[Senate Hearing 115-700]
[From the U.S. Government Publishing Office]


                                                     S. Hrg. 115-700

                  ENERGY AND INTERNATIONAL DEVELOPMENT

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON MULTILATERAL
                       INTERNATIONAL DEVELOPMENT,
                     MULTILATERAL INSTITUTIONS, AND
                    INTERNATIONAL ECONOMIC, ENERGY,
                        AND ENVIRONMENTAL POLICY

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 1, 2017

                               __________


       Printed for the use of the Committee on Foreign Relations

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                   Available via the World Wide Web:
                         http://www.govinfo.gov

                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
37-105 PDF                 WASHINGTON : 2019                     
          
-----------------------------------------------------------------------------------         

                     COMMITTEE ON FOREIGN RELATIONS

                    BOB CORKER, Tennessee, Chairman
JAMES E. RISCH, Idaho                BENJAMIN L. CARDIN, Maryland
MARCO RUBIO, Florida                 ROBERT MENENDEZ, New Jersey
RON JOHNSON, Wisconsin               JEANNE SHAHEEN, New Hampshire
JEFF FLAKE, Arizona                  CHRISTOPHER A. COONS, Delaware
CORY GARDNER, Colorado               TOM UDALL, New Mexico
TODD, YOUNG, Indiana                 CHRISTOPHER MURPHY, Connecticut
JOHN BARRASSO, Wyoming               TIM KAINE, Virginia
JOHNNY ISAKSON, Georgia              EDWARD J. MARKEY, Massachusetts
ROB PORTMAN, Ohio                    JEFF MERKLEY, Oregon
RAND PAUL, Kentucky                  CORY A. BOOKER, New Jersey



                  Todd Womack, Staff Director        
            Jessica Lewis, Democratic Staff Director        
                    John Dutton, Chief Clerk        



        SUBCOMMITTEE ON MULTILATERAL INTERNATIONAL DEVELOPMENT,
         MULTILATERAL INSTITUTIONS, AND INTERNATIONAL ECONOMIC,
                    ENERGY, AND ENVIRONMENTAL POLICY

                     TODD YOUNG, Indiana, Chairman
JEFF FLAKE, Arizona                  JEFF MERKLEY, Oregon
CORY GARDNER, Colorado               TOM UDALL, New Mexico
JOHN BARRASSO, Wyoming               CHRISTOPHER A. COONS, Delaware
ROB PORTMAN, Ohio                    EDWARD J. MARKEY, Massachusetts

                                  (ii)


                            C O N T E N T S

                              ----------                              
                                                                   Page

Young, Hon. Todd, U.S. Senator from Indiana......................     1


Merkley, Hon. Jeff, U.S. Senator from Oregon.....................     2


Kyte, Rachel, Chief Executive Officer and Special Representative 
  of the United Nations Secretary-General, Sustainable Energy for 
  All, Washington, District of Columbia..........................     4

    Prepared statement...........................................     6


Moss, Dr. Todd, Senior Fellow, The Center for Global Development; 
  nonresident scholar at The Center for Energy Studies, Rice 
  University's Baker Institute, Bethesda, Maryland...............    13

    Prepared statement...........................................    15


Talocchi, Joao, Program Director, Purpose Climate Lab, New York, 
  New York.......................................................    18

    Prepared statement...........................................    20


Mitchell, Paul, President and Chief Executive officer, Energy 
  Systems Network, Indianapolis, Indiana.........................    24

    Prepared statement...........................................    25

                                 (iii)

 
                  ENERGY AND INTERNATIONAL DEVELOPMENT

                              ----------                              


                      WEDNESDAY, NOVEMBER 1, 2017

                               U.S. Senate,
        Subcommittee on Multilateral International 
       Development, Multilateral Institutions, and 
 International Economic, Energy, and Environmental 
                                            Policy,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:35 p.m. in 
Room SD-419, Dirksen Senate Office Building, Hon. Todd Young, 
chairman of the subcommittee, presiding.
    Present: Senators Young [presiding], Barrasso, and Merkley.

             OPENING STATEMENT OF HON. TODD YOUNG, 
                   U.S. SENATOR FROM INDIANA

    Senator Young. Good afternoon. This meeting of the Senate 
Foreign Relations Subcommittee on Multilateral International 
Development, Multilateral Institutions, and International 
Economic, Energy, and Environmental Policy will come to order.
    The purpose of today's meeting is to receive testimony 
related to energy and international development. Today's 
meeting will be divided into two panels.
    The first panel consists of Ms. Rachel Kyte, Special 
Representative of the United Nations Secretary-General for 
Sustainable Energy for All and Chief Executive Officer of 
Sustainable Energy for All. Ms. Kyte is appearing voluntarily 
today as a courtesy to brief the committee, and we are honored 
to have you here today, Ms. Kyte.
    Following this panel, we will convene a second panel with 
three witnesses. They include Dr. Todd Moss. He is Senior 
Fellow at the Center for Global Development at Rice 
University's Baker Institute. And Mr. Joao Talocchi. No, I did 
not practice that beforehand. He is Program Director at the 
Purpose Climate Lab. And finally, I would like to welcome a 
fellow Hoosier, Mr. Paul Mitchell. Paul is the President and 
Chief Executive Officer of the Energy Systems Network based in 
the great City of Indianapolis, Indiana.
    On behalf of the subcommittee, I welcome each of you.
    As I said, the purpose of today's meeting is to discuss the 
intersection between energy and international development. But 
before we begin, I would like to offer a few observations to 
frame that discussion.
    Earlier this year, I co-chaired a bipartisan Center for 
Strategic and International Studies task force. The topic of 
that task force was reforming and reorganizing U.S. foreign 
assistance, focusing on increasing the efficiency and 
effectiveness of U.S. development efforts overseas.
    Now, my starting point for that task force and my starting 
point for today's hearing is that U.S. international 
development is not an end in and of itself. Development, 
rather, is a tool or a means to do good while promoting 
America's security and economic interests. Our country has seen 
that poverty, instability, and governance vacuums often create 
opportunities for our enemies. They generate threats to 
Americans and compel more costly military interventions later, 
more costly in terms of lives and treasure.
    Benjamin Franklin is often quoted as saying that an ounce 
of prevention is worth a pound of cure. That is why I have been 
and will continue to be a strong supporter of U.S. 
international development efforts.
    But that does not mean we should reflexively accept all 
U.S. international development programs as they currently 
exist. On the contrary, Congress must constantly scrutinize and 
reassess U.S. international development programs, asking tough 
questions on behalf of the taxpayers' international interests. 
We must ensure these programs are optimally designed and 
implemented.
    Now, when I ask some of these questions and survey U.S. 
international development programs, a few key points emerge. 
Let me quickly highlight just three of them.
    First, it is difficult to overstate the importance of 
energy in international development. It was Dr. Moss who stated 
in his prepared testimony, ``mass electrification can be 
catalytic for reducing poverty and deprivation while generating 
growth and prosperity. It can also generate revenue for 
governments in the developing world, enabling them to address 
challenges within their borders more effectively with less 
foreign assistance. After all, we should seek to transition and 
enable recipients of U.S. foreign assistance, not perpetuate 
dependence.''
    Second, there have to be significant changes in the energy 
sector in the developing world that must guide our efforts. In 
addition to the fracking revolution and the increasing 
importance of natural gas, we also see many exciting 
innovations related to alternative energy and public-private 
partnerships. U.S. international development efforts should 
reflect and harness these developments.
    That is one of the reasons why I am so excited to have Paul 
Mitchell here from Indiana's Energy Systems Network. The 
Federal Government and our international partners can benefit 
from some of the cutting-edge development that Indiana's Energy 
Systems Network has achieved. They have already done much 
internationally, and I am confident they can do more.
    We also see there is enormous projected population growth 
in Africa, and we must help our partners there create jobs. As 
Dr. Moss states in his prepared testimony, ``power is 
absolutely essential to creating the tens of millions of new 
jobs that Africa needs every year.'' He continues, ``there is 
no scenario where Africa is stable and thriving without a rapid 
expansion of the power sector.'' I agree.
    Finally, as I have researched this issue, I have been 
impressed, once again, with the goodness and generosity of the 
American people. We see many American companies, individuals, 
and cooperatives doing good abroad when it comes to energy and 
international development.
    I would cite as an example Indiana Electric Cooperatives. 
They have a project known as Project Indiana. And as part of 
this effort, according to IEC, dozens of Hoosiers have traveled 
repeatedly to Guatemala at their own expense to install 61 
miles of electric lines there in five villages. All 38 electric 
distribution cooperatives, and the two generation and 
transmission cooperatives, in my home State of Indiana have 
been involved in this impressive effort. More than 3,100 
Guatemalans now have power for the first time as a result of 
these efforts. Churches, schools, and a health clinic now have 
power, improving the lives of Guatemalans and generating 
durable goodwill for the United States. This is just one 
example of Americans at their best.
    With those observations in mind, I would now like to turn 
to Ranking Member Merkley for his opening statement. Senator 
Merkley?

                STATEMENT OF HON. JEFF MERKLEY, 
                    U.S. SENATOR FROM OREGON

    Senator Merkley. Thank you very much, Mr. Chairman, and I 
sure appreciate our experts coming to share their insights with 
us today.
    As those who are focused on international development know, 
many people around the world lack access to electricity and 
clean and reliable sources of fuel for cooking, for home 
heating, and for transportation. It is now 2017. We think of 
ourselves in a very modern era. And yet, one out of six 
individuals around the globe does not have access to 
electricity. 600 million of these individuals live in sub-
Saharan Africa, another 300 million in India.
    Access to clean and renewable energy in developing 
countries can provide affordable and reliable energy but also 
significantly impact local poverty and provide public health 
benefits.
    As a result of technological innovation, we have seen the 
price of solar and wind energy drop dramatically, as has the 
cost of battery storage. This means that communities that lack 
access to electricity now have an affordable option to gain 
access by building micro-grids--smaller, self-contained grids 
that can meet the needs of the isolated community more quickly 
and affordably than waiting for an electric utility to make 
significant investments to expand the electric grid to the 
community. Decentralized grids powered by local renewable 
energy sources usually have far lower initial capital 
investment requirements. Not only that, but economically few 
things bring greater opportunities for impoverished communities 
to develop small business and other economic activity than 
providing electricity access.
    For developing countries without universal or widespread 
access to reliable energy and electric grids, there are 
opportunities to bring these communities into the 21st century 
with more resilient, more economically viable, cleaner energy 
sources. Electricity can provide lights for schools and homes. 
It can power machines for small businesses. It is a linchpin 
for participating in the modern economy. Electricity can also 
provide the opportunity for micro-enterprises that I have seen 
both in India, and in Africa, for example, when an individual 
has a small solar panel that charges a battery, and then they 
use that to charge cell phones for others, creating such a 
small business.
    But electricity is not the whole story. There are twice as 
many individuals, as compared to those who lack electricity, 
who lack access to clean fuel for cooking food, and instead use 
wood or charcoal for cooking even when cooking indoors. These 
fuels can cause enormous indoor air pollution, causing an 
estimated 4 million premature deaths annually and contributing 
to a wide range of illnesses, including pneumonia, low birth 
weight in children, lung cancer, blindness, and heart disease. 
Women and children often bear a disproportionate share of these 
health impacts because it is common in many countries that they 
spend more hours indoors.
    The good news is that there are clean and affordable fuel 
options for cooking as well, and I hope we will hear more about 
that today.
    There are clear benefits to billions of people around the 
world to getting access to clean, affordable, sustainable 
sources of energy. But we should keep in mind that this 
transformation has significant benefits for us here at home. 
America is safer when we are able to make progress in 
addressing the root poverty issues that increase the 
possibility of radicalization and extremism. Bringing new 
sources of energy to underserved communities can also reduce 
conflicts among countries or ethnic groups fighting over 
limited resources. Investment in energy development, which has 
such immediate impacts on people's lives, promotes trust and 
good faith between developing communities and the broader 
international community.
    And on the jobs front, as I believe our witnesses will 
attest today, our investment in bringing renewable, sustainable 
energy to developing communities is a win-win, creating new job 
opportunities in the countries where we are working to provide 
access while providing markets for U.S.-based businesses that 
produce technology to support sustainable energy solutions.
    I really am looking forward to the testimony today. 
Sustainable energy access is transforming development in many 
parts of the world, and we need to understand it, promote it, 
and benefit from it here at home in terms of security as well. 
Thank you.
    Senator Young. Well, I thank our ranking member.
    And, Ms. Kyte, once again thank you for appearing before 
the subcommittee. Your full written statement will be included 
in the record, and I welcome you to summarize your written 
statement in about 5 minutes, please.

 STATEMENT OF RACHEL KYTE, CHIEF EXECUTIVE OFFICER AND SPECIAL 
    REPRESENTATIVE OF THE UNITED NATIONS SECRETARY-GENERAL, 
           SUSTAINABLE ENERGY FOR ALL, WASHINGTON, DC

    Ms. Kyte. Chairman Young, Ranking Member Merkley, I 
appreciate the invitation to brief you today. Thank you very 
much, other members of the subcommittee.
    In 2015, the international community agreed to a set of 
sustainable development goals. Sustainable Development Goal 7 
is to secure affordable, reliable, sustainable, and modern 
energy for all by 2030. Its targets include a doubling of the 
rate of improvement in energy efficiency, doubling of the 
amount of renewable energy in the mix, and universal access to 
sustainable energy.
    Of course, later in 2015, the Paris Agreement on climate 
change put the energy transition at the forefront of a time-
sensitive economic transformation to cleaner and more inclusive 
sustainable growth. Then, to meet the SDG and the Paris 
Agreement, the energy transition must embrace three drivers: 
decarbonization, decentralization, and digitalization.
    Included in this energy transition is delivering 
electricity to over a billion people that currently lack 
access, and to do so over the course of the next 13 years. 
Twenty countries in Africa and Asia represent 80 percent of 
that challenge. In these countries, domestic and international 
public and private finance--the commitments that are made 
average just under half of the estimated needs in the period 
2013 to 2014. So that is $19.4 billion compared to $52 billion. 
This finance has targeted critical support for economic and 
industrial growth. However, only $6 billion of that has focused 
on connecting residential consumers. Nearly two-thirds of this 
finance was in India, the Philippines, and Bangladesh. Eleven 
of the twenty highest impact countries, all of whom are in 
Africa, each saw less than a billion dollars of investment a 
year.
    Decentralized electricity systems could provide near-term, 
low-cost electricity to millions of rural consumers but face 
policy and regulatory uncertainty that constrains growth. 
Seventy percent of Africa's least electrified nations where 
access is below twenty percent have barely begun to establish 
an enabling environment for access. Electrification plans that 
help define the boundaries between centralized systems and 
decentralized services are generally lacking.
    Now, countries in Asia with a strong policy framework, such 
as India and Bangladesh, have seen correspondingly high rates 
of electricity access. They do well across policies for grids, 
mini-grids, and standalone systems, suggesting that these 
efforts are complementary.
    By 2030, the International Energy Agency suggests on a 
business-as-usual basis, 89 percent of the 674 million people 
who will still be without access will be in Africa. Some 
countries, such as Kenya have announced plans to close the 
electricity gap well ahead of 2030. It is possible to estimate 
the dividend in economic and development terms of achieving 
access to electricity as a priority. Benefits include 
significant savings in energy expenditures, as well as 
additional study time for children at home. With advances and 
dropping prices of distributed renewable technologies and with 
evidence of the benefits of connection, the question before 
countries with electricity access gaps and the international 
community is why wait for the grid to arrive.
    Electricity represents one part of the energy needs of 
those without access. Clean cooking represents a significant 
added challenge. Just over 3 billion people lack access to 
clean fuels for cooking. Under a business-as-usual projection, 
2.3 billion people in Asia and Africa will remain without 
access by 2030. Current detectable financing flows for clean 
cooking are very low against an estimated need of just over $4 
billion a year. Stronger emphasis is needed on creating big 
markets for clean fuels in addition to investments in clean 
cooking technologies and funding for research and development. 
Use of traditional biomass, wood, charcoal, and animal dung, is 
devastating to human health and a driver of deforestation. The 
WHO estimates that over 4 million people die prematurely from 
illness attributable to household air pollution from cooking 
with solid fuels every year. Transitioning to cleaner fuels, 
including ethanol, LPG, and natural gas, will require long-term 
industry building.
    These comments have been primarily focused on challenges in 
securing universal energy access. The good news, gentlemen, is 
that advances in technology, financing and business models and 
a focus on demand side efficiency in products and services mean 
that we can achieve the goal. However, it will require a shift 
in mindset from supporting centralized energy systems to more 
integrated systems with a greater share of renewables. The U.S. 
has been engaged in these efforts for many years. Its continued 
engagement at a time of advances in technology and business 
models and with an international focus on sustainable 
development could reap real rewards.
    I would be very happy to answer any questions you may have. 
Thank you.
    [Ms. Kyte's prepared statement follows:]


