Affordable, Clean Electricity for All

Rocky Mountain Institute’s work in sub-Saharan Africa and the Caribbean improves people’s well-being

By Allyn Harvey, a freelance writer and public relations consultant based in Carbondale, Colorado. He has written on the environment and energy issues for a number of publications over the last 25 years.

When communities are electrified, additional benefits accrue, including improved literacy rates and grades because children can study after dark.

Sub-Saharan Africa and the Caribbean are separated by a mighty ocean, but are united by the need to significantly improve their energy situation. In Africa, millions of people live without access to electricity, and many who do have access have unreliable access at best. On the other hand, most Caribbean island residents have access to electricity, but spend a large portion of their income on the imported energy that fuels their islands’ diesel power plants. They spend such a large portion, in fact, that many of them are considered to be living in energy poverty. They also both largely depend on getting energy from fossil fuels. For their sake, and the world’s, it is important for these regions to gain the affordable, reliable electricity they need while avoiding a major increase in carbon emissions.

Rocky Mountain Institute has been working on energy issues in both regions, albeit with somewhat different approaches. RMI’s new Sustainable Energy for Economic Development (SEED) program focuses on sub -Saharan Africa, collaborating with governments and stakeholders to develop clean energy plans and establish the relationships and mechanisms needed to implement them. The Islands Energy Program, led by the Carbon War Room (CWR) business unit of RMI, takes on both design and implementation, providing strategic planning and on -the -ground support with requests for proposals, community engagement initiatives, and more. And both programs are demonstrating the value of pragmatic, unbiased analysis and advice to governments, utilities, development partners, and the private sector about how to improve access, reduce costs, and make significant gains in the use of renewable resources.

“Access to even a little bit of electricity can have an enormous effect on human well-being and economic development.”

In sub-Saharan Africa, RMI experts are working with top government officials in Rwanda, development partners, utilities, and companies to rapidly improve electricity access for large segments of the population that are currently underserved or have no access to electricity. For the government and other stakeholders, collaborating with the SEED program means key decision makers get the information they need to direct spending toward projects that enhance and expand the existing grid, and toward off-grid systems that complement the grid and improve the daily life and businesses of Rwandans.

In the Caribbean, RMI is working with the Clinton Climate Initiative to facilitate the switchover from diesel-generated electricity to renewable generation systems. For the eleven nations working with the Islands Energy Program, RMI’s analysis and guidance offer a chance to stabilize the unpredictability that comes with fluctuations in oil prices and to replace diesel systems — many of which have been in place since World War II and are past their design life — with reliable, renewable energy generation.

“The theory of change in both cases is that if we provide solid strategic advice and project analysis, we will be able to help funders, governments, and utilities direct money to projects that make the most sense and do the most to achieve their goals,” says Stephen Doig, the RMI managing director in charge of the work in both regions. For RMI, the goal is to create a model that can be duplicated as developing economies generate more demand for electricity — one that avoids greater impact on the climate and lowers costs, increases access, lowers risks, and increases security of supply.

SUSTAINABLY POWERING THE POPULATION IN RWANDA

Efforts to electrify the African continent have been slow. The current trajectory suggests that a similar percentage of people will lack adequate access to electricity in 2040 as today. RMI conceived the SEED program in sub-Saharan Africa to address this challenge. The aim is to accelerate access to electricity by promoting energy efficiency, cost-competitive renewables, and thoughtful development of distributed energy resources.

In Rwanda, the first country in Africa to engage in the SEED program, only 24 percent of the population has access to electricity. The government’s goal is to raise that number to 70 percent by 2018 with a combination of on-grid and off-grid technologies.

“Having access to and using even a little bit of electricity can have an enormous effect on human well-being and economic development,” says Eric Wanless, a principal at RMI working on the SEED program. With electricity, children can study at night. Businesses can remain open after dark, increasing economic opportunities for business owners and allowing people who work throughout the

Workers learning to install solar panels at health clinics in Rwanda, where only 24 percent of the population has access to electricity.

day to have time to buy their daily staples. And industries such as grain milling to make flour can provide far more service at greater speed and lower cost when powered by electricity.

