Three years ago, Tarabhai Lakshmi Koli, 43, her construction worker husband, and their two grown sons, moved into their first real house in Siddapurwadi, a rural remote hamlet of 500 households in southern India, about 370 miles from Bangalore. But it lacked one important necessity: electricity.
For Koli and many others who live in distant areas of India, reliable energy often has been an unattainable luxury. Living without power makes it difficult to cook, to work, to read and study, and to stay cool in India’s often merciless heat. It means unrelenting darkness for many once the sun sets. It significantly contributes to poverty and poor health.
But Koli was lucky. She was able to secure a low interest loan, sufficient to buy a small solar power system capable of lighting two bulbs. Two lights in the house might not seem like much to those in the developed world, but they were transformational for Koli and her family. They enabled her to cook (using liquefied natural gas purchased with the help of a government subsidy) under a bright LED light, safer and cleaner than combustible, polluting kerosene lamps.
More importantly, her future grandchildren will have light in order to do their schoolwork. “I wish we had it when our sons were in school, but at least their children will be able to study in proper light,” she said in 2014, soon after her solar system began operating.
Not everyone in the country is as fortunate as Koli. An estimated 240 million people (some estimate the total at more than 300 million) located in remote areas of India still do not have access to electricity, according to the International Energy Agency’s 2015 World Energy Outlook. Most of their power comes from kerosene, wood, coal, and cow manure — sources that create serious pollution, especially when used indoors.
Lacking access to power constitutes a serious threat to public health. In addition to indoor pollution, having no electricity means there is no refrigeration to store vaccines and drugs, or to make ice for cooling humans and storing food. There is not enough light for childbirth, no way to charge cell phones — a critical lifeline in rural areas during emergencies — or to run fans and water pumps.
Moreover, people, industries, and health care facilities connected to the country’s central grid have found it unreliable and unpredictable, with intermittent power outages that occur frequently without warning. Imagine trying to run a hospital where the electricity goes off during surgery.
“This takes a huge toll on people’s health, not to mention on the nation’s economy and air quality,” said Matt Baker, an environment program officer in the William and Flora Hewlett Foundation. “Solar energy can deliver power without harming the air or the global climate — and with power, people’s quality of life and economic opportunities improve dramatically.”
India and the United States have been working together to support India’s transition to clean energy, including its goal of deploying 175 gigawatts of renewable energy by 2022, including 100 gigawatts from solar power. Both countries reaffirmed this commitment during Prime Minister Narendra Modi’s recent U.S. visit, listing a series of continued steps that will keep the momentum going.
“We need to see the change on the ground,” said Anjali Jaiswal, senior attorney and director of the Natural Resources Defense Council’s (NRDC) India initiative. “We need to see clean energy taking off, both for the future — for light for kids trying to read — and to mitigate the worst impacts of climate change, which are going to be profoundly felt in India.’’
Noting that India recorded its hottest day ever on May 19–51 degrees Celsius (123.8 Fahrenheit) in a small city in northwest India — she added: “In fact, they already are.”
To that end, four U.S. foundations recently announced a major initiative to support efforts to bring reliable “off-grid” or “mini-grid” power — fueled by solar energy — to people in India who now are without it. The philanthropies include Hewlett, as well as the David and Lucile Packard Foundation, the Jeremy & Hannelore Grantham Environmental Trust, and the John D. and Catherine T. MacArthur Foundation. The four have put forth $30 million (which the government of India will match) to fund the program.
“These technologies are really transformative in many, many ways,” said Justin Guay, climate program officer at the Packard Foundation. “First and foremost, they bring people basic but life-changing energy services in a matter of days, not years or decades it would take for the grid to arrive. Many of the communities have been waiting for the grid to arrive since Independence, so we are unlocking the potential of generations of people.”
Moreover, these technologies drive financial inclusion, important for those currently without credit or bank accounts, he added. “These are assets that require finance, and for those who are considered ‘unbanked,’ this is the first time they have ever opened a bank account, or taken out a loan,” Guay said. “This creates incredibly important history for the next time they want or need a loan. Imagine trying to get a home loan if you didn’t have credit history — it just wouldn’t happen.”