                   Prepared Statement of Rachel Kyte

    Chairman Young, Ranking Member Merkley, distinguished members of 
the subcommittee, I appreciate the invitation to brief you today.
    In 2015, the international community agreed a set of Sustainable 
Development Goals (SDGs). Sustainable Development Goal 7 is to secure 
``affordable, reliable, sustainable and modern energy for all by 
2030''. Its targets include a doubling of the rate of improvement in 
energy efficiency, a doubling of the amount of renewable energy in the 
energy mix and universal access to ``sustainable energy''. Later in 
2015, the Paris Agreement on climate change put the energy transition 
at the forefront of a time sensitive economic transformation to cleaner 
and more inclusive sustainable growth. To meet the goals of the SDG and 
the Paris Agreement, the energy transition will embrace three drivers: 
decarbonization, decentralization, and digitalization
    Included in the energy transition is delivering electricity to over 
1 billion people that currently lack access, in the coming 13 years.\1\ 
Twenty countries in Africa and Asia represent 80 percent of this 
challenge.\2\ In these countries, domestic and international, public 
and private finance commitments averaged just under half of what 
estimated needs are in the period 2013-14,\3\ ($19.4 billion compared 
to an annual estimate need of $52 billion).\4\ This finance targeted 
critical support for economic and industrial growth, however only $6 
billion focused on connecting residential consumers. Nearly two-thirds 
of this finance was for India, the Philippines and Bangladesh. Eleven 
of the twenty highest impact countries, all in Africa, each saw less 
than a billion dollars a year of investment.
---------------------------------------------------------------------------
    \1\ IEA and World Bank, 2017. Global Tracking Framework 2017 (GTF) 
http://gtf.esmap.org/
    \2\ Those countries are Angola, Bangladesh, Burkina Faso, Chad, 
Democratic Republic of the Congo, Ethiopia, India, Kenya, Democratic 
People's Republic of Korea, Madagascar, Malawi, Mali, Mozambique, 
Myanmar, Niger, Nigeria, South Sudan, Sudan, Tanzania and Uganda.
    \3\ SEforALL. 2017. Energizing Finance: Scaling and Refining 
Finance in Countries with Large Energy Access Gaps.
    \4\ IEA, 2017. World Energy Outlook Special Report, Energy Access 
Outlook, 2017.
---------------------------------------------------------------------------
    Decentralized electricity systems could provide near-term, low-cost 
electricity to millions of rural consumers, but face policy and 
regulatory uncertainty that constrains growth. Seventy percent of 
Africa's least electrified nations--where access is below 20 percent--
have barely begun to establish an enabling environment for access. 
Electrification plans that help define boundaries between centralized 
and decentralized services are generally lacking. Only one percent--
$200 million a year--in financing commitments in these 20 countries 
over 2013-14 focused on decentralized energy.
    Countries in Asia with a strong policy framework, such as India and 
Bangladesh,\5\ see corresponding high rates of electricity access. They 
do well across policies for grids, mini-grids, and stand-alone systems, 
suggesting these efforts are complementary.
---------------------------------------------------------------------------
    \5\ World Bank, 2017. Regulatory Indicators for Sustainable Energy: 
A Global Scorecard for Policy Makers. http://RISE.worldbank.org.--India 
and Bangladesh score 84 and 68 percent, respectively, in the Regulatory 
Indicators for Sustainable Energy compared to 33 percent on average in 
Africa
---------------------------------------------------------------------------
    By 2030, the International Energy Agency (IEA) suggests that on a 
business as usual basis 89 percent of the 674 million people still 
without access (missing the Sustainable Development Goal) will be in 
Africa.\6\ Some countries, such as Kenya and Bangladesh, have announced 
plans to close the electricity gap well ahead of 2030. It is possible 
to estimate the ``dividend'' in economic and development terms of 
achieving access to electricity early. \7\ Benefits include significant 
savings to authorities and households from savings in energy 
expenditure as well as additional study time. With advances and 
dropping prices of distributed renewable technologies and with evidence 
of the benefits of connection, the question before countries with 
electricity access gaps and the international community is why wait for 
the grid to arrive and why push access down the priority list of 
investments needed.\8\
---------------------------------------------------------------------------
    \6\ IEA, 2017. World Energy Outlook Special Report, Energy Access 
Outlook, 2017.
    \7\ SEforALL, Power for All and ODI. 2017. Why Wait? Seizing the 
Energy Access Dividend (forthcoming).
    \8\ The Energizing Finance reports recommend that to drive the 
energy transition, at the required pace, African governments, bilateral 
and multi-lateral financiers should consider urgently developing a 
shared vision and targeted work program to deliver SDG 7 that embraces 
energy access goals, enabling policies, utility participation, and 
financing. Integrated policy and regulation that embraces centralized 
and decentralized electricity solutions can increase market certainty, 
reduce the risk of stranded assets, decrease the risk profile of 
decentralized investments, and provide confidence to private investors. 
Complementary measures are required to enable access for the most 
vulnerable people who are beyond the reach of conventional markets. 
SEforALL. 2017. Energizing Finance: Scaling and Refining Finance in 
Countries with Large Energy Access Gaps.
---------------------------------------------------------------------------
    Electricity represents one part of the energy needs of those 
without access or little access. Clean cooking presents a significant 
added challenge. Just over 3 billion people lack access to clean fuels 
for cooking and stoves.\9\ Under a business as usual projection, 2.3 
billion people in Asia and Africa are projected to remain without 
access in 2030.\10\ Current detectable financing flows for clean 
cooking is very low against estimated needs of $4.4 billion per 
year.\11\ Stronger emphasis is needed on creating big markets for clean 
fuels, in addition to the current often small-scale projects on clean 
cooking technologies. Funding for research and development and 
innovation in cooking technologies is also needed. Use of traditional 
biomass (wood, charcoal and animal dung) is devastating to human health 
and a driver of deforestation--this land degradation removes the carbon 
sink capacity of many countries. The World Health Organization 
estimates that over 4 million people die prematurely from illness 
attributable to household air pollution from cooking with solid fuels 
every year. Transitioning to cleaner fuels-including ethanol, LPG and 
natural gas-will require long-term, ``industry-building'' initiatives, 
which must begin immediately to meet the 2030 goals.
---------------------------------------------------------------------------
    \9\ IEA and World Bank, 2017. Global Tracking Framework 2017 (GTF) 
http://gtf.esmap.org/
    \10\ IEA, 2017. World Energy Outlook Special Report, Energy Access 
Outlook, 2017.
    \11\ SEforALL. 2017. Energizing Finance: Scaling and Refining 
Finance in Countries with Large Energy Access Gaps.
---------------------------------------------------------------------------
    These comments have been primarily focused on challenges in 
securing universal energy access. The good news is that advances in 
technology, financing and business models and a focus on demand side 
efficiency in products and services, mean that we can achieve the goal 
and do so cleanly. However, it will require a shift in mindset from 
supporting energy systems that have been centralized, to ones that are 
integrated, with a greater mix of fuel sources, including more 
renewables. Securing access to reliable and affordable energy services 
delivers other economic, political and social benefits. The United 
States has been engaged in these efforts for many years. Its continued 
engagement, at a time of technology and business model advances and 
international focus on sustainable development, could reap real 
rewards.
    I am ready to answer any questions you may have. Thank you.


    Senator Young. Well, thank you for your excellent 
testimony, Ms. Kyte. I know each of us up here have a number of 
follow-up questions for you.
    Here today, as well as at greater length in your written 
testimony, you discussed the importance of the development of a 
strong policy framework, creating a policy environment that 
will facilitate a greater rate of uptake of electricity 
solutions, thus providing a higher rate of electricity access 
to citizens. India and Bangladesh you have cited as examples of 
countries that have developed this strong policy framework.
    Could you discuss the importance of that relationship 
between the policy framework on one hand and electricity access 
on the other and perhaps outline what a strong policy framework 
related to electrification looks like?
    Ms. Kyte. Thank you very much.
    I think perhaps then to a Senate subcommittee, it is 
important to say that policy does matter. And what we see is 
where a strong policy environment is put in place, speed and 
scale of improvement is possible. That is not to say that there 
are not good things happening in many, many different 
countries, but the speed and scale relates to the policy 
environment.
    We have been able, through pioneering work by the World 
Bank Group and others, to provide a sort of benchmarkable set 
of indicators around the regulatory environment for energy 
efficiency, for increasing the renewable penetration in the 
mix, which is important for decarbonizing the electricity 
system, and then also for policies which would lend themselves 
to speeding up access.
    When it comes to access, which was the subject of my 
briefing, you hear what we see is that the traditional 
regulatory environment, the traditional incentive is around the 
performance of the grid. And that needs to continue to be a 
focus of policy in terms of the levels of subsidy, the kind of 
price, the reliability of the grid, et cetera.
    But when we are looking at closing the access gap, those 
countries that are moving towards supporting a more integrated 
system, which means allowing off-grid systems to operate 
alongside grid systems, as well as allowing for a level playing 
field between energy sources, renewable as well as fossil fuel 
and other traditional sources, that in that circumstance, then 
we see a quicker closing of the energy access gap.
    Some countries, the ones that we name, have also focused on 
the regulatory environment and what a rural electrification 
agency would look like. And I am happy to submit, perhaps in 
writing, more detail around that.
    But I think that we do see that where you put access as a 
priority, you understand that efficiency will drive 
productivity throughout the economy and you wish to have a more 
modern energy mix that supports those initiatives is having an 
impact on closing the access gap more quickly.
    Senator Young. Thank you, Ms. Kyte.
    In your prepared statement, you also discussed the health 
effects of using certain fuels, specifically biomass, for 
cooking. You said a World Health Organization report, 
indicating that over 4 million people die prematurely every 
year from illness attributable to household air pollution from 
cooking with biomass and solid fuels generally.
    In their statement that I entered into the record, the UN 
Development Program said that almost 3 billion people lack 
access to clean cooking fuel, depending on traditional biomass 
to meet their energy needs instead.
    So, first of all, to make sure I understand this 
correctly--I have absorbed it from your reading--biomass is 
preferable to some of these solid fuels or biomass is one of 
the fuels that leads to adverse health effects among the 
populations.
    Ms. Kyte. It is an excellent question, Mr. Chairman.
    A traditional biomass, so the burning of wood or charcoal 
or cakes made from animal dung or a combination of those, is 
highly detrimental to health. It has heavy particulate matter.
    Senator Young. So that is all under the heading of biomass.
    What kind of specific R&D and innovation do we need to 
address this health and development issue?
    Ms. Kyte. So the R&D that is needed is over the improvement 
of the performance of cook stoves so that if you were to use 
some form of biomass, you would have much less emissions as a 
result of that. And there is a metric for understanding how 
good they have to be in order to not have any health impact. 
And then I think that there is also work to be done on building 
out markets for LPG, ethanol, and gas, as well as eventually 
solar induction stoves. But for those who are using biomass, we 
need more R&D into the actual performance of the stoves that 
burn that.
    Senator Young. Ms. Kyte, my time is running short here, and 
I want to make sure I pass it on to the ranking member.
    Before I do, I would be remiss if I did not reiterate that 
Mr. Paul Mitchell from Energy Systems Network from my home 
State is testifying on the second panel. Have you had an 
opportunity to read his written testimony?
    Ms. Kyte. I have. I have, sir.
    Senator Young. Well, thank you for doing that. And it 
strikes me that ESN has made some great progress on various 
projects that just might support your efforts at Sustainable 
Energy for All. Would you consider coming to Indiana and 
visiting with Energy Systems Network? This was not a trap. 
[Laughter.]
    Senator Young. But I would be grateful for your strong 
consideration, ideally your public commitment here and now.
    Ms. Kyte. Mr. Chairman, it is an extremely kind and 
generous offer. I read with interest the testimony. We have a 
lot to talk about, and I would be delighted to take you up on 
that offer. Thank you.
    Senator Young. Thank you.
    Senator Merkley?
    Senator Merkley. Thank you very much. It is so much 
appreciated--your testimony and the work that you are engaged 
in, a very important role in the world.
    And you mentioned policy and regulatory uncertainty. And 
one of the things that I have heard often is simply the access 
to lower interest financing as a significant hurdle. For 
example, at one point in a conversation with the power minister 
in India, he was relaying--this is now outdated--but that he 
wanted to reach two-thirds of the 300 million folks in India 
without electricity with coal-powered plants and a third with 
renewable. And I asked what was driving the separation between 
those two, and he said it was the very high interest rate on 
the renewable energy projects, which I think he pegged at about 
15 percent.
    What kind of work are we seeing in the international 
community to provide affordable financing for renewable energy 
electricity?
    Ms. Kyte. Thank you, Senator Merkley, for the question.
    There are many, many layers to a full answer to that, but I 
think that increasingly countries are addressing the investment 
climate to make sure that there is a consistency in the way in 
which they both set the regulatory environment but also then 
encourage effective pricing and encourage state-owned banks, in 
the case of India, as well as commercial banks and other 
lenders to be able to be part of the energy transition. Since 
the quote that you gave me, India has been able to auction for 
power, grid-connected solar power, at very, very competitive 
prices and now believes that solar power is cheaper than coal 
without subsidy. And so the question really for India is the 
exposure of their state-owned banks to the coal sector, as well 
as to stimulate both commercial and state-owned banks and 
international investors into their renewable industry.
    What we see in smaller projects around the world, in 
particular in Africa, is the lack of availability to well-
priced, long-term debt and perhaps a lack of awareness within 
the banking sector in some of the developing countries around 
the future for off-grid renewable energy, and that is something 
that a number of development partners are starting to address.
    Senator Merkley. I was really struck by just the transition 
in this single year between April and June driven, I think, by 
decisions in India related to that dropping price. Was that 
about 3 cents per kilowatt in those auctions?
    Ms. Kyte. Yes.
    Senator Merkley. I would not mind having more of that in 
Oregon.
    Ms. Kyte. I am happy to provide the detail on that.
    Senator Merkley. Thank you. That would be very helpful.
    And part of your presentation was labeled ``Dropping 
Prices--Why wait for the grid?'' I think that part was about 
prices dropping in micro-grid technology, which I have seen 
everything from the household panel to the small village 
system. What are you seeing evolve between the marketplace and 
those settings that are far from grid connections?
    Ms. Kyte. Thank you.
    Well, Senator, I think the best figure comes from Bloomberg 
New Energy Finance, and the framing that they give is that the 
price of solar PV has fallen by more than 70 percent in just a 
few years, and the price of storage is also falling. And then 
you have, therefore, a market of products and services that can 
work off that solar PV. And so what you now have is the 
opportunity to introduce technology in standalone or solar home 
systems or in micro-grids and mini-grids at a reasonable price 
into remote rural communities as well as into the peri-open 
communities of cities.
    That does not mean to say that it is easy to get the 
financing for these kinds of projects, but the actual price of 
the hardware has meant that all kinds of business models are 
now evolving around the provision of those kinds of services. 
And so rather than just even 5 years ago when this goal seemed 
to be extremely aspirational, it now seems to be one that if we 
can align the finance with the right policy environment and 
with the entrepreneurs and the backing that they need, that 
this is actually achievable.
    Senator Merkley. One thing that I saw was a very innovative 
strategy where individuals, instead of buying the system, they 
buy time on the system, and then when that time runs out, they 
can go buy more time. Meanwhile, they may have been able to 
sell electricity to other individuals for small televisions or 
for cell phones, et cetera to have made that. That seems to 
have tackled both the challenge of theft because you cannot 
operate it without the code and a more affordable financing 
direction.
    I will close by mentioning that for some reason Cottage 
Grove, Oregon, has become a center for efficient wood stoves to 
developing countries around the world. One company, InStove, 
specializing in institutional cooking stoves and another, 
Aprovecho Research Center, specializing in family-based 
cooking. And they both have designed these stoves so that they 
squeeze every last ounce of energy out of the combustion of 
wood, but even if it is done indoors, which it generally is 
not, they burn so efficiently that they have far less 
byproducts in terms of indoor potential pollution. But those 
Oregon stoves are now all around the world, and I am very happy 
to see that development.
    Senator Young. Ms. Kyte, I appreciate your answers to those 
questions.
    We have been joined by Senator Barrasso, a valued member of 
the subcommittee. Would you like to ask some questions?
    Senator Barrasso. Thank you very much, Mr. Chairman.
    I appreciate you being here. I serve on both the Energy 
Committee, as well as the Environmental and Public Works 
Committee, and I am very interested in this and was here to 
hear your entire testimony. I appreciate it. I had the chance 
to review the written testimony as well.
    Last year in the Environment and Public Works Committee, we 
had the President of the Center for Industrial Progress, Mr. 
Alex Epstein, come in. He has written a book about the moral 
case for fossil fuels. He states that you cannot be a 
humanitarian and condemn the energy humanity needs. Climate-
related deaths are way down, including in under-developed 
countries. Our technologies and our wealth have given poorer 
countries better, cheaper everything, materials for building 
buildings, medicine, food for drought relief. He goes on. The 
scientific and medical discoveries that we have made in the 
time that has been bought with fossil fuel-powered, labor-
saving machines benefit everyone around the world and that to 
oppose fossil fuels, he says, is ultimately to oppose the 
under-developed world.
    Now, I believe, Ms. Kyte, that the United States should be 
working with countries to promote an all-of-the-above energy 
strategy. The United States policy should focus on making it 
easier and more affordable for these nations to achieve access 
to electricity, not harder and not more expensive.
    And it appears that the United Nations and affiliated 
organizations and multilateral institutions are placing 
restrictions and prohibitions on the use of traditional energy 
sources such as coal and oil and natural gas.
    So I would ask if you could describe the programs at the 
United Nations which actually support traditional energy 
resource development as a way to help underdeveloped nations 
grow their way out of poverty and improve the quality of life 
for the people who live there.
    Ms. Kyte. Senator Barrasso, thank you so much for your 
question and for your long-held commitments to this issue. 
Thank you.
    So as international organizations, we are guided by the 
decisions of our member states. And so for the first time I 
think after many decades of discussion, the agreement in 2015, 
which was unanimous, and then the almost unanimous agreement in 
the Paris Climate Agreement really frames the energy issue 
around reliability, affordability, and access to modern energy 
services. And there is a need to change the mix of those energy 
services if we are mindful of the concerns around the impact 
that warming of the climate is producing.
    But on reliability and affordability, most member states of 
the United Nations--or most countries in the world--are 
struggling with how to produce that, and that means that we 
have a responsibility to look at the effective management of an 
energy service which will provide services for everybody. That 
means shifting perhaps to more resilient energy systems that 
use off-grid and grid. It means modernizing the grid using 
digital technology. And it means being much more productive 
with the use of energy now. And I think there is a real 
revolution there. It is something that the United States has 
led on in the past.
    And it means counting in the cost of the impact of poor air 
quality. And this is what is driving most countries. So whether 
it is China or India or the capital city of my home state, so 
London in the United Kingdom, or whether it is Lagos in 
Nigeria, what is driving policy is the need for clean air 
because that is going to attract competitive companies. That is 
going to protect children and future generations.
    And so I think that what we are seeing is a drop in price 
of renewables because of technological advance, and we are also 
seeing a choice that people want to make, if it can be 
affordable and reliable, towards cleaner energy sources because 
they cannot afford to have choked cities and an economic 
development that is being slowed for that reason.
    So I think that the kinds of requests we are getting from 
member states are about help us with a transition for reliable, 
affordable, and cleaner energy because we do not see a pathway 
to sustained economic growth if we have the kind of air quality 
that we are beginning to experience now.
    Senator Barrasso. It just seemed interesting in some of my 
trips to Africa and being in some of the townships in South 
Africa, I know there are areas where there are people 
desperately looking for any sort of energy. And the cell phone 
has done remarkable information in terms of helping with making 
sure people were taking the HIV medication and helping with the 
mothers to mothers program. But the problem that they are 
dealing with is there seems to be a lack of any energy, as we 
have heard the testimony--the billion people around the world.
    So my concerns in terms of restrictions that are being 
placed on funding and things is that instead of regulating and 
placing impossible restrictions on underdeveloped energy 
sectors of developing nations, we should be encouraging growth 
so that these countries can compete in the international 
marketplace, create jobs, alleviate poverty. There are so many 
things that we can do. And it just seems that we want to all 
make energy as clean as we can, as fast as we can, but in ways 
that make this energy available. And if there are resources 
that can do it now, I think it is hard when we put additional 
restrictions and limit the kinds of energy that they can use 
because you talked about the dung that is burned compared to 
what we have used to advantage this nation, that we ought to be 
able to have that used elsewhere as well.
    Thank you, Mr. Chairman. My time has expired.
    Senator Young. Well, thank you, Senator. I appreciate your 
bringing that important component to this overall conversation. 
I think that definitely needs to factor into our policymaking 
as well.
    So thank you, Ms. Kyte, once again for your testimony here 
today.
    This concludes the first panel, and we are going to take a 
few minutes for the second panel's witnesses to get situated. 
[Pause.]
    Senator Young. Everyone looks situated, and we are running 
against the clock. So I thought we would proceed. I call back 
into order this subcommittee.
    And I would like to welcome again Dr. Todd Moss, Senior 
Fellow at The Center for Global Development and at Rice 
University's Baker Institute; Mr. Joao Talocchi, Program 
Director at the Purpose Climate Lab; and Mr. Paul Mitchell, 
President and CEO of Energy Systems Network.
    Your full written statements will be entered into the 
record. I welcome you to summarize your statement in about 5 
minutes or less, please. Let us go in the order I welcomed you. 
Dr. Moss, your testimony, please.

