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Haley Zaremba

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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Distributed Energy Projects Could Transform Emerging Economies

As you read this article on your computer or your smartphone, it’s easy to forget that almost a billion people around the world don’t have access to electricity. While most of us can’t imagine life without the internet, much less life without light bulbs, a full 13 percent of the global population will never live with those luxuries.  In Brazil, this is not an abstraction, but a stark reality for many of the poorest communities. 23.7 million of Brazil’s total 212 million live in poverty, and bringing energy to every corner of the vast country is a massive undertaking. There are many scientists and researchers, however, who are trying to do just that. Some believe that the answer lies in decentralized and distributed energy production, also known as “energy communities.”

This is the goal of the Brazilian Association of Distributed Generation (ABGD), located in the southeast of Brazil in the state Minas Gerais, where a massive proportion of the state population--1.5 million of the state’s 2.7 million people--lives in poverty. Half of those 1.5 million live in extreme poverty. ABGD believes that bringing electricity to all Brazilians will require solidarity, and their motto says that “showing solidarity is consuming the energy generated in your own municipality.”

As reported by the Inter Press Service News Agency, “distributed or decentralized generation is seen as an important means of giving a social boost to poor or energy-poor communities in different parts of this country” which will play a pivotal role in Brazil’s contribution to the global fight against climate change, allowing the nation to add energy capacity without growing its carbon footprint. Furthermore, it will empower consumers and help to break up the monopolies that have the Brazilian energy industry gridlocked with serious barriers to entry for any small players. 

The growth of decentralized energy communities is also an economic boon. ABGD’s Walter Abreu estimates that “if local governments were to decide to use solar panels to generate the electricity consumed by their offices and other facilities, this would represent significant savings in public spending and incomes comparable to a minimum wage (about 200 dollars per month) for 3,500 families,” as paraphrased by Inter Press Service based on a Solar TV interview.

Allowing Brazil’s poor to convert themselves into energy prosumers (both producers and consumers of energy for the local grid) would allow many to lift themselves out of poverty. This is especially relevant for Northeastern Brazil, where 27 million people have yet to recover from the impact of a 7-year drought which ended in 2018. According to Inter Press Service, increasing the flow of solar energy into the national grid to a total of just 5 percent could lift 2 million people out of poverty in the region. 

Related: Venezuela’s Oil Major Sees Oil At $35 Through 2021

So far, there is not a lot of adoption of micro-solar farms or other energy communities in Brazil, but while the numbers are small they’re growing quickly. Distributed power generation “rose twofold from one to two gigawatts between June and December 2019 and reached three GW in May 2020,” Inter Press Service reported based on data from Brazil’s Energy Research Company, a planning body under the Ministry of Mines and Energy.

Brazil is not the first Latin American country to turn to energy communities as a major part of the nation’s energy future. Just last month the Chilean government revealed a new energy plan to be put in place on November 6th which features distributed energy production as a central pillar. According to reporting by PV Tech, Chile’s new energy rules “will introduce the possibility of systems with a generation capacity no larger than 300 kW to supply power for multiple consumers. Such energy communities will enable users to coordinate a shared PV array with a single grid connection to inject surplus power back into the electricity network.” 

While Latin America seems to be taking the charge on energy communities, it’s likely that they will soon become a global trend. Earlier this year, the European Commission released a 60-page report on the topic, so the powers that be are definitely taking this emerging concept seriously. With their potential for more equitable and widespread energy production without major negative environmental externalities, energy communities may play a pivotal role in the global energy transition. 

By Haley Zaremba for Oilprice.com

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