Taming a Wicked Problem: Energy Access Planning From an Energy-Poor Perspective
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CitationGibson, Harold D. 2017. Taming a Wicked Problem: Energy Access Planning From an Energy-Poor Perspective. Master's thesis, Harvard Extension School.
AbstractIn practice, addressing universal energy access has largely been treated as a simple planning and delivery problem – identifying the target, selecting the least-cost technology, and implementing the recommended solution. In reality, a look at the underlying dynamics suggests that we’re dealing with a more complex “wicked problem” that requires a different approach. Geographic Information System (GIS) based energy access decision tools have emerged which offer a quick assessment of potential electrification options from a least cost of electrification (LCOE) perspective. Broadly speaking, these tools tend to take a top-down, grid-centric approach biased toward investment level decisions by national energy planners and donor funding institutions – leaving off-grid solar home system pay-as-you-go (SHS PAYG) service providers to make risky, empirical decisions regarding markets entry and expansion.
The hypothesis I examined is that SHS PAYG market penetration can be increased in the Economic Community of West African States (ECOWAS) through the development of an enhanced GIS-based energy access decision tool framework which overcomes institutional barriers and leverages enabling environment conditions. Overcoming the market distortion introduced by energy consumption subsidies (i.e. the institutional barrier) and leveraging the energy addressable market (i.e. the enabling environment condition) created by the faster pace of mobile service last-mile distribution (versus the pace of electrification) are proposed as the initial elements of this framework.
The research questions explored to support my hypothesis include: 1) Why has SHS PAYG market penetration remained limited in the face of a significant addressable market in the ECOWAS region? 2) How do energy consumption subsidies, which are intended to benefit low-income consumers, distort the market and impact progress toward achieving universal energy access? 3) How can the mutual goals of SHS PAYG service providers and mobile network operators (MNOs) be leveraged to accelerate the pace of SHS PAYG scale up? 4) What are the best subsidy reform options to create a level playing for SHS PAYG service providers? 5) How can existing GIS-based energy access decision tools be enhanced to support the energy access planning process from an energy poor perspective?
My research methods included computer simulations of the SHS PAYG addressable market, the “energy addressable market”, and connection subsidies and results based financing schemes using the Open Source Spatial Electrification Toolkit (onSSET). In addition, the set of existing GIS-based energy access decision tools was evaluated to identify the platforms most suitable for enhancement to address SHS PAYG business decision needs. My results show a sharp contrast between a robust SHS PAYG addressable market of 40 to 80 million (~10-20 million households) and the 13 to 17 million people (3 to 4 million households) who are currently served by mini-grids and SHS PAYG across the region. Examination of the current status of each ECOWAS member states, coupled with projections using the historical pace of electrification, indicates that the 2030 universal energy access goals are unlikely to be met without a significant shift in the current planning paradigm. Evaluation of the existing decision tools suggests that onSSET and GeoSim® are the most suitable for future enhancement from an energy-poor perspective.
My conclusion is that my proposed enhanced GIS-based energy access decision tool framework points to a prioritization scheme employing two levels of geographic selection. First, the energy addressable market can be used as a geospatial indicator for communities which have mobile phone service but no electricity access - representing a pent-up demand for SHS PAYG service providers, increased revenues for MNOs, and critical lighting and phone charging services for energy-poor consumers. Second, geographic selection can then be applied to this result to identify connection subsidy programs (market entry) or results based financing programs (market expansion) – allowing SHS PAYG service providers to “follow the money.”
In terms of future research, immediate efforts should include pilot studies of the proposed geographic selection prioritization scheme in both established and nascent SHS PAYG markets. In the mid-term, datasets from the World Bank’s ongoing multi-tier framework baseline surveys should be considered as an opportunity to use the geographic selection and prioritization approach to target communities with minimal/no electricity access. Finally, development of a geospatial coordination platform designed to mitigate the risk of stranded assets for SHS PAYG service providers and mini-grid developers due to unexpected grid encroachment should be explored in the long term.
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