The Government has sought to add 220 megawatts of clean power to the country’s energy grid by 2020 which is 10 percent of the country’s current daily electricity demand. By 2025, the country hopes to boost its solar power output to 1,000 megawatts to meet fast-growing power needs according to President Sirisena. Solar power has the potential to meet 32 percent of Sri Lanka’s annual power demand of around 10,500 gigawatts – but so far just 0.01 percent of that potential has been developed, according to the Sri Lanka energy sector development plan for 2015-2025.
Today about 3 percent of Sri Lanka’s energy demand is met by renewables such as wind and solar. Hydropower provides about half of the country’s electricity during the wet season but during the dry season, between August and October, 81 percent of the island’s power needs are met by fossil fuels, over half of that from coal.
Issue of subsidies
For the smallest-scale users, of 1 to 30 units of electricity a month, electricity costs Rs. 7.85 a unit, while large household consumers – those above 180 units - pay Rs. 45 per unit. Under the current effort to promote household solar installation, the government has offered to buy electricity generated by household solar panels at about Rs. 22 per unit. The scheme also offers households low-interest bank loans to buy the equipment, with a repayment period of seven years.
A new electricity system is emerging to bring light to the world’s poorest
According to the UN, 220 m people gained electricity between 2010 and 2012. But most of them were in urban areas, particularly in India. In sub-Saharan Africa, a region that, excluding South Africa, uses less electricity than New York state, electrification barely kept pace with population growth. Some 600 million of its people are without electricity; demography means that by 2030 the number could be even higher. What would it take to bring all these people into the modern world?
Beyond the pylons
Governments and utilities in poor countries are often too cash-strapped to extend their grids. Part of the problem is widespread reluctance among users to pay for electricity. Across the world efforts are under way to change such attitudes, using technology and attempts to tweak social norms. In parts of Delhi, a utility has encouraged women to persuade neighbours to pay their bills in order to secure better service for all. Mr. Greenstone is part of a project, funded by the International Growth Centre, a global research network with headquarters in London, that is looking for ways to encourage people to pay for electricity in Bihar, where 64 m people are without power—the highest share, at 64%, of any Indian state.
Bihar has plenty of generating capacity, Mr. Greenstone says, but gets paid for little more than half the power it provides. The rest is pilfered, unmetred or unbilled. The state power company has promised to provide electricity to “feeder” areas of 2,000-3,000 households that pay at least 60% of their bills. In a few randomly selected areas, it will increase the supply of electricity in proportion to the share of bills that are paid. The aim is to make people more aware of the value of their electricity supply and to encourage payment.
Mr. Greenstone thinks that the results of the trial, due later this year, will underscore the need for pre-paid electricity metres for households. These are similar to coin-fed metres in low-income housing in the developed world, but can be topped up by mobile phone, rather than cash. Uganda, where only 15% of the population is connected to the grid, is an early adopter. Selestino Babungi, the head of Umeme, the sole grid operator, says that half of its 800,000 customers use pre-paid metres. Before 2005, when it won the distribution contract, theft was ubiquitous. About 38% of electricity was “lost” because of illegal hook-ups or non-payment; some big businesses went as far as flying in Indian engineers to rig their metres. By making payments easier for clients and installing an automated system that detects when a metre is tampered with, the firm has brought that share down to 18.5%.
Higher revenues will help the company reach its goal of tripling the size of its distribution network to absorb additional power soon to be generated in Uganda. Most will go to industry and agribusiness, says Mr. Babungi, creating jobs that bring more people to the income level where they can afford to connect to the grid and buy household appliances that consume more power. Customers in such areas are likely to be better payers.
The power of progress
Though Uganda’s government promises that eventually electricity will be rolled out to everyone, starting with regions where jobs are likely to be created is an idea with a good pedigree. Vietnam launched its post-war electrification in the rice-growing regions of the Red river and Mekong river deltas, helping the country to become one of Asia’s biggest rice exporters. Then it moved on to less immediately profitable areas. Access, which was under 50% in the late 1980s, is now almost universal.
Thailand and Costa Rica, which also quickly electrified rural regions, both prioritised areas where the potential for commercial development was higher.
Such rapid electrification, often using fossil fuels, may look like the cheapest way to bring power to everyone. And replacing fires and wood stoves improves air quality. But overall the environmental damage is severe, in terms both of adding smog to cities and accelerating climate change. Even the poorest countries are increasingly aware of the risks of pollution, says Anita Marangoly George of the World Bank. “Why lock them into choices that will turn Lagos and Nairobi into Delhi and Beijing?,” she asks.
Hence donors prefer to fund power projects that are green as well as profitable. Some worry that this could saddle poor countries with pricey, intermittent energy. For instance a $24 m utility-scale solar-energy project in Rwanda generates electricity at 24 cents per kilowatt hour. Industry executives say they could produce it at half the cost using natural gas.
Others fret that solar energy is still not reliable enough to power economic development. Bill Gates, co-founder of Microsoft, published an open letter with his wife, Melinda, drawing attention to poor people’s lack of energy around the world, and poor women’s lack of time (in part because they lack powered labour-saving devices).
He says that with current technology, solar power and batteries are insufficient to satisfy Africa’s energy needs. The good news, he adds, is that Africa has several other possible sources of fairly clean and reliable energy: geothermal in east Africa, hydro in Ethiopia and central Africa, and natural gas in several countries, including Mozambique and Tanzania. Unlike wind and solar power, these can be used for “baseload” power that operates constantly. “If you want to attract manufacturing jobs you can’t have intermittent energy,” says Mr. Gates. “If you want energy at less than 10 cents per kilowatt hour that’s not some battery connected up to intermittent forces.”
Potentially the most promising approach to bringing light to the 1.1 billion divides the task between traditional utilities and smaller, more entrepreneurial firms. The former focus on cities and businesses, and the latter supply “off-grid” power to poorer households in rural areas, individually or via neighbourhood “mini-grids”.
M-KOPA, which operates in Kenya, Uganda and Tanzania, and Off-Grid Electric, in Tanzania and Rwanda, offer packages of appliances, such as a few LED lights, a mobile-phone charger and a radio, all powered by a solar panel and a battery. Payments are made via mobile phone. An upfront cost of $150-500 would be prohibitive to most of their customers. So the firms charge in instalments, which are spread out enough to bring the monthly cost below that of buying kerosene for lamps. Default rates are negligible; if payments stop, the service is disconnected remotely by disabling the box that links the panel to the appliances.
Once the loan is paid off, there are no further payments, until a customer invests in a bigger system with more appliances, such as a flat-screen TV. M-KOPA says it is introducing new customers to electricity at the rate of 500 a day.
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