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The need for electricity in the developing world is growing at an alarming rate, and it has implications around the world.
WASHINGTON — A blackout in Italy won’t raise electricity prices in New York City.
Unlike oil, electricity is not a globally traded commodity. Were the Strait of Hormuz to be shut down, consumers filling up at the pump in the U.S. would immediately feel the pinch. There is no such analogous situation for electricity.
Still, electricity is growing in importance. The closer we look at ways to reduce CO2 emissions and ensure reliable, affordable and clean energy, the more we see the electricity sector at, or very near, the center of the global security agenda. In particular, we need to start thinking about the mounting geopolitical implications of electricity in the developing world.
Three recently issued high-profile reports — from, respectively, the United Nations and the World Health Organization, the International Energy Agency (IEA) and ExxonMobil — highlighted how electricity in developing countries is at the center of two inter-related and daunting challenges: domestically, to help alleviate poverty and foster economic development, and internationally to curtail greenhouse gas emissions.
The IEA, in its annual World Energy Outlook, reported that global electricity demand is set to increase 2.5 percent per year between now and 2030, making electricity the world’s fastest growing energy source. Exxon’s outlook echoes this forecast noting that power generation “is not only the largest energy-demand sector,” but it will also represent 55 percent of the total growth in world energy demand by 2030. More ominously, power generation is forecast to be fueled mainly by coal, with severe implications for rising CO2 emissions and the world’s poorest countries that have little financial or institutional capacity to deal with climate change.
The IEA said that more than 80 percent of global electricity growth will occur in developing countries, mainly in China and India. Currently, India has an estimated 500 million people without access to electricity, while China, according to MIT’s 2007 study, The Future of Coal, is adding the equivalent of nearly the entire U.K. power grid each year in power generation.
But this crisis extends well beyond China and India. There are 1.5 billion people who have no access to electricity, 80 percent of whom live in South Asia and Sub-Saharan Africa. The U.N.-WHO report also notes that with global population growth, an additional 1.2 billion people will need access to electricity by 2015 to meet the Millennium Development Goal of halving the proportion of people living in poverty.