   STATEMENT OF DR. TODD MOSS, SENIOR FELLOW, THE CENTER FOR 
   GLOBAL DEVELOPMENT; NONRESIDENT SCHOLAR AT THE CENTER FOR 
 ENERGY STUDIES, RICE UNIVERSITY'S BAKER INSTITUTE, BETHESDA, 
                            MARYLAND

    Dr. Moss. Great. Thank you, Chairman Young, Ranking Member 
Merkley, and other members of the subcommittee.
    I proudly served in the State Department under Secretary 
Condoleezza Rice and continue to work closely on U.S. energy 
and development policies at the nonpartisan Center for Global 
Development and at Rice University.
    I have three brief points today, and I will conclude with 
three brief recommendations.
    Point number one, helping our allies build modern energy 
systems directly serves U.S. economic, national security, 
diplomatic, and development interests. Energy statecraft is a 
valuable lever for transforming our relationships with emerging 
nations and promoting the full array of U.S. interests around 
the world especially in Africa, an increasingly important 
region. Africa's ambitions are not just for lights and phone 
chargers but for the modern energy infrastructure that every 
country needs to benefit from the global economy and to create 
jobs for their growing populations.
    Our own country's experience shows that mass 
electrification can be catalytic for reducing poverty while 
generating growth and prosperity. Africa is vastly underpowered 
today. My refrigerator uses more electricity than nine people 
in Ethiopia. And these gaps are only going to widen as people 
grow richer and their energy demands expand.
    Now, for the United States, the potential economic up side 
is tremendous. Closing Africa's power gap would help to unleash 
the massive consumer and investment potential of a continent 
that is already home to more than a billion people, and it is 
bursting with creative and entrepreneurial talent.
    Conversely, the security down side of failure is 
frightening. There is simply no scenario where Africa is stable 
and thriving without a dramatic expansion of the power sector. 
And electricity will be one of the driving determinants whether 
the continent becomes a source of economic dynamism or a source 
of dangerous security threats.
    A prime example here is Nigeria. Africa's largest economy 
could be a major destination for U.S. investment and a robust 
engine for global growth. Nigeria is also a critical U.S. 
partner in our fight against nearly every transnational threat 
we face such as terrorism, criminal networks, and disease.
    Now, sometime in the next 25 years, Nigeria's population 
will be larger than ours. Yet, while we have about 1,000 
gigawatts of electricity generation capacity, Nigeria today has 
about four. If we help Nigeria build a modern energy system, we 
will help a critical ally and generate opportunities for 
American companies. If we ignore Nigeria's energy future, 
either China fills the vacuum or Nigeria fails and becomes a 
hotbed of dangerous threats.
    Point number two, Power Africa has made an extremely 
promising start. So far, Power Africa is right on track to meet 
its goals of 30 gigawatts of new generation capacity and 60 
million new connections.
    To be very clear, Power Africa is not using U.S. taxpayer 
funds to build power plants in foreign countries. It is instead 
deploying technical advisors and other tools to unlock the 
potential of the private sector. A core component of Power 
Africa is the Overseas Private Investment Corporation. Now, 
OPIC makes commercial loans to specific high-value projects 
where private credit is unavailable. This does not cost U.S. 
taxpayers as OPIC is profitable and returns money into the U.S. 
Treasury every year. So Power Africa is succeeding, but it must 
be sustained and it could be even better at little to no 
additional cost.
    Point three is that in energy, big is still beautiful. 
Small-scale distributed power systems are definitely going to 
reach many, many poor people, but African economies will still 
require large-scale power plants and a modern grid. If you are 
poor and live today without any electricity, then getting a 
solar lantern or a small home system is a remarkable step up. 
However, three caveats to this.
    One is that small home systems are really just the very 
first step on a long energy ladder. The global definition of 
rural modern energy access is just 50 kilowatt hours per person 
per year. This is what an average American consumes in about a 
day and a half. It is barely enough to power light bulbs or 
charge a cell phone. And 50 kilowatt hours is not an end goal. 
It is just a very, very first step. And it is really kind of 
crazy to call this modern energy access.
    The second caveat is that electricity for development is 
not just about reaching homes. Reaching homes is important, but 
it is also about powering industry and commerce. No matter how 
many lanterns are delivered, Africa's growing cities and 
industrial zones will require large-scale power for job 
creation and economic growth.
    And the third point is that all-of-the-above, which we 
heard Senator Barrasso mention, is not just an American 
approach. Every country exploits its own endowments to meet the 
energy needs of its people. Yes, solar, wind, geothermal, and 
hydro will all play an important role in Africa's future energy 
mix. Yet, natural gas will be part of the solution too. In 
Ghana, Nigeria, Kenya, Tanzania, Mozambique, Cote d'Ivoire, 
Senegal, and others, it is simply untenable to expect these 
countries to produce natural gas and export all of it to Asia 
and Europe while their people still need power. Now, we can 
either help these allies build smart infrastructure with modern 
American technology or we can cede this space to others.
    Let me conclude briefly with three ways to make Power 
Africa even more effective in supporting U.S. interests and how 
Congress can help.
    One, Congress should insist that the administration 
continue Power Africa and fulfill the goals of the bipartisan 
Electrify Africa Act.
    Two, the very modest Power Africa team based at USAID must 
be fully funded. Their valuable work paves the way for private 
investment.
    And three, Congress should work with the administration to 
turn OPIC into the U.S. Development Finance Corporation, a 
full-service development finance institution worthy of the 
United States and built for the energy statecraft of the 21st 
century.
    [Dr. Moss's prepared statement follows:]


                 Prepared Statement of Dr. Todd J. Moss

    Thank you Chairman Young, Ranking Member Merkley, and other members 
of the subcommittee. I appreciate the opportunity to highlight how the 
United States can better utilize energy policy to pursue our objectives 
in sub-Saharan Africa, a region of growing economic and national 
security importance. I proudly served in the State Department under 
Secretary Condoleezza Rice and continue to work closely on U.S. energy 
and development policies as a Senior Fellow at the nonpartisan Center 
for Global Development and at Rice University's Baker Institute.
    I have three points today and will conclude with three brief 
recommendations. My three main points are:

 1. Helping our allies build modern energy systems directly serves U.S. 
        economic, national security, diplomatic, and development 
        interests.
 2. Power Africa, using U.S. tools and expertise to unlock private 
        investment in the power sector, has made a very promising 
        start. But Power Africa must be sustained--and could be even 
        better at little to no additional cost.
 3. Small-scale distributed power is going to reach many poor people, 
        but to grow their economies, create jobs, and meet escalating 
        demand, African countries will still require largescale power 
        plants and a modern grid. In energy, big can be beautiful too.

