Green energy for developing nations

Paradoxically, those nations which are most vulnerable to climate change’s ill effects also require significant energy investment. Yet, emerging economies such as China’s and India’s cannot grow whilst still relying on coal-fired electricity and oil for transport. The consequences for the planet and human lives would be catastrophic. It’s clear that developing countries must leapfrog current technologies in favour of low or zero-carbon energy sources.

This may seem an unfair burden to impose on less prosperous nations. Yet, solar power is becoming financially attractive, in addition to it’s green credentials. The levelised cost of electricity, or the minimum price for which electricity must be sold so that a power plant breaks-even, shows solar power converging on gas and coal. Such gains were driven by significant cost reductions in the manufacturing of solar panels since 2010.

Long-term contracts to purchase solar power in developing countries including South Africa, the United Arab Emirates, Peru and Mexico support such analysis. The Economist cites an example earlier this year: Enel Green Power, an Italian power company, won a tender to provide Peru with 20 years of PV solar power at a rate of less than $48/MWh. Soon after, Mexico also awarded the company a long-term contract to generate solar power at a price of about $40 per MWh. Bloomberg New Energy Finance describes these contracts, and another awarded to ACWA in Dubai in January, as the lowest subsidy-free solar contracts seen so far. 

Large grid-connected solar projects in China and India accounted for most of the global growth in solar capacity additions last year. China’s biggest project yet – a 200 MW solar power plant  in the Gobi desert – is now under construction. It could eventually power up to a million homes. The Indian government is flirting with offering 2-4 GW tenders for solar power plants. Solar power is central to both the Chinese and Indian governments’ plans for economic growth and reducing greenhouse gas emissions. 

Off-grid solar in Africa

Grid-connected, large-scale solar does not suit developing countries currently lacking in grid infrastructure though. Further, difficult terrain, a significant rural population or remote communities present a challenge to electrification. M-Kopa is an innovative company currently bringing cheap, off-grid solar electricity to more than 200, 000 households across Kenya, Uganda and Tanzania – reaching places that landlines and power lines do not. Customers pay 35 dollars upfront for a solar panel, LED bulbs and a flashlight, a radio and cellphones chargers. The package would normally cost around 200 dollars. This is paid off, via a mobile banking service, in installments proportional to the amount of energy consumed. Once their initial loan is paid the electricity is free.

By M-Kopa’s own estimate over 80-percent of their customers live on less than 2 dollars per day. An average off-grid Kenyan household spends 75 cents per day on energy. Kerosene is the most common source of energy – used to cook food and light homes. A customer saves about 750 dollars over four years after switching to M-Kopa’s basic solar kit the company claims. Kerosene is not only expensive, it is also very pollutive – its fumes cause nose and throat irritation, respiratory disease, and blacken the walls of homes. Its combustion also releases greenhouse gases. Yet, M-Kopa is a profitable, private firm – the green benefits are almost an accident.

Self-sufficient energy islands

In Haiti, the poorest country in the Western hemisphere and devastated by the 2010 earthquake, more than 75-percent of the population does not have access to electricity. Non-profit EarthSpark International estimates that rural Haitians spend 6.5-percent of their annual income on kerosene and candles for home lighting, whereas the average American family contributes only 0.5-percent. The inhabitants of Les Anglais had no electricity and relied on kerosene until Earthspark brought a self-sufficient, solar microgrid online last year. The pay-as-you-go system has connected hundreds of homes and reduced households’ energy costs.  Earthspark has ambitions to install a further 25 microgrids throughout Haiti.

The grid-connected electricity that does exist in Haiti  is generated  by burning diesel imported from Venezuela. Isolated islands, such as Haiti, suffer disproportionately from upswings in global energy prices, being dependent on fuel imports. In this context, renewables can become highly competitive with imported fuels for electricity generation.  

An abundance of wind and sun also makes islands well-suited to renewable energies.   Electricity storage technologies are needed to ensure reliable supply from the grid though, since islands also lack interconnections to other regions. Akuo Energy, a French renewables company, has used lithium-ion batteries, existing technology, alongside solar power plants in French overseas island territories to provide a reliable source of clean power. A number of facilities are now in operation in Corsica and Ile de la Réunion that have contributed to improving the islands’ energy self-sufficiency.

