MITIGATING ENERGY POVERTY IN DEVELOPING COUNTRIES (II)

By Daniel Adams

      

BARRIERS TO MITIGATING ENERGY POVERTY

-           Financial Barrier: The governments of most developing countries still find it difficult to finance the construction of new electricity grids and transmission lines for the rural areas. According to IEA/UNDP energy access case: about $700billion is needed to provide electricity for the 1 billion people living without electricity access by 2030. This amount alone is larger than the GDP of 50 developing countries put together.

-          Affordability: this is a major barrier to increasing energy access. For example in India, about 90% of the population has access to the grid but only 43% are actually connected.

-          Political will and Institutional Strength: The governments of most developing countries lack the will to create a change, also due to corruption in these countries the institutions do not have the strength to carry out the rural electrification program.

-          Lack of Awareness: the lack of awareness is another barrier. People living in the rural areas of these developing countries are not aware of the cost benefit of switching from the traditional use of energy to cleaner and more efficient energy sources.

-          Physical Distance: the distance between the locations of the grid from the rural area could also be a barrier.

          

 ALLEVIATING ENERGY POVERTY

In order to tackle the issue of energy poverty and lack of access to modern energy, there is the need of state governments to make provision for institutional, regulatory and legal framework and also financing from all available sources including the private sector. International donor agencies can do more in terms of creating awareness about the benefits of using modern and cleaner energy, also in the area of subsidized investment on production and distribution of electricity. Another promising approach includes reliance on renewable energy in rural application for electricity generation.

According to OFID and Energy Poverty Challenges (2010)[1], in order to mitigate energy poverty, a two sided approach is necessary. Firstly the developing countries should be assisted in increasing their capacity to make use of other fuel sources e.g. LPG and Oil products and also in constructing capacity in areas such as power generation, transmission and distribution as this will make electricity supply more stable and efficient.

Secondly, the use of diversified sources of fuel is important together with renewable energy forms like hydro, solar power and wind energy.

Other measures to be taken in order to mitigate energy poverty are:

- By developing energy infrastructure and by providing loans with lower interest rates and longer repayment periods to governments of developing countries and to the private sector.

- By creating and making necessary financial services available to the poor and helping them to diversify and increase their income.

- By increased support from international agencies in the area of international trade of energy products.

ADDRESSING ENERGY POVERTY BY CREATING POLICIES

Developing countries have formulated policies to help address the issue of energy poverty. Some of these policies aim at reducing greenhouse gas emissions and possibly phase off subsidies on fossil fuels. This policies focus on providing adequate modern energy access for their citizens. The issue of energy poverty cuts across regions, therefore regional bodies have come together to set targets to achieve for improved energy access. Some of these regional bodies are Economic Community of West African States (ECOWAS), CEMAC, Forum of Energy Ministers of Africa (FEMA) and East African Community (EAC).

Some targets are:

- To reduce indoor air pollution caused by the use of traditional biomass by providing Improved Cooking  Stoves (ICS) to 50% of Africans residing in the rural areas.(FEMA 2005)

- To provide access to modern electricity for at least 50% of hospitals, communities and schools for reading, refrigerating and for communication purposes. (ECOWAS 2006)

- To enable 100% of those living in rural areas to have access to modern energy services and well equipped social service centers. (EAC 2007)

- To ensure that at least 55% of the population in the East African region has access to LPG and continuous supply of modern biomass. (EAC 2007)

The international community is also involved in the drive to mitigate energy poverty. An example is the World Energy Outlook 2010 by the IEA which aims to increase energy trade, production and distribution and give the entire global population access to modern energy services by 2035 and also making electricity and modern cooking fuels available for all by 2015 and 2030 respectively

Fig 2. IEA Universal Modern Energy Access Target

Source: IEA World Energy Outlook (2010)

BEST EXAMPLES IN REDUCING ENERGY POVERTY VIA ACCESS TO CLEAN ELECTRICITY

Many countries have been able to achieve success in generating and providing access to electricity. Developing countries lacking access to electricity can learn from countries like Tunisia and China

TUNISIA

Tunisia is a very good example because it has been able to increase electricity access of rural households from about 6 percent to 88 percent within 23 years. About USD$319.5 million has been invested in rural electrification projects which are top on the agenda for economic and social development. Only 6% of Tunisia’s rural households were electrified at the inception of the rural electrification project in the mid 1970s.

