Growing up in South Korea, I have seen the country transform from a recipient of aid to a fully developed economy and a donor in its own right, sharing its experience of how to use development support as a catalyst to promote long-term sustainable growth.
South Korea has also made tremendous progress in promoting green growth. As a Korean, I was therefore very proud that we were able to welcome the Green Climate Fund to South Korea. Through the Korea International Cooperation Agency and GCF, South Korea has a critical role to play in leading on climate change in the region and beyond.
One of the critical lessons we have learned is that poverty and exclusion go together. If people have little or no access to power and other resources, their opportunities and their ability to improve their condition are very limited.
However, bringing access to power to people has been difficult, particularly in remote rural areas. As a result, as World Bank President Jim Yong Kim noted in his blog post last week, “about 1.2 billion people worldwide don't have access to electricity.”
However, as the blog entry also points out, this issue can be addressed: “Renewable energy development will be critical to close this energy-access gap sustainably. Fortunately, renewable energy is becoming increasingly affordable. In many countries, developing utility-scale renewable energy is now cheaper than or on par with fossil fuel plants,” Kim wrote.
The Gasa Island initiative
Not only is this possible, but it is becoming reality. On Gasa Island, about 7 kilometers off South Korea’s southwest coast, wind turbines and solar panels supply power for its 168 households and visitors.
Isolated from the mainland, the island used to be entirely reliant upon diesel generators and suffered from chronic power shortages. After installing wind and solar power facilities and energy storage systems in October 2014, however, the island now enjoys constant, uninterrupted energy supply.
Gasa Island showcased the first microgrid operation of its kind in South Korea: a small-scale, self-sufficient grid, which generates energy from renewable resources such as wind and solar power, combined with ESS technology.
The entire process is managed by an automated energy management system, which tracks electricity use in real time, forecasts demand and channels power either to meet immediate demands or to store the surplus in the ESS.
Not only is the supply more reliable, it is also cheaper: bringing diesel to Gasa Island meant that electricity cost 10 times more than on the mainland and electrifying the island has reduced energy costs by almost $300,000 a year. The islanders have now been able to restart salt and fish farms that were closed due to high diesel costs, improving the variety of their diet and increasing income earning opportunities.
Scaling up the model
Learning from the successful Gasa Island initiative, South Korea is replicating the microgrid model and scaling it up on other islands.
One such initiative will make Ulleungdo, South Korea’s second-largest island, energy independent and carbon neutral. The project, which will be launched in August, aims to provide energy from renewable resources: solar, wind, and small hydropower combined with the ESS and EMS by 2017, transitioning to geothermal energy and fuel cells by 2020. Led by the New Energy Industries Committee — which includes members from both public and private sectors — the project will raise funding through innovative project financing and a special purpose vehicle established by private investors.
South Korea’s goal is to expand microgrid projects to another 120 islands, which is estimated to reduce energy production costs by $14.5 million and reduce greenhouse gas emissions from the islands by 80 percent a year. The committee is now exploring how to export this model to remote communities in Southeast Asia.
Similar innovation is taking place elsewhere too. In India, energy solutions are being implemented for residents marginally connected to the power grid. Most rural Indian communities — particularly those households with a lower per capita income — use kerosene for lighting.
Kerosene lanterns are dangerous, dirty and expensive, and they do not even provide much light; however, they have a low initial purchase price and allow flexible payments over time. New prepaid metering and mobile payment technologies directly address these problems, allowing remote villages with seasonally low income to purchase solar panel systems with a light and mobile charger on a lease-to-own basis, making payments on their mobile phones with schedules set by the users.
Take a holistic look at the problem
As these cases demonstrate, the combination of clean energy and technologies can provide innovative solutions, especially for those at the bottom of the pyramid who are often located in remote rural areas.
Two main factors have made these models viable and scalable. First, renewable energy is more affordable than diesel or kerosene. Second, these business models use innovative yet simple technologies, already developed for other markets (e.g. prepaid mobile phones).
The key to the approach is to take a holistic look at the problem and not be blinded by one technology or type of organization. Using a range of existing technologies, it is possible to create rapid results and bring power to remote communities. As a result, small and midsize enterprises can explore business opportunities — indeed, SMEs are major investors in the Ulleungdo project, for example.
The business models of the projects in Gasa Island, Ulleungdo and India can be easily replicated in other parts of the world too. In communities that rely on diesel or that have no access to the grid, cheap and simple renewable energy and ICT technologies from the private sector can partner with multilateral development banks, governments and governmental agencies.
KOICA President Kim Young-mok recently stated that “private sector involvement is extremely important to scale up energy access for all in a sustainable manner.”
I agree and believe efforts can be easily scaled up with private sector investments. These affordable and simple solutions can be applied by the energy poor across the world to provide bright light, opportunity and help to ensure no one is left behind.
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