SPECIAL FEATURE SEAR ENERGY EFFICIENCY A KEY ENABLER FOR ENERGY ACCESS Matt Jordan, CLASP, Jenny Corry, CLASP, and Ivan Jaques, World Bank b    S TAT E O F E N E R GY ACCES S R EPO RT  |  2 0 1 7 Copyright © 2017 International Bank for Reconstruction and Development / THE WORLD BANK Washington DC 20433 Telephone: +1-202-473-1000 Internet: www.worldbank.org This work is a product of the staff of the World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work and accept no responsibility for any consequence of their use. 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Furthermore, the ESMAP Program Manager would appreciate receiving a copy of the publication that uses this publication for its source sent in care of the address above, or to esmap@worldbank.org Cover photo: © Asian Development Bank (via flickr CC lic) ENERGY EFFICIENCY A KEY ENABLER FOR ENERGY ACCESS Matt Jordan, CLASP, Jenny Corry, CLASP, and Ivan Jaques, World Bank INTRODUCTION E nergy itself does not meet the needs of energy-poor a way that the construction, availability and utilization of households, businesses, and communities. Rather, it energy supply—rather than the provision of reliable energy is the services that energy enables—such as lighting, services at least total or life-cycle cost—is the goal. This telecommunications, refrigeration, cooking, transportation, approach is evident in programs and projects that set and mechanization—that transform lives and accomplish and work toward targets like “10,000 MW of new generat- the goals of energy access. Yet billions of people today in ing capacity installed”, “50,000 new connections,” and developing countries (in both rural and urban areas) lack “150,000 MWh consumed.” sufficient access to reliable, cost-effective modern energy Energy access is a supply-side problem, but it is also a services, which would help lift them out of poverty. demand-side problem—and addressing the demand-side What can be done to improve this picture? A potent, often mitigates supply-side needs. Integrating energy effi- too-often overlooked resource in global efforts to deliver ciency into energy access efforts requires that practitioners modern energy services at least cost is energy efficiency. approach access holistically, shifting the way projects are By reducing the energy supply investments required to designed and success is measured to prioritize the provi- provide energy services, greater efficiency optimizes the sion of reliable energy service at least cost. By reducing delivery and utility of energy service while mitigating the supply investments and consumers’ energy costs, smart costs and harmful social and environmental impacts of deployment of energy efficiency can dramatically acceler- energy supply. One estimate even suggests that universal ate energy access impacts—but, in time, it may also yield access to modern energy services could be delivered significant energy efficiency impacts. For example, as table using 50—85 percent less energy if currently available effi- 1 shows, at the lowest access level, energy-efficient light ciency measures were utilized.1 emitting diodes (LEDs) can radically reduce the size and The benefits of energy efficiency are well-documented costs of the solar PV and batteries needed to provide ser- in residential, commercial, industrial, and transportation vice, making these technologies affordable for vast new sectors in developed economies, and theory and limited market segments. At the middle access level, energy-effi- experience from the field suggest that efficiency is a cient appliances can increase the number of connections a first-order energy access resource. Wherever energy sup- mini-grid can support and lower a system’s capital cost ply investments are needed, energy efficiency should requirements, potentially improving financial viability. reduce the amount of investment needed. Wherever exist- These access levels reflect a multi-tier framework adopted ing supply resources fall short, or are unduly expensive on by the Sustainable Energy For All (SE4ALL) initiative to the margins, energy efficiency should (i) improve sectoral track global energy access. or system reliability and performance and (ii) mitigate mar- In countries where power sector reform and grid exten- ginal fuel or tariff costs. sion efforts are necessary, robust markets for efficient prod- Unfortunately, energy efficiency is too rarely used as a ucts and services typically do not exist. Thus, programs resource in energy access efforts, and there are important and policies that build sustainable markets that reward gaps in the research and techno-economic analysis needed energy efficiency can have significant impacts, sending to support its use. The goal of this special feature is to appropriate signals about efficiency’s value, encouraging highlight the role of energy efficiency as an energy access commercial and technological competition on the basis of resource, along with providing an overview of opportuni- efficiency, and locking in efficiency’s benefits over the ties where energy efficiency is supporting—and in many long-run. Power sector development and reform offer a cases enabling—significant energy access impacts. chance to build energy efficiency into the foundation of emerging energy markets, avoiding the challenges of established markets where efficiency is leveraged to FRAMEWORK FOR INTEGRATING ACCESS address longstanding problems ex post. AND EFFICIENCY In off-grid contexts, solar companies are working to Energy access programs and policies often approach