From May 30-31, the Global Conference on Scaling-up Energy Access and Finance in Least Developed Countries (LDCs) was held in Beijing. It was co-hosted by GEIDCO (Global Energy Interconnection Development and Cooperation Organization) and UN-OHRLLS (UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States), with an aim to discuss sustainable energy development and financing models, share experiences and best practices, enhance energy access and regional collaboration in LDCs and pursue UN Sustainable Development Goals (SDGs).
At the opening ceremony, Mr. Liu Zhenya, Chairman of GEIDCO, delivered a keynote speech. Ms. Fekitamoeloa Katoa ' Utoikamanu, UN Under-Secretary-General and High Representative of UN-OHRLLS, the senior representatives from the Ministry of Foreign Affairs of China and other organizations made opening remarks. More than 200 guests from nearly 40 counties, including energy ministries of LDCs, the United Nations and other international organizations, as well as financial and research institutions attended the conference.
During the conference, the GEI Action Plan for Addressing Electricity Access, Poverty and Health Issues made its world debut. The Action Plan provides an innovative plan and an implementation path for addressing population without electricity access, poverty and health issues from the perspective of energy transition. It is highly relevant to sustainable development of LDCs.
Building GEI help crack the “development dilemma” of LDCs
According to statistics, 90% of the 47 LDCs in the world are located in Africa and Asia, with a population of over one billion, and the GDP of LDCs only accounts for 1.2% of the global total and per capita GDP is less than USD 1,000; per capita power consumption is less than 200 KWh, only 7% of the world average; more than 60% of the population has no access to electricity; only 46% of LDSs’ population has received secondary or higher education; and medical, pension and other social insurance are less than half the level of middle-income countries.
“To crack the development dilemma of LDCs, it is necessary to give priority to energy development, accelerate energy transition and upgrading, and achieve green, low-carbon and sustainable development.” Mr. Liu noted that building GEI is a necessary path to accelerate the economic and social development of LDCs. Building GEI can accelerate the development and utilization of clean energy and ensure adequate power supply in a green way; promote the underdeveloped countries to establish and improve industrial systems, and transform the advantages of clean energy resources of the underdeveloped countries into economic advantages through transnational power trade; and address the issue of electricity access, promote infrastructure development in transportation, medical care, public health and education, and ensure that all people enjoy a modern and civilized life.
Mr. Liu pointed out that, through the building of African Energy Interconnection, by 2050, Africa’s installed electricity capacity and per capita electricity consumption will be seven times and three times the current level respectively; the cost of electricity in Africa will be more than 5 US cents/KWh lower than what it is today; and more than 100 million new jobs will be created in energy and related industries.
It is learned that, in essence, GEI is “Smart Grids + UHV Grid + Clean Energy”. It serves as an important platform for large-scale development, transmission and utilization of clean energy worldwide.
“China’s solution” provides a roadmap for fundamentally addressing electricity access, poverty and health issues
On May 31, GEIDCO launched the GEI Action Plan for AddressingElectricity Access, Poverty and Health Issues. This Action Plan is the fourth one released by GEIDCO to align with major UN initiatives after the release of GEI Action Plan to Promote the 2030 Agenda for Sustainable Development, GEI Action Plan for Promoting the Implementation of the Paris Agreement, and GEI Action Plan for Promoting Global Environmental Protection.
The Action Plan analyzes problems about electricity access, poverty and health facing today’s world, examines the importance of transforming energy development model, and expounds the implementation path of building GEI to resolve the issues of population without electricity access, poverty and health issues as well asthe development benefits GEI brings about. It also puts forward six actions including accelerating clean energy development, strengthening grid interconnection and fostering inherent growth dynamism, and six mechanisms including energy development aid, joint interconnection and coordinated industrial development.
