Energy Poverty guide
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| © Visible Earth, NASA |
Satellite photographs of Africa by night betray the injustice of the global divide. They do so through the medium of energy poverty, the darkness of a continent blanketing the human frustration in millions of homes. The UN Secretary-General, Ban Ki-moon, has championed the needs of 1.3 billion people around the world without access to electricity and 2.7 billion without clean cooking facilities. His vision of universal access to modern energy services by 2030 must contend with complex overlapping claims for scarce financial resources for sustainable development.
updated April 2012
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Millennium Development Goals
Not one of the sixty indicators chosen to monitor progress of the Millennium Development Goals (MDGs) is concerned with energy poverty.
With hindsight, it seems inconceivable that the architects of the UN framework for reducing global poverty could have made such an omission. The relevance of electricity and efficient cooking facilities to seven of the eight MDGs is almost self-evident.
Improvements in health will stall if clinics cannot refrigerate vaccines and medicines. Education cannot flourish in its core purpose if evening study in the home is impractical, nor in its broader sense if computers and televisions remain the stuff of dreams.
Primitive cooking methods directly confront the Millennium Declaration’s vision of women’s equality and empowerment. Hours of valuable time are lost to the task of wood fuel collection, whilst smoke from the cooking process endangers health.
Even the most basic lighting facilities will extend the potential hours of workshop or retail livelihoods. And if mobile phones are to fulfil the social and economic potential that has so excited development experts, then the capacity for routine recharging is essential.
Although the provision of electricity alone is insufficient to underwrite development, there is close correlation between high energy poverty countries and poor progress towards the MDGs.
Conversely, the champions of poverty reduction can boast almost universal access to electricity. China has connected 500 million people in rural areas since 1990 whilst Vietnam has increased coverage from 5% to 98% in 35 years.
Timothy Wirth, President of the UN Foundation, discusses the omission of energy poverty from the UN poverty agenda and poses broad questions that must now be addressed.
Global Energy Divide
Exclusion from the MDGs has restricted access to foreign aid and other sources of development finance that energy poverty programmes might otherwise have expected.
In consequence, just under 1.3 billion people in sub-Saharan Africa and the least developed countries of Asia have no access to electricity at all. In countries such as Ethiopia and Rwanda, more than 90% of rural households are without electricity; in rural India, 400 million people share this disadvantage.
Not that connection to a grid in poor countries is any guarantee of household energy security. Inadequate maintenance, transmission losses and inability to pay for fuel imports have reduced many urban systems to a laughing stock. Up to a billion people experience unreliable services characterized by high charges and interminable periods of load shedding.
Bungled privatisations and governance failings have created energy divides within countries, with middle class urban elites and their business interests attracting premium services.
Although global investment in energy access is at last on the rise, the International Energy Agency (IEA) believes that current government policies are barely sufficient to keep pace with population growth. The Agency projects that by 2030 there will still be 1.1 billion people without electricity. By then almost 100 years will have elapsed since the completion of rural electrification programmes in North America and Western Europe.
A similar picture emerges for access to modern cooking facilities, equally neglected by the international donor community until very recently. Across the developing world 2.7 billion people rely on traditional biomass cooking methods, including 840 million in India alone. The IEA fears that this total figure will not change at all by 2030.
In these households, rudimentary cooking stoves burn wood, charcoal or agricultural waste, creating kitchen pollution which scientists say is equivalent to a child smoking 3-5 cigarettes per day.
Recent research demonstrates links between pregnancy in this domestic environment and hampered cognitive development of the child. In 2009, 1.5 million deaths from child pneumonia and adult lung disease and were attributed to these stoves, more than double the number of deaths from malaria.
Nigerian entertainers speak out against the state of electric power supply, from effianjay.
Electricity Solutions
In any country, delivery of rural electrification by extension of a national grid becomes less cost effective with each added kilometer of transmission. In developing countries, grid economics is further challenged by the low price tariff that poor rural communities can afford.
Financial expediency therefore limits plans for refurbishing and extending national grids to urban centres and their peripheries. The IEA suggests that no more than 30% of rural areas are suitable for access by grid extension.
