25
AUG
2015

Sustainable Energy and Undergrid Risk

SolarPowerPanelsKenyaSustainable energy development promises vast amounts of electrical power around the world while promising a better environment. As the cost of solar, thermal and wind energy declines relative to traditional carbon sources, its use is growing exponentially in the developed and underdeveloped regions of the world where energy to power businesses and communities was previously nonexistent. While the promise of clean energy offers both environmental and economic solutions to many of the problems facing the world, it is not without problems of its own. This is particularly true in the developing regions of the world where clean energy faces the gritty reality of poverty and inequality.

In 2013, the Kenyan government in partnership with private companies launched a US$1.2B initiative to develop solar energy operations across that country. Due to fully come online in 2016, it is estimated that these new clean energy facilities will generate as much as half of the country’s electrical needs.

This dramatic development in electricity generation will shift Kenya from the lowest rungs of energy production in Africa to one of the leading energy producers. However, ordinary Kenyans may be left in the dark, literally and figuratively, as these projects come online. In a study published in 2014, Kenneth Lee and a team of researchers at the National Bureau of Economic Research found that in Kenya, “electrification rates remain very low despite significant investments in grid infrastructure for both poor and relatively well-off households and businesses.”[i] To address the problem of communities operating “under the grid,” governments must develop ways to subsidize access to these new sources of energy for all members of society.

Moreover, as solar, hydro and wind projects are developed, the impact to nearby communities can be profound. Displacement from land used by local communities for agricultural, social and cultural purposes are at risk. Like more traditional footprint projects – mines, oil fields, dams – the human rights impacts arising out of sustainable energy projects can pose significant risks for both the people in the way of these projects as well as for the energy producers themselves. A near universal problem affecting both solar and wind farms is that they use vast amounts of land on the order of hundreds of thousands of acres for the energy demands of a country such as Kenya.

For example, a massive solar wind farm in the northern part of the country is due to come online this year. In the Turkana Lake region of Kenya bordering South Sudan and Ethiopia, the Turkana Wind Farm project promises to provide 20% of the country’s electricity when it comes online. What will be the largest wind energy project in Africa, it will cover 40,000 acres of land. While observers gush euphorically about the promise of this clean energy source, it faces opposition from communities in the path of both the facility and the transmission lines carrying the power to population centers in the country. In a settlement estimated to be in excess of US$19M, the project’s developers will compensate people with land in the path of the transmission lines. But in a region that has experienced recent conflict between an energy company and local communities, this agreement may not be the final word on the matter. The recent promise of oil in the region, discovered by Tullow Energy, a British firm, has met resistance because of the view that the local residents will be displaced by the oil exploration and subsequent production while sharing none of the financial rewards from the sale of the oil. The recent settlement between the solar power developers and local residents is a warning for future developers hoping to cash in on sustainable energy.

In practical terms, sustainable energy developers must consider engaging in a human rights due diligence process that accounts for the range of risks arising from large-scale land use. This includes an assessment of land and water use and access, respect for cultural and religious sites impacted by the development as well as the social, health and employment impacts from the influx of workers brought in to build and maintain the energy facilities. While sustainable energy projects hold promise for the environment and macro-economic development, energy developers must also consider the lives of people impacted and least likely to enjoy the benefits from this kind of infrastructure development. Failure to account for these non-financial risks put sustainable energy projects at peril from the practical realities on the ground.

 

 

[i] Kenneth Lee et al., BARRIERS TO ELECTRIFICATION FOR “UNDER GRID” HOUSEHOLDS IN RURAL KENYA, http://www.nber.org/papers/w20327.

 

 

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