Looking ahead: Health facility electrification in 2024 and beyond
In recent years, we have seen substantial progress in the health facility electrification sector. The COVID-19 pandemic brought with it an increase in awareness of the importance of health centres having reliable power. The period witnessed many financial commitments towards electrification, particularly to ensure that vaccines could be stored reliably.
However, as expected, there is still a large electricity access gap for health facilities, especially in more remote areas that lack the necessary infrastructure or resources. According to the World Health Organization, an estimated 1 billion individuals globally currently depend on health facilities that have either no or only unreliable electricity. The proportion of health facilities lacking any access to electricity is as large as 12 and 15% in South Asia and Sub-Saharan Africa, respectively.
There are several challenges in bridging this gap, including a lack of adequate funding in the sector. Greater coordination between key stakeholders is necessary, especially between health and energy ministries, where more capacity building and knowledge are vital to fully understand how to overcome these challenges.
More needs assessments and energy audits are also crucial to identify the specific needs of facilities and ensure robust system design. And a lack of long-term funding and frameworks for Operations and Maintenance (O&M) can cause problems with long-term sustainability.
Lastly, without up to date and complete data, it is difficult to make the most strategic and well-informed decisions and to integrate electrification efforts with larger national processes such as clean energy transition plans or integrated energy plans.
So, what can we expect from the sector in 2024 and the coming years? There are a couple of important changes and developments that will make significant improvements in healthcare facility electrification:
- Firstly, the use of energy-efficient appliances is likely to increase, which will reduce the overall energy consumption of facilities, and improve their development and climate impact, as well as directly improve health outcomes and the efficient use of resources.
By integrating appliances with advanced diagnostic tools and reliable refrigeration for vaccines and medications, better patient care can be provided and healthcare staff can perform their duties more effectively.
- More countries are expected to use and experiment with different models of energy provision, such as the ‘Energy as a Service’ model. This is a service-based approach to energy provision, where health facilities pay for the energy they use, instead of purchasing energy infrastructure upfront.
Changing from capital expenditure to an operational expenditure model allows more health centres, especially with small budgets, to access reliable energy sources. This model also encourages the private sector to become involved, as it presents a practical solution for energy providers, though with the caveat that it is not necessarily suitable in all contexts.
However, its success depends on the readiness and ability of governments and institutions, which vary significantly across different countries and regions. To help with this challenge, donor organizations are increasing technical assistance programmes to improve capabilities within governments and key institutions, thus preparing them for successful implementation. Therefore, we can expect a rise in the adoption of ‘Energy as a Service’ models, which should provide health facilities with more flexible and accessible options.
- Progress in technology and data collection, such as data analytics, remote monitoring, and artificial intelligence (AI) should improve efficiency and sustainability in the sector. Significant improvements in AI will provide smarter and more efficient solutions, which along with the power of big data, will ensure a more nuanced and dynamic approach to managing energy resources.
Data analytics enables precise tracking of energy consumption patterns, allowing for the optimization of power usage and finding areas for energy-saving improvements. Remote monitoring can streamline and automate data collection, which can in turn improve monitoring and impact assessments. It can also support O&M by tracking the real-time performance of energy systems, and remotely identifying problems or inefficiencies before they occur, ensuring continuous and reliable energy access.
- We expect an increase in the utilization of climate finance, and other types of innovative financing, such as D-RECs (distributed renewable energy certificates), which could play a crucial funding role. As the sector evolves, it is becoming increasingly clear that traditional funding mechanisms, of which the vast majority are capex grants, are not sufficient to meet the growing demand.
On the other hand, D-RECs can offer a novel mechanism for health facilities to capitalize on the environmental benefits of their renewable energy installations. They can provide extra income to cover part of the O&M costs, while simultaneously supporting climate change mitigation efforts. As these models continue to develop and gain traction, we expect more health facility electrification initiatives to adopt similar financial mechanisms.
While the energy access gap is still large, there are clear reasons to be optimistic that the target of universal electrification of health facilities is still within reach by 2030. However, to achieve it we need to find flexible and innovative funding solutions, increase quality and availability of data, improve coordination between key stakeholders and capacity building, and ensure that O&M frameworks are in place so that health facilities have access to 24/7 reliable and sustainable power.
This article draws from the groundbreaking and interesting findings in our upcoming State of the Market for Health Facility Electrification report, which details the current state of the market, challenges, financing options and recommendations. Funded by UKAID’s Transforming Energy Access (TEA) programme and developed in consultation with Economic Consulting Associates Limited (ECA) and Odyssey Energy Solutions, it provides a comprehensive global analysis of the sector, based on our extensive Powering Healthcare Intervention Database. The report outlines a strategic way forward with practical recommendations and provides an essential guide for stakeholders who aim to align with the SDGs and improve global health provision.