    First, helping our allies build modern energy systems directly 
serves U.S. economic, national security, diplomatic, and development 
interests. The old version of energy statecraft was the Carter 
Doctrine, which asserted the right to use military force to protect the 
flow of oil from the Middle East. Today's global energy marketplace is 
wholly different and requires a new approach by the United States. The 
fracking revolution and rise of natural gas has dramatically changed 
the geostrategic balance. Similarly, promoting energy access is a 
valuable new lever for transforming our relationships with emerging 
nations in sub-Saharan Africa and promoting the full array of U.S. 
interests in that increasingly important region.\1\
---------------------------------------------------------------------------
    \1\ Bazilian, Morgan, Benjamin Sovacool, and Todd Moss. 
``Rethinking Energy Statecraft: United States Foreign Policy and the 
Changing Geopolitics of Energy.'' Global Policy 8, no. 3 (September 
2017): 422-25.
---------------------------------------------------------------------------
    Our own experience here in the United States shows that mass 
electrification can be catalytic for reducing poverty and deprivation 
while generating growth and prosperity. Africa is vastly underpowered 
today and the gaps are only going to widen. Africans already use far 
less energy than their income level would predict.\2\ My refrigerator 
uses the same amount of electricity each year as nine people in 
Ethiopia.\3\ As people grow richer, demand for energy expands as people 
can afford higher power appliances and move into higher-value jobs that 
require modern power.
---------------------------------------------------------------------------
    \2\ Moss, Todd, and Gailyn Portelance. ``Do African Countries 
Consume Less (or More) Electricity than Their Income Levels Suggest?'' 
Center for Global Development, May 31, 2017.
    \3\ Moss, Todd, and Madeleine Gleave. ``Seven Graphics that Explain 
Energy Poverty and How the US Can Do Much More'' Center for Global 
Development, February 18, 2014.
---------------------------------------------------------------------------
    All African countries aspire to what we take for granted: 
affordable 24/7 electricity that is mostly hidden but fundamental to 
the way we live, work, communicate, and travel. For African governments 
building modern energy systems to deliver on the ambitions of their 
citizens, they understandably seek active U.S. engagement to help them 
connect with investors and advanced technology. These ambitions are not 
just for lights and a phone charger, but for the modern energy 
infrastructure that every country needs to benefit from the global 
economy and to create jobs for their growing populations.
    Why should the U.S. even care about Africa's unmet energy demand? 
The economic upside is tremendous. Data show very clearly that lack of 
power for African businesses is among the very top constraints to 
economic growth.\4\ Resolving Africa's power gap would help to unleash 
the massive consumer and investment potential of a continent that is 
already home to more than a billion people and is bursting with 
creative and entrepreneurial talent.
---------------------------------------------------------------------------
    \4\ Ramachandran, Vijaya, Alan Gelb, and Manju Kedia Shah. Africa's 
Private Sector: What's Wrong with the Business Environment and What to 
Do About It. Washington, DC: Center for Global Development, 2009.
---------------------------------------------------------------------------
    Conversely, the security downside of failure is frightening. Power 
is absolutely essential to creating the tens of millions of new jobs 
that Africa needs every year. There is no scenario where Africa is 
stable and thriving without a rapid expansion of the power sector. It's 
not too strong to say that the continent will either become a source of 
new economic dynamism or a source of instability and threats--and that 
electricity will be one of the driving determinants.
    A good example of the upside opportunities and the downsides risks 
is Nigeria, Africa's largest economy and most populous nation. Nigeria 
is an unavoidable American partner in our fight against nearly every 
transnational threat we face: terrorism, disease, criminal networks, 
and trafficking in drugs, guns, and people. With a population 
approaching 200 million, Nigeria is also a major investment and trading 
partner that we would be unwise to ignore.
    To give you some perspective, in about 25 years, Nigeria's 
population will surpass the population of the United States. We 
currently have about 1,000 GW of electricity generation capacity in the 
U.S, a number that the Department of Energy expects to rise to about 
1,200 GW by 2040. Today, Nigeria has 4 GW. If we help Nigeria build a 
modern energy system that meets its economic and human development 
needs, we will help a critical ally, support its path to better 
governance, and generate tremendous opportunities for American 
companies. Choosing to overlook Nigeria's energy needs leaves only two 
scenarios: China fills the vacuum or Nigeria disintegrates and becomes 
an epicenter of dangerous threats.
    Second, Power Africa has made a very promising start, but must be 
sustained--and could be even better at little to no additional cost. 
The initiative, launched in 2013 in specific response to ally requests 
for U.S. assistance, aims to boost generation by 30 GW and to connect 
60 million new homes and businesses by 2030. The effort is backed by 
Congress through the Electrify Africa Act, which passed in 2016 with 
strong bipartisan support.
    So far, Power Africa is right on track to meet these goals.\5\ 
Importantly, Power Africa has used a suite of public policy tools to 
convene, catalyze, and cajole private investment in the power sector. 
To be very clear, Power Africa is not using U.S. taxpayer funds to 
build power plants in foreign countries. It is instead deploying 
technical advisors and other tools to unlock the potential of the 
private sector. The limited public sector funding that is being 
deployed is largely from the Overseas Private Investment Corporation 
(OPIC), which makes commercial loans to specific high-value projects 
where private credit is unavailable. This does not cost U.S. taxpayers, 
as OPIC is profitable and returns money into the U.S. Treasury every 
year.
---------------------------------------------------------------------------
    \5\ Power Africa Annual Report August 2017. Washington, DC: United 
States Agency for International Development, 2017. Moss, Todd. 
``Grading Power Africa.'' Brief. Washington, DC: Center for Global 
Development, 2016.
---------------------------------------------------------------------------
    Third, small-scale distributed power solutions are going to reach 
many poor people, but African economies will still require large-scale 
power plants and a modern grid. The notion of universal energy access 
is a worthy goal and one that can be reached in our lifetime. If you 
live today without any electricity, then getting your first solar 
lantern or a small solar home system is a huge step up. However, there 
are important caveats:

  Small solutions are just the first step on a long energy ladder. 
        The International Energy Agency currently considers a rural 
        person to have ``modern access'' at just 50 kWh per person per 
        year. It is what an average American consumes in a day and a 
        half--barely enough to power a light bulb or charge a cell 
        phone. No person will ever be satisfied with this much power, 
        and it is absurd to call this modern energy access.\6\ 
        Expecting Africans to stay at a very low level of energy 
        consumption is to expect them to remain in poverty.
---------------------------------------------------------------------------
    \6\ More Than a Lightbulb: Five Recommendations to Make Modern 
Energy Access Meaningful for People and Prosperity. Report of the 
Energy Access Targets Working Group. Washington, DC: Center for Global 
Development, 2016.
---------------------------------------------------------------------------
   Getting energy to poor people in their homes is important, but the 
        major development benefits come from energy for industry and 
        commerce. In a typical economy, the vast majority of 
        electricity is used by industry and commerce, not households. 
        No matter how many lanterns are delivered, Africa's growing 
        cities and industrial zones will require large-scale power for 
        job creation and economic growth.
   ``All of the above'' is not just an American approach. Every 
        country exploits is own endowments to meet the energy needs of 
        its people. Solar, wind, and hydro will all play an important 
        role in Africa's future energy mix. Yet many countries will 
        still need to use their own natural gas as part of their energy 
        solution. Countries already producing natural gas include 
        Ghana, Nigeria, Kenya, Tanzania, Mozambique, Cote d'Ivoire, 
        Republic of the Congo, Angola, and Senegal. It is untenable to 
        expect these nations to produce natural gas and export it all 
        to Asia or Europe while their people need power. We can either 
        help these countries build infrastructure smartly and with 
        modern American technology or we can cede this space to others.

    Allow me to conclude briefly with three ways to make Power Africa 
even more effective in supporting U.S. interests--and how Congress can 
help.

 1. The administration should vigorously embrace the goals and tools of 
        Power Africa with the continued support and encouragement of 
        Congress. This requires a clear statement that Power Africa 
        will continue and that the bipartisan Electrify Africa Act will 
        be fulfilled.
 2. The modest Power Africa team based at USAID must be fully funded. 
        Their work covers a range of technical support, data 
        collection, and other activities that pave the way, as it 
        should, for private investment to do the bulk of the heavy 
        lifting. USAID requires resources to do this job.
 3. OPIC could do much more with additional flexibility and 
        capabilities. At no additional cost to American taxpayers, OPIC 
        could easily do two or three times the volumes of power deals 
        in Africa if Congress provided multiyear authorization, equity 
        authority, and allowed OPIC to invest a small portion of its 
        profits in expanding its deal teams. Even better, Congress 
        could work with the administration to turn OPIC into the United 
        States Development Finance Corporation (USDFC), a full-service 
        development finance institution worthy of the United States, 
        and built for the energy statecraft of the 21st Century.\7\
---------------------------------------------------------------------------
    \7\ Leo, Ben, and Todd Moss. ``Bringing US Development Finance into 
the 21st Century: Proposal for a Self-Sustaining, Full-Service USDFC.'' 
Policy Paper. Washington, DC: Center for Global Development, 2015.

---------------------------------------------------------------------------
    Thank you.


    Senator Young. Thank you, Dr. Moss.
    Mr. Talocchi?

 STATEMENT OF JOAO TALOCCHI, PROGRAM DIRECTOR, PURPOSE CLIMATE 
                    LAB, NEW YORK, NEW YORK

    Mr. Talocchi. Chairman Young, Ranking Member Merkley, 
members of the committee, thank you for inviting me to testify 
on the important issue of energy access in emerging economies.
    I was once in a community in the Amazon that was not 
connected to the grid when the diesel generator was turned on. 
Putting aside the less than optimal way that diesel was stored 
and handled, I was struck by one thing, and that was the noise. 
I asked a villager if it bothered him, and his answer was, ``A 
little, but the worst part is we cannot hear the snakes.'' As 
it happened, a kid had been bitten a few weeks before.
    Senators, providing energy access to the 1.2 billion people 
around the world that lack access to electricity is a 
fundamental step to improve their social and economic 
conditions and that of their countries. But to do so, we need 
to focus on the best solutions, those that are fast to deploy, 
affordable, safe, and effective.
    To address this need, policymakers face two distinct 
options that are complementary, though: extend infrastructure 
of a centralized electricity grid or provide local renewable 
energy solutions. To date, the primary approach to solve this 
problem has been to increase grid connectivity, but progress 
has been slow and the number of underserved households is 
expected to decline by only a few percentage points over the 
next few years.
    The problem is that it makes little economic sense to 
extend and maintain the grid for long distances over rivers and 
across mountains with costs at the tens of thousands of dollars 
per mile just to sell underpriced electricity to a few houses. 
Utilities found this. Even if the grids reach these remote 
places, the utilities need to wait for subsidies that are slow 
to come. Or they need to spend money to send people to collect 
money from villagers that either cannot or do not want to pay 
because the electricity services are poor and power cuts are 
constant. As populations grow, this all-or-nothing grid-based 
approach will continue to leave millions in the dark.
    Decentralized renewable energy systems, especially those 
with storage capacity, are a much smarter solution. These 
technologies like solar, wind, hydro, and biomass can operate 
in multiple configurations from a simple individual or home 
systems to more complex local mini-grids or even as 
complementary regional grids. They can work for a few hours or 
provide 24/7 power.
    Renewable energy technologies are independent and resilient 
relying on locally available and usually free fuels, the sun, 
wind, and water, and do not depend on supply chains or power 
lines that cost a lot and can be disrupted by various factors 
as conflict or natural disasters. Just think about Puerto Rico.
    But some will say many governments tried to install solar 
power before, and those experiments failed. I myself have seen 
many solar panels from the 1980s serving as doors to chicken 
coups in remote communities. The technology is not to blame. 
The problem was the approach. Public agencies tried to install 
the systems and they just left. The first time something went 
wrong and no one came back to fix it, that was the end of it.
    Many governments are learning that lesson and, instead of 
doing it themselves, are working to create enabling 
environments for small and medium local enterprises. These 
enterprises can build deep rural distribution networks for 
renewable energy solutions as well as customers' trust. Because 
their returns depend on neither products working well or the 
sale of electricity, they are bound to offer guarantees, after-
sale support, and perform repairs.
    Decentralized renewable energy for energy access needs to 
be a business. This is already starting to happen. Because of 
renewable energy solutions are scalable. It is possible to 
reach communities in weeks instead of years and to do that in 
economical terms offering enough power at a price that can be 
afforded and that makes business sense for all involved.
    This is a shift from the all-or-nothing approach based on 
grid connections. It creates a new model based on entry level 
power and the concept of an energy ladder. Communities can use 
their new sources of energy to keep small businesses open a bit 
later. They can store products in refrigerators and access 
communication and banking services.
    Decentralized renewable solutions are being used for 
irrigation with solar water pumps and also grinding, milling, 
husking, drying, smoking, expelling oils, powering tools and so 
on. These are economic activities that provide income. I have 
met a woodworker in the Amazon who tripled his output just 
because he had access to energy. In turn, people can afford 
more electricity and energy systems can be scaled up.
    Beyond making existing jobs more efficient, renewable 
energy solutions create local permanent jobs for maintenance, 
payment and collection, and after-sale support just as 
examples.
    Energy access for rural communities strengthens local 
economies and job creations. It is a win-win-win for all. This 
is a new space and sharp reductions in the cost of generation, 
storage technologies are helping it grow quickly. The United 
States can play an important role in supporting it through 
technology, innovation, and finance. We can continue wait 
decades for the grid to reach these 1.2 billion people, but the 
smarter option is to create the conditions for markets to 
deliver energy access through decentralized renewable energy 
which can happen in a much shorter term. The benefits of jobs, 
resiliency, reduced air and water pollution, avoided climate 
change emissions, increased school performance, and new 
opportunities for social and economic development cannot be 
ignored or delayed.
    Thank you.
    [Mr. Talocchi's prepared statement follows:]