Islands with tropical climates also have the necessary oceanic conditions to take advantage of an established renewable energy technology called Ocean Thermal Energy Conversion. OTEC relies on a temperature difference between colder deep water and warmer shallow water. The difference is exploited to vaporise a working fluid circulating in a closed circuit, which in turn spins a turbine coupled to a generator. This provides a reliable, steady source of electricity and no pollution. An OTEC demo facility began operations in Hawaii in 2015 and is currently powering around 150 homes. A pilot project in Martinique is being jointly developed by Akuo Energy and DCNS. Construction is expected to get underway this year. Installation will make this facility the largest OTEC project to date.

The COP21 agreement signed in Paris last year specifically mentions small island nations in the text. This recognises their unenviable position as victims of both climate change and energy poverty. The climate change related calamities visited upon islands include rising seas levels, more intense and more frequent droughts and cyclones, as well as a heightened vulnerability to airborne diseases. Clean energy development is imperative for such island nations, as well as other developing countries: to reduce their energy bills, lift communities out of energy poverty and to improve their self-sufficiency. Incidentally, this will also help bring greenhouse gases under control . 


Coal condemned

During the last decade, the majority of the OECD countries decoupled their economic growth from energy consumption. Normally these rise in tandem – a trend that persists in developing countries and world’s soon-to-be fastest growing and most populous nation, India.

This decoupling happened as developed nations shifted to providing services and building knowledge economies, which is less energy-intensive than industrial production and manufacturing. China too has started down this path. Policy-makers now talk of “decarbonising” the economy. That is, only producing and consuming energy which does not release greenhouse gases into the atmosphere and contributing to climate change.

Decarbonisation is currently focussed in the electricity sector where it is being helped along by policy incentives. Subsidies, guaranteed prices for electricity and tax-breaks dramatically boosted the growth in renewable electricity generation across Europe in the last few years. The liberalisation of Europe’s electricity markets and new regulation improving competition also played a role. Although, falling prices and technology gains spurred the sector’s expansion more than any government policy, particularly for solar power.

For renewables’ expansion to make any difference to greenhouse gas emissions coal-fired power production has to be tackled. Although it is cheap, burning coal releases significantly more greenhouses gases than other fossil fuels including gas in the electricity sector and oil in transportation. Europe’s aging fleet of coal-fired plants are also extremely inefficient at generating electricity compared to newer gas-fired units. A quarter of electricity in the European Union and almost forty-percent in the United States is still generated by burning coal. It is around two-thirds of the electricity mix in China where the resulting air pollution in its major cities is fuelling a sense of urgency.

Political leaders are aware of this danger and are acting to reduce coal production and consumption in many countries around the world. By 2025 all coal-fired power in the United Kingdom will be shut down according to current plans. New Zealand will close its two remaining large-scale coal-fired power plants in 2018. The provincial government of Alberta in Canada, where the tar sands industry alone produces more emissions than Portugal, has announced plans to phase-out coal power over the next fifteen years. China’s goal is to cap coal consumption in 2025 and accelerate its decline thereafter.

President Obama’s Clean Power Plan intends to restrict emissions from current coal-fired power plans, substitute coal with gas-fired or zero-carbon generation and impose strict emissions standards on new plants. The goal is to cut emissions in the electricity sector by a third relative to 2005 levels. Coal mining states have fiercely contested this “war on coal”, which is bound to be difficult for certain towns and regions whose local economy and workforce are dependent on coal mining, not just in the US. Nevertheless, coal needs to eventually exit the electricity sector if the commitments made by the US and 195 other countries at COP21 in Paris late last year are to materialise.

Yet, none of the above is enough to slow climate change. India is set to contribute the greatest share of growth in global coal demand in the future, mostly from increased domestic production. How it intends to reach its goal to produce forty-percent of its electricity from non-fossil fuel sources by 2020 is unclear. In Germany, coal’s resurgence in the power sector has cast a shadow over its achievements in increased generation from renewable resources. Angela Merkel’s government is working on a plan to phase out coal by mid-century. From the European Unions’s biggest economy this is too long to wait. Decarbonising electricity production by phasing out coal remains a long way off. Coal has been condemned by the world’s leaders but not yet replaced.