A Trillion-Dollar Appetite for Electricity
A Trillion-Dollar Appetite for Electricity
The world's developing nations are projected to have a staggering trillion-dollar appetite for new electric power plants over the coming decade. Investing in raising the energy efficiency of lighting and other electric end-uses is a way to reduce the need for such large infusions of money.
Lighting is among the very first uses of electricity in developing countries. Among other things, lighting can enhance the development process by enabling people to be more productive after the sun goes down. But the rising cost of inefficient lighting can also waste precious development dollars.
ESCALATING COSTS OF ENERGY
The escalating costs of providing energy drain money away from food, health services, housing, and other basic needs in poor countries, and, hence, have become a serious constraint (rather than aid) to development. Nonetheless, the demand for light will grow manyfold as these countries become more populated, affluent, and urbanized. The callenge is to minimize the electricity needed to meet this rightful demand for energy services. Growth will be greatest in countries where many homes have yet to be electrified.
Of the $1 trillion estimated by the World Bank as being the required investment in electricity supply in the developing world over the next decade, a significant portion will be for lighting. The Bank and other lenders are prepared to provide only a small fraction of theses funds. Even if the funds were available, it is all too clear to lenders and borrowers that past investments in electricity supply have contributed substantailly to the enormous international debt (and associated inflation) faced by some developing countries.
Often coincident with an electric utility's peak demand, lighting is a driving force in the need to build new power plants. With the large power distribution losses and long, expensive transmission systems typical of developing countries, a single one-dollar light bulb can require hundreds of dollars of investment in the power system. Even the low estimates by the World Bank peg future electricity capital costs in the developing world at over $4 000 per kilowatt. Estimates by the World Energy conferecnce range as high as $11 000 per kilowatt.
POSSIBILITIES
It is clear that if efficient lighting is ignored the cost of providing illumination can become a great problem.
Previous studies have revealed a sizeable potential for improving lighting energy-efficiency in developing countries in a cost-effective way. An all-sector estimate for Brazil identified a 48% savings opportunity. An analysis of commercial buildings in Thailand revealed a nearly 70% savings potential.
OBSTACLES
Given the high costs of providing electricity and the low incomes of the poor, governments must often provide large subsidies to consumers. Subsidizing energy costs can be a clumsy, and often undesirable, way to help people afford light. In parts of India, for example, kerosene is subsidized for use by poor households as a lighting fuel. Unfortunately, this makes kerosene cheaper than gasoline, and it ends up being used (in a very polluting way) in vehicles as well. In a similar manner, subsidized electricity for lighting fails to encourage efficient use.
There are also other barriers to efficient lighting in the developing world:
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Even the most basic statistics on lighting energy use are often unavailable.
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There is an extreme scarcity (or unavailability) of efficient lighting products and information.
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Technical problems, such as variations in voltage or frequency, can interfere with the proper functioning of certain lighting products.
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High import duties (often near 100%) can be levied on efficient lighting components. The problem is magnified when inefficient products are manufactured domestically.
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Energy-efficiency standards or guidelines are often lacking.
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Electric utilities still have very limited awareness of and interest in promoting efficient energy use.
- Almost all energy-related loan funds are targeted at the supply side rather than towards energy efficiency.
Fortunately, there are signs that policies are beginning to address these obstacles. For example, import duties have been drastically reduced in Pakistan ("Efficient Lighting Shines on Pakistan " , IAEEL 1/93) and Thailand.
Mandatory standards for commercial buildings - including lighting - are being developed within the Association of Southeast Asian Nations (ASEAN). Electric utilities in Thailand (see Electronic Ballasts on the Thai Horizon IAEEL1/92, Moving the Thai Market, IAEEL 3/93),Mexico (IAEEL 2/92), and Brazil are initiating financial incentive programs for efficient lighting in households, businesses, or streetlighting.
The World Bank and other lending agencies are beginning to support energy-efficiency projects. As another means of marshaling capital, Western entrepreneurs such as Pacific Resources Inc. (in Chicago, IL, USA) have entered into joint ventures to produce efficient lighting products in China (See China - A Lighting Giant, IAEEL 3/94).
Evan Mills
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For more information see:
Fueling Development: Energy Technologies for Developing Countries, U.S. Congress, Office of Technology Assessment, 1992; and Proceedings of the 1st European Conference on Energy-Efficient Lighting (E. Mills, ed.) and Swedish National Board for Industrial and Technical Development, NUTEK, Department of Energy Efficiency, Stockholm, Sweden.