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In places where unexpected, regular blackouts can be measured in days rather than hours, people often run backup generators so that power can flow uninterrupted to their homes, schools, and businesses. These fossil fuel-guzzling machines are a major source of electricity access in western Africa, for example, where they account for over 40 percent of the electricity consumed.

But backup generators generate more than power: They are a significant source of air pollutants that harm people’s health and the environment. Because generators consume the same fuels and emit the same pollutants as vehicles, their impacts are often unclear to policymakers.

In regions where generators are a predominant source of energy access, spending on fuel can be higher than the total national spending on the grid. In sub-Saharan Africa, for example, where one fifth of the gasoline and diesel consumed is burned for electricity generation, the amount spent on generator fuel alone is equivalent to 20 percent of government spending on education and 15 percent on health care. In South Asia, the numbers are lower but still substantial: Nine percent of educational spending and 8 percent of health care.

Time and effort required to install, fuel, and maintain generators impose additional costs to those who depend on them. Ellis E. Mbeku/Shutterstock.com
Time and effort required to install, fuel, and maintain generators impose additional costs to those who depend on them. Ellis E. Mbeku/Shutterstock.com

Despite this, solutions to the problems presented by backup generators and broken electrical grids have been slow to develop because of challenges such as the scarcity of data.

A new IFC-led initiative aims to address just that. Innovative research and modeling tools developed by IFC and the Schatz Energy Research Center at Humboldt State University provide a better understanding of the true cost of generator-based electricity dependency. This is the first step toward a collaborative effort led by IFC to work with companies to develop a market for solar and energy storage alternatives that have the potential to displace fuel-based generators and remove the heavy footprint they leave and the energy poverty they prolong.

A Collaboration for Change

The initial findings of the research are detailed in the report The Dirty Footprint of the Broken Grid: The Impacts of Fossil Fuel Back-Up Generators in Developing Countries. This study explores fundamental questions about the scope and impacts of backup generators that have been largely unanswered beyond anecdotal and local or regionally focused studies. For the first time, we are able to see a global picture of the aggregate costs of backup generators. The research is the result of a partnership with the IKEA Foundation, the Dutch Ministry of Foreign Affairs, and the Italian Ministry of Environment, Land and Sea.

The study examines the impacts of backup generators in 167 developing countries. The countries modeled represent 94 percent of the people living in low- and middle-income countries, excluding China. It explores the extent to which running these engines imposes economic burdens, compromises health, and contributes to climate disruption. It also addresses several basic but important knowledge gaps related to the topic.

The report details the long-term costs of backup generators, finding that users spend $30 billion to $50 billion annually on fuel, and noting that the value of generators imported into developing countries exceeded $5 billion in 2016. In many countries, electric utilities are struggling to keep up with surging demand, suggesting that grid reliability will worsen and spending on backup generation will increase, at least in the near term.

In regions where generators are a predominant source of energy access, spending on fuel can be higher than the total national spending on the grid. In sub-Saharan Africa, for example, where one fifth of the gasoline and diesel consumed is burned for electricity generation, the amount spent on generator fuel alone is equivalent to 20 percent of government spending on education and 15 percent on health care. In South Asia, the numbers are lower but still substantial: Nine percent of educational spending and 8 percent of health care.

In many countries, electric utilities continue to struggle to keep up with surging demand, suggesting that grid reliability will worsen and spending on backup generation will increase, unless alternatives are embraced quickly. This presents an opportunity, enabled by recent improvements and rapidly falling costs for solar and energy storage technologies, to catalyze a new market for cleaner, safer, more reliable, and economically superior distributed solar solutions to complement the grid.


Next Steps

As the report concludes, distributed solar and storage technology offer a commercially viable path away from backup generator dependency. Reliable solar-based alternatives can cost-effectively displace much of the dangerous, expensive, and dirty fleet of backup generators. Yet new technologies require innovative policies and finance to accelerate expedite the transition away from generators.

Distributed  Arne Jacobson/SERC
Distributed solar and storage technology offer a commercially viable path away from backup generator dependency. Arne Jacobson/SERC

Thanks to IFC’s efforts through its Lighting Global initiative, off-grid solar has become a $1 billion-a-year market and has enabled more than 200 million people globally to access modern energy. A similar revolution is possible in the next few years with the launch of innovative products and business models that will leverage available solar and storage technology to displace fuel-based generators at scale—commercially and sustainably.

Join the conversation: #IFCimpact

Published in September 2019