- Transition to clean energy must also tackle energy poverty around the world.
- Infrastructure investment needed to support this transition is beyond the reach of many countries.
- Low-income countries, like Colombia, are proving that low-cost solutions can achieve economic and environmental benefits.
- Read the Energy Transition Index 2021.
According to the United Nations, 700 million people (10% of the world’s population) still live in poverty. A shocking statistic by any account, but one that many of us forget as we get on with our busy lives and deal with our own personal stresses.
What is less well known, or less discussed, is that people living in poverty need access to energy far more than their more affluent peers – to keep warm, to provide and prepare healthy food, and to access clean water. For those of us not living in poverty, access to energy is of course just as vital, but we have the means to provide warmth and food for ourselves and our families in multiple, easily accessible ways. We typically take these fundamental needs for granted.
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We in the energy industry focus so keenly on achieving the energy transition, and rightly so. This work is encapsulated by two UN Sustainable Development Goals: Goal 7 Affordable and Clean Energy and Goal 13 Climate Action. The UN defines its 17 Sustainable Development goals as “integrated and indivisible”. Have you ever stopped to consider how the energy transition is linked to the others, especially to Goal 1 “Ending poverty in all its forms, everywhere”?
According to the UN: “The world is making progress towards Goal 7 [Affordable and Clean Energy], with encouraging signs that energy is becoming more sustainable and widely available. Access to electricity in poorer countries has begun to accelerate, energy efficiency continues to improve, and renewable energy is making impressive gains in the electricity sector. Nevertheless, more focused attention is needed to improve access to clean and safe cooking fuels and technologies for 3 billion people.”
What if we could do more? Here’s the thing – we can.
Working towards the energy transition offers a unique and very important opportunity to also address energy poverty and poverty in the broader sense. The solution is in how we pursue the energy transition.
What's the World Economic Forum doing about the transition to clean energy?
Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.
Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.
Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.
Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.
To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.
Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.
Is your organisation interested in working with the World Economic Forum? Find out more here.
Some countries will be able to invest massively in new infrastructure – according to a new Wood Mackenzie analysis, the US will need to spend an estimated $4.5 trillion over the next decade to convert to 100% renewable energy) – but in less affluent countries this type of investment simply isn’t an option.
How utilities execute their investment in the energy transition is of great importance because these choices will most directly impact lower income customers in the form of increased bills. Countries and their utilities are rightly being thoughtful about how they do this.
Colombian example shows energy transition can be low-cost
Take Colombia for example – where they are finding clever, innovative, and low-cost ways to pursue the energy transition and provide affordable electricity to their citizens – of whom more than a quarter live below the poverty line.
One of Colombia’s leading utilities, Empresas Públicas de Medellín (EPM), has recently announced its successful application of Modular FACTS (Flexible Alternating Current Transmission Systems), which manages the power flow on the grid and is having broad economic and environmental benefits. This technology is allowing EPM to optimize its existing infrastructure, rather than needing to invest in the construction of new infrastructure and improve energy access throughout Medellín. EPM is serving this growing load by facilitating the connection of renewable generation. Through this work, EPM is improving system reliability while lowering operational costs and this translates into lower bills for their customers.
EPM’s vision and commitment to leverage innovation is benefiting Medellín ratepayers, and the broader Colombian electric sector. It is this kind of creative action the energy industry must consider, if we are going to achieve the energy transition, and more importantly, address energy poverty.
We have an opportunity to do something about it, as citizens of the world we have an obligation to do something about it. Now is the time to start talking, thinking, and most importantly take action.