Beyond the reach of national grids lie new opportunities for energy production in mini-grids. Small hydropower installations are expected to feature in this context, alongside other renewable sources such as solar, wind, geothermal, and biomass. Less than 1% of geothermal potential in Africa has been exploited.
Subject to appropriate local management capacity, mini-grids can be built and operated in a distributed model, independent of central government or national energy companies.
For the remotest villages, there may be no alternative to off-grid energy solutions, for which solar is the lead technology. Sunlight is plentiful in most countries of high energy poverty.
The importance of mini-grid and off-grid solutions places developing countries in the vanguard of the global clean energy revolution that the 21st century must deliver.
The benefits of solar home systems provided by Grameen Shakti in Bangladesh make the challenge of finding up-front finance worthwhile, from Ashden Awards.
Cookstove Solutions
Such modest aspirations for grid-based energy supplies rule out any prospect of introducing the electric or gas cookers familiar in developed countries. Research has therefore concentrated on efficient modern versions of biomass cookstoves.
These greatly enhance heat transfer, reducing fuel consumption and emissions. Safe ventilation of smoke eliminates the risk of lung disease.
Modern biogas stoves are increasingly popular alternatives to biomass. Although they are more expensive, these stoves open the way to self-sufficiency in a household which owns livestock. In urban areas, LPG stoves are the preferred option.
In common with other development initiatives which impact directly on household behaviours, modern cookstoves will not succeed without recognition of the potential cultural barriers to proper use. Likewise, local communities dependent on the charcoal industry may understandably resist the new technology.
Cooking Not Killing - the advantages of clean cookstoves, from Global Health News.
Energy Access Definition
A global strategy to tackle energy poverty requires a benchmark to measure progress. The IEA has been developing a definition of energy access that might gain universal acceptance.
In its latest proposals, published in conjunction with the 2011 World Energy Outlook, the IEA suggests an energy poverty line of just 250 kilowatt-hours (kWh) per household per year for rural households, and double that figure in urban environments.
This rural threshold provides little more than very basic lighting for two rooms. It has therefore been criticised as inadequate to meet basic human needs, let alone to improve livelihoods or support community facilities.
Conscious that the principle of equity in sustainable development is at stake, the IEA envisages that the energy poverty line should rise over time, reaching 800 kWh per household by 2030. By comparison, the average annual household consumption in 27 European Union countries in 2008 was just under 18,000 kWh.
The core of any eventual definition will refer not just to a connection to electricity but also to access to safe and energy efficient cooking facilities.
Even small supplies of energy can make a real difference in remote rural areas in Rwanda, from UNIDO
Sustainable Energy For All
The UN Secretary-General, Ban Ki-moon, has personally led efforts to rectify the neglect of energy poverty in the international development agenda. He proposes a new goal to achieve universal access to modern energy services by 2030, implying affordable electricity coverage to a defined threshold and use of modern cooking methods for all.
Mr Ban believes that energy development in poor countries can leapfrog traditional fossil fuel generation just as mobile phones have superseded landlines in Africa. He has declared 2012 to be the International Year of Sustainable Energy for All and appointed a high level UN group to advance the cause.
The Group has been tasked with producing an action plan to 2030, in time for the 2012 Rio de Janeiro UN Conference on Sustainable Development, known as “Rio+20”. The plan will invite national actions, suggest financial mechanisms and identify performance benchmarks.
The pace of the Secretary-General’s endeavours is not yet matched by the national and international political commitment that will be essential to their success.
The Future We Want, the draft outcome document for Rio+20, contains reference to a new set of goals for sustainable development. But definition of these goals must first endure a three-year period of discussion. Energy may or may not be included.
Costs and Funding
The cost of providing universal access to modern energy services requires average funding of $48 billion per annum in the period to 2030, according to the IEA. Access to electricity accounts for almost 90% of this estimate, of which only a fraction is already committed.
Although the figure is believed to represent only 3% of current energy investment plans in developed countries, prospects of any new support from foreign aid are currently very low.
