REN21 blog: Distributed renewable energy in developing countries

Key to universal energy access: In advance of GOGLA’s 4th International Off-Grid Lighting Conference and Exhibition

If universal electrification has a chance to succeed, according to the International Energy Agency (IEA), 55 percent of all new power between now and 2030 must come from decentralised energy sources with 90 percent of it being renewable.[i]

Renewable energy plays an increasingly central role in the provision of energy services to people globally. Over the past number of years, renewable energy has grown at an unprecedented rate and accounts for 19.1 % of final global energy consumption. Global renewable energy capacity has more than doubled in the past decade and, in 2014, approximately 60% of the net addition to the global power capacity came from renewables.[ii]

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REN21 Renewables 2015 Global Status Report – Estimated Renewable Energy Share of Global Final Energy Consumption

Technology advancements and a dramatic decrease in costs have made renewables broadly cost competitive with conventional energy sources. Thus, it is not surprising that some USD 270 billion was invested in renewable power and fuels in 2014, increasing to 301 billion when we take into account large-scale hydropower (> 50 MW). It is worth noting that almost 50% of this was in developing countries. [iii]

In developing countries, renewable energy systems offer unprecedented opportunities to accelerate the transition to modern energy services in remote and rural areas. Increased access to affordable lighting, sustainable cooking and heating devices, communications, and refrigeration; improved public health; and energy for processing and other productive activities achieve this.

In particular, with the rapid decline in the price of renewable energy technologies in the past decade, distributed renewable energy technologies are quickly emerging as the most cost-effective and reliable approach to provide access to modern energy to the majority of the 1.1 billion people still lacking access to electricity and the 2.9 billion[iv] to clean forms of cooking living in rural areas.

Due largely to the substantial cost reductions during the last few years and the growing recognition of their cost-effectiveness, renewables are playing a large and growing role in providing essential and productive energy services.[v] Despite the lack of official data[1], distributed renewable energy technologies appear to have a significant and growing market presence (this includes small-scale solar PV and stand-alone lighting systems, wind, biodiesel, and micro and pico-hydro stations for electricity, heating and cooling units, and cooking devices).[vi]Investment figures indicate that this trend is continuing: In the first month of 2015, off-grid companies received $42 billion from development banks and investors–almost 70% of the total amount raised in 2014.[vii] Many countries have already successfully embraced renewable energy off-grid systems in view of providing access to their population. Bangladesh, for example, currently provides electricity to about 10% of its population through solar home systems[viii] while Tanzania plans to use solar power for 10% of its population by 2017 with the deployment of one million solar home systems[ix].

However, expansion and scale-up of distributed renewable energy remains challenging, increasingly for political and financial reasons, not technical ones. Distributed renewable energy deployment is often constrained by a lack of available financial resources or reluctance on the part of investors and decision makers. The lack of good data on this market is widely acknowledged as another barrier to scaling-up the sector and to leveraging private sector investment. Data is not accessible, not correct or not tracked in a uniform way, making it impossible to aggregate. Policy makers, development organisations, private industry as well as NGOs and practitioners need to collaborate to provide improved and consolidated data that is required to understand market potential, to drive policy development, and to attract investors. I see the 4th International Off-Grid Lighting Conference and Exhibition as the perfect opportunity for all off-grid energy stakeholders to come together and define a path forward for data collection.

 

[1] The data situation on distributed renewable energy in developing countries is challenging, due to the decentralised nature of installations, energy production, and industry structure. So far, reliable quantitative data on global, regional, and often even national distributed renewable energy markets and installed capacities are limited, though authorities at the national and local level are furthering their efforts to improve data surveys and other means of data collection, and international agencies and non-governmental organisations are pursuing innovative approaches to data collection and collaboration.

[i] IEA, 2012, World Energy Outlook, (Paris, IEA)

[ii] REN21. 2015. Renewables 2015 Global Status Report, (Paris, REN21 Secretariat).

[iii] BNEF/UNEP Frankfurt School Collaborating Center: Global Trends in Renewable Energy Investment 2015

[iv] Global Tracking Framework 2015 Summary

[v] World Bank, Global Tracking Framework: Energy Access (Washington, DC: 2015), http://www.ren21.net/Portals/0/documents/e-paper/GSR2015/page230.html

[vi] REN21. 2015. Renewables 2015 Global Status Report, (Paris, REN21 Secretariat), Reference Table R22

[vii] http://www.greentechmedia.com/articles/read/off-grid-solar-firms-closed-64m-in-2014

[viii] REN21. 2015. Renewables 2015 Global Status Report, (Paris, REN21 Secretariat).

[ix] http://www.pv-magazine.com/news/details/beitrag/tanzania-announces-one-million-solar-homes-initiative_100018261/#axzz3bufe5LkN