The four quadrants of EPA matrix
1. Community Driven EPA Initiatives
Availability of Resource – High
Capacity to Pay – Low
There are many villages which have abundance of sunlight, are in deep forests with lot of biofuel available but the local population is deep in poverty depending on natural habitat agriculture and cattle grazing for survival. Their lifestyle can be changed for better through intense awareness drive to make them knowledgeable about the benefits of energy access to health, hygiene, education and productivity but such initiatives have to be community driven with upfront support for installation of Energy Supply devices by local government or NGO. In North Eastern India there are dense forests and extreme poverty. Lifestyle of many villages got transformed through the initiative of Local Government and self help groups and more than 1,50,000 roof top Solar PV panels have been installed and are operating satisfactorily for more than a decade now.
2. Commercially Driven EPA Initiatives
Availability of Resource – High
Capacity to Pay – High
Another striking example of a successful business model addressed to the bottom of the pyramid is again from the peripheral villages of Sundarban in North East India where there are different villages still out of reach of electricity grid Bio-fuel based off-grid/distributed electricity generation helped bring prosperity to these villages and consumers were willing to pay a reasonable tariff to make business sense to the entrepreneur. The only problem in such cases is that once the grid connectivity reaches these villages the DDG becomes commercially non-viable which is a big deterrent to the Entrepreneur willing to set up Units in such areas. The issue is compounded by the fact that at times for political benefit leaders make very optimistic and promising commitment for grid electricity reaching these villages much ahead of practically possible dates which puts off entrepreneurs decisions to provide DDG due to inadequate risk coverage and fear of loss of business once grid electricity reaches these places. In such cases it is desirable to have proper institutional and policy support cover the risks and ensure appropriate technology and scale of project to get the optional fit.
3. Institution Driven EPA Initiatives
Availability of Resource – Low
Capacity to Pay – High
There may be places where the available resources may be scarce or fully utilized however; the local villagers may be willing to pay an affordable price for energy they may still not have access to. Such structures calls for exploring the possibility of extra grid connectivity or developing decentralized system using resources imported from neighboring areas careful selection of technology to be adopted and suitable higher size units can be used on a commercial scale. A mix of various available resources used through a smart mini grid may also solve the problem in such cases. For example we can extend a gas pipeline to such areas and it can be tapped at a number of places for small generating units and as fuel for cooking/heating to meet local need.
4. Socially Driven EPA Initiatives
Availability of Resource – Low
Capacity to Pay – Low
The severest cases of energy poverty prevails in areas which are deprived of natural resources of energy and most of the available source of energy is used up in finding means of survival with little or no money spare able for energy access. Such villages should get first priority to access philanthropic funds, CSR initiatives and grants to improve their health, hygiene and lifestyle through energy access. However, the challenge here is that on one hand any project in such locations has to be totally supported through grants and charity still due to lack of awareness its acceptability is local community may be low. There is also a threat of disturbing the fragile socio-economic balance and linkages that marginalized communities have with their local ecosystems. We have to tread softly in such areas and create awareness through training/ education and advantages through live demo to meet the basic minimum requirements of people.
Despite modest government lead efforts, most small scale energy production in the energy impoverished world is being taken on by nonprofits and local organizations. These small scale solutions are spreading throughout Africa and other parts of the developing world as a result of small businesses and nonprofits. Some such organization invests in green businesses in developing country to provide them with the capital to implement off the grid energy solutions. Some small American Solar companies, that sells solar powered lanterns to rural and urban homes so homes do not have to rely on kerosene and firewood for lighting; a $224,241 investment to an Indian company, , has sold small scale solar systems to more than 70,000 households in India, and an equity investment in Chinese company that manufactures mini hydropower systems that are used to generate electricity in rural China. Many other organizations are working towards fighting energy poverty by allowing individuals to make micro loans to entrepreneurs in developing countries. Many larger organizations across Globe have taken initiatives to “enable small companies to innovate more rapidly, advises international organizations how to support these emerging [energy] markets, designing market research and performing market research, and helps students engage in the issue.”
Individuals can choose from a list of green entrepreneurs on their website, make a loan to help fund green energy projects, track the progress of the project, and eventually get repaid. This is a sustainable and affordable way for ordinary citizens to become involved in remedying energy poverty.
Many organizations across the Globe are doing inspiring work, have noble goals, and continue to make a real impact on the lives of the world’s poorest citizens; however, they are small organizations with limited capacity and funds. Small scale projects are for now, the most feasible and economical way of bringing people out of energy poverty, but the projects are just that, small. For the nearly 3 billion people living in energy poverty, this relief is not coming fast enough. It is understandable, then, why private-sector investments in clean energy technology are so small. Yet, while it may make sense for individual companies to make these choices as there is vast opportunity in energy. Prices are declining in solar energy and wind, and they could fall further with new technology.
Investment into energy R&D would help secure future, for the billions living in energy poverty. The small scale renewable projects provide the best opportunity for alleviating poverty while not adding to greenhouse gas emissions. By driving down the cost of solar cells, wind turbines, and energy storage electrifying rural areas could become not only become a cost effective proposition for governments, but profitable endeavor for private investors.
Conclusion
Energy poverty is one of the most important and devastating social issues of our time that has been sidelined for too long, and bringing half of the world’s population out of energy poverty is an enormous task. Innovative policies are needed to bring energy to people who live away from the grid and financing is needed to implement those solutions.
As we look to the future we need to develop innovative practices and technologies that will deliver clean energy to the developed world as well as the developing world, and in doing so, we have the opportunity eliminate energy poverty.
