Francesco La Camera
Our planet is in trouble. The Intergovernmental Panel on Climate Change estimates that to meet the targets of the 2015 Paris agreement and keep global warming below 2° Celsius, renewable energy must supply 70-85 percent of the world’s electricity by 2050. In other words, renewable capacity must triple by 2030 to avert a climate catastrophe.
Yet, despite the existential threat posed by climate change, a joint report released by the International Renewable Energy Agency (IRENA), World Bank, WHO, IEA, and the United Nations Statistics Division paints a grim picture: the world is not on track to achieve UN Sustainable Development Goal 7, which aims to “ensure affordable, reliable, sustainable, and modern energy for all.”
As of 2022, 685 million people still lived without access to electricity, and 2.1 billion relied on polluting and hazardous cooking fuels. The problem is particularly pronounced in Africa, where 600 million people lack energy access. Electrification has not kept pace with population growth, and centralised power grids have consistently failed to reach those most in need. Consequently, many Sub-Saharan communities depend on expensive diesel generators.
These carbon-intensive systems account for an estimated 360 gigawatts of electricity generation in low- and middle-income countries (LMICs), with annual fuel costs exceeding $40b. Fortunately, it is not too late to change course. Distributed renewable energy (DRE) solutions, which include mini, metro, and mesh grids, as well as small-scale household systems like photovoltaic (PV) solar panels and battery storage, are the key to ensuring electricity for all while meeting climate goals.
Mini-grids, which often rely on renewable-energy sources like solar PV, are small-scale generators connected to localised distribution networks that can operate independently or link to main grids when available. Their scalability makes them well-suited for rural populations and enterprises such as farms, small factories, and schools, as well as for bolstering urban networks. Scaling DRE systems in LMICs is crucial to expanding energy access and decarbonising power grids.
With their unmatched flexibility, these technologies are ideal for electrifying underserved communities, boosting small-business productivity, and strengthening national energy resilience and security. At scale, DRE has the potential to deliver electricity to an additional 500 million people and reduce carbon emissions by 1.2 gigatons by 2030.
To accelerate the green transition and help close the energy access gap by 2030, IRENA, GIZ GmbH, and GEAPP are committed to deploying DRE technologies such as mini-grids and standalone solar home systems in LMICs.Projects across the developing world have shown that DRE is more cost-effective than fossil fuels and better suited to decentralised energy distribution.
A prime example is Energising Development (EnDev), a multi-donor partnership led by GIZ and the Netherlands Enterprise Agency (RVO). Over the past 20 years, EnDev has provided energy access to more than 31.6 million people across Africa, Asia, and Latin America at an average cost of $13.3 per person. Its success can be attributed largely to market-based support tailored to local needs, as well as to results-based financing.
Given the systemic barriers preventing clean-energy companies from accessing adequate financing, GET.invest – which connects projects and companies with suitable financiers and is part of the Global Energy Transformation Programme – has mobilised €1.6b in funding for more than 130 DRE initiatives. One such initiative, OnePower Lesotho, has raised approximately €9m to bring electricity to 30,000 people in remote mountainous regions. In Mauritius, IRENA has financed the installation of 10,000 standalone rooftop solar systems, adding combined capacity of 10 megawatts of clean electricity.
This programme has delivered tangible benefits, reducing beneficiaries’ electricity bills by 50 percent, cutting up to 15,000 tonnes of carbon dioxide emissions annually, and saving $400,000 on diesel imports. Although DRE is the most sustainable and cost-effective way to electrify off-grid communities, additional support and investments are urgently needed to achieve universal energy access by 2030.
As global temperatures hit record highs, electricity access is one of the most urgent challenges of our time. With renewable-energy technologies maturing and component costs steadily declining, DRE has the potential to replace a significant share of existing diesel generators and prevent new ones from being installed. If deployed at scale, DRE could reduce poverty, drive economic development in LMICs, accelerate the transition away from fossil fuels, and bring us closer to achieving SDG7.
Realising this vision will require greater cooperation between governments, multilateral development banks, private companies, and philanthropic organisations to secure grants and concessional financing for clean-energy projects. By fostering public-private partnerships and harnessing the transformative potential of DRE technologies, we can make universal energy access a reality and build a greener, more equitable future for all.
By Ingrid-Gabriela Hoven, Francesco La Camera
Project Syndicate
