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Chapter 5: Mobilizing Synergies

5.1 New Approaches to Energy and Development

Renewable energy technologies for developing countries have been the subject of a variety of official assistance schemes. Renewable energy first became an official priority for international aid at the 1981 UN Nairobi Conference on New and Renewable Sources of Energy, which called for action in research, planning, investment and dissemination of renewable energy technologies. During the following 10-15 years, there emerged two kinds of initiative: legal or regulatory developments to encourage private investment in renewable energy, and financial assistance to public or private investors from national, bilateral or multilateral sources for capital intensive projects.

However, much of the early international assistance for renewable energy development tended to focus on large-scale projects, and also overlooked the practical needs for promoting technology transfer. Lessons were learnt and the need for a different approach was realized. As an example, USAID reviewed its policies in 1990, and suggested a series of recommendations for industrialized country donors (USAID, 1990). These lessons are equally valid in the planning and assessment of activities for the next decade and beyond:

The discussion in Chapter 1 set out some of the key themes in the relationship between energy and development. New initiatives were designed during the mid-1990s, with the focus changing to an integrated process of encouraging small, local entrepreneurs in developing suitable technologies and then supporting market deployment. More recent experiences of renewable energy programmes suggest that acknowledging local needs and integrating them into technology transfer activities is the best way to ensure that new technologies can be adopted. Policies will also be needed to encourage the private sector, or public-private partnerships, to become involved in improving energy provision in rural areas.

For example, the World Bank has produced a revised set of strategic objectives for its energy policy (World Bank, 1999). These include a larger role for renewable energy systems, creating better links between energy activities and other non-energy sector lending, improving access to modern energy by rural populations to alleviate poverty and projects aimed at reducing the health impacts of traditional fuel use. The Inter-American Development Bank has also included the promotion of new markets for rural energy in its draft energy strategy, and is stimulating renewable energy projects through its Sustainable Markets for Sustainable Energy programme (IDB, 1999).

In the renewable energy sector, the World Bank launched its Solar Initiative in 1994, which seeks to commercialize renewable energy use in developing countries, and has set up the PV Market Transformation Initiative that aims to accelerate the commercialization of solar PV energy services (see Box 1 for additional details). Other initiatives to promote renewable energy by national, bilateral and multilateral agencies have been established in the last few years. Financial and institutional assistance to renewable energy development now tends to address both private-sector needs and improving the regulatory and legislative structure of the energy sector.

Examples of national programmes relating projects combining rural energy and agriculture in developing countries are given in Box 8.

5.2 The Energy-Agriculture Nexus

The analysis presented in this report has suggested that the energy-agriculture nexus is a coherent system, and that energy, biomass and carbon flows can be identified and traced throughout the system. Biomass is an energy source that is renewable over a short time frame, especially if managed annual crops or perennial and short-rotation woody species are used. Sustained economic growth depends on having a secure supply of energy inputs, and biomass can provide an important feedstock for energy systems in developing countries.

The institutional requirements and the policy frameworks that are needed to build on the nexus between energy and agriculture for developing countries are key factors. For this nexus to be fully exploited, the potential of agriculture as a source of renewable energy for rural development and CO2 substitution needs to feature more strongly in the policy agendas of national, multilateral and bilateral organizations. The cost-effectiveness of using biomass technologies for energy supply, and the associated social and environmental benefits also should form part of this framework.

Bioenergy can and should play a significant role in improving agricultural productivity, whilst at the same time there is a major opportunity for biomass to contribute both to energy supply and global environmental sustainability. The linkages between the energy, biomass and carbon flow elements should form a main focus of rural development and rural energy policy formulation. Developing the potential for bioenergy has also to be seen in relation to poverty alleviation, rural community development and health.

Recognition of the importance of these linkages is now emerging. Technical developments of plant/crop based renewable resources for modern energy conversion systems have been undertaken in many countries over the last 10-20 years, and progress has been considerable. Furthermore, the potential for energy supply from agriculture has gained a higher profile. Box 9 provides examples of the use of agriculture in climate change mitigation through a national climate change policy, a project established under AIJ that links energy and agriculture, and a GEF project involving biomass and co-generation (DETR, 2000; UNFCCC, 2000; and Winrock, 2000). These examples illustrate some of the opportunities by which use of biomass resources, promoting energy development and achieving climate change mitigation can be combined.

