A Call to Establish A New Economic Metric for Energy Development

As the Pacific Rim is facing massive loss of life and destruction, and as the New Year of 2005 begins, it is a perfect time to reflect. As we add hundreds of millions of people to our planet, mostly earning $2 or less a day and investments into Africa, Asia, and Latin America become less and are less targeted — there are some grim realities to face.

As Dr. Harish Hande of SELCO Solar Light (P) Ltd of Bangalore (India) wrote: “In the new MDG (Millennium Development Goal for reducing poverty) document of the United Nations – solar PV is shown in poor light. The document constantly speaks about the “expensiveness” of solar PV. My question – is it cheaper to have uneducated youth with poor eye-sight down the road? Is it cheaper to transmit electricity through a grid which does not exist? Is it cheaper for girls to go into the forest to collect wood rather than going to school? Are these the less expensive options?” These are good insights and actually exemplifies the vacuum ‘we’ in the renewable community have allowed to be perpetuated. By accepting the traditional measures of viability (cents per kWh, for instance) PV and other renewables always come out poorly. Another economic “metric” needs to be crafted and effort initiated to build support for it (such as dollars per immediate used, levelized cost, non-interruptable energy) When you take these modifiers in account – biomass, free-flow hydropower, geothermal, photovoltaics, solar thermal, wind, and waste heat/cogeneration along with other clean distributed generation and energy efficiency come out quite well. We must begin to drive the market using metrics in our own terms and enlist well known people as prime movers, to build public acceptance. That is a monumental challenge — but one worth fighting for, in my opinion. Now with the devastation in the Pacific Rim – these issues become even more urgent and necessary. Will the international community focus on the midterm, not just on the immediate short term? Smart, targeted use of micro-lending and mini-grants to re-establish businesses to bring on-site energy, clean water, telecommunications, etc. seems to be the key here – rather than centralized approaches that leave people in refugee tent villages with no way to participate in rebuilding their lives and communities. We have ample lists of millions of the poorest people on the planet being warehoused from Haiti to Rwanda to Indonesia. The time is to establish the NILIAkw “metric” for development — that is energy driving services that are non-interruptable, stable in cost for its lifetime, and immediately accessible by the users. Large centralized grids driven by fossil fuels or even dispersed systems sustained by propane or diesel would definitely have a “high” NILIAkw, while indigenous renewably-driven applications have the lowest cost sustained NILIAkw level. Now there are those of you may have a better acronym, I am sure. But the issues I believe must be confronted globally to address how to sustain global economic growth for most of the world in face of harsher climate and geophysical disturbances, environmental degradation, and greatly increased and sophisticated terrorism. As my firm becomes more involved in critical infrastructure hardening projects supporting homeland security, none of the analysis to which I have been exposed supports greater centralization of energy, communications, water, or transportation infrastructure or endorses greater reliance on centralized targets for terrorism such as LNG tanker ports, nuclear power plants and repositories, and larger petroleum and natural gas pipelines. Remember – just one human failure – as experienced in Ohio (regional grid outage), New York (911 twin tower disasters) or the space shuttle (Challenger and beyond) — could have catastrophic consequences. I am advocating advanced, sophisticated technology in a far more agile and resilient configuration. I am advocating financial approaches that drive development, economic growth, and individual capitalism at the closest level of most of the world’s consumers. But most governments, particularly the industrialized nations (and regardless of political party) seem hell-bent on supporting large economic bureaucracies that have created their own “rules of thumb” that not surprisingly show indigenous use of renewable energy and efficiency as expensive and not worth their time. And at the other end, we have developing country governments, many of which will not liberalize their economies in order to keep the wealth centralized in the governing few. As we grapple with the complexities and challenges in the global picture, it is incumbent on us in the clean energy communities to take the initiative in our own terms, not someone else’s. Multilateral institutions and individual governments for way too long have been allowed to define their non-success with most of the world relying on interruptible energy, whose prices vary widely, whose access by consumers is very limited, whose use creates loss of domestic capital and growth, and which seriously impairs the environment and health of the users. While the traditional balance sheet number crunches smile that their ROIs are good, we all know that the basis for that comfort is more “Enronesque” than real. So my New Year’s resolution embodies the experience and success of two small bands of women, the first who established Mothers Against Drunk Driving (MADD) who were scorned in the early years but who now have laws passed in most states with large bipartisan margins. And the second, from a group of the September 11th relatives who persevered in Congress to pass the recent bill to implement the 911 Commission Report. In each case, the groups were small, the odds were against them, and yet their message was focused, consistent, and solid. It’s about time we take to heart these lessons as we enter a New Year in the aftermath of the recent tragedy in the Pacific Rim. Clearly, we have the technology, the financing and business models, and many successes — but we have yet to dominate and influence the market, the governments, and the implementers as we need to — and that challenge is in our collective hands. Happy New Year. About the author… Scott Sklar is president of his own policy and strategic marketing firm, The Stella Group Ltd., Washington, D.C. (solarsklar@aol.com). Previously, he served simultaneously as executive director of the Solar Energy Industries Association and the National BioEnergy Industries Association for 15 years. His book, A Consumer Guide to Solar Energy, was re-released in 2004 for its third printing.

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