build a global market that could someday reach hundreds access as a supply-side problem, structuring efforts in such of millions of consumers. The unique economics of the off-   1  2    S TAT E O F E L E C T RI CI TY ACCES S R EPO RT  |  2 0 1 7 TABLE 1  Energy access interventions and indicative energy efficiency benefits The EA+EE Opportunity in Context ACCESS TIER TECHNOLOGY OR MODE OF DELIVERY ENERGY EFFICIENCY’S VALUE PROPOSITION TIER 1 Solar Portable Lanterns / Pico PV Energy-efficient light emitting diodes (LEDs) radically reduce the size and costs of the solar PV and batteries needed to provide service, making these technologies affordable for vast new market segments. TIER 2,3,4 Off-Grid Systems Energy-efficient appliances radically reduce energy supply needs, allowing a given off-grid system size to provide greater service and smaller, more affordable systems to provide equivalent service. Micro- and Mini-Grids Energy-efficient appliances and devices can increase the number of connections a mini-grid can support, and can reduce a system’s capital cost requirements, potentially improving financial viability. Industrious / Community Uses Energy efficiency reduces the energy costs and/or extends the run time of motorized products such as mills, grinders, and pumps. Efficient solar LED street lights increase public safety and facilitate after dark commerce. Efficient solar pumping systems for irrigation have been found more cost effective than the average electric pumps.2 Efficient medical applications operate more reliably in under-electrified rural clinics, or require smaller and more affordable off-grid energy systems. TIER 5 Grid Electrification / Power Supply- and demand-side efficiency improvements can enhance Sector Reform  power sector reliability and financial performance; lowering prices for consumers, and increasing likelihood of energy bills being paid. In sectors with subsidized tariffs, efficiency can lower government costs. Note: SE4All has developed a multi-tier framework for global tracking of energy access. Tier 1 represents very low energy service and Tier 5 includes full grid connectivity with higher power appliances. See “Beyond Connections: Energy Access Redefined”, ESMAP, 2015. grid market—where the costs of solar PV and batteries can can be provided much more cost-effectively—for about be as much as 58 percent3 or more4 of purchase price— $200 billion—if currently available energy efficiency technol- place an extraordinary premium on energy efficiency, as ogy is utilized.7 Indeed, as figure 1 shows, greater end-use shaving even a single watt from an off-grid appliance’s load efficiency could reduce energy usage and energy supply leads to lower initial solar package costs or improved ser- needs in all five SE4All access tiers, ranging from 46 percent vice, and often both. This has led one scholar to predict at tier 5 (highest level) to 83 percent at tier 1 (lowest level). that significant “investment in the development of super-ef- ficient appliances for off-grid applications should lead to a EA+EE Benefits to Consumers major acceleration of energy efficiency improvement rates Across the board, energy efficiency reduces the need for globally.”5 Moreover, the cost of these systems has gone energy supply investment—but it can also reduce the costs down in part thanks to the emergence of direct current (DC) of access that consumers and project implementers face, end-use appliances, where renewable energy-based off- and can make many (primarily off-grid) energy access busi- grid solutions are expanding rapidly. These appliances ness models technically and economically feasible. eliminate the need for inverters and reduce distribution losses, maximizing the use of limited output from small Off-Grid Solar Portable Lighting and Home Systems generation units. The increasing adoption of renewable In recent years LED lighting has become far more energy energy off-grid access systems can boost the demand for efficient and affordable, and these trends are expected to DC appliances, helping reduce their cost (due to econo- continue. LED efficiency and price improvements, along mies of scale-induced market transformation) and opening with improvements in battery technology and declining new markets. solar PV prices, have reshaped off-grid solar portable light- ing markets, enabling smaller, significantly more affordable solar PV and battery configurations to provide equivalent ENERGY EFFICIENCY’S CONTRIBUTION IN and improved lighting service to underserved consumers EXPANDING AND SCALING-UP ENERGY (Figure 2). For example, in 2009, a LED and lead acid bat- ACCESS tery cost about $45, but in 2014, a LED and lithium battery In 2011, the International Energy Agency (IEA) estimated was half that price and is now closer to $12. that $640 billion will be needed by 2030 to achieve global Similarly, energy efficiency can make larger off-grid access to electricity.6 However, recent analysis suggests that solar home systems more affordable. According to a recent the same level of energy service assumed in IEA’s analysis analysis by researchers from Humboldt State University, ENERGY EFFICIENCY: A KEY ENABLER FOR ENERGY A C C E SS   3  FIGURE 1 Better energy efficiency could sharply reduce energy usage (Energy Use Reduction Potentials for each SE4All Access Tier by Improving End-Use Efficiency (kWh/household/year)) SE4All access tracking time Tier 5 Tier 4 Tier 3 Tier 2 Tier 1 0 1000 2000 3000 4000 5000 Energy consumption kWh/year Business as usual scenario Energy efficient scenario Source: Craine, S. et al. “Clean Energy Services for All: Financing Universal Electrification” 2014. Note: Tier 1 represents very low energy service and tier 5 includes full grid connectivity with higher power appliances. FIGURE 2 Off-grid LED lighting becoming cheaper and more efficient (Retail price of pico-solar off-grid products that provide lighting service of 120 lumens for four hours per day) CFL & lead acid battery (2009) CFL & lithium battery (2014) LED & lead acid battery (2009) LED & NiMH battery (2012) LED & lithium battery (2014) LED & lithium battery (2016 projection) $0 $10 $20 $30 $40 $50 Retail price by component ($US) Light source Battery PV Balance of system Source: Phadke, A. et al. “Powering a Home with Just 25 Watts of Solar PV: Super-Efficient Appliances Can Enable Expanded Energy Access Using Off-Grid Solar Power Systems.” 2015. Lawrence Berkeley National Laboratory, and the University ance markets have scaled up and become more competi- of California, “the upfront cost of a typical off-grid energy tive, the marginal cost of super-efficiency has declined. system can be reduced by as much as 50 percent if Take the case of Bangladesh, which is home to the world’s super-efficient appliances and right-sized solar PV and bat- largest solar home system market. When its solar home teries are used, while delivering equivalent or greater system companies phased out tubular and compact fluo- energy service.”8 rescent lighting in favor of LEDs, customers purchasing It is worth noting that the technologically advanced, solar home systems saw remarkable, immediate improve- super-efficient appliances often do have a higher upfront ments in the lighting value they received. For example, cost—but as figure 3 shows, that additional cost is more when Bangladesh’s Grameen Shakti (a non-profit village than made up for by a corresponding reduction in energy energy scheme) introduced LEDs in 2013, it led to a dra- supply costs. Moreover, as super-efficient off-grid appli- matic rise in lighting service value (Figure 4). 4    S TAT E O F E L E C T RI CI TY ACCES S R EPO RT  |  2 0 1 7 FIGURE 3 Solar home systems increasingly offering more for less (Retail purchase price for three solar home systems that provide identical levels of service) SHS with Standard Appliances (2009) SHS with Standard Appliances (2014) SHS with Super-Efficient Appliances (2014) SHS with Super-Efficient Appliances (2017) $0 $200 $400 $600 $800 $1,000 $1,200 Retail price by component ($US) Lights Battery PV Balance of system Appliances Source: Phadke, A. et al. “Powering a Home with Just 25 Watts of Solar PV: Super-Efficient Appliances Can Enable Expanded Energy Access Using Off-Grid Solar Power Systems.” 2015. FIGURE 4 LED usage in Bangladeshi solar home systems boosts LED street lighting. Off-grid solar LED street lighting pro- lighting service vides communal lighting and promotes public safety and (Impact of Super-Efficient LED Technology on the Price of Daily Lighting Service after-dark social and commercial activity. As with solar (lumen-hour/day/dollar); Indicative Grameen Shakti SHS configurations, 2004 to 2013) home systems, without efficient LEDs much larger, more expensive solar PV and battery configurations are needed. 35 In grid-connected settings, municipal street lighting can account for 20 percent or more of a city’s electric load. Daily Lighting Service (lumen-hour/day/$) 30 Retrofitting street lights with LEDs can achieve massive 25 energy savings--reducing energy supply constraints, free- ing up energy for other uses, and potentially improving 20 grid reliability. Recent experience in Guadalajara, Mexico, suggests that energy savings from retrofitting streetlights 15 with LEDs can exceed 50 percent. Medical devices. As most medical devices are designed 10 for use in developed, grid-connected communities, few medical device manufacturers have considered the impacts 5 of energy efficiency in rural and energy-poor communities throughout the developing world. If developed, medical 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 devices like refrigeration, sterilizers/autoclaves, and moni- tors that are energy-efficient, affordable, and compatible 85Wp system 50Wp system 20Wp system with off-grid solar would bring important life-saving tech- nologies to the energy poor. Source: CLASP analysis (forthcoming) Agriculture and agribusiness. Many energy poor commu- nities depend on agriculture for nutrition and income. The positive impacts that efficient lighting have had on Access to energy services improves agricultural productivity off-grid energy service markets need not remain limited to by reducing labor, keeping produce fresh and salable, and lighting. These price and service impacts are wholly trans- optimizing processes. Energy efficiency reduces the costs ferable to other, more advanced forms of energy service to farmers and improves the reliability of these services. like refrigeration, telecommunications, and industrial appliances. EA+EE Benefits to Utilities and Service Providers Cookstoves. All over the world, about 3 billion people Utilities and other grid-connected energy service pro- each day prepare their meals on inefficient, traditional viders typically earn revenue for each unit of energy sold cookstoves, or over open fires, using solid fuels.9 Yet ener- (for example, kilowatt hours), creating a clear incentive gy-efficient cookstoves reduce the amount of fuel needed, structure that encourages the consumption of energy improve health outcomes, and contribute to social and and discourages