Off grid solutions for remote poor

Planners and policy makers have long pondered how best to supply light and power to remote areas of developing countries, where some 1.6 billion people — about a quarter of the world’s population — still live without electricity. The usual solution is to build out centralized power systems, or extend the grid. But such capital-intensive projects present huge challenges for poorer nations, even when foreign aid is involved. On top of servicing debt, "you have to have a system where people pay their bills. You need functional governments," says Russell Sturm, leader of the Sustainable Energy Team at International Finance Corp., the World Bank’s private-sector lending arm.

New approaches are gaining favor that are inexpensive, safe and don’t rely on big utilities or their grids. Aid agencies, nonprofits, environmentalists and start-ups all are involved in initiatives to promote "off-grid" power-generation using renewable resources and other environmentally friendly technology.

The United Nations Development Program, for one, is implementing 153 renewable-energy projects around the world with funding totaling some $556 million. The program has awarded $18 million in small grants of up to $50,000 to communities operating about 820 small-scale renewable energy projects. These include solar-powered water desalination in Mauritius; wind energy for water pumping in Egypt; and micro-hydroelectric plants, harnessing the energy of nearby rivers, to electrify homes and schools in the Dominican Republic.

Elsewhere, Western environmental groups are helping to create off-grid homes, often with electricity
generated by solar panels or wind turbines.

Private companies, meanwhile, are interested in the Third World as a potential market for inexpensive, energy-efficient appliances such as solar-powered lights and hand-crank radios. Some are teaming up with nonprofits and government agencies to get their products in the hands of consumers. Cosmos Ignite, for example, charges $40 for its solar-powered MightyLights, which is more cash than most poor Indians usually have on hand. A several-month supply of kerosene would cost about the same, though, and Cosmos Ignite says its lights last for years. That’s why nonprofit microlenders and Indian government agencies are stepping in to help with such purchases.

In the Philippines, the U.S. Agency for International Development has spearheaded a drive since 2001 to use solar cells and micro-hydro power to electrify hundreds of remote rural communities on the conflict-wracked island of Mindanao. So far, the Alliance for Mindanao Off-grid Renewable Energy, or AMORE, has electrified 413 villages, 320 community centers, 145 schools, and installed 319 streetlights. USAID says the group plans to light up 520 villages by 2009.

Fighting between Philippine forces and Muslim militant groups, including the Al Qaeda-linked Abu Sayyaf, for years stymied government efforts to expand the island’s electric grid to large areas. At the same time, the widespread darkness gave the militants more room in which to maneuver.

"Kerosene was hard to get, so the villages weren’t lighted at night," says Calista Downey, the officer of USAID’s Philippine desk. "Abu Sayyaf and other rebel groups moved about in the darkness. Lighted areas were always safer."

Electricity also has given the local economy a big shot in the arm. Fishermen now have a few more hours of light in which to mend their nets. Markets stay open longer. Children have more light to do their homework. And security has improved. "Perhaps more important than having light, when the villages see their life improving, they’re less likely to give refuge to insurgents," Ms. Downey says.

AMORE, which comprises USAID, the Philippine government, the Atlanta-based power company Mirant Corp., and local authorities, trains locals to operate the power-generating systems. The locals decide who gets to use the power.

Initiatives such as AMORE are getting a boost from the big advances now under way in the production of solar-, wind- and hydro-power technology. "The prices for [solar-energy’s] photovoltaic cells and wind turbines keep coming down," says Gordon Weynand, a USAID expert on renewable energy who is based in Washington, D.C.

That’s also the case with LED technology. While LED products still cost more to produce than conventional lighting, they last longer, produce more light and use very little energy. Long used in automobile rear-window, brake lights, and in the infrared beams of television remote controls, LEDs now are so powerful they can be used to create ambient lighting for a whole room, like the lights Cosmos Ignite makes.

Mr. Scott, who now lives in London, and who teamed up with Indian entrepreneur Amir Chugh to form Cosmos Ignite, says the company’s MightyLight LED lamp is now three to four times brighter than it was four years ago. "Most other lighting technologies are static, but LEDs will continue to improve," he says. That’s made a big difference to his business model. "We can now offer more light for the same wattage," he says.

In addition to running on solar power, LEDs can be recharged using hand cranks or pedal power. Freeplay Energy PLC, a London-based company, pioneered a radio operated with a hand crank that has sold well throughout Africa, and it is now applying the same technology to a range of LED lights for the poor.

There are many small, high-tech start-ups working on the technology, says Mr. Sturm of the World Bank’s IFC. "Refugees from the dot-com bust," he calls them.

Some of the biggest names in the lighting business are getting interested in this market, too, such as Philips Electronics NV of the Netherlands. In 2005, Philips launched a pilot project in India aimed at bringing affordable, energy-efficient lighting to the poor, using rechargeable, portable lanterns and hand-cranked LED flashlights. Company spokeswoman Santa van der Laarse adds that Philips expects the falling cost of producing LEDs to make such products increasingly affordable for Third World customers over the next few years.

The IFC is interested in this market as well. It sees its mission as helping to disseminate such products in the developing world by educating consumers and helping the companies stitch together supply chains. Last year it unveiled its Lighting Africa initiative, a plan to help provide inexpensive, safe and clean lighting to 250 million people in sub-Saharan Africa by 2030. As part of that initiative, it launched a competition to design low-cost, environmentally friendly lighting products tailored to the local market: Some 500 lighting companies, suppliers and distributors have expressed an interest, Mr. Sturm says, including big names like Philips, and smaller operators like Cosmos Ignite, too.

The biggest enemy of off-grid technologies, meanwhile, could be their rapid success. Rising demand is leading to serious shortages of equipment. "It’s rare that you can get photovoltaic cells off the shelf, and on wind turbines you’re sometimes looking at a year’s wait," says USAID’s Mr. Weynand. "It affects all thedonors. You have to get in the queue like everyone else."

Originally published in The Wall Street Journal , 11 February 2008

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