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Technology and new business models boost electricity access

More people worldwide are getting connected for the first time with renewables and off-grid systems are playing an increasing role, says International Energy report

A new IEA report found the number of people with no access to electricity fell to 1.1bn in 2016 down from 1.7bn in 2000. New technology and business models have been significant factors behind this progress—and clean energies and off-grid connections will account for a greater share of new connections in the future.

Since 2012, the number of people getting access to electricity for the first time has accelerated to more than 100m people per year. That is compared to 62m people per year between 2000 and 2012. At this rate, the number of people with no access to electricity is on track to fall from more than one billion today to 674m by 2030.

Developing countries in Asia have made significant progress, and the electrification rate in the region reached 89% last year, up from 67% in 2000. According to the report, India is the frontrunner among developing Asian countries and will reach universal access well before 2030. China reached a full electrification rate in 2015, while 100m people in Indonesia and 90m in Bangladesh have gained access since 2000.

Latin America and the Middle East have reached 99% and 95% electrification rates, respectively.

Electrification efforts in sub-Saharan Africa outpaced population growth for the first time in 2014, leading to a decrease in the number of people without access in the region. Nonetheless, despite some progress in the last few years, the electrification rate in sub-Saharan Africa is currently just 43%.

While several countries in the region, including Ethiopia, Gabon, Ghana and Kenya, are on track to reach universal electricity access by 2030, progress across sub-Saharan Africa is uneven. The number gaining access is failing to keep pace with population growth in some countries. By 2030, roughly 600m of the 674m people still without access will be in sub-Saharan Africa, mostly in rural areas.

Analysis on the IEA's database reveals that from 2000 to 2016 nearly all of those who gained access to electricity worldwide did so through new grid connections, mostly with power generation from fossil fuels. Over the last five years, however, renewables have started to gain ground, as have off-grid and mini-grid systems, and this shift is expected to accelerate.

By 2030, renewable energy sources will power over 60% of new access to electricity, and off-grid and mini-grid systems will provide the means for almost half of new access, underpinned by new business models using digital and mobile technologies.

Since 2000, most new access has come from fossil fuels (45% coal, 19% natural gas and 7% oil). The technologies used to provide access, however, have started to shift, with renewables providing 34% of new connections since 2012, and off-grid and mini-grid systems accounting for 6%. The declining costs of renewables, efficient end-user appliances and innovative business models for access are all having an impact.

This combination of factors is set to transform the energy access landscape in the years to come, says the report, especially in rural areas. From now until 2030, new connections to the grid will bring electricity to over half of those that will newly gain access, and offer the most cost-effective means of access in urban areas. Meanwhile, decentralised systems will be the most cost-effective solutions for more than 70% of those who gain access in rural areas.

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