Addressing the lack of access to clean, reliable and affordable energy services for billions of people is one of the world’s most critical development challenges and is becoming increasing prominent on the international agenda. The WBCSD Access to Energy Initiative helps business and other key stakeholders understand how the business contribution to access to energy can be maximized. The Initiative is co-chaired by GDF SUEZ, Schneider Electric and ERM, and has 21 member companies actively engaged in its core group. The Initiative focuses on the key opportunity areas to scaling the business contribution: innovative business models, enabling policy frameworks and financing mechanisms. Collaboration and partnerships are key cross-cutting enablers.

1. Business solutions
to enable energy
access for all
The WBCSD Access to Energy Initiative
January 2012

2. Presentation overview
• Energy poverty
• Business opportunities & challenges
• The WBCSD Access to Energy
Initiative
• New publication highlighting:
 Role of business
 Business model innovation
 Enabling policy frameworks
 Financing
 Collaboration & partnerships
• Conclusions
• Advocacy & engagement
2

3. Energy poverty: a major global
development challenge
• The „Missing Millennium Development
Goal‟ – essential to economic and
social development
• Current status:
 No access to electricity – 1.3 billion
 Poor-quality electricity – 1 billion more
 Cooking with traditional biomass – 2.7 billion
• Business-as-usual 2030 projections:
 Percentage improvement
 Absolute numbers remain approximately the
same
3

4. Energy poverty by region
Million people without electricity
Million people without clean cooking facilities
Sub-Saharan Africa China
8 423
Rest of
Latin America 585 653 developing
India
Asia
31
85 289 379
836
661
Source: IEA World Energy Outlook 2011
4

5. The health implications of a lack of
access to clean cooking facilities
2.5
Premature
Deaths 2.0
(millions)
1.5
1.0
0.5
0
2008 2030 2008 2030 2008 2030 2008 2030
Malaria Tuberculosis Smoke from HIV/AIDS
biomass
Source: IEA World Energy Outlook 2011
5

6. Universal energy access is possible
without major increases in CO2
Billion tonnes of oil equivalent
20 40
Gigatonnes
0.7%
1.1%
Additional energy
15 30
demand
10 20
Additional CO2
emissions
5 10
0 0
World energy World CO2
demand emissions
2030 2030
Source: IEA World Energy Outlook 2011
6

7. Business opportunities…
• Key feature of many emerging &
low income country energy markets.
• „Base-of-the-pyramid‟ (BoP) market
for energy services - USD +500
billion per year.
• Provision of infrastructure &
management services.
• Competitive advantage for utility
service providers.
• Deployment & commercialization of
new technologies.
7

8. …But significant challenges
• Fragmented & immature markets.
• Lack of intermediaries & information.
• Poor-quality of existing
infrastructure.
• Dispersed (and often very poor)
rural populations.
• Solutions vary with the local context.
• Lack of political will and public
investment.
• Weak regulatory and investment
climate in many countries.
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9. WBCSD Access to Energy Initiative
• Maximizing the business contribution to expanding
access to clean, reliable & affordable energy.
• Leading global energy companies:
 Co-Chairs: ERM, GDF Suez, Schneider Electric
 Core-Group:
ABB, AEP, Alstom, Chevron, DNV, eni, E.ON, EPM, Eskom, GE, Nov
ozymes, Philips, Shell, Siemens, Statkraft, Statoil, Vattenfall, Veolia
Environment, BCSD Argentina
• Providing a business voice in the international
dialogue on how to achieve universal energy access
effectively and efficiently.
9

10. New publication: Business solutions
to enable energy access for all
19 member
company
case studies
10

11. KEY LARGE COMPANIES &
UTILITIES
STAKEHOLDERS
1. Efficient deployment of
existing solutions at scale
Regulatory 2. Innovation and new
Agencies solutions
Development 3. Efficiency & reliability of
Government
Agencies the energy system
4. Knowledge & skills
transfer
EXPANDING
5. Financial resources
ACCESS TO
Financing CONTRIBUTION 6. CSR programs
CLEAN,
Institutions OF BUSINESS 7. Linkages with local firms
RELIABLE &
AFFORDABLE
Partnering, supply
ENERGY chain, joint ventures
etc.
Consumers/ Communities
Householders
LOCAL FIRMS & SOCIAL
NGOs ENTREPRENEURS
•Localized solutions to meet
local customer needs
•Last mile service delivery
•Key producers and
11
distributors

