Here in Cancun, the discussions on energy efficiency made me reflect on the "big picture" about energy efficiency in Africa. For years this subject has been near and dear to my heart. As Director for Energy in the World Bank I saw how much there is to gain from solid energy efficiency plans in developing countries. I saw how increasing costs of energy can encourage serious action on efficiency. Now, as Director for Sustainable Development in Africa, I see how committed African countries are to improving energy efficiency and making smart use of demand-side management in their efforts to combat climate change.
This week I met with at least nine Ministers of Environment at the margins of the Cancun COP. Each one of them mentioned the importance of energy access but this was qualified with the fact that this energy must be clean and it must be used efficiently. For many of these governments, it is no longer enough to speak of clean energy in isolation. They prefer to think about it in the context of their integrated low carbon development agendas.
Given that 560 million people in sub-Saharan Africa do not have access to modern energy, African countries must expand power generation and access if they're going to reduce poverty. The trick is they will have to do it in climate-smart ways and this is where energy efficiency is an important win-win.
When we address energy efficiency we need to look at the demand side as well as the supply side . The discussion made me think about the Africa Infrastructure Country Diagnostic study conducted by my colleagues in the World Bank. They found that addressing Africa's power problems and implementing regional trade will require spending US$41 billion per year. But they also found that reforming power utilities to reduce inefficiencies would save US$3.3 billion a year. There's a lot of money to be saved through energy efficiency!
In Ethiopia, new compact fluorescent light (CFL) bulbs are saving rural households money and energy. Through a World Bank project, the Government of Ethiopia distributed five million CFL bulbs. After only half of the bulbs had been distributed they had already saved 80 megawatts of electricity. To build power plants that generate 80 megawatts of electricity costs about US$100 million. So, for a US$4 million investment in new light bulbs the Government saved US$100 million in energy costs. Sounds like a win-win to me.
And it's not just a win for the Government. Low-income households can reduce their electricity consumption by 55% through efficient lighting—and this means lower electricity bills. That's a win for African families too. But the Ethiopians didn't stop with the light bulbs. They've designed a conservation campaign, upgraded street lighting, negotiated with large power users, and distributed 2.5 million efficient household cook stoves. The new stoves use 40-60% less wood fuel which saves women and children precious time fetching wood, and of course saves trees. In Uganda, we distributed 800,000 CFLs and in Rwanda another 200,000. This is the kind of energy efficiency that is spreading across Africa and I'm proud to say we in the Bank are helping.
Climate change requires that we all look carefully at the "big picture" of energy efficiency and demand-side management. How can we reduce consumption, conserve energy, and provide power to more people for more sustainable economic development? I'd say Africa is on the move looking at the menu of solutions and adapting them to local needs.
I am certain that as these countries prepare their Nationally Appropriate Mitigation Actions (NAMAs), this issue will only get more prominence. The continent is not waiting for the global deal to be sealed, they are working on a parallel track to start actions on the ground, and energy efficiency in the context of low access is definitely a good strategy.