The energy challenges in Rwanda are significant. Electricity can be expensive to generate, especially when diesel is used, and, depending on the location, significant energy can be lost in the transmission and distribution of electricity. What’s more, the emergence of off-grid electrification solutions and mini-grids makes coordinated planning across the public sector, private sector, and development community even more difficult.

Another challenge is too much information. Key decision makers in Rwanda and throughout the and expand the existing grid, and toward off-grid systems that complement the grid and improve the daily life and businesses of Rwandans. In the Caribbean, RMI is working with the Clinton Climate Initiative to facilitate the switchover from diesel-generated electricity to renewable generation systems. For the eleven nations working with the Islands Energy Program, RMI’s analysis and guidance offer a chance to stabilize the unpredictability that comes with fluctuations in oil prices and to replace diesel systems — many of which have been in place since World War II and are past their design life — with reliable, renewable energy generation. “The theory of change in both cases is that if we provide solid strategic advice and project analysis, we will be able to help funders, governments, and developing world are constantly being contacted with proposals. “There is so much information coming in, and it’s often presented in inconsistent ways that make it very difficult for decision makers,” Wanless says. “Working collaboratively with local partners to identify no-regrets solutions like investing in energy efficiency can buy time for countries to take a step back and evaluate the options on the table.”

Funded by Virgin Unite, work started late last year in Rwanda with a robust technical and economic diagnostic that involved extensive in-country interviews with local experts and stakeholders, government officials, the private sector, and development partners like the World Bank and the U.K.’s Department for International Development. The diagnostic was delivered this spring with succinct and actionable recommendations that allow the RMI team to work with stakeholders to capture near-term opportunities and hand off ongoing responsibility for implementation.

The fact that RMI began work in late 2015 and is now helping Rwanda take action is one thing that makes the SEED project unique. Most studies of the scope delivered in Rwanda take years and millions of dollars to complete. “In Rwanda, we’ve been moving much more quickly with the government to identify the most important things the country can do to advance the goal of providing electricity that is both affordable and efficient,” says Wanless. “Rapid work and deployment of solutions are really important to deliver meaningful change.”

One important first step is to take advantage of near-term opportunities, which can save money and buy time for the work to proceed. In Rwanda, there is an opportunity to save $20 million per year by switching out compact florescent lighting (CFLs) with LED lighting. The RMI team also provided a critical eye on the development of mini-grids, which provide sustainable energy in smaller communities. They have captured the attention of funders but present real challenges in transforming from donor-funded efforts to lasting business models.

The diagnostic also provided a set of policy recommendations that need to be implemented quickly in order to create the conditions necessary for future success. The RMI team remains in Rwanda to help policymakers fit those recommendations into the nation’s legal framework.

The goal in Rwanda is to supply around 50 percent of the population with power from distributed resources via the grid, and over 20 percent of the population with power from off-grid systems by 2018. During the diagnostic, RMI worked with private sector companies to make off-grid development affordable and compatible with the grid, and to build a robust market that can be scaled up rapidly. The government is now looking at a combination of regulatory changes and a public information campaign to help achieve its ambitious goal.

For several months, RMI will continue to help the Rwandan government, the utility, and development partners implement recommendations from the diagnostic. “It’s important that we aren’t analyzing the situation and providing recommendations from an office in Colorado,” Doig says.

REFORMS DRIVE RENEWABLE ADOPTION IN THE CARIBBEAN

The Islands Energy Program was launched in 2012 at the Rio+20 Summit with attendance and endorsement by Christiana Figueres, then-executive secretary of the UNFCCC, Sir Richard Branson, CWR founder, and CWR leadership. Today the Islands Energy Program is working with 11 island government and utility partners, mostly in the Caribbean, to accelerate the transition off fossil fuels. As in sub-Saharan Africa, these nations are developing economies with limited resources. Island nations such as Saint Lucia, Aruba, and Grenada typically spend about 20 percent of their GDP on oil imports. The average island resident spends 12 percent of his or her income on electricity, above the 10 percent threshold that is considered to impose fuel poverty.

“Island nations are at the forefront lower-cost power. of adapting alternative energy systems into national energy grids.”

The average cost of producing electricity is high: $0.35/kWh — and in some countries as high as $0.52/kWh — compared with about $0.10 in the United States. Far from being carbon neutral, diesel generation systems are antiquated and dirty, affecting public health and the environment. “Nowhere else do you have locations where there is such a high cost of electricity coupled with such high potential for renewable electricity,” says Justin Locke, director of the Islands Energy Program.