12. The diverse role of business in the
transformation of the energy system
• Efficient delivery of existing solutions as
well as innovation for new solutions.
 Numerous member WBCSD cases highlighted in
this presentation.
• Also improvements in system efficiency
and reliability, knowledge and skills
transfer, linkages with local firms etc.
 Alstom. Skills development and improving plant
efficiency in South Africa; R&D for tailored local
hydropower solutions in India.
 Eni. Partnerships to build local skills and capacity
in the Congo.
12

13. Maximizing the Business Contribution
DELIVERY OF GOODS & SERVICES
1. BUSINESS MODEL
INNOVATION
• Grid extension
• Decentralized/renewable
MAXIMIZING THE energy systems
4. COLLABORATION
BUSINESS • Products & appliances
& PARTNERSHIPS
CONTRIBUTION
(Governments, IFIs,
TO PROVIDING Development
ACCESS TO Agencies, Social
CLEAN, RELIABLE ENABLING ENVIRONMENT entrepreneurs, NGOs
& AFFORDABLE etc.)
ENERGY SERVICES 2. ENABLING POLICY
FRAMEWORKS
3. FINANCING MECHANISMS
13

14. Business model innovation
• More affordable and reliable
products and services.
• Overcoming or circumventing
market barriers/failures.
• Increasing profitability and
scalability of servicing poor
customers.
14

15. Grid extension
• Key innovations:
 Cost reductions through technical innovation.
 Connection costs paid in installments.
 Pre-pay technology to reduce losses and
increase convenience.
 Working through community associations.
 Complementary businesses (e.g. sale of
appliances).
• Challenges:
 Cost of servicing many rural communities.
 Affordability for poorest consumers.
15

16. WBCSD member cases (I)
• Eskom. Improving the electrification
rate in South Africa by 36 to 83%,
targeting universal coverage by
2020.
• GDF Suez. Improving access to
electricity and other utility services
for 500 000 people in Greater
Casablanca.
• Eni. Reducing gas flaring and
providing electricity for 700 000
people on the Congo.
16

17. WBCSD member cases (II)
• Chevron. Clean and reliable
hydropower from geothermal power
in Indonesia for 4 million
households.
• Energy Access Partnership (incl.
Eskom, Vattenfall & the WBCSD).
Effective models for rural
electrification in Africa.
• BCSD Argentina. Innovations by
members (EDENOR, Gas Natural
Fenosa) for energy access in
Greater Buenos Aires.
17

18. Distributed/renewable systems
• Key innovations:
 Established as a local enterprise.
 Locally-appropriate technologies.
 Servicing household and productive uses.
 Financial model - balancing affordability and
operational sustainability.
• Challenges:
 Mobilizing capital costs.
 Sufficient local capacity to manage, operate
and maintain systems.
 Cost v‟s reliability trade-offs.
18

19. WBCSD member cases
• ABB. Access to Electricity
Program.
• Schneider Electric.
Distributed solutions for
remote communities in
Vietnam.
• Osram. “Umeme Kwa Wote”
Off-Grid Lighting Project.
19

20. Products & appliances
• Key innovations:
 Localizing R&D.
 Systematic market identification and product
development.
 „Aspirational‟ branding.
 Distribution channels and marketing relationships
with non-traditional partners.
 CDM finance to reduce costs for consumers.
 Local capacity to provide after-sales and
maintenance services.
• Challenges:
 Difficult markets with low margins.
 Complex distribution partnerships/relationships.
 Affordability and access to finance.
20

21. WBCSD member cases
• Bosch & Siemens Home
Appliance Group. Protos
cookstove.
• Shell/Shell Foundation. Market
based solutions for clean cooking
• Schneider Electric. In-Diya LED
lighting system.
• Novozymes. An integrated model
for providing clean cooking fuels
in Africa.
21

22. Maximizing the business contribution
DELIVERY OF GOODS & SERVICES
1. BUSINESS MODEL
INNOVATION
• Grid extension
• Decentralized/renewable
MAXIMIZING THE energy systems
4. COLLABORATION
BUSINESS • Products & appliances
& PARTNERSHIPS
CONTRIBUTION
(Governments, IFIs,
TO PROVIDING Development
ACCESS TO Agencies, Social
CLEAN, RELIABLE ENABLING ENVIRONMENT entrepreneurs, NGOs
& AFFORDABLE etc.)
ENERGY SERVICES 2. ENABLING POLICY
FRAMEWORKS
3. FINANCING MECHANISMS
22

23. Enabling environment: how do you
scale up business investment?
STRATEGIC ALIGNMENT:
Alignment with business strategy &
investment priorities
PRIORITY ACTIONS:
• Removing investment barriers
• Enhancing return on investments
• Lowering the risks on investment
23

