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Particpants in the
Africa Economic Summitwill discuss solutions to providing impoverished communities access to energy. Paul Rapp of BC Hydro and Project Manager of the World Economic Forum's Energy Poverty Action task force, sets out the needs and challenges of bringing power to the people in Africa.
What are the energy access needs in Africa?
The Energy Poverty Action (EPA) group is focusing efforts on providing electricity to rural, off-grid communities. In these communities the primary energy needs are for lighting, cooking and industrial uses such as water pumping or milling. A mix of energy sources including biomass (wood), kerosene, human or animal effort and others currently provide this energy.
Some of these energy sources could be replaced more economically by electricity, and electricity offers the potential for new productive energy uses. For example, electrical power has the to potential to replace sources of in-home lighting such as candles or kerosene lanterns and can also provide previously unavailable community benefits such as vaccine refridgeration for a clinic. |
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Electrification has the potential to support other developmental efforts, reduce environmental impacts and provide significant social benefits to a community.
The EPA was initiated by a group of eight energy CEOs during the
2005 Annual Meeting
of the World Economic Forum in Davos. The objective is to contribute to the United Nations' Millennium Development Goals (MDGs) by developing a scheme for the provision of access to electricity to villages that are not yet connected to the grid.
The Energy Action Task Force is exploring at the Africa Economic Summit business models for rural electrification. What are the key components of a successful business model that are on the table for discussion?
Energy poverty is a trillion dollar issue: only a business model can provide the necessary funding. The key components for the business model currently being discussed by the EPA team include:
- Developing a commercially-based product consisting of the services required to deliver sustainable energy systems for rural, off-grid applications. This product will be developed and tested through the successful implementation of a pilot project. Sustainability of the energy systems will require that end users pay the costs of ongoing operation and maintenance, without subsidies.
- Establishing a legal entity (e.g. joint venture) amongst the companies involved in EPA as the delivery platform for the product. This entity would operate on a commercial basis and would receive returns from customers that meet the business requirements of the partner companies (financial, social, environmental or others). Economic sustainability of the delivery platform also implies ensuring that it is commercially viable in the long term.
- Customers would include governments, utilities, communities or NGOs who have a mandate or interest in rural electrification and have the financial capacity to pay for the necessary investment. Funding sources for the customers could include government revenues, aid funding, or donor funding, but assembling adequate funds remains the responsibility of the customer.
Typically, what is the most difficult challenge that you anticipate the Task Force will face and how can this be overcome?
One of the most difficult challenges will be ensuring that the electrification initiative fits the needs of the community. Early involvement of the community will help overcome this challenge by identifying the community needs and designing an appropriate solution that incorporates sustainabilty, community empowerment and capacity building. The technical components are secondary to getting the rest of the solution right.
Looking ahead, how can effective models be expanded to national and regional levels?
The EPA team feels strongly that replicability and growth of rural electrification will only occur if the delivery of these systems is a commercially viable enterprise for those companies involved. If an effective, commercially based model can be demonstrated then the market will naturally expand and grow and the pace of rural electrification will increase.
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