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Published on March 24th, 2014 | by Jigar Shah

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Norway Can End Energy Poverty

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Norway can take the lead to end energy poverty with its new mandates for renewable energy investment and sustainable development. These mandates can and should call for transitioning energy access investment away from large-scale centralized energy investments to small scale, distributed clean energy investments. Norway and others have already committed over $1B in funding announced during the Rio +20 meeting in 2012, now it is time to figure out how to put that money to work. In doing so, Norway can lead the world in ending our failing approach to energy poverty.

Addressing energy poverty has been a 40-year wait. During that time span, the World Bank, India, and others have promised the poor a connection to the electricity grid. In India’s case every 5-year plan is littered with broken promises and the poor wait in the dark. As a result the world’s population is growing at about the same rate as the population gaining access to electricity – meaning 1.3 billion people are permanently left behind if something doesn’t change. What’s worse, nearly 2.5 billion people today considered “electrified” receive only a few hours of electricity per day.

The reasons for this failure are many. Beyond corruption alone, grid extension is expensive, cumbersome, and slow. But we have an opportunity to change all that. With a twenty-year track record and recent cost reductions, it is well acknowledged today that distributed renewable energy is the fastest, cheapest and most effective means of delivering on the world’s energy access goals.

But it’s not just us that believe distributed renewables are the solution to energy poverty. The International Energy Agency (IEA) has made clear in a series of reports the only way to reverse energy inequality is to rely heavily on small scale distributed energy infrastructure in rural areas. However, current investments by governments, public institutions, and multi-lateral banks involved in the United Nations Sustainable Energy for All (SEFA) are heavily skewed towards investments in large scale centralized power plants and grid extension. But a new way forward, catalyzed by the convergence of distributed renewable energy and mobile phone technology is emerging.



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Today, three out of every four new mobile phone subscribers live in emerging markets. Just as mobile phones leapfrogged landlines across the developing world, distributed renewable energy is leapfrogging the grid, in part to power these off grid mobile customers. More importantly, mobile operators are not earning enough profit on these customers because over 500 million mobile phone customers don’t have a place to charge their phones at home. Support of this 21st century approach requires investment.

Entrepreneurs have solutions to this problem that can save families money and their lives. Already the off grid solar lighting market in sub Saharan Africa is growing at a 95% compound annual growth rate according to Lighting Africa. In Bangladesh, Grameen Shakti and others are deploying 30,000 to 40,000 solar home systems every single month. But despite this initial success, a stifling lack of access to finance so acute it can take years for entrepreneurs to raise the money to test their ideas is holding back our ability to end the travesty of energy poverty.

Luckily small amounts of venture capital from Khosla Impact, Solar City, and other mainstream, hard-nosed investors has changed the sector in the past 6 months. But private sector capital is not enough in infrastructure. That’s why twenty of the world’s leading off-grid clean energy entrepreneurs are requesting $500 million in financial commitments from leading public institutions to help them deliver on the world’s energy access goals. The group’s efforts have been backed by CEOS of more than 25 leading civil society organizations from around the world. This money has already been pledged by Governments around the world by Norway’s own Energy+ work. Now it is time to actually unlock this money not just pledge it.

So, many people are coming together to create a parallel track to the false hope of building polluting power plants and extending the existing electricity grid infrastructure to the poor. We are asking the Norwegian Sovereign wealth fund shift 5% of its total fund or ~$50B to renewable energy, and that at least 1% of that be provided to off-grid renewables. This money would not be a subsidy. It would be provided to mainstream capital providers to leverage their expertise and provide a compelling return back to investors – just like was done with microfinance.

We have a once in a generation opportunity to do something that matters. The eradication of energy poverty is an essential step to the empowerment of women, education of children, effectiveness of health care, and attainment of the millennium development goals. There are over one billion reasons for Norway to help us make this happen. We’re asking them to help us bring the world from darkness to light.

Jigar Shah is author of Creating Climate Wealth: Unlocking the Impact Economy, 2013 Icosa Publishing. Shah unlocked the multi-billion dollar worldwide solar industry with a business model innovation (Power Purchase Agreement), not a new technology. This model created SunEdison, the largest solar services company worldwide. Jigar Shah has shown that business model innovation applied to the biggest challenge of our lifetime – climate change – will unlock a $10 trillion dollar new economy.

After SunEdison was sold in 2009, Jigar served through 2012 as the first CEO of the Carbon War Room —the global organization founded by Sir Richard Branson and Virgin Unite to help entrepreneurs address climate change. SunEdison and Carbon War Room proved that we could make positive change through business and financial model innovation in many industries. Today, as CEO of Jigar Shah Consulting, he works with global companies in a multitude of industries to deploy existing clean energy solutions fueled by new business models.

