* Renewable energy seen more viable vs oil for poorest
* IEA says would cost 3 pct of global energy investment
* Projections presume higher oil prices here to stay
By David Sheppard
UNITED NATIONS, Sept 21 (Reuters) - Higher oil and energy
costs mean the world's poorest people should look to renewable
energy sources to provide the power generation so many lack,
the head of the International Energy Agency said on Tuesday.
Nobuo Tanaka, executive director of the IEA which advises
28 industrialized countries on energy policy, said oil prices
near $75 a barrel <CLc1> meant rural populations in sub-Sahara
Africa should turn to solar, wind and other renewables.
"Higher energy prices have a very large impact on the
poorest populations," Tanaka said on the sidelines of a summit
on world poverty at the UN headquarters in New York.
"That is why we think that renewables are often the best
solution. The issue is how you finance these projects
initially."
The IEA was launching a report created with the United
Nations Development Programme and Industrial Development
Organization looking at energy poverty and how to make modern
energy access universal.
It highlights that it would cost $36 billion a year between
now and 2030 to provide energy supplies to the world's 1.2
million people who currently lack access. []
The report argues this amounts to just 3 percent of what
the world is projected to invest in future energy projects over
the next 20 years.
"Lack of access to modern energy services is a serious
hindrance to economic and social development and must be
overcome if the UN Millennium Development Goals are to be
achieved," the IEA said in the report.
Tanaka said current oil prices around $75 a barrel may fall
in the short-term if the economic recovery in the developed
world falters, saying he saw many risks to growth, but the IEA
and its partners do not see prices heading lower for long.
"In the report we're not projecting oil prices will go down
significantly," said Minoru Takada,the head of Sustainable
Energy at the UN Development Programme.
"We expect the oil price will stay around this level or
rise a bit higher."
The report said in this environment, "Small, stand-alone
renewable energy technologies can often meet the electricity
needs of rural communities more cheaply and have the potential
to displace costly diesel-powered generation options.
"One of the main advantages of renewable energy sources,
particularly for household scale applications, is their
comparatively low running costs (fuel costs are zero), but
their high upfront costs demands new and innovative financial
tools to encourage uptake."
Takada of the UN Development Programme said they would work
with host and donor countries to encourage subsidies for
initial projects.
Using primarily renewables to provide energy access to the
world's poorest populations would only boost oil demand by less
than 1 percent and carbon dioxide emissions by 0.8 percent, the
IEA said.
(Reporting by David Sheppard; Editing by Richard Chang)
