LC

Low Carbon Electrification of Remote Locations

Universal access to electricity can be achieved through low carbon solutions.

No more than 1 trillion tonnes of carbon can be released by human activities if we are to limit warming to 2°C and therefore avoid the most dangerous climate impacts. At the same time, more than 1.2 billion people, 20% of the world’s population, are still without access to electricity. Almost all of these people live in developing countries. The majority of existing, remote electricity supply is based on diesel. With Africa’s population expected to double and world population to exceed 9 billion by 2050, continuing business-as-usual for remote electrification will cause an explosion in greenhouse gas emissions.

Much of the required technology for remote, low carbon electrification exists, but there are significant barriers to implementation of these solutions. The business solution accelerates remote electrification through the formulation of “solution packages” designed to meet needs ranging from providing light or charging electronic devices in single households (kW) to grid-equivalent electricity supply for sizable communities or production locations (MW). The solution provides recommendations on the policy and financing environment as well as on new business models and investment decision-making processes, to enable access to modern services and make a significant contribution to the goal of universal access to all.

The Business Case

  • It is economical. Renewable energy is in many cases the most economical solution for village electrification, with the Levelized Cost of Electricity (LCOE) lower than diesel fuel. Renewable energy avoids the impacts of transporting fuel over long distances.

  • It creates value. Value is created for companies in the energy sector as well as companies that want to produce goods and services. High global remote electricity need (and market) is estimated to be almost 600 Terawatt-hours by 2030.

  • It demonstrates commitment to corporate responsibility. It addresses the development needs of nations while aiming to transform energy systems to ensure that net cumulative emissions do not exceed 1 trillion tonnes of carbon.

  • It delivers solution sets for policymakers. The solution toolboxes will assist informed and possibly faster decision-making as well as facilitate deployment of the technology in developing and emerging economies. This will lead to a significant contribution toward reaching those without access to modern energy services.

  • It increases the capacity of energy providers and governments to develop national resources to provide electricity that is reliable, affordable, efficiently produced and environmentally protective.

Timeline

Now

Background research

  • Survey current, relevant initiatives, identify areas for potential cooperation/leverage and identify speaking partners in those organizations.

Years 1-2

Project set-up and development

  • Identify target countries; survey policymakers. Identify stakeholders/speaking partners.

  • Select region(s) for implementation of solutions.

  • Identify electricity access needs in target areas and select scenarios. Map technology solutions and partners for identified scenarios.

  • Identify barriers to implementation and good practices/success stories for scenarios.

  • Design a plausible policy pathway and map key stakeholders for delivery.

  • Develop solution “toolbox” for decision makers, including technology solutions, policy recommendations, case studies, possible business model solutions and communications material.

Years 3-4

Project implementation

  • Work with stakeholders to help implement remote low-carbon solutions, such as containerized energy, off-grid and mini-grid solutions.

Enablers

Regulations:

  • Legislation and standards.

  • Market deployment support.

  • An integrated systems approach.

Partnership. Partnership with a range of organizations with interests in low carbon remote electrification.

Awareness, capacity building, education:

  • Sharing of best practices among sector practitioners.

  • Capacity building to operate, manage and maintain the solution.

Data and technology. Development of technology sets.

Effective business models. Innovative models such as one-handed dealer credit, two-handed end-user credit, fee for service, lease/hire purchase, etc.

Barriers

  • Knowledge of available technology solutions. A variety of technologies is available, but solutions for remote electrification are often very specific to the location and social/economic environment. Policymakers often are aware neither of the variety of solutions nor of their appropriate applications, leading to slow decision-making or selection of “proven” fossil-based solutions.

  • Lack of policy frameworks. Energy policies focus on grid-connected energy generation. Electrification in remote areas requires different technical solutions, different business models and generally different players are involved. Appropriate policy frameworks are required to support this development.

  • Financing/business models to support scale. Often electrification business models are developed project by project, limiting scalability and broader implementation.

  • Decision-making process for financial investment.

Relevant priority areas