Box 8: Rural energy and agriculture programmes

Development of a national biogas programme in Nepal

This FAO project aimed to assist the Government of Nepal in designing and developing a National Biogas Programme and in upgrading the human resources necessary to implement it. The first objective was achieved through the preparation of a National Framework for Biogas Policy in Nepal which should assist in consolidating the Government financial and technical policies for biogas development and serve to develop institutional capacity in the biogas sector. The training of human resources for the implementation of the programme was achieved through the organization of training courses for 130 district level Officers, 150 new local masons, 30 master masons and 150 female biogas users. A training manual was used in five training courses for district level officers. A comprehensive manual on "Biogas Technology: A Training Manual for Extension" was developed.

Mexico - Renewable energy programme

The Mexico Renewable Energy Programme (MREP) is managed by Sandia National Laboratories (USA) for the US Agency for International Development (USAID) and the US Department of Energy (USDOE). It aims to promote the use of renewable energy systems, enhance economic and social development in Mexico, create new business opportunities and off-set greenhouse gas emissions. The focus is on rural, off-grid productive uses of renewable energy systems in off-grid areas, mainly solar and small-scale wind. Productive uses include water pumping for irrigation and/or live-stock, communication and lighting for eco-tourism facilities. The MREP complements programmes by the Mexican Government mainly focuing on Solar Home Systems and is a cooperative effort between governmental and non-governmental institutions from Mexico and USA, including the Mexican Commission for Energy Savings (CONAE), the National Solar Energy Society (ANES), the Center for Energy Research of the National Autonomous University (UNAM), the Shared Risk Trust Fund (FIRCO), Winrock International, New Mexico State University (NMSU) and ENERSOL Associates. Until the second half of 1998, 180 pilot renewable energy projects had been installed, totalling more than 100 kW: 66% PV water pumping, 17% PV Electrification; 3% PV Communication; 1% PV/Wind hybrid electrification; 3% wind water pumping and 10 % wind electrification.

Production of Transport Fuels from Sweet Sorghum in China

Sweet sorghum varieties developed at Shenyang Agricultural University in China are used to produce ethanol for transport. The grain is used for animal feed. Biogas produced from manure is utilized to generate the required process heat. Finally, the squeezed bagasse is converted to pyrolytic biodiesel. This FAO-supported project was successful in these objectives at a pilot scale level. The results of the integrated energy base established are now being used by FAO and the Chinese Science and Technology Commission to scale up this approach with a view of producing ethanol, which will be added to gasoline to reduce emissions of air pollutants and CO2 from transport.

Box 9: Examples of agriculture in climate change mitigation programmes

UK Climate Change programme: Wood fuelled power station

The UK government has recognised that the most effective way for the agriculture sector to contribute to reductions in greenhouse gas emissions is through the production of energy crops. Ways of encouraging renewable energy generated from forest residues, short rotation coppices and miscanthus are being explored. Short rotation coppice is currently the most suitable energy crop for UK conditions as it is capable of being grown productively on both arable and reasonable quality pasture land. It has one of the highest energy yields and its development as an energy crop is well advanced. Estimates are that 125 kha could deliver a significant fraction of the UK national target of providing 10% of electricity supplies from renewable energy sources, and this could provide a saving of around 0.6 MtC in 2010, depending on the fossil fuel generating plant that are displaced. A current demonstration project of a 10MWe wood-fuelled power station, which uses wood chips from forestry residues and purpose grown short rotation coppice, will provide commercial operating experience of the technology in the UK.

US-Honduras AIJ Pilot Phase project: Biomass Power Generation

A US-Honduras AIJ project involves the construction and operation of a privately owned and operated 15MWe biomass waste-to-energy plant in Sava, Honduras. The plant will utilize wood wastes generated from forest products processing and palm oil production in the region. The wastes, which include sawmill, logging and palm tree plantation residues, are currently burned under uncontrolled conditions, disposed of in rivers or left to decay in place. Power produced by the plant will be sold to the national electricity utility and will displace electricity and greenhouse gas emissions that would have been produced by fossil-fuel plant.

USAID/India Greenhouse gas pollution prevention project

This project is funded out of the US contribution to the pilot phase of the GEF. It began in 1995 and aims to mitigate increases in greenhouse gases through institutional development, capacity building and outreach to key stakeholder groups. One of the main components of the project is providing financial assistance to support demonstration of state of the art co-generation technologies. Much of the work has concentrated on implementing bagasse/cane trash handling, storage and utilization for co-generation, including developing electricity generation both during the cane crushing season and the off-season covering at least 270 days/year.

