A marriage of Micro enterprise and renewable energy

Reading this article has drawn to me this novel idea of micro finance institutions of providing solar laterns for power needs of island communities in the country.

 

From BusinessWorld Philippines

June 05, 2012

Confronting Asia’s energy challenge

Over the past decade, the Asia-Pacific region has made incredible progress towards achieving universal or near universal energy access for vast numbers of people.

The Philippines is but one of many examples.

Yet despite this progress, about 700 million people in the region still have no access to electricity, many of them living in rural areas. Around 1.9 billion — nearly half of Asia’s population — have no access to modern cooking fuels and facilities, relying on wood, coal, charcoal, or kerosene.

Current trends show that without fundamental policy, regulatory and financing changes, even a generation from now — in 2030 — about 350 million people in the region will have no electricity access, and 1.6 billion will have no clean cooking facilities.

Asia can do better, not only in terms of expanding access, but also in ensuring that energy is progressively cleaner and greener. It’s essential that it does.

With Asia’s energy demand projected to almost double by 2030, and with fossil fuels likely to be the primary source meeting the region’s increasing demand, Asia will be responsible nearly half of the world’s carbon dioxide (CO2) emissions by 2030.

The climate change consequences of this trend will have disastrous impact on many Asian countries, including increased floods, typhoons, and other extreme weather events, and growing mass migration.

Asia needs energy, but given growing climate risks there is also an urgent need to embrace more innovative ways of providing all the region’s people with access while at the same time reducing Asia’s greenhouse gas emissions.

Renewable energy and energy efficiency can make key contributions to maximizing energy access and transforming energy systems, because many of the contributions to providing rural access lie in increasing efficiency and in providing off-grid distributed renewable solutions.

To provide universal energy access, Asia needs vast amounts of finance and investment: the International Energy Agency estimates that $12 billion a year is needed in the region until 2030. This will require a combination of public sector financing and the right incentives to drive a major scale-up in private sector investment in energy access.

Similarly, incredible amounts of finance for clean energy investments are also needed over the next 20-40 years — between $7 trillion and $9 trillion to 2030. Again, while public sector resources will provide some of this financing, innovative new business models that incentivize the private sector to invest are essential.

While the scale of finance needed for maximizing access for all and providing clean energy investment is vast, finance alone — without the right governance structures and enabling legal and regulatory frameworks — will likely not deliver the investments and infrastructure to satisfy demand.

In the Philippines, the Asian Development Bank (ADB) is working with a micro-finance institution to deploy solar lanterns and support local entrepreneurship. Small entrepreneurs can sign up as micro-retailers to rent out solar lanterns to local households at minimal cost, instead of needing capital to purchase solar lanterns on a wholesale basis. The fees generated then finance a common fund for the operation and maintenance of the lanterns.

On the policy and regulatory reform side, ADB has commissioned work on power sector reform, and has also supported studies on enhancing effective energy regulation that includes analysis of the effectiveness of policy and regulations for the poor.

The progress the Philippines and other Asian nations have achieved to date clearly demonstrates that universal energy access and a clean energy for Asia can be realized in our lifetime.

It just requires that Asian nations — and their people — firmly commit to the right governance, policy and regulatory regimes to provide sustainable energy access for all.

Stephen Groff is the Vice-President for East Asia, Southeast Asia and the Pacific at the Asian Development Bank.

Article location : http://www.bworldonline.com/content.php?Section=Opinion&title=Confronting Asia’s energy challenge&id=52942

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