For Rachel Kyte, Asia-Pacific's energy future is all about efficiency

By Lean Alfred Santos 14 June 2016

Rachel Kyte, CEO of Sustainable Energy for All. Photo by: The Business & Climate Summit - Paris 2015 / CC BY-NC-SA

Rachel Kyte wants you to imagine a sustainable energy future. As the CEO of Sustainable Energy for All, an initiative launched by United Nations Secretary-General Ban Ki-moon in 2011, she sees improvements in efficiency as the key to reaching that goal.

Taking the stage at the Asia Clean Energy Forum last week, held at the Asian Development Bank headquarters in Manila, Kyte asked the audience to close their eyes and visualize success. At the annual meeting of the Caribbean Development Bank in Jamaica last month, she did the exact same thing.

“We have to imagine that we're going to be successful. The people in that room are leaders … private sector leaders, government leaders,” she told Devex in an interview, while emphasizing the sheer magnitude of the task ahead. “We've got to help economies through a transition which no one ever had to go through. … This is uncharted territory, and we have a lot of what we need at our disposal but it's not being used effectively today.”

Kyte, who served as the World Bank vice president and special envoy for climate change until December 2015, asked the room to imagine it was 2024 — what she calls the end of the decade of Sustainable Energy for All — when transportation is cheaper and quicker, millions of jobs are created and focused on clean technology, and every community across the globe is connected to the grid and has access to cleaner and more sustainable energy sources.

This transition includes countries' ability to decarbonize enough to meet the Paris agreement goal of a global temperature under 2 degrees Celsius; manage to grow and create jobs with lesser reliance on carbon-based energy sources; exploit renewable energy sources better; and achieve sustainable energy mix while providing universal access to energy that meet everybody's needs.

“If we can imagine that life can be transformed by clean energy in less than a decade, then we can have the courage to make better policy decisions and make bolder financial decisions now,” she explained.

Efficiency for Asia-Pacific

Kyte sees the Asia-Pacific as the most likely region to pioneer this shift. The world's most populous region and the epicenter for economic growth for the last decade is expected to double its demand for energy by 2030, according to ADB.

Countries such as India and China have committed to aggressively reducing their carbon emissions in the next couple of years while focusing on developing renewable energy sources at home. Yet their energy consumption will inevitably grow: the two regional powers are home to around half a billion people without access to electricity.

Kyte sees energy efficiency as the only way to boost sustainable energy without sacrificing growth. “Every country in the region no matter how developed or developing needs to put efficiency first because efficiency is the cleanest, easiest, cheapest fuel,” she said.

The idea of efficiency that Kyte likes to drive at is simple: It's about getting more out of what you already have. For example, a superefficient LED bulb can provide the same amount of light while lasting longer and consuming less electricity — reducing carbon emissions without compromising the productivity levels.

“[Efficiency] brings down your additional need for power generation. Of course you need more power generation as you grow but it's much cheaper to be efficient than to build new power generation,” she said.

A focus on efficiency also gives governments more legroom to explore a more sustainable energy mix, according to Kyte, rather than building quick-fixes for power generation that may be devoid of sustainability perspectives.

“Pursue an energy mix which would meet your growth needs, meet your needs for competitiveness but which would be cleaner,” the SE4ALL chief said, while highlighting the growing competitiveness of renewable energy sources with the continuous decline in prices.

Universal access

One of the region’s primary challenges as it develops is universal access and connection to the grid. Only a third of Myanmar’s population has access to electricity, for example, with less than 20 percent of the rural population connected to the grid.

Kyte sees innovative new ways to expand connectivity. The traditional practice would be to design an energy system with a centralized grid and then extend that grid outward. “What we're actually saying is, with modern technologies and new business models, distributed energy, alongside the grid, can mean that we can meet the energy access needs in a much shorter time frame.”

The SE4ALL chief argued that a more proactive and integrated approach with efficiency at the core is possible by simultaneously focusing on grid connection and energy distribution, instead of traditionally pursuing them one at a time. And with communities having more efficient tools and appliances than before, access is easier as the amount of electricity needed is lesser without affecting productivity.

“When you're managing the energy system, you need to make sure that there are no disincentives or perversities that slow down distributed energy,” she said. “Think about achieving the access goal quickly so that means a more inclusive society ... that way we believe that this region could speed the way in which it attacks the energy access goal.”

Need for a mind shift

Stakeholders need to put efficiency first in order to achieve sustainable energy in the region, Kyte said.

Governments can take the lead in establishing and pursuing efficiency standards through policy and strict implementation. These standards can include efficiency requirements from the automobile industry, construction and operations, and other industrial processes, for example. Doing this, Kyte explained, “positions your domestic industry to be competitive internationally” … and “in a more resource efficiency perspective.”

Second, countries need to look at the bigger picture when considering costs and benefits in choosing energy sources. As the price of renewable energy falls, investments in sustainable energy are far more beneficial than fossil fuel, the SE4ALL chief said, particularly given the latter's externalities.

“You have to ... factor in the economic impact of the health impacts of coal, the competitiveness that is lost because of people being ill through air pollution, [and] the competitiveness that is lost if your city has bad air,” she explained. “I mean businesses will not go to those cities.”

One way that countries can give renewable energy players a chance is to cut fossil fuel subsidies and level the playing field. In 2014, worldwide fossil fuel subsidies amounted to $490 billion, according to the International Energy Agency's World Energy Outlook.

“When you take away the subsidies which would support fossil fuel technology over renewable energy, it makes renewable energy even more competitive,” Kyte concluded. “Look at the experience of other countries around the world where they've auctioned out power generation, where they're starting to deal with subsidies and they're pricing energy correctly, and you'll see most of those auctions are being won by renewable energy firms.”

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About the author

Lean 2
Lean Alfred Santos@DevexLeanAS

Lean Alfred Santos is a Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. Prior to joining Devex, he covered Philippine and international business and economic news, sports and politics. Lean is based in Manila.


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