The first part of the foundations’ plan provides grants to clean energy business projects to help get them finance-ready. Specifically this means resources that will provide the feasibility studies, finance documentation, land surveys, customer due diligence procedures, etc., necessary to fulfill loan requirements established by the Overseas Private Investment Corporation (OPIC), a U.S. government loan agency that works in developing nations.
Secondly, the initiative aims to encourage funding for solar energy projects from development finance companies like OPIC, the U.K. Department for International Development (DFID), the German Investment Corporation (DEG), the World Bank, the Asian Development Bank, and others, making it easier to attract private capital.
In effect, the foundation funding will help mitigate risk and boost global investor confidence.
“Even small amounts of strategically used money can unlock much larger amounts…a small sliver, willing to take that first mover risk and send the signal to the private markets that they can invest and make money in clean energy in emerging markets,” Guay said. “We need a lot more of this flavor of money and activity to catalyze the clean energy revolution we all know is necessary.”
The foundation seed money “will unlock the dynamism and power of private financial markets,” Guay added. “What we have done here is take the first step down that road now we need other sources of public money to come with us.”
The willingness of these foundations to put forth their money “changes the risk profile of a project, making it much more bankable,” said Rachel Cleetus, lead economist and climate policy manager for the Union of Concerned Scientists. “It will make it more attractive for private money to flow in. It’s a very important blueprint that shows an innovative way of making a little money go a long way. You can imagine many, many initiatives of this type blossoming around the world.”
The program is modeled after a similar, successful one in Africa, the U.S.-Africa Clean Energy Finance Initiative, supported by the U.S. Department of State, OPIC, and the U.S. Trade and Development Agency (USTDA) which put forth an initial $20 million in grants in order to spur more than $1 billion in clean energy investments in Africa.
ACEF “has deployed $20 million in grants to catalyze over $1 billion in clean energy project investments in Africa,” Baker said. “We think our funding in India could do even better, leveraging as much as $400 million in investments from OPIC and other investors to generate projects that will deliver solar energy for the first time to communities without any power.”
Carl Pope, former executive director and chairman of the Sierra Club, believes the fastest way for India — as well as other Asian and African countries — to achieve universal electrification is to encourage investments in distributed, renewable energy. This would primarily be solar — roof-top panels or mini-grid installations — but also include “micro-hydro, mini-wind and biomass [which] also have niche roles,” he said.
Moreover, when the centralized grid eventually arrives, it will both need and benefit from this local generation, “because the 21st century grid will be multi-source and multi-directional, not one way from a small number of big power plants,” he said. “Much distributed solar will be developed in places where the spasmodic grid of much of the world has already arrived, so people can have reliable power, and higher quality power than the grid offers.”
Since mini-grids can operate independently — as well as connect to the central grid — they can serve as a backup when the main system goes down, as it often does, making them “a promising solution,” said Vrinda Manglik, campaign representative for the Sierra Club’s international climate and energy program. “Already, in cities, people are using off-grid systems to complement their connection to the grid, due to [the latter’s] lack of reliability.”
Off-grid solar has the potential to grow quickly, she added. “We’ve seen solar scale very rapidly in the United States, and the price of solar globally has fallen rapidly as well.”
As clean energy sources begin to take hold in India, the impact could be enormous. For example, Jaiswal described the work of India’s Self Employed Women’s Association (SEWA), an organization of low-income, self-employed women workers, who, among other things, use solar power generators to produce salt from the salt marshes in Gujurat, in Western India, which provides 70 percent of the country’s salt.
“The women and their families live there nine months out of the year, using the generators to pump water out of the ground, setting up salt pans, and — when the water evaporates — collecting the salt,” she said. “Clean energy can not only provide lights, but livelihood,” Jaiswal said. “Some of the women in the villages are weavers, this will enable them to sew and make a living. They will be able to use solar lighting for night markets. It will produce electricity to allow people to work at home. We will see that throughout the country.
“This is unprecedented,” she added. “No other country has tried to do what India is trying to do — build a clean energy economy and bring millions of people out of poverty. It’s not going to be easy. But these new initiatives are a step in the right direction to achieve these goals.’’
See this story at ThinkProgress.
Marlene Cimons writes for Nexus Media, a syndicated newswire covering climate, energy, policy, art and culture.