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December 2015, No. 3 Vol. LII, Sustainable Energy

The provision of energy services¡ªsuch as illumination, thermal comfort, cooking, communications and mobility¡ªis critical to both social and economic good. But the use of fossil fuels in meeting these needs can also lead to higher greenhouse gases emissions, potentially becoming a threat to our well-being. Ironically, the greatest threat is to underdeveloped nations and populations of the most vulnerable geographies of small island developing States. They are either constrained by extreme poverty or limited by expensive energy access. The year 2015 marked a significant milestone in the global debate on energy with United Nations adoption of Sustainable Development Goals (SDGs), including the specific goal on energy (SDG 7) aiming ¡°to ensure access to affordable, reliable, sustainable and modern energy for all¡±. SDG 7 also addresses the need to increase energy from renewable sources as well as promote energy efficiency technologies. Consequently, SDG 7 encompasses targets for universal energy access (7.1), renewable energy growth (7.2), energy efficiency improvements (7.3), international cooperation in sustainable energy infrastructure development (7.a) and technology upgrades and expansion of energy systems (7.b).

These objectives are frequently interlinked and they reinforce each other. For example, lower prices for some renewable energy technologies such as solar photovoltaics can provide access to energy services even to relatively small consumers of electricity, since the investment cost of even the smallest solar panel scales with its size without compromising efficiency. Energy-efficient appliances can further boost the value of service. Hence achieving SDG 7 targets together can foster sustainable growth.

The adoption of SDG 7, however, comes at a time when the world faces serious energy development gaps: more than 1 billion people worldwide lack access to electricity, approximately 85 per cent of our global energy mix comes from non-renewable sources and the potential for energy efficiency in buildings, transportation and industrial processes remains largely untapped. ?On the other hand, the financial scale of the investments needed for traditional electricity grid access is also high, when compared to resources available to the poorest countries. ?

Previous studies, including the World Energy Outlook by the International Energy Agency, the Assessment Reports by the Intergovernmental Panel on Climate Change, and the Global Energy Assessment by the International Institute for Applied Systems Analysis show that current evolution of global energy systems might not achieve adopted targets for SDG 7 unless transformative initiatives are put in place.

This is where Information and Communications Technologies (ICT) can play a vital role. The inclusion of ICT in energy systems is enabling unprecedented and improved monitoring, control and management of their work, in both developed and developing countries.

For universal energy access, ICT is transforming the business models that are poised to provide energy access to millions of people. For example, ICT can facilitate smart meters that can be pay-as-you-go, reducing operational costs for providers and at the same time enabling flexible payment options for the poor. It can also enable the use of mobile payment systems and leverage hundreds of millions that have benefitted from financial inclusion and allow the use of data analytics, as well as a combination of demand, supply, and storage management to drive down the costs of assessment, maintenance and operations.

For renewable energy growth, ICT-enabling capabilities are vital to manage the volatile and distributed nature of renewable energy sources. Renewable energy sources are intermittent¡ªi.e. wind speed, solar irradiation and water flow are variable¡ªand deeper market penetration of renewables would be impossible without ICT-enabled real-time measurement, control and management. Moreover, deeper penetration of renewables can be cost-effective if combined with demand side management efforts. ?ICT¡¯s revolutionary role has already been observed in the modernization of electricity grids across the world, where ICT is helping increase grid efficiency, cost effectiveness and the integration of an incoming wave of renewable energy resources.

ICT can play an important role in energy conservation and efficiency through sensing and control. ICT can also contribute to higher resource utilization through shared systems and increased efficiency driven through smarter appliances, infrastructure and manufacturing. Information systems can enable behavioral changes and reduce emissions by scheduling loads based on supply. The increased interaction between people and devices and devices themselves¡ªa trend also known as the Internet of Things¡ªis creating new paradigms for energy efficiency.

To summarize the potential impact of ICT in the energy sector and achieving SDG 7, 12 transformative ICT-based innovations are listed below:

• Platforms for the provision of Energy as a Service, i.e. charging for pumped water, lighting, battery charging or efficiency services instead of charging for the energy consumed.
• Dematerialization of billing processes and metering of energy services to operators.
• New financing models for energy access with metering, and advanced demand and supply management.
• Increased flexibility of existing electric grids with improved management of power flows.
• Enhanced control of distributed generation systems, e.g. renewable energy sources.
• Empowering individual and commercial users to identify and manage energy efficiency efforts.
• Raising consumer awareness of energy efficiency and sustainable energy consumption.
• Accelerating decision-making processes for energy infrastructure development.
• Enhancing transparency in energy subsidy distribution, as part of growing e-government initiatives.
• Providing a communications network to increase electricity supply quality and system resiliency.
• Automation and unprecedented connectivity in transportation systems.
• Gathering data of energy indicators to assess progress and identify improvement needs.

The above list is not exhaustive, with new ideas, startups and new business models emerging constantly. However, it does help to envision a transformative role of ICT in future energy systems, increasing efficiency, affordability and reliability of these systems, and in accelerating the challenging but achievable journey to reach SDG 7.

Recommendations

The ICT potential to transform the energy sector is clear and countries are already adopting measures to include ICT in their energy systems. To fully unlock the potential of ICT in achieving SDG 7, several important parallel measures are required:

- Entrepreneurship promotion. Bringing ICT access to entrepreneurs can boost the development of mini-grid and off-grid operation enterprises and accelerate the bridging of the energy access gap. A framework to enable cashless payments to reduce transaction cost and provide electricity services is vital for these entrepreneurs, since they will handle multiple small-scale transactions.

- Requesting minimum levels of reliability of electricity supply when issuing licenses to grid operators. These requirements can use reliability indices such as guaranteed number of hours of supply, minimum number of users affected by outages, and minimal duration and frequency of these outages. Furthermore, these quality requirements should be enforced to protect private businesses and households from the cost of unsupplied electricity and low productivity. This can thus help foster economic growth and job creation in the private sector.

- Clear targets for renewable energy share paired with reliability requirements. Simply increasing renewable energy in the supply mix can lead to supply instability due to renewable energy variability, i.e. wind speed, solar radiation and water flow are not constant energy sources. Renewable energy resources should be properly managed and ICT is a proven tool for this.

- Fostering a competitive environment for renewable energy generation. Subsidized or fixed tariffs on electricity have hindered operations for renewable energy mini-grids that cannot receive those subsidies or want to apply variable tariffs.

- Encouraging educational institutions to include ICT training to increase competitiveness of human capital in energy-related careers. A wide range of companies in the energy sector, such as electric utilities, energy generators, electric equipment manufacturers and transportation businesses are requiring employees with ICT skills because ICT is increasingly present in the evolving components and systems with which energy professionals are working.

- Create and encourage access to online portals where information about energy efficiency education is available to citizens.

- Implementation of ICT-based identity verification systems. This will effectively distribute subsidies for energy access and for energy efficiency.

- Promotion of monitoring and managing of energy consumption, so that industry and building operators can track inefficiencies in their energy use.

Although the path to meet SDG 7 is full of challenges, Governments can establish an environment in which stakeholders and partnerships can thrive, exploit ICT benefits and adopt accelerated technology implementation, financing, training and service provision at affordable per-unit costs.