Host Daniel Raimi talks with Professor Subhrendu Pattanayak of Duke University. Over the last several years, Subhrendu has literally trekked the Himalayas to do research on how to provide access to electricity for communities in hard-to-reach places. Daniel and Subhrendu talk about what policy and market factors might make it easier to expand energy access, and Subhrendu explains how dynamics within these communities can affect the likelihood of small-scale electricity projects to succeed or fail.
Listen to the Podcast
Top of the Stack
References and recommendations made during the podcast:
- "Power to the Poor" by Morgan D. Bazilian
- "Reducing Risk for Private Investment in Off-Grid Energy" by Oliver Waissbein
- "Energizing Finance 2017" Sustainable Energy for All
- "Energizing Finance 2018" Sustainable Energy for All
- "The Lorax" by Dr. Seuss
- "Earth" by Lil Dicky (we're going to let you look this one up)
Full Transcript
Daniel Raimi: Hello and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Daniel Raimi. This week, we talk with Professor Subhrendu Pattanayak of Duke University. Over the last several years, Subhrendu has literally trekked the Himalayas to do research on how to provide access to electricity for communities in hard-to-reach places. I'll ask Subhrendu about what policy and market factors might make it easier to expand energy access, and he'll help us understand how dynamics within these communities can affect the likelihood of small-scale electricity projects to succeed or fail. Stay with us. Subhrendu Pattanayak, my former teacher and former colleague from Duke University, Sanford School of Public Policy, thanks so much for joining us on Resources Radio.
Subhrendu Pattanayak: I am very excited to be talking to you, Daniel. It's been a while since we've met, but what better topic to chat about?
Daniel Raimi: Absolutely. And, I'm looking forward to learning more about your work. But, one question I never, I don't think I asked you when I was studying with you, was how you ended up working on energy and environmental topics. What sort of drew you into the world of energy and the environment?
Subhrendu Pattanayak: So, it's unlikely that there was any one particular event, but I guess perhaps it was a set of things. In college, I used to hike in the high Himalayas, and this is several days at a time with a group of 15, 16 people, sort of living in the mountains there. It's so pristine and clean and clear. I must've had my Lorax moment somewhere up there thinking about who exactly speaks for the trees and for the birds and the clean air and water. And, around that time, I think the Brundtland Commission Sustainable Development Report was coming out, and it seemed like this was a deep cause. And, miraculously enough, economics had something to do with it.
Subhrendu Pattanayak: And so, I think my both intrinsic passion for economics and love for the environment came together through environmental economics. And, I would say the energy aspects weren't at the forefront initially, I was mostly studying clean water and clean air and biodiversity. Until I had a child, I guess, the whole climate change dimension sort of reared its head—thinking about the world that I was going to be leaving him with. And if I hadn't done my part, then I would have failed him. So, I guess that's when energy issues became much more salient, in my mind at least.
Daniel Raimi: Well, that makes sense. And, as a new dad, I can certainly identify with that feeling, and I think a lot of people have that motivation, at least in part.
Subhrendu Pattanayak: Right. I mean, I don't think we have to watch a dystopian movie to sort of get the message here, but it's pretty scary if we haven't done our part.
Daniel Raimi: Right, right. So, let's get into the substance and talk about your work on energy access. You've done lots of work on energy access over the last several years, and we're going to dive into some of it. But first, maybe just like a really naïve question, and hopefully this is intentionally naïve. I guess we'll find out, but can you just give us a quick overview about why is energy access important and, in particular, how does access to electricity and clean cooking affect peoples' lives?
Subhrendu Pattanayak: Sure. I mean, I think . . . I do a lot of seminars on the topic, and the typical motivation is just think of how you started your day today, Daniel. I think you probably flipped on a switch before you got that first cup of coffee, and if you're not a coffee drinker, tea, or whatever it is.
Daniel Raimi: Yes.
Subhrendu Pattanayak: And, that got you going, right? And, compared to that, there are about a billion people, actually three billion, who have to light a fire and cook something and then get going. This is problematic in a couple of ways at least, but I think economists try to lump this into sort of equity and equality issues and efficiency issues.
