Comment: Ashden CEO Harriet Lamb explains why frontline clean energy enterprises in developing countries can’t must not be allowed to fail, despite the grave danger they face because of Covid-19
Reaching the UN’s Sustainable Development Goal 7, clean energy for all by 2030, was a tough challenge even before Covid-19 gripped the world; 860 million people still lack access to energy, making it harder for them to earn, learn and stay healthy. Now development resources are pulled towards tackling the pandemic, and the businesses of clean energy innovators are in grave danger.
Make no mistake – we are at a crossroads. One path leads to a low-carbon future for all, where marginalised people enjoy healthier and more comfortable lives, and are better placed to escape poverty. The other path leads to a world of increasing division, where the climate crisis strikes harder and harder at those who have done least to cause it.
How do we put ourselves on the right road? Ambition. Now is not the time to be shrinking back or giving up. Instead, the world must be more creative, more committed and more radical.
The fight ahead is huge. Those at risk from the economic impact of coronavirus crisis include frontline clean energy enterprises. These organisations use local knowledge and connections to bring clean energy into the heart of marginalised communities.
They form a vital part of the energy ecosystem but play a role far beyond that, bringing food and services to the marginalised, enabling them to earn money through jobs or livelihoods powered by energy, creating a decentralised – and so democratised – form of energy. Quite simply, they are too important to fail.
The danger they face was highlighted in a recent survey by industry body the Global Distributors Collective. It found that 71% of clean energy enterprises that sell everyday items to low-income communities in developing countries, such as low-cost solar lights, stoves, water filters and mobile phone chargers, had lost sales due to low customer income or reduced access to communities. More worryingly, 14% said they had ceased operations completely. That is why enterprises, particularly smaller grassroots ones, with local roots and no international donors in their phone contacts, need urgent support from funders, investors and policymakers.
I see reasons for optimism in the visionary work by governments in some of the world’s least developed countries
As CEO of Ashden, I’ve been inspired by hundreds of organisations specialising in low-carbon innovation around the world who’ve applied for the Ashden Awards. We’ve given awards to 236 incredible organisations since 2001 and we continue to work with the winners and the runners up for years afterwards, bringing them together with others in the clean energy sector, funders or policymakers. Every day, the impacts of the climate crisis can be seen in extreme weather events and falling biodiversity, so knowing that there are positive climate solutions happening around the world that have impact and are scalable is an incredible motivator.
I also see reasons for optimism in the visionary work by governments in some of the world’s least developed countries, as in the example of Togo.
In 2017, only 40% of the Togolese population had access to electricity, dropping as low as 8% in rural areas. Many disadvantaged rural households were using candles, battery torches and kerosene lamps for lighting.
In response, the Togolese government has committed to providing electricity for every citizen by 2030. Its approach is an imaginative hybrid, drawing on a combination of electricity grid expansion, rural mini-grids and solar home systems. By offering a combination of routes to energy, Togo is overcoming some of the regional and access challenges faced by rural people. That’s why the Togolese Agency for Rural Electrification and Renewable Energy won this year’s ward for system innovation for energy access.
This approach includes subsidies for the poorest families, and work to train technicians that can support the arrival of energy systems in homes across the nation. At least 50% of the new technicians will be women, reminding us that progress towards SDG7 goes hand in hand with other development goals, such as gender equality. Energy enterprises also play a crucial role, installing the off-grid solutions so important in remote communities.
Another great example of public-private innovation comes from the Beyond the Grid Fund for Zambia, which won Ashden’s award for innovative finance in 2019. This initiative, a partnership between the government and global development agencies, offered solar companies the chance to bid for substantial contracts to deliver affordable off-grid energy in rural areas. By taking part they are obliged to service “hard to reach” customers, such as the poorest and those living in the most remote villages, and to deliver impactful, high-quality products. In return, they get the finance they need upfront, overcoming the hurdle that customers on low incomes simply cannot pay for products all at once.
In the next few years, community-owned grids are set to become a common sight at Yemen’s schools and health clinics
Every new connection is tracked and mapped using an impressive data platform, which shows the spread of clean energy across Zambia in real time. The success of the work has triggered the creation of the Beyond the Grid Fund for Africa, which will use the same approach to connect 5 million people in Burkina Faso, Liberia, Mozambique and Zambia by 2025.
National co-ordination is crucial, but must also enable and empower grassroots action. An inspiring example of frontline innovation comes from Bangladesh, which boasts nearly 6 million solar home systems. But up to a third of the electricity they generate, worth $1bn, goes to waste as people’s usage patterns vary from day to day and season to season. At the same time, 50 million people in the country live with no electricity, or an unreliable supply. Most still rely on polluting and expensive fuels like kerosene or diesel generators.
This year’s winner of Ashden’s innovative finance award, energy enterprise SOLshare, tackles these challenges with its peer-to-peer solar energy exchange platform, SOLbazaar. The platform allows households and small businesses to trade electricity with their neighbours. Their technology interconnects solar home systems into a neighbourhood network, so people can sell what they do not need, and buy extra electricity when they need more. Those who cannot even afford a solar home system can plug into the network, at a fraction of the cost of purchasing one.
The power of clean energy is also on display in Yemen, where coronavirus follows years of conflict that have left people displaced and desperately hungry. Work is scarce; for many, food is available but punishingly expensive.
But in three sites across the country, the United Nations Development Programme has helped people set up community-owned solar microgrids, bringing refugees and non-displaced people together, creating much-needed incomes for grid owners, and much cheaper electricity for their neighbours. It is an initiative that won this year’s humanitarian energy award.
One grid in the Abs district is owned and operated entirely by women, a radical act in a country with strict gender restrictions. It has been a long road – as the grid manager says, “they made fun of us, that we want to do men’s work”. But now the whole community benefits, and the women who made it happen are role models. In the next few years, community-owned grids are set to become a common sight at Yemen’s schools and health clinics.
In troubled times, it is heartening to see bravery and bold thinking by leaders in the Global South and communities gripped by poverty and conflict. Funders and investors in the Global North, as well as politicians and the wider energy sector, must show similar ambition and courage, and be ready to take more risks. Ensuring frontline organisations survive the pandemic is the perfect place to start.
This article is part of our in-depth Energy Transition briefing. See also:
SDG7 Covid-19 Ashden Awards Togolese Agency for Rural Electrification and Renewable Energy Beyond the Grid Fund for Zambia SOLshare SOLbazaar UNDP microgrids Yemen