efficiency. Nevertheless, energy effi- economic development for families and communities ciency is an important part of the energy service busi- where there is a high reliance of solid fuels for cooking. ness model. ENERGY EFFICIENCY: A KEY ENABLER FOR ENERGY A C C E SS   5  Large-scale deployment of highly efficient end-use FIGURE 5 More efficient lighting is also more affordable products reduces peak demand, which in turn mitigates (Life Cycle Cost Advantage of Efficient Lighting over Inefficient Lighting) load shedding and the need for large new generating sup- ply investments. One way to do this is with energy effi- ciency standards and labeling, as Ghana has done (see Box US$/year 1). Reduction in peak demand can reduce the need for 45 spot generation and energy/fuel imports, which can be 40 extraordinarily expensive and can complicate sectoral and Annualised LLC of light over utility financial planning. Wide scale energy efficiency can 35 6 year analysis period also result in better service and customer satisfaction, 30 which—especially when coupled with the lower energy 25 bills enabled by energy efficiency—can improve the likeli- 20 hood that customers pay for services in good time. Supply- side efficiency gains (like using super-efficient distribution 15 transformers) can enhance system reliability, improve 10 financial performance, and ensure that megawatts gener- 5 ated become megawatts sold (see Box 2).10 0 EA+EE Benefits to Governments and Multilateral Candle Kerosene Kerosene Solar Solar wick lamp hurricane LED lantern LED lantern Organizations lamp (low-cost) (high-cost) For years, government and multilateral organizations have invested significant resources in energy access. Corre- Source: CLASP analysis, 2015. sponding investments in energy efficiency optimize these Note: This comparison provides an annualised net present value life-cycle cost of light for a six- year analysis period, assuming lamps operate 4 hr/day, kerosene costs of US$1/litre, and a 7 investments by reducing additional energy supply needs percent discount rate. Assumptions on sources are: candles $0.10 and 13 lumens, small wick and maximizing the delivery and value of each unit of lamp $1.50 and 15 lumens, hurricane lamp $4.00 and 30 lumens, small solar portable lantern $20 energy produced. and 60 lumens, large solar lantern $40 and 225 lumens. Note that light output levels are not normalised in this comparison—it is assumed consumers enjoy improved light service when In economies where tariffs are subsidized, governments upgrading from candles. have a strong incentive to invest in energy efficiency and reduce the outlay of subsidies. While removing subsidies entirely and exposing consumers to “the true cost of appealing than efforts to obviate the need for shovel ready energy” would do more to encourage efficiency, this is projects. rarely a politically acceptable option. In these cases, gov- Financial constraints. Many products with superior energy ernment support of energy efficiency can deliver a win- performance have a higher up-front cost, but have signifi- win-win: reduced expenditure on subsidies, mitigated cantly lower life-cycle costs. Rather than taking this into peak demand and strain on the grid, and lower energy bills consideration, procurement processes tend to favor prod- for low-income consumers. ucts with the lowest initial price. Lack of market infrastructure and quality assurance pro- INTEGRATING EFFICIENCY INTO tocols. Self-sustaining commercial markets require a good ACCESS PROJECTS: CHALLENGES AND deal of infrastructure that is often lacking in countries with BEST PRACTICES low levels of energy access. Creating self-sustaining mar- kets for quality- and energy-performance assured products Given that the value of energy efficiency as an energy and enforcing standards is harder still. access resource is often overlooked, what can be done to turn this situation around? A big part of the problem is that Variability in usage patterns for energy using products. policymakers and practitioners may not be aware of the For some products, like cookstoves, variation in long-stand- valuable role energy efficiency can play, and they are usu- ing usage patterns and practices make meaningful prod- ally hampered by a lack of resources, or an inadequate uct comparison across markets and regions difficult. understanding of, available tools and options. Barriers Moreover, the tastes and preferences that these usage pat- include: terns express may complicate adoption of new technolo- gies. In addition to higher upfront prices, efficient products Lack of political and market champions. Economies may present challenges to usability or cultural practice. requiring access interventions often lack a strong and vocal This is not limited to emerging markets: consumer prefer- community of efficiency stakeholders to inform project and ences in the United States led to significant challenges and policy design. In addition, there is typically little overlap political pushback with regard to the wide-spread adop- between the professional communities who work on energy tion of compact fluorescent lights, despite their energy-ef- efficiency and energy access: energy access experts are not ficiency benefits. necessarily energy efficiency experts, and vice versa. Despite these challenges and the general lack of prior- Lack of visibility. Improving energy service and sector per- ity granted to efficiency by access efforts, examples of formance with efficiency has longer time horizons, is less smart practices and effective models for