In my previous post, Part 1 of this series, I reported on an analysis we've done at the Tau Institute that shows a relatively modest global investment to bring the electricity resources of the developing world much closer to developed-world standard. Specifically, I mentioned an overall range of between $700B and $1.5T to bring the developing world to 25% or 40% of the developed-world standard.
By Roger Strukhoff
Large development projects any where, but particularly in the developing world, stall, stumble, and founder in the best of circumstances. How well might a large investment in developing-world energy grids play out?
As we estimated the investment requirement, we also have ways to measure the difficulty of achieving the goals.
The first way is to integrate an index we've developed that measures technological dynamism within the 143 nations we cover with the cost to build out a nation's clean energy grid to either 25% or 40% of a developed-world standard.
What we mean by technological dynamism is derived principally from investment in and shipment of modern ICT equipment necessary for any economy to fully participate in the modern era of digitalization, digital economic transformation, and Industry 4.0 in all its forms.
Why modern ICT environments matter
A more dynamic ICT society and economy – characterized by rapidly growing Internet access, increasing digital telecom and data bandwidth speeds, more mobile subscriptions, and modern cloud services data center development – will also provide a more amenable environment for increased clean, renewable energy capacity development.
Looking at the data, we see a range of 1% to 270% of a nation's GDP being required to bring its national grid up to between 25% and 40% of the developed-world standard we use – the median per-person amount of kW of electric power consumption within the EU.
Then, we see a range of half a magnitude across the technological dynamism of these environments.
(Note: All of our Tau Institute work starts with publicly available information from the United Nations, World Bank, CIA World Factbook, Transparency International, International Telecommunications Union, and other organizations. We develop our integrations, derivatives, and indices from there.)
We are able to integrate the two measures – percent of a nations' GDP required for a particular investment, and our Tau analysis of dynamism – into a final number that can be expressed as in logarithmic form.
This lets us view the results as having a certain magnitude. A difference of a full point of magnitude represents a challenge that is 10X larger than the magnitude below. A difference of 0.1 in magnitude represents an increase in difficulty of about 25%.
Doing this shows four magnitudes of challenges. African nations face most of the fourth- and third-level (ie, most difficult) challenges, led by South Sudan, Burundi, Eritrea, and Malawi. Examples of African nations with slightly less daunting (but still considerable) third-level challenges include Ethiopia, Uganda, and Rwanda.
Examples of countries with second-level challenges include Ghana, Kenya, Pakistan, Cambodia, and Laos.
Examples of countries with first-level challenges include Indonesia, Tunisia, Peru, and Moldova.
These numbers are reported on a per-person basis. So the total national investment will vary dramatically depending on a nations' population.
The total data set we have here goes far beyond the scope of this short blog post, so please contact me with all of your detailed questions.
These numbers also do not take into account possible difficulties posed by a nations' socioeconomic environment – its poverty level, its reputation for corruption, or the state of its physical infrastructure. The good news is I'll address this issue in my next post.