Daniel Raimi: Yeah.
Subhrendu Pattanayak: So, the equality aspect is just right there, it's . . . The fact that a billion people around the world don't have electricity, and maybe another two billion don't have reliable electricity, that's about half the world that just doesn't have that ability to switch on a switch in the morning and get their cup of coffee, right? And so, this is a justice issue, this is a distributional issue or a humanitarian issue.
Subhrendu Pattanayak: On the other side . . . And, that will be good enough in itself, but on the other side what they are doing to get by, their main source of energy is a biomass product, so a piece of wood or some dung or leaves, and burning that causes all kinds of problems. It causes health problems, it causes resource degradation because this is not coming in nice bundles of wood, it causes emissions, and that emission affects you and me here. So, there are externalities from the act of consuming or using dirty energy around the world. Externalities are the entry point for most economists as to why someone should be intervening and trying to get the system to be using less of this.
Daniel Raimi: Right.
Subhrendu Pattanayak: So, electricity and clean cooking would not only deliver environmental justice types of outcomes, but it will also make things more efficient around the world in many ways.
Daniel Raimi: Right.
Subhrendu Pattanayak: Yeah.
Daniel Raimi: Yeah. And so, let's talk a little bit more in general terms about energy access and then dive into some depth with your work in Nepal in particular. So, there are kind of two stories around energy access that were emerging when I was looking at the data on this topic, and one of them is a pretty positive story. If you look at data from the IEA, there's been lots of progress on increasing energy access over the last few decades. So, for example, the percentage of people with access to electricity in India grew from 43 percent in the year 2000 to 87 percent in 2017, and this is of a base of over a billion people, so really big progress. There's been really big progress in China over the last several decades. So, we're going to talk about the downsides in a minute, but first, can you just speak to the successes in energy access and what has driven them over the last several decades.
Subhrendu Pattanayak: Sure. So, let me start out by saying that looking at the policy macro context is . . . That's not really my strong suit. And, even in this field, people specialize in this and that, and I tend to specialize more at the household consumer demand level and, furthermore, at what local supply chains look like. But, of course, I've been thinking and worrying about this for long enough that I can hopefully give you a credible story here.
Daniel Raimi: Yeah.
Subhrendu Pattanayak: So, the first thing is, naturally, it's how much countries have prioritized this issue, I mean, how salient has it been to the electoral politics where politicians offer to solve this problem? And, you talked about India, but really China is the shining study here, and then many of the other middle income countries, or the bricks I would say, Russia and Brazil and others. And so, it's how much priority they give and, by that, it means what sort of policies do they put in place? And, I think the World Bank has a report that it puts out every couple of years, they are called the RISE Reports, Regulatory Indicators for Sustainable Energy.
Subhrendu Pattanayak: So, that would roughly tell you that yes, there are policies that are relevant for energy access, there are policies that are relevant for energy efficiency, which is what more the US focuses on, and then there's policies relevant for renewal energies. This is also something that the US focuses on. But, let's just pick the energy access part, the electrification, and here you could see that the policies have to do broadly in sort of three groupings. Is there an electrification plan, and how well is it being tracked? Okay, number one. Number two, is there a framework for incorporating mini-grids and sort of the non-grid-heavy options for bringing this in? So, stand-alone systems, not just the big grid, slowly like a behemoth sort of crawling across the landscape. So, if that's in place. And, thirdly, how seriously has the country's policies dealt with consumer affordability? So, the places that don't have . . . That are energy-poor or are lacking energy, tend to be poor in different ways, and so affordability tends to be a big issue. And, the different sort of finance schemes that countries are able to put together has a lot to do with that.
Subhrendu Pattanayak: And, sorry, I forget. There is also a fourth piece, and it's about how well utilities are monitored, and how transparent they are with their accounting, and if they're credit worthy, et cetera. So, that's at the policy-level, and I've done some work much more macro. In fact, it's an RFF working paper right now and in review, that is sort of looked only at the solar, home solar systems, and try to figure out what the enabling environment is for success in that field. And, by that enabling environment, I'm thinking a set of market related factors, such as a supply chain. A set of finance factors such as different financing schemes. We already touched on regulation, that was one of them. But, also sort of program-level implementation factors, and . . . So, as you can see, it's a real big bundle of things. It's no one issue that's rising to the top.