efficiency’s use visible, and is harder to quantify than adding generating and optimization exist. capacity. Politically, “shovel ready” projects may be more Market Transformation Programs 6    S TAT E O F E L E C T RI CI TY ACCES S R EPO RT  |  2 0 1 7 BOX 1 BOX 2 Leading Africa into Energy Efficiency Reducing Grid Loss with Super-Efficient Standards: Ghana Distribution Transformers In the 1980s and 1990s, Ghanaian demand for electric- One relatively simple way to improve efficiency is through distri- ity grew along with the country’s strengthening econ- bution transformers, which are an integral part of every grid. omy. Ghana’s limited electricity supply was soon Transformers have a service life of about 30 years, but their use- outstripped by this surge in demand, and by 1998 roll- ful life can extend well beyond that, particularly in developing ing blackouts were impacting businesses and house- economies. These long lifetimes make it critically important to holds and decreasing the country’s economic output. In consider life-cycle cost when procuring and installing transform- response, Ghana in 2000 developed Sub-Saharan Afri- ers so as to avoid the lock-in of inefficient technologies. Ineffi- ca’s first standards and labeling policy, targeting room cient transformers waste energy and add further strain to air conditioners, compact fluorescent lights, and refrig- supply-strained grids. erators. A 2002 analysis found that by 2003 strong com- Transformers are a globally traded product, and at least 16 pliance with the room conditioner standard alone would developed and developing economies (including Brazil, China, free up 13MW of generating capacity. The analysis pre- India, Mexico, and Vietnam) have either minimum energy per- dicted that by 2013 the demand savings from this single formance standards (MEPS) or labels in place that regulate or standard would grow to 150MW, and by 2020 it would facilitate the installation of highly-efficient transformers. These grow to nearly 250MW, all at a net savings to the Gha- existing efforts make establishing new programs and policies naian economy. far less burdensome for developing economies. In recent years, a slate of high-impact programs have US$877 million.13 Programs like this will result in im- taken a broad view of the development of energy access proved energy service for its beneficiaries, and the markets, from commercial investment and supply-chain cost-savings could easily be reinvested in future energy management, to policy reform, to consumer awareness. access or efficiency efforts. These include the World Bank’s Lighting Global program, Creating a CFL market in Bangladesh. The World Bank’s Global Lighting and Energy Access Partnership, the Global Bangladesh Renewable Energy for Rural Economic Devel- Alliance for Clean Cookstoves, and UNEP’s en.lighten ini- opment (RERED) project, launched in 2002, has helped tiative (table 2). Common to these efforts is (i) a thoughtful spur the world’s largest and most dynamic off-grid solar evaluation of their respective markets’ fundamentals and home system market. But that is not RERED’s only focus. In barriers, (ii) a nimble market-based approach to improving 2010, Bangladesh and RERED launched the Efficient Light- those fundamentals and removing those barriers, and (iii) ing Initiative of Bangladesh (ELIB) to cope with a persistent an appreciation of the importance of product quality and supply shortfall—and the attendant unreliability of the energy efficiency to sustainable market growth. grid—which was significantly hampering the country’s energy access and socio-economic development goals. National Efforts ELIB encouraged ratepayers to exchange incandes- Mexico’s solution to the digital transition. To facilitate cent lamps for energy-efficient CFLs. Until that point, recent advances in telecommunications technology, econ- market uptake of CFLs had been low due to limited con- omies around the world are transitioning television broad- sumer awareness, high initial costs, and market spoiling cast signals from analog terrestrial to digital terrestrial. caused by low-quality products. Through ELIB, Bangla- This entails a massive conversion of consumers’ existing deshi utilities ran a large consumer awareness campaign television technology from analog to digital receivers, emphasizing the value of energy efficiency and procured wires, and/or satellites. Often, countries have used tempo- millions of CFLs, which were exchanged for ratepayers’ rary analog/digital simulcasts, and some have deployed incandescent bulbs at convenient locations like schools digital converter boxes. and community centers. Despite operational challenges Mexico has engineered an extraordinary approach to related to procurement that ultimately resulted in an early this issue that may serve as a model for countries seek- termination of the program, ELIB had a major impact by ing energy access solutions. Rather than providing or inspiring a new, competitive commercial marketplace for mandating costly, energy-consuming converter boxes, efficient products. This demand, and industry’s rush to Mexico is piloting an effort to give away efficient digital meet it, continues to pay dividends—saving ratepayers flat-screen TVs.11 The flat-screen TVs are significantly money, reducing peak demand, and providing social and more expensive than digital converters,12 but the energy environmental benefits. savings reaped by Mexico—which subsidzes its tariffs— will more than cover the expense. The Super-Efficient Electrifying low-income urban communities