New technologies may enable increasing energy demand in developing countries to be met by sustainable power sources. Energy use is projected to grow three times as fast in emerging markets compared to OECD countries until 2035. However, outdated grids and infrastructure combined with inflexible, state-owned utilities dominating the power sector have stifled private investment and hindered the availability of reliable energy from sustainable sources. Neither has the transposition of centralised energy systems common in developed countries been effective in emerging markets. In sub-Saharan Africa, for example, only 15% of the rural population has access to electricity, due to the unreliability of the grid supply. The result is environmentally unfriendly alternative power generation; kerosene lamps and log burning in homes and backyard generators to run businesses.

Worldwide digitalisation in the power sector has boomed over the past decade with global investment in digital electricity infrastructure and software up by 20% annually since 2014; surpassing investment in gas-fired generation in 2016. New technologies such as digital, off-grid solar power and block chain are able to by-pass poorly functioning main grids and rigid regulatory systems in emerging markets to provide a reliable power supply and encourage financial investment in renewable energy. Localised, solar-based mini-grids have transformed life in Asia and Africa; electricity can now be bought via a pre-paid system with smart counters and online portals ensuring a fair and sustainable power distribution and the storage of excess solar energy to maintain a constant supply. This has enabled an increase in sustainable tourism. Block chain technology has the potential to drastically increase financing of renewable energy projects in emerging markets by allowing developers to circumvent the need for long-term, credit-worthy Power Purchase Agreements by offering 'energy tokens' to investors, who then provide capital in exchange for the purchase of future energy production. Block chain may also be used to allow direct region-to-region trading of renewable energy through seamless 'smart contracts', thereby paving the way for sustainable energy to power homes and businesses even in the most remote areas.   

Tech advances have the power to transform consumer energy access in emerging markets. Happily, the trend is towards investment in renewable energy provision, thereby allowing sustainable businesses to thrive in some of the most densely populated regions on the globe.  

 Clyde & Co is hosting energy and infrastructure-themed tables in The Chancery Lane Project's virtual legal hackathon, running from 23 September to 18 December 2020. This post is part of a series of updates posted during the hackathon on business-relevant climate initiatives and innovative solutions to some of the challenges arising from climate change in the Energy or Infrastructure industries.