The fact that island nations pay some of the highest electricity prices in the world and are among the most vulnerable to the effects of climate change puts them at the forefront of work underway to adapt alternative energy systems into national energy grids. “These nations are in a unique position to inform the transition of other isolated economies, and potentially large economies, to adopt high levels of renewables and put in place the regulatory framework to support this adoption,” says Locke.

Renewable energy such as solar photovoltaic promises a cleaner environment and lower-cost power.

For the outside observer, it would seem that making the transition to a system that employs the abundance of wind and sunshine that exists in the Caribbean would be a no-brainer. Renewable energy promises a cleaner environment and lower-cost power that is not at the whim of world oil markets. But the transition is more complex than meets the eye. “Island governments are challenging the status quo of diesel-based utilities that are monopolies,” Locke explains. “But in order to provide reliable, affordable electricity, utilities must be solvent. Changing the way in which utilities provide and are paid for electricity is a difficult challenge — and one that they must get right the first time.”

In order to address this challenge, the Islands Energy Program is pursuing a three-prong strategy. The RMI team begins by aligning stakeholders around a shared vision, and then conducts a detailed analysis of how to pragmatically achieve that vision, which includes identifying the most cost-effective renewable energy investments. Finally, the team supports utilities and governments in reducing risks involved with implementing projects and ensuring they are prepared to execute them at the lowest cost possible. Underpinning this work, RMI is working with the Caribbean utility association (known as CARILEC) to ensure that the lessons learned are shared among utility engineers and executives working in the renewable energy space.

Several attempts by island governments to introduce alternative energy systems through foreign investment have been unsuccessful. But the RMI team was recently able to help the government of Saint Lucia and its utility lay out a plan to meet their renewable energy targets, and more importantly to develop the optimal ownership structure for reducing consumer costs. This success came after RMI completed a diagnostic that demonstrated that it is more efficient to adopt renewable energy when the utility retains ownership of the assets, such as solar panels. Likewise, energy loads are better managed and consumers end up paying less. This is an important step for the future of Saint Lucia, and it can provide insight to other island nations. In addition to the progress made in Saint Lucia, positive outcomes in recent months include:

  • A contract with Colombia to carry out an energy transition strategy on two islands, San Andres and Providencia
  • Solar microgrid projects underway on select islands in Belize and the Grenadines in Saint Vincent
  • Advisory support to the Turks and Caicos utility on its recent integrated resource plan, and an RFP for a 1 MW solar photovoltaic (PV) project
  • Creation of a regional forum (called CAREC) that enables members, including utility management, systems operators, policymakers, and regulators, to exchange expertise and good practices
  • An RFP for a 7 MW solar PV project in Aruba
  • An RFP for a 3 MW PV project in Saint Lucia, which will be one of the largest renewable projects to date in the Eastern Caribbean, supplying up to 10 percent of the island’s peak demand

Early results have been achieved, in large part, because RMI provides analysis of infrastructure and policy recommendations at a reduced cost. “When we develop projects, the utility and government don’t have to pay us $300,000 or $400,000,” Locke explains. “We subsidize those costs in order to de-risk these projects and provide expertise to make them happen, recovering some of our costs when the project is completed.”

CHANGING THE TRAJECTORY

In addition to providing a model for energy access and development, RMI’s work in Africa and with island nations demonstrates how to reduce the carbon impact of developing economies, which are projected to be one of the primary sources of growth in greenhouse gas emissions over the next several decades.

With SEED and the Islands Energy Program, RMI is creating a template to support rapid development of electricity distribution and direct it toward more sustainable solutions. The work is garnering attention, and support. The SEED program received funding from Virgin Unite and The Rockefeller Foundation to expand its reach to another four to six countries over two years. The Islands Energy Program has secured funding from the Global Environment Facility, the Government of Colombia, and the Dutch Postcode Lottery to scale its impact over the next three years.

“There is a need in developing countries to improve access to sustainable electricity in a cost-efficient manner,” says Doig. “We are building on 30-plus years of work and experience to bring 21st-century solutions to those most in need.”

WEB EXTRA

For more information on this topic, visit: rmi.org/smart_island_economies