This post is the third in a six-part series featuring Dalberg’s contributions towards achieving the goals discussed at the 78th session of the United Nations General Assembly (UNGA), held September 18 to 26, 2023.
Businesses are often seen as the primary drivers in the journey towards cost-effective and sustainable decarbonization. Fortunately, the technology needed to empower consumers is readily available. Some promising solutions, if expanded, could significantly reduce household electricity consumption by a substantial 900 terawatt-hours (TWh), equivalent to 27% of total consumption.
A recent SEforALL study highlights the crucial role consumers can play in achieving 24/7 decarbonization. During an event organized by Sustainable Energy for All (SEforALL) on September 20, the 24/7 Carbon-Free Energy Compact, with 136 signatories, took the spotlight. This compact unites organizations committed to delivering equitable Carbon-Free Energy (CFE) solutions. The event featured findings from a recent study conducted by Dalberg for SEforALL, which focused on the potential for consumers to take the lead in reducing carbon emissions during the energy transition.
Experts from various sectors, including national and municipal governments, utilities, and businesses, participated in the discussion, which had two objectives: (i) to showcase results from a new study launched by the 24/7 CFE Compact on empowering consumers to accelerate 24/7 Carbon-Free Energy, and (ii) to have focused discussions on the role of governments, local communities, and consumers in the 24/7 CFE movement to support grid decarbonization and facilitate a just and inclusive energy transition.
In her presentation of the study’s key findings, Annette Chau, Associate Partner at Dalberg, highlighted the technologies and solutions required for the energy transition that already exist, including in the Global South, such as:
- In Brazil, which has accelerated its prosumption (consumers participating in renewable energy production), with small solar systems now accounting for 10% of its grid. This progress is partly driven by Brazil’s robust regulatory framework around prosumption, which establishes clear pricing mechanisms for solar production and enables the flow of data necessary for prosumers to sell energy generated from their solar systems back to the grid.
- In South Africa, Eskom, the national electricity utility, has implemented pricing schemes that encourage households and firms to reduce peak demand by 5-10%. Access to consumption data can also empower consumers.
- In Malaysia, the national electricity utility piloted home energy reports with data-rich insights and personalized recommendations on how to save energy.
“With the right infrastructure and regulatory enablers, we can shift over a quarter (27%) of residential electricity consumption away from fossil fuels. That is a significant number in a world where we must use all available tools to transition to 24/7 decarbonization,” Chau noted.
Chau stressed the need for regulatory changes, incentives, awareness, and infrastructure to harness the potential of existing and emerging carbon-free solutions. Every nation has the potential to make significant strides in achieving uninterrupted access to clean and carbon-free energy around the clock. The path to this goal varies depending on each country’s progress, necessitating diverse strategies and solutions to create the optimal regulatory framework.
There is an opportunity to catalyze action at the consumer level, and the 24/7 CFE Compact can play a significant role in facilitating this. It can enable consumer action by establishing a coordinating entity that promotes the alignment of policies, private sector initiatives, and consumer advocacy groups. The entity will disseminate information, investigate comprehensive policy proposals tailored to individual countries, evaluate and experiment with efficient methods for aggregating consumer demand seamlessly, and facilitate investments necessary to empower consumers.
