Guest Articles

Wednesday
March 9
2022

Peter Weston / David Nicholson

Access Alone is Not Enough: Why a Holistic Approach is Necessary to Develop Lasting Energy Solutions

If you asked 100 random people to name the greatest challenges facing humanity, how many of them would say access to energy? We’ll be honest, probably only a handful, if that. Yet access to energy is in fact one of the defining issues—and defining opportunities—of our time. About 800 million people, 86% of whom live in countries classified as fragile, lack reliable access to energy. Too often, energy access can mean the difference between life and death: It is one of the factors that determine whether a mother and her newborn baby survive a difficult birth, and whether farmers merely eke out a living, or increase their harvests year after year.

Reliable access to energy helps the smallholder farmers who feed the majority of the world increase their crop yields and provide more food for their families and communities. It allows medical clinics and other health facilities to provide 24-hour care with functioning equipment and refrigerated vaccines. Children who go to school during the day can study after dark if they have electricity, which is also vital for many of the services households and communities need to help them prepare for, and adapt to, a changing climate. And access to energy powers small businesses, paving the route to greater stability and resilience for families and communities.

In short, securing energy access is of paramount importance to saving and improving lives. That’s why Mercy Corps recently chose to boost its focus on the energy sector in particular, by merging with Energy 4 Impact to increase access to climate-smart, sustainable energy for people around the world. Over the last 14 years, Energy 4 Impact has accelerated access to clean energy for 18 million people across Africa, through activities that range from supporting the installation of solar power for schools, health clinics, remote rural areas and refugee camps, to promoting climate-smart agriculture and technologies like irrigation systems and cold storage. With the help of Mercy Corps’ deep reach into fragile states—including Burkina Faso, the Democratic Republic of the Congo, Ethiopia, Mali, Niger, Nigeria, Somalia, South Sudan, Yemen, Syria and more—Energy 4 Impact can now expand energy access to the communities that need it most, helping them build a more just and greener future.

 

Thinking Beyond Energy Access

Both of our organizations believe that access to energy is the key to unlocking people’s potential. But crucially, providing access alone is not enough. We must also ensure that people, businesses and communities are able to capitalize on this energy access, and this will require us to build new skills, catalyze sufficient investment, identify suitable technologies and develop local sustainable markets.

To do this we must take a comprehensive market system approach. This 360-degree approach often begins by looking at the industries, value chains and markets which already exist in a community, then identifying the critical gaps affecting the energy value chain, along with the different players and the challenges they face. Only when we have a full picture can we define bespoke approaches to addressing those challenges and filling those gaps.

For example, potential approaches might include supporting the efforts of solar technology providers in a capital city to service rural businesses in remote areas, or helping informal businesses with little collateral to access finance, so they can invest in electric equipment and build their capacity to use that equipment profitably. Or they might involve devising new business and financial models to make solar irrigation affordable to low-income farmers, while at the same time helping farmers find new routes to market to sell their products at better prices.

Each market is a complex system involving many players, each with their own particular set of challenges. Understanding these markets and designing holistic solutions that address both demand and supply issues is crucial to making energy access work for people.

 

Designing Holistic Solutions

Our work in Rwanda, where 70% of the population is employed in the agricultural field, provides a good example of this sort of holistic solution. In 2020 we completed our Solar Irrigation Rwanda program to help develop a new market for the country’s smallholder farmers. Most farmers in Rwanda are dependent on rainwater for irrigation: Based on our calculations, in 2017, only 2% used machine-powered irrigation, and nearly all of that was fueled by diesel. Our goal here was not only to provide access to clean solar power for these farmers, but also to create a sustainable and equitable market for solar so that it will be a lasting solution.

Part of the solution, of course, involved providing the technology and infrastructure; namely, solar irrigation systems that pump surface water from rivers and lakes. But we also took a holistic approach that included:

  • Raising farmer awareness of the potential of solar irrigation;
  • Addressing the affordability of these solar systems through subsidies and third-party financing;
  • Working with suppliers to identify the best-performing systems;
  • Building the capacity of farmers to use these systems;
  • Creating new distribution channels and delivery models for these technologies;
  • Strengthening links between farmers and those who purchase their agricultural products;
  • Improving the accessibility of government subsidy schemes that support solar solutions;
  • Creating favorable policy and regulatory frameworks; and
  • Ensuring the participation of women agricultural workers.

Looking at all of these factors combined allowed us to design systems that we knew farmers would actually use, and that would meet their needs in the long term. As a result, 1,450 farmers in Rwanda adopted solar irrigation systems through the program, allowing them to improve yields, reducing their vulnerability to droughts and changing rainfall patterns, and enabling multiple cropping practices—improvements that will allow them to help increase food security for the entire region.

 

Sustainably Powering the Future

Despite all the social and economic opportunities that energy access and the productive use of energy offer, the sector’s efforts remain well below the scale required to achieve UN Sustainable Development Goal 7: universal access to affordable, reliable, sustainable and modern energy by 2030. According to one recent report, current global investment falls well short of what is needed to reach these ambitious goals on schedule. With the turmoil of climate change, COVID-19 and other crises unraveling many of the development gains made over the past decade and pushing millions more people further into poverty, there has never been a more urgent time to help communities build back with access to cleaner, more sustainable energy.

Last November’s COP26 summit saw the launch of the Global Energy Alliance for People and Planet, which aims to unlock US $100 billion in public and private financing to accelerate the transition to renewable energy and reach 1 billion underserved people with reliable, renewable power. Delivering on this pledge will be one of the most important priorities for humanity over the next several years. And as these pledged dollars hopefully make their way to communities across Africa, Asia and Latin America, it will be paramount that they are channeled towards projects that meet local needs in a sustainable and equitable way, spurring broad-based growth and social development. A major component of this will involve providing finance options to homegrown companies, which are best positioned to scale and build local supply chains and markets. These are often early-stage companies with unproven or less-established business models, and few connections to investor networks. So funders and other stakeholders must leverage innovative forms of financing, while also ensuring that the right capacity-building and investment-readiness support is available for them to attract the capital required to achieve impact at scale.

With the right partnerships and smart approaches, we can create climate-resilient energy solutions that will help farmers grow more food, enable health care providers to reach more people, help schools to educate more students, and empower entrepreneurs to lift up their communities so that all people are able to prosper.

 

Peter Weston is the Managing Director of Energy 4 Impact, and David Nicholson is the Senior Director of Mercy Corps’ global Technical Unit for Environment and Energy.

Photo credit: David Brazier / IWMI.

 


 

 

Categories
Agriculture, Energy, Entrepreneurship, Environment
Tags
agribusiness, agriculture, business development, climate change, climate finance, energy access, entrepreneurship, smallholder farmers