in São Appliance Deployment initiative estimates that this Paulo, Brazil. Providing energy services to low-income could provide Mexico with a net benefit as high as urban areas can offer a unique set of challenges. Energy ENERGY EFFICIENCY: A KEY ENABLER FOR ENERGY A C C E SS   7  TABLE 2 Overview of Global Energy Access Market Transformation Efforts INITIATIVE MANDATE LIGHTING GLOBAL The World Bank Group’s Lighting Global program and its affiliates support “the growth of the international off-grid lighting market as a means of increasing energy access to people not connected to grid electricity.” Lighting Global does this through a variety of targeted efforts, including investor education, industry matchmaking, policy reform, and consumer awareness. Lighting Global’s efforts are built upon a best-in-class quality assurance framework for off-grid solar products that ensures that products receiving program benefits have an “appropriate balance product cost, quality, and performance” and themselves drive the market in the right direction. GLOBAL LEAP Global LEAP is the Clean Energy Ministerial’s clean energy access initiative, and its efforts focus on promoting quality-assurance efforts, demand-side super-efficiency, and partner collaboration. Among other market development efforts, Global LEAP supports the Global LEAP Awards, an international competition to identify the world’s highest-quality, most energy-efficient off-grid appliances – products that are essential to the growth and future of the off-grid market. Several other Global LEAP off-grid appliance programs provide market actors with the information and support needed to, like Lighting Global, nudge the market toward the right balance of price, quality, and energy efficiency. GLOBAL ALLIANCE FOR The Global Alliance for Clean Cookstoves “is a public-private partnership hosted by the UN CLEAN COOKSTOVES  Foundation to save lives, improve livelihoods, empower women, and protect the environment by creating a thriving global market for clean and efficient household cooking solutions.” Fundamental to Alliance’s approach is a market development roadmap drawn up to drive innovation and scale in efficient cookstove design, sales, and use. National and international standards processes, labeling and certification of cookstoves, and consumer awareness, are central to their efforts. EN.LIGHTEN The United Nations Environment Programme’s en.lighten initiative supports the United Nation’s SE4All initiative by promoting policies that favor high market penetration efficient off-grid lighting, convening government and industry leaders to develop policy. service providers are often hesitant to expand to these FUTURE PROSPECTS AND PROJECTIONS areas because of issues such as energy theft, uncertain Energy access professionals around the world are accom- land tenure, poor enforcement of legal regulations, lack of plishing astounding things, introducing life-changing infrastructure, difficult geographic conditions, and the energy services to millions—but this can be done better, transitional nature of inhabitants.14 faster, and more cost-effectively through the smart utiliza- In 2005, the United States Agency for International tion of energy efficiency. Development, the International Copper Association, and several local partners launched the Slum Electrification and Beyond lighting: The future of off-grid. To move beyond Loss Reduction Program in São Paulo. The program’s the provision of very basic energy services like lighting and objective was to test and evaluate sustainable and widely mobile phone charging and serve more customers, the replicable approaches—including energy efficiency—that global off-grid marketplace needs a complementary, com- increase access to electricity service for low-income urban petitive marketplace of low-cost, energy-efficient, high residents. Some of the specific issues that the project quality, and well-designed off-grid appliances. However, addressed were inefficient and overloaded transformers, due in part to a lack of familiarity with the off-grid market illegal connections, lack of community lighting, and ineffi- opportunity on the part of appliance manufacturers, as cient lighting and appliances. well as the risks and difficulties of market entry perceived Besides removing illegal connections, the project incor- by those manufacturers who are familiar with the market, porated a suite of energy efficiency components—includ- such a marketplace does not yet exist. Plus off-grid compa- ing community and consumer awareness, replacement of nies are often ill-equipped to develop off-grid appropriate old and faulty wiring and transformers, and the replace- appliances of their own, and the market infrastructure to ment of inefficient appliances with efficient lighting, solar equip these companies to source great appliances is lack- water heaters, and refrigerators. As a result, consumer pay- ing. Efforts to address these issues are under way, includ- ment rates rose to 90 percent, radically improving utility ing new Global LEAP programs that will encourage the revenues, and households saved on average 200 kWh a development, marketing, and quick uptake of excellent month. The pilot project has since been scaled up and is off-grid appliances. now benefitting over 500,000 households and businesses In the information technology and telecom sectors, the in Brazil.15 trend is toward products that have multiple uses. For many newly electrified households, a television or radio is the 8    S TAT E O F E L E C T RI CI TY ACCES S R EPO RT  |  2 0 1 7 first appliance purchased after lighting needs are met. policymakers could radically improve how many energy Low-power technologies like smart phones and tablets access projects and programs are structured and ulti- provide the option to have an energy-efficient device that mately perform. meets both communication and entertainment needs.16 EA + EE + RE. Energy efficiency and renewable energy are Smarter, skinnier grids. The design and construction of critically important to the future of energy access, but it electric grids has not changed much over the past century, may well be that energy access is even more important to despite the technological advances and significant the future of energy efficiency and renewable energy, par- changes in the way we live and use energy. Highly efficient ticularly in off-grid solutions. appliances flatten peak demand and need less energy Off-grid energy access companies around the world are supply. When less energy is needed, small communities creating a global market that could one day serve billions can be powered using thinner, less expensive cabling and of consumers, and that is entirely predicated upon energy wiring. These “skinny grids,” when combined with efficient efficient appliances and renewable energy generation transformers have the potential to reach households 5-10 solutions. Ask an off-grid entrepreneur and they will tell kilometers from a power source at much lower cost than you: sustainable off-grid energy access simply does not other commonly used rural electrification models.17 work without energy efficiency and renewable energy. As such, energy access markets may hold the potential to Decoupling energy access and energy supply. In places drive technology, market, and policy innovation that could like California, policies to “decouple” utilities’ revenues leapfrog longstanding challenges associated with deploy- from their per-unit energy sales have enabled significant ing these technologies—unlocking untold economic and strides in the use and economic, social and environmental environmental benefits, and transforming the way the benefits of energy efficiency. It may be that in energy entire world consumes energy. access contexts, a similar decoupling of energy sales and revenue, along with a coupling of energy service and reve- Price signals that encourage efficiency. While often nue, could flip energy service providers’ default incentives unpopular, cost-reflective tariffs and prepaid or pay-per- and drive the development of business models that pro- use energy metering help consumers internalize the true vide services at least cost. cost of energy, modify behavior, and gravitate toward effi- cient devices and appliances. To date, country examples of Market-responsive design. Early consumer response to truly cost-reflective tariffs are rare, but they do exist—such CFLs was less than promising: the products neither looked as South Africa’s prepaid metering programs. Another tool nor performed according to the expectations and tastes can be import duty reform. Developing countries often of average consumers accustomed to incandescent impose high import duties on appliances and equipment, lamps. This led to significant challenges and delays with typically to protect domestic manufacturing, generate regard to their market penetration, as well as political revenue, or impose a “luxury tax” on high-end goods. blowback, despite their money-saving and environmental Reducing duties for high-quality, highly-efficient prod- benefits. LED lighting companies like CREE were paying ucts—perhaps benchmarked against an international or attention, and their market strategy was built around regional standard—will lower downstream prices for these products that look, feel, and perform according to con- products and make them cost-competitive with inefficient sumer preferences. products, spurring uptake and access benefits like lower Designers and manufacturers of efficient energy access costs and reduced load shedding. products have something to learn from this example. Clean, efficient cookstoves will not sell if people do not want to use them. Off-grid households and businesses do RECOMMENDATIONS FOR OPTIMIZING not use small-scale refrigeration the way a university stu- IMPACTS dent might. Smart, iterative product design efforts that emphasize quality, efficiency, and consumer preferences Energy efficiency is not a separate consideration from will accomplish a great deal for energy access markets. energy access. Rather, it is a foundation upon which access is delivered more cost-effectively and reliably. Energy Least cost procurement. In 2006, the U.S. state of Rhode access professionals would do well to keep the holistic Island passed the Comprehensive Energy Conservation, nature of energy access in mind and to incorporate effi- Efficiency and Affordability Act—a law requiring utilities to ciency into project planning as a first-order resource. The invest in energy efficiency whenever doing so is less expen- following recommendations provide ideas for energy sive than purchasing the electricity or heating fuel supplies access policymakers and project planners as they pursue that would be needed to meet that demand. This innova- efforts to deliver energy service at least cost: tive yet simple mandate to do a cost-benefit analysis and pursue the least expensive option has quickly made Rhode Make efficiency “first in the access loading order.” The Island one of the United States’ most energy-efficient ideal approach of any access effort is to first