The electrification project involves both renewable energy in form of photovoltaic and also grid programs which complement each other. There have been positive externalities in areas such as increased income, improved health and gender equality because of the growth of the rural electrification scheme. It has also lead to a decreased poverty rate and increased life expectancy from fifty to seventy four years. It lead to improved human development especially in the area of better education as a result of proper lighting system for schools and studying at night.

The political will of the Tunisian government was the driving force for this achievement. Tunisia’s electrification has reached 100% in urban areas and 88% in the rural areas. Providing electricity for the poor via low cost technologies usually produces great impact on their standard of living. All this was achieved by decentralized planning and public funding via sources like the African Development Bank (ADB) and other sources. From 1975, about 600,000 connections have been made in the rural areas, 7,700 with 50-100 watt, solar photovoltaic systems. (World Bank Energy Sector Management Assistance Program)

CHINA

According to Global Energy Network Institute (GENI 2008) china’s population is put at 1.321 billion in 2007. It has the highest population globally and is the largest country in East Asia. It is one of the world’s greatest energy consumers and emitter of GHG.
China embarked on rural electrification since 1949 which helped in steady development of the rural economy and agriculture. Due to high energy demand China has given top priority to modern electrification. By 1996 about 97% of villages had access to electricity and over the past 50 years it has achieved 98% electrification. The main focus for china is the use of photovoltaic (PV) and wind energy grid extension for the isolated rural areas.
China uses a bottom up approach to achieving rural electrification. This involves rural development and empowerment in different stages. The strong will of china together with active participation of the local community and modern technology has helped in shaping the rural electrification process. Other reasons for Chinas success was the flexibility of technology, capacity building and the early realization that the rural electrification was necessary for rural development to take place.

A program called Township and Village Electrification programs was initiated in year 2000 by the Chinese Government. The main priority was to alleviate poverty and provide electricity for the rural areas with a final objective of making modern electricity accessible to 23 million people in the remote rural areas by 2010 via the use of renewable energy sources such as hydro power, wind energy and PV. China has increased its investment in renewable technology by 90 fold since the 1950s with is main focus on health, education, and poverty mitigation.
Despite this success China still faces some challenges in the area of rural electricity usage in the area of supporting long term supply and commercial operation of the system. Developing countries can learn from China’s experience and use it as a model for modern electrification especially in rural areas by ensuring active local participation, rural development and strong commitment.

WORST EXAMPLES IN REDUCING ENERGY POVERTY 

Access to modern energy in the East African Country member states is very poor and does not meet the domestic needs of the population. This is a barrier to mitigating energy poverty. The EAC member states are Burundi, Kenya, Rwanda Tanzania and Uganda. They still make use of traditional biomass to meet most of their heating and household needs. Most of the biomass is being depleted at an alarming rate. Less that 30 percent of people in these countries make use of LPG or ICS. At this rate more than 70% of households will be lacking modern energy for cooking by 2015. In Kenya 68.3 percent of the total energy consumption is derived from traditional biomass. Also in Burundi traditional biomass from plant residue and charcoal provides 96 percent of energy consumption. The excess use of traditional biomass has adverse health and environmental impacts such as air pollution and respiratory illness.