Most current projects in developing countries are devoted to extending grid services for urban and industrial customers. Although fraught with political and other risks, this is familiar financing territory for multilateral development banks, private sector corporations and domestic governments.
Prospects for private sector funding of the estimated $20 billion per annum required for mini-grid and off-grid solutions are subject to differing opinions. In its 2011 report, the IEA is pessimistic: “a breakthrough is still required in developing commercially-viable business models for providing modern energy services to the rural poor on a significant scale."
The more positive view observes that poor households already pay for expensive kerosene and candles for lighting, resources that could alternatively repay loans for micro-energy installations. Many developing countries subsidise the price of fossil fuels for rich and poor alike – funds that could be retargeted to stimulate a new market in distributed energy.
Neither governments nor households relish such radical change but the business case is strong, especially as costs are falling rapidly. Prices as low as $7 have been reported for a modern biomass cookstove, whilst a solar home system can be obtained for around $150.
A combination of conventional market forces, innovative financing, government support and local enterprise could engineer the transition. There is undoubtedly a frenzy of new business activity in Africa and South Asia, backed up by donor initiatives such as the Global Alliance for Clean Cookstoves.
The Rio+20 conference will bring a rash of announcements of energy projects designed to leverage this enterprise, led by Norway and the European Union. It is impossible to gauge whether the sum of multiple commitments can deliver the global goal.
Michael Liebreich, CEO of Bloomberg New Energy Finance and member of the UN Secretary-General's High-Level Group on Sustainable Energy for All, puts the “bottom-of-the-pyramid” business case for eradication of energy poverty, from UN Foundation.
Climate Finance
Energy poverty makes a significant contribution to global warming. This apparent contradiction occurs in three ways, each associated with traditional biomass cookstoves.
The UN Food and Agriculture Organization reports that a very high percentage of wood removed from forests in sub-Saharan Africa is for burning on domestic stoves or for charcoal production. Deforestation is a key source of carbon dioxide emissions.
Smoke from the cooking fires is believed to contribute almost a quarter of worldwide black carbon emissions, one of the causes of global warming. The combustion itself emits carbon dioxide in a particularly inefficient method of heat conversion. Africa’s energy intensity per unit of GDP is higher than any other continent.
Development projects for conversion to modern stoves or installation of low carbon mini-grid capacity therefore have a very strong claim on international climate finance.
For example, the Green Climate Fund, created in recent rounds of UN climate negotiations, can anticipate support of up to $100 billion per annum by 2020. The Clean Development Mechanism, long established under the Kyoto Protocol, encourages the introduction of low carbon technologies in exchange for carbon credits.
There are two core concerns about climate finance for addressing energy poverty. First, there is a long queue of competing claims for climate mitigation and adaptation. Second, the promised flow of funds is bogged down by the protracted nature of international negotiations on climate change.
Energy poverty campaigners may increasingly suggest that an earmarked fund be created to channel donor support for universal access.
A basic explanation of the links between deforestation, energy and the economy in Malawi, from Communicty
Grid Dilemmas
Whilst finance for extending existing grids may be more straightforward than mini-grid and off-grid development, there is scope for controversy over the choice of energy source.
IEA projections show that 40% of the new capacity necessary to achieve universal access in developing countries could be created by extending national grids. The Agency suggests that half of this expansion should be powered by coal, despite its contribution to greenhouse gas emissions.
Many global warming campaigners oppose this strategy, arguing that climate change will aggravate poverty in developing countries, ultimately reversing the benefits of energy access.
Coal is plentiful in Africa and South Asia and most developing countries assert their right to a traditional fossil-fuel development path. They point out that attainment of the universal access goal is estimated to add only 1%-2% to global greenhouse gas emissions. And that many developed countries also plan new coal-fired capacity in their own energy strategies.
Sensitive to accusations of overlooking the needs of the poor in urban and peri-urban areas, climate campaigners focus their opposition on the availability of soft loans from the multilateral development banks for fossil fuel projects.
Tensions ran particularly high in 2010 when the World Bank approved a massive $3.75 billion loan to Eskom of South Africa for a coal-fired power station. Many advocacy NGOs are pressing the Bank to graduate to mini-grid and off-grid projects.