                  Prepared Statement of Joao Talocchi

Introduction:
    Chairman Young, Ranking Member Merkley, members of the committee. 
Thank you for inviting me to testify on the important issue of energy 
access in emerging economies.
    For the past 3 years I've directed campaigns at the Purpose Climate 
Lab, an initiative incubated by Purpose Campaigns and focused on 
accelerating the adoption of low carbon solutions through public 
engagement, communications and the coordination of collaborations among 
stakeholders. Working with a variety of stakeholders including social 
and environmental NGOs, local governments, the private sector, faith 
groups, celebrities and the UN, I have lead campaigns that mobilized 
and engaged more than three million people over the last two years and 
resulted in the adoption of renewable energy and clean transport 
policies. These campaigns simultaneously harness the reach and power of 
digital engagement platforms while fostering the deep connections 
created by innovative partnerships, offline activations and the 
influence of traditional media. The campaigns are developed using the 
best available knowledge, provided by scientific reports; technical 
reports developed by organizations specialized in the development and 
implementation of low carbon solutions and continuous interactions with 
multiple stakeholders collaborating towards similar goals.
    Before Purpose, I held a variety of roles across at Greenpeace, 
including positions with the climate, energy and forest campaigns in 
the Brazil, International and United States offices. In addition to 
plan and implement multiple public campaigns, I worked with teams to 
commission a study that measured the hidden external cost of coal in 
South Africa and compared them to the potential for renewable energy 
investments. The results of this study will be referenced in my 
testimony.
    I also directed the Amazonas State Climate Change Center, within 
the Sustainable Development Secretariat from the state of Amazonas, in 
Brazil. There, I lead the implementation of the state's climate change 
law, the development of the state's environmental services policies, 
supported pilot projects for renewable energy access in remote 
communities and created and the state's energy council.
Context:
    Providing energy access to the 1.2 billion people around the world 
that lack access to electricity is a fundamental step to improve the 
social and economic conditions of these people, their countries and the 
world. No country has developed without access to reliable and 
affordable energy services.
    How and when this done will have a direct impact over all of the 17 
United Nations Sustainable Development Goals. It is unreasonable to 
consider that its possible to eliminate poverty, improve nutrition, 
ensure quality education, empower women and promote sustained economic 
growth without energy.
    It is also unreasonable to consider that its possible to ensure 
sustainable management of water, to make human settlements resilient, 
to protect ecosystems and to combat climate change if that energy is 
the result of exploring and burning fossil fuels. Especially, but not 
only because of fossil fuel's role in exacerbating the potential risks 
of climate change, which is predicted to have severe negative impacts 
on food and water resources, ecosystems, economic growth, population 
dynamics and health, undermining and often reversing gains made through 
development.
    One reason for this is fossil fuels have been around for decades, 
but have still failed to deliver energy to about one sixth of the 
world's population.
    Another reason is the use of fossil fuels results in numerous 
negative externalities, such as long-term water pollution, the 
destruction of arable lands and crops, air pollution and climate 
change. I was part of the development of a scientific study in South 
Africa, entitled The external cost of coal-fired power generation: the 
case of Kusile. It showed that making consumers pay for the true cost 
of coal-fired electricity generation would add between 237 percent and 
459 percent to the tariff.
    Another key finding was that it would be possible to develop no 
less than 5 times the generation capacity of a specific proposed coal 
power plant, if only 30 percent of its external costs were used to fund 
renewable electricity generation. Despite these findings, this coal 
power plant, Kusile, is now under construction, with the support of 806 
million dollars from the Export-Import Bank of the United States. The 
potential for it to increase energy access to under served communities 
remains to be seen.
    Communities without access to electricity often approach it one of 
two ways. In most cases, they rely on diesel generators, which usually 
only operate for a limited number of hours a day. The costs of fuel and 
maintenance are often too high for communities, unless the cost of 
diesel is highly subsidized. In the Brazilian Amazon, I've heard the 
communities complain about the smoke, the fluctuating costs, the 
storage problems, the supply chains and the noise that diesel 
generators create. The latter point is curious but important. When you 
are in a poorly lit community in the forest, silence is an important 
ally, as noises can indicate the presence of thieves, snakes, jaguars 
or other risks.
    But for many communities, light comes from kerosene lamps. In this 
case, fires that burn entire houses and indoor air pollution are ever-
present threats. These lamps don't produce enough light for kids to 
study at night and the streets remain dark, which creates security 
problems. In India, for example, Kerosene is heavily subsidized, with 
costs reaching U$5.1 billion in financial year 2013/2014, although the 
government seems to be aiming to put an end to it.
    For the past 3 years, I've been directing projects throughout the 
Indian states of Uttar Pradesh and neighboring Bihar, with combined 
populations approaching the size of the U.S. These are states in a 
region that houses many of India's thermal power plants and some of the 
world's most polluted cities in terms of air quality, and where fewer 
than half of rural households have power connections.
    The lack of energy access for many in India is not only about 
building more power plants or access to fuel. India is a power surplus 
nation with significant electric power generation capacity idling for 
want of demand. The state-run coal mining company is the world's 
largest.
    The problem is supplying rural homes with electricity from the grid 
isn't economical at this point. It makes little economic sense to 
extend and maintain the grid for long distances, over rivers and across 
mountains, with costs at the tens of thousands of dollars per mile, 
just to sell under priced electricity to a few houses. On top of that, 
technical losses and power thefts make grid power even less attractive.
    But the suggestion of extending the grid makes political sense. In 
countries and regions where many people have no access to energy, 
political power and electrical power are closely linked.
    The promise of abundant, free or heavily subsidized electricity is 
a great way to secure votes. Election after election, from local seats 
to the highest elected positions, candidates talk about how they will 
be the ones that will finally bring power to these communities. This 
could be positive if it resulted in the electrification of poorer rural 
households and communities that are usually forgotten after election 
cycles. But despite progress, rates of electrification in the countries 
with the largest populations currently without electricity are barely, 
if at all, keeping pace with population growth.
    Repeated again and again, the promise of abundant free or cheap 
power, which national grids can theoretically deliver, becomes a dream. 
It's no surprise that many villagers, especially older ones, will 
resist the suggestion of paying for some electricity from local 
renewable systems. But the constant power cuts from the grid, 
especially to rural villages, as part of load shedding and the falling 
cost of and advances in standalone renewable generation are making 
individuals optimistic about the potential for the technology to 
provide a solution for rural electrification.
    On top of asking only for what has been promised, this demand for 
grid electricity is also grounded in negative past experiences with 
renewables. In previous decades, many governments have tried to 
electrify houses and communities using off-grid renewable energy, with 
varying levels of success.
    In many places, solar systems were installed, with no cost to the 
consumers, but also no maintenance and support offered by the 
government. The lifetime of those systems was only as long as its first 
malfunction. I've seen solar panels from the 80s serving as chicken 
coops' doors in the Brazilian Amazon.
    I want to stress that this does not mean decentralized renewable 
energy systems are not a solution. They are the best solution to will 
deliver energy access to remote and rural communities in the short 
term.
Decentralized renewable energy solutions as the best solution for 
        energy access:
    Decentralized renewable energy systems, especially those with 
storage capacity, can provide electricity for lighting, communications 
and productive activities. These technologies--solar, wind, hydro, 
biomass or biogas--can operate in multiple configurations--from 
individual and home systems to local mini-grids or as a complement to 
centralized energy generation systems. They are resilient and 
independent, relying on locally available fuels that are many times 
free--the sun, wind and water--and don't depend on supply chains or 
power lines that can be disrupted by various factors, as conflict or 
natural disasters.
    After Hurricane Maria destroyed the power grid in Puerto Rico, Elon 
Musk from Tesla offered to rebuild the country's grid with solar power 
and battery storage, as has been done in smaller islands, as Kauai and 
the American Samoa. It can happen in Puerto Rico because there is no 
``scalability limit,'' as he put it.
    This is a key feature of decentralized renewable solutions, as 
solar power. Because they are scalable, it's possible to reach 
communities in weeks instead of years, and to do that in economical 
terms, offering enough power at a price that they can afford and that 
makes business sense for all involved. This can put an end to the ``all 
or nothing'' approach based on grid connections and creates entry-level 
power. Simple solutions such as solar lanterns or solar home systems 
form the basis of an energy ladder in which individuals and communities 
have the option to scale up as income and technological development 
allows.
    Communities can use the new source of energy to keep small 
businesses open late, store products in refrigerators and use 
communications and banking services, for example.
    Decentralized renewable energy is being used for irrigation, 
grinding, milling, husking, drying, smocking, expelling oils, powering 
tools and so on. It increases the efficiency of economic activity and 
thus income. In turn, people can afford more electricity. It also 
allows kids to study after dark, providing billions of additional hours 
of study. Schools can have lights, fans, communication and 
refrigerators and stay open late. In the Brazilian Amazon, a local 
school started to offer adult education at night, after the community 
was connected to a solar micro grid.
    These benefits could be created by any source of electricity, but 
because decentralized renewable energy, including storage capacity, can 
be deployed in a very short time, they become much more immediate, 
tangible and logical. On top of eliminating the costs of fuels, being, 
scalable and resilient, renewable energy powered systems also improve 
health through the displacement of indoor air pollution, produce no or 
low noise levels and reduce greenhouse gas emissions.
    The problem with attempts for renewable energy from past decades 
were not technology based. It was the price--it was still too 
expensive--and the approach.
    On costs--in India, an average small solar home system, that can 
provide power for a few lights, radio and charge phones, is priced 
below US$65. If micro-financed, it can simply replace the costs of 
kerosene. And the Indian solar photovoltaic power tariff has fallen to 
U$3.8 per KWh in May 2017, which is lower than any other type of new 
power generation in the country. Those prices will only continue to 
fall.
    On approach--governments should not be responsible for maintaining 
and operating distributed renewable energy systems in remote areas. 
Instead, they need to create enabling environments for small and medium 
local enterprises, which can build deep rural distribution networks and 
customer trust. Distributed renewable energy for energy access needs to 
be a business.
    A market led approach means that final consumers will have to pay 
for electricity, but it also forces providers to guarantee its supply, 
which means they'll service the systems when they stop working. In 
addition, it opens up a lot of room for innovation and collaboration.
    This enabling environment requires policy stability and clarity. 
For example, because there is little clarity on where the grid is going 
next in India, many businesses in the space are afraid to install a 
solar system in a community, just to have that community connected to 
the grid in a year or two. Government's are addressing this by creating 
``exit policies'' where they would either buy the electricity through 
the new grid, or purchase the entire system. Policies that specify 
minimum technical standards will help remove cheap but ineffective 
products from the market and improve competition. Finally, tenders that 
allow smaller and new players to become empaneled and serve communities 
as part of government programs can also play a role.
    When I supported the installation of a solar micro-grid in a 
community in the Amazon in 2012, we quickly realized the need for 
social innovation, as some of the women bought electric hair 
straighteners and blow-dryers that demanded too much power and caused 
the system to shut down. There was a community meeting where a local 
protocol was created, setting rules that limited the times when people 
could use certain appliances. This kind of innovation is still used in 
communities today, although technology can now help solve the problem, 
with smart meters and pay-as-you-go systems--where people buy energy in 
advance, similar to putting credits on your phone, available.
    Pay-as-you-go innovations and remote controlled smart meters will 
also reduce the risk and burden of collecting payments on a regular 
basis, which in many cases is done through regular visits to the 
communities. This is a real risk and has real impacts on the capacity 
of enterprises, especially new ones, to operate. Banks and other 
financial institutions are wary of their business models, based on high 
up-front costs and slim profit margins. Access to finance and 
affordable capital are some of the main challenges faced by companies 
trying to offer distributed renewable energy solutions. International 
investment from multilateral institutions, developed and developing 
countries play a key role in supporting energy access, though efforts 
need to be scaled up. National governments can also be a significant 
source of finance for electricity by drawing from their own budgets and 
facilitating private investments. Innovation and market diversification 
is a real need of the sector and companies are filling those gaps.
    For example, many companies are looking to develop strong 
relationships with banks and micro-finance institutions in order to 
ensure access to finance for the consumer, who can decide to pay for 
systems upfront, on installments or as they go. Companies are also 
aware that while the consumers of today are concerned with lighting and 
mobile charging, the consumers of tomorrow will want more fans, TVs and 
other appliances, and are diversifying their portfolios and offerings.
    Distributed renewable energy solutions are also a source of 
employment and income generation for people in these remote areas. When 
I supported the installation of solar microgrids in Amazon communities, 
the company involved trained two of the villagers to perform regular 
maintenance and fix simple problems. These villagers were then engaged 
in the installation of other systems. Where companies operate in large, 
remote areas, this will be the most economical way of offering after 
sales support and a great opportunity to build trust with local 
consumers and strengthen the local economy.
    On a larger scale, the work done by hundreds of groups--from civil 
society, academia, business and government--to develop and promote 
renewable energy around the world is producing very positive results. 
Grid connected renewable energy already represents the majority of 
investments in new electricity generation capacity, especially in the 
countries with the largest populations without energy access. This is 
very positive. It creates economies of scale, reduces costs, 
consolidates new players and creates jobs. It also facilitates policy 
development and proves that renewable energy is a real source of 
electricity.
The Purpose Climate Lab work on energy access
    The large potential and multiple benefits of distributed renewable 
energy solutions for energy access are the core reason why the Purpose 
Climate Lab has promoted it as a solution and worked to close some of 
the gaps that remain ahead of implementation, especially in India but 
also in Kenya.
    This work has been focused on creating awareness that renewable 
technologies are not too expensive, too high tech or too limiting for 
rural communities, in order to reduce communities' initial resistance 
and increase demand. Another objective is to secure stable and clear 
policies to allow market players to fulfill their potential. This work 
is happening through broad communication campaigns, the engagement with 
hundreds of local, national and international organizations and local 
government agencies. One of our approaches is to facilitate 
partnerships between micro-financial institutions, service and 
technology providers and local governments to accelerate the adoption 
of what we call ``smokeless villages,'' where energy for cooking and 
electricity will come from clean sources.
Conclusion
    While government efforts are expected to increase grid 
connectivity, in India and in other countries where large populations 
still have no access to energy, progress has been slow and the number 
of underserved households is expected to decline by only a few 
percentage points over the next few years.
    Governments must decide if they want to keep their rural and remote 
communities waiting for the promise of grid connected power that will 
take decades to be fulfilled or to provide readily available, 
affordable, real electricity from decentralized renewable solutions. 
These are not trade-offs, as decentralized renewable energy solutions 
can be integrated to complement centralized energy generation systems.
    If these governments opt for prioritizing the extension of the 
grid, the trend of focusing on new renewable energy generation capacity 
must be continued. Financial and economic indicators, as well as the 
imperative to mitigate climate change, reduce air and water pollution 
and create new jobs mean this is the natural path forward. But the 
smarter option is to create the conditions for markets to deliver 
energy access through decentralized renewable energy, which can happen 
in the short term. The benefits of jobs, reduced air and water 
pollution and climate change emissions, resiliency, increased school 
performance and opportunities for social and economic development 
cannot be ignored or delayed.


    Senator Young. Thank you, Mr. Talocchi.
    Mr. Mitchell?

   STATEMENT OF PAUL MITCHELL, PRESIDENT AND CHIEF EXECUTIVE 
     OFFICER, ENERGY SYSTEMS NETWORK, INDIANAPOLIS, INDIANA

    Mr. Mitchell. Chairman Young, Ranking Member Merkley, thank 
you for the opportunity to appear before your subcommittee 
today to testify and update you on the many technology 
innovations that are taking place in the great State of Indiana 
and how they are directly applicable to international 
development.
    We have been able to achieve significant innovations as a 
result of our collaboration with industry, academia, and 
government institutions. We have facilitated many successful 
public-private partnership ventures, and I am proud of the role 
that ESN has played in making this possible.
    Energy Systems Network, or ESN, is an Indiana-based 
nonprofit consortium working to build an energy ecosystem that 
integrates all aspects of the energy landscape from generation 
and distribution to transportation and infrastructure. Founded 
in 2009 by a group of leading energy and transportation CEOs 
and with strong support from then-Governor of Indiana Mitch 
Daniels, ESN's mission is to leverage our network to develop 
integrated energy solutions that increase quality of life for 
today and tomorrow. Our collective focus is to reduce costs, 
emissions, and waste, influence policy, and advance 
technological innovation. To date, the public-private 
partnerships we have led have resulted in investment of more 
than $700 million in the State of Indiana.
    ESN projects have brought together dozens of global and 
Fortune 500 companies, numerous startups and scale-up firms, 
leading research universities, and federal labs with a common 
purpose: to accelerate the pace of energy technology innovation 
and adoption using the State of Indiana as a launching pad for 
solutions that will benefit the world.
    Let me give you just a few examples of some of our 
successes.
    The Development of BlueIndy, the largest electric car 
sharing system in North America with more than 300 electric 
vehicles and 500 charging stations across the City of 
Indianapolis offering low-cost, sustainable transportation to 
thousands of Hoosiers.
    The founding of the Battery Innovation Center, a $20 
million world-class energy storage, research, testing, and 
prototype manufacturing lab in rural Green County, Indiana just 
outside of Naval Surface Warfare Center Crane building, a first 
of its kind mobile micro-grid in 2010 powered by renewable 
biomass and solar energy capable of supplying forward remote-
operating bases with a sustainable energy supply using their 
own waste.
    Or partnering most recently with the Indiana Housing and 
Community Development Authority to build six net-zero 
affordable housing developments with integrated transportation 
options for residents.
    One of our founding principles is that no one company or 
institution has all the tools to solve our energy challenges. 
Solutions require a collaborative approach that cuts across 
traditional industry boundaries. Solutions require us to work 
together with a range of corporate, academic, and government 
partners. This type of approach to address the many challenges 
associated with international development also works perfectly. 
It is the power of public-private partnerships and the 
collaboration that drives them which is best able to solve the 
complex and varied challenges of energy in international 
development.
    While ESN is based in Indiana, we ensure that our projects 
are scalable well beyond the Hoosier State. In order to drive 
scalability, we partner with companies that are working around 
the world, and we reach out to nations to find ways for our 
best practices to be adopted abroad. ESN has formed 
partnerships with companies and institutions, with countries, 
most notably Japan, China, France. We have also worked to do 
outreach in less developed nations like the Republic of 
Georgia.
    ESN's engagement around the world has taught us that energy 
solutions are truly global in nature. We have learned that 
sustainable and cost-effective and environmentally responsible 
energy solutions that we have helped deliver to Hoosiers can 
work in other countries too, including those, as we have heard 
about, that are struggling to develop modern energy 
infrastructure and supply.
    For example, the increased adoption of distributed energy 
resources, which includes, of course, renewables but also 
small-scale fossil fuel plants, which are often coupled with 
energy storage, offer a revolutionary new approach to scaling 
the modern energy supply.
    Or the rapidly increasing adoption of transportation 
electrification, which can trace its roots back to the State of 
Indiana where General Motors developed the first modern 
electric vehicle in the late 1990s. Today, electric vehicles 
are becoming commonplace and nearly every major manufacturer of 
light-duty passenger cars to heavy-duty trucks and buses are 
rolling out electric products.
    ESN with our many partners are playing an important role in 
facilitating these dynamics. We are leveraging Indiana as a 
proving ground for the innovative technologies, business 
models, and regulatory policies that will support this 
transformation. Our more than half a billion dollars in 
successful public-private partnerships are proof that 
collaboration is working, and the ability to share these best 
practices with other nations is a logical step for ESN and one 
that our partners are eager to pursue with the support of this 
committee.
    Thank you, Chairman Young and Ranking Member Merkley. I 
again welcome this opportunity to update you on what ESN has 
done at the intersection of energy and international 
development and look forward to answering any questions you may 
have.
    [Mr. Mitchell's prepared statement follows:]


