It goes without saying that electricity is a primary cornerstone of modern civilization. Without it, some of the greatest achievements of mankind never would have occurred, and our everyday lives would be dramatically different: we could not light our homes, access clean water, provide adequate health care, operate machinery, or communicate with the rest of the world. For many of us, it's hard to imagine a life without power. Yet, for 1.5 billion people on the planet such is their reality. This is unacceptable.
For too long, the role of energy in meeting basic human needs had been overlooked by the international development community. Access to energy was not included as one of the Millennium Development Goals (MDGs) when they were introduced by the United Nations in 2000, even though energy is an absolute prerequisite for achieving each of them. Over time, however, it has become readily apparent to many development experts that none of the MDGs can be achieved without access to modern energy services.
This growing consensus has resulted in the United Nations's "Sustainable Energy for All" initiative formally launched earlier this year by U.N. Secretary General Ban Ki-Moon who called upon the private sector, civil society and governments of the world to join forces to end energy poverty by the year 2030. The initiative is focused on three goals: ensuring universal access to modern energy services for the world's poor; doubling the rate of improvement in energy efficiency; and doubling the share of renewable energy in the global energy mix. Through the creation of this initiative, the U.N. has elevated the importance of energy access to the highest level of political discourse.
How realistic is it to provide energy to 1.5 billion people, some of whom live in the remotest parts of the world, in the next 15 to 20 years? Certainly it's possible, but there are a host of challenges that must be overcome such as project planning, access to financing, scaling-up of innovative energy technologies, technology transfer, material resources, and community and government involvement, to name a few.
There is a tremendous opportunity to make progress towards these goals at the upcoming Rio+20 Conference on Sustainable Development. This gathering of representatives from nongovernmental organizations (NGOs), the private sector, governments, U.N. agencies and other major stakeholders is critical in forming the relationships and partnerships needed to overcome the challenges of energy poverty.
Public-private partnerships will be a key to achieving the U.N's goals, not so much because of their ability to deploy project-based solutions, but more so because of their ability to create new markets, revenue streams, and sustainable business models targeted at the base of the pyramid (BOP).
The World Resources Institute estimated in 2005 that the BOP market for energy was $433 billion, and that the world's poor spend about $38 billion per year on kerosene, just for lighting. To compare, in 2004, the worldwide soft drinks industry was estimated to be $307 billion.
Opportunities at the BOP exist, but the cost of doing business at this level can be high. There are many unknown variables, and BOP environments can be hard to navigate, both physically and politically. This is where the role of NGOs becomes a very important part of the public-private partnership model. Many have been operating in the field of energy poverty for years, implementing renewable energy solutions in some of the remotest parts of the world. They've accumulated a tremendous amount of on-the-ground experience, from system design and installation to developing relationships with communities, and coordinating with local and national governments.
NGOs have a history of operating effectively at the nexus of government and private sector engagements, and their work in the energy sector is no exception. Not only are they in a prime position to act as consultants to businesses and governments to identify new revenue opportunities and create new markets at the BOP, but they also know what works and what doesn't when it comes to the design, implementation, operations and maintenance of energy projects in developing countries.
Achieving the goals of the Sustainable Energy for All initiative will require all the creative thinking, innovation, expertise, and cooperation that everyone in the international development field can muster. For renewable energy companies operating in well established markets, the thought of entering an emerging market at the BOP can be daunting. But a public-private partnership, especially one that utilizes the expertise and insights of an established NGO, offers the best hope of creating new business models that can sustainably -- and profitably -- deliver modern energy services to people living at the base of the pyramid.