By early 2000, grant assistance to several sugar mills with a total installed capacity of 88 MWe had been made, together with technical assistance for feasibility studies for co-generation design capacity of a further 85 MWe.

5.3 The Outcome of CSD-8

Agriculture was one of the main themes of CSD-8, held in New York from 24 April to 5 May 2000. The decision on agriculture in CSD-8 provides further support to the importance of the links between energy and agriculture (UNCSD, 2000)27. The particular focus of the debate was on promoting sustainable agriculture and rural development (SARD). Three statements are of close relevance to the arguments being presented in this report:

This recognition of the importance of cross-sectoral approaches, environmental protection and technology transfer presents a major opportunity to energize the agricultural sector in developing countries. In pursuing this approach, developing countries have the opportunity to weaken the historical links between economic growth, energy consumption and environmental pollution. In the rural development sector, this can be achieved by relying more on sustainable energy technologies such as renewable energy systems and by using all fuels more efficiently through energy efficiency programmes. What is needed are integrated energy policies and frameworks, beyond project-specific environmental assessments, in which the costs and benefits of technology options can be assessed and compared on a sector-wide basis, allowing the right choices to be taken early in project design.

Income growth and industrialization in developing countries are driving their economies towards the use of secondary energy carriers that deliver greater end-use energy efficiency. Typical of these carriers are electricity, distributed gas systems and liquid fuels. Modern biomass technologies can provide energy development pathways that meet all these requirements at the same time as offering both global environmental and local socio-economic benefits in rural areas.

5.4 Key Issues

Chapter 1 has shown that energy consumption in many rural areas of developing countries is well below 1 toe/capita/year. This barely covers the cooking, heating and lighting needs of rural people. Present energy consumption and production patterns in rural areas rely on biomass, often used in an inefficient manner. Upgrading the use of biomass resources offers both energy and environmental benefits, and improved energy services can assist more broadly in rural development as well as in food security. An integrated approach, which captures the full benefits of coordinated actions, supporting rural livelihoods, education, health, sanitation and economic development, is needed.

Agricultural production in developing countries continues to be based on human and animal work. Insufficient mechanical and electrical energy is available for agriculture, and as a result the potential gains in agricultural productivity through the deployment of modern energy services are not being realized. Increased fossil fuel use need not be the solution and non-fossil fuel alternatives can give social, environmental and economic benefits. Agriculture can also provide a legitimate energy supply function. The world-wide potential for energy supply from energy crops is very large and biomass could, in theory, substitute for as much as 25% of the world's use of fossil fuels. Bioenergy can, therefore, make a significant contribution to climate change mitigation through CO2 substitution.

However, as the summary in Table 4.4 showed, any shift to a greater use of bioenergy is fraught with difficulties. Fossil fuels are not in short supply when viewed over the immediate short-term energy planning horizon, and this has led to complacency and a lack of longer-term thinking. Whilst local environmental concerns such as air pollution from woodfuel combustion, are receiving attention, actions to reduce the global environmental impacts of energy use are not at the top of many agendas. Questions arise concerning development priorities, competing land uses, the cost-effectiveness of biomass technologies, the extent of capital availability and how best to effect technology transfer. The need to pay an insurance premium to cover future global environmental impacts is still seen as many years ahead.

Nevertheless, funding via the GEF or projects using JI and the CDM may offer opportunities to unlock the potential of biomass, through private sector investment from industrialized countries in suitable modern bioenergy technologies in developing countries. At present, however, this approach may have little resonance with current rural energy policies. The key is to make the energy function of agriculture more explicit. Links with the outcome of CSD-8, described above, are particularly relevant in developing worthwhile energy-agriculture initiatives.

5.5 Technology Leapfrogging

Historically most energy technology development has taken place in industrialized countries, where large, rapidly-growing demands created favourable conditions for innovation, and where commercial and industrial interests have found opportunities for profitable markets. In recent years, however, this growth has been confined largely to services and knowledge-based industries, which tend to require very few materials and energy resources. To the extent that innovation is still taking place in the energy sectors of industrialized countries, these are now driven by local and global environmental concerns.

On the other hand, rapid growth in energy producing and energy intensive activities in developing countries is expected to take place over the next 20-30 years. The conditions for innovation in energy technology are likely to be more suitable in developing countries, and hence these countries have an opportunity to stimulate techniques and technologies that could enable them to bypass some of the energy supply and demand patterns of the industrialized countries. This prospect of technological "leapfrogging" by developing countries could give them the chance to commercialize new technologies relatively quickly, provided there is a strong commercial incentive and a sustained market pull for such technologies. Rapid growth prospects in developing countries offer the opportunity for them to become market leaders in environmentally sound energy technologies (UNDP, 1997).