                 Prepared Statement of Paul J. Mitchell

                      about energy systems network
Overview
    Energy Systems Network (ESN) is a not-for-profit based in 
Indianapolis that is building an energy ecosystem which integrates all 
aspects of the energy landscape: energy generation, distribution, the 
built environment, and transportation. ESN's mission is to leverage our 
network of corporate and institutional partners and global thought 
leaders to develop integrated energy solutions that increase quality of 
life for today and tomorrow. Our collective focus is to: reduce costs, 
emissions and waste; influence policy; and advance technological 
innovation.
    Launched in 2009, ESN has since implemented several collaborative 
projects and public private partnerships resulting in over $700 million 
invested. Our partner organizations include representatives from 
industry (including a dozen Global and Fortune 500 companies), leading 
research universities, federal labs, non-profits and government 
agencies. These partners are active in a diversity of industries 
including transportation, energy generation, transmission and 
distribution, equipment manufacturing, real estate development, 
information technology, and many others. Our facilitation of 
collaboration across traditional industry boundaries allows for 
innovation of new energy technology and accelerates commercialization 
and market adoption.
    ESN also provides a range of services to support innovation 
including market studies, technology evaluation, project development 
and management, formation of joint ventures, brainstorming workshops, 
and research efforts.
ESN's Approach
    ESN has developed the Path to Sustainability, a framework which 
guides our approach to project development and implementation. The 
framework consists of the following elements:


   People and Place: Each project starts with the customer/consumer in 
        mind. Our goal is to use energy systems solutions to improve 
        quality of life to individuals, organizations, and geographic 
        locations.
   Policy: Once the customer and objectives are defined, ESN works 
        directly with regulators, government agencies, and policymakers 
        to build support for, or remove barriers to, project 
        implementation.
   Finance: A wide range of creative financing models using public and 
        private funding sources are leveraged to implement our 
        projects.
   Assets: Financing is used to support the deployment of ``assets,'' 
        which refers to all hardware, software, systems, and other 
        tangible resources that are required to deliver integrated 
        energy-related system solutions.
   Total Cost of Ownership (TCO): We take a holistic approach to 
        calculating the return on investment that our projects 
        generate. By taking into consideration all possible costs of 
        owning and maintaining the equipment or service, in addition to 
        upfront capital costs, ESN provides TCO data to justify 
        sustainable business models and solutions.

Partnerships
    Since its founding, ESN has built upon its network of partner 
organizations--representing industry, academia, government agencies, 
non-profits, and others--to continue collaboration and broaden 
engagement to achieve the most innovative energy solutions. Past and 
current partners on ESN projects include, but are not limited to, the 
following:


A123 Systems
AECOM
Allison Transmission
Altairnano
Battery Innovation Center
Bollore Group
Cummins Inc.
Delphi Automotive
Duke Energy
EnerDel
Hunt Construction
IBM
Indiana Economic Development Corporation
Indiana Housing and Community Development Authority
Indianapolis Power & Light
ITOCHU Corporation
Ivy Tech Community College
LHP Engineering Solutions
MISO
Naval Surface Warfare Center Crane
Nissan
Purdue University
Rocky Mountain Institute
SAIC
Simon Property Group
Sumitomo Electric
Toshiba
Toyota
Underwriters Laboratories (UL)
Vectren Corporation
Wanxiang Group
      
_______________________________________________________________________

Leadership--Board of Directors and Technical Advisory Council
    ESN has engaged executive leadership representation on its Board of 
Directors, which includes Fortune 500 companies, academia, non-profits, 
and others. Current and past Board members include the following:


John Bear, President and CEO--MISO
Carl Chapman, Chairman, President and CEO--Vectren Corporation
Mitch Daniels, Jr., President--Purdue University
Doug Esamann, Executive Vice President of Energy Solutions; Midwest and 
Florida Regions--Duke Energy
David Glass, Chief Executive Officer--LHP Engineering Solutions
David Johnson, President and CEO--Central Indiana Corporate Partnership 
and BioCrossroads
Eizo Kobayashi, Chairman--ITOCHU Corporation
Tom Linebarger, Chairman & CEO--Cummins Inc.
General Gene Renuart, Commander of North American Aerospace Defense 
Command and U.S. Northern Command (retired)
Thomas Snyder, President Emeritus--Ivy Tech Community College
      
_______________________________________________________________________

Previous Board Members
Hisao Tanaka, former CEO of Toshiba
Amory Lovins, Chief Scientist at Rocky Mountain Institute
John Kelly, Chief Technology Officer at IBM
Jeff Owens, former Chief Technology Officer at Delphi
Jim Rogers, former President and CEO of Duke Energy
France Cordova, former President of Purdue University
      
_______________________________________________________________________




    ESN has also gathered some of the greatest technical experts in 
advanced energy technologies to form a Technical Advisory Council (TAC) 
that helps direct and advise on ESN's current and new project 
activities. Current and past TAC members include the following:


Koji Abe, General Manager, Corporate Development Department--ITOCHU 
Corporation
Dr. Dan Hirleman, Chief Corporate and Global Partnerships Officer--
Purdue University
Gary Johansen, Executive Director of Engineering for High Horsepower--
Cummins Inc.
Alec Proudfoot, Engineering Consultant--Proudfoot Design, Google
Michael Rowand, Director of Technology Development--Duke Energy
John Waters, Chief Technology Officer--Energy Systems Network Previous 
TAC Members
Dr. John Wall, former Chief Technology Officer--Cummins Inc.
Dr. James Lyons, Chief Technologist--Novus Energy Partners
David Mohler, former Chief Technology Officer--Duke Energy
      
_______________________________________________________________________




    Among ESN's portfolio of activities, there are four primary areas 
of work that fully demonstrate our strengths in public-private 
partnership development and implementation. ESN's most long-standing 
programs are centered around transportation electrification, through an 
initiative named Project Plug-IN. Additionally, ESN incubated and 
launched the Battery Innovation Center (BIC) in southern Indiana 
outside Naval Surface Warfare Center (NSWC) Crane. We have led a number 
of microgrid system projects including MicroGreen, a first-of-its-kind 
mobile microgrid. Finally, ESN's most recent program is called Moving 
Forward, which is a partnership with the Indiana Housing and Community 
Development Authority (IHCDA) to develop net-zero energy efficient 
affordable housing with integrated multimodal transportation options 
for low- to moderate income families.
Project Plug-IN
    What began as one of the largest initial demonstration projects of 
plug-in vehicles in the nation in 2010 has evolved into supporting more 
than $100 million invested in transportation electrification in 
Indiana. The first step in Project Plug-IN was an early adopters pilot 
in 2010 to introduce the first plug-in electric vehicles (PEV) in the 
state of Indiana. This resulted in more than 125 vehicles and nearly 
200 charging stations deployed to support government and corporate 
fleets as well as private citizens across central Indiana. This pilot 
also led to one of the first time-of-use rates for PEV charging in the 
nation approved by the Indiana Utility Regulatory Commission. After our 
completion of the early adopters pilot, ESN engaged with the City of 
Indianapolis in 2013 to become the first city in the nation to announce 
conversion of its entire fleet to non-oil sources (i.e. electric, 
natural gas, and biofuels) by 2025. As a first step toward this goal, 
ESN worked with the City of Indianapolis to deploy 225 plug-in vehicles 
into its municipal fleet, representing the largest PEV fleet of any 
city in the nation.
    ESN continued its partnership with the City of Indianapolis in 
2014-2015 to establish a largest-in-the-nation all-electric car sharing 
program in Indianapolis with Bollore Group of France. BlueIndy launched 
publicly in 2015 as the largest all-electric car sharing program in 
North America and operates more than 300 shared electric vehicles with 
more than 500 charging points located across the city. More than 50,000 
trips have been taken in the first 18 months of operations and there 
are plans to grow the system to as many as 500 cars and 1,000 charging 
points. This project represents a public-private partnership with 
nearly $10 million pledged by the City and local utility company and 
more than $40 million from Bollore Group.
    ESN has also consulted with the city's public transportation 
corporation, IndyGo, to help select electric bus suppliers and 
technology options to include in the city's bus fleet, as well as 
provide our transportation electrification expertise to support the 
deployment of the nation's first electric Bus Rapid Transit (eBRT) 
line, the Redline, that consists of a 13.6-mile route through the heart 
of the city. Today, IndyGo operates 21 electric buses--more than any 
city in the nation.
Battery Innovation Center
    ESN launched the Battery Innovation Center in 2013 to accelerate 
the advanced energy storage market by linking manufacturers, government 
agencies and research labs, academia, and Fortune 500 companies.
    The $20 million R&D and prototype manufacturing facility is located 
next to NSWC Crane, which houses a U.S. Department of Defense center of 
excellence in battery development and power electronics.
    The BIC's proven capabilities attracted the attention of 
Underwriters Laboratories (UL), which made the BIC its Battery & Energy 
Storage Technology (BEST) Test Center. The BIC also serves as a U.S. 
Department of Commerce Proof of Concept Center and the first MESA 
Standards Alliance interoperability and testing center in the world.
    To date, the BIC has contracted with more than 65 companies for a 
wide range of battery and energy systems development, testing and 
validation, or engineering services. This list includes large companies 
(Rolls Royce, SAIC, Cummins, Duke Energy, AES, GE, NEC, etc.) as well 
as emerging startups (BrightVolt, SiNode Systems, Black Diamond 
Structures, Pellion, etc.) and government labs and research 
institutions (NSWC Crane, Penn State University, Purdue University, 
Argonne Labs, etc.)
MicroGreen
    In 2010, ESN launched a public-private partnership among 
technology, utility, and defense industry partners to develop a first 
of its kinds mobile renewable microgrid to provide scalable power to 
forward operating bases in remote locations without access to reliable 
power and who face dangers associated with delivery of diesel fuel. The 
project brought together a number of companies and institutions 
operating in the state of Indiana who worked together to design and 
build the MicroGreen solution.
    Partners included SAIC, Cummins, EnerDel, Duke Energy, and NSWC 
Crane. Funding for MicroGreen came from a $1.5 million grant from the 
U.S. Department of Energy and was matched with more than $3 million in 
private investment. In 2011, a prototype mobile microgrid system was 
completed that was capable of providing one megawatt of power using a 
combination of biomass, solar, and energy storage. The product was 
fielded and tested at Naval Support Activity Crane. System integrator 
SAIC used the IP and learnings to support a range of future projects 
for the U.S. Department of Defense and commercial customers.
Moving Forward Program
    According to the U.S. Department of Housing and Urban Development, 
the budgeting rule of thumb for housing and transportation is 30 
percent and 15 percent, respectively. That means that families usually 
spend nearly half of their income on these two necessities, and many 
spend more. For many families, covering these costs is a significant 
hardship. Current public subsidies, where applicable, do not consider 
the total cost of ownership (TCO) for either the home or the vehicle, 
such as utility costs, fuel, maintenance, and energy usage.
    Moving Forward is a program that was developed between ESN and the 
Indiana Housing and Community Development Authority (IHCDA) in 2015 to 
address this challenge of affordable housing and transportation. Moving 
Forward approaches housing and transportation simultaneously to reveal 
additional solutions and efficiencies not typically seen when these 
topics are treated separately.
    The program is an innovative, first-of-its-kind program to address 
the challenge of providing sustainable, integrated affordable housing 
and transportation. The program uses ESN's systems approach to create 
affordable sustainable housing that increases the quality of life for 
tenants, while decreasing the cost of living and transportation for 
low- to moderate income individuals and families. Using existing 
federal tax credits, IHCDA provides funding to support two affordable 
housing developments per year that integrate energy efficiency, the 
built environment, and transportation. The developers and their teams, 
selected by IHCDA, participate in ESN's Innovation Workshop, a 
charrette-style brainstorming workshop which brings together an 
impressive collection of subject matter experts in built environment, 
transportation, systems integration, energy efficiency and supply, 
policy, finance, and poverty alleviation together to create two high-
level designs. Developers then identify their own sites within Indiana 
and design their full-scale development plan.
    Because the challenges of affordable housing and transportation are 
not specific to the state of Indiana, the Moving Forward program is one 
that can be replicated in other states with the same low-income housing 
tax credit programs as well as in other countries in which creating 
cross-efficiencies through a systems approach would result in cost 
savings and improved quality of life outcomes. This public-private 
partnership already has four net-zero housing developments with 
integrated multimodal transportation options for tenants in progress 
across the state, with two more beginning the process in November 2017. 
When completed these developments will house more than 200 low income 
families in six cities across the Indiana.
                      esn international engagement
U.S.-China Advanced Vehicle Technology Summit, 2010
    One successful example of our work to use energy technology to act 
as a bridge for international development was the U.S.-China Advanced 
Technology Vehicle Summit, held in 2010 in Indianapolis. The event 
brought together the largest ever delegation of automotive industry 
executives from China with a number of U.S. automotive technology 
supplier CEOs to discuss how the emergence of new hybrid and electric 
vehicle solutions developed in the U.S., including many from Indiana, 
could help China accelerate its adoption of cleaner vehicles. The 
summit hosted approximately 300 participants, including a number of 
government, institutional and corporate leaders including, among 
others:


Mitch Daniels, Jr., Governor of Indiana
Chao Wang, Assistant Minister, Ministry of Commerce, Republic of China
David Sandalow, Assistant Secretary for Policy and International 
Affairs at U.S. Department of Energy
President France Cordova, Purdue University
      
_______________________________________________________________________




    CEOs and senior executives from a number of U.S. and Chinese 
automotive companies, including:


Allison Transmission
Cummins
Delphi
Remy International
BYD
China FAW Group Corporation
Dongfeng Motor Corporation
Geely Automotive Holdings Limited
SAIC
      
_______________________________________________________________________




    Several memoranda of understanding (MOUs) were signed at the event 
between U.S. and Chinese companies, establishing international 
collaborative partnerships for advanced vehicle technology development 
and strategic cooperation. The signed MOUs include the following:


MOU of Two-Way Investment Promotion Cooperation: Investment Promotion 
Agency of the MOFCOM of China, Indiana Economic Development Corporation
MOU on Cooperation: China Chamber of Commerce for Import and Export of 
Machinery and Electronic Products (CCCME), ESN, China Association of 
Automobile Manufacturers (CAAM)
Electric Vehicle Battery Joint Venture: Wanxiang Group, Ener1 Group
Agreement on Strategic Cooperation on Vehicle Energy Efficiency and 
Environmental Issues: Guangxi LiuGong Machinery Company, Cummins Inc.
Agreement on Strategic Cooperation on Research of Vehicle Energy 
Efficiency and Environmental Issues: Zhengzhou Yutong Group, Cummins 
Inc.
      
