Universalising Energy Access through Solar

By Dr Ajay Mathur
On 1 September 2023 at 12:01

Editor’s note: Views expressed in this article are of the author and do not necessarily represent the opinions of IGIHE. Dr Ajay Mathur is the Director General of the International Solar Alliance.

Access to reliable and affordable energy, especially in developing regions, is a formidable challenge that’s exacerbated by the need for environmentally friendly solutions. As of 2021 estimates, approximately 675 million people, constituting 9% of the global population, lacked access to electricity. If the current trajectory continues, an alarming projection suggests that about 660 million people could remain without electricity by 2030. Additionally, access to clean cooking facilities remains limited, with only 71% of the global population having this essential service in 2021. Given current trends, over 1.9 billion people might lack clean cooking access by 2030. The energy access challenge is especially acute in Sub-Saharan Africa and rural areas of developing countries, necessitating heightened efforts to achieve universal energy access.

To overcome these challenges, a shift in electrification strategies is required. While conventional approaches have focused on central power grid extensions, these can be slow and costly. Solar energy, combined with battery storage, emerges as a practical and cost-effective alternative. This approach can be tailored to diverse contexts, addressing energy access challenges effectively.

A variety of strategies can be employed to tackle energy access gaps. Grid extensions prove effective for densely populated areas within proximity of existing power grids. For more remote settlements, mini-grids powered by solar energy offer a viable solution, requiring a mix of grants, government support, and private investments. Stand-alone renewable energy solutions suit sparsely populated, remote regions where traditional grid extensions are impractical.

However, while the technology exists, challenges remain. Solar-based mini-grids hold substantial potential for energy access in rural areas, but their sustainable deployment requires viable business models supported by private-sector financing. Policy and regulations play a pivotal role, and intergovernmental organizations can aid in creating an enabling environment. Investments are essential, with the ISA projecting a need for around $192 billion to achieve universal energy access, where solar-based mini-grids account for a significant portion.

The private sector has emerged as a driving force in addressing energy poverty, with private mini-grids proliferating across Asia, Africa, Latin America, and Small Island Developing States. Lessons from government-supported mini-grids underscore adaptability to local needs and the importance of supporting local businesses. The International Solar Alliance and The World Bank emphasize the cost-effectiveness and sustainability of privately-owned solar mini-grids in bringing electricity to previously underserved populations. These mini-grids not only provide clean and reliable power but also enable services like mobile telephony, agro-processing, and e-mobility, acting as rural development catalysts.

Solar mini-grids are also proving to be resilient solutions in the face of climate shocks, crucial for climate-vulnerable regions like rural Africa and Asia. They complement centralized grid infrastructure in cases where it reaches communities. For instance, Cambodia’s experience demonstrates how isolated mini-grids were eventually integrated into the national grid, benefiting over a million consumers.

Solar energy’s cost-effectiveness and environmental benefits make it a crucial component of a diverse energy mix. Well-run solar mini-grids, paired with battery storage, offer reliable grid-level electricity, surpassing other electrification methods in reliability and cost-effectiveness. The success of India’s clean energy initiative showcases the potential of collaboration between public and private sectors to drive innovation and emissions reduction. Private mini-grids represent a mature, deployable solution that needs increased support to address energy access and climate action needs urgently.

ISA’s analysis indicates that around 59% (396 million people) of the unelectrified population would be best suited for electrification through solar-based mini-grids. Approximately 30% (203 million people) could be connected through grid extensions, while the remaining 11% (77 million people) would benefit from DRE solutions. Achieving this level of electrification will require a total investment of around USD 192 billion, spread across solar-based mini-grids: USD 97 billion for approximately 25,738 MW capacity; solar-based DRE solutions: USD 18 billion for about 1,224 MW of capacity; and grid extensions: USD 78 billion for the necessary infrastructure.

Consequently, access to affordable finance is a must. Most energy access-deficit populations reside in underdeveloped regions, where affordability remains a significant barrier. High financial risks in these areas increase project costs for developers, further widening the gap between consumer affordability and supplier viability. Risk mitigation measures including concessional financing and payment guarantees can attract private sector investments to energy access projects, enhancing scalability and sustainability.

Financial support of around USD 48.5 billion, which accounts for 50% of project costs as viability gap funding, will be necessary to achieve the required deployment of mini-grids. Increased investments, ecosystem development initiatives, focused interventions, optimal resource utilisation, and solar PV-based cooking solutions integration with electrification initiatives can accelerate global development and pave the way for universal energy access by 2030.

Training and capacity building are the other cornerstones. Key stakeholders in energy access-deficit countries often need more technical and financial expertise to drive electrification initiatives. Efforts such as skill development activities, access to global best practices, and programmes supporting sectoral entrepreneurs are essential to address this gap. Training and capacity building, entrepreneurial support, and awareness creation can drive long-term progress in energy access deficit countries.

The International Solar Alliance (ISA) has responded to this global issue by devising a comprehensive roadmap centred around solar energy. This initiative, aimed at realizing Sustainable Development Goal 7 of universal energy access by 2030, seeks to leverage the multifaceted benefits of solar power, including technical viability, financial feasibility, climate benefits, and social impact, along with battery storage capabilities. With concerted efforts and strategic partnerships, we can unlock the potential of solar energy and achieve the ambitious goal of universal energy access by 2030.

Dr Ajay Mathur is the Director General of the International Solar Alliance.