Daniel Raimi: Right, yeah. So, it's complex.
Subhrendu Pattanayak: And, I could just keep going. But, I know you want to wrap this at some point, yeah.
Daniel Raimi: Yeah. Well, I mean, you know how I . . . I always wish I could spend more time with our guests, but we do have to stop at some point.
Subhrendu Pattanayak: Yeah.
Daniel Raimi: So, I won't dwell on more sort of big picture items, but I will throw out just few more stats to give listeners a sense of the scale and maybe geographical distribution of energy access challenges. So, you mentioned earlier that there are roughly one billion people who lack access to any electricity and, when you look, most of that is in Asia and sub-Saharan Africa. So, we have about 170 million people in India, about 180 million people in other parts of Asia, but the really big chunk of folks is in sub-Saharan Africa, where we have roughly 600 million people without access to energy. And, this is from IEA data.
Daniel Raimi: So, that's kind of the big picture framing, but let's dive down into your work and talk about Nepal in particular. Or, feel free, please, to bring in other examples as you see fit. So, you've been working in Nepal. You've done a lot of work on providing electricity through something called micro-hydro systems. So, some of our listeners can probably imagine what a micro-hydro system is, but can you give us a brief description of what those systems look like and how they work?
Subhrendu Pattanayak: Yes, so I think I started today's discussion by reminding you that what got me into the environment was hiking in the high Himalayas.
Daniel Raimi: Yeah.
Subhrendu Pattanayak: And, one of the outstanding features of that setting is these fast-flowing streams and rivers, right? And, to an engineer, that's uncontained energy, right? So, if you can actually trap it and use gravity to sort of propel a turbine, you could . . . That's essentially what a micro-grid is: a micro-hydro micro-grid. Right? So, you can get about 2, 300 people electricity because the stream is being sort of channeled into a turbine that's firing up 2, 300 households, a community, plus maybe two communities, for three, four hours a day. So, a couple of hours in the morning, couple of hours in the evening, and it's usually mountainous, rugged terrain, fast-flowing rivers, and that's what it looks like. At the face of it, it sounds like an engineering marvel, and it's really about engineering, but I think as social scientists and those who do policy work, you realize that it's much more than engineering.
Daniel Raimi: Right.
Subhrendu Pattanayak: To have the system functioning, to have it's parts being repaired, and you need people to get along with each other to collect money, to employ an operator and all of that, and that's sort of underrated. That's exactly what we're trying to study.
Daniel Raimi: So, could you tell us a little bit more about those sort of social networks and how they . . . I don't know, maybe give us an example of how a social system can help enable or potentially destabilize some engineering project like a micro-hydro mini-grid?
Subhrendu Pattanayak: Right. So, I think, at some level, it's all the old adages in community-managed systems as long as the community is not too big and the community is reasonably homogenous. So, this last winter, I was in Nepal looking at the system and the Gurung . . . I don't know what to call them. A tribe, I guess? Social sub . . . Well, it's a caste system. The Gurung people get along with each other and they have pride in their system and as long as there are not too many non-Gurungs, they are willing to help each other out. So, homogeneity helps, the size of the community helps, and some history of having done things together of community projects helps. But, minus all those things, you have trouble. So, if the communities fractionalized, it's too big, it has never really got together to do community projects, then that's going to be difficult. That's what we'll sort of . . . That's a hypothesis, at least so far. And, we're testing it
Daniel Raimi: And, that . . . I mean, it sort of plays into the next question that I was thinking about, which was this question of scale and at what point do different scales of technology make sense? So, I was listening to a podcast, another podcast you did. You're a man of the world. You're a podcaster of the world. And, in that podcast, you said . . . You used the phrase, "small is beautiful," when referring to these systems, and that's different than how we often think about electricity systems, and we think about the value of having large, centralized energy where you can pull electricity from different wide geographical areas. So, for regions that are looking to expand access to the grid, how do you think about the trade-offs for when small is better versus when big is better?
