New IFC study details environmental, economic, health costs of fossil-fuel generators

Fossil fuel burning back-up generators in developing countries produce as much power as 700-1,000 coal-fired power stations, consume up to $ 50 billion in fuel costs annually, and emit dangerous chemicals into homes and businesses, according to a report released Wednesday by IFC, a member of the World Bank Group.

Researched in partnership with the Schatz Energy Research Center at Humboldt State University and the International Institute for Applied Systems Analysis (IIASA) with support from the IKEA Foundation, the report, The Dirty Footprint of the Broken Grid, documents for the first time the economic, environmental, and health effects of fossil fuel generators, and calls for the rapid adoption of clean alternatives.

Key findings include:

• In developing countries, generators serve 20-30 million unique sites, with the potential to produce the energy equivalent of 700-1,000 coal fired power stations. In some countries, back-up generators provide more electrical capacity than the national power grid itself. 
• Annual spending on generator fuel reaches up to $ 50 billion – nearly twice the average hourly cost of grid-produced electricity. In much of sub-Saharan Africa, there is more annual spending on generator fuel than on the maintenance and management of the national grid. 
• Generators are a significant source of dangerous pollution, including sulphur dioxide, nitrous oxide, and carbon dioxide. While these chemicals are also released by cars, trucks, and motorcycles, generators are usually operated extremely close to homes, businesses, and in crowded commercial districts. The potential health impact of these ‘tailpipe’ emissions is broad – from serious respiratory illnesses to cancer. 
• Back-up generators emit more than 100 megatons of CO2 into the atmosphere every year. In sub-Saharan Africa alone, the CO2 emitted by generators is equal to nearly 20% of vehicle emissions — the equivalent of 22 million more passenger vehicles on the road. 
• The study notes that modern and cost-effective solar technology may offer developing countries a commercially viable path out of generator dependency. 

“The private sector has an opportunity to establish a new market for modern energy access –and vastly improve economic conditions in parts of the world that still rely on inefficient electrical grids,” said IFC CEO Philippe Le Houérou. “Adopting new solar and storage solutions will require innovative programs and catalytic finance.” 

The Dutch Ministry of Foreign Affairs, the Italian Ministry of Environment, Land and Sea, and the IKEA Foundation are working alongside IFC to advance solar energy services in emerging markets.  

IKEA Foundation Head of the Renewable Energy Portfolio Jeffrey Prins said: “Those living in poverty are often solving their energy needs, but at a high price. Their energy options are often expensive, noisy and polluting, such as the diesel gen-set. Through research and by championing renewable energy alternatives, IFC is enabling this change – a change that ensures that more and more families in the world’s poorest communities can power their homes and livelihoods with renewable energy in an affordable way. That is why we are supporting IFC with a € 4.3 million grant for enabling a new renewables environment.”