SINGAPORE – There are close to 1.5 billion people in the world without access to electricity, more than half in the Asia Pacific region. Unfortunately, in today’s world it is almost impossible to find viable income-generating activities without access to electricity.
Renewable energy technologies (RETs) are invaluable to those who live outside the boundaries of power grids. The Renewable Energy Policy Network for the Twenty-First Century (REN21) estimates that there are tens of millions of rural households served by renewable energy around the globe. But this still translates into a mere drop in the ocean.
Why doesn’t the power grid reach these households in the first place? For starters, they are typically located in remote villages where grid access is prohibitively expensive. Governments lack both the means and motivation, owing to their inability to recoup costs from poor villagers, often because subsidized electricity prices depress revenues. In some cases, grid expansion makes sense after removing these distortions. But, where the villages and households are too remote, expanding the grid will never make economic sense.
These households resort to traditional fuels such as wood, oil, and candles for heating and lighting, leading to severe indoor pollution, not to mention chronic fire hazards. Study after study has shown the devastating effects that indoor pollution has on women, children, and public-health finances. Moreover, these fuels are not cheap, costing isolated households a significant proportion of their income.