Energy for All: updated April 2021
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. Globally, there are 789 million people without access to electricity and 2.8 billion without clean cooking facilities.
A large proportion of those who do enjoy a connection to a grid in poor countries experience unreliable services characterized by high charges and interminable periods of load shedding.
The Covid-19 crisis has highlighted the implications of energy poverty, particularly in Africa. Even if adequate vaccine supplies were available, the logistics of distribution would be hampered significantly by lack of refrigeration capacity. And it has come as a shock to populations of richer countries to learn that home working and schooling are concepts without meaning in the absence of adequate and reliable electricity, let alone internet connections.
Even in normal times, 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. Basic lighting facilities can 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 social and economic development, there is close correlation between countries with the lowest energy capacity and those classified as Least Developed Countries. The Africa Progress Report 2015 warned that “energy-sector bottlenecks and power shortages cost the region 2-4 per cent of GDP annually, undermining sustainable economic growth, jobs and investment.”
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 increased coverage from 20% to 80% in just 9 years, prior to achieving universal access.
In the absence of modern energy sources, household cooking and heating is dependent on rudimentary stoves that burn solid fuels such as wood, charcoal or agricultural waste. Scientists say that kitchen pollution caused by this combustion 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. The World Health Organization has stated that “the use of inefficient fuels for cooking alone is estimated to cause over 4 million deaths annually, mainly among women and children. This is more than TB, HIV and malaria combined.”
Sustainable Development Goal for Energy
The relevance of electricity to a global vision of human development is so self-evident that the exclusion of energy from the UN’s Millennium Development Goals seems inexplicable. Not one of the sixty indicators chosen to monitor progress between 2000 and 2015 was concerned with energy poverty.
Negligible improvement in access to electricity and clean cooking over that period was the unsurprising consequence. By 2014 there were still 1.1 billion people with no electricity access and 3.0 billion relying on traditional unhealthy biomass cooking methods, more than 40% of the world’s population. In rural areas of sub-Saharan Africa, electricity access had reached only 17%.
Bungled privatisations and governance failings had created energy divides within countries, with middle class urban elites and their business interests attracting premium services. The mushrooming population of cities around the developing world added this urban dimension to energy poverty.
The disturbing lack of progress provoked a major shift in attitudes. The former UN Secretary-General, Ban Ki-moon, personally led efforts to rectify the neglect of energy poverty in the international development agenda. His Sustainable Energy for All initiative (SE4ALL), established in 2011, was successful in influencing the UN’s post-2015 development process.
One of the 17 Sustainable Development Goals (SDGs) approved by the UN General Assembly in 2015 was dedicated to energy. Its aim was ambitious: “to ensure universal access to affordable, reliable, and modern energy services (by 2030)”, with separate monitoring for access to electricity and use of clean fuels for cooking.
Much as the new Goal was welcomed, the target date for universal access falls almost 100 years after the completion of rural electrification programmes in North America and Western Europe.
As with other goals within the SDG programme, the interpretation of “access” is critical to the outcome and to its costs. The World Bank has led the development of a multi-tier framework which measures energy access for both electricity and cooking facilities, in countries at differing stages of development. The capacity requirement for “Tier 1” of the framework is fulfilled by as little as 250 kWh per year, the output of a very basic household solar power system powering lighting in one or two rooms. In urban areas this Tier 1 threshold is doubled.
Such a low level of ambition for energy provision in the world’s poorest countries merits comparison with average annual household consumption of 3,700 kWh in Europe and 11,000 kWh in the US. A single fridge in these countries consumes more than the Tier 1 rural capacity threshold. Some development agencies campaign for this tiny poverty threshold to be raised to reflect meaningful household benefits.
Progress towards SDG7 by 2018 (the most recent year for which data is available) is mixed. The number of people without access to electricity has fallen from 1,100 million to 789 million. Anticipating rising populations, the Energy Progress Report 2020 estimates that as many as 620 million people will remain without access in 2030, 85 percent of them in sub-Saharan Africa.
