Barriers and drivers for the deployment of renewable energy technology in developing countries

Case study: Deployment of solar water pumps in Ghana

Term Paper 2008 14 Pages

Politics - International Politics - Topic: Development Politics



1. Introduction

2. Drivers for the deployment of RET in developing countries
2.1. Drivers for developing countries
2.2. Drivers for developed countries

3. Barriers to the deployment of RET in developing countries

4. Case study: Barriers to the deployment of solar water pumps in Ghana
4.1. Energy in Ghana
4.2. Case study: Solar water pumps in Ghana

5. Conclusion


1. Introduction

Renewable energy technology (RET)1 are considered as “one of the strong contenders to improve plight” (Painuly 2001: 73) for more than 2 billion people in developing coun­tries who don’t have access to the clean modern energy which is essential to social and economic development (BMZ 2006). RET are increasingly recognised for their contri­bution to development especially in rural areas, increasing health, energy independence and climate change mitigation.2

Due to massive technological improvements in recent years, economies of scale in pro-duction3 and given the absence of market distortions4, RET can be cost competitive with conventional energy sources. This counts especially for off-grid RET in rural and re­mote areas where costs for grid connection are excessively expensive and where 80% of people without access to electricity live. RET become even more competitive if envi­ronmental externalities5 are factored into the market price of competing fuels (Martinot et al. 2002). Despite those advantages, RET in developing and developed countries are only tapped to a small amount of their potential as there are several types of barriers to their deployment (Painuly 2001). While traditional renewable energy sources like bio­mass (i.e. fuel wood, animal wastes and crop residues) provide 30 - 45% of the energy supply in developing countries (up to 90 % in rural Sub-Sahara-Africa) RET produce only about 2 % of the global energy supply, mostly in developed countries (REN21 2005).

This paper aims to identify major drivers and barriers to the deployment of renewable energy technology in developing countries. In chapter two the main drivers for RET, as well as their ability to contribute to development aims and poverty reduction, will be discussed in general, as there are a number of incentives for developing as well as de­veloped countries. Barriers, however, depend more on the particular technology and conditions in countries or regions (Martinot et al. 2002). The second part of this paper will look at a specific case study: The deployment of solar water pumps in Ghana.

2. Drivers for the deployment of RET in developing countries

There are different drivers for the promotion of RET in developing countries. For de­veloping countries RET can bring major benefits for economic and social development, especially in rural areas. A switch from oil to renewable resources and energy technol­ogy can reduce dependency on oil imports. For developed countries, the advantages of the deployment of RET in the South derive from international climate change agree­ments like the Kyoto Protocol and from economic interests.

2.1. Drivers for developing countries

Most of the developing countries are facing major changes in their energy supply. Fast growing economies like China, India or Brazil have to meet enormous growth rates of their energy demand and poorer nations have to meet international poverty reduction goals, which implies reduction of energy poverty especially in rural areas (BMZ 2006). Besides international pressure and support there are other important incentives for meet­ing the growing energy demand in developing countries with RET.

One of the arguments for developing as well as developed countries to switch to renew­able resources is the opportunity of gaining independency from oil and fossil fuels. Es­pecially after the oil price shocks and the oil price increases of the 1970s there was a rising awareness about the vulnerability of economies. Renewable energies can support developing countries to gain independency from fossil fuels (BMZ 2006). One of Bai-ley’s arguments for introducing RET in Ghana is that its oil imports are a major con­tributor to the country’s excessive debt as 10 % of its GDP are spent for oil imports (Bailey 2007). This implies a high vulnerability of the power industry and economy.

There is also a great incentive for developed countries to support independence from oil and other fossil fuels as those resources are scarce and if the growing energy demand of developing countries was to be met with fossil fuels, world market prices would rise and resources would decrease even faster. That wouldn’t meet the interest of developed countries which are themselves highly dependant on the fossil fuel markets.

Regarding social and economic development, there are important benefits of RET. First is its potential for decentralised power supply. In the next few decades, large numbers of poor people in rural areas or in urban slums will remain unserved by grid-based electricity mainly because of the high costs of grid extension (Reiche et al. 2000). Especially for those low demand users, off-grid electrification provides an alternative and a grow­ing market niche for small rural energy serving companies. RET are most important in this context as the only non-RET on such a small scale requires the use of diesel-generators. All other proposed technologies are biomass, wind, solar PV or small hydro power (ibid., GTZ 2007, BMZ 2006).

There are several positive impacts on social and economic development that motivates governments and donors to support RET. Most of the poor in the South rely on tradi­tional biomass for cooking and heating. Women and children in particular suffer from indoor air pollution due to burning biomass in the house without sufficient aeration. The World Health Organisation (WHO 2002) estimates that about 1.6 million premature deaths can be annually attributed to indoor cooking. Another major disadvantage de­rives from the substantial time use for collecting firewood or other forms of biomass. The collection time can be seen as a large non-monetary expenditure especially for women who are mostly responsible for collecting fuels. Where RET replace former tra­ditional biomass use, they therefore have an important positive impact on health and on time use, especially of women and children, both of whom can influence productivity of education, income generating or subsistence activities. Furthermore the substitution of biomass can reduce the exploitation of local natural resources (Reiche et al 2000) and can lead to a reduction of biomass based GHG emissions (Sagar 2005).6

According to the World Bank (2000) access to electrification in general can improve standards of living and economic development. Electric lighting in evenings and nights and access to modern media like TV, radio and computer can improve education. Ac­cess to modern media can improve the ability of poor people to organise their interests and gain information on political issues that will have important impacts on their politi­cal and social empowerment. Furthermore they help to gain important information to improve their livelihoods about market prices, weather forecast or available support ser­vices (Reiche et al. 2000).

Besides those important social improvements which can also have impacts on produc­tivity, there are other productive uses of electricity and RET in developing countries that increase incomes and provide development benefits. The major productive uses are for agriculture (e.g. irrigation, drying processes, grain mills), small-scale industry (e.g. silk


1 Renewable energy is defined as an energy source which is replaced within a human lifetime. Technol­ogy to harness this energy is referred to RET such as biomass, solar photovoltaic (PV), hydro, wind or geothermal technology.

2 With proper management RET have nearly no impact on the environment as they produce little of no emission of green house gases (GHG) or solid waste (Edjekumhene et al. 2002).

3 Reduction in cost per unit resulting from increased production, realized through operational efficiencies.

4 Market distortions occur through market interventions of governments through price ceilings, price floors or tax subsidies.

5 Environmental externalities are negative side effects of production like air pollution whose costs are not borne by the producer but by the whole society.

6 It is often assumed that the poor rely on ‘climate-friendly’ biomass and have relatively low levels of energy use so that their consume doesn’t have impact on green house gas emissions. But according to Sagar (2005) the aggregate emissions of rural and urban poor worldwide (nearly one third of humanity) are not insignificant.


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University of Manchester – Institute for Development Policy and Management
renewable energy reneqable energy rechnology development developing countries solar energy ghana




Title: Barriers and drivers for the deployment of renewable energy technology in developing countries