How to address the three global issues of population without electricity access, poverty and health by building GEI? The report draws the following conclusions:
To achieve universal electricity access, large grids are the main force with the focus being put on meeting the needs of urban areas, population and industries that have intensive electricity demands; local power distribution networks and microgrids is an important approach,especially in remote areas, small islands and other areas with decentralized demands. By means of building centralized energy bases, developing distributed energy in a coordinated way, and building interconnected power grids, it is estimated that by 2030, the world’s population without electricity access will be reduced to less than 500 million; the cost of electricity will be reduced by about 1/4; and per capita electricity consumption will be increased by more than 40%.
Building large-scale clean energy development projects in regions suitable for centralized development and rich in resources will transform the resource advantages of poverty-stricken areas into economic strength, foster new growth engines and create new jobs. China’s “Photovoltaic Poverty Alleviation” has achieved remarkable results. By the end of 2017, photovoltaic power stations with a total installed capacity of 10.11 GW had been built in 25 provinces and 940 counties, benefiting about 30,000 villages and 1.646 million households in poverty. A 300 KW village-level power station can generate annual revenue of more than RMB 200,000 and gain stable revenue of more than 20 years under sound operation and maintenance management.
Building GEI can realize “Clean Replacement” and “Electricity Replacement”, directly reduce environmental pollution caused by fossil fuels, improve living environment of human, and reduce related diseases and deaths, thus enabling people to enjoy cleaner production and living environment and more reliable medical and health services. It is estimated that by 2050, health problems caused by air, water and other environmental pollution will be reduced by about 20%; 2 million to 3 million cases of related diseases will be reduced in Africa each year; and the gap between the average life expectancy of low-income countries and high-income countries will be narrowed from 17.5 years in 2015 to 13~14 years in 2030.
Mr. Zhou Yuanbing, Director General of Economic and Technology Research Institute of GEIDCO, stated that “eliminating poverty and achieving electricity and health for all is a global responsibility that requires joint action by countries around the world to build GEI and actively promote clean energy development, large-scale allocation and reform in the field of energy consumption”.
Co-development of “electricity, mining, metallurgy, manufacturing and trade” solves the problem of project investment and financing
Most LDCs are rich in clean energy resources such as hydro, wind and solar, or mineral resources such as aluminum, iron and copper. Such resources have long been starved of development for lack of funds, lack of market and other reasons. GEIDCO has put forward the co-development of “electricity, mining, metallurgy, manufacturing and trade”, providing a package of solutions for underdeveloped countries to solve the problems of project investment and financing and economic and social development.
The co-development of “electricity, mining, metallurgy, manufacturing and trade” refers to developing hydro, wind, solar power and other clean energy bases and using advanced UHV transmission technology to deliver electricity to mining, metallurgical processing and various industrial parks, so as to promote the transformation of trade exports from primary products to high value-added industrial products, build an industrial chain for the coordinated development of electricity, mining, metallurgy, industrial park and trade, and realize the virtuous circle of “investment - development - production - export - reinvestment”.
Mr. Liu said that based on the sound benefit expectation of the project, this model facilitates the three parties of power generation, transmission and consumption to sign long-term contracts, and form a community of shared interests. In the process of implementation, the project shall be guided by the policy financing featuring long term and low cost, and the market-oriented financing such as equity investment, bank loan and bond issuance shall be the main body to provide sufficient and diversified capital guarantee for the project.
According to the GEIDCO’s research report, with the large-scale development of clean energy and the innovation of financing models as the breakthrough points, assistance model will be more like “blood production” instead of “blood transfusion”, and therefore create new growth points. In the case of delivering hydropower from the downstream of the Congo river to West Africa, the final price is 4~5 US cents lower than that of the local hydropower in West Africa, which will strongly promote the development of mining, smelting and other industries in West African countries.
During the 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC), GEIDCO and the Republic of Guinea jointly launched the initiative on establishing “African Energy Interconnection and Sustainable Development Alliance (AEISDA)”. AEISDA aims to build platforms for governments, enterprises, financial institutions and other parties to establish effective cooperation mechanisms, and promote clean energy development, industrialization, electrification and economic integration in Africa.