January 11, 2008

Bright Lights, Rural Village

There are about 1.6 billion people around the world who don't have electricity. Not only is that a catastrophe in its own right, but environmentalists worried about global warming might fairly wonder what'll happen if and when all those people do get power. An explosion in fossil-fuel consumption, over and beyond what we're already seeing? Well, maybe not. This new report from the World Bank suggests that, for many of those 1.6 billion, renewable energy may actually be the most cost-effective option for generating electricity. Really.

The logic goes like this: It's true, without a carbon tax, building a coal plant is often the "cheapest" option for large-scale power needs ("cheap," that is, if you ignore the pollution and climate-change costs). But that's not true for rural folks who live off the grid (about 500 million people) or in smaller, isolated villages (a good chunk of the rest). For these communities, wind, biomass, geothermal, hydro, and sometimes even solar are more economical, even before you start thinking about green concerns.

That makes sense. For a tiny village in the middle of nowhere that requires a 500kw load, building a monster coal plant—or installing hundreds of miles worth of transmission lines to the nearest urban area—won't necessarily be the easiest way to bring in electricity. There's also the added bonus that state-owned utilities in many developing nations can be unreliable, and micro-generation is a nice way to not have to rely (too heavily) on a corrupt central government.

Back in 2001, Nick Thompson and Ricardo Bayon wrote a wonderful Washington Monthly piece about how renewable energy often makes more sense for many developing countries than doing what the now-rich countries all did and burn loads of fossil fuels. (They used the example of solar power in rural villages in Ghana.) In some cases, it'd be easier for renewable companies to make inroads in the developing world, since it's not like there's a ton of pre-existing fossil-fuel infrastructure in place. But anyway, it's nice to see the World Bank putting forward a similar argument, only with more charts and graphs.
-- Brad Plumer 7:08 PM || ||