Blazing the Trail

Hosts of innovative small and medium-scale enterprises are bringing clean energy to tens of millions of the powerless, and must be supported
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Solar PV is now one-sixth of its cost in 2007, battery costs have more than halved and huge improvements in energy efficiencies, such as LED bulbs, are allowing power to go much further.

If we are really going to limit global warming to 2°C, it is essential to identify and invest in the next wave of sustainable energy pioneers and innovative trail blazers. Over the past 15 years, the Ashden Awards have rewarded and supported pioneers in sustainable energy— from solar-powered micro-grids in Africa to low-carbon building innovators in the United Kingdom.

Our award winners are already transforming the lives of more than 50 million people across the world. In developing countries and emerging economies they are bringing light, power and clean cooking to communities for the first time through affordable renewable energy. This, in turn, is fundamental to help reduce poverty, improve health and education, address gender inequality, increase productivity and promote economic growth.

Take the Sarhad Rural Support Programme in Northern Pakistan, one of this year’s winners. It has built 189 micro-hydro schemes in little more than a decade, bringing clean energy to around 365,000 people and transforming communities in the process. The resulting electricity is making studying easier and health care safer. At the same time, access to power is enabling a multitude of new businesses to start up—from flour mills to hotels to information technology centres.

Hydro power is delivering these same benefits in North East Afghanistan through a 2012 winner—the German government development enterprise GIZ and consulting engineers INTEGRATION. In addition, the project is bringing fractious communities together, providing education facilities for women and generating new businesses and jobs that replace growing opium.

Meanwhile, the last ten years have seen a remarkable drop in the cost of renewable energy technologies. Solar PV is now one-sixth of its cost in 2007, battery costs have more than halved and huge improvements in energy efficiencies, such as LED bulbs, are allowing power to go much further.

Combine this with the mobile phone revolution in Africa and an enormous potential for access to energy is opening up. Some 66 per cent of the continent’s people now own a mobile phone—up to 89 per cent in such countries as South Africa and Kenya. East Africa is making the most of this trend, emerging as a hotbed of creative solutions.

Mobiles are increasingly used to transfer funds to pay for clean electricity. Off Grid Electric, an Ashden winner last year, is a leader in Tanzania, using mobile money to sell solar power as a daily service to off-grid homes at an affordable price. Their pay-as-you-go service is tailored to user needs, with flexible payments, an opportunity to change service level and support from a customer care team and local agents. These qualities combine with a sophisticated app-based customer registration and product tracking system.

In neighbouring Kenya—80 per cent of whose people lack access to mains electricity— winner SteamaCo is using similar digital developments to bring the benefits of clean energy through solar powered micro-grids.

These work like mini power stations for entire villages, supplying enough electricity to run small businesses, as well as to power TVs, radios and bright lights in the home. It uses a cloud-based remote metering and payments system that monitors energy use, lets users pay through their mobile phones and quickly troubleshoots problems.

Such small and medium-sized clean energy enterprises are bringing huge social and economic benefits. While they are in the vanguard of getting energy access to those who need it most, they need access to finance that will enable them to scale up and reach many more millions.
A Christian Aid report found that financing was enormously difficult in the early stages for these enterprises.

They need working capital and grants focused on growth, new programmes and innovation. There is great potential in blended finance that combine public, private and philanthropic sources. But these and other mechanisms desperately need to be developed and expanded.

End-user finance to help customers purchase energy products is just as critical. In Asia—the birthplace of micro-finance—2008 winner Grameen Shakti in Bangladesh deploys the one-shop-stop model. It provides technology, after-sales service and end-user finance tailored to the specific needs of clients under one roof.

The Shri Kshethra Dharmasthala Rural Development Project, an Ashden Award winner in South India, provides affordable loans to families, helping them to buy such renewable energy goods as biogas plants, solar home systems and cookstoves. Self-help groups that help people plan their household needs—and make informed choices on what energy products to buy—are a key ingredient of its success. However, with the mobile money developments in Africa, the real innovation in end-user finance is the pay-as-you-go model.

The Paris Summit requires a high level of ambition and strong international coordination and collaboration. This can help ensure that investment in the right kind of energy infrastructure promotes sustainable growth and development. It now makes financial sense to be investing in renewable energy rather than fossil fuels, and in different models of energy infrastructure. The decentralised model is the essential, cost-effective way to bring modern energy services to those communities that lack them across Africa, Asia and beyond.