The picture for clean cooking facilities is even less promising, with 2.8 billion still lacking access in 2018, exactly the same figure as in 2010. All improvements over the last decade have been offset by parallel increases in population. With over 80% of people in sub-Saharan Africa unable to escape this domestic poverty trap, prospects for the 2030 goal are very poor. The Energy Progress report 2020 suggests that under current and planned policies 2.3 billion people will still be deprived of access to clean cooking fuels and technologies in 2030.
Solutions to Energy Poverty
In any country, delivery of rural electrification by extension of a national grid becomes less cost effective with each added kilometre of transmission. In those developing countries where access to electricity is most deficient, grid economics is further challenged by the low price tariff that poor rural communities can afford.
Financial expediency in poorer countries therefore limits plans for refurbishing and extending national grids to urban centres and their peripheries. The International Energy Agency has suggested that no more than 30% of rural areas of low income countries are suitable for access by grid extension.
Beyond the reach of national grids lie new opportunities for energy production, ideally through mini-grids which serve small regions or single communities. Small hydropower installations typically 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 utility 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 cheapest household solar power systems deliver little more than basic lighting, not even sufficient to meet the minimum “Tier 1” requirement that counts as “access” for the purpose of the Sustainable Development Goal for energy. Nevertheless, the transition from dirty and expensive kerosene lamps represents a milestone in family life for the 136 million people estimated to have acquired these household systems by 2018.
Such basic energy systems lack the capacity to replace traditional cooking facilities. Research has therefore concentrated on an intermediate solution – efficient modern versions of traditional biomass cookstoves.
These greatly enhance heat transfer, reducing wood fuel consumption and emissions that cause global warming. Safe ventilation of smoke reduces 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.
There are encouraging signs that these traditional solutions to energy poverty are being superseded by rapid improvements in energy and battery technologies, in parallel with falling costs and enhanced efficiency of household appliances. Innovative combinations of renewable technologies in mini-grid or household configurations are increasing affordable capacity.
This reshaping of supply and demand opens up the potential for homes to invest in small-scale electric cookers, the ultimate solution to dirty stoves. Rural schools and health centres can be transformed by reliable power supplies. The operation of pumps or other mechanised tools, enables modernisation of agriculture and local trades, boosting economic activity.
The Kenya Off-Grid Solar Access Project (KOSAP) illustrates how investment beyond the national grid can deliver impact comparable to a conventional grid extension. A blend of connected mini-grids and standalone solar systems, this is a flagship programme to deliver Kenya’s goal of universal access to energy as soon as 2022.
It is therefore the task of governments, in sub-Saharan Africa in particular, to devise national energy policies that encourage innovative rural solutions beyond the national grid, exploiting Africa’s vast renewable energy potential. Such models could pioneer the global clean energy revolution that the 21st century must deliver.
Finance for Energy for All
The Sustainable Development Goal for energy (SDG7) supplements the vision of universal access to electricity and clean cooking with two further aims. These address global energy efficiency and the use of renewable technologies. As these sustainability aims focus on enhancement of existing energy capacity, engaging rich countries as well as poor, estimates of the cost of providing universal access to electricity and clean cooking can be confused with those for SDG7 as a whole.
Estimates dating from 2015 suggest a global financing requirement for universal access to electricity and clean cooking of the order of $45 billion and $4.4 billion per annum respectively, for the period to 2030. These were compiled by Sustainable Energy for All (SE4All) and the International Energy Agency.
What can be stated with greater certainty is that the actual scale of funding support has been pitifully modest, possibly as low as 1% of requirements for both electricity and cooking. In failing to deliver the flurry of promises made in 2015, many international institutions are accountable for the disappointing progress reported to date.
For example, the African Development Bank’s New Deal on Energy for Africa had a vision of universal energy access on the continent by 2025, five years earlier than SDG7, targeting investment of $30-$55 billion per year. The European Commission promised to facilitate access to modern energy supplies for 500 million people by 2030. These and many other pledges remain unfulfilled.