A second area of controversy centres on the interest of many developing countries in large hydropower projects, influenced by studies which declare the untapped potential to be as much as 92% and 80% in Africa and Asia respectively. As a renewable source, hydropower is a highly attractive option.
However, these projects have a poor track record of environmental destruction and human displacement, often without proper prior assessment or consultation. New developments such as the Gibe III dam in Ethiopia attract opposition from international environmental and human rights watchdogs.
Big hydropower is also vulnerable to climate change. A fall in the level of dam water below the point necessary to drive turbines has already caused chronic power shortages during periods of drought in Uganda and Ghana.
If you like this guide, please make a voluntary micropayment to help OneWorld publish educational Guides (credit/debit card or PayPal).
Not one of the sixty indicators chosen to monitor progress of the Millennium Development Goals (MDGs) is concerned with energy poverty.
|
| Indoor air pollution in rural Nepal © Naresh Newar / IRIN News |
Improvements in health will stall if clinics cannot refrigerate vaccines and medicines. Education cannot flourish in its core purpose if evening study in the home is impractical, nor in its broader sense if computers and televisions remain the stuff of dreams.
Primitive cooking methods directly confront the Millennium Declaration’s vision of women’s equality and empowerment. Hours of valuable time are lost to the task of wood fuel collection, whilst smoke from the cooking process endangers health.
Even the most basic lighting facilities will extend the potential hours of workshop or retail livelihoods. And if mobile phones are to fulfil the social and economic potential that has so excited development experts, then the capacity for routine recharging is essential.
Although the provision of electricity alone is insufficient to underwrite development, there is close correlation between high energy poverty countries and poor progress towards the MDGs.
Conversely, the champions of poverty reduction can boast almost universal access to electricity. China has connected 500 million people in rural areas since 1990 whilst Vietnam has increased coverage from 5% to 98% in 35 years.
Timothy Wirth, President of the UN Foundation, discusses the omission of energy poverty from the UN poverty agenda and poses broad questions that must now be addressed.
Global Energy Divide
Exclusion from the MDGs has restricted access to foreign aid and other sources of development finance that energy poverty programmes might otherwise have expected.
|
| Damaged infrastructure in Kenya © Peter Armstrong |
Not that connection to a grid in poor countries is any guarantee of household energy security. Inadequate maintenance, transmission losses and inability to pay for fuel imports have reduced many urban systems to a laughing stock. Up to a billion people experience unreliable services characterized by high charges and interminable periods of load shedding.
Bungled privatisations and governance failings have created energy divides within countries, with middle class urban elites and their business interests attracting premium services.
Although global investment in energy access is at last on the rise, the International Energy Agency (IEA) believes that current government policies are barely sufficient to keep pace with population growth. The Agency projects that by 2030 there will still be 1.1 billion people without electricity. By then almost 100 years will have elapsed since the completion of rural electrification programmes in North America and Western Europe.
A similar picture emerges for access to modern cooking facilities, equally neglected by the international donor community until very recently. Across the developing world 2.7 billion people rely on traditional biomass cooking methods, including 840 million in India alone. The IEA fears that this total figure will not change at all by 2030.
In these households, rudimentary cooking stoves burn wood, charcoal or agricultural waste, creating kitchen pollution which scientists say is equivalent to a child smoking 3-5 cigarettes per day.
Recent research demonstrates links between pregnancy in this domestic environment and hampered cognitive development of the child. In 2009, 1.5 million deaths from child pneumonia and adult lung disease and were attributed to these stoves, more than double the number of deaths from malaria.
Nigerian entertainers speak out against the state of electric power supply, from effianjay.
Electricity Solutions
In any country, delivery of rural electrification by extension of a national grid becomes less cost effective with each added kilometer of transmission. In developing countries, grid economics is further challenged by the low price tariff that poor rural communities can afford.
Financial expediency therefore limits plans for refurbishing and extending national grids to urban centres and their peripheries. The IEA suggests that no more than 30% of rural areas are suitable for access by grid extension.
|
| Solar power in Morocco © Greenpeace International |
Subject to appropriate local management capacity, mini-grids can be built and operated in a distributed model, independent of central government or national energy companies.
