Increasing Energy Access in the Developing World: How Can Natural Gas Help Alleviate Energy Poverty

Brad Ritts, Managing DirectorTisha Schuller, Strategic AdvisorStanford Natural Gas Initiative(ritts@stanford.edu)

NGI Industrial Affiliates Meeting8 November 2017

Gas is globally abundant, but formidable challenges to use

2

Proved Reserves: 1995, 2005, 2015

ME

Euras

AP

NA

186120

Source: 2017 BP Statistical Review of World Energy Source: EIA

Are development goals and climate goals fundamentally incompatible?

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• Is it possible to give everyone access to modern energy-using amenities and hold the rise in global temperature to a safe level?

• “fossil-free” advocacy is not limited to rich nations

• What are the implications of ruling out fossil fuels in cooking?

• Can distributed renewable electricity provide a sufficient solution to energy poverty?

• Can high-quality, affordable energy be delivered reliably through a centralized grid without the use of fossil fuels?

2017 Symposium “Reducing Energy Poverty with Natural Gas: Changing Political, Business, and Technology Paradigms”

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May 9 & 10, 2017 at StanfordAttended by 130 participants

12 countries represented from North America, Europe, Asia, and Africa

Participants from industry, governments, inter-governmental organizations, foundations and

NGOs, and universities

Mark Zoback (Stanford NGI Director) and Philip Mshelbila (GM, Shell Nigeria)

https://ngi.stanford.edu/events/reducing-energy-poverty-natural-gas

Joyashree Roy (Jadavpur Univ) and Rachel Pritzker (President, PritzkerInnovation Fund)

Samir Saran (VP, Observer Research Foundation

George Shultz (Stanford), Sally Benson (Director Precourt Energy Inst, Stanford, Maarten Wetselaar

(Executive Committee, Royal Dutch Shell)

What is Energy Poverty?

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a basic minimum threshold of modern energy services…access to these modern energy services must be reliable and affordable, sustainable where feasible (UN Advisory Group on Energy and Climate)

Source: Todd Moss, CGDev

Photo: Samir Saran, ORF

Energy access correlates strongly with economic development

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Source: Todd Moss, CGDev

Gro

ss N

atio

nal I

ncom

e pe

r cap

ita

Annual energy use per capita

Energy Poverty and Social Well-Being

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It is unclear if limited energy access is a cause of or the result of poverty

It is certain that sustainable socioeconomic development requires access to energy

There is a lot of uncertainty in how provision of energy access affects these outcomes

Electricity Access (World Bank)

Life Expectancy (UN WPP)

Literacy (World Bank)

Map Source: Samir Saran, ORF

Limitations of energy access result in real harms

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Photo: Samir Saran, ORF

Photo: BBOXX

Photo: BBOXX

Energy Poverty, Pollution, and Human Health

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3B people rely on solid cooking fuels

1.2B people do not have access to reliable electricity

Air pollution is a major contributor to 24% of global disease and 13% of preventable deaths every year globally (7MM deaths attributed to air pollution in 2012)

95% of people affected by these health impacts live in low and middle income countries

India, developing Asia, and Africa are forecast to drive future growth in energy demand

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Source: 2017 BP Energy Outlook

This forecast shows 1.3% per annum energy growth (and covers total energy); Bloomberg New Energy Finance forecasts 2% per annum growth in electricity

demand between now and 2040

China growth rapidly slows and levels

OECD flat to declining

India, Developing Asia and Africa drive future growth

How can natural gas be used to reduce energy poverty?

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Large-scale(Centralized)

(Urban)

Small-scale(Distributed)

(Rural)

Electricity generation and electrical grids

Industrial applications

Transportation? Residential LPG

Centralized grids are the proven way to deliver power

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Source: Mark Thurber, Stanford

Decarbonization of electric grids is seen as a leading way to reduce GHG emissionNatural gas affords an immediate GHG reduction over coal (and additional air quality benefits) with proven technologyGrid-scale renewables are disproportionately found in rich countries (and remain a small fraction)Can reliable, affordable centralized grids be built without fossil fuels? Intermittency becomes limiting factor with “leapfrog” strategies

Coal vs Natural Gas

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Source: US Energy Information Agency

Expansion of access through LNG is an enabler

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14 Asian countries began importing LNG 2013-2017 and 10 more plan to import LNG by 2020

Global LNG export capacity currently at 462 bcm and expected to reach 650 bcmin 2022

July 2017 – Japan International Cooperation Agency, World Bank and partners agreed to finance and LNG import terminal in Bangladesh

North America shows greatest opportunity for

new projects

Source: 2017 World LNG Report (IGU)

The expansion of LPG use is a clear success (but incomplete)

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Source: Mark Thurber, Stanford

These 6 countries have 64% of world population cooking with biomass

60% of LPG in China and 90% in India is for domestic use

India is a success story• India is world’s 2nd largest LPG

consumer and importer• 32 MM new connections to

reach 200 MM households• Increase from 73% of

households to 80% by 2019

How can natural gas be used to reduce energy poverty?

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Large-scale(Centralized)

(Urban)

Small-scale(Distributed)

(Rural)

Cooperation between governments, industry, and

finance Infrastructure finance and security

of pricing and payments

Removal of competing subsidiesInternational strategies to

encourage GHG reductionsLocal incentives for air quality

improvement

Anchor customers to build new supply chains

Affordability through government subsidy or new customer finance

models

New fuels technologyOpportunities for indigenous fuels

supply chainsIntegrated energy systems for distributed energy & mini-grids

Electricity generation and electrical grids

Industrial applications

Transportation? Residential

Small Business

How do we plan to proceed at Stanford?

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The role for natural gas for increasing energy access in the developing world will remain an important topic for NGI

• Markets and governance focus area• Methane conversion focus area includes distributed technologies

and alternative fuels research, which could be enabling technologies

• Possible workshop to explore distributed technologies, microgrids, and synergies with renewables

• Follow-up meetings to May 2017 symposium

NGI will cooperate with the new Hub for Energy Access program being developed by Todd Moss to link selected university research centers with global policy makers through a restricted set of policy think-tanksStanford University has interests in this area from a much broader community and the India Program is envisioned as another center for energy access in the developing world outside of NGI