Sus­tain­able en­ergy now

Financial Mirror (Cyprus) - - FRONT PAGE - By Anita Ge­orge

The world has never been closer to achiev­ing the dream of a more sus­tain­able and se­cure en­ergy fu­ture. Re­new­able en­ergy from the wind and sun is be­com­ing com­pet­i­tive with fos­sil-fuel-based power gen­er­a­tion, and oil prices are hit­ting lows not seen for years. Th­ese de­vel­op­ments put us at the edge of a global en­ergy trans­for­ma­tion – as long as we get the next steps right.

Coun­tries are al­ready seiz­ing the mo­ment. With the oil-price drop that started in mid-2014, the first pri­or­ity be­came clear: re­form fos­sil-fuel sub­si­dies be­fore prices go back up. Th­ese sub­si­dies have sapped gov­ern­ment bud­gets, en­cour­aged waste­ful en­ergy use, and in­creased pol­lu­tion and car­bon-diox­ide emis­sions. In­dia has lifted con­trols on the price of diesel. In­done­sia has moved away from gaso­line sub­si­dies. Oth­ers are fol­low­ing suit. Money saved from end­ing sub­si­dies can be bet­ter used to cre­ate safety nets that pro­tect the poor when en­ergy prices rise.

But phas­ing out fos­sil-fuel sub­si­dies, while crit­i­cal, is only a first step in the right di­rec­tion. By tak­ing ad­van­tage of new tech­nolo­gies, now widely avail­able at af­ford­able prices, coun­tries can fi­nally move to­ward long-term en­ergy se­cu­rity and away from the in­her­ent volatil­ity of oil mar­kets.

For low-in­come coun­tries, this means re­duc­ing the use of im­ported oil to pro­duce elec­tric­ity. Kenya, for ex­am­ple, de­pends on heavy fuel oil and diesel for 21% of its elec­tric­ity; the com­pa­ra­ble fig­ure in Sene­gal is a whop­ping 85%; and some is­land states use im­ported diesel for all of their elec­tric­ity needs.

For some coun­tries, this is cur­rently the only vi­able op­tion, but over the long run this de­pen­dence can mean higher en­ergy costs and vul­ner­a­bil­ity to price volatil­ity and sup­ply shocks. With the right poli­cies and in­ter­na­tional sup­port, th­ese coun­tries can in­vest in the in­fra­struc­ture needed to achieve a more di­ver­si­fied en­ergy mix.

For many coun­tries, the next step will be pre­par­ing elec­tric­ity grids to in­te­grate high lev­els of vari­able re­new­able en­ergy like so­lar and wind. Thanks to the drop in the cost of so­lar pan­els and wind tur­bines, both are ex­pand­ing at a faster pace than ever ex­pected. Ac­cord­ing to a new World Bank re­port, as of 2014, 144 coun­tries had es­tab­lished na­tional plans to ex­pand re­new­able en­ergy, and al­most 100 had set spe­cific tar­gets and in­cen­tives. In just seven years, from 2006 to 2013, the world’s in­stalled ca­pac­ity for wind power quadru­pled, while use of pho­to­voltaic sys­tems grew al­most 20-fold. And all signs in­di­cate that the pace of adop­tion is ac­cel­er­at­ing.

Old con­cerns about in­te­grat­ing wind and so­lar into tra­di­tional elec­tric­ity sys­tems are drop­ping away. In Mex­ico, am­bi­tious and fre­quently re­mote re­new­able-en­ergy projects – hy­dropower, so­lar, and wind – are be­ing con­nected to the grid. China, which has the world’s largest in­stalled ca­pac­ity for re­new­able en­ergy, is study­ing the re­quire­ments and costs of up­grad­ing the grid to bring in higher lev­els of dis­trib­uted so­lar power.

As the World Bank re­port shows, with the right in­vest­ments and poli­cies, coun­tries can now meet a large share of their elec­tric­ity needs from vari­able re­new­able en­ergy with­out com­pro­mis­ing the re­li­a­bil­ity of the grid or the af­ford­abil­ity of elec­tric­ity. Th­ese in­vest­ments in­clude en­ergy stor­age, im­proved fore­cast­ing sys­tems, and smart grids – all of which have ben­e­fited from break­throughs in tech­nol­ogy and fall­ing prices.

Per­haps most im­por­tant, en­ergy mar­kets must be opened to new play­ers. For poorer ru­ral ar­eas, this means cre­at­ing a fer­tile en­vi­ron­ment for en­trepreneurs and small power pro­duc­ers to de­velop mini-grids – gen­er­ally pow­ered by so­lar, small hy­dro, or so­lar-diesel hy­brids – that can bring elec­tric­ity to com­mu­ni­ties that would oth­er­wise wait for years for grid con­nec­tions. In Tan­za­nia, small power pro­duc­ers are now able to sell to cus­tomers with­out go­ing through a lengthy li­cens­ing process. In In­dia, re­mote cel­lu­lar tow­ers, which would oth­er­wise have to be pow­ered by diesel gen­er­a­tors, are serv­ing as “an­chor cus­tomers” for new mini-grids.

The terms “sus­tain­able en­ergy” and “re­new­able en­ergy” are of­ten used in­ter­change­ably. But per­haps a broader def­i­ni­tion is needed. Truly sus­tain­able en­ergy is not only clean, with a min­i­mal im­pact on pol­lu­tion and CO2 emis­sions. It is also af­ford­able for gov­ern­ments and cit­i­zens alike; it is re­li­able, drawing on sources upon which we can de­pend for decades to come; and it con­trib­utes to shared pros­per­ity, by bring­ing ser­vices and benefits to all mem­bers of so­ci­ety.

Thanks to lower oil prices, in­no­va­tion, and economies of scale in the re­new­ableen­ergy sec­tor, that vi­sion can now be turned into re­al­ity.

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