Energy grids have transformed the rich world, ensuring consistent supply in consumer households that has helped fuel demand for growth over the last 130 years. Over time, the original grid system (a singular, unidirectional system that supplied energy to nearby houses in Massachusetts) has evolved into a complex framework of interconnected regions, economies of scale and massive power-generating stations.
The modern power grid began to decline as the most appealing option as several things became apparent: increased demand during peak hours (when consumers put the greatest strain on the system) haven’t been met with corresponding technological advancement in effective metering, meaning that consumers no longer receive completely equal pricing. In parallel, the need to develop ever larger power stations relied primarily upon fossil fuel burning facilities, whose environmental polluting drove populations to demand they were placed far away from urban centers. Even more environmentally-focused solutions, such as hydro damming and nuclear, have been shown to negatively impact their surrounding environments and are often the targets of NIMBYism, leading to the hunt for alternative sources.
The developing world is another story entirely. Of the 1.5 billion people worldwide who lack access to electricity, 85% live in rural or fringe areas. A United Nations estimate claimed that installing effective energy infrastructure to these regions would cost approximately $35-$40 billion USD to be invested annually over the next 15 to 20 years, simply to provide enough power to meet basic needs. In this, we see that the economic case for developing comprehensive top-down solutions is strained at best and unfeasible at worst. But there are alternatives to grids.
Renewable energy growth in the third world has been sparked by need and low costs. Both demand and supply have fueled industry growth, with private sector supplier growth exploding alongside economic development since the mid 1990’s. Industry growth has been fuelled along lines of renewable type; suppliers seeking to develop in an area have to contend with existing infrastructure, local governments and expertise to properly manage issues of supply to consumers and manage the risk/return of each project.
The same issues exist, but in a reduced form, as any third world development project. But the inflow of private sector developers reduces pressure on local governments to develop systems using foreign investment while simultaneously keeping prices lower for consumers and fuelling local innovation. The need for skilled professionals to maintain micro-grid systems also relies upon education and collaboration with local stakeholders; if a solar generator is installed on every house in the region, having a centralized operation makes little sense. Employing locals to manage and operate the systems becomes the more attractive and feasible option in a non-centralized world.
The developing world and its 1.5 billion consumers need access to energy. Burning kerosene until local governments overcome the myriad of obstacles to create functional energy grids is both unrealistic and undesirable. Decentralized systems offer something the Western world has yet to acquire: genuine reliability and the freedom to develop locally-focused solutions. After all, the global energy problem was not solved 130 years ago in the state of Massachusetts.