address gen- states, benefiting consumers, utilities, and the economy. eration, transmission, and demand-side inefficiencies and While the experience in Rhode Island is unlikely to be then adjust supply to meet demand as needed. wholly transferable to each and every energy access con- Give efficiency a seat at the table. Energy access experts text, the adoption of a least-cost procurement principle are not necessarily energy efficiency experts, and vice by energy access professionals, project developers and versa—and the public interest goals that draw individuals ENERGY EFFICIENCY: A KEY ENABLER FOR ENERGY A C C E SS   9  to these professional communities are not necessarily the ACKNOWLEDGEMENTS same. Even so, these communities have a lot to learn from one another. Simply inviting efficiency experts into access CLASP consulted many experts when conducting research project and program planning exercises may yield signifi- for this special feature. We’d like to thank the following cant benefits. individuals for their contributions: Ranyee Chiang, Global Alliance for Clean Cookstoves Educate and equip consumers. Consumer awareness and Stewart Craine, Village Infrastructure quality-assurance efforts have a significant influence on the Justin Guay, The Packard Foundation long-term efficacy of energy access efforts. Thus, it is vital Mark Hopkins, United Nations Foundation to educate consumers about the benefits of high-quality, Arne Jacobson, Humboldt State University energy-efficient appliances and devices—and equip them Hasna Khan, Prokaushali Sangsad Limited to act on that education through certification schemes, Amol Phadke, Lawrence Berkley National Laboratory labels, and quality-assurance frameworks. Michael Scholand, United Nations Environment Redefine success. Individual and institutional efforts tend Programme to bend toward meeting goals and metrics. Defining suc- Kate Steel, United States Agency for International cess as “50,000 MW of generating capacity installed” will Development result in efforts to install 50,000 MW. Rather than setting Richenda Van Leeuwen, United Nations Foundation project goals and metrics that imply that access is solely a supply-side problem, define success as delivering energy service at least cost and set the appropriate metrics. NOTES 1. Craine, S., Mills E., and Guay, J. “Clean Energy Services for All: Financing Universal Electrification.” 2014. 2. Phadke, A., et al. “Potential to Reduce Costs and Subsidy Requirements for Solar Pump Sets by Improving their Energy Efficiency.” Forthcoming. 3. Hoque, S., & Das, B. “Analysis of Cost, Energy and CO2 Emission of Solar Home Systems in Bangladesh.” International Journal of Renewable Energy Research 3(2). 2013. 4. Phadke, A. et al. “Powering a Home with Just 25 Watts of Solar PV: Super-Efficient Appliances Can Enable Expanded Energy Access Using Off-Grid Solar Power Systems.” 2015. 5. Van Buskirk, R. “Accelerating the Global Pace of Energy Efficiency Improvement through Energy Access.” 2015. 6. International Energy Agency, “Energy for All – Financing Access for the Poor.” 2011. 7. Craine, S., Mills E., and Guay, J. “Clean Energy Services for All: Financing Universal Electrification.” 2014. 8. Phadke, A. et al. “Powering a Home with Just 25 Watts of Solar PV: Super-Efficient Appliances Can Enable Expanded Energy Access Using Off-Grid Solar Power Systems.” 2015. 9. Source: Global Alliance for Clean Cookstoves. 10. Raul Jimenez, R. et al. Tomas Serbrisky, Jorge Mercado. “Power Lost: Sizing Electricity Losses in Transmission and Distribution Systems in Latin America and the Caribbean.” 2014. 11. Crayton Harrison. “Mexico to Give Away Hi-Def Televisions for Digital Transition.” 2014. 12. Greg Scoblete. “Mexico’s Turbulent Digital TV Transition.” 2014. 13. SEAD Initiative. “The LEERA Model.” 2014. 14. International Copper Association. “Pilot Project for Slum Electrification and Loss Reduction.” São Paulo, Brazil. 2009. 15. Hopkins, Mark. “Enabling Energy Access Through Energy Efficiency.” Presentation. 16. Interview with Justin Guay. 17. Interview with Stewart Craine. 10    S TAT E O F E L E CTR I CI TY ACCES S R EPO RT  |  2 0 17 REFERENCES Craine, S., Mills E., and Guay, J. “Clean Energy Services for International Energy Agency, “Energy for All – Financing All: Financing Universal Electrification.” 2014. Access for the Poor.” 2011. Phadke, A., et al. “Potential to Reduce Costs and Subsidy Raul Jimenez, R. et al. Tomas Serbrisky, Jorge Mercado. Requirements for Solar Pump Sets by Improving their “Power Lost: Sizing Electricity Losses in Transmission and Energy Efficiency.” Forthcoming. Distribution Systems in Latin America and the Caribbean.” Hoque, S., & Das, B. “Analysis of Cost, Energy and CO2 2014. Emission of Solar Home Systems in Bangladesh.” Crayton Harrison. “Mexico to Give Away Hi-Def Televisions International Journal of Renewable Energy Research 3(2). for Digital Transition.” 2014. 2013. Greg Scoblete. “Mexico’s Turbulent Digital TV Transition.” Phadke, A. et al. “Powering a Home with Just 25 Watts of 2014. Solar PV: Super-Efficient Appliances Can Enable SEAD Initiative. “The LEERA Model.” 2014. Expanded Energy Access Using Off-Grid Solar Power International Copper Association. “Pilot Project for Slum Systems.” 2015. Electrification and Loss Reduction.” São Paulo, Brazil. Van Buskirk, R. “Accelerating the Global Pace of Energy 2009. Efficiency Improvement through Energy Access.” 2015. SPECIAL FEATURES To download the State of Electricity Access Report, overview, and Special Features, visit: http://esmap.org/SEAR