As part of our series in response to the UN’s 2016 World Cities Report, we’re exploring the opportunities and challenges presented by the rapid growth of developing countries.
Previously we’ve discussed housing, as well as personal and professional services. For our fourth post in the series, we’re turning our attention to the negative impact of rapid urban growth on the climate and environment.
Sea levels are rising in places like Bar Beach in Lagos Nigeria. Before the government stepped in to fill huge swathes of land with sand, Lagos island suffered from constant flooding—a temporary and potentially dangerous solution, and a post for another day.
So what are the solutions to the challenge of adverse climate change in developing cities? Climate change, like all cycles, cannot be solved. The only way to break a cycle is to adopt a new one, in this case a distributed and renewable energy system.
The utility industry is made up of three layers:
- Infrastructure: generation plants, wires and lines, transformers, meters
- Technology: the software that runs the operations of all the infrastructure and customer interactions
- Consumer: metering, billing and payments
In the future, electricity will be generated far more locally to the individual customer, in the form of solar panels on their homes, for example. Another example would be wind farms, which are far less damaging to the environment than coal plants, and well-functioning hydrogenation plants.
More developed countries across the world have already made inroads to improving the function and delivery of utilities. Many have provided consumer incentives to purchase and install solar panels, making geothermal generation a far more affordable long-term option than obtaining power from the grid.
One of our portfolio companies, Beacon Power Services, is already bringing this reality to hundreds of customers in Nigeria. But we need to do more. Megacity governments will have to play a critical role, creating and passing policy measures designed to increase the adoption of renewable energy. It’s the only way to ensure that as urban growth continues, we can avert future climate catastrophes.