Lack of data is holding back the changes in planning and investment that are needed to scale decentraliesd energy
Today, decentralized energy is often provided by private organizations who see a business opportunity in providing services to unserved and underserved populations with the additional incentive of creating positive and social impact. However, these organizations suffer from several challenges which hinder their ability to propagate these solutions rapidly. In a blog post in the Inclusive Business Hub, Mitali Sahni of Simpa Networks recognized the challenge of slow penetration of these products:
“A big reason for this is the lack of knowledge about the customer segment that is being catered to. In any industry, a clear understanding of the customer’s attributes, behaviours, needs, willingness and ability to pay, and customer segmentation is the basis for the development of a compelling product offering and sales planning… Unfortunately, very little research has been carried out to date in scientifically understanding the needs, motivations and beliefs of target customer groups in the embryonic energy access sector.”
The problem of scientifically looking at the question of how best to deploy decentralized renewable electricity products to address universal electricity access can then be broken up into two questions: how can electricity utilities plan for decentralized options and where can businesses and impact seeking investors focus their relatively scarce resources on?
The importance of geospatial planning in energy access
To address the planning question, it is essential to complement traditional national energy planning tools with geographic information systems (GIS) that account for local energy-related and socio-economic characteristics. Within the electricity sector, the use of GIS data and associated analytical tools can be beneficial in conducting strategic planning as well as prioritizing and rationalizing decision making related to energy infrastructure. However, this type of tools and information is not widely available, making energy access efforts resource intensive. Another hindrance in expanding energy access has been the high transaction costs incurred by regular data aggregation, as there has been no established mean of dissemination of open data through platforms.
Open tools and data are thus quintessential to inform decision-making in the energy field and help bridge science, technology and policy at different levels and in a transparent manner. This will enable users to repeat an analysis and allow planners to carry out new applications.
In this direction, KTH in collaboration with partners has developed an Open Source Spatial Electrification Tool (OnSSET) that estimates investments and technology needs to reach universal access to electricity using 16 Geographic Information System (GIS) datasets such as population density, proximity to power infrastructure, and energy resource availability. Already, planners are putting the open source electrification tool to use. The World Bank and ESMAP are using it to identify cost optimal Electrification Pathways. ABB, an industrial partner on the OnSSET project, has decided to use the tool to identify market opportunities. The International Energy Agency and UNDESA are using it for informing energy access supply strategies. Academia at other universities are using it as well.
But energy access solutions should not only be selected based on a least cost comparison but also on current affordability and potential development impact. To do so, the WRI in collaboration with partners is introducing web-based maps that can help energy entrepreneurs and electricity planners identify potential markets for distributed clean energy. The recently released Tanzania Energy Access Maps visualizes data related to energy need (percentage of households lacking access to electricity), economic buoyancy (measured by percentage of households owning of livestock, radios and iron roofing) as proxies of ability to pay for or invest in clean energy), mobile phone penetration, indicating potential to adopt pay-as-you-go service delivery models.
The tool draws on both publicly available data sources and data collected from surveys and interviews. Users can explore these attributes by region or district to find areas most viable for electricity access implementation efforts. Regions and districts that lack electricity but are economically buoyant are likely to have residents with the economic freedom to invest in clean energy. These areas are likely to attract private investment in clean energy. Conversely, areas that lack access to electricity but are economically vulnerable are least likely to attract private investments. Public support will be needed to meet electrification needs in such areas.
These and other geospatial energy access models are useful planning tools. However, to scale up we need to build capacity within country stakeholders to collect useful data, develop and use maps. This will allow stakeholders and planners to set up their own energy access models according to their requirements and tap onto the growing expertise within the sector. Further, the creation of data standards to facilitate data sharing and reuse as well as comparability across countries and models constitutes a crucial next step. Finally, integrating such geospatial models to powerful interfaces (such as Google Earth) will lead to increased usability.
Why we need new approaches to provide access to energy
About 1.1 billion people lack access to electricity, according to the latest IEA’s Energy Access Outlook: mainly in Sub Saharan Africa and South Asia. The importance of energy services for economic and social development is recognized in the Agenda 2030 for Sustainable Development: a set of 17 sustainable development goals. The 7th SDG focuses on a concerted global effort to ensure access to affordable, reliable, sustainable and modern energy for all by 2030 and targets the elimination of energy poverty, which otherwise would remain an incessant threat to the attainment of Agenda 2030. Modern energy services are a necessary condition for improving quality of economic conditions, health services, education, gender equality, indoor environment of the currently un-served and under-served populations.
The goal of universal energy access is attainable because of the rapid improvements of renewable energy. The development of standalone – distributed – renewable energy products have the ability to provide energy to communities where the costs of providing services by traditional methods is not feasible or cost prohibitive. However, energy utilities – in particular- electricity utilities do not necessarily have the capacity to adopt decentralized renewable energy systems. Moving from planned, centralized electricity systems, towards fluctuating, decentralized and cost effective renewable energy production necessitates considerable modifications in the energy infrastructure and investment in planning methods.
Dimitris Mentis is a Team Lead at the World Resources Institute where he manages the development of the Energy Access Watch. Sanjoy Sanyal works with the World Resources Institute as a Senior Associate Clean Energy Finance.