Most current projects of significant scale in developing countries are devoted to extending grid services for urban and industrial customers, often resorting to fossil fuel generation. Although fraught with political and other risks, these represent familiar financing territory for multilateral development banks, private sector corporations and domestic governments. This structure of energy finance has failed to shake off its preference for middle class urban customers over the rural poor.
However, the off-grid needs of the poorest households do bring out the best in local innovation and entrepreneurship. As these households already pay for expensive kerosene and candles for lighting, a basic solar home system has become a viable proposition, aided by innovative repayment models for loans. There is undoubtedly a frenzy of entrepreneurial solar business activity in Africa and South Asia, backed by diverse funding sources and partnerships.
Climate finance offers another source of optimism for meeting the energy needs of the poorest households. Traditional biomass cookstoves make a significant contribution to global warming, through unsustainable collection of firewood and its inefficient combustion. Smoke from cooking fires is believed to contribute almost a quarter of worldwide black carbon emissions, one of the causes of global warming.
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. An encouraging development is the commitment of the Green Climate Fund to include energy access as an eligible activity for grantee project applications. The GCF is the principal global vehicle for climate finance.
The Covid-19 pandemic has revived awareness of the importance of energy to poverty reduction, accompanied by alarm at the lack of progress. In a major response, the Global Commission to End Energy Poverty will bring together major US institutions in a drive for funding of small-scale solar power projects for improved energy access and rural economic performance. Established by the Massachusetts Institute of Technology Energy Initiative and the Rockefeller Foundation, the Commission hopes to leverage funding of $2 billion from the US Development Finance Corporation.
Coal and Hydro Dilemmas
Coal is plentiful in Africa and South Asia and most low income countries assert their right to exploit fossil-fuels for the urgent task of extending their national grids. Observing that average household emissions are tiny fractions of those in Europe and North America, these countries perceive an element of hypocrisy in the maintenance of significant coal-fired generation in developed economies such as Germany and Australia.
For example, Zimbabwe plans to increase coal production by a factor of five, largely to fuel power generation, despite its plentiful renewable resources. Many environmental campaigners oppose this model of development, arguing that failure to control climate change will aggravate global poverty, ultimately reversing the benefits of expanded energy access.
Projections by global energy policy and research groups generally assume that coal will continue to feature prominently in the energy mix for developing countries, despite encouragement to “leapfrog” the old technologies in favour of renewables.
This conclusion is borne out in national plans published as a commitment under the 2015 Paris Climate Agreement. The poorest countries are expected to improve on “business as usual” in power generation, but without jeopardising economic development, for which energy capacity is crucial. For example, India’s rapid progress in creating new solar capacity cannot conceal its continued dependence on coal for more than half the country’s electricity.
The global coal industry itself lays claim to a moral responsibility to pursue global poverty reduction by achieving energy goals more quickly and at lower cost than renewable alternatives. Households desire connection to a traditional grid, runs this argument, observing that small-scale solar systems cannot play more than an interim role in an industrialising economy.
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 for fossil fuel projects from the multilateral development banks or indeed loans from commercial banks. Such lobbying is increasingly successful but is substantially undermined by China’s state-owned banks who have no qualms about stepping in, as is the case for Zimbabwe’s plans.
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 underperformance, environmental destruction and human displacement, often without proper prior assessment or consultation. Plans for major dams in Myanmar and Laos attract fierce opposition from international environmental and human rights watchdogs.
Both hydropower and coal-fired electricity are 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 Mozambique, Uganda, Zambia and Ghana. Governments grappling with water scarcity are prone to overlook that power stations consume vast quantities of water for cooling.
The energy roadmap for the world’s poorest countries is therefore hemmed in by conflicting forces – the desperate need for human and economic development in parallel with the protection of vital environmental assets – both perspectives recognised in the Sustainable Development Goals. These countries face dilemmas that did not exist at the comparable period of development in Europe and North America, more than a hundred years ago.