Subhrendu Pattanayak: Yeah. So, I think I might come back to this further along and feel free to ask me to expand if we have time, but it's helpful to remember that in the US, you often . . . The countryside got electricity through small-scale systems to start with, before we sort of went big. And, I would say that there is a place and time for everything, and right now, if . . . Daniel, one day you will get to one of these mountains, and you'll realize how hard it is to get there.
Daniel Raimi: Yeah.
Subhrendu Pattanayak: Let alone, how hard it is to bring electricity to these places. Right? On a grid, to have a cable line. So, if it's remote, if it's rural, and if it's hard to get to, I think these non-grid solutions have to be perhaps the only thing, right? We started out today's conversation with imagining life without life. So, we shouldn't be imagining that life without light, and if we need to get . . . People are still living in these remote, rural, hard-to-get places.
Subhrendu Pattanayak: So, off-grid is going to be perhaps the only option there and, especially when you have limited finance. So, remote, rural, hard-to-reach places without access to big chunks of investment, limited finances, that's sort of the short-run answer to when these will work. I think there is also, if you take the truly ecological, environmental lens, perhaps a long-run answer that right now some of the electrification that's happening in the world is happening on the back of coal. Okay? And, coal is neither sustainable or not very clean, as sort of implemented around the world mostly . . . And so, I think from a long-term, clean, sustainable energy solution, some of these hydro-renewable solutions are also part of it, right? So, I think, until we get to clean, beautiful coal, or wind and hydro on a large scale, off-grid solar is going to be a very important player to solve some of those challenges that I sort of introduced at the beginning.
Daniel Raimi: Yeah, so you mentioned investment and different scales of investment. For the small communities that you're looking at, whether they're in the Himalayas or maybe other parts of the world that are looking for access to electricity, what are the sort of options that they have to gather investment for these sort of smaller scale projects? Are they financed by the communities themselves, or are governments coming in with grants? Are there international organizations helping out, kind of? What's the landscape there?
Subhrendu Pattanayak: For most parts, it's some mix of all those things that you mentioned, Daniel, I don't think it's only one. It's actually some mixed bag of all those things that you listed, and that's really what's happening. And, I wish I knew which one of them is more successful than the others, but that's the reason for our research. We're sort of exploring different business models. I can expand on that in a second.
Daniel Raimi: Yeah, please do.
Subhrendu Pattanayak: So, it's true that some mix of private investment and stable policies are needed, and at some level it's always wise to call some dead, famous economist like Schumpeter.
Daniel Raimi: Sure.
Subhrendu Pattanayak: So, there is a place and time for everything, right? So, I think different things work in different places, and to say that it's private finance that is of this kind and not some of the social finance or public investments is perhaps a mistake. I think we should be looking at these systems more through sort of general reform principles, not really saying it's private or public. Those labels don't really mean much in these settings. And so, those principles are really . . . Is there competition? Okay? So, that's first. So, when the private comes in, and the public . . . I think there is a healthy competition between the two. If it's only one, then the other will dominate. Second, is there any accountability? Is there a way for the consumer to signal back to the provider that what they're doing is not right, or not good, or low-quality? Okay?
Daniel Raimi: Yeah.
Subhrendu Pattanayak: Either why they lose the elections or their company is kicked out, it has to . . . There's gotta be some accountability. Failing their accountability, we should have some system of evaluation and monitoring, so where there is difficulty in accountability, you need third party monitoring of some kind to sort of say, "This is not right," or, "This is good." And, ultimately, of course, I think we have to sort of remember . . . I think you might remember this from one of our lectures in class many moons ago, that public services have a different flavor than private commodities, right? So, as much as electricity is a private commodity, we've talked about its public value, and so with public services, I think there's got to be some alignment of the missions and the motives of the organizations that's providing it. And, that puts a little bit of a question mark on all the emphasis on sort of the private investments being the solution because private investments come with a few risks associated with them.
Daniel Raimi: Yeah.
