Four main takeaways from the IEA’s new report on energy access.
I like numbers. They are reliable, they usually don’t lie, and they can be powerful tools when trying to enact big changes: “We are the 99 percent”, “1.5 degrees warming”, “Five will make you get down now.” The International Energy Agency (IEA) plays a key role in providing the numbers to guide efforts in securing electricity for the more than a billion people presently lacking it. They just came out with a new report, and if you’re like me and don’t have time to read all 100-plus pages right away (I don’t like numbers THAT much), here are just four numbers that are worth focusing on, which will have huge implications in the fight to provide energy for all.
1.1 billion still in need
This clearly represents the status of the problem at hand which remains an international disgrace. When 1.1 billion people still lack access to any forms of basic electricity, the challenge of lifting people out of poverty is that much harder. Girls are not able to switch on the lights to study at night; farmers have to rely on (increasingly unreliable) rain or expensive generators and pumps to irrigate their crops; mothers must give birth by candlelight. The report shows that while progress has been made in providing access since the turn of the century (when 1.7 billion didn’t have electricity), too many still lack basic access.
Finance needs to triple
The IEA has estimated that to provide energy access for all, approximately $52 billion a year needs to be provided for energy access initiatives in the Global South. Relatively speaking, this is in the realm of affordability given that governments spend almost ten times that amount propping-up the fossil fuel industry through harmful and inefficient subsidies. Another recent report by Sustainable Energy for All estimates the total money presently being spent for energy access at $19.4 billion – well short of what is needed.
Buried on page 494 of the 2011 IEA World Energy Outlook was this this little gem of a statistic: 64 percent of the financing needed to provide energy for all should go to off-grid energy – which will most directly benefit the poorest communities. It’s a number that I have dined out on for while as it speaks to the heart of the matter of where energy access finance should be targeted. It shows how additional energy finance needs to be split between on-grid projects (for the main, large, centralized power plants such as coal, natural gas and large-scale hydro power) and off-grid projects (primarily clean forms of energy such as solar home systems, and micro-hydro projects). The IEA has now updated its financing estimate, saying that an even greater percentage – 71 percent – of the needed financing should go toward off-grid energy. Yet critically, only 1 percent of finance is heading in that direction at the moment. Most of the energy poor live away from the grid, making grid extension prohibitively expensive, so it is no wonder so many people are still lacking access to electricity given this growing bias toward financing on-grid projects.
1.5 degrees warming – should this matter?
Of course it matters. The energy poor are the most vulnerable to climate shocks, making the resolution of poverty completely intertwined with swift and thorough action on climate change. The report shows that providing the energy poor with cost-effective access to modern electricity and clean cooking has the potential to not increase emissions. Yet, there is a renewed push for the use of coal and other fossil fuels within international forums in the name of energy access – climate be damned. Collectively, the world needs to move toward a just transition away from fossil fuels to make sure we don’t cook the planet, and this does mean the responsible use of the last of the fossil fuels. But this shouldn’t blind financiers to the suitability of the technologies used to meet the needs of the poor. Coal comes with huge local environmental damage and has a poor track record in providing equitable energy access. It is also terrible at integrating with renewable energy in electricity grids due its inability to ramp up or down with demand, while increasingly being the more expensive option.
For all these reasons, one of the most telling findings from the report is a strong rebuke from the IEA to the idea that coal will play a role in increasing access – as it will provide only 16 percent of global energy access by 2030. Renewable energy on the other hand will cover almost 90 percent of all needed investments. As I have written about at length, we can achieve a win-win on energy access and climate, and the IEA has once again reinforced this with new and improved data. Those providing the money and making the decisions however, need to be more driven by the numbers, and less by ideology.