Universal Energy Access

By Tessa Weiss

In a world growing increasingly reliant on electricity for basic living, it is necessary for cities to have reliable access to energy. The World Bank evaluates energy access on the basis of peak capacity, duration of service, affordability, legality, and quality of voltage regulation. By 2050, cities must ensure that their city has appropriate access to energy and that it is affordable for its population. Especially in quickly developing urban areas, an adequate energy supply as well as affordable access is needed to support the development of clean sanitation systems, education, healthcare facilities, and food production.¹ The table below shows the differences in urban and rural electrification rates for different regions around the world.

As the data shows, Africa, primarily Sub-Saharan Africa, has the least amount of energy access in urban areas. Currently, 75% of the world’s energy use occurs in urban areas,² with that number projected to increase by the year 2050 as three quarters of the world’s population is estimated to live in cities by then³ (roughly an increase of 2.5 billion people⁴). Collectively, in urban areas from around the world, 132 million people in these cities do not currently have access to electricity.⁴ In order to accommodate the growing urban population, cities must find a way to provide energy access to its inhabitants in a sustainable manner. These changes can be made through implementing renewable energy as a primary energy source, increasing the resiliency of the electric grid, and defining the ambiguity of peri-urban areas. For the cities with 100% energy access, the energy supply must be made more reliable to offset disconnections caused by weather damages.

Due to unexpected, expanded urbanization, many cities are classified as “peri-urban,” meaning they are in transition between a rural and an urban area. These areas would have a harder time increasing and diversifying their energy sources if there is nobody regulating the energy of the region.⁵ The UPEA III conference on urban and peri-urban energy access identified barriers to energy access in peri-urban areas and solutions to these problems both on the supply and demand side, using case studies in Kenya, Thailand, Argentina, Senegal, Brazil, South Africa, and India. On the supply side, there is an inability to keep up with growing demand and lack of initiatives to encourage connections to the grid in peri-urban areas. On the demand side, electricity has been unaffordable due to high upfront costs and a lack of communication between energy providers and residents. To increase affordability, implementation of prepaid electricity cards and community meters to keep the costs community based could be implemented.⁶

For example, in Dakar, Senegal there are three barriers that limit urban energy access: lack of definition/ understanding of peri-urban areas, illegal power connections, and a high initial cost (up to $650) for houses more than 30 meters away from the grid.⁷ These peri-urban areas in Senegal fall into an undefined zone of having no one to supply them with electricity: there are electric companies for urban areas, and rural electrification agencies for rural areas, but no method for supplying peri-urban areas with electricity. As a result, many illegal connections  form as residents are trying to become connected to the grid and many people do not have access to electricity. Policy that addresses urban versus peri-urban areas as well as strategies for increasing energy access are necessary. Illegal connections arise from undocumented sources of energy or illegal settlement of the dwelling. To promote legal energy connections, more valid connection options must be available as well as a way to provide residents legal settlement of the dwelling. The high upfront cost could be dissolved into the monthly payments of the electric bill over a period of time to reduce the large cost of far away connections. The government will have to provide additional fiscal investments to expand energy availability to these growing areas.  In addition to extending the electric grid, diversifying the types of energy sources will provide energy security to the growing population, especially if the region is not dependent on imported fossil fuels. Renewable energy provides this diversification and energy independence. In Dakar specifically, solar thermal energy provides a good source of energy for city buildings and solar provides an excellent way to foster connections to the grid for houses located more than 30 meters away from the grid.⁷

In order to ensure that electricity is reliably supplied to its final consumer, the electric grid must become more resilient, especially as extreme storms are becoming more prevalent as a result of climate change.⁸ In the U.S., from 2000 to 2014, the average monthly power grid outages increased six fold, primarily due to aging technology, growing population, and increased severity of storms.⁹ In order to reduce the number of power outages, we must increase proper recovery techniques and timely responses to outages, durability of the technology, and reliability of the  “backup plan” when there are power outages.¹⁰ As the transition to renewables continues, we must design reliable energy storage techniques since renewables cannot be “on demand” like fossil fuels are: they are dependent on the weather. For further information about energy storage, reference the article “The Importance of Energy Storage.”

