Energy Transition

How electrification will make the world more inclusive

Electrification of the developing world could have global benefits. Image: NASA/Unsplash

Lisa Davis
Chief Executive Officer, Global Energy; Member of the Managing Board, Siemens AG
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Energy Transition

This article is part of: World Economic Forum Annual Meeting

The number of people without access to electricity fell below one billion in 2017. This is great news – and not just for those gaining better opportunities for basic supply, education, healthcare and economic development. It’s also good news for the global economy. In order for the world’s remaining underdeveloped regions to participate in the global marketplace, universal access to modern forms of energy is essential. The big question is how these regions will develop the necessary capacities. In the increasingly globalized energy value chain, they may play a unique and significant role.

In recent years, most of the progress in improving access to electricity has been concentrated in Asia. India has made significant advances with its Village Electrification Programme – even if in some areas there’s still a long way to go to get the entire population connected. The biggest challenge by far, though, is in sub-Saharan Africa. According to the International Energy Agency, in 2017 there were still 600 million people in the region who had no access to electricity. The major task here is the same as everywhere else: connection to the grid is just the beginning. Without a sizeable addition of reliable generation capacity, the lasting and powerful impact on people’s lives made possible by electrification won’t be achieved.

Electrifying to unlock economic potential

Building new, high-efficiency power plants and modernizing ageing plants are two of the main drivers for providing a cleaner, more reliable power supply. Advanced technology of the kind used in today’s gas turbines can not only drastically reduce fuel consumption and CO2 emissions, it also provides the necessary flexibility to compensate for fluctuating renewable energy sources.

Major energy projects like the world's largest combined cycle power plants in Egypt go beyond just meeting the demand for excellent efficiency and reliable power plant technology; they also address the growing need to fast-track project execution. In Egypt, Siemens built 14.4 GW of power capacity in just 27.5 months, expanding the country’s energy infrastructure by over 40%. All the same, projects like these do need to acknowledge developing countries’ understandable desire to participate in the project’s execution – including civil engineering, component delivery and long-term maintenance services. Including a significant share of local content helps create high-quality jobs and balances the long-term benefits of electrification by providing opportunities for near-term economic development.

Renewable energy puts developing countries at the heart of the future energy system

In addition to large projects, there is also a major need for action in more remote regions. Upwards of 80% of those who suffer from energy poverty live in rural areas. This is where other technologies come into play, like efficient diesel engines and mobile gas turbines, some of which can even be configured as floating installations. These types of innovative applications are portable and scalable, and are well-suited to environments where expansive land-based installations aren’t feasible - on islands, for example.

It is renewable energy sources, though, that will likely play the largest role in the future of electrification. Wind power and solar photovoltaics have become so readily available and cost-effective that they’re no longer an idealistic concept. They are competitive energy options that are increasingly superceding conventional energy sources. In fact, regions with an extensive need for development – parts of Africa, Central and South America, and Asia – often have the best conditions to support renewable energy options. Sub-Saharan Africa offers especially great potential for photovoltaic power, and many coastal regions in each of these areas are good candidates for wind power.

 Huge parts of the developing world are rich in photovoltaic potential
Image: World Bank Group
Renewing and diversifying energy value chains

Making the most of these renewable energy opportunities gives countries access to a low-cost power supply that benefits local consumers. It also offers them a chance to join an increasingly electrified and globalized energy value chain. When built at scale, low energy prices combined with high energy yields could allow these regions to capitalize on opportunities to produce synthetic fuels based on renewable electricity.

For example, electrolytic synthesis can generate fuels like hydrogen, methane, and even liquid-state e-fuels like methanol or ammonia. This offers a new opportunity for a win-win relationship between emerging and industrialized countries, where importing these fuels could provide an economical approach to decarbonizing the energy market. Trading green energy in storable form could dispel the concerns about supply security that sunk the Desertec project, which was based on direct export of renewable power and therefore hardly securable even over a short period of time.

Have you read?

Synthetic fuels have a realistic market potential today. Methanol, for example, can readily be mixed into fuels for conventional internal combustion engines. Over the long term, gas turbines could be operated CO2 emission-free by using pure hydrogen as fuel, providing a reliable, environmentally friendly power supply without relying on fossil fuels.

Electricity has historically been an enabler for industrial development, social welfare and improved healthcare, and its role is only increasing in importance. The broad electrification of end-user sectors like mobility and heating has made electricity the growing backbone of the world’s energy supply. And the promise of a cleaner electricity supply, which will benefit the world’s climate, only adds to the momentum of worldwide electrification. These advances offer the hope of an inclusive globalization that continues to improve the quality of life for all, not just some.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Energy TransitionSustainable DevelopmentGeographies in Depth
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