Subhrendu Pattanayak: And, this has sort of lent itself to thinking about decentralized off-grid because they have many of these boxes there. There is ground-level accountability. In these small systems, you can actually . . . It's actually community run, so the leader sits in the community and gets voted out if there's a problem, right? And, there's direct monitoring because the community monitors. There's some level of competition, not a lot. But there is a fairly high level of alignment of mission and motives.
Daniel Raimi: Yeah. I was going to ask about that, what those interrelated issues of accountability and monitoring. So, for . . . Are there examples out there or are there many examples out there where both accountability and monitoring are taking place at the local level? Because I was thinking about if you want to do monitoring for many many projects scattered in many different places and small communities, that would be . . . I imagine that would be fairly hard to centralize. But, can you talk a little bit more about that?
Subhrendu Pattanayak: So, I think you . . . that's exactly the right phrase that you used. The moment you think of some sort of centralized audit system, this is difficult, right?
Daniel Raimi: Yeah.
Subhrendu Pattanayak: So, the fact that we're thinking of decentralized mini-grids, micro-hydro, name them, it's . . . Those are supposed to be self-sufficient, right? So, they are actually watching each other. It's not like an external regulator is coming and seeing if they're delivering. Yeah?
Daniel Raimi: Yeah.
Subhrendu Pattanayak: And . . . But, even in that world, there are failing off-grid systems and succeeding off-grid systems. And, in fact, that is the point of our research in Nepal. Why have some succeeded and others have failed? And, I don't want to get too carried away with the three site visits we did, one to a lousy site and one to a good site, but there was already some evidence that the failing one didn't have clear accounting. There was lack of trust in the community. They weren't reporting what they were doing with their finances. And then, the one that was succeeding, all those things were happening, and . . . Which led to this hypothesis that maybe some of this is going on. And so, our goal right now is to sort of get data from 100, 200, 300 of these systems and see if there's a more general statistical pattern.
Subhrendu Pattanayak: And then, the one that was succeeding, all those things were happening, and . . . Which led to this hypothesis that maybe some of this is going on.
Daniel Raimi: Yeah, great. Well, are . . . And, how are you going to carry that out? Are you going to be trekking more in the Himalayas in the years to come?
Subhrendu Pattanayak: Yeah. So, I . . . well, why do you think I picked that place? As you get older, you got to sort of combine work and activity. So, yes, we are. But, jokes aside, I think we are launching a mammoth survey. We've got some Seed Grant from within Duke and we're looking for external funding and combining as much GIS work as we could do to sort of do this system by system across multiple systems. Right?
Daniel Raimi: Right.
Subhrendu Pattanayak: Rather than these anecdotal case studies. And, hopefully, they'll be some beautiful treks and nice pictures also somewhere in there.
Daniel Raimi: Yeah, fantastic. Yeah, I mean, we'll look forward to kind of hearing back maybe in a year or two-
Subhrendu Pattanayak: Sure. Absolutely.
Daniel Raimi: Once you have that bigger end, and see what you're finding. And this, I can't help but remember the one trip I took to the sort of foothills of the Himalayas in China, a place called Tiger Leaping Gorge, which is this epically vast gorge. I think it's the headwaters of the Yangtze river. And, a really beautiful place, a really remote place, where they did actually have electricity. And, I think it was a grid, a large grid system, that was providing it. But, this is China. It's sort of a different model.
Subhrendu Pattanayak: China's always an exceptional story, and we should all remember that. But, the other thing your listeners should probably be aware of is the foothills of the Himalayas are often about 10,000 feet, so . . .
Daniel Raimi: Yeah.
Subhrendu Pattanayak: Life is quite challenging in those parts, and the grid is not reaching there anytime soon.
Daniel Raimi: Yeah. Right, right. Okay, great. Well, thank you, Subhrendu, so much for telling us about this and sharing some of your experiences working in Nepal and elsewhere. We're going to close it out with a segment that we call, "Top of the Stack."
Subhrendu Pattanayak: Okay.