5.6 Impacts on Rural Livelihoods

The rural poor and landless require sustainable livelihood systems that are flexible and not over-dependent on a single resource or product. If large protected areas were managed for bioenergy feedstocks, local people might lose access to other products such as fibre and food. Bioenergy development policy must build in adequate provisions concerning local environmental and social factors, including means of achieving participation and in assessing and monitoring bioenergy activities.

For rural people to benefit directly from bioenergy projects, there need to be checks and balances to ensure that land use changes do not reduce equity. Flexibility to allow for local conditions, which might involve a mix of agroforestry, agriculture and dedicated bioenergy plantations. A robust strategy for developing bioenergy in a way that can assist local rural development should, therefore, include appropriate policies, institutions and community mechanisms.

5.7 The Role of FAO

FAO has a longstanding global mandate from its member countries to promote renewable energy within the agricultural and forestry sectors. FAO has for many years stressed the potential of biomass as a locally available, renewable source of energy and has been active in implementing a range of field projects funded by donor agencies aimed at:

FAO is currently strengthening its bioenergy programme with the aim of contributing to a partial substitution of fossil fuels by biofuels, as well as encouraging the more rational, efficient and safe utilization of biomass. A series of further proposed actions for FAO and its national, multilateral and bilateral partner organizations is listed below28:

5.8 Advancing modern bioenergy technology

For the energy function of agriculture to contribute to the rural economy of developing countries, the potential role of energy production from biomass should receive greater recognition. There is also the need for positive political encouragement and appreciation of the social and cultural changes that might be needed to develop this potential.

There is a balance to be struck between the advantages and disadvantages of bioenergy and this is reflected in both optimistic and pessimistic views regarding the uncertainties about how bioenergy systems can provide cost-effective local and global benefits. These uncertainties have restricted the development and commercialization of modern biomass technologies. However, with the significant environmental pressures to redirect the global energy economy onto a more sustainable path, there is a real and urgent need to reconsider policy choices and commitments in the energy sector. Actions to take the energy sector in new directions are vitally important, and the proposed steps listed above are a first stage in this process, which is applicable to the rural energy sector of developing countries.

It is clear that considerable efforts will be needed in order to take forward the energy-agriculture nexus set out in this report. The technological, environmental and social dimensions need to be further developed and assessed. It is hoped that, by drawing the attention of the CSD-9 to the potential of this nexus, and describing the advantages and disadvantages of modern bioenergy technologies, areas for action can be identified and implemented through cooperative efforts within the international community and with host developing countries.

5.9 A Challenge and an Opportunity

The key tools at the disposal of governments, as they try to open opportunities for rural energy development, are mainly institutional, regulatory and financial. Policies and projects aimed directly at improving energy services for the poor are needed. One means of achieving this is by investments in pilot or demonstration projects that increase market uptake of promising new technologies, with active involvement of local people, NGOs and the private sector. For many developing countries, an energy transition would be characterized by a move from the present levels of subsistence energy usage based mainly on human work and woodfuel resources, to a situation where household, community and agricultural activities make use of a range of sustainable and diversified renewable energy resources.

Energy and agriculture in developing countries has long been considered as a secondary activity, with industrial and urban energy provision taking priority in many national energy programmes. Whilst no single energy source will have a monopoly of supply, it is clear that renewable energy sources in general, and bioenergy in particular, are likely to have larger role in future.

Projects implemented as a result of the Kyoto Protocol could make use of modern bioenergy technologies. Bioenergy projects are already included in GEF activities, and a number of projects have been funded through this route. To help develop these opportunities further, a series of specific related activities could be pursued by the international community. These might include:

The energy function of agriculture needs to be brought to the level of national policy in developing countries. A series of suggested actions for national, multilateral and bilateral partner organizations to mobilize the synergies between energy and agriculture is presented below as the next steps to take. Actions such as energy policy support, institutional strengthening, capacity building, research and development activities and technology development work are important. A prime task should be that of stimulating the integration of energy into the agricultural sector so that emerging policy directions take account of the energy function of agriculture. These actions should have the following features:

27 See the CSD web site for further information, < decision.htm>

28 Other recommendations prepared by FAO for PV and sustainable agriculture and rural development are listed in Annex A.3.

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