For more than a century the model for generating and distributing electrical power has remained unchanged. Power is produced in large generating plants each of which takes years to build and typically costs hundreds of millions of dollars. These plants supply power to a grid — a network of high and low voltage cables and transformers, which deliver power to homes and factories across the country. But this century-old model now faces a new challenger. What is about to happen in the power industry is reminiscent of what happened in the telecommunications industry when cellular networks started to be deployed in the early 1980s.
Poor countries, many of them in Africa, leapfrogged conventional landline telephony and moved directly to cellular networks. They saved billions of dollars, which would have been invested in landlines and exchanges. And extended reliable mobile phone services to their remotest and poorest regions. Change, in the telephone industry, was made possible by new technology — cellular telephones. Change, in the power industry, will come because of improvements to a very old technology.
The French physicist Edmond Becquerel discovered the photovoltaic effect in 1839. Becquerel later used his discovery to produce the world’s first photovoltaic cell — a device to convert light energy directly to electric power. These devices are now more commonly known as “solar cells.”
Over time the efficiency of these cells has improved dramatically and their costs have plummeted. In 1971 for example solar cell cost was $100 per watt of power generated. Today, this cost is below $0.50 per watt, and still falling. It is thought that “grid parity”— the cost at which producing power from solar cells equals the cost of traditional electricity — was achieved several years ago.
The implications of solar power cost falling below grid parity are immense and potentially revolutionary. This is especially true for poor countries such as Pakistan where the grid has yet to reach the poorest parts of the country. And where sharp rises in international oil prices have had two related and devastating effects. First, the cost of electricity has risen beyond the ability of the poor to pay. And second, the government itself, lacking the resources to buy energy to operate all of its power plants, has been obliged to resort to widespread power cuts. Most cities and villages now routinely see power cuts that range from 15 to 20 hours a day.
A new “solar model” for power generation would address many of these problems. Here is how it could work: A small solar plant consisting of an array of solar panels will be set up in a village. Cables will run from the plant to every house to provide basic needs — a couple of fans, several LED lights (which consume only 5 percent of the power of conventional lights) and appliances like a fridge and TV.
Of course the Sun only shines during the day. So each house would need to have a storage battery, which would be charged during the day and then supply power during the night. Advances in battery technology have brought down costs, resulted in increased storage capacity, longer life and as a consequence lower life cycle cost.
We in Pakistan can quickly and cheaply electrify large swathes of the rural countryside. Sunlight is free and non-polluting. So tens of millions of people who have no power now will get cheap and green electricity. Billions of dollars will be saved by not building huge new centralized power plants and related distribution networks. This is money that can instead be used to build schools and health care facilities.
The new model for power generation is localized production and distribution of cheap, green electricity. And before the decade is out it will change the way the world’s poor get their electricity.