Daniel Raimi: And, this is . . . we ask everybody this question and we're going to ask you what's the top of your literal or metaphorical reading stack? So, something that you've read or watched or heard recently that you enjoyed, or that you thought was interesting related to the environment or energy that you thought our listeners might enjoy. And, I'm going to recommend a video that I just watched last week on YouTube. It's incredibly popular, so you may have heard of it already. It's got over like 60 or 70 million views at this point. It's a song called “Earth” by an artist named Lil Dicky, who I had never heard before.
Subhrendu Pattanayak: Okay.
Daniel Raimi: It's a ridiculous video. It's really fun. It's quite vulgar. But, it's really really warm-hearted. And, it's a song about the earth and its importance and the species on the earth. There are cameos from many famous singers and actors, like Justin Bieber and Ariana Grande and even Joel Embiid, the basketball player, makes a cameo. So, it's not something that I would recommend for policy advice or you know, learning the nooks and crannies of energy and environmental policy. But, it's really fun, it's got a couple good laughs in it, and I think pretty much everyone would enjoy it. So, check it out: “Earth” by Lil Dicky.
Subhrendu Pattanayak: Absolutely. Will do that, yeah.
Daniel Raimi: How about you Subhrendu?
Subhrendu Pattanayak: So, the problem with being academics is that you tend to read too much all the time, right? And, I would like to say that I'm reading only really serious tropes and books out there, but probably just reading lots and lots of complaining emails from students and administrators about things that I haven't done for them. So, I'm just going to recommend a few things that are not book length, but really short, just maybe a couple of things. One is . . . There's an article in Foreign Affairs in, say 2015 by Morgan Bazilian. Yeah, that's his name. Bazilian.
Daniel Raimi: Yep.
Subhrendu Pattanayak: He was a lead energy economist at the World Bank, and now has moved to Colorado. It's called “Power to the Poor.” It's a really nice introduction to all of these things that I just mentioned. It's short, and you can actually listen to it. Strangely enough, Foreign Affairs found that article to be so popular that they have a voice-over on it, and you can listen to it in about 20 minutes. So, there's . . . Next is a cluster of short articles on de-risking off-grid that UNDP and the ETH Zurich have produced. I think that's a helpful introduction. Just like the World Bank RISE Reports, they've had one in 2018, one in 2016. So, RISE, again, stands for Regulatory Indicators Scorecard something. I forget, sorry.
Daniel Raimi: I think it's Regulatory Indicators for Sustainable Energy.
Subhrendu Pattanayak: Sustainable Energy, right. But, they end up letting you get a scorecard at the end of it. That's why I remember. And then, finally . . . So, if you've got general introduction, you've got policies, and I think the sustainable energy for all, or SE for all, puts out these finance reports every couple of years, and there's been one in 2017 and 2018. If your listeners have time, just scanning the executive summaries, which are about a page and a half or two pages, is a good introduction to all of this material, yeah. But, no long books or Justin Bieber from me, sorry.
Daniel Raimi: I think we've spanned the gambit of recommendations from Justin Bieber to long books to magazine articles, so we've got something for everyone today.
Subhrendu Pattanayak: And, to Lorax. Yeah, yeah.
Daniel Raimi: And, to Lorax. Right.
Subhrendu Pattanayak: Yeah.
Daniel Raimi: So, great. Thank you so much Subhrendu for coming on and talking to us, and we'll look forward to hearing updates on your research in the future.
Subhrendu Pattanayak: Absolutely, it was a pleasure. Thank you, Daniel for asking me.
Daniel Raimi: Thank you so much for joining us on Resources Radio. We'd love to hear what you think, so please write us on iTunes or leave us a review. It helps us spread the word. Also, feel free to send us your suggestions for future episodes. Resources Radio is a podcast from Resources for the Future. RFF is an independent, nonprofit research institution in Washington, DC. Our mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. Learn more about us at rff.org. The views expressed on this podcast are solely those of the participants. They do not, necessarily, represent the views of Resources for the Future, which does not take institutional positions on public policies. Resources Radio is produced by Kate Petersen, with music by Daniel Raimi. Join us next week for another episode.