Making the electric grid less susceptible to weather patterns can have profound economic benefits, as countries can spend billions of dollars fixing damages from storms, many damages of which stem from the electric grid. For example, during Hurricane Matthew, 2.5 million residential, industrial, and commercial energy consumers lost power on the storm’s most damaging day.¹¹ However, due to the implementation of a “smart grid,” 70% of the 2 million overall affected customers in Florida were able to receive power within 24 hours of initial power loss.¹² The smart grid allows greater user-utility interaction, decreased response time in the face of disaster, and increased user input to monitor energy usage. The smart grid ideally consists of smaller microgrids with a large microgrid backbone combined with the ability to sense potential problems (such as potential outages) and fix them before they cause more damage. To update the grid in the U.S., it will cost an estimated $17 to $24 billion dollars averaged out over 20 years. However, it will reduce outage costs by $49 billion per year, so there are a savings of around $20 billion per year.¹³ Thus, the investment into a smart grid system to reduce the frequency of power outages, as well as improve overall efficiency of energy transmission and usage, will pay for itself and save the city money in the long run.

Renewables may have a higher initial cost of installation than fossil fuels but the price of renewable energy sources are falling. For example, in the US the price of solar for large scale projects has dropped by 70% from 2008 to 2014.¹⁴  Marc van Gerven, Vice President of global strategic marketing at First Solar, said “up to 50% of the cost of a fossil plant is the expense of the fuel over the life of the plant, while sunlight is essentially free.” Combined with the economic benefits of renewable energy, renewables are a far better option than enhancing fossil fuel energy sources in growing areas. Renewable energy has the potential to increase global economic output by 1.1% by 2030, primarily through employment of 24.4 million people mostly in construction, fuel sources, and manufacturing fields.¹⁵ Fossil fuel prices are projected to increase as the resources become increasingly rare, while the price of renewables is falling as the technologies become more common and reliable.¹⁴ However, more incentives must be established to accelerate the motivation to increase the presence of renewable energy systems, especially for developing areas where fossil fuel implementation is favored (see the article “Methods for Energy Production”). Renewable energy has a higher initial cost than non-renewables, but it can be built more quickly leading to more immediate energy access, in turn leading to more immediate economic development. Wind farms can be built in nine months and large-scale solar plants in three to six months, where as coal or gas facilities can take several years to build.¹⁶ If a growing city can afford to make the initial investment into renewables it will experience connection to the electric grid quicker and save money in the long run, partly because the overall cost of renewables declines as they are used more as renewables do not have to account for continuous costs of production as heavily as fossil fuel sources do.¹⁷ World banks must increase efforts to fund energy initiatives in impacted countries.¹⁸ In addition, private investors and governments must be willing to support the investment. More information about renewable energy can be seen in the article “Methods for Energy Production.”

100% energy access for city populations can be achieved through increasing the durability of the grid, defining proper policy of peri-urban areas, and implementing renewable technologies as the primary source of energy, but this cannot happen without the proper funding. Funding can come from private investors, world development banks, and the country and city governments in order to make the initial expansion of renewable energy systems possible. For example, the World Bank donated $190 million of an estimated $290 million project to support Bangladesh in connecting to the grid.¹⁹ This investment resulted in 650,000 connections to the grid and over 2 million solar home systems installed between 2002 and 2013. Bangladesh is not stopping now as it has plans to become the ‘first comprehensive solar nation in the world’.²⁰ To see how development banks play a necessary role in achieving universal energy access, Bangladesh can be looked to as an example to show that achieving universal electrification through the use of renewable energy is not a far off concept; It is happening now. The UK has set up a Green Investment Bank to specifically fund environmental related projects and improvements , however the institution will not be successful in isolation. A carbon tax and public support will foster the switch to renewables.²¹ Similarly, Scotland has a renewable energy investment fund and Hungary has an energy efficiency co-finance program that offers a credit guarantee to investors. These financing initiatives encourage renewable energy development and implementation, and other countries, such as Jordan for example, are looking to learn from their advantages and pitfalls.²¹ To attract private investors, green bonds could be used to fund new projects or refinance existing ones.²² However, at the end of the day private investors will invest into whatever they think will make them money. If we encourage public education about the need for renewables and energy access in developing cities as well as the urgency of the situation, public investors will view the situation as a wise investment.

In order to achieve this goal, cities must promote the use of renewable energy resources, increase the resilience of the electric grid, enhance the durability of the grid, and properly define peri-urban regions. Through funding from public investors and world banks they will be able to better finance the projects to complete these requirements, but they will see the economic benefits start to pay off after the technologies have been implemented. It is possible for cities to achieve 100% energy access by 2050, and by following these recommended solutions a city will be able to do so.