For the remotest villages, there may be no alternative to off-grid energy solutions, for which solar is the lead technology. Sunlight is plentiful in most countries of high energy poverty.
The importance of mini-grid and off-grid solutions places developing countries in the vanguard of the global clean energy revolution that the 21st century must deliver.
The benefits of solar home systems provided by Grameen Shakti in Bangladesh make the challenge of finding up-front finance worthwhile, from Ashden Awards.
Cookstove Solutions
Such modest aspirations for grid-based energy supplies rule out any prospect of introducing the electric or gas cookers familiar in developed countries. Research has therefore concentrated on efficient modern versions of biomass cookstoves.
|
| Traditional cooking in Africa © Jocelyn Sambira / IRIN News |
Modern biogas stoves are increasingly popular alternatives to biomass. Although they are more expensive, these stoves open the way to self-sufficiency in a household which owns livestock. In urban areas, LPG stoves are the preferred option.
In common with other development initiatives which impact directly on household behaviours, modern cookstoves will not succeed without recognition of the potential cultural barriers to proper use. Likewise, local communities dependent on the charcoal industry may understandably resist the new technology.
Cooking Not Killing - the advantages of clean cookstoves, from Global Health News.
Energy Access Definition
A global strategy to tackle energy poverty requires a benchmark to measure progress. The IEA has been developing a definition of energy access that might gain universal acceptance.
In its latest proposals, published in conjunction with the 2011 World Energy Outlook, the IEA suggests an energy poverty line of just 250 kilowatt-hours (kWh) per household per year for rural households, and double that figure in urban environments.
This rural threshold provides little more than very basic lighting for two rooms. It has therefore been criticised as inadequate to meet basic human needs, let alone to improve livelihoods or support community facilities.
Conscious that the principle of equity in sustainable development is at stake, the IEA envisages that the energy poverty line should rise over time, reaching 800 kWh per household by 2030. By comparison, the average annual household consumption in 27 European Union countries in 2008 was just under 18,000 kWh.
The core of any eventual definition will refer not just to a connection to electricity but also to access to safe and energy efficient cooking facilities.
Even small supplies of energy can make a real difference in remote rural areas in Rwanda, from UNIDO
Sustainable Energy For All
The UN Secretary-General, Ban Ki-moon, has personally led efforts to rectify the neglect of energy poverty in the international development agenda. He proposes a new goal to achieve universal access to modern energy services by 2030, implying affordable electricity coverage to a defined threshold and use of modern cooking methods for all.
|
| Solar energy in India © The Energy and Resources Institute |
The Group has been tasked with producing an action plan to 2030, in time for the 2012 Rio de Janeiro UN Conference on Sustainable Development, known as “Rio+20”. The plan will invite national actions, suggest financial mechanisms and identify performance benchmarks.
The pace of the Secretary-General’s endeavours is not yet matched by the national and international political commitment that will be essential to their success.
The Future We Want, the draft outcome document for Rio+20, contains reference to a new set of goals for sustainable development. But definition of these goals must first endure a three-year period of discussion. Energy may or may not be included.
Costs and Funding
The cost of providing universal access to modern energy services requires average funding of $48 billion per annum in the period to 2030, according to the IEA. Access to electricity accounts for almost 90% of this estimate, of which only a fraction is already committed.
|
| Solar panel charging a computer battery, rural Kenya © Peter Armstrong |
Most current projects in developing countries are devoted to extending grid services for urban and industrial customers. Although fraught with political and other risks, this is familiar financing territory for multilateral development banks, private sector corporations and domestic governments.
Prospects for private sector funding of the estimated $20 billion per annum required for mini-grid and off-grid solutions are subject to differing opinions. In its 2011 report, the IEA is pessimistic: “a breakthrough is still required in developing commercially-viable business models for providing modern energy services to the rural poor on a significant scale."
The more positive view observes that poor households already pay for expensive kerosene and candles for lighting, resources that could alternatively repay loans for micro-energy installations. Many developing countries subsidise the price of fossil fuels for rich and poor alike – funds that could be retargeted to stimulate a new market in distributed energy.