Image Credit: Norwegian flag with typical norwegian red wooden house with sod roof via Shutterstock






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About the Author

is author of Creating Climate Wealth: Unlocking the Impact Economy, 2013 Icosa Publishing. Shah unlocked the multi-billion dollar worldwide solar industry with a business model innovation (Power Purchase Agreement), not a new technology. This model created SunEdison, the largest solar services company worldwide. Jigar Shah has shown that business model innovation applied to the biggest challenge of our lifetime – climate change – will unlock a $10 trillion dollar new economy. After SunEdison was sold in 2009, Jigar served through 2012 as the first CEO of the Carbon War Room —the global organization founded by Sir Richard Branson and Virgin Unite to help entrepreneurs address climate change. SunEdison and Carbon War Room proved that we could make positive change through business and financial model innovation in many industries. Today, as CEO of Jigar Shah Consulting, he works with global companies in a multitude of industries to deploy existing clean energy solutions fueled by new business models.



  • Raymond Del Colle

    “Is it too hard to go to the moon, eradicate smallpox or end apartheid? Is it too hard to build a computer that fits in your pocket? No? Then it’s not too hard to build a clean energy future, either.” http://clmtr.lt/c/EPG0fz0cMJ

  • Bob_Wallace

    Jigar, I think micro solar is a very low hanging fruit on the ‘minimize climate change’ tree. And it has the side effect of freeing up precious money for those with the least and improving their health. So much good can be accomplished with so little.

    There are a number of start ups that are trying to get at this problem. All of them apparently trying to invent fire on their own. Many are well meaning, but either their business model, hardware, or capitalization seem less than optimal.

    There are millions of reasonably intelligent, highly motivated individuals who would love to own and operate their own business. They live where micro solar is needed. They don’t need to make much money to be successful considering their present options.

    Give them an idea, some training, access to quality product and small amounts of capital. Within a very short period of time the poorest of us all will have electricity in their homes.

    What is needed, I think, is a knowledgeable, adequately funded organization that can do the equipment development, manufacturing oversight, owner training, and financing. An organization that is adequately funded to let it spread out quickly after the basics are developed.

    Think of it as a franchise company. Do the more advanced chores in one central place, concentrate the design and planning so that highly qualified people can put together various system packages of good quality components.

    Build a training program that can turn willing individuals into installers with the basic business skills to run a local solar company. Put trainers and quality assurance people into the field. Give the local franchisees access to materials on credit.

    The mother organization probably wouldn’t need huge amounts money. It would need to support the central organization and provide each owner with their first shipment of equipment. After that, properly organized and administered, it could become self-sustaining.

    • Banned by Bob

      A much more realistic and pragmatic approach that could begin right now.

  • JamesWimberley

    Another headline that lets down the content by going well beyond anything it supports. Jigar Shah asks Norway to take the lead (entirely feasible), not to solve the problem by itself (quite impossible). Reporting is not marketing; hype kills stories.

    Shah fails to mention that part of the failure of LDC governments to deliver electricity to the poor is the pernicious and deep-rooted culture of energy subsidies, in many countries to the urban middle class, in India also to farmers. Distributed generation can only contribute if it’s understood that everybody must pay what electricity costs. That’s the basis for mobile phones spreading like wildfire.

  • Banned by Bob

    So let me get this straight.

    India and the World Bank have made promises over time about delivering power to the poor. But they haven’t delivered. So now it’s Norway’s obligation to do something that these government entities could not?

    The good news is that the economics work for displacing oil with solar. But guilting those who have the means into backing this is not a very productive approach.

    • JamesWimberley

      Norway has a huge pot of money from oil to invest and a conscience, an unusual combination. As a strategic investor it can exercise very considerable leverage. In fact the decision to earmark a share of its sovereign wealth fund in renewable projects (not just companies) is nearly a done deal.The open issue is fossil divestment.

      • Banned by Bob

        The reason Norway has a Sovereign Wealth Fund, unlike any other EU country, is that they have fossil fuel assets and a fiscally conservative government. Don’t think we’ll live to see Norway divest these assets.

        Agree with your points below.

        • JamesWimberley

          The divestment under consideration would presumably be from non-Norwegian assets: http://cleantechnica.com/2014/03/18/norway-may-use-oil-fund-provide-renewables-40bn-boost/

          • Banned by Bob

            Peanuts compared to the value of their oil and gas production assets.

        • DrewBach

          1. Norway is not a member of the EU.
          2. Norway’s gov’t has been social-democratic for the last decade (and more in various combinations). The current Conservative gov’t is *left* of the US Democratic party.
          3. There are EU countries that have SWF’s, including France.

          - a Norwegian Conservative party member

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