One of the major challenges for development in the world today is to provide modern energy services to over 1 billion people located mainly in the rural areas of developing countries.
Recognizing this in September 2011, the Sustainable Energy for All (SE4All) initiative was born, with three objectives for 2030:
- Providing universal access to modern energy services, including clean cooking and heating fuels
- Doubling the global rate of improvement in energy efficiency (from 2010 level of -1.3% to -2.6% in 2030)
- Doubling the share of renewable energy in the global energy mix (from 2010 level of 18% to 36% in 2030)
In support of SE4All, 2012 was declared by the United Nations as the Year of Sustainable Energy for All and subsequently 2014–24 as the Decade of Sustainable Energy for All.
What is the progress so far? In short, rapid but insufficient.
Towards universal energy access
As reported in the Global Tracking Framework 2015, from 2010 to 2012 the global electrification rate increased from 83% to 85% (95% to 96% in urban areas, 70% to 72% in rural areas), and up from 76% in 1990 and 79% in 2000. This reduced the absolute population without electricity from 1.2 billion to 1.1 billion. Among the regions, improvements were most notable in South Asia (75% to 79%), Sub-Saharan Africa (32% to 35%) and Oceania (25% to 29%).
The population to be electrified by 2030 is today’s access deficit of 1.1 billion plus the projected population growth from 2012 to 2030 of 1.5 billion. This access deficit is overwhelmingly rural, the forecast population increment almost entirely urban. The deficit is also overwhelmingly concentrated in Sub-Saharan Africa and South Asia, with the top access-deficit countries India with an unelectrified population of 263 million, Nigeria with 75 million and Ethiopia with 67 million.
To achieve universal access by 2030 requires an annual growth of 135 million from 2012 through 2030 (compared with 111 million from 2010 to 2012).
Improving energy efficiency
Primary energy intensity fell by more than 1.7% a year from 2010 to 2012, up from the average drop of 1.3% a year from 1990 to 2010. This acceleration was driven primarily by high-income countries, whose compound annual growth rate of primary energy intensity fell to 2.6% in this period, bringing them to the global target rate. However, in the upper-middle-income countries the fall in primary energy intensity remained low at around 0.5% a year and largely due to rapid industrialization, energy intensity remains well above the global average.
Among end-use sectors, industry was the largest contributor to the reduced energy intensity, followed closely by transport.
To achieve the target doubling in the historical rate of decline in energy intensity an annual 2.6% drop is needed between 2010 and 2030. The top 20 primary energy-consuming countries, led by China and the US and collectively responsible for nearly three-quarters of global energy use in 2012, will have a huge effect on achieving this objective.
Increasing renewable energy
The share of renewable energy in total final energy consumption increased from 17.8% to 18.1% globally – corresponding to a net increment of 2.9EJ – between 2010 and 2012. This is equivalent to an increase of 0.17% annually and compares with an average 0.06% annually from 1990 to 2010.
This increase was primarily driven by progress in East Asia and to a lesser extent the EU, Southeast Asia and North America. By technology, increases in hydro, wind, and solar resources accounted for roughly three-quarters of the net increase. By end use, increases in electricity generation did the same. This progress partly reflects a significant scale-up in efforts by policymakers, while continual reductions in the cost of key technologies have contributed to progress in deployment and a trend toward cost grid-parity in some technologies.
To achieve the target doubling in the share of renewable energy requires an average annual increase of 0.89% from 2010 to 2030 and will likewise depend on the top 20 countries with the largest total final energy consumption.
Sustainable energy investment gap
In the Global Tracking Framework 2013, global investment in areas covered by the three objectives was estimated around US$400 billion in 2010, and that additional annual investments of at least US$600-800 billion would be required to achieve the three objectives.
New estimates confirm that actual investments remain near US$400 billion and that the required investments are around US$1,050–1,250 billion. This implies an investment gap of around US$650–850 billion and point to a tripling of annual investments to achieve the SE4All objectives. To mobilize incremental annual investment by 2020 four broad investment themes have been identified – green-bond market development, structures that use development finance institutions’ derisking instruments to mobilize private capital, insurance products that remove specific risks, and aggregation structures that bundle and pool for small-scale opportunities.