24. Enabling policy frameworks
• Well-designed and stable policy and
regulatory frameworks are critical:
 Prioritization in national planning.
 Private participation in the energy sector.
 Appropriate tariff policies and payment collection.
 Product standards for appliances.
 Removing import tariffs on key components.
 Provision of key public goods and supporting
infrastructure.
 Public-Private Partnerships (PPPs).
• The quality of the policy and regulatory
environment is a key factor in attracting
private investment flows.
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25. SIMPLIFIED POLICY FRAMEWORK FOR SCALING
BUSINESS INVESTMENT
PLANNING,
COORDINATION & INVESTMENT CLIMATE
PRIORITIZATION
Enabling of private
Improvement of the
Prioritization in National participation & Public
investment climate &
Development Planning Private Partnerships
removal of barriers
(PPPs)
Policy coordination & Capacity building & Public investments in
coherence skills development core infrastructure
SUPPORT TO Distributed/
KEY Products & renewable
Grid extension
appliances energy
SOLUTIONS systems

26. The importance of finance
• Universal energy access will require
$US 1.0 trillion additional
investment.
• Challenge: (often) weak private
financial case but clear social benefits
warranting public investment.
• However, business role is critical
and there is a financing gap to be
filled.
• Public and development finance can
be designed to leverage additional
business investment to maximize
impact.
26

27. The financing gap…
50
Private finance
Billion dollars (2010)
40 Developing country governments
Multilateral development banks
30
Bilateral official development assistance
20
10
0
2009 Annual requirement
for universal access
by 2030
Source: IEA World Energy Outlook 2011
27

28. Enabling business investment
• Public-Private Partnerships will be a key delivery model.
• Financial incentives and support important for catalyzing
and scaling business model innovation.
• Larger investments based on project finance models:
 Attract (affordable) equity finance
 Affordable debt finance
 Carbon finance can help but affordable equity/debt still essential
• Addressing risks is therefore critical!
 Risks: political, policy, technical, currency, carbon prices etc.
 Key tools: insurances, guarantee facilities, strong/enforceable
contracts, currency hedging/facilities
 Fundamental importance of the policy and regulatory environment
28

29. Business is also supporting finance
flows to local entrepreneurs
• GDF SUEZ. Rassembleurs
d‟Energies program.
• Schneider Electric. Energy
Access Fund
• ERM. Low Carbon
Enterprise Fund
29

30. Maximizing the business contribution
DELIVERY OF GOODS & SERVICES
1. BUSINESS MODEL
INNOVATION
• Grid extension
• Decentralized/renewable
MAXIMIZING THE energy systems
4. COLLABORATION
BUSINESS • Products & appliances
& PARTNERSHIPS
CONTRIBUTION
(Governments, IFIs,
TO PROVIDING Development
ACCESS TO Agencies, Social
CLEAN, RELIABLE ENABLING ENVIRONMENT entrepreneurs, NGOs
& AFFORDABLE etc.)
ENERGY SERVICES 2. ENABLING POLICY
FRAMEWORKS
3. FINANCING MECHANISMS
30

31. Collaboration & partnerships
• Partnerships and cross-sector collaborative
approaches between key stakeholders are essential
to make all of these opportunity areas successful.
• Effective public private partnerships (PPPs) will be
particularly important drivers of progress toward
universal access to energy.
• Partnerships are also critical for:
 Making new business models work.
 Effective financing models.
 Advocacy for global action (e.g. Global Alliance for Clean
Cookstoves).
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32. Conclusions
• Lack of access to clean, reliable & affordable energy
must be overcome to achieve the MDGs.
• Business is the primary solution provider.
• The business contribution can be scaled by focusing on
key opportunity areas:
 Business model innovation
 Enabling policy frameworks
 Financing mechanisms
• Partnerships – especially PPPs – will be critical.
• The WBCSD will work with key stakeholders to support
effective action to deliver universal energy access.
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33. Advocacy & engagement
• Key partnerships:
 Energy for All (Asian Development Bank)
 Energy Access Partnership
 Global Alliance for Clean Cookstoves
 Energy+ Initiative
• Activities in 2011:
 Asia Clean Energy Forum (June)
 IEA World Energy Outlook 2011 Special Chapter on
financing energy access (October)
 Oslo conference on financing energy access (October)
• Upcoming in 2012:
 International Year of Sustainable Energy for All
 World Future Energy Summit (January)
 Delhi Sustainable Development Summit (February)
 Rio +20 (May/June)
 UN General Assembly (September)
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34. http://www.wbcsd.org/accesstoenergy.aspx
Contact: Matthew Lynch
lynch@wbcsd.org
+41 (0) 22 839 31 94