Putting an end to energy poverty is potentially within sight. Distributed renewable energy can deliver energy access to the billion-plus people around the world who lack it a lot faster than many people realize — and far quicker than the traditional approach of extending centralized electricity grids.
That’s one of the key messages of a new report, Decentralized Renewables: From Promise to Progress, released earlier this week by Power for All, an advocacy group whose mission is to achieve universal and cost-effective sustainable energy access within 10 years.
Power for All's goal is even more ambitious than the United Nations, which wants to achieve universal energy access by 2030. The UN's goal will be impossible if policymakers stick to the old playbook, say the report authors.
“The grid had 100 years to get it right. It had its day,” said Kristina Skierka, Power for All’s campaign director and a co-author of the report. Rather than rely on a single, overburdened government agency and utility to extend the electricity grid to rural areas, Skierka said that distributed renewable energy catalyzes the interests of many different renewable energy companies and consumers.
“There’s an entire human contingency who want to be involved in solving this problem, and that goes all the way from these companies who are ready and eager to sell their products to the consumers themselves who have shown they want a different solution and are willing to pay for it,” said Skierka, who spearheaded the state of California’s energy efficiency strategic plan and the Flex Your Power campaign.
“If we make the tent bigger about solving the problem, can we get there faster? Absolutely, we can.”
A policy roadmap
Capturing the promise of distributed renewables will require important policy changes.
“We need policy to catch up with the technology,” said Skierka. The report, which was written with policymakers as the target audience, outlines five key policies that should be pursued to dramatically accelerate growth of distributed renewables. They are:
- A reduction of the import duties and tariffs that are often levied on renewable energy products
- Expansion of local finance through loans, grants and microfinance
- The establishment of either energy access targets or national electrification commitments
- The inclusion of distributed renewables into rural electrification plans and programs
- The adoption of quality standards for products and services, and technical regulation of mini-grid operators using established licensing procedures
With a focus on making recommendations actionable, the authors also suggest process improvements aimed at speeding the advance of renewable-supportive policies.
They include: ensuring that decentralized renewables are included in national energy policies and rural electrification plans; including distributed energy in integrated planning so that it receives equal consideration alongside grid extension, mini-grid and standalone system initiatives; and the institution of collaborative policy design processes that include government, the private sector, funding organizations and civil society players.
A focus on practical solutions
To identify the most effective policies to spur distributed renewables development, Power for All used a regression analysis to examine the policies that helped five countries — India, Bangladesh, Tanzania, Kenya and Ethiopia — create high-growth markets. It also compared academic research with real-world trends.
“We supported that [academic research] by asking private sector partners in some of these thriving DRE markets, 'what makes a difference to you?'” said Skierka. “This is not just thought leadership for the sector. So much of what you read is conjecture and there’s no proof. Time and time again, policymakers end up with huge documents full of conjecture and great thinking, but no proof that it can boil down into actionable activity.”
Policies dictated by political will
There’s no single way to make the biggest and quickest difference in catalyzing market growth for distributed renewables. Instead, Skierka said it’s a country-by-country question dictated by what domestic policymakers prioritize. “A lot of times, things that are most helpful depend on the champion,” she said. “In Ethiopia, the new energy minister came on board and wants to make integrated energy planning, the kind we talk about in the report, his legacy.”
While the country-by-country context varies, Skierka said two particular policies can make a big difference in how quickly distributed renewables can scale up. At the core of Power for All’s theory of change is the belief that political will is the essential ingredient needed for markets to explode. Because of that, setting national targets for energy access and rural electrification is vital, because it has ripple effects throughout bureaucracies that change mindsets and eliminate roadblocks to quick implementation.
Skierka’s experience working on California’s energy efficiency plan, which included targets, bolsters her belief in their importance. “I’ve seen firsthand what a difference targets make, and that is an incredibly strong expression of political will,” she said. “At the end of the day, it’s about humans and what we are able to create by our focused direction and energy. If you have human energy focused to solve a problem like this and a commitment to be publicly accountable, it makes a huge difference in how fast things can go.”
Reducing import duties and tariffs on equipment is also important. Although the cost of renewable energy technologies is getting lower and lower, applying tariffs and import duties on hardware makes it more difficult to run profitable and sustainable businesses. “When you put a 25 percent import tax on something that is a public good, think about what a disincentive that is,” said Skierka. “It’s significant.”
One positive example comes from Sierra Leone. In 2016, Power for All began working with the president, the ministry of energy, and a variety of local partners. The country reduced import tariffs on goods and set a goal of delivering power to all its citizens by 2025, with the specific target of 250,000 distributed renewable energy connections by the end of 2017.
Since taking those actions, Sierra Leone’s market has more than doubled, attracting companies like Azuri, Barefoot, Mobile Power, Ignite, Greenlight Planet, d.light and Total.
“A year ago, it didn’t have a decentralized energy market,” said Skierka. “In the course of a few months they have put together a national market and they have put together a campaign with us and we have seen the sector explode.”