Neither governments nor households relish such radical change but the business case is strong, especially as costs are falling rapidly. Prices as low as $7 have been reported for a modern biomass cookstove, whilst a solar home system can be obtained for around $150.
A combination of conventional market forces, innovative financing, government support and local enterprise could engineer the transition. There is undoubtedly a frenzy of new business activity in Africa and South Asia, backed up by donor initiatives such as the Global Alliance for Clean Cookstoves.
The Rio+20 conference will bring a rash of announcements of energy projects designed to leverage this enterprise, led by Norway and the European Union. It is impossible to gauge whether the sum of multiple commitments can deliver the global goal.
Michael Liebreich, CEO of Bloomberg New Energy Finance and member of the UN Secretary-General's High-Level Group on Sustainable Energy for All, puts the “bottom-of-the-pyramid” business case for eradication of energy poverty, from UN Foundation.
Climate Finance
Energy poverty makes a significant contribution to global warming. This apparent contradiction occurs in three ways, each associated with traditional biomass cookstoves.
|
| Deforestation on Mount Kenya, by treesftf © Flickr |
Smoke from the cooking fires is believed to contribute almost a quarter of worldwide black carbon emissions, one of the causes of global warming. The combustion itself emits carbon dioxide in a particularly inefficient method of heat conversion. Africa’s energy intensity per unit of GDP is higher than any other continent.
Development projects for conversion to modern stoves or installation of low carbon mini-grid capacity therefore have a very strong claim on international climate finance.
For example, the Green Climate Fund, created in recent rounds of UN climate negotiations, can anticipate support of up to $100 billion per annum by 2020. The Clean Development Mechanism, long established under the Kyoto Protocol, encourages the introduction of low carbon technologies in exchange for carbon credits.
There are two core concerns about climate finance for addressing energy poverty. First, there is a long queue of competing claims for climate mitigation and adaptation. Second, the promised flow of funds is bogged down by the protracted nature of international negotiations on climate change.
Energy poverty campaigners may increasingly suggest that an earmarked fund be created to channel donor support for universal access.
A basic explanation of the links between deforestation, energy and the economy in Malawi, from Communicty
Grid Dilemmas
Whilst finance for extending existing grids may be more straightforward than mini-grid and off-grid development, there is scope for controversy over the choice of energy source.
IEA projections show that 40% of the new capacity necessary to achieve universal access in developing countries could be created by extending national grids. The Agency suggests that half of this expansion should be powered by coal, despite its contribution to greenhouse gas emissions.
Many global warming campaigners oppose this strategy, arguing that climate change will aggravate poverty in developing countries, ultimately reversing the benefits of energy access.
Coal is plentiful in Africa and South Asia and most developing countries assert their right to a traditional fossil-fuel development path. They point out that attainment of the universal access goal is estimated to add only 1%-2% to global greenhouse gas emissions. And that many developed countries also plan new coal-fired capacity in their own energy strategies.
Sensitive to accusations of overlooking the needs of the poor in urban and peri-urban areas, climate campaigners focus their opposition on the availability of soft loans from the multilateral development banks for fossil fuel projects.
Tensions ran particularly high in 2010 when the World Bank approved a massive $3.75 billion loan to Eskom of South Africa for a coal-fired power station. Many advocacy NGOs are pressing the Bank to graduate to mini-grid and off-grid projects.
|
| Site of controversial Myitsone dam, Burma © Sin Kye / IRIN News |
However, these projects have a poor track record of environmental destruction and human displacement, often without proper prior assessment or consultation. New developments such as the Gibe III dam in Ethiopia attract opposition from international environmental and human rights watchdogs.
Big hydropower is also vulnerable to climate change. A fall in the level of dam water below the point necessary to drive turbines has already caused chronic power shortages during periods of drought in Uganda and Ghana.
If you like this guide, please make a voluntary micropayment to help OneWorld publish educational Guides (credit/debit card or PayPal).
| £1 | US$2 | EUR2 | AU$2 | CA$2 | NZ$3 | SG$3 | PHP50 |
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