible sources and people, including energy end-users themselves. This can occur through formal programmatic demonstration efforts and/or informal social networks. In the cases examined here, marketing and promotion involved publication and distribution of catalogs; informational brochures; product displays; Web sites; and advertisements in print, radio, or on television. In Bangladesh, Grameen Shakti conducted large demonstrations of solar and biogas devices and employees made door-to-door visits to familiarize communities with technology. REDPs in China and Nepal, the Renewable Energy for Rural Access Project (REAP) in Mongolia, and the Energy Services Delivery Project (ESDP) in Sri Lanka did “road shows” where experts demonstrated technologies in rural areas.

Maintain Quality Assurance

Prefeasibility studies are important before a project commences as are rigorously setting and monitoring technological standards and after-sales service and maintenance. Yet these are often missing in existing programs because of limited resources and/or a belief that managers already know what's best without the need for consultation or assistance. Successful programs frequently start with pilot programs before initiating full-scale projects and scaling up to greater production or distribution volumes. Independent evaluations of project performance, and/or penalties for noncompliance make a difference—as does setting realistic expectations. Grameen Shakti in Bangladesh closed offices and refused to pay participating organizations if they did not meet financial requirements. The REDP in China and REAP in Mongolia fined manufacturers millions of dollars for violating technical standards. The ESDP in Sri Lanka required that villagers interested in hydro schemes establish an electrical consumer society, solicit a project developer, fulfill administrative requirements, and obtain verification from a chartered engineer before they proceeded with loan applications. Successful programs emphasize after-sales service and maintenance, ensuring that rural populations or technicians care for systems. This can occur on the “supply side” through product guarantees, warranties, and assurances to buy back systems if communities are connected to the grid; or the “demand side” through training and free maintenance. The Mongolia REAP, for example, gave financial support for warranties and after-sales service call centers.

Encourage Nested Institutional Arrangements

Effective programs tend to receive external political support, including a dedicated or experienced implementing agency, integration with other policies and regulations, and a clear project champion. Approaches to secure such political support are complex and beyond this article's scope, but it is clear that planners may want to limit time and money spent on projects without such support because they may be hard-pressed to succeed and sustain themselves. The ESDP in Sri Lanka, for instance, was backed by public subsidies for electrification, as well as a renewable portfolio standard and tax credits; its advocates changed the constitution so that off-grid and grid-connected developers had legal rights to distribute and sell electricity.

Effective programs distribute responsibilities among diverse stakeholders, especially nonstate actors and community leaders. This allows for sharing of risks as well as “nested” organizational multiplicity, which can create checks and balances. Involvement of women's groups, multilateral donors, rural cooperatives, local government, manufacturers, nongovernmental organizations, and consumers can increase performance of partnerships. Such input can accelerate feedback to correct errors and handle disputes and can improve legitimacy, because programs with broader support are less likely to be opposed, protested, or even attacked during civil wars and internal conflicts (22, 23). Typically, effective programs transcend multiple scales, from self-governance (e.g., community-formed microhydro functional groups in Nepal, cooperatives in Indonesia, and PESCOs in Laos) to national agencies (e.g., the Sustainable Energy Authority of Sri Lanka or Alternative Energy Promotion Center in Nepal) to international actors [e.g., the United Nations Development Programme (UNDP), World Bank, Global Environment Facility], making them “polycentric” (12, 13).

Build Human Capacity

Efficacious programs undertake capacity-building, including strengthening technical or managerial capacity of private and public firms and educating villagers and communities about productive energy uses. Planners can neglect to build capacity out of hubris, thinking that their institutions already have sufficient expertise; a desire to focus on the “simpler” act of deploying technology instead of the more difficult act of building human institutions; or, in rare cases, bias and corruption. Effective interventions have built private-sector capacity through basic research grants; manufacturing and production loans; and efforts to standardize, certify, and test technology. Programs can train staff at rural electricity companies, cooperatives, and manufacturers in tariff setting, metering, billing, revenue management, accounting, and auditing, as well as formulating business plans, advertising, and marketing. Other private-sector support can include staff recruitment and education, establishment of rural outlets, and expansion of inventory. Public-sector capacity can be improved through recruiting new staff, devising electrification and renewable energy deployment master plans, operating databases and new computer systems, and conducting feasibility studies and resource assessments. Assistance can enhance the ability to monitor and evaluate projects, report results, arrange bulk purchases, and create or upgrade government research and testing laboratories. Community-scale programs can educate households about energy and income generation (e.g., China's REDP offered nomadic herders tips on using solar electricity for lighting and to separate milk and cheese and for charging mobile phones).

Conclusion

Rural energy users must be viewed not as passive consumers but as active participants in energy projects. None of these principles or this shift in focus is necessarily new. Yet, energy development practitioners may be too busy, too determined to push a particularly “favorite” technology, or too proud to learn from each other and the academic literature to take them into account. In some cases, maldevelopment or negative impacts can occur if programs waste precious resources. Practitioners, and those interested in energy development, could start by shifting how they conceive of energy technology and program structure (table S4). No matter how dazzling and promising advances in energy science and technology may be, it will have an extremely limited effect in eradicating energy poverty unless programs take these principles into consideration.

References

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