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17 Feb 2023

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Level Zero Sustainable Grids Are the Foundation of Developing Nation Development

The worldwide growth of Digital Infrastructure starts with electricity. Without what can be thought of as this “Level Zero” layer, there are no data centers or networking with end-point sensors, vehicles, factories, and personal devices.

I wrote some pieces on this topic in 2019, estimating that a relatively low level of investment of 0.3% of global GDP for each of the next 30 years would build adequate, sustainable electric grids for the world. By adequate, I meant bringing up developing nations use of electricity to 40% of the EU per-person average. Today, developing nations often operate on only 1% to 5% of the EU average.

The Rural Electrification Challenge
A recent piece by a partner at Voyager, a venture firm explicitly focused on “early-stage climate technology companies creating the foundation of a decarbonized global economy,” takes a historical view of the situation. Posted by Bloomberg, the piece outlines rural electrification in the US, a massive government program that started in the 1930s near the end of President Franklin Roosevelt's first term.

About half of the US population lived in rural areas at the time, and only 3% of its 6.8 million farms were electrified. Gasoline and kerosene supplied most of the power. Today in the US, the number of farms has declined by 70%, and the rural population by one-third, dropping 14% of the country's total.

Today's Global Challenge
Rural populations with little to no electricity remain common in much of the developing world. India, for example, still finds 64% of its 1.4 billion living in rural areas. The world average is 39%, far above the US level cited above and similar totals throughout the developed world.

IDCA Research is embracing, extending, and magnifying my previous work. The need for developing vast resources of new, sustainable energy in the developing world remains a top global issue. Regarding this topic, the Bloomberg article cited above has some figures and a conclusion that can stop one cold:

“There are still 770 million people worldwide without reliable access to power, for whom electrification hardly needs a strong pitch. Off-grid solar could provide electricity to more than 600 million people by the end of this decade, according to the

Global Off-Grid Lighting Association. But not only will off-grid solar not provide power to absolutely everyone, it will still not provide (italics mine) the entirety of what even a 1930s- style rural grid in the US could: consistent, always-on power not just for lighting and cooking, but for pumping water and industrial activity.”

Quick Survey of Regions
A quick look at the large developing regions of the world shows similar, yet diverse challenges:

* In Africa, Niger, Zimbabwe, and South Africa are above the level of 40% of the EU, each for particular reasons that don't obscure the sizable challenges each nation faces to achieve future socioeconomic progress. A clutch of nations in Northern Africa can reach the 40% level with a cumulative total of less than 10% of their annual GDPs.

Nigeria, Ghana, Ivory Coast, and Kenya can reach it with investments in the 20s of annual GDP. Cameroon, Zambia, and Tanzania are in the 30s and 40s. Beyond that, the numbers become more extreme, but a case can be made for each nation to justify the investment. As a side note, reaching the 25% level can be accomplished for about half the cost of reaching the 40% level.

* In Southeast Asia, investments totaling less than 10% of annual GDP will bring most nations up to the 40% level. In South Asia, Bangladesh sits at 24% and Pakistan at 36%

* In Latin America, Brazil has effectively achieved this level, and many nations can reach it with investments of less than 1% to about 5% of their annual GDP. Outliers Nicaragua and Haiti come in at 24% and 30%, respectively.

There are deep underlying issues to be addressed in many developing nations, clearly. Just somehow installing all this power is an academic exercise without considering all that must be developed with it, physically, economically, and socially.

But the Voyager article and IDCA Research's numbers hit on a fundamental truth: the US electrical grid was woefully underdeveloped for half of its people well into the 20th century. Rural electrification played a tangible as well as catalytic role in developing its economy and transforming the nation in a relatively short period of time. Why not work together to achieve a similar result for the rest of the world today?

Satellite image of Africa at night from NASA.

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