_______________________________________________________________________

                   esn and international development
    There are a number of ways in which ESN has impacted international 
development directly and indirectly though our projects and our diverse 
network of partners. Furthermore, there are several projects we have 
led which could be scaled internationally in ways that would support a 
variety of development goals and objectives including energy access, 
sustainable and efficient energy supply, energy security, improved 
quality of life, and economic development. One of our founding 
principles is that no one company or institution has all the tools to 
solve our energy challenges. Solutions require a collaborative approach 
that cuts across traditional industry boundaries and leverages a range 
of corporate, academic, and government partners. This same guiding 
principle is directly analogous to addressing challenges of 
international development. It is the power of public-private 
partnerships and the collaboration that drives them, which is best able 
to address the complex and varied challenges of international 
development.
    While ESN is based in Indiana and implements most of our work in 
the state, we ensure that our projects are scalable well beyond the 
Hoosier state. In order to drive scalability, we work to bring in 
partner companies that are working around the world and we reach out to 
other nations to find ways for our learnings to be adopted abroad. ESN 
has formed partnerships with companies and institutions in a number of 
countries including Japan, China, and France; we have also conducted 
outreach and engagement in the Republic of Georgia. Many of our past 
and present board member companies like Cummins, ITOCHU, Toshiba, 
Delphi, and IBM are active in nearly every corner of the world.
    ESN's outreach and engagement around the world has taught us that 
energy solutions are truly global in nature. Many of the same 
challenges that we face bring sustainable, cost effective, and 
environmentally responsible energy solutions to the citizens of Indiana 
are present in most countries around the world, including those that 
are still struggling to develop modern energy infrastructure and 
supply. For example, the emergence of the increased adoption of 
distributed energy resources (DER)--such as renewables (solar, wind, 
biomass) as well as smaller scale fossil fuel plants, often coupled 
with energy storage in the form of advanced batteries--offers a 
revolutionary new approach to scaling modern energy supply. This 
approach moves away from a dependence on traditional centralized power 
plants with miles of transmission and distribution infrastructure 
needed to reach customers. Instead, energy supply is located closer to 
the demand and can be scaled up or down faster and with less cost over 
time. This DER approach is supported by advancements in controls 
systems that allow for microgrids to operate independently or link 
together in a broader system. Most traditional energy companies, 
including all of our ESN partners, are embracing this new approach to 
energy development and including it in their current and future systems 
buildout or upgrade plans.
    A second revolutionary movement impacting the energy industry is 
the rapidly increasing adoption of transportation electrification. The 
development of hybrid and electric vehicles can trace their roots back 
to the state of Indiana. Indiana was the home of the General Motors 
Delco Remy Propulsion Division which developed the first modern 
electric vehicle, the EV1. The hybrid and electric powertrain 
technology from this effort preceded Toyota's famed hybrid Prius 
program. Later, the learnings of the EV1, developed largely in Indiana, 
resulted in the launch of the first hybrid bus system by Allison 
Transmission of Indianapolis. Today electric vehicles are becoming 
commonplace and nearly every major vehicle manufacturer for both light 
duty passenger cars to medium- and heavy-duty trucks and buses are 
rolling out electric products. Indiana's own Cummins, a global leader 
in diesel engines for more than a century, recently announced that it 
will be selling an all-electric powertrain into the market for trucks 
and buses by 2019. The trend toward more electric vehicles can, if 
managed correctly, perfectly complement the adoption of a DER approach 
to energy generation and distribution. This is because electric 
vehicles can charge and eventually, with improved technology, discharge 
into DER microgrid or networks in a way that supports the overall 
energy efficiency of the system. The electric vehicles, and 
specifically the batteries in the vehicles, in a sense become another 
distributed resource integrated into the network. This can be 
especially important in developing countries where the development of a 
DER network can support new forms of lower cost and lower emissions 
transportation, and where the alternative of building a traditional 
central power plan in addition to a supply chain for gasoline or petrol 
can be very expensive and take years to reach remote villages or 
communities.
    The intersection of the DER and transportation electrification 
revolutions as well as other energy systems innovations are happening 
today through the work of ESN and our partners. We are leveraging 
Indiana as a launching pad for the innovative technologies, business 
models, and regulatory policies that will support its adoption. Our 
many successful public-private partnerships--including, but not limited 
to, the deployment of the largest electric car sharing network, the 
first mobile microgrids powered by renewable energy, development of 
advanced battery and energy storage solutions, and building of six net-
zero affordable housing developments with integrated transit--are 
examples that our collaboration is working. The ability to share these 
learnings and models with other nations is a logical next step, and one 
that ESN and our partners are eager to pursue with the guidance and 
support of this committee.


    Senator Young. Well, thank you, Mr. Mitchell. And thank you 
again to each of you for your insightful comments.
    Before we proceed to questions, I would like to address one 
administrative item. Andrew Herscowitz, the Power Africa 
Coordinator for USAID, as well as Joe Scheuer, Director with 
the United Nations Development Program, Bureau for Policy and 
Program Support, have submitted written statements to the 
subcommittee. With unanimous consent, I would like to include 
them both in the record.
    Senator Merkley. Consent.


    [The material referred to above was not made available in 
time to be included in this hearing transcript.]