According to WHO about 75,000 people die annually from pneumonia. This is because of continuous inhaling of smoke from indoor use of traditional biomass. The factors which lead to expansion of energy poverty in this region are lack of access to modern energy services from LPG or electricity. About three percent of the rural areas and thirty two percent of the urban areas in East Africa are connected to the electricity grid. This has a negative effect on industrial activities e.g. manufacturing. Also the budgetary allocations in EAC states are lower than $4 per capita. Another factor for the persistence of energy poverty in this region is limited human capacity and institutional capacity at the East African Community Secretariat. This has lead to inefficient delivery of services. The situation needs to be addressed in order to provide effective services for member states. Unless proper policies and programs are implemented in this region, there would be lack of electricity for almost 90 percent of the community, schools and hospitals.

CONCLUSION

The use of cleaner energy forms will help in mitigating energy poverty. Cleaner energy helps in improving the standard of living of poor people especially in developing countries. The benefits can be seen in areas such as increased individual income, providing lighting for the community, pumping clean water and also refrigeration of food and drugs. All this goes a long way to improve economic and social development.

Provision of cleaner energy and electricity will lead to a reduction in the use of women and children for labor because things will be done easily and more efficiently with the use of electricity. The use of cleaner energy will also lead to improved health conditions of people living in the developing countries. They will depend less on traditional energy forms such as charcoal, animal dung, plant residue and firewood which have adverse health risks. The use of renewable energy and off grid technology in electricity generation will serve the rural areas better and have less negative externality on the environment.

When making decisions about the use of modern energy such as LPG, electricity or renewable energies, the financial transaction is the major concern. Commercial energy usage depends on 2 forms of decision making. Firstly, the decision of consumers to switch over to modern energy sources or not. Secondly, decision about the appropriate appliances to use. It is always better to use energy saving appliances. The decision to switch to modern energy is usually based on financial capability.

The poor people of developing countries will have better access to modern energy if the energy source satisfies some economic conditions such as: (1). low cost of supply.(2). The energy source must be able to satisfy basic human needs and (3). It should help in generating more income for the poor.

NUTSHELL

This is the second installment of this article by Daniel Adams (Click here to read the first). In the previous installment, the author identified suggestions made by organisations relating to energy access targets which are also in line with the global millennium development goals. Here, the author identifies the various barriers which hinder efforts to mitigating energy poverty and also makes reference to countries who have the best and worst situations of reducing energy poverty. Read, Learn, Share and Discuss!!!  

BIBLIOGRAPHY

EAC. (2007). Strategy on Scaling Up Access to Modern Energy Services in Order to Achieve the Millennium Development Goals.

ECOWAS (UEMOA). 2006. White Paper for a regional policy, geared towards increasing access to energy services for rural and peri-urban populations in order to achieve the Millennium Developments Goals.

FEMA. (2005). FEMA Position Paper: Energy and the MDGs.

Global Energy Network Institute (2008). The Case for Meeting the Millennium Development Goals through Access to Clean Electricity

 IEA (2010) Energy Poverty: How to make access to modern energy universal? At http://www.worldenergyoutlook.org/docs/weo2010/weo2010_poverty.pdf (last visited on 21th June, 2011)

IEA (2010) World Energy Outlook. at http://www.worldenergyoutlook.org/electricity.asp (last visited on 26th June, 2011)

OFID and Energy Poverty Challenges Vienna, Austria June 2010 at http://www.ofid.org/publications/PDF/EN_Energy_Poverty.pdf  (last visited 27^th June 2011)

UNDP (2009) The Energy Access Situation In Developing Countries: A Review Focusing on the Least Developed Countries and Sub-Saharan Africa. athttp://content.undp.org/go/cms-service/stream/asset/?asset_id=2205620 (last visited 2^nd of July 2011)

WORLD RESOURCES INSTITUTE.  at http://www.wri.org/stories/2011/03/world-bank-energy-strategy-must-address-energy-poverty-and-climate-change  (last visited 30^th of June 2011)

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[1] OFID and Energy Poverty Challenges Vienna, Austria June 2010