    Senator Young. Dr. Moss, in your testimony you state that 
the, ``fracking revolution and rise of natural gas has 
dramatically changed the geopolitical balance.'' Can you 
describe in more detail these broad developments and what their 
significance is and most importantly how U.S. policy should 
address them?
    Dr. Moss. Yes. If we think about the intersection of energy 
and U.S. foreign policy, a lot of people are still stuck in the 
Carter doctrine era where we just think about oil resources, 
making sure that the oil can flow, and it kind of stops there. 
But today we are looking at an incredibly dynamic global energy 
marketplace where the role of the United States is both a 
supplier and buyer. And in sub-Saharan Africa in particular, 
energy is such in high demand both economically and 
diplomatically that this is a new lever for the United States 
to help build alliances, to help support our partners and to 
help our allies become more capable to deal with a whole 
panoply of issues.
    You know, Power Africa was not cooked up in the basement of 
some government building. Power Africa came out of a long 
series of consultations with African allies where they said we 
really want American partnership in the power sector. And that 
is what I mean. It is a new global energy statecraft where 
helping countries build energy systems is in our interest.
    Senator Young. Mr. Mitchell, Indiana has such a fine 
history of innovation. You spoke to some of the things we have 
done in the energy and transportation space. What do you see as 
the most promising R&D and innovation initiatives in the energy 
field right now? And what role is ESN playing in some of those 
cutting-edge areas?
    Mr. Mitchell. Well, you know, there is such a rich 
diversity of R&D and tech transfer going on it is hard to speak 
to that in a short period of time. But let me talk about two 
areas where I see a lot of interest in investment.
    The first one is energy storage, and we have heard about 
that quite a bit today I think from each of the speakers. The 
energy and transportation industries have been looking for a 
low-cost, scalable way to store electricity for decades. And it 
seems we are finally reaching the tipping point where the 
family of lithium-ion battery technology could provide a viable 
solution. Costs are coming down at rates once thought 
impossible. But it is still an expensive technology, and it has 
a ways to go.
    In Indiana, we invested in launching something called the 
Battery Innovation Center that I spoke to earlier. And this lab 
really brings together industry, academia, and government 
institutions, and we are working with 65 companies from big 
corporations like GE and Duke Energy and Rolls Royce to 
promising startups like BrightVolt and SiNode. And what we are 
seeing is a number of game-changing innovations in the energy 
storage space from the coupling of batteries into really large 
grid storage systems that would look like a large data center 
all the way down to taking nano-materials and putting them on a 
small, flexible battery that fits into a medical device. Within 
the very near term, battery technology is going to be so 
ubiquitous you are going to see it on virtually--if you are not 
already, seeing it on every car, every airplane, every 
Internet-connected device, every drone, and every good system 
around the world. So this is a really important area of 
innovation.
    Senator Young. Are there things we should be doing from 
your vantage point here at the federal level to scale up some 
of these existing technologies, to catalyze new ones, 
especially as it relates to our international development 
efforts?
    Mr. Mitchell. Yes. I mean, I think one of the issues we 
have is that we certainly do not want to give up the battery 
industry to Asia. China is investing huge sums in building a 
number of large factories called giga-factories for battery 
technology. And I think there needs to be a concerted effort in 
the U.S. to make sure that U.S. innovation continues to play a 
leadership role in that space.
    I think another area where we need to play a bigger role is 
something the previous panelist spoke to in terms of our 
innovation in unconventional oil and gas production. We have 
unleashed an amazing innovation in that type of fracking and 
that type of production. We are now producing volumes at prices 
and in locations once thought impossible of oil, gas, and non-
liquid gases. And I think we have got to help other countries 
in unlocking that same potential in their markets and to use 
exports of oil and gas as a tool for U.S. interests around the 
world.
    Senator Young. Senator Merkley?
    Senator Merkley. Thank you very much. All of you brought 
different perspectives to bear and expertise. Much appreciated.
    Mr. Talocchi, as you talked about the variety of ways you 
can address the challenge of energy with micro-grids, you 
mentioned things such as irrigation, milling, drying, smoking, 
anyway small-scale--I do not know if you can quite call it 
manufacturing but small-scale energy applications. Can those be 
achieved with village-level grids?
    Mr. Talocchi. Thank you for the question, Senator.
    Some of those technologies are already nascently connected 
to the power generation as, for example, solar water pumps. 
With village-scale grids, it will all depend on the scale of 
the grid. So it depends on where you are on the energy ladder 
and the capacity of both the company that is there to make the 
initial investment but also capacity of the villagers to pay 
for that electricity. So some of that can be definitely 
achieved with the technology. It is there. It just needs to be 
built in the right size for those activities.
    Senator Merkley. Let me reframe the question a little bit. 
I have seen in villages in a variety of places fairly quick 
adoption of small solar panels that provide enough energy for 
communications, including very low energy television screens, 
cell phones, LED lights to study by or to cook by at night. But 
I have not seen much adoption for kind of day-to-day tasks done 
in the village in terms of husking, drying, grinding, milling, 
and so forth.
    Are you starting to see that now in your broader exposure 
to what is going on?
    Mr. Talocchi. Yes. And I was part of that in the Amazon 
when we installed grids there and we supported the supply 
chains of fish with refrigerators. So that was a big step so 
people could store fish, keep it there, and only transport it 
back to markets when they had better opportunities or volumes.
    In India, there are opportunities. Husking, for example, is 
happening with the support of biomass. So you have micro-grids 
there built using not necessarily only solar technology but 
hydro and biomass and that then can be scaled to support the 
activities. And it is a win-win because they have the fuel 
right there.
    Senator Merkley. So one of the things I have often heard as 
a critique of distributed solar is that you cannot essentially 
enable there to be manufacturing activities. And I think that 
is fair. Large energy demands, especially ones that require a 
lot of heat. But in an economy, normally those are done in 
centralized urban areas anyway because of the networks of 
transportation. So you do not really put a factory that takes--
even if you have electricity, you do not put it in a village 
far out somewhere.
    But you mentioned that there is another advantage, which is 
eliminating power line disruption. And it took me back to a 
situation in West Africa where power lines would go up, and 
then they would disappear because of copper theft. Is that 
still a problem with the effort to expand grids?
    Mr. Talocchi. I do not know if the power lines are a 
problem. I know that in Brazil we have seen a lot of 
politicians promise access to energy during campaigns, and if 
elected, they would sometimes bring the light poles and then 
nothing would happen. And then 4 years later, they would run 
again, and maybe the cables would be connected but not 
necessarily the electricity. So the grid was kind of a choke 
point that was used and not to supply electricity but to 
achieve votes.
    Senator Merkley. And you mentioned in your written 
statement how the sociology changes as people become used to 
what is possible. And for example, maybe it was the Amazon 
community you referred to where women started buying hair 
dryers, and that proved incompatible and had to drive a 
community discussion.
    Mr. Talocchi. Yes. So one of the systems we installed--we 
quickly realized that because, of course, we were dealing with 
a limited supply of electricity, you needed people to be 
responsible with the amount of electricity that they would use. 
So, yes, some of the women in the village got hair 
straighteners or blow dryers, and those systems made the solar 
grid shut down. That was sorted with a community meeting, but 
now smarter grids, remote controlled grids, and pay-as-you-go 
systems would probably solve that through the technology side.
    Senator Merkley. Wind can also produce very low-cost 
energy, but you tend to see a lot more solar. Why is that?
    Mr. Talocchi. Sorry?
    Senator Merkley. Wind can also produce very low-cost 
energy, but in terms of micro-grids, at least what I have seen, 
there is a lot more solar. Why is that?
    Mr. Talocchi. I think, one, there is less data on the 
availability of wind in remote communities they need to 
measure, and the initial capital investment for a wind turbine 
is higher than for solar. And also it is much more complicated 
to fix and repair, and there are not enough suppliers in the 
market that can offer that technology.
    Senator Merkley. Thank you.
    Senator Young. Thank you, Senator Merkley.
    Dr. Moss, would you like to reply to Senator Merkley's line 
of questioning, please?
    Dr. Moss. I think the hair dryer example is pretty telling 
in that we are talking about, very often in many cases, very, 
very low power systems where you have to have a village meeting 
to coordinate who is going to use a hair dryer when. You know, 
this is something that we absolutely take for granted in the 
United States.
    And I think it is worth thinking a little bit about the 
scale of power we are talking about. So there is no such thing 
in the world as a rich country that is a low-power economy. It 
does not exist. In the United States, we use about 13,000 
kilowatt hours per person. Nigeria is at 150. So the gaps are 
so tremendous that we really need--you know, all-of-the-above 
is usually used in the context of fuels mix. It is also in 
terms of delivery systems. So, absolutely, rural isolated 
communities, should not have to wait for the grid. They are 
absolutely going to use decentralized systems, and those 
systems are getting better and cheaper every day. It is 
actually a super exciting time to be working in the energy 
field, but the big cities, the big industrial zones are, I do 
not think in our lifetime, going to be running on small 
systems. So we are going to need all-of-the-above in every way 
possible.
    Senator Young. Is this why you make the point that many 
countries are still going to need their own natural gas as part 
of their energy mix moving forward and that we have an interest 
in helping those countries, a point Mr. Mitchell made, exploit 
their natural resources?
    Dr. Moss. Absolutely. I mean, many of the countries that 
have the greatest unmet power needs are producing natural gas, 
and there is no question whether they are going to produce it 
or not. It is a question of whether they are going to export 
all of it to richer markets or whether a small portion of it 
will be used for power generation at home. And that is where 
initiatives like Power Africa can be very helpful because you 
have got to deal with a lot of policy issues around the grid, 
around the utilities, around the pricing structure to get a 
complicated power deal in place.
    Senator Merkley. Well, how can we improve that? You 
indicated that there are some improvements that could be made 
over at OPIC. In fact, you said that we could easily do two or 
three times the volume of power deals in Africa. That would be 
a lot more deals. But Congress is going to have to take some 
specific steps. What are those steps?
    Dr. Moss. Well, with OPIC specifically, OPIC is a very high 
performing agency that was built in the Nixon administration 
and it is still living with rules from the Nixon 
administration. So there are things like multiyear 
authorization, the authority to take equity positions, which is 
very important in certain kinds of deals, the ability to just 
invest in its own teams to have enough staff to handle the 
deals, and a number of other ways that would not cost American 
taxpayers money. Ideally, a super-sized OPIC would actually 
even generate greater profits and save taxpayers even more. So 
that is really the crux of turning OPIC into a bigger, better 
institution.
    Senator Young. Thank you.
    Mr. Mitchell, ESN has been involved in a number of public-
private partnerships with respect to energy and transportation. 
You have some sense of when those public-private partnerships 
make sense and when they do not. Tell me. In what instances 
should government play a large role? When should the private 
sector play a larger role, and when is there an opportunity for 
a blending, if you can give me some general rules of some rules 
to go on in this area?
    Mr. Mitchell. Public-private partnerships are really at the 
center of what we do at Energy Systems Network. And so we have 
got a lot of experience in this area.
    What I would say is in almost every instance, successful 
public-private partnerships are industry-led and are driven by 
industry funding. I think if you look at the Power Africa 
experience and the ability to leverage a lot of private 
capital, that is going to be the fastest way to succeed. You 
absolutely need a joint partnership and collaboration between 
government and industry, but if you cannot get industry to the 
table, if you cannot get them to risk their own capital and to 
put money into projects, the challenge is when that public 
money starts to dry up or the priorities move somewhere else, 
the projects kind of end. We heard about that earlier where 
maybe some solar panels were put in but then never fully 
exploited. And so you have got to find ways to bring private 
innovation and private capital to the table.
    And I actually think one of the things that is holding that 
back is a lack of awareness. In my experience, a lot of the 
companies that are doing the most innovative things in Indiana 
or the United States are small to medium-sized businesses, and 
many of those companies view international development projects 
as something that is reserved for the large multinational 
corporations or large global NGOs when the reality is if we 
could find ways to connect and learn more about what is going 
on in the Hoosier State but also other States and connect those 
to business partners overseas, some of these development goals 
are going to happen on their own.
    Senator Young. Are there specific steps that we as 
policymakers can take, to your mind, so that U.S. companies can 
compete more successfully for U.S. Government projects, for 
multilateral development projects, or other contracts that are 
out there?
    Mr. Mitchell. So one step--it seems simple enough, but it 
may be one of the most important--is awareness. It is finding a 
way to get the USAIDs, the Millennium Challenge Corporations, 
the OPICs, and others out into the States interacting with 
organizations like mine, Energy Systems Network, and others so 
we are even aware that these programs are available because, 
again, I think a lot of companies in the U.S. think of this as 
something that is happening somewhere else that they do not 
have available to them. So outreach and engagement.
    The other thing I would say that would be important is a 
lot more business-to-business partnerships that are driven 
between States or regions and provinces or communities 
overseas, so not necessarily nation state to nation state. But 
we have seen a lot of successful partnerships come from sister 
city relationships between Indianapolis or Indiana and 
communities overseas.
    Senator Young. Thank you, Mr. Mitchell.
    Senator Merkley?
    Senator Merkley. Thank you.
    Mr. Mitchell, you talked both about renewable but also 
about oil and gas development. And one of the circumstances we 
face is that the level of carbon pollution driving climate 
disruption has risen substantially, and the rate of pollution 
has increased almost threefold between 1960 and now. That is, 
we are polluting the air at a three times faster rate now than 
we were decades ago. And we are seeing the impact in many ways. 
The point was brought home to us most dramatically by the 
energy contained in the recent set of hurricanes. And while it 
is often noted that any single hurricane is hard to attribute 
directly to the warming of the ocean, the warming ocean does in 
most cases--most scientists would acknowledge--creates greater 
power in a hurricane, a greater punch. We were hit pretty hard.
    As you wrestle with advocating for energy systems around 
the world and we have this particular global challenge, how do 
you weigh that in your decision on how we should proceed?
    Mr. Mitchell. Let me say that every project that we have 
led at ESN has had a net positive impact on reducing carbon 
emissions, but those have not been the primary driver or the 
primary goal of the project itself. The primary goal has always 
been technology innovation.
    I am glad you are asking me this question because one of 
the things I think that we need to recognize is the phenomenon 
of distributed energy resources, which is a term we have heard 
a lot today, is not limited to renewables. In the United States 
and specifically in Indiana, what distributed energy resources 
means is having the generation closer to the demand source. And 
so that includes, of course, renewables and things like energy 
storage to help balance those renewables. But it also includes 
in many cases distributed fossil generation plants, usually 
smaller-scale natural gas combined cycle plants that are far 
more efficient, have a much lower CO2 impact than, say, large 
baseload coal plants of the past. And I really think that if 
you are going to achieve this combination of energy access but 
also abundance, which is necessary for economic growth, 
serious, long-term economic growth, you have to blend 
distributed energy in the form of renewables with combined 
cycle natural gas, usually smaller-scale systems, and this new 
phenomenon of energy storage. That trifecta gives you the 
reliable power source that you need that is also scalable to 
support the kinds of economic development growth opportunities 
that can allow a manufacturing site to be in a more rural 
location.
    Senator Merkley. And, Mr. Talocchi, we have seen the impact 
on economic development in some cases flowing from carbon 
pollution both in terms of fisheries, droughts affecting 
farming, hurricanes destroying significant areas. As you ponder 
our energy choices, how do you weigh into your decisions the 
observable impacts of carbon pollution?
    Mr. Talocchi. I think that when we look at the development 
goals that we have ahead of us--the UN has 17 of them--climate 
change, if it happens as predicted and as the models that are 
most accepted say it will, it will impact our ability to meet 
each one of those goals, all 17 of them.
    So our understanding is that we need to prioritize and 
continue to invest in renewable energy at all scales. We 
believe it is possible to achieve the same kind of energy 
access in abundance through renewable energy technologies 
paired with, of course, storage technologies and even 
accelerate that to the transport sector. You see the 
governments of China and India making commitments to go 100 
percent electric on the transport. Of course, that is going to 
increase electricity demand. And those commitments must now be 
paired with commitments to also increase the amount of 
renewable energy generation and capacity so when we get to 
stages where all the vehicles are being electrified, that 
electricity is also clean.
    We believe it is doable. It is happening. Governments 
around the world are already adopting that vision. Forty-eight 
of the world's least developed countries, known as the Climate 
Vulnerable Forum, have made a commitment to go 100 percent 
renewable, and now we need to find ways to support them in 
getting there.
    Senator Merkley. Thank you.
    Senator Young. Dr. Moss, you know, I hear a lot of these 
public pronouncements by countries in international forums, and 
sometimes I wonder whether or not they are genuine, thoughtful, 
believable commitments or, if instead, they are public 
relations, or maybe a little bit of both. So we just heard 
about a pledge by--was it 40 countries, sir? What are your 
thoughts about that, Dr. Moss? Are we really moving that boldly 
into a new frontier where that will be possible, 100 percent 
renewable?
    Dr. Moss. International fora--governments make certain 
commitments all the time. Some of them are real; many of them 
are not. I would be surprised if we would see 48 countries go 
entirely renewable. The countries that have very, very high 
proportions of renewable--it is mostly large hydro, which also 
faces significant challenges. There is still a lot of hydro 
potential in sub-Saharan Africa. So we could see a lot more of 
that. So that is certainly one option.
    When I hear talking about the poorest, most vulnerable 
countries of the world and how they are going to lead on this, 
it is true. They are going to have a much higher renewables 
mix. These are a lot of tropical countries with a lot of wind 
and solar resources. But these are also the poorest countries 
in the world, and these bright lights that are shining on us 
right now--95 percent of the power in Washington, D.C. comes 
from coal, gas, and nuclear. And so there is more than a whiff 
of hypocrisy when we are trying to restrict finance for the 
world's poorest countries to use their own resources in ways 
that we are already doing especially since these countries are 
not the ones causing the emissions in the first place.
    Senator Young. Well, thank you, and I would request that in 
the future, when you answer, do not be so politically correct. 
Just tell us what you mean. [Laughter.]
    Senator Young. Thank you, Dr. Moss.
    Dr. Moss, could you and Mr. Mitchell address the following? 
We know many U.S. companies work in the international energy 
sector, but their interests are not always aligned with our 
government. How can we in the U.S. Government better leverage 
the efforts of U.S. firms in developing resources in certain 
countries to actually promote U.S. policies?
    Mr. Mitchell. Let me give you an example of a company that 
I have worked with closely, Cummins, and they are an Indiana-
based company and they are active around the world. And one of 
the things they sell is diesel and natural gas gen sets that 
are used for providing remote power, in some cases all the way 
up to multi-megawatt power systems.
    And so I think to the point that was made earlier, you need 
to have an all-of-the-above approach. You need to make sure 
that you are engaging with the companies that are involved in 
the natural gas and the oil and gas industries in the United 
States and think about what role they can play in this broader 
solution of access and abundance.
    What can we do to get companies more directly involved or 
make sure we are all swimming in the same direction? A lot of 
it goes back to information sharing in forums and engagement.
    The other thing is to ensure that there are ways that 
companies can co-invest in these projects and that they are not 
restricted in terms of regulatory or financial restrictions on 
how they can invest in overseas development projects. Some of 
that has to do with some of the tax issues of getting money 
invested overseas and bringing the profits back and so on and 
so forth, which I know we are trying to work on and folks are 
working on right now. I mean, those are the kinds of things 
that you can do.
    But definitely the key is to get more companies involved 
and I think strategically to get more small to medium-sized 
businesses involved.
    Senator Young. Dr. Moss?
    Dr. Moss. The United States--we do not have China's model. 
We are not using our companies to directly implement our 
foreign policy, and I do not think that we should.
    I do think, though, that the United States--the way our 
companies operate overseas helps to set a higher bar in terms 
of behavior, in terms of transparency. I think the Foreign 
Corrupt Practices Act is one of the most important things that 
the United States brings to the world because, A, it helps 
protect our companies from poor corporate governance and 
misbehavior in certain circumstances, but it also raises the 
bar for everybody else and helps to create a more level playing 
field and promote good corporate governance and good governance 
in the countries in which they operate. That is one of the 
greatest things that we can do.
    Senator Young. Senator Merkley?
    Senator Merkley. Dr. Moss, I believe you have written some 
about the challenge of energy-rich, fossil-rich countries 
facing the energy curse, that is, that the value of these 
resources is so high, they drive an enormous amount of 
corruption, make decision-making on behalf of the country 
benefiting from those resources extremely difficult. Advocates 
sometimes end up dead.
    Equatorial Guinea has a per capita income of $20,000. 
Enviable for a developing country around the world. But the 
majority of the population of that country lives on less than 
$2 a day. Any thoughts or insights on how we address that?
    Dr. Moss. Yes. Well, thank you for that question. I mean, 
this is one of the biggest challenges that a lot of countries 
face, and we collectively as the development community have 
some answers but they are not very satisfactory. It seems to 
work best in countries that have strong institutions that are 
relatively democratic and that deliver services for their 
people. But this is kind of akin to telling an insomniac that 
you have diagnosed their problem and they need more sleep. It 
is true but it is not very helpful.
    So one of the things that I have been working on--I 
actually wrote a book with colleagues at the Center for Global 
Development in 2015--is if there are lessons we could learn 
actually from the U.S. State of Alaska which, as you know, 
provides a dividend to every State resident every year. Now, 
that was the genius of Governor Jay Hammond back in the early 
1980s, and he did that not because Alaskans were poor, but he 
wanted every Alaskan to feel it in their pocketbook to pay 
attention to what the politicians were doing with their money, 
with their natural resources. So we did a book called ``Oil to 
Cash,'' which explores the possibility of using citizen 
dividends in resource-rich countries to try to ignite greater 
public interest in how resources are used and to see if we can 
create a positive dynamic rather than the negative dynamic 
that, as you rightly point out, we have seen in places like 
Equatorial Guinea.
    Senator Merkley. Any success?
    Dr. Moss. So there are a lot of countries that have become 
wealthy and successful from natural resources. We live in one. 
Canada, Australia. These are resource-rich countries that have 
managed to avoid the resource curse. There are a lot of 
countries on the other side that are not doing well.
    You know, one of my favorite countries that I have already 
spoken about, Nigeria, is still struggling with this. I do 
think things are getting a lot better. Nigeria now reports on 
all of their oil income, where it is going. We now have a 
better idea of how it is being spent. But it is a long process. 
It is a very political process.
    And I do think we are seeing some progress with countries 
experimenting with cash dividends in very specific cases, but 
we have not seen the full Alaska model replicated anywhere else 
yet.
    Senator Merkley. So I will just close my comments by saying 
I would encourage you to be careful with charges of hypocrisy. 
It is kind of a below-the-belt shot. There are many parts of 
the developing world that are deeply afflicted by changing 
climate suffering significant starvation. We have seen that 
starvation trigger tribal wars and significant chaos. In Syria, 
we saw the collapse of the village economy help drive the civil 
war that led to the mess that we have been dealing with for 
years and will for many years to come. Many fishing 
communities, island communities, are extremely worried about 
rising sea levels and salt water infiltration of fresh water 
sources, and many of them have fisheries that are driven by 
coral reefs that are dying. So these are very important issues 
in global economic development. And I want to try to steer away 
from doubting the sincerity or integrity of the conversation.
    Senator Young. Well, thank you, Senator Merkley.
    I want to accept some measure of responsibility. I sort of 
led into my question with Dr. Moss by admitting that 
occasionally I have some skepticism when these international 
pledges are made. But I am grateful for our constructive 
relationship. I understand the depth of conviction you have 
about the importance of these issues. He has played a very 
important leadership role in these issues, and I am still 
learning from you. So thank you very much.
    I am going to ask one final question of Dr. Moss. Because 
Power Africa has been such an important model not just for the 
United States but really for the world with respect to 
electrification and energy development, what best practices 
have we seen with Power Africa that might potentially be 
applied to other sectors of international development?
    Dr. Moss. Thank you for that question.
    Let me just briefly just take the opportunity to clarify. I 
absolutely believe that developing countries are being 
tremendously impacted by climate change. I believe that it is 
real. The issue is that Tuvalu did not contribute one bit to 
the Global Climate Change Challenge. That came from Europe, the 
United States, and other rich countries. The countries that 
suffer the most are those least responsible for those problems. 
That was merely my point.
    Power Africa I think has actually done--yes?
    Senator Young. Senator Merkley, do you have any follow-up 
there? I just want to make sure everyone is good at the end of 
this hearing. We want to continue to do some good together.
    Senator Merkley. I think that point is accurate. In April, 
when I was meeting with India's power minister and we were 
discussing the challenge of financing renewable energy, he 
indicated it was somewhat irritating to have this conversation 
with Americans who for 150 years were burning the coal and the 
oil that created a lot of this problem. And I acknowledge it. 
That is an accurate representation of our energy history.
    And I said we can wrestle with that, but looking forward, 
what does a single kilowatt of new coal energy cost? And the 
answer is about 7 cents. And what was the cost of a new 
kilowatt of solar energy? The answer is about 3 to 4 cents. And 
I said, so how do we work together to help take advantage of 
the changing economics for renewable energy? And I said, and by 
the way, there is a big difference between what is outside your 
window and you could not see in New Delhi 200 yards down the 
road because of the--it was not just it comprises your sight. 
It is the fact that people breathing that is having enormous 
health consequences. And so there is a huge bonus on top of the 
fact that solar is cheaper.
    And 3 months later, the power minister who told me at that 
meeting he was going to build 40 new power plants in a 2-year 
period, announced a couple months later that they were 
canceling those plants and were doubling down on their strategy 
with renewable energy. And I think that is part of the 
conversation around the world.
    Senator Young. Dr. Moss?
    Dr. Moss. Thank you, Chairman.
    So I think Power Africa--you know, I was skeptical that 
Power Africa, which at times is wrangling 12 federal agencies 
to cooperate around a small set of projects, that that would 
work. I think they have done an admirable job doing it. But I 
do think that Power Africa is kind of the exception that proves 
the rule that you need a presidential initiative, you need a 
special coordinator to kind of make all of our agencies 
cooperate. So I am actually quite skeptical that we can 
replicate this many times over because it is such a heavy lift 
and it is such a deliberate effort.
    I do think that it is absolutely worth continuing, but I 
would not like to see us try to have a Power Asia, a Water 
Latin America, all of those efforts. I think that would be an 
interagency nightmare.
    Senator Young. Well, thank you. We are now officially out 
of time. So I want to thank each of you for appearing before us 
today.
    We are going to leave the record open for additional 
questions until 5:00 p.m. on Friday.
    Thank you again to everyone in attendance, as well as our 
witnesses and most especially to my ranking member, Senator 
Merkley.
    This hearing is officially adjourned.


    [Whereupon, at 